Chemehuevi Indian Tribe et al v. Jerry Brown et al

NOTICE OF MOTION AND MOTION for Summary Judgment as to all of Plaintiffs' claims

C.D. Cal.February 2, 2017

1 PLAINTIFFS’ NOTICE OF MOTION AND MOTION [CASE NO. 5:16-CV-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LESTER J. MARSTON California State Bar No. 081030 RAPPORT AND MARSTON 405 West Perkins Street Ukiah, California 95482 Telephone: 707-462-6846 Facsimile: 707-462-4235 Email: marston1@pacbell.net Attorney for Plaintiffs UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA - EASTERN DISTRICT CHEMEHUEVI INDIAN TRIBE, and CHICKEN RANCH RANCHERIA OF ME-WUK INDIANS, Plaintiffs, v. JERRY BROWN, Governor of California, and STATE OF CALIFORNIA, Defendants. Case No. 5:16-cv-1347-JFW-MRW NOTICE OF MOTION AND CROSS- MOTION FOR SUMMARY JUDGMENT [Fed. R. Civ. P. 56, L.R. 56] Date: March 13, 2017 Time: 1:30 p.m. Courtroom: 7A Judge: Hon. John F. Walter Action Filed: June 23, 2016 TO ALL PARTIES AND THEIR COUNSEL OF RECORD: PLEASE TAKE NOTICE that, on March 13, 2017, at 1:30 p.m., or as soon thereafter as the matter may be heard, in the courtroom of the Honorable John F. Walter, at the United States District Court for the Central District of California, Courtroom 7A, located at 350 West 1st Street, Los Angeles, California, Plaintiffs, the Chemehuevi Indian Tribe and the Chicken Ranch Rancheria (“Tribes”), shall, and hereby do, move the Court for an order granting summary judgment in favor of the Tribes, pursuant to Fed. R. Civ. P. 56 and Local Rule 56. Case 5:16-cv-01347-JFW-MRW Document 81 Filed 02/02/17 Page 1 of 4 Page ID #:4756 2 PLAINTIFFS’ NOTICE OF MOTION AND MOTION [CASE NO. 5:16-CV-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The Tribes move for summary judgment on the grounds that: 1. The Tribes operate casinos pursuant to Class III gaming compacts with the State of California (“State”) that were entered into pursuant to the requirements of the Indian Gaming Regulatory Act, 25 U.S.C. § 2701 et seq. (“IGRA”). 2. The Tribes’ compacts (“Compacts”) contain identical provisions that establish a fixed date on which the Compacts will end (“Termination Provision”), thereby terminating each Tribe’s right to engage in Class III gaming unless and until each Tribe and the State enter into a new or amended compact, despite the fact that the State permits, under State law, other persons, organizations and entities to play the same games within the State, that the Tribes are offering for play under their respective Compacts. 3. The inclusion of a Termination Provision in a Class III gaming compact is in conflict with the plain wording of the IGRA, Congress’ purposes in enacting the IGRA, and Congress’ intention that the compacting requirement in the IGRA not be used to prevent Indian tribes from conducting gaming on their Indian lands, because the Termination Provision grants the State the power to terminate the Tribes’ Class III gaming on their Indian lands. 4. The Termination Provision in the Tribes’ Compacts is, therefore, void and unenforceable. 5. There is no genuine dispute as to any material fact relating to the Tribes’ claims and the Tribes are entitled to judgment as a matter of law. This motion is based on this Notice of Motion and Cross-Motion for Summary Judgment, the Memorandum of Points and Authorities in Support of Plaintiffs’ Cross- Motion for Summary Judgment, the Declarations of Clois Erwin, Craig Powell, Charles Wood, Edward D. “Tito” Smith, Glenn H. Lodge, George Forman and Lester J. Marston in support of Plaintiffs’ Cross-Motion for Summary Judgment, the Stipulated Statement of Facts and Supporting Evidence in Support of Cross-Motions for Summary Judgment and Plaintiffs’ Statement of Uncontroverted Facts and Supporting Evidence in Support Case 5:16-cv-01347-JFW-MRW Document 81 Filed 02/02/17 Page 2 of 4 Page ID #:4757 3 PLAINTIFFS’ NOTICE OF MOTION AND MOTION [CASE NO. 5:16-CV-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 of Cross-Motions for Summary Judgment, all of which are filed herewith, and such other pleadings, papers, and evidence that may be introduced prior to or at the hearing on this motion. DATED: February 2, 2017 Respectfully Submitted, RAPPORT AND MARSTON By: /s/ Lester J. Marston LESTER J. MARSTON Attorney for Plaintiffs Case 5:16-cv-01347-JFW-MRW Document 81 Filed 02/02/17 Page 3 of 4 Page ID #:4758 4 PLAINTIFFS’ NOTICE OF MOTION AND MOTION [CASE NO. 5:16-CV-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CERTIFICATE OF SERVICE I am employed in the County of Mendocino, State of California. I am over the age of 18 years and not a party to the within action; my business address is that of Rapport & Marston, 405 West Perkins Street, Ukiah, CA 95482. I hereby certify that I electronically filed the below listed documents with the Clerk of the United States District Court for the Central District of California by using the CM/ECF system on February 2, 2016. 1. Notice of Motion and Cross-motion for Summary Judgment; 2. Memorandum of Points and Authorities in Support of Plaintiffs’ Cross-motion for Summary Judgment; 3. Declaration of Lester J. Marston in Support of Plaintiffs’ Cross- motion for Summary Judgment; 4. Declaration of Craig Powell in Support of Plaintiffs’ Cross- motion for Summary Judgment; 5. Declaration of Clois Erwin in Support of Plaintiffs’ Cross- motion for Summary Judgment; 6. Declaration of Glenn H. Lodge in Support of Plaintiffs’ Cross- motion for Summary Judgment; 7. Declaration of Edward D. “Tito” Smith in Support of Plaintiffs’ Cross-motion for Summary Judgment; and 8. Declaration of Charles Wood in Support of Plaintiffs’ Cross- motion for Summary Judgment. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct; executed on February 2, 2016, at Ukiah, California. /s/ Brissa De La Herran BRISSA DE LA HERRAN Case 5:16-cv-01347-JFW-MRW Document 81 Filed 02/02/17 Page 4 of 4 Page ID #:4759 i MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LESTER J. MARSTON California State Bar No. 081030 RAPPORT AND MARSTON 405 West Perkins Street Ukiah, California 95482 Telephone: 707-462-6846 Facsimile: 707-462-4235 Email: marston1@pacbell.net Attorney for Plaintiffs UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA - EASTERN DIVISION CHEMEHUEVI INDIAN TRIBE, and CHICKEN RANCH RANCHERIA OF ME-WUK INDIANS, Plaintiffs, v. JERRY BROWN, Governor of California, and STATE OF CALIFORNIA, Defendants. Case No. 5:16-cv-1347-JFW-MRW MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS-MOTION FOR SUMMARY JUDGMENT Date: March 13, 2017 Time: 1:30 p.m. Courtroom: 7A Judge: Hon. John F. Walter Action Filed: June 23, 2016 Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 1 of 29 Page ID #:4760 ii MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS I. INTRODUCTION ................................................................................................... 1 II. LEGAL STANDARD ............................................................................................. 1 III. UNDISPUTED FACTUAL BACKGROUND ....................................................... 2 A. The Indian Gaming Regulatory Act. ............................................................. 2 B. The Chicken Ranch And Chemehuevi Compacts. ........................................ 3 C. Impacts Of The Termination Provision On Chicken Ranch And Chemehuevi. ............................................................................................................ 4 1. Chicken Ranch. ....................................................................................... 4 2. Chemehuevi. ............................................................................................ 5 3. Impacts of Termination Provision on the Tribes. ................................... 7 IV. ARGUMENT ........................................................................................................... 8 A. The Termination Provision Violates The Plain Wording Of The IGRA. ..... 8 B. A Termination Provision Is Not A Proper Subject Of Compact Negotiations Under The IGRA. ............................................................................. 11 C. The Termination Provision Conflicts With Congress’s Purposes In Enacting The IGRA. .............................................................................................. 14 D. The Termination Provision Conflicts With Congress’s Intent That The Compacting Process Not Be Used To Prevent Tribes From Engaging In Gaming. 16 E. A Termination Provision Cannot Be Included In A Compact Even If It Was Agreed To By The Tribes In Exchange For A “Meaningful Concession.” .......... 18 F. A Perpetual Compact Is Consistent With The Plain Wording And The Purposes Of The IGRA. ......................................................................................... 21 G. Any Ambiguities In The IGRA Must Be Interpreted In Favor Of The Tribes. .................................................................................................................... 23 H. The State Entering Into A Compact With A Perpetual Term Would Not Violate California Law. ......................................................................................... 23 V. CONCLUSION ...................................................................................................... 24 Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 2 of 29 Page ID #:4761 iii MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Federal Cases Alaska Pacific Fisheries Co. v. United States, 248 U.S. 78 (1918) ................................ 23 Artichoke Joe’s Grand Casino v. Norton, 353 F.3d 712 (9th Cir. 2003) ........................ 23 California v. Cabazon, 480 U.S. 202, 221-222 (1987) ...................................................... 2 County of Yakima v. Confederated Tribes and Bands of the Yakima Indian Nation, 502 U.S. 251 (1992) ............................................................................................................ 23 Holt v. Winpisinger, 811 F.2d 1532 (D.C. Cir. 1987) ..................................................... 19 Idaho v. Shoshone-Bannock Tribes 465 F.3d 1095 (9th Cir. 2006) ................................ 18 In re Indian Gaming Related Cases, 331 F.3d 1094 (9th Cir. 2003) ....................... passim J. I. Case Co. v. NLRB, 321 U.S. 332 (1944) .................................................................. 19 Michigan v. Bay Mills Indian Community, __ U.S. __, 134 S. Ct. 2024 (2014) ....... 13, 14 Montana v. Blackfeet Tribe, 471 U.S. 759 (1985) ........................................................... 23 North Fork Rancheria of Mono Indians of California v. State of California, 2015 U.S. Dist. LEXIS 154729, *29-30 (E.D. Cal. 2015) ................................................ 12, 13, 14 Pueblo of Sandia v. Babbitt, 47 F.Supp.2d 49 (D.D.C. 1999) ......................................... 21 Rincon Band of Luiseño Mission Indians v. Schwarzenegger, 602 F.3d 1019 (9th Cir. 2010) ...................................................................................................................... passim Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996) .............................................. 21 Spirides v. Reinhardt, 613 F.2d 826 (D.C. Cir. 1979) ..................................................... 19 Sycuan Band v. Roache, 54 F. 3d 535 (9th Cir. 1994) ...................................................... 2 Statutes 15 U.S.C. §1175 ............................................................................................................... 18 18 U.S.C. §1166 ......................................................................................................... 10, 18 25 U.S.C. §2701 ..................................................................................................... 8, 13, 15 25 U.S.C. §2702 ............................................................................................... 2, 14, 15, 23 25 U.S.C. §2703 ................................................................................................................. 2 25 U.S.C. §2710 ........................................................................................................ passim Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 3 of 29 Page ID #:4762 iv MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 25 U.S.C. §2711 ............................................................................................................... 10 26 U.S.C. §7871 ............................................................................................................... 16 Rules Fed. R. Civ. P. 56(a)........................................................................................................... 1 Constitutional Provisions California Constitution, Art. IV, §19(f) ................................................................. 3, 10, 26 Other Authorities 78 Fed. Reg. 14352 (March 5, 2013) ................................................................................. 9 Cal. Bus. & Prof. Code § 19527 ...................................................................................... 24 Cal. Bus. & Prof. Code § 19528 ...................................................................................... 24 Cal. Gov’t Code § 66801 ................................................................................................. 17 Cal. Penal Code § 1389 .................................................................................................... 24 Cal. Veh. Code § 15000 ................................................................................................... 24 Kevin Washburn, “Recurring Issues in Indian Gaming Compact Approval,” Research Paper No. 2016-02, Legal Studies Research Paper Series, University of Mexico School of Law ......................................................................................................... 20, 21 Senate Report, 100-446 (1988) .................................................................................. 10, 17 Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 4 of 29 Page ID #:4763 1 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I. INTRODUCTION Plaintiffs, the Chicken Ranch Rancheria (“Chicken Ranch”) and the Chemehuevi Indian Tribe (“Chemehuevi”) (together, “Tribes”), operate casinos pursuant to gaming compacts with the State of California (“State”). The Tribes’ compacts (“1999 Compact” or “Compacts”) contain identical provisions that establish a fixed date upon which the Compacts will terminate (“Termination Provision”), thereby terminating each Tribe’s right to engage in Class III gaming unless and until each Tribe and the State enter into a new or extended compact. The questions for the Court to resolve in this action are whether the Termination Provision: (1) violates the provisions of the Indian Gaming Regulatory Act, 25 U.S.C. §2710 et seq. (“IGRA”), and (2) frustrates the congressional purposes of the IGRA. The answer to both of these questions is “yes.” Inclusion of the Termination Provision in the Compacts: (1) is contrary to the plain wording of the IGRA, specifically 25 U.S.C. §2710(d)(3)(C); (2) frustrates the intent of Congress in enacting the IGRA, which is to allow the Tribes to engage in gaming to generate revenue to fund essential governmental programs and services; and (3) violates the purposes of the IGRA by dramatically shifting the balance of negotiating power in favor of the State in negotiations with the Tribes for new or extended Compacts. This case presents no disputed issues of material fact and the Tribes, therefore, are entitled to a judgment as a matter of law declaring that the Termination Provision in the Compacts is void. II. LEGAL STANDARD A court shall grant a motion for summary judgment when there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). In ruling on a motion for summary judgment, a court construes the evidence in the light most favorable to the non-moving party. Scott v. Harris, 550 U.S. 372, 378, 380 (2007). Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 5 of 29 Page ID #:4764 2 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 III. UNDISPUTED FACTUAL BACKGROUND A. The Indian Gaming Regulatory Act. In California v. Cabazon, 480 U.S. 202, 221-222 (1987) (“Cabazon”), the Supreme Court held that California had no jurisdiction over gambling in Indian country. After Cabazon, California had no authority to regulate tribal gaming in Indian country. See Sycuan Band v. Roache, 54 F. 3d 535 (9th Cir. 1994). Congress’s primary purpose in enacting the IGRA was “to provide a statutory basis for the operation of gaming by Indian tribes as a means of promoting tribal economic development, self-sufficiency, and strong tribal governments....”, 25 U.S.C. §2702(1). Congress also intended to grant the states limited authority to regulate Class III gaming through a negotiated compacting process so states could protect their interests in ensuring that organized crime was not involved in the gaming activities and that the games were being played fairly. 25 U.S.C. § 2702(2). In order to achieve these purposes, Congress established three “classes” of gaming on Indian lands: Class I (ceremonial and social games); Class II (bingo, games similar to bingo, and non-banked card games if not prohibited by state law); and Class III (all other forms of gaming that are not Class I or Class II gaming, including slot machines of any kind). 25 U.S.C. §2703(6)-(8). Under the IGRA, a tribe has the right to engage in Class III gaming on its Indian lands if: (1) the tribe enacts a gaming ordinance, that authorizes Class III gaming, which must be approved by the Chair of the National Indian Gaming Commission (“NIGC”); (2) the state in which the tribe’s Indian lands are located permits any person, organization, or entity to play the games that the tribe is seeking to play; and (3) the tribe negotiates and enters into a tribal-state compact that authorizes Class III gaming. 1 1There is one circumstance under which a tribe may conduct Class III gaming without a compact: where the state is determined by a Federal District Court not to have negotiated in good faith, the state has rejected a court-appointed mediator’s selection of the tribe’s last, best offer of a compact, and the Secretary of the Interior has prescribed “procedures” under which the tribe may conduct Class III gaming. 25 U.S.C. §2710 (d)(7)(B)(vii). Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 6 of 29 Page ID #:4765 3 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 25 U.S.C. §2710(d)(3). In negotiating a compact with a tribe, a state is limited to negotiating over those subjects that are specifically enumerated in the IGRA and that are directly related to the gaming activities. 25 U.S.C. §2710(d)(3)(C). Any compact entered into between a tribe and a state must be approved, or deemed approved, by the Secretary of the Interior (“Secretary”) and notice of such approval must be published in the Federal Register before the compact can take effect. 25 U.S.C. §2710(d)(1)(3)(b). B. The Chicken Ranch And Chemehuevi Compacts. Chicken Ranch and Chemehuevi entered into functionally identical compacts with the State in 1999. 2 The Compacts were executed by the parties and ratified by the California Legislature in September, 1999. Stipulated Statement of Facts and Supporting Evidence in Support of Cross-Motions for Summary Judgment and Plaintiffs’ Statement of Uncontroverted Facts and Supporting Evidence in Support of Cross Motion for Summary Judgment (“SOF”), ¶¶ 17-27. The Compacts took effect on or about May 16, 2000, after California’s voters approved an amendment to California’s Constitution, Art. IV, §19(f), that specifically empowered the Governor to negotiate and conclude, and the Legislature to ratify, tribal-state compacts authorizing the operation of slot machines, banking and percentage card games and lotteries on Indian lands. Until the California Constitution was amended, the State was not obligated to negotiate with tribes about the operation of slot machines or banked or percentage card games, because California law prohibited such games. Hotel Employees & Restaurant Employees International Union v. Davis, 21 Cal. 4th 585, 611-616 (1999). The 1999 Compact authorizes the Tribes to operate slot machines, banked and percentage card games and lotteries, and imposes various regulatory and other obligations on the Tribes. SOF,¶ 21; ¶ 27. The 1999 Compact also includes a 2 Because the 1999 Compact was a model compact, the provisions of both Tribes’ Compacts are identical. Any quote from or citation to a provision of the 1999 Compact is applicable to both Tribes’ Compacts. Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 7 of 29 Page ID #:4766 4 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Termination Provision (§11.2.1), which provides: “Once effective this Compact shall be in full force and effect for state law purposes until December 31, 2020.” 3 SOF, ¶ 29. C. Impacts Of The Termination Provision On Chicken Ranch And Chemehuevi. 1. Chicken Ranch. Chicken Ranch conducts Class III gaming at the Chicken Ranch Bingo and Casino (“Chicken Ranch Casino”) pursuant to its 1999 Compact. SOF, ¶ 21. The Chicken Ranch Casino does not produce sufficient revenue to allow Chicken Ranch to develop government facilities that would enable Chicken Ranch to provide governmental programs and services to its members on the Chicken Ranch Rancheria (“Rancheria”). SOL, ¶ 45. The limited revenue from the Chicken Ranch Casino also does not allow for the creation of the infrastructure necessary to develop and utilize its trust and fee land. SOF, ¶ 46. The only way that Chicken Ranch can significantly increase its governmental revenue is through the development of a larger casino and the creation of associated non-gaming commercial enterprises. SOF, ¶ 47. In 2012, Chicken Ranch developed a plan to build a new and larger casino, hotel, and other facilities on approximately 42 acres of trust land that are contiguous to the original Rancheria (“Project”). Chicken Ranch also developed a related plan to build housing and infrastructure on a portion of its fee land. SOF, ¶ 48. A market study performed for Chicken Ranch concluded that the proposed new casino would produce approximately $100 million in gaming revenue in the first year of operation, 2015, with an additional $14.4 million in gaming revenue if Chicken Ranch built the proposed hotel. That would have represented a nearly five-fold increase in tribal revenue over Chicken Ranch Casino’s actual 2015 revenue. Operation of the 3 The Compact provides for an extension of the term until June 30, 2022, if negotiations for a replacement compact are in progress but have not been concluded by December 31, 2020.SOF, ¶ 30. Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 8 of 29 Page ID #:4767 5 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 proposed hotel was estimated to produce approximately $11 million in non-gaming revenue in the first year and a proposed golf course was projected to produce $2.7 million in revenue in the first year. SOF, ¶¶ 50-52. The architect’s cost estimate prepared for the Project concluded that Chicken Ranch would need approximately $237,775,000 to construct the new casino, hotel, and related facilities. SOF, ¶ 53. When Chicken Ranch contacted Oak Valley Bank (“Bank”), the financial institution that has provided financing for Chicken Ranch’s economic development projects in the past, seeking financing for the Project, the Bank informed Chicken Ranch that the Bank would not lend Chicken Ranch the funding necessary for the Project. SOF, ¶¶ 54. The Bank refused to finance the Project because the financing would have to be secured by, and repaid from, the gaming revenues. SOF, ¶ 55. Due to the Termination Provision, there was inadequate time to generate the gaming revenues needed to repay the loan. Further, the Bank said it would not finance the Project even if the current term of the 1999 Compact were extended for 20 years (the length of the initial term), because the Bank’s lending guidelines required that the casino revenues be available as security for a period greater than 25 years. SOF, ¶ 56. 2. Chemehuevi. The Chemehuevi Indian Tribe conducts Class III gaming at the Havasu Landing Resort and Casino (“Havasu Landing Casino”) pursuant to the 1999 Compact. SOF, ¶ 27.The revenue received from the operation of the Havasu Landing Casino is insufficient to allow the tribal government to resolve numerous problems that plague the tribal members residing on the Chemehuevi Indian Reservation (“Reservation”): poverty, lack of infrastructure, inadequate educational facilities, a high rate of alcohol and substance abuse, lack of sufficient medical and emergency services, and chronic power outages. SOF, ¶ 61. Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 9 of 29 Page ID #:4768 6 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 In order to raise the standard of living for the majority of members of the tribe who are low-income and very low income, and in order to ensure that all tribal members have access to decent employment opportunities, housing, health care, education, properly maintained roads, and reliable electrical power, Chemehuevi has been engaged, for more than a decade, in efforts to significantly develop its Reservation economy and thereby increase its governmental revenue. SOF, ¶ 62. Beginning in 2003, Chemehuevi, with financial assistance from the San Manuel Band of Mission Indians, created a master plan for the development of the southern portion of the Reservation (“Master Plan Project”). SOF, ¶ 63. The Master Plan Project included hotels, a casino, golf courses, tennis facilities, a spa/fitness center, a water park, an equestrian center, low density custom home parcels, spa villas, condominiums and time shares. SOF, ¶ 64. Phase One of the Master Plan Project was budgeted for $314,937,241 in 2003, and, viewed in isolation, appeared to be financially viable. SOF, ¶ 65. However, the development of the Master Plan Project required $58,460,250 in infrastructure improvements. SOF, ¶ 65. Chemehuevi might have been able to find financial support for the Master Plan Project, based on the projected revenues from the project, but no financial institution or investor was willing to lend Chemehuevi the money required to make the infrastructure improvements to allow the Master Plan Project to go forward. SOF, ¶ 67. The only viable way to finance the construction of the infrastructure improvements necessary to support the Master Plan Project would have been through 30-year bond financing paid for out of revenue generated by Chemehuevi’s gaming operation and other commercial enterprises. SOF, ¶ 68. Chemehuevi’s compact term, even if renewed for an additional term of 20 years, would not cover the entire 30-year period of the bond financing. SOF, ¶ 69. Without the certainty of income from Chemehuevi’s gaming operation throughout the entire 30-year bond financing period, Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 10 of 29 Page ID #:4769 7 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 no financial institution was willing to underwrite the necessary bond financing for the Master Plan Project. SOF, ¶ 70. Because of the Tribe’s inability to obtain long term bond financing, the Master Plan Project was shelved in 2007. SOF, ¶ 72. The Tribe has spent years working on a far less ambitious project, the construction of a new casino, hotel, and marina in the northern portion of the Reservation (the “H2O Project”). SOF, ¶ 73. The H2O Project has also been limited by the lack of funding. SOF, ¶ 74. Despite a market study projecting that the H2O Project would be economically feasible, four banks declined to fund the project because the Tribe was seeking 10-year financing and only had seven years remaining on its 1999 Compact. Id. Finally, in 2016, Chemehuevi obtained two loans from Great Western Bank (“GW Bank”) totaling approximate $30,000,000 to finance the construction of a new hotel and casino. SOF, ¶ 75. The Bureau of Indian Affairs agreed to guarantee repayment of 90% of the hotel loan in the event that Chemehuevi defaults on the hotel loan. SOF, ¶ 75. The loans that Chemehuevi received from GW Bank require that Chemehuevi pay off the loan in 10 years and granted GW Bank, as security, an interest in every significant asset owed by the Tribe, including, but not limited to, the income and assets of the Havasu Landing Casino, the Tribe’s fee land located in Havasu City, Arizona, and the Tribe’s ferry boat. SOF, ¶ 76. The increased revenue that the Tribe hopes to receive from the H2O Project will only be a small percentage of the anticipated revenues from the Master Plan Project. SOF, ¶ 77.The H2O Project will only allow the Tribe to engage in a much more limited and less diversified development project than it would have under the Master Plan Project. SOF, ¶ 77. 3. Impacts of Termination Provision on the Tribes. The Termination Provision in the 1999 Compacts has had the effect of preventing the Tribes from obtaining financing, including both bank loans and long-term bond financing, for the construction of new or expanded gaming facilities, the infrastructure Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 11 of 29 Page ID #:4770 8 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 improvements necessary to construct or expand those facilities, and other economic development projects. SOF, ¶ 78. The inability of the Tribes to construct new or expanded gaming facilities prevents the Tribes from being able to finance, with increased gaming revenues from new or expanded gaming facilities, the infrastructure improvements on the Tribes’ reservations that are necessary to develop new non-gaming businesses and tribal government facilities. SOF, ¶ 79. The inability of the Tribes to construct new or expanded gaming facilities, to construct necessary infrastructure improvements, and to develop new non-gaming businesses, hinders the Tribes’ ability to provide essential governmental programs and services to its members. SOF, ¶ 80. If the Tribes’ 1999 Compacts terminate, pursuant to the Termination Provision, the Tribes’ economies will be devastated. All tribal programs and services will have to terminated or be drastically reduced. The Tribes will be forced to depend entirely on federal grants, limited Class II gaming revenue, and existing non-gaming enterprises for their governmental revenue. SOF, ¶ 86. IV. ARGUMENT A. The Termination Provision Violates The Plain Wording Of The IGRA. The IGRA states that “Indian tribes have the exclusive right to regulate gaming activity on their Indian lands if the gaming activity is not specifically prohibited by Federal law and is conducted within a state which does not, as a matter of criminal law and public policy, prohibit such gaming activity.” 25 U.S.C. §2701(5). The IGRA grants Indian tribes the absolute right to engage in Class III gaming so long as they meet three conditions: Class III gaming activities shall be lawful on Indian lands only if such activities are- (A) authorized by an ordinance or resolution that- Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 12 of 29 Page ID #:4771 9 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (i) is adopted by the governing body of the Indian tribe having jurisdiction over such lands, (ii) meets the requirements of subsection (b), and (iii) is approved by the Chairman, (B) located in a State that permits such gaming for any purpose by any person, organization, or entity, and (C) conducted in conformance with a Tribal-State compact entered into by the Indian tribe and the State under paragraph (3) that is in effect. 