Court reaffirms previous ruling

Scott Csernyik

11/14/2001 12:00:00 AM

A Sixth Circuit U.S. Court of Appeals decision on Nov. 7 supported a lower court ruling that seven Michigan Tribes-including the Saginaw Chippewa-do not have to pay the state 8 percent funds after they no longer had the exclusive right to operate gaming facilities.

The ruling reaffirmed the Saginaw Chippewa Indian Tribe of Michigan's position that their exclusive right to operate electronic games of chance within the state ended on Feb. 18, 1999, when the state negotiated gaming compacts with several other Indian Tribes. Although the state agreed the obligation of the original seven Tribes has ended, it argued unsuccessfully for a later termination date.

"This decision is a complete validation of the position the Tribes have taken from the beginning of the dispute," stated Saginaw Chippewa Tribal Chief Phillip Peters Sr. in a Nov. 8 press release. "We always believed the agreement was clear, and we were certain we would prevail in the end. It is our hope that the state will accept this ruling rather than spend additional tax dollars seeking further review."

Under a consent judgement, the seven Tribes who signed gaming compacts with the state in August 1993 were required to pay 8 percent of their electronic video gaming and slot machine profits to the state and 2 percent to local municipalities.

From 1994 through 1999, the seven Tribes pumped over $182 million into the Michigan Strategic Fund. The Saginaw Chippewa Tribe has contributed $95.8 million to the fund. The other Tribes originally named as plaintiffs in the lawsuit include the Sault Ste. Marie Tribe of Chippewa Indians, Grand Traverse Band of Ottawa and Chippewa Indians, Keweenaw Bay Indian Community, Hannahville Indian Community, Bay Mills Indian Community and the Lac Vieux Desert Band of Lake Superior Chippewa Indians.

Because five of the Tribe negotiated settlements with the state prior to litigation, only the Lac Vieux Desert Band and Saginaw Chippewa Tribe argued their position through the appeals process.

The Tribes argued their right to exclusivity was voided when the Michigan legislature approved four new gaming compacts on Dec. 19, 1998 with the following four Tribes: Nottawaseppi Huron Band of Potawatomi, the Little River Band of Ottawa Indians, the Pokagon Band of Potawatomi Indians and the Little Traverse Bay Bands of Odawa Indians. The compacts were approved by the U.S. Secretary of the Interior and published in the Federal Register on Feb. 18, 1999.

On Feb. 28, 2000, Senior U.S. District Judge Douglas W. Hillman ruled the state violated the August 1993 compacts when the Michigan legislature approved the four new gaming compacts on Dec. 19, 1998.

"The Governor's argument turns on a linguistic sleight-of-hand," Hillman contended. "In light of plain meaning of the consent judgment and the Tribal compacts, as well as analysis applied by both the district court and Sixth Circuit on the prior motion to compel, the Tribes' right to operate ceased being exclusive when that right was extended and became effective as to the new Tribes.

"As a consequence, the Tribes no longer �enjoy[ed] the exclusive right to operate electronic games of chance in the state...' as of Feb. 18, 1999 when the four new Tribal-state compacts were published in the federal register."

In the Nov. 7 opinion, Chief Judge Boyce F. Martin Jr. wrote "the new Tribes could not lawfully operate electronic games of chance until Michigan gave them permission to do so in the compacts.

"This of course required the compacts to take effect. Pursuant to their own plain terms, this happened on Feb. 18. Once another entity possessed that right, the seven Tribes stopped owing Michigan the disputed payments. The district court correctly denied Gov. Engler's motion."