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Prairie Island Indian Community v. Minnesota Department of Public Safety

April 01, 2003

PRAIRIE ISLAND INDIAN COMMUNITY, RESPONDENT,
v.
MINNESOTA DEPARTMENT OF PUBLIC SAFETY, RESPONDENT (C9-02-1012, C0-02-1013), APPELLANT (C7-02-1025), DEFENDANT (C2-02-1028), AND WILLIAM J. LAWRENCE, APPELLANT (C9-02-1012, C0-02-1 013), RESPONDENT (C7-02-1025), INTERVENOR-DEFENDANT (C2-02-1028), AND STAR TRIBUNE, AMICUS CURIAE, AND MILLE LACS BAND OF OJIBWE INDIANS, RESPONDENT (C9-02-1012, C0-02-1013), PLAINTIFF, (C7-02-1025, C2-02-1028),
v.
STATE OF MINNESOTA AND CHARLIE WEAVER AS THE COMMISSIONER OF THE MINNESOTA DEPARTMENT OF PUBLIC SAFETY, RESPONDENTS (C9-02-1012, C0-02-1013), APPELLANTS (C7-02-1025, C2-02-1028), AND WILLIAM J. LAWRENCE, APPELLANT (C9-02-1012, C0-02-1013), RESPONDENT (C7-02-1025), INTERVENOR-DEFENDANT (C2-02-1028), AND STAR TRIBUNE, AMICUS CURIAE.



Ramsey County District Court File No. C5018766

Considered and decided by Minge, Presiding Judge, Peterson, Judge, and Hudson, Judge.

SYLLABUS BY THE COURT

1. Only when federal law intends to classify data in the possession of a state agency as nonpublic does that data become nonpublic under Minn. Stat. § 13.03, subd. 1 (2002).

2. The Federal Indian Gaming Regulatory Act, 25 U.S.C. § 2716(a) (1988), neither intends to require that financial statements be treated as nonpublic for purposes of Minn. Stat. § 13.03, subd. 1 nor preempts the discretion of a state agency to publicly release such statements.

3. Gaming casino's summary financial statements that are more than six years old are not nonpublic trade secrets under Minn. Stat. § 13.37, subd. 1(b) (2002).

The opinion of the court was delivered by: Minge, Judge

Affirmed in part, reversed in part, and remanded

OPINION

The state of Minnesota (State) and William Lawrence as an intervenor appeal from a summary judgment determination that the Minnesota Government Data Practices Act (MGDPA) does not require release of financial audit information submitted to the State by Prairie Island Indian Community and the Mille Lacs Band of Ojibwe Indians pursuant to tribal/state gaming compacts. The Prairie Island Indian Community and the Mille Lacs Band of Ojibwe Indians cross-appeal determinations by the district court that disclosure is not prohibited by federal law, contractual limits, or estoppel. Because we conclude that the release of at least some of the financial audit information is required under the MGDPA and that neither federal law, nor contractual limits, nor estoppel preclude disclosure, we affirm in part, reverse in part, and remand.

FACTS

Respondents Prairie Island Indian Community (Prairie Island) and the Mille Lacs Band of Ojibwe Indians (Mille Lacs) are federally recognized Native American tribal governments. In 1988, Congress enacted the Indian Gaming Regulatory Act (IGRA) that established a system for gaming on Indian land and required compacts between states and any tribes that engage in certain gaming activities. 25 U.S.C. §§ 2701, 2710(d) (1988). IGRA also established the National Indian Gaming Commission (NIGC) to provide federal oversight of Indian gaming. Id. §§ 2704, 2706.

In 1989 and 1990, respectively, Prairie Island and Mille Lacs entered into compacts with the State for Class III video games of chance. In 1991, Prairie Island and Mille Lacs entered into tribal/state compacts with the State regarding Class III blackjack. The compacts require the tribes to make certain casino financial audit information available to the State upon request. The blackjack compact provides that "[t]o the extent possible under state law, the State shall not disclose any information obtained pursuant to such a request." The video compact does not contain a similar limitation on disclosure by the State.