25 U.S.C. § 2710(d)(1). (Emphasis added). The Tribes meet all of the requirements under the IGRA to conduct Class III gaming on their Indian lands. Each Tribe has enacted a gaming ordinance, which has been approved by the Chair of the NIGC, which authorizes the Tribes to play games authorized by California law. SOF ¶¶ 8, 14. California, where the Tribes’ Indian lands are located, affirmatively permits Indian tribes to conduct Class III gaming consisting of slot machines (gaming devices), banked and percentage card games and lotteries on their Indian lands within the State. California Constitution, Art. IV, §19(f). SOF, ¶ 16. The Tribes and the State have entered into the 1999 Compacts, which permit the Tribes to conduct Class III gaming on their Indian Lands. SOF, ¶ ¶ 17-20, 23-26. Thus, the Tribes have the absolute right to conduct gaming on their Indian lands: “Class III gaming activities shall be lawful….” 25 U.S.C. §2710(d)(1). Contrary to the IGRA, the Termination Provision sets a date certain after which the Tribes would be prohibited from engaging in Class III gaming pursuant to the IGRA, even though the State permits Class III gaming to be conducted by other persons, organizations, and entities within the State without a termination date. 4 The Termination Provision would subject the Tribes’ Class III gaming activities to federal enforcement of 4 There is no termination date for pari-mutuel wagering on horse races or for the State Lottery. SOF, ¶ 43. Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 13 of 29 Page ID #:4772 10 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the IGRA’s prohibition on Class III gaming without a compact once the Compacts expire. See, 18 U.S.C. §1166 [which assimilates into federal law all state gambling laws, except as to Class II gaming or gaming authorized by compact]. Terminating the Compacts on the expiration date violates the plain wording of the IGRA, because it denies the Tribes their absolute right to conduct Class III gaming on their Indian lands. Significantly, the word “duration” is not used at all in the IGRA. The word “term,” in the sense of a period of time, is used twice in the IGRA; in both cases, the word is used with reference to limitations on the permissible duration of management contracts. 25 U.S.C. §2711(b). If Congress had intended to limit the duration of gaming compacts or to ensure that term provisions were included among the proper topics of negotiation, it could have done so, since Congress included restrictions on the length of management contracts. Instead, Congress chose not to address the duration of the compacts at all in the IGRA. Revealingly, the Senate Select Committee on Indian Affairs, in its report on the IGRA, also did not use the word “duration” and used the word “term” exclusively in the context of management contracts. See Senate Report 100-446, pp. 8, 15. Evidently, Congress did not regard a termination provision as a necessary feature of gaming compacts. Above and beyond the fact that the IGRA does not mention the words “term” or “duration”, the State has no legitimate State interest in insisting that the Compact contain a termination provision. The State’s only interest in including the Termination Provision is to gain undue leverage in negotiating a new or extended compact as the compact’s fixed expiration date approaches. 5 5 To the extent that the State might be concerned that changed circumstances over time might warrant adjustments to the regulatory regime prescribed in the Compact, that concern already is addressed by the Compact’s existing provisions for dispute resolution and negotiation of amendments of specific provisions upon showing of adequate justification. See Compact §9 (dispute resolution), §12 (amendments). (SOF, ¶17, Exhibits 8; ¶ 26, Exhibit 13.) Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 14 of 29 Page ID #:4773 11 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Finally, the only action that a state is authorized to take to stop a tribe from conducting Class III gaming is to entirely prohibit all Class III gaming “for any purpose by any person, organization, or entity” within the state, thereby making such gaming a violation of state criminal law. The State lottery would have to be terminated, and, as a result of Proposition 1A, the Constitution of the State of California would have to be amended in order to effectuate a prohibition on all forms of Class III gaming. There is no question that Class III gaming is currently being conducted in California, both on and off of Indian lands, by Indian tribes, and the State. As a result, the State cannot prohibit the Tribes from gaming on their Indian lands, and any attempt to do so by the State would constitute a violation of the IGRA. B. A Termination Provision Is Not A Proper Subject Of Compact Negotiations Under The IGRA. The IGRA, lists the subjects that the State has a right to negotiate for in a tribal- state Class III compact: (i) the application of the criminal and civil laws and regulations of the Indian tribe or the State that are directly related to, and necessary for, the licensing and regulation of such activity; (ii) the allocation of criminal and civil jurisdiction between the State and the Indian tribe necessary for the enforcement of such laws and regulations; (iii) the assessment by the State of such activities in such amounts as are necessary to defray the costs of regulating such activity; (iv) taxation by the Indian tribe of such activity in amounts comparable to amounts assessed by the State for comparable activities; (v) remedies for breach of contract; (vi) standards for the operation of such activity and maintenance of the gaming facility, including licensing; and Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 15 of 29 Page ID #:4774 12 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (vii) any other subjects that are directly related to the operation of gaming activities. 25 U.S.C. §2710(d)(3)(C). The subjects listed in Section 2710(d)(3)(C) are the only subjects that IGRA permits to be included in a compact. Rincon Band of Luiseño Mission Indians v. Schwarzenegger, 602 F.3d 1019, 1028-1029, n.9 (9th Cir. 2010) (“Rincon”); accord, In re Indian Gaming Related Cases, 331 F.3d 1094, 1111 (9th Cir. 2003) (“Coyote Valley II”); North Fork Rancheria of Mono Indians of California v. State of California, 2015 U.S. Dist. LEXIS 154729, *29-30 (E.D. Cal. 2015) (“North Fork”). Manifestly, the Termination Provision does not fall within any of the six specific topics listed in Section 2710(d)(3)(C)(i)-(vi). The Termination Provision does not relate to the application of criminal and civil laws and regulations, the allocation of criminal and civil jurisdiction, the State’s costs of regulating the Tribes’ gaming, taxation of the gaming by the Tribes, remedies for breach of contract, or standards for the operation and maintenance of the Tribes’ gaming facilities. A common sense interpretation of the final, “general” category, Section 2710(d)(3)(C)(vii) would compel the conclusion that the phase “other subjects that are directly related to the operation of gaming activities” also does not encompass the Termination Provision. There is, thus, no provision of Section 2710(d)(3)(C)(i)-(vii) that, on its face, purports to authorize inclusion of the Termination Provision in the Tribes’ Compacts. The State, nevertheless, contends that the Termination Provision is a proper subject of negotiation under Section 2710(d)(3)(C)(vii), on the theory that, under a broad reading of that subsection, the Termination Provision is a subject “directly related to the operation of gaming activities.” The term “gaming activities” is not defined in the IGRA or the Senate Report on the IGRA. It has, however, been the subject of detailed analysis by a number of Federal Courts of Appeal and District Courts. See e.g., Rincon, 602 F.3d at 1033-1034; Coyote Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 16 of 29 Page ID #:4775 13 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Valley II, 331 F.3d at 1111-1114; North Fork, 2015 U.S. Dist. LEXIS 154729 at *32-39. In Michigan v. Bay Mills Indian Community, __ U.S. __, 134 S. Ct. 2024 (2014), (“Bay Mills”) the Supreme Court gave the term a definitive, and definitively limited, meaning: [N]umerous provisions of IGRA show that “class III gaming activity” means just what it sounds like--the stuff involved in playing class III games. For example, §2710(d)(3)(C)(i) refers to “the licensing and regulation of [a class III gaming] activity” and §2710(d)(9) concerns the “operation of a class III gaming activity.” Those phrases make perfect sense if “class III gaming activity” is what goes on in a casino--each roll of the dice and spin of the wheel. But they lose all meaning if, as Michigan argues, “class III gaming activity” refers equally to the off-site licensing or operation of the games. (Just plug in those words and see what happens.) See also §§2710(b)(2)(A), (b)(4)(A), (c)(4), (d)(1)(A) (similarly referring to class II or III “gaming activity”). The same holds true throughout the statute. Section 2717(a)(1) specifies fees to be paid by “each gaming operation that conducts a class II or class III gaming activity”--signifying that the gaming activity is the gambling in the poker hall, not the proceedings of the off-site administrative authority. And §§2706(a)(5) and 2713(b)(1) together describe a federal agency’s power to “clos[e] a gaming activity” for “substantial violation[s]” of law--e.g., to shut down crooked blackjack tables, not the tribal regulatory body meant to oversee them. Indeed, consider IGRA’s very first finding: Many tribes, Congress stated, “have licensed gaming activities on Indian lands,” thereby necessitating federal regulation. §2701(1). The “gaming activit[y]” is (once again) the gambling. Bay Mills, 134 S. Ct. at 2032-33. Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 17 of 29 Page ID #:4776 14 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The Supreme Court’s rejection of Michigan’s efforts to broaden the meaning of “gaming activity” in Bay Mills leaves no room for the argument that a Termination Provision is “directly related to the operation of the gaming activities.” Limiting the duration of a compact is far less directly related to the actual conduct of the Class III gaming in a tribal casino than were the licensing and administrative activities that the Supreme Court found did not qualify as gaming activities in Bay Mills. The Termination Provision is not directly related to “what goes on in a casino--each roll of the dice and spin of the wheel.” Bay Mills, 134 S. Ct. at 2032-33; accord, North Fork, 2015 U.S. Dist. LEXIS 154729 at *28-38. 6 C. The Termination Provision Conflicts With Congress’s Purposes In Enacting The IGRA. Congress’s paramount purpose in enacting the IGRA was to protect the right of tribal governments to utilize gaming to raise revenues and attain economic self- sufficiency for tribal communities in ways that would assure that tribal government gaming is properly regulated and does not conflict with the public policies of the states in which Indian lands are located. 25 U.S.C. §2702 (2). ““Congress enacted [the IGRA] to provide a legal framework within which tribes could engage in gaming-an enterprise that holds out the hope of providing tribes with the economic prosperity that has so long eluded their grasp- while setting boundaries to restrain aggression by powerful states.” Rincon Band of Luiseno Mission Indians v. Schwarzenegger, 602 F.3d 1019, 1027 (9th Cir. 2010). To comply with the IGRA, the Termination Provision would have to be consistent with these goals. Rincon, 602 F.3d 1019, 1034-37 (9th Cir. 2010); Coyote Valley II, 331 6 The only, even indirect, reference in the IGRA to termination of Class III gaming on a tribe’s Indian lands is found 25 U.S.C. §2710(d)(2)(D)(i) which authorizes tribes to revoke their gaming ordinances, thereby making Class III gaming illegal on the Indian lands of such Indian tribe. This language, when considered in the context of the language of the IGRA taken as a whole, compels the conclusion that the State may not insist that a compact include a termination date, or even propose such inclusion. Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 18 of 29 Page ID #:4777 15 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 F.3d at 1111 (9th Cir. 2003). Instead, the Termination Provision directly conflicts with the purposes of the IGRA. The mere existence of the Termination Provision in the 1999 Compact impairs the Tribes’ ability to obtain financing for projects that would promote tribal economic development, including development of non-gaming economic development projects and the construction and expansion of tribal infrastructure. SOF ¶¶ 78-80. The loss of tribal revenue resulting from a termination of the Tribes’ Compacts would have a devastating impact on all aspects of their governments, including tribal economic development, infrastructure improvements, and law enforcement, elder care, daycare, health care, social services, educational programs and student scholarship programs. SOF, ¶ 86. These adverse impacts resulting from the Termination Provision are entirely inconsistent with Congress’s intent that gaming conducted pursuant to the IGRA be “a means of promoting tribal economic development, self-sufficiency, and strong tribal governments.” 25 U.S.C. §2702 (1). Terminating the Tribes’ gaming operations would cripple tribal economic development and self-sufficiency, and weaken the Tribes’ governments, which are almost entirely dependent on revenue from gaming. SOF, ¶ 86. The Termination Provision is antithetical to Congress’s intent to protect such tribal government “gaming activities on Indian lands as a means of generating tribal governmental revenue.” 25 U.S.C. §2701(1). The threat of termination of the 1999 Compacts undermines the generation of tribal revenue by diminishing the Tribes’ current incentives and ability to continue investing in the maintenance, improvement or replacement of existing gaming facilities. That, in turn, makes it more difficult for the Tribes to retain market share in the face of ever-increasing competition, to finance the development of Reservation infrastructure required for both gaming and non-gaming activities, and diversify the Tribes’ economies. SOF, ¶ 86. In addition, the termination of the Tribes’ Compacts and the resulting loss of the principal source of tribal revenue Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 19 of 29 Page ID #:4778 16 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 would make long-term planning and procurement of advantageous financing arrangements extremely difficult, if not altogether impossible. SOF, ¶ 86. Voiding the Termination Provision would leave the 1999 Compacts with a perpetual term, allowing the Tribes to make long-term plans for capital improvements, the establishment and maintenance of vital governmental services and programs, and the acquisition of long-term financing for gaming and non-gaming projects on terms comparable to those enjoyed by other governments. 