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Big Lagoon Rancheria v. State of California

United States Court of Appeals, Ninth Circuit

January 21, 2014

BIG LAGOON RANCHERIA, a federally recognized Indian tribe, Plaintiff-Appellee-Cross-Appellant,
State of CALIFORNIA, Defendant-Appellant-Cross-Appellee.

Argued and Submitted Dec. 6, 2012.

Page 1033

Peter H. Kaufman (argued) and Randall A. Pinal, Deputy Attorneys General, San Diego, CA, for Defendant-Appellant-Cross-Appellee.

Peter J. Engstrom, Baker & McKenzie LLP, San Francisco, CA, for Plaintiff-Appellee-Cross-Appellant.

Appeal from the United States District Court for the Northern District of California, Claudia Wilken, District Judge, Presiding. D.C. No. 4:09-CV-01471-CW.

Page 1034

Before: STEPHEN S. TROTT and JOHNNIE B. RAWLINSON, Circuit Judges, and FREDERIC BLOCK, District Judge.[*]

Opinion by Judge BLOCK; Dissent by Judge RAWLINSON.


BLOCK, District Judge:

The State of California (" the State" ) has entered into an agreement allowing Big Lagoon Rancheria (" Big Lagoon" ) to operate a casino on an eleven-acre parcel of land in Humboldt County, California. It did so, however, only because the district court ordered it to negotiate with Big Lagoon under the Indian Gaming Regulatory Act (" IGRA" ), 25 U.S.C. §§ 2701-2721. The State appeals that order and, for the following reasons, we reverse.


A. Historical Background and Carcieri

Big Lagoon is situated on two parcels of land along the shore of the eponymous lagoon in Northern California. The eleven-acre parcel on which Big Lagoon proposes to operate a casino was acquired by the United States, acting through the Bureau of Indian Affairs (" BIA" ), in 1994.[1] However, to understand the background of the case, we must go further back in time to 1918, when the BIA purchased another parcel— a nine-acre tract adjacent to the eleven-acre parcel— as a homestead for James Charley and his family. According to contemporaneous BIA records, the purchase was paid out of an appropriation " to purchase land for village homes for the landless Indians of California."

By 1921, Charley had died and his widow had moved, with their children, to Trinidad, California. Charley's son Robert may have lived on the nine-acre parcel from 1942 to 1946, but the land was otherwise vacant for more than 30 years. In 1954 or thereabouts, Thomas Williams— Robert's nephew by marriage— and his wife, Lila, received the BIA's permission to camp on the land, but made no claim to ownership.

The 1950s ushered in a major change in Indian policy, from isolation to assimilation. As part of the change, the federal government moved to dissolve reservations and other tribal entities and distribute their lands to individual tribe members. The policy came to California with the enactment of the California Rancheria Termination Act, Pub.L. No. 85-671, 72 Stat. 619, in 1958. The Act mandatorily dissolved some 43 rancherias— the term for small Indian settlements in California— although some were later restored. See Tillie Hardwick v. United States, No. 79-1710 (N.D. Cal. stipulated judgment entered 1983). A 1964 amendment to the Act allowed any rancheria to request dissolution and distribution. See Pub.L. No. 88-419, 78 Stat. 390.

The Williamses apparently came to consider the nine-acre parcel a rancheria because they applied for dissolution and distribution in 1967. A 1968 BIA memorandum, by contrast, notes that the parcel " was not set aside for any specific tribe, band or group of Indians" when it was acquired in 1918. It further notes that the occupants " have not formally organized"

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and did not have " allotments or formal assignments." The BIA nevertheless approved distribution to the Williamses and their daughter and son-in-law— who were also living on the land— in 1968.

The proposed distribution never took place because, for reasons unknown, the Williamses withdrew their request. But the 1968 distribution list forms the basis for membership in Big Lagoon as it exists today. The tribe first appeared on a 1979 list of " Indian Tribal Entities That Have a Government-to-government Relationship With the United States." 44 Fed.Reg. 7325 (Feb. 6, 1979). It has consistently appeared on similar lists since. See, e.g., 78 Fed.Reg. 26384-02 (May 6, 2013) (" Indian Entities Recognized and Eligible to Receive Services From the United States Bureau of Indian Affairs" ). Its roughly two dozen members trace their ancestry, not to Charley, but to his son's wife's nephew.

As noted, the BIA purchased the eleven-acre parcel in 1994. It took the land " in Trust for Big Lagoon Rancheria, a Federally Recognized Indian Rancheria" pursuant to 25 U.S.C. § 2202. That statute, in turn, is based on 25 U.S.C. § 465, which authorizes the BIA to acquire land " for the purpose of providing lands to Indians." Title is " taken in the name of the United States in trust for the Indian tribe or individual Indian for which the land is acquired." Id.