7 Perpetual gaming compacts are the most efficient, predictable, and dependable way to ensure that tribes continue to develop their economies, their self-sufficiency, and governmental programs, and to strengthen their governmental institutions. The primary purpose in enacting the IGRA was to ensure that Indian tribes engaging in gaming would be able to generate revenue to provide essential programs, benefits and services to their members. A Termination Provision requiring tribes to cease gaming is simply contrary to that purpose. D. The Termination Provision Conflicts With Congress’s Intent That The Compacting Process Not Be Used To Prevent Tribes From Engaging In Gaming. In drafting the IGRA, Congress struck a careful balance between tribes’ need to generate governmental revenue and state concerns that the introduction of forms of casino gaming not otherwise permitted by state law might attract criminal activity and conflict with state public polices. Congress did so through the mechanism of compacts. 7 Under the Tribal Governmental Tax Status Act, 26 U.S.C. §7871, Tribes are able to issue tax-exempt bonds for certain purposes. Such bonds often are issued for 20 to 30 years, longer than terms for conventional loan financing. Lengthening the repayment period increases cash flow, making more money available for tribal governmental purposes. For example, if a tribe can only obtain a 5 year loan to construct the roads, water and sewer systems and other infrastructure improvements necessary to construct a gaming facility because it only has 5 years remaining on its compact the project may not be economically feasible or if feasible result in all of the Tribe’s gaming revenue going to pay debt service, leaving the Tribes with no revenue to fund badly needed services. Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 20 of 29 Page ID #:4779 17 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 There was a reason that Congress used the term “compact” as opposed to the word “contracts” to describe the types of agreements that states and tribes were required to enter into in order for the tribes to conduct Class III gaming. The Class III gaming compacts that are entered into between Indian tribes and states pursuant to the IGRA are not commercial contracts. Congress intended that the compacts be understood to be agreements between sovereigns to allocate jurisdiction that otherwise would be exclusively tribal or federal. The Senate Committee on Indian Affairs “concluded that the use of compacts between tribes and states is the best mechanism to assure that the interests of both sovereign entities are met with respect to the regulation of complex gaming enterprises . . . .” Senate Report 100-446, p. 13 (1988). In the IGRA, Congress intended that gaming compacts would give two sovereigns the right to work together to authorize and regulate Class III gaming activities-and only the Class III gaming activities themselves-of regulatory concern to both parties. 8 Congress anticipated the potential abuse of the compacting requirement by states and explicitly declared that the compacting process may not be used by states to prevent tribes from conducting gaming: “It is the Committee’s intent that the compact requirement for class III [gaming] not be used as a justification by a State for excluding Indian tribes from such gaming . . . .” S. Rep. No. 100-446, at 13. (Emphasis added). Congress did not intend that states have greater bargaining power than tribes or that states be able to use the compacting process to interrupt or terminate tribes’ abilities 8 Gaming compacts entered into under the IGRA are similar to interstate compacts in that they define the relationship between sovereigns and set forth each sovereign’s obligations in addressing an on-going matter of significance to both sovereigns. Interstate compacts seldom include a fixed term provision. Rather, they commonly provide for negotiation of amendments or withdrawal from the compact in the event of changed circumstances. See, e.g. Tahoe Regional Planning Compact, Cal. Gov’t Code § 66801d. Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 21 of 29 Page ID #:4780 18 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 to conduct Class III gaming that is not prohibited by state law. If a gaming compact includes a termination provision and a tribe and a state do not successfully negotiate to renew or replace an existing compact, the compact would expire at the end of the term, and thereafter the tribe would be prohibited from engaging in Class III gaming, Section 2710(d)(1)(C), or face prosecution by the U.S. Department of Justice under, inter alia,18 U.S.C. §1166 and 15 U.S.C. §1175. These impacts are precisely what Congress intended to avoid. For these reasons, the Compact’s Termination Provision is fundamentally inconsistent with Congress’s intent in imposing the compacting requirement in the IGRA. E. A Termination Provision Cannot Be Included In A Compact Even If It Was Agreed To By The Tribes In Exchange For A “Meaningful Concession.” A state cannot condition its agreement to a Class III gaming compact upon the Tribes’ acceptance of terms and conditions outside the scope of the proper subjects of negotiation permitted by the IGRA, 25 U.S.C. §2710(d)(3)(C)(i)-(vii), i.e., terms that are not directly related to the regulation of the games themselves. In Coyote Valley II and Rincon, the Ninth Circuit concluded that some compact provisions that do not fall within any of the listed proper subjects of negotiation may be valid if they were agreed to in exchange for a “meaningful concession” from the state. Accord, Idaho v. Shoshone-Bannock Tribes 465 F.3d 1095, 1101-1102 (9th Cir. 2006) (“Shoshone-Bannock Tribes”). The meaningful concession exception, however, only applies to provisions that, while not falling within the explicitly identified proper subjects of negotiation, meet the two criteria established in Coyote Valley II: the provisions must be “directly related to the operation of gaming activities” and they must be compatible with the purposes of the IGRA. Rincon, 602 F.3d at 1033. Under the analysis set forth in Coyote Valley II and Rincon, a provision that is agreed to by a tribe in exchange for a meaningful concession from the state is not valid Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 22 of 29 Page ID #:4781 19 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 if it violates the IGRA or another Federal law. Rincon, 602 F.3d at 1033-1034; Coyote Valley II, 331 F.3d at 1111-1112. Because a gaming compact is a creation of the IGRA and the IGRA determines and limits the compact’s permissible scope, the negotiated terms of a compact cannot exceed what is prescribed by the IGRA. Federal courts have consistently found that contract provisions that frustrate the purpose of a statute are invalid. See, e.g., J. I. Case Co. v. NLRB, 321 U.S. 332 (1944) (“Whenever private contracts conflict with [the NLRB’s] functions, they obviously must yield or the [National Labor Relations] Act would be reduced to a futility.”); Holt v. Winpisinger, 811 F.2d 1532, 1541 (D.C. Cir. 1987) (“To allow employees to contract away ERISA’s vesting provisions would frustrate the purpose of the statute, which was enacted to protect employees from just such unfair deprivations of pension benefits.”); Spirides v. Reinhardt, 613 F.2d 826, 832 (D.C. Cir. 1979) (“[E]mployment contracts, no matter what the circumstances that justify their execution or what the terms, may not be used to waive protections granted to an individual under this [Title VII of the Civil Rights Act of 1964] or any other act of Congress.”). Furthermore, in analyzing the “meaningful concession” exception, the Ninth Circuit has made it clear that the exception is subject to the requirement that the concession not be inconsistent with the IGRA. Rincon, 602 F.3d at 1033; Coyote Valley II, 331 F.3d at 1111-1115. The State may argue that, because the Secretary has approved compacts in the past that contain a termination provision, a termination provision is consistent with the IGRA. In affirmatively approving a compact, the Secretary is required to find that the provisions of the compact do not violate the IGRA. 25 U.S.C. §2710(d)(8)(B). Previous approvals of compacts containing termination provisions should not, however, be cited as evidence that the Secretary takes the position that termination provisions do not violate the IGRA. The issue of whether a termination provision violates the IGRA has Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 23 of 29 Page ID #:4782 20 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 never been addressed in a federal court decision, so the Secretary had no specific reason to consider, or had judicial guidance on, the issue. Likewise, up until now, no tribe or state has ever raised with the Secretary whether a termination provision violated the IGRA. Since its enactment, interpretations of the IGRA have continued to evolve. The Secretary, based on recent court decisions, has concluded that provisions of the compacts that the Secretary deemed approved even 5 years ago, now violate the IGRA. Kevin Washburn, “Recurring Issues in Indian Gaming Compact Approval,” Research Paper No. 2016-02, Legal Studies Research Paper Series, University of Mexico School of Law, (“Washburn Paper”) p. 4. Similarly, a duration provision has been included in Secretarial procedures imposed after a finding of a failure on the part of the state to negotiate in good faith and is referenced in the regulations implementing the Secretarial procedures provisions of the IGRA. That should also not be interpreted to be a determination that a termination provision is a proper subject of negotiation as part of the compacting process. The purpose of, and procedures for establishing, Secretarial procedures are significantly different from the requirements for compact negotiation, agreement and approval. Compare, 25 U.S.C. §2710(d)(3)-(4) with 25 U.S.C. §2710(d)(7). The inclusion of a termination provision in the Secretarial procedures contemplates that states that have failed to negotiate in good faith will have an opportunity and an incentive to reconsider the effects of the gaming under the Secretarial procedures and, at the end of the term of the procedures, reach agreement on a compact, the mechanism Congress intended to be the primary and preferred means of authorizing and regulating Class III gaming. By raising the issue in these proceedings, the Tribes are raising an issue of first impression before the Court. The Court’s ruling in this case will bring the issue to the attention of the Secretary. Until the Secretary affirmatively addresses the issue, there is no reason to conclude that approvals of past compacts and inclusion of a termination Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 24 of 29 Page ID #:4783 21 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 provision in Secretarial procedures are evidence that the Secretary has concluded that termination provisions are consistent with the IGRA. Finally, on a number of occasions, the Secretary has concluded that a compact includes provisions that violate the IGRA, but has determined that disapproval of the compacts would cause the tribe great hardship. 9 Under those circumstances, the Secretary has allowed approval of the compact by operation of law, but appended a cover letter stating that the approval is only effective in so far as the provisions of the compact do not violate the IGRA or other federal law. 10 See, Rincon, 602 F.3d at 1041- 1042. As was demonstrated in detail in the previous sections, the Termination Provision violates both the plain wording and the purposes of the IGRA. The State could not, therefore, insist that the Tribes agree to a termination provision, even if the State offered a meaningful concession in exchange for the inclusion of the provision. F. A Perpetual Compact Is Consistent With The Plain Wording And The Purposes Of The IGRA. For the same reasons that the Termination Provision is in conflict with the purposes of the IGRA, a perpetual compact is consistent with the plain wording and purposes of the IGRA. A perpetual compact allows the states a role in the regulation of Class III gaming on Indian lands without granting the states the ability to terminate a tribe’s authority to conduct the very gaming activities that the IGRA was enacted to 9 Significantly, in the majority of states, Indian tribes are in the unfortunate position of having to take or leave the offers made by the State, because the States enjoy sovereign immunity from suit based on a claim that the state has refused to negotiate in good faith as a result of the Supreme Court’s decision in Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996). The Secretary has, therefore, allowed a number of compacts to be approved by operation of law, even if a provision of the compact appears to violate the IGRA, because the alternative would be that the Tribes would not be able to conduct gaming at all. See, e.g. Pueblo of Sandia v. Babbitt, 47 F.Supp.2d 49, 51, 56-57 (D.D.C. 1999). 10 “Since 1998, the Department has reviewed more than 500 compacts. It has disapproved at least 20 and expressed concern about more than 60 as reflected in ‘deemed approved’ letters.” Washburn Paper, p. 4. Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 25 of 29 Page ID #:4784 22 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ensure that tribes could conduct. It eliminates the possibility of states imposing unreasonable conditions on tribes’ conduct of gaming by taking advantage of the economic duress arising from the threat of termination of the tribal gaming. A perpetual compact creates the most stable environment for tribal economic development based on revenue from gaming. Without the threat of sudden reductions in tribal revenue arising from the suspension or termination of the compact, tribal programs can be planned and budgeted over longer periods of time Without the threat of termination, tribes will be able to obtain longer term and more favorable loans from financial institutions and other lenders and allow for longer term planning for both tribal gaming and non-gaming enterprises. Consistent with the absence of any language in the IGRA authorizing the inclusion of a termination provision, seventy-one tribes in eleven states have entered into Class III gaming compacts of perpetual duration and are conducting gaming pursuant to those compacts. 11 The long-term predictability of perpetual compacts also makes regulation by the tribes and the states easier and more effective. The parties are assured that the compact process will not lead to sudden or drastic changes in the conduct or regulation of the gaming based on the inability to reach agreement on a new or renewed compact. A provision in a compact allowing a state and a tribe to periodically address changed circumstances allows issues arising from future changed conditions to be addressed as well as, and perhaps more efficiently than, addressing changed conditions through compact negotiations that take place under the threat of termination of the gaming. / / / / / / / / / 11 The States are Colorado, Connecticut, Idaho, Kansas, Minnesota, Oregon, Washington, Mississippi, Montana, New York, and Nevada. SOF, ¶44, Exhibits 45-55. Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 26 of 29 Page ID #:4785 23 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 G. Any Ambiguities In The IGRA Must Be Interpreted In Favor Of The Tribes. For over 180 years, the Supreme Court has adhered to “the general rules that statutes passed for the benefit of the dependent Indian tribes…are to be liberally construed, doubtful expressions being resolved in favor of the Indians.” Alaska Pacific Fisheries Co. v. United States, 248 U.S. 78, 89 (1918). Accord, County of Yakima v. Confederated Tribes and Bands of the Yakima Indian Nation, 502 U.S. 251, 269 (1992); Montana v. Blackfeet Tribe, 471 U.S. 759, 766 (1985). There is no question that the Indian canons of construction apply to the IGRA. Artichoke Joe’s Grand Casino v. Norton, 353 F.3d 712, 731 (9th Cir. 2003). 12 Analyzing the IGRA in the light most favorable to the Indians, it is clear that insistence by the State on the inclusion of the Termination Provision would frustrate the purposes of the IGRA and therefore, should be severed from the 1999 Compact. As discussed more thoroughly above, the IGRA provides tribes with a perpetual right to conduct Class III gaming activities so long as the conditions set forth in 25 U.S.C. §2710(d)(1) are met. Assuming 25 U.S.C. §2710(d)(1) is ambiguous, application of the Indian canons requires that provision to be read narrowly with regard to the ability of a state to prevent a tribe from engaging in Class III gaming activities Rincon, 602 F. 3d at 1029, n.9. The Indian canons also require that 25 U.S.C. §2710(d)(1) be read broadly with regard to protecting a tribe’s right to engage in gaming in furtherance of the congressional policies set forth in 25 U.S.C. §2702. H. The State Entering Into A Compact With A Perpetual Term Would Not Violate California Law. Finally, it is beyond question that the State has the authority to enter into perpetual compacts, and there is nothing in Article IV, § 19(f) that would limit the authority of the Governor to execute, and the Legislature to ratify, a perpetual Class III 12 In enacting the IGRA Congress presumed that federal courts would interpret any ambiguous provision in the IGRA in the tribes’ favor. Rincon, 602 F.3d at 1027. Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 27 of 29 Page ID #:4786 24 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 gaming compact. Indeed, California long ago entered into and the Department of the Interior approved perpetual Class III simulcast wagering compacts (off-track betting) with five California Tribes. 13 SOF, ¶ 43, Exhibits 40-44. California also is currently a party to 28 interstate compacts. Among the interstate compacts entered into by the State, only one, the National Association of State Directors of Teacher Education and Certification (NASDTEC) Interstate Agreement, even arguably contains a fixed date termination provision. The other 27 interstate compacts have no specific termination date. See, for example, Agreement on Detainers, Cal. Penal Code § 1389 et seq., Driver License Compact, Cal. Veh. Code § 15000 et seq., and the Interstate Compact on Licenses of Participants in Horse Racing with Pari-Mutuel Wagering, Cal. Bus. & Prof. Code §Secs. 19527-19528. The parties to those compacts can seek to amend or withdraw from the compacts, or the compacts may terminate under specific circumstances. As long as the parties choose to remain a party to the compacts, the compacts remain in effect. See Cal. Pen. Code § 1389, Art. VIII. Thus, there is no constitutional or statutory barrier to the State agreeing to Class III gaming compacts with a perpetual duration provision or the implementation of the Tribes’ Compacts if the Court declares the Termination Provision in the Compacts void. V. CONCLUSION The Termination Provision in the Tribes’ Compacts violates the plain wording of the IGRA and is inconsistent with the Congressional purposes and intent of the IGRA. For these reasons and the reasons set forth above, the Tribes respectfully request that the Court grant the Tribes’ motion for summary judgment. Dated: February 2, 2017 Respectfully Submitted, 13 Barona Group of Capitan Grande Band of Mission Indians of the Barona Reservation, Cabazon Band of Mission Indians, San Manuel Band of Mission Indians, Sycuan Band of the Kumeyaay Nation, Viejas Group of Capitan Grande Band of Mission Indians of the Viejas Reservation Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 28 of 29 Page ID #:4787 25 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No: Case No. 5:16-cv-1347-JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RAPPORT AND MARSTON By: /s/ Lester J. Marston LESTER J. MARSTON, Attorney for Chicken Ranch Rancheria of Me-Wuk Indians and the Chemehuevi Indian Tribe Case 5:16-cv-01347-JFW-MRW Document 81-1 Filed 02/02/17 Page 29 of 29 Page ID #:4788 1 DECLARATION OF LESTER J. MARSTON IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No. 5:16-cv-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LESTER J. MARSTON California State Bar No. 081030 RAPPORT AND MARSTON 405 West Perkins Street Ukiah, California 95482 Telephone: 707-462-6846 Facsimile: 707-462-4235 Email: marston1@pacbell.net Attorney for Plaintiffs UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA - EASTERN DISTRICT CHEMEHUEVI INDIAN TRIBE, and CHICKEN RANCH RANCHERIA OF ME-WUK INDIANS, Plaintiffs, v. JERRY BROWN, Governor of California, and STATE OF CALIFORNIA, Defendants. Case No. 5:16-cv-1347- JFW-MRW DECLARATION OF LESTER J. MARSTON IN SUPPORT OF PLAINTIFFS’ CROSS MOTION FOR SUMMARY JUDGMENT Date: March 13, 2017 Time: 1:30 p.m. Courtroom: 7A Judge: Hon. John F. Walter Action Filed: June 23, 2016 I, Lester J. Marston, declare: 1. I am an attorney with the law offices of Rapport and Marston. I submit this declaration in support of the Cross-Motion for Summary Judgment filed by the plaintiffs in the above-entitled action. The information contained in this declaration is of my own personal knowledge and, if called as a witness in these proceedings, I could competently testify thereto. 2. I have served as the Tribal Attorney of the Chicken Ranch Rancheria since 1996. Case 5:16-cv-01347-JFW-MRW Document 81-2 Filed 02/02/17 Page 1 of 2 Page ID #:4789 2 DECLARATION OF LESTER J. MARSTON IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No. 5:16-cv-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3. I have served as the Tribal Attorney of the Chemehuevi Indian Tribe since 1977. 4. In a letter dated April 20, 2016 (“Letter”), addressed to Joginder Dhillon, Senior Advisor for Tribal Negotiations to the Governor of the State of California, I, together with attorney George Forman, on behalf of the Chicken Ranch Rancheria and the Chemehuevi Indian Tribe (together, “Tribes”), requested that the State of California (“State”) agree that the Termination Provision in the model class III tribal-state gaming compact (“1999 Compact”) with the State entered into by each of the Tribes violates the Indian Gaming Regulatory Act (“IGRA”) and is void, and that the Tribes have no obligation to negotiate a renewal of their 1999 Compacts. 5. The Letter further stated that, in the event that the State refused to agree that the Termination Provision in the 1999 Compact violates the IGRA and is void, and that the Tribes have no obligation to negotiate a renewal of their 1999 Compacts, the Letter should be considered formal notice that the Tribes were initiating the 1999 Compact’s dispute resolution process, pursuant to Section 9.1 of the 1999 Compact. 6. In a letter dated May 20, 2016 (“State’s Response Letter”), Dhillon informed the attorneys representing the Tribes that the State did not agree with the Tribes’ position as set forth in the Letter. I declare under penalty of perjury that the foregoing is true and correct, executed this 2rd day of February, 2017, in Ukiah, California. /s/ Lester J. Marston LESTER J. MARSTON Case 5:16-cv-01347-JFW-MRW Document 81-2 Filed 02/02/17 Page 2 of 2 Page ID #:4790 1 DECLARATION OF CRAIG POWELL IN SUPPORT OF PLAINTIFFS’ CROSS-MOTION FOR SUMMARY JUDGMENT [Case No. 5:16-cv-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LESTER J. MARSTON California State Bar No. 081030 RAPPORT AND MARSTON 405 West Perkins Street Ukiah, California 95482 Telephone: 707-462-6846 Facsimile: 707-462-4235 Email: marston1@pacbell.net Attorney for Plaintiffs UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA - EASTERN DIVISION CHEMEHUEVI INDIAN TRIBE, and CHICKEN RANCH RANCHERIA OF ME-WUK INDIANS, Plaintiffs, v. JERRY BROWN, Governor of California, and STATE OF CALIFORNIA, Defendants. Case No. 5:16-cv-1347- JFW-MRW DECLARATION OF CRAIG POWELL IN SUPPORT OF PLAINTIFFS’ CROSS-MOTION FOR SUMMARY JUDGMENT Date: March 13, 2017 Time: 1:30 p.m. Courtroom: 7A Judge: Hon. John F. Walter Action Filed: June 23, 2016 I, Craig Powell declare: I am an enrolled member of the Chicken Ranch Rancheria of Me-Wuk Indians (“Chicken Ranch”) and a former member of the Chicken Ranch Tribal Council. I submit this declaration in support of the Cross-Motion for Summary Judgment filed by the plaintiffs in the above-entitled action. The information contained in this declaration is of my own personal knowledge and, if called as a witness in these proceedings, I could competently testify thereto. 1. Chicken Ranch is a federally recognized Indian tribe organized under a Case 5:16-cv-01347-JFW-MRW Document 81-3 Filed 02/02/17 Page 1 of 7 Page ID #:4791 2 DECLARATION OF CRAIG POWELL IN SUPPORT OF PLAINTIFFS’ CROSS-MOTION FOR SUMMARY JUDGMENT [Case No. 5:16-cv-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 written constitution, which designates the Chicken Ranch Tribal Council as the governing body of the Chicken Ranch Rancheria. 2. Chicken Ranch’s tribal trust land, the Chicken Ranch Rancheria (“Rancheria”), is located in Tuolumne County, California. 3. Chicken Ranch has enacted a Gaming Ordinance, which was approved by the Chairperson of the National Indian Gaming Commission. 4. On October 8, 1999, Chicken Ranch’s Tribal Chairperson and Governor Gray Davis executed the 1999 Model Tribal-State Class III Gaming Compact with the State of California (“1999 Compact”). 5. On May 5, 2000, Chicken Ranch’s 1999 Compact was approved by Assistant Secretary - Indian Affairs Kevin Gover. 6. Chicken Ranch’s 1999 Compact was ratified by the California State Legislature. Cal. Gov’t Code § 12012.25(a)(13). 7. Chicken Ranch conducts class III gaming at the Chicken Ranch Casino and Bingo (“Chicken Ranch Casino”) pursuant to the IGRA and its 1999 Compact. 8. The Casino is located on a parcel of land held in trust by the United States for Chicken Ranch within the exterior boundaries of the Rancheria. 9. Access to the parcel upon which the Casino is located is a narrow, two lane road that runs through a residential area made up of houses built on former Reservation land by non-members. Because of the location of the Casino and the inconvenient road access to the Casino, the Casino’s business has been limited since it began operations. The Casino currently has eleven thousand square feet dedicated to class III gaming, with 349 class III machines, and a nine thousand square foot Class II bingo/event area. 10. After the Tribe began receiving revenue from its Casino, the Tribe started buying back parcels of land located within the boundaries of the original Reservation and nearby ranchland, a total of approximately 600 acres. 11. One 42-acre parcel adjacent to the Rancheria behind the Casino has been Case 5:16-cv-01347-JFW-MRW Document 81-3 Filed 02/02/17 Page 2 of 7 Page ID #:4792 3 DECLARATION OF CRAIG POWELL IN SUPPORT OF PLAINTIFFS’ CROSS-MOTION FOR SUMMARY JUDGMENT [Case No. 5:16-cv-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 taken into trust by the United States for the benefit of Chicken Ranch. 12. Two smaller parcels, which are within the original boundaries of the Rancheria, have also been returned to trust status. 13. Most of the land owned by Chicken Ranch is owned in fee status and is subject to Williamson Act contracts, which limits how the Tribe can use the land. The Tribe pays County property taxes on the fee land. 14. Despite the fact that approximately 25 tribal members currently live in Tuolumne County, Chicken Ranch is unable to provide governmental programs and services to all of its members. That is because the Casino does not produce sufficient revenue to allow Chicken Ranch to construct tribal housing or to develop other government facilities that would enable Chicken Ranch to provide governmental programs and services to its members on the Rancheria. 15. The limited revenue from the Casino also does not allow Chicken Ranch to create the infrastructure necessary to develop and utilize its trust land or fee land. 16. Of the 7 adult members of Chicken Ranch who are employed, all of them work either at the Casino or for the tribal government. Approximately 14 adult tribal members are currently unemployed, either because they are unable to work or because they cannot afford housing that is close enough to the Rancheria to make working for the Casino or the Chicken Ranch tribal government financially feasible. 17. From the time of the Chicken Ranch’s termination until well after Chicken Ranch opened its Casino, tribal members have had little access to health care. That situation was improved somewhat when Chicken Ranch opened its own health clinic in 2007, in Jamestown, California, using Casino revenue for the purchase and renovation of a former catholic church. The clinic provides only limited health care services. It is the only health care available to most of our people. 18. Because Chicken Ranch lacks the resources to create the infrastructure and facilities necessary to provide tribal programs and services to its members, the Tribal Case 5:16-cv-01347-JFW-MRW Document 81-3 Filed 02/02/17 Page 3 of 7 Page ID #:4793 4 DECLARATION OF CRAIG POWELL IN SUPPORT OF PLAINTIFFS’ CROSS-MOTION FOR SUMMARY JUDGMENT [Case No. 5:16-cv-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Council concluded that the only feasible way to provide members with the ability to obtain vital services is to make a quarterly per capita payment to each tribal member under the tribe’s revenue allocation plan, which was approved by the Secretary of the Interior (“Secretary”), pursuant to the IGRA. 19. If Chicken Ranch did not provide per capita payments from Casino revenues to the members of the tribe, all of the tribal members would qualify as low income or very low income under federal poverty guidelines. 20. The only way that Chicken Ranch can significantly increase its governmental revenue is through the development of a larger casino operation and the creation of associated non-gaming commercial enterprises. 21. Chicken Ranch has developed a plan to build a new, larger casino, a hotel, and other facilities on approximately 42 acres of trust land that are contiguous to the original Rancheria (“Project”). Chicken Ranch has also developed a related plan to build housing and infrastructure on a portion of its fee land. 22. In 2012, Chicken Ranch hired a marketing firm specializing in casino and hotel market studies to prepare a market study for the Project. 23. The market study (“Market Study”) concluded that there is a significant market for an expanded gaming facility. A true and correct copy of the Market Study is hereby incorporated by this reference and is attached to the Stipulated Statement Of Facts And Supporting Evidence In Support Of Cross-Motions For Summary Judgment And Plaintiffs’ Statement Of Uncontroverted Facts And Supporting Evidence In Support Of Cross Motions For Summary Judgment, p. 15, ¶ 50, Exhibit 56. 