Section 465 was enacted as part of the Indian Reorganization Act of 1934 (" IRA" ), ch. 576, 48 Stat. 985. Another section of the IRA defines " Indian" as including

all persons of Indian descent who are members of any recognized Indian tribe now under Federal jurisdiction, and all persons who are descendants of such members who were, on June 1, 1934, residing within the present boundaries of any Indian reservation, and ... all other persons of one-half or more Indian blood.

Id. § 19, 48 Stat. 988 (codified at 25 U.S.C. § 479).

In Carcieri v. Salazar, 555 U.S. 379, 129 S.Ct. 1058, 172 L.Ed.2d 791 (2009), the Supreme Court held that the phrase " now under Federal jurisdiction" " unambiguously refers to those tribes that were under the federal jurisdiction of the United States when the IRA was enacted in 1934." Id. at 395, 129 S.Ct. 1058. Thus, under Carcieri, the BIA lacks authority to acquire land in trust for tribes that were not under federal jurisdiction in 1934. See id. at 388, 129 S.Ct. 1058 (" [T]he Secretary's authority to take the parcel in question into trust depends on whether the Narragansetts are members of a ‘ recognized Indian Tribe now under Federal jurisdiction.’ " ). [2]

B. Indian Gaming and IGRA

Beginning in the 1970s, the State and several Indian tribes came into conflict over the operation of bingo halls on Indian lands. The conflict culminated in California v. Cabazon Band of Mission Indians, 480 U.S. 202, 107 S.Ct. 1083, 94 L.Ed.2d 244 (1987), in which the Supreme Court held that state regulation of gaming on Indian lands " would impermissibly infringe on tribal government." Id. at 222, 107 S.Ct. 1083.

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Congress responded by enacting IGRA, which assigns authority to regulate gaming to tribal and state governments according to the class of gaming involved. " Class III" gaming— which includes the casino-type gambling at issue here— is allowed on Indian lands only if " conducted in conformance with a Tribal-State compact entered into by the Indian tribe and the State." 25 U.S.C. § 2710(d)(1)(C). Such compacts are the result of negotiations requested by the " Indian tribe having jurisdiction over the Indian lands upon which a class III gaming activity is being conducted, or is to be conducted." Id. § 2710(d)(3)(A). " Upon receiving such a request, the State shall negotiate with the Indian tribe in good faith to enter into such a compact." Id.

If negotiations are successful, the resulting compact goes to the BIA for approval. See id. § 2710(d)(3)(B). If not, the tribe may sue in the district court. See id. § 2710(d)(7)(A)(i). If the district court concludes that the State has failed to negotiate in good faith, it must order the parties to reach an agreement. See id. § 2710(d)(7)(B)(iii). If no agreement is reached after 60 days, the court orders each party to submit a proposed compact to a court-appointed mediator, who selects " the one which best comports with the terms of [IGRA] and any other applicable Federal law and with the findings and order of the court." Id. § 2710(d)(7)(B)(iv). If the State is unwilling to accept the mediator's selection, the matter is referred to the BIA, which must then develop procedures " under which class III gaming may be conducted on the Indian lands over which the Indian tribe has jurisdiction." Id. § 2710(d)(7)(B)(vii)(II).

A unifying thread running through the statutory provisions relating to class III gaming is the concept of " Indian lands." Such lands are where the gaming activities are to take place and it is the tribe " having jurisdiction" over those lands that requests negotiations and, if necessary, institutes legal action. IGRA defines " Indian lands" as

(A) all lands within the limits of any Indian reservation; and
(B) any lands title to which is ... held in trust by the United States for the benefit of any Indian tribe or individual ... and over which an Indian tribe exercises governmental power.

Id. § 2703(4).

C. Negotiation History

In 1998 and 1999, the State proposed a model compact to tribes seeking to offer class III gaming on their lands, including Big Lagoon. Most tribes accepted the State's model compact; Big Lagoon did not. Instead, it filed suit in the district court, alleging that the State had failed to negotiate in good faith under IGRA.

As the litigation proceeded, the State and Big Lagoon continued to negotiate in an effort to reach a mutually acceptable agreement. Those negotiations bore fruit in 2005, when the parties agreed that Big Lagoon, along with another group, would be allowed to operate a casino on non-Indian lands in Barstow. As part of the settlement, the lawsuit was dismissed without prejudice.

The settlement proved illusory, however, because the California Legislature did not ratify the agreement, as required by state law. The so-called Barstow Compact lapsed by its own terms in September 2007.

On September 18, 2007, Big Lagoon sent the State a written request for new negotiations " for the purpose of entering into a Tribal-State compact governing the conduct of Class III gaming activities on the trust lands that constitute the Big Lagoon Rancheria." A principal point of contention

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that arose during the resultant negotiations concerned the site of the casino. The State was reluctant to allow the casino to be built near the " environmentally significant State resources located adjacent to the rancheria."

The State ranked its siting preferences as follows:

1. locating a 500-device casino and a 100-room hotel on a site approximately five ...

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