24. The Market Study concluded that the proposed new casino would produce approximately $100 million in gaming revenue in the first year, 2015, with an additional $14.4 million in gaming revenue if Chicken Ranch built the proposed hotel. That would have represented a nearly five-fold increase in tribal revenue over Chicken Ranch Casino’s actual 2015 revenue. Case 5:16-cv-01347-JFW-MRW Document 81-3 Filed 02/02/17 Page 4 of 7 Page ID #:4794 5 DECLARATION OF CRAIG POWELL IN SUPPORT OF PLAINTIFFS’ CROSS-MOTION FOR SUMMARY JUDGMENT [Case No. 5:16-cv-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 25. In addition, operation of the hotel was estimated to produce approximately $11 million in non-gaming revenue in the first year and a proposed golf course was projected to produce $2.7 million in revenue in the first year. 26. Chicken Ranch hired an architect to prepare an estimate of what it would cost to build the Project. The architect prepared the estimate and submitted it to the Chicken Ranch Tribal Council. The architect’s estimate prepared for the Project concluded that Chicken Ranch would need approximately $237,775,000 to construct the new casino, hotel, and related facilities. A true and correct copy of the Architect’s Estimate is hereby incorporated by this reference and attached to the Stipulated Statement Of Facts And Supporting Evidence In Support Of Cross-Motions For Summary Judgment And Plaintiffs’ Statement Of Uncontroverted Facts And Supporting Evidence In Support Of Cross Motions For Summary Judgment, p. 15, ¶ 53, Exhibit 57. 27. When Chicken Ranch contacted Oak Valley Bank, the financial institution that has provided financing for Chicken Ranch’s economic development projects in the past, seeking financing for the Project, the Bank informed Chicken Ranch that the Bank would not lend Chicken Ranch the funding necessary for the Project. 28. In a letter dated February 17, 2016, the Bank explained that its refusal to provide financing for the Project was based on the fact that the financing for the Project would have to be secured by, and be repaid from, the gaming revenues from Chicken Ranch’s casino operations, and, because of the Termination Provision in the Compact, the Compact does not encompass a sufficiently long period of time to meet the Bank’s requirements for repayment of such a loan. A true and correct copy of the February 17, 2016 letter from Oak Valley Bank to Chicken Ranch is hereby incorporated by this reference and attached to the Stipulated Statement Of Facts And Supporting Evidence In Support Of Cross-Motions For Summary Judgment And Plaintiffs’ Statement Of Uncontroverted Facts And Supporting Evidence In Support Of Cross Motions For Summary Judgment, p. 16, ¶ 54, Exhibit 58. Case 5:16-cv-01347-JFW-MRW Document 81-3 Filed 02/02/17 Page 5 of 7 Page ID #:4795 6 DECLARATION OF CRAIG POWELL IN SUPPORT OF PLAINTIFFS’ CROSS-MOTION FOR SUMMARY JUDGMENT [Case No. 5:16-cv-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29. In its February 17, 2016 letter, the Bank further informed the Tribe that financing for the Project would not be available even if the current term of the 1999 Compact was extended by the same term as the 1999 Compact, because the Bank’s lending guidelines would require that the casino revenues be available as security for a period greater than 25 years. 30. The Project would allow Chicken Ranch to develop a stable, long term gaming operation that would provide Chicken Ranch with governmental revenue for decades. It would raise the standard of living of the members of Chicken Ranch and provide the tribal government with the means to ensure that its members have sufficient housing, health care, and educational opportunities to allow Chicken Ranch’s members to achieve a reasonable standard of living for the foreseeable future. 31. Chicken Ranch has been unable to obtain the financing it needs in order to develop the Project because its 1999 Compact contains the Termination Provision. The Termination Provision, thus, prevents Chicken Ranch from engaging in precisely the kind of development that was intended by Congress when it enacted the IGRA. 32. The threat of termination of the 1999 Compact has affected the resource allocation decisions made by the Chicken Ranch Tribal Council. The threat of termination not only prevents Chicken Ranch from engaging in the development of the tribe’s commercial enterprises, as described above, potential termination discourages Chicken Ranch from long term investment in security, law enforcement, and infrastructure. It also discourages the Tribe from expanding governmental programs and services. 33. The threat of termination of the 1999 Compacts undermines the generation of tribal revenue by diminishing the Chicken Ranch’s current incentives and ability to continue investing in the maintenance, improvement or replacement of existing gaming facilities. That, in turn, makes it more difficult for the tribe to retain market share in the face of ever-increasing competition, to finance the development of Rancheria Case 5:16-cv-01347-JFW-MRW Document 81-3 Filed 02/02/17 Page 6 of 7 Page ID #:4796 7 DECLARATION OF CRAIG POWELL IN SUPPORT OF PLAINTIFFS’ CROSS-MOTION FOR SUMMARY JUDGMENT [Case No. 5:16-cv-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 infrastructure required for both gaming and non-gaming activities, and to diversify the Tribe’s economy. 34. If Chicken Ranch’s 1999 Compact actually terminates pursuant to the Termination Provision, the tribe’s economy will be devastated. Gaming revenues account for all of Chicken Ranch’s governmental revenue, except for grants. All of the tribe’s already limited programs and services will have to be terminated or drastically reduced almost immediately following termination. Chicken Ranch will have to lay off all or nearly all of its employees. The tribe will be unable to develop any of its trust or fee land. The termination of the 1999 Compact and the resulting loss of the principal source of tribal revenue will make long-term planning and procurement of advantageous financing arrangements extremely difficult, if not altogether impossible. Chicken Ranch will be forced to depend entirely on federal grants for governmental revenue. I declare under penalty of perjury that the foregoing is true and correct; executed this 2rd day of February, 2017, in Jamestown, California. /s/ Craig Powell CRAIG POWELL Case 5:16-cv-01347-JFW-MRW Document 81-3 Filed 02/02/17 Page 7 of 7 Page ID #:4797 1 DECLARATION OF CLOIS ERWIN IN SUPPORT OF PLAINTIFFS’CROSS- MOTION FOR SUMMARY JUDGMENT [CASE NO. 5:16-CV-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LESTER J. MARSTON California State Bar No. 081030 RAPPORT AND MARSTON 405 West Perkins Street Ukiah, California 95482 Telephone: 707-462-6846 Facsimile: 707-462-4235 Email: marston1@pacbell.net Attorney for Plaintiffs UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CHEMEHUEVI INDIAN TRIBE, and CHICKEN RANCH RANCHERIA OF ME-WUK INDIANS, Plaintiffs, v. JERRY BROWN, Governor of California, and STATE OF CALIFORNIA, Defendants. Case No. 5:16-cv-1347-JFW-MRW DECLARATION OF CLOIS ERWIN IN SUPPORT OF PLAINTIFFS’ CROSS-MOTION FOR SUMMARY JUDGMENT Date: March 13, 2017 Time: 1:30 p.m. Courtroom:: 7A Judge: Hon. John F. Walter Action Filed: June 23, 2016 I, Clois Erwin, declare: 1. I am an enrolled member of the Chicken Ranch Rancheria (“Chicken Ranch”) and the former Chairperson of the Chicken Ranch Tribal Council. I submit this declaration in support of the Cross-Motion for Summary Judgment filed by the plaintiffs in the above-entitled action. The information contained in this declaration is of my own personal knowledge and, if called as a witness in these proceedings, I could competently testify thereto. Case 5:16-cv-01347-JFW-MRW Document 81-4 Filed 02/02/17 Page 1 of 6 Page ID #:4798 2 DECLARATION OF CLOIS ERWIN IN SUPPORT OF PLAINTIFFS’CROSS- MOTION FOR SUMMARY JUDGMENT [CASE NO. 5:16-CV-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2. The ancestors of the current members of Chicken Ranch have occupied the lands that currently comprise the Chicken Ranch Rancheria and the surrounding area since long before the arrival of Europeans in North America. 3. On October 21, 1908, the Commissioner of Indian Affairs sent a letter to the Secretary of the Interior (“Secretary”) requesting that the Secretary issue an order creating an Indian reservation for the ancestors of the current members of the Tribe. 4. On October 24, 1908, pursuant to the Commissioner’s recommendations, the Secretary issued an order directing the United States General Lands Office “to reserve from all forms of disposition the E ½ of the E ½ of the NE ¼ of Sec. 20, T. 1 N., R. 14 E., M.D.M., California for the use of the band of … Indians residing thereon.” (“Rancheria”.) 5. The Rancheria, as originally created by the Secretary’s order, consisted of approximately 40 acres of land located near Jamestown, in Tuolumne County, California. 6. At the time that it was created, the Rancheria was occupied by a group of Eastern Sierra Miwok Indians. 7. From the time they were rounded up and placed on the Rancheria until the time of Chicken Ranch’s termination in 1961, the members of Chicken Ranch lived in poverty. 8. Chicken Ranch was illegally terminated pursuant to Pub. L. No. 85-671, 72 Stat. 619 (1958) (“Rancheria Act”). 9. Pursuant to the Rancheria Act, the Secretary developed a distribution plan for the Rancheria, which, as a result of misrepresentations and duress on the part of officials of the federal government, was “approved” by a majority of the Chicken Ranch’s members in 1959. The plan provided for subdivision and conveyance of the 40 acres of Rancheria trust land to 16 adults members of the Tribe in fee. 10. The illegal termination of Chicken Ranch was completed on August 1, Case 5:16-cv-01347-JFW-MRW Document 81-4 Filed 02/02/17 Page 2 of 6 Page ID #:4799 3 DECLARATION OF CLOIS ERWIN IN SUPPORT OF PLAINTIFFS’CROSS- MOTION FOR SUMMARY JUDGMENT [CASE NO. 5:16-CV-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1961. 11. The termination of Chicken Ranch extinguished the existence of the tribe, ended the rights of tribal members to receive special federal services as Indians, ended the trust status of the Rancheria lands, and exposed the Rancheria lands to state regulation and taxation. 12. Prior to termination, tribal members lived in substandard housing with little or no infrastructure. Tribal member homes lacked indoor plumbing. There was no water or sewage system on the Rancheria. 13. Despite the requirements of the Rancheria Act, officials of the Department of the Interior did not install a proper water or sewer system on the Rancheria prior to the final termination of Chicken Ranch and the trust status of the Rancheria lands. 14. After the members of the tribe “agreed” to the distribution plan, the Department of the Interior built a cistern well, which provided water to eight tribal homes. The cistern was filled by seepage from a PG&E irrigation ditch. Many summers the cistern went dry. 15. Tuolumne County piped the PG&E ditch in 1989 or 1990, when non- member property owners developed land adjacent to the Rancheria. 16. One of the leech lines built by a non-member property owner impacted the drainage area of the cistern, resulting in fecal coliform contamination of the water. The water was only safe to drink after boiling. This was not discovered by the Chicken Ranch community until after I had contracted hepatitis. 17. The cistern eventually became useless as a result of the PG&E piping of the ditch. 18. After termination, the sewer system on the Rancheria remained mainly outhouses or hand dug cesspools. That may also have contributed to the contamination of our drinking water. 19. As soon as the trust status of the Rancheria land was terminated, the parcels Case 5:16-cv-01347-JFW-MRW Document 81-4 Filed 02/02/17 Page 3 of 6 Page ID #:4800 4 DECLARATION OF CLOIS ERWIN IN SUPPORT OF PLAINTIFFS’CROSS- MOTION FOR SUMMARY JUDGMENT [CASE NO. 5:16-CV-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 of land assigned to the tribal members under the distribution plan and the dwellings built on the parcels became subject to Tuolumne County’s planning and zoning laws, the California Subdivision Map Act, and the County’s uniform construction standards. 20. Almost immediately after termination went into effect, Tuolumne County officials issued citations to tribal members because their houses and parcels failed to meet State and County zoning and subdivision requirements and uniform construction standards. As a result, within weeks of termination, many tribal members were prohibited from inhabiting their homes. Few tribal members had enough money to bring their homes up to the applicable zoning and building code standards, which forced many tribal members to sell their property. 21. The former Rancheria parcels also became subject to County real property tax immediately after termination, upon the distribution of the parcels and the recording of the deeds with the County Recorder’s Office that transferred ownership of the parcels to the tribal members. Most tribal members, many of whom were not even aware of their property tax liability, were too poor to pay the taxes. 22. By the late 1960’s, the only land that was still owned by a tribal member was land deeded to my mother, Inez Mathiesen. She deeded one acre of her property to me and one to my brother, leaving her with three acres. Ownership of all of the other former Reservation parcels eventually passed into non-Indian ownership. 23. In 1983, the United States District Court for the Northern District of California entered a “Stipulation for Entry of Judgment” and an “Order Approving Entry of Final Judgment in Action” in Hardwick v. United States, N.D. Cal. Case No. c- 79-1719-SW. 24. In 1985, the court entered a “Stipulation for Entry of Judgment” in the case relating specifically to Chicken Ranch and its members. 25. The judgments provided for the reinstatement of the status as Indians of the members of Chicken Ranch and their eligibility for the federal benefits and services Case 5:16-cv-01347-JFW-MRW Document 81-4 Filed 02/02/17 Page 4 of 6 Page ID #:4801 5 DECLARATION OF CLOIS ERWIN IN SUPPORT OF PLAINTIFFS’CROSS- MOTION FOR SUMMARY JUDGMENT [CASE NO. 5:16-CV-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 provided to Indians by the United States, the reinstatement of the recognition of the Chicken Ranch’s status as a federally recognized Indian tribe, the reinstatement of the application to the tribe’s members of all federal statutes that affect Indians because of their status as Indians, the establishment of the right of the members of Chicken Ranch to restore to trust status any Rancheria land that was not owned by non-Indians, the reestablishment of the boundaries of the Rancheria, and the restoration of all of the lands within the original boundaries of the Rancheria to the status of “Indian country” as defined by 18 U.S.C. § 1151. 26. After the Hardwick judgments were entered, my mother had her remaining three-acre parcel of land taken back into trust by the United States for her benefit. 27. After the land was taken back into trust, my mother expressed great relief that the land could no longer be taken from her. 28. At the time that the land deeded to my mother was taken back into trust by the federal government, my mother’s home was heated by burning wood. 29. The house had only cold running water from a well my brothers had drilled, which was at least drinkable. The house had no bathroom or bathing facilities. 30. Sheetrock and insulation were installed in only one bedroom of the house. The rest of the house was not insulated. A few years earlier, we were forced to update the wiring in my mother’s house, as it had begun to cause problems. 31. My family bathed at my mobile home near my mother’s house. The sewage from my mobile home drained into a hand dug cesspool. 32. At the time that my mother’s land was restored to trust status, all of the Chicken Ranch’s members qualified as low-income or very low-income, according to federal poverty guidelines. Tribal members earned money by working for others, doing mostly manual labor. 33. My mother cleaned houses, did washing, and whatever else she could to earn a dollar. My brothers went into construction and eventually learned to run Case 5:16-cv-01347-JFW-MRW Document 81-4 Filed 02/02/17 Page 5 of 6 Page ID #:4802 6 DECLARATION OF CLOIS ERWIN IN SUPPORT OF PLAINTIFFS’CROSS- MOTION FOR SUMMARY JUDGMENT [CASE NO. 5:16-CV-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 pneumatic drills for blasting with explosives. I worked for the Tuolumne Tribes’ health project off and on according to funding. I also cleaned motels and later county buildings until I was unable to work. At the time that my mother’s land was restored to trust status, my son was finishing high school and was working with my brother cutting and selling firewood. 34. Thus, like other California tribes, the history of the Chicken Ranch Rancheria is one of relentless oppression, broken promises, and theft of the Tribe’s and its members’ property perpetrated by the federal government, the State government, local government, and non-Indian individuals. It resulted in the removal of tribal members from even the tiny parcel of land upon which they were forced to relocate in the early 20 th Century, the loss of nearly all of their land and possessions, and, for more than 20 years, the loss of their identity as members of the Tribe. I declare under penalty of perjury that the foregoing is true and correct; executed this 2rd day of February, 2017, in Jamestown, California. /s/ Clois Erwin CLOIS ERWIN Case 5:16-cv-01347-JFW-MRW Document 81-4 Filed 02/02/17 Page 6 of 6 Page ID #:4803 1 DECLARATION OF GLEN H. LODGE IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No. 5:16-cv-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LESTER J. MARSTON California State Bar No. 081030 RAPPORT AND MARSTON 405 West Perkins Street Ukiah, California 95482 Telephone: 707-462-6846 Facsimile: 707-462-4235 Email: marston1@pacbell.net Attorney for Plaintiffs UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA - EASTERN DISTRICT CHEMEHUEVI INDIAN TRIBE, and CHICKEN RANCH RANCHERIA OF ME-WUK INDIANS, Plaintiffs, v. JERRY BROWN, Governor of California, and STATE OF CALIFORNIA, Defendants. Case No. 5:16-cv-1347- JFW-MRW DECLARATION OF GLENN H. LODGE IN SUPPORT OF PLAINTIFFS’ CROSS MOTION FOR SUMMARY JUDGMENT Date: March 13, 2017 Time: 1:30 p.m. Courtroom: 7A Judge: Hon. John F. Walter Action Filed: June 23, 2016 I, Glenn H. Lodge, declare: 1. I am an enrolled member of the Chemehuevi Indian Tribe (“Tribe”), the current Vice-Chairman of the Chemehuevi Tribal Council (“Council”), and a resident of the Chemehuevi Indian Reservation (“Reservation”). I submit this declaration in support of the Cross-Motion for Summary Judgment filed by the plaintiffs in the above-entitled action. The information contained in this declaration is of my own personal knowledge and, if called as a witness in these proceedings, I could competently testify thereto. Case 5:16-cv-01347-JFW-MRW Document 81-5 Filed 02/02/17 Page 1 of 2 Page ID #:4804 2 DECLARATION OF GLEN H. LODGE IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No. 5:16-cv-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2. I have served as Vice-Chairman of the Chemehuevi Indian Tribe since 2014. 3. On May 3, 2016, I, together with other representatives of the Tribes and representatives of the State, met in person to confer with regard to the Tribes’ request that the State agree that the Termination Provision in the 1999 Compacts violates the IGRA, is void, and that the Tribes have no obligation under their 1999 Compacts to negotiate a renewal of their 1999 Compacts. I declare under penalty of perjury that the foregoing is true and correct, executed this 31st day of January, 2017, in Havasu Lake, California. /s/ Glenn H. Lodge GLENN H. LODGE Case 5:16-cv-01347-JFW-MRW Document 81-5 Filed 02/02/17 Page 2 of 2 Page ID #:4805 1 DECLARATION OF EDWARD D. “TITO” SMITH IN SUPPORT OF PLAINTIFFS’ CROSS-MOTION FOR SUMMARY JUDGMENT [Case No. 5:16-cv-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LESTER J. MARSTON California State Bar No. 081030 RAPPORT AND MARSTON 405 West Perkins Street Ukiah, California 95482 Telephone: 707-462-6846 Facsimile: 707-462-4235 Email: marston1@pacbell.net Attorney for Plaintiffs UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA - EASTERN DIVISION CHEMEHUEVI INDIAN TRIBE, and CHICKEN RANCH RANCHERIA OF ME-WUK INDIANS, Plaintiffs, v. JERRY BROWN, Governor of California, and STATE OF CALIFORNIA, Defendants. Case No. 5:16-cv-1347- JFW-MRW DECLARATION OF EDWARD D. “TITO” SMITH IN SUPPORT OF PLAINTIFFS’ CROSS-MOTION FOR SUMMARY JUDGMENT Date: March 13, 2017 Time: 1:30 p.m. Courtroom: 7A Judge: Hon. John F. Walter Action Filed: June 23, 2016 I, Edward D. “Tito” Smith, declare: 1. I am an enrolled member of the Chemehuevi Indian Tribe (“Tribe”), the former Chairman of the Chemehuevi Tribal Council (“Council”), and a resident of the Chemehuevi Indian Reservation (“Reservation”). I submit this declaration in support of the Cross-Motion for Summary Judgment filed by the plaintiffs in the above-entitled action. The information contained in this declaration is of my own personal knowledge and, if called as a witness in these proceedings, I could competently testify thereto. 2. I served as Chairman of the Council from approximately 2002 to 2005 and from 2012 to 2015. I served as Vice-Chairman of the Council from approximately 1996 Case 5:16-cv-01347-JFW-MRW Document 81-6 Filed 02/02/17 Page 1 of 3 Page ID #:4806 2 DECLARATION OF EDWARD D. “TITO” SMITH IN SUPPORT OF PLAINTIFFS’ CROSS-MOTION FOR SUMMARY JUDGMENT [Case No. 5:16-cv-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 to 1999. 3. For more than a decade, the Tribe has been engaged in efforts to significantly develop its Reservation economy. Beginning in 2003, the Tribe, with financial assistance from the San Manuel Band of Mission Indians, created a master plan for the development of the southern portion of the Reservation (“Master Plan Project”). 4. At the time that the Master Plan Project was created, I was serving as Chairman of the Council. 5. The Master Plan Project included a variety of components, including hotels, a casino, golf courses, tennis facilities, a spa/fitness center, a water park, an equestrian center, low density custom home parcels, spa villas, condominiums and time shares. The Master Plan Project was designed to comply with the Tribe’s zoning and land use plans, and emphasized environmentally appropriate land use and designs. A true and correct copy of the Master Plan for the development of the Southern portion of the Reservation is hereby incorporated by this reference and attached to the Stipulated Statement Of Facts And Supporting Evidence In Support Of Cross-Motions For Summary Judgment And Plaintiffs’ Statement Of Uncontroverted Facts And Supporting Evidence In Support Of Cross Motions For Summary Judgment, p. 19, ¶ 63, Exhibit 59. 6. Phase One of the Master Plan Project was budgeted for $314,937,241 in 2003, and, viewed in isolation, appeared to be financially viable. However, the development of the Master Plan Project required $58,460,250 in infrastructure improvements. Currently, there is no paved road that allows for year-round access to the southern portion of the Reservation from the northern section, where the Tribe’s residential, governmental, and commercial facilities are located. There is also no water, sewer, telephone, Internet or electrical transmission infrastructure in the southern section of the Reservation. 7. The Tribe might have been able to find financial support for the Master Plan Project, based on the projected revenues from the project, but no financial Case 5:16-cv-01347-JFW-MRW Document 81-6 Filed 02/02/17 Page 2 of 3 Page ID #:4807 3 DECLARATION OF EDWARD D. “TITO” SMITH IN SUPPORT OF PLAINTIFFS’ CROSS-MOTION FOR SUMMARY JUDGMENT [Case No. 5:16-cv-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 institution or investor was willing to lend the Tribe the money for both the project and the infrastructure improvements needed to allow the Master Plan Project to go forward. 8. The only viable way to finance the construction of the infrastructure improvements necessary to support the Master Plan Project and still obtain financing for the Project would have been through 30-year bond financing paid for out of revenue generated by the Tribe’s gaming operation and other commercial enterprises. 9. The Tribe’s compact term, even if renewed for an additional term of 20 years, would not cover the entire 30-year period of the bond financing. 10. Without the certainty of income from the Tribe’s gaming operation throughout the entire 30-year bond-financing period, no financial institution was willing to underwrite the necessary bond financing for the Master Plan Project. 11. The Master Plan Project would have provided the Tribe with a wide array of benefits. It would have allowed the Tribe to develop extensive portions of its Reservation lands that are currently almost entirely unused and undeveloped. It would have provided the Tribe with substantial non-gaming revenue as well as increased gaming revenue, thereby significantly diversifying the Tribe’s revenue base while setting the groundwork for long term development and sustained revenue for decades. It would also have allowed the Tribe to concentrate its commercial activities in the southern part of the Reservation, while allowing the Tribe to use the northern section of the Reservation for tribal housing and governmental facilities. 12. Because of the Tribe’s inability to obtain long term bond financing, the Master Plan Project was shelved in 2007. I declare under penalty of perjury that the foregoing is true and correct, executed this 2rd day of February, 2017, in Havasu Lake, California. /s/ Edward D. “Tito” Smith EDWARD D. “TITO” SMITH Case 5:16-cv-01347-JFW-MRW Document 81-6 Filed 02/02/17 Page 3 of 3 Page ID #:4808 1 DECLARATION OF CHARLES WOOD IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No. 5:16-cv-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LESTER J. MARSTON California State Bar No. 081030 RAPPORT AND MARSTON 405 West Perkins Street Ukiah, California 95482 Telephone: 707-462-6846 Facsimile: 707-462-4235 Email: marston1@pacbell.net Attorney for Plaintiffs UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA - EASTERN DIVISION CHEMEHUEVI INDIAN TRIBE, and CHICKEN RANCH RANCHERIA OF ME-WUK INDIANS, Plaintiffs, v. JERRY BROWN, Governor of California, and STATE OF CALIFORNIA, Defendants. Case No. 5:16-cv-1347- JFW-MRW DECLARATION OF CHARLES WOOD IN SUPPORT OF PLAINTIFFS’ CROSS-MOTION FOR SUMMARY JUDGMENT Date: March 13, 2017 Time: 1:30 p.m. Courtroom: 7A Judge: Hon. John F. Walter Action Filed: June 23, 2016 I, Charles Wood, declare: 1. I am an enrolled member of the Chemehuevi Indian Tribe (“Tribe”), the current Chairman of the Chemehuevi Tribal Council (“Council”), and a resident of the Chemehuevi Indian Reservation (“Reservation”). I submit this declaration in support of the Cross-Motion for Summary Judgment filed by the plaintiffs in the above-entitled action. The information contained in this declaration is of my own personal knowledge and, if called as a witness in these proceedings, I could competently testify thereto. Case 5:16-cv-01347-JFW-MRW Document 81-7 Filed 02/02/17 Page 1 of 11 Page ID #:4809 2 DECLARATION OF CHARLES WOOD IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No. 5:16-cv-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2. I have been Chairman of the Tribe since May, 2015. I was previously Chairman from 2005-2012. 3. The Tribe is a federally recognized Indian tribe organized under Section 16 of the Indian Reorganization Act of 1934, (25 U.S.C. § 476) (“IRA”) pursuant to a written constitution, which was approved by the Secretary of the Interior (“Secretary”) and which designates the Council as the governing body of the Tribe. 4. The Tribe is the beneficial owner of the Chemehuevi Indian Reservation, which consists of approximately 32,487 acres of trust land located in San Bernardino County, California. 5. Since time immemorial, the Chemehuevi Indians have occupied and used the lands within and adjacent to the Chemehuevi Valley, including all the lands currently comprising the Reservation. 6. Pursuant to the Act of March 3, 1853, 10 Stat. 244 (1853) (“1853 Act”), Congress withdrew from settlement and protected from white encroachment all lands in the occupation or possession of any Indian tribe, including the Tribe, in the State of California. 7. On February 2, 1907, the Secretary issued an order to the General Land Office establishing the boundaries of the Chemehuevi Indian Reservation. 8. At the time of its original establishment, the Chemehuevi Indian Reservation consisted of approximately 36,000 acres of land. 9. A majority of the Reservation comprised high mesa desert that was not suitable for farming, cattle grazing, or any other form of development. Harsh soil conditions, combined with temperatures commonly exceeding 120° Fahrenheit in the summer, made it difficult to inhabit. 10. The other, far smaller, portion of the Reservation was a steep valley leading down to the Colorado River. Periodic flooding from the river left deposits of fertile soil along the riverbanks at the base of the valley, which, combined with the cool air from Case 5:16-cv-01347-JFW-MRW Document 81-7 Filed 02/02/17 Page 2 of 11 Page ID #:4810 3 DECLARATION OF CHARLES WOOD IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No. 5:16-cv-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the shadowed river bottom caused by the walls of the valley, made the strip of land suitable for both agriculture and human habitation. 11. All of the tribal members resided in the valley. 12. On July 8, 1940, pursuant to the “Act for the Acquisition of Indian Lands for the Parker Dam and Reservoir Project, and for Other Purposes,” 54 Stat. 744 (1940), the United States condemned approximately 7,776 acres of the Tribe’s original Reservation lands for the purpose of constructing Parker Dam and creating Lake Havasu. The condemned land was comprised of all of the land within the Reservation located below the 465-foot contour line. 13. The lands taken by the United States for the Parker Dam project included all of the Tribe’s Reservation land located within the Chemehuevi Valley that was suitable for agriculture and human habitation. The condemnation of the only arable lands on the Reservation and the subsequent flooding of the lands to create Lake Havasu forced the members of the Tribe to leave the Reservation. As of 1955, only one tribal- member family remained on the Reservation. 14. After the construction of the Parker Dam, Lake Havasu did not rise to the expected level. The lake water rose to the 450-foot contour line, leaving a strip of land (the “Shoreline”) owned by the United States of America lying between the high water mark of the Lake and the 465-foot contour line, where the lands owned by the United States in trust for the Tribe began. 15. The Bureau of Land Management and the United States Fish and Wildlife Service administered the Shoreline until November 1, 1974. During the time that it administered the Shoreline, the United States, through those agencies, issued permits to non-Indians to operate concessions on the property, including Havasu Landing Resort, Inc., a for-profit California corporation, created for the purpose of constructing and operating a mobile home park, marina, hotel and small cafe. A number of non-Indian Case 5:16-cv-01347-JFW-MRW Document 81-7 Filed 02/02/17 Page 3 of 11 Page ID #:4811 4 DECLARATION OF CHARLES WOOD IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No. 5:16-cv-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 individuals were granted leases for lakeside parcels, upon which they constructed vacation cabins. 16. On November 1, 1974, the Secretary issued an order restoring to the equitable ownership of the Tribe the land between the 450-foot contour line and the 465-foot contour line, the approximately 2,000 acres of condemned land located within the Shoreline (“Shoreline Restoration Order”). At that time, the only buildings on the Reservation were the Havasu Landing Resort and the vacation cabins. The infrastructure on the Reservation was limited to a county road, wells, septic tanks, and the Havasu Water Company’s water treatment plant and distribution system that served only a non- Indian community in one section of the Reservation. 17. Immediately after the Secretary issued the Shoreline Restoration Order, Havasu Landing, Inc. sued the Secretary in an attempt to invalidate the order. 18. After years of litigation, the parties entered into a settlement agreement. Under the settlement agreement, the Tribe agreed to purchase all of the assets of Havasu Landing Resort, Inc. from the non-Indian owners, at a cost of $1.2 million dollars, which the Tribe financed through a loan from the United States revolving loan fund created pursuant to the IRA. 19. The Tribe was forced to borrow an additional $1 Million Dollars from the revolving loan fund to construct rudimentary infrastructure improvements for the Resort. As a result, from the outset of its efforts to make the Reservation habitable, to create an economic foundation for the Tribe’s activities, and to attract tribal members back to the Reservation, the Tribe was burdened with significant debt. 20. In the first years of the Tribe’s efforts to create tribal institutions and facilities, the Havasu Landing Resort (“Resort”) was the Tribe’s only economic development enterprise, and revenue from the Resort was entirely dedicated to debt service on the loans from the United States. Case 5:16-cv-01347-JFW-MRW Document 81-7 Filed 02/02/17 Page 4 of 11 Page ID #:4812 5 DECLARATION OF CHARLES WOOD IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No. 5:16-cv-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 21. Between 1974, the year that the Tribe began operating the Resort, and 1988, the year that the Indian Gaming Regulatory Act, 25 U.S.C. § 2701 et seq. (“IGRA”), was enacted, the Tribe only generated enough revenue from the operation of the Resort to maintain the Reservation’s existing infrastructure and construct three new mobile home parks. 22. On September 10, 1999, the Tribe Tribal Chairperson and Governor Gray Davis executed the 1999 Model Tribal-State Class III Gaming Compact with the State of California (“1999 Compact”). 23. The Tribe’s 1999 Compact was ratified by the California State Legislature. Cal. Gov’t Code § 12012.25(a)(12). 24. On May 5, 2000, Assistant Secretary - Indian Affairs Kevin Gover approved the Tribe’s 1999 Compact. 25. The Tribe has enacted a Gaming Ordinance, which was approved by the Chairperson of the National Indian Gaming Commission. 26. The Tribe conducts class III gaming at the Havasu Landing Resort and Casino (“Havasu Landing Casino”) pursuant to the IGRA and its 1999 Compact. 27. The Havasu Landing Casino is located on land owned by the United States of America in trust for the Tribe within the exterior boundaries of the Reservation. 28. The Havasu Landing Casino initially operated only 100 class III gaming machines. 29. In 2005, the Tribe secured a loan from another gaming tribe, expanded the casino, and increased the number of class III games to 220 class III gaming devices and six (6) blackjack tables, which incrementally increased the Tribe’s revenues. 30. The revenue received by the tribal government from the operation of the Havasu Landing Casino is insufficient to allow the tribal government to resolve numerous problems that plague the tribal member population residing on the Reservation: poverty, lack of infrastructure, inadequate educational facilities, a high rate Case 5:16-cv-01347-JFW-MRW Document 81-7 Filed 02/02/17 Page 5 of 11 Page ID #:4813 6 DECLARATION OF CHARLES WOOD IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No. 5:16-cv-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 of alcohol and substance abuse, lack of sufficient medical and emergency services, and chronic power outages. 31. There are approximately 250 residents on the Reservation, including non- tribal spouses and children. That population does not include the visitors to Resort’s RV Park or the residents of the Section 36, which is a non-Indian community. Of those 250 residents, approximately 200 are tribal members. Approximately 1000 tribal members live off of the Reservation. 32. The current unemployment rate among adult tribal members on the Reservation is approximately 51%, significantly higher than the unemployment rates for the County of San Bernardino and the nearby City of Needles. 33. The employment opportunities on the Reservation are insufficient for the current Reservation population and are woefully inadequate to attract a significant percentage of the tribal members living off of the Reservation to return to the Reservation. 34. The limited housing available on the Reservation is also a major obstacle to the return of tribal members to the Reservation. Currently, the Reservation has housing sufficient for only 119 households. Ninety-eight of those homes were constructed for low-income families, using grant funding from the U.S. Department of Housing and Urban Development and the U.S. Department of Agriculture. 35. The lack of water and sewer infrastructure has significantly restricted the Tribe’s ability to expand housing, government facilities, and commercial facilities on the Reservation. In the last two (2) years, the Tribe has performed multiple repairs and upgrades to the Reservation’s water and sewer infrastructure. Even with those repairs and upgrades, the Tribe’s water and sewer infrastructure extends to only 8,000 acres of the Reservation’s 32,487 total acres, all in the northern half of the Reservation. 36. The educational facilities available to the Tribe’s student-age population are also inadequate for the needs of the Tribe. The Tribe has a K-5 school on the Case 5:16-cv-01347-JFW-MRW Document 81-7 Filed 02/02/17 Page 6 of 11 Page ID #:4814 7 DECLARATION OF CHARLES WOOD IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No. 5:16-cv-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Reservation, which is staffed by teachers assigned to the Tribe’s school by the San Bernardino County Office of Education. The Tribe’s school is periodically forced to close as a result of a lack of teachers available to travel to the Reservation to work. The Tribe’s school was closed for six (6) years and only recently reopened during the 2015- 2016 academic year. 37. There is no middle or high school on the Reservation. In order to attend middle or high school, students living on the Reservation are compelled to ride for an hour in each direction to attend high school in Needles, California, which is approximately 45 miles away from the Reservation. Reservation students 6th through 12th grade must be on the school bus at 6:15 a.m. to get to school on time, and share one bus regardless of age. 38. Up until recently, the middle and high school students had to travel in a bus that lacked air conditioning, despite the fact that temperatures on the Reservation can reach 120° Fahrenheit during April, May, and June. 39. The chronic absenteeism rate for the Tribe’s high school students is significantly higher than the rates for the State of California and San Bernardino County. Only three (3) Reservation students graduated from high school in 2015. Only 10 Reservation students have graduated high school since 2011. 40. Tribal members on the Reservation suffer numerous health problems at higher rates than those of the general populations of San Bernardino County and the State of California. 41. The significant lack of medical and emergency services on the Reservation is another major obstacle to the return of tribal members to the Reservation. The Tribe does not have sufficient revenue to pay for health insurance for its members who cannot afford it themselves and therefore, tribal members normally rely on health care provided by the Indian Health Service (“IHS”). Case 5:16-cv-01347-JFW-MRW Document 81-7 Filed 02/02/17 Page 7 of 11 Page ID #:4815 8 DECLARATION OF CHARLES WOOD IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No. 5:16-cv-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 42. There is no hospital on the Reservation. The IHS runs a clinic three days a week on the Reservation, and periodically cancels entire days of service. The clinic services are limited to check-ups, minor exams, and dental and vision. Only one doctor and one nurse are responsible for providing the clinic services to the 200 tribal members who reside on the Reservation. 43. In non-life threatening emergency service situations, tribal members must be taken by ambulance to the Colorado River Medical Center in Needles, 45 miles away, which has limited facilities, or Parker, Arizona, 65 miles away. For more severe and life-threatening medical situations, tribal members must be medevac’d by helicopter to Phoenix, Las Vegas, or Loma Linda. 44. The County of San Bernardino maintains, intermittently, one county road on the Reservation. The Tribe maintains all of the other roads on the Reservation, with assistance from the Bureau of Indian Affairs (“BIA”). The roads are often in need of maintenance and repair due to wash outs and flash flooding. 45. The Tribe experiences chronic power outages because of unreliable electrical service provided to the Reservation by Southern California Edison. Power outages occur as often as ten times or more a year. There were five (5) power outages in 2016. Some of the power outages have been scheduled, but, on average, half of the power outages are unexpected and unplanned. The scheduled power outages are usually scheduled to last approximately four (4) hours, but, recently, the power outages have exceeded the scheduled time and have lasted as long as nine (9) hours. 46. Because of the extreme heat on the Reservation, power outages pose a significant danger to the health of tribal members, especially elderly tribal members. Without air conditioning in their homes, tribal members must go to - or, in the case of the sick or elderly, be transported to - a tribal facility, such as the Tribe’s community center, which has a generator that can continue to power the air conditioner in the gym. 47. The frequent power outages also interfere with tribal commercial Case 5:16-cv-01347-JFW-MRW Document 81-7 Filed 02/02/17 Page 8 of 11 Page ID #:4816 9 DECLARATION OF CHARLES WOOD IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No. 5:16-cv-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 operations. 48. Over the last decade, the Tribe has attempted to develop a solar power generation facility on the Reservation to meet the Tribe’s energy needs. The project could not go forward because the cost of the necessary upgrade of the Reservation’s transmission lines was cost prohibitive. 49. The Tribe has constructed tribal offices, but those buildings are small and limited in their utility. 50. In order to raise the standard of living of the majority of members of the Tribe above low-income and very low income levels, and in order to provide programs that ensure that all tribal members who wish to participate in tribal programs have access to decent employment opportunities, housing, health care, education, properly maintained roads, and reliable electrical power, the Tribe has been engaged, for more than a decade, in efforts to significantly develop its Reservation economy and thereby increase its governmental revenue. 51. Because of the Tribe’s inability to obtain long term bond financing, as a result of the 1999 Compact’s termination provision, the Tribe’s effort to engage in large scale development of the Reservation, the Master Plan Project, was shelved in 2007. See Declaration of Edward D. “Tito” Smith in Support of Plaintiffs’ Cross-Motion for Summary Judgment. The Tribe has, since, spent years working on a far less ambitious project, the construction of a new casino, hotel, and marina in the northern portion of the Reservation (the “H2O Project”). 52. The H2O Project has also been limited by the lack of funding. Despite a market study projecting that the H2O Project would be economically feasible, four banks declined to fund the project because the Tribe was seeking 10 year financing and it only had seven years remaining on its 1999 Compact. 53. It was not until the Tribe convinced Great Western Bank (“Bank”) that, if the State refused to reach agreement on a new compact, the Tribe would be able to use Case 5:16-cv-01347-JFW-MRW Document 81-7 Filed 02/02/17 Page 9 of 11 Page ID #:4817 10 DECLARATION OF CHARLES WOOD IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No. 5:16-cv-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the IGRA bad faith litigation provisions to compel the State to enter into a new compact, or that the Tribe would be able to obtain secretarial procedures that would allow it to continue to engage in class III gaming after the Compact expired, that the bank eventually agreed to fund the H2O Project. 54. In 2016, Chemehuevi obtained two loans from Great Western Bank totaling approximately $30,000,000.00 to finance the construction of a new hotel and casino. The Bureau of Indian Affairs agreed to guarantee repayment of 90% of the hotel loan in the event that the Tribe defaults on the hotel loan. The loan that the Tribe received from Great Western Bank requires that the Tribe pay off the loan in 10 years and granted the Bank, as security, an interest in every significant asset owed by the Tribe, including, but not limited to, the income and assets of the Resort, the Tribe’s fee land located in Havasu City, Arizona, and the Tribe’s ferry boat. 55. The increased revenue that the Tribe hopes to receive from the H2O Project will be only a small percentage of the anticipated revenues from the Master Plan Project. The H2O Project will only allow the Tribe to engage in much more limited and much less diversified development than it would under the Master Plan Project. It will not permit the Tribe to develop commercial enterprises in the southern half of the Reservation, and will not permit the Tribe to develop the infrastructure needed to even incrementally develop the southern portion of the Reservation for any purpose in the foreseeable future. 56. The threat of termination of the 1999 Compact has affected the resource allocation decisions made by the Tribal Council. The threat of termination not only prevents the Tribe from engaging in the development of the Tribe’s commercial enterprises, as described above, potential termination discourages the Tribe from long term investment in security, law enforcement, and infrastructure. It also discourages the Tribe from expanding governmental programs and services. Case 5:16-cv-01347-JFW-MRW Document 81-7 Filed 02/02/17 Page 10 of 11 Page ID #:4818 11 DECLARATION OF CHARLES WOOD IN SUPPORT OF PLAINTIFFS’ CROSS- MOTION FOR SUMMARY JUDGMENT [Case No. 5:16-cv-1347- JFW-MRW] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I declare under penalty of perjury that the foregoing is true and correct, executed this 2nd day of February, 2017, in Havasu Lake, California. /s/ Charles F. Wood CHARLES F. WOOD Case 5:16-cv-01347-JFW-MRW Document 81-7 Filed 02/02/17 Page 11 of 11 Page ID #:4819