The Minnesota Department of Public Safety (DPS) has been responsible for overseeing the State's interest in Native American gaming operations. The DPS sought and obtained certified financial statements from Prairie Island for the years 1991-1997. The DPS sought and obtained similar financial statements from Mille Lacs for the years 1991-1995 for both its Hinckley and Mille Lacs casinos. All statements were prepared by independent accounting firms in accordance with generally accepted accounting standards. Availability of those financial statements to the public is the subject of this lawsuit.

The statements at issue cover the tribes' gaming activities in the aggregate and consist of summary, consolidated balance sheets, profit-and-loss statements, and cash-flow statements. Distributions to the respective communities and some detail regarding debt is set forth in the statements. Aside from single line-item entries, the statements do not set forth any details regarding gaming, hospitality, or retail operations, nor do the statements differentiate among or provide information about different forms of gaming. The mix and scope of gaming and other operations has changed since the date of the last statement at issue in this proceeding.

When Prairie Island provided its financial information, it reaffirmed its understanding that the DPS would not disclose the information to the public. Prairie Island only provided its audits to the DPS and to the NIGC. Prairie Island has taken steps to maintain the confidentiality of the data internally by limiting the number of its members who have access to the data. In September 2001, Prairie Island passed a formal resolution that codified the practice of restricting internal access to the audits.

Prairie Island submitted affidavits from Tribal Council President Audrey Kohnen and Finance Director Frank J. Loth regarding the nature of the audit data. Kohnen and Loth averred that competitors could use the otherwise unavailable audit data to reduce costs in starting and maintaining casinos. Michael Opton, a gaming analyst for Nevada Gaming Publishing, averred that cumulative financial information, even if several years old, would provide significant benefit to competitors and suppliers.

During the years in question, Mille Lacs' casinos were managed by a publicly held company, Grand Casinos, Inc. Grand Casinos, Inc. filed annual reports with the Securities and Exchange Commissioner (SEC) and those reports are available to the public. The SEC filings contain different financial information than do Mille Lacs' audits, and the SEC filings use a fiscal year different from the fiscal year in the audits. In addition, the SEC filings contain information about other casinos managed by Grand Casinos, Inc.

Affidavits from the State indicate that significant information regarding casino and gaming activities is publicly available. Both Prairie Island and Mille Lacs submitted financial information to their association--Minnesota Indian Gaming Association (MIGA)--in 1992 and 1997 for use in MIGA's reports concerning the economic impact of Indian gaming in Minnesota. These MIGA reports list the aggregate average gross revenue, expense, and income information. The reports do not provide financial information with respect to any individual tribe. MIGA does not release specific audit or other financial information. Various newspapers have secured and published gaming financial data. Intervenor Lawrence has published this information on the White Earth Band in his newspaper. The White Earth Band voluntarily published its audit for the year 2000 and stated it will make its audits available in the future. Various trade publications report average net revenue per day for each of the various types of casino video-gaming machines and blackjack tables and other statistics regarding casino operations for different parts of Nevada and three other states. The State has made available to the public details of the state lottery, summary information on charitable pull-tabs, and gaming and financial information on the Canterbury Park racetrack.

Neither Prairie Island nor Mille Lacs sought out and reviewed the published or publicly available reports on other Minnesota gaming operations. This includes published reports on other Minnesota tribal gaming, and extensive publicly-available financial information regarding the Minnesota state lottery, the Canterbury Park racetrack, and charitable gambling.

In February 2001, appellant William Lawrence, the publisher of the Native American Press/Ojibwe News, asked the DPS for a copy of financial audit data submitted by the Red Lake Band of Chippewa Indians. The DPS denied the request, taking the position that the financial audit data are nonpublic. Lawrence then requested an advisory opinion from the Commissioner of the Minnesota Department of Administration (Commissioner) pursuant to Minn. Stat. § 13.37 (2002). On June 6, 2001, the Commissioner issued an opinion that the Red Lake audit data are public according to the Minnesota Government Data Practices Act (MGDPA). Based on the Commissioner's opinion, the DPS released the Red Lake data. Neither Prairie Island nor Mille Lacs has sought this information.

Thereafter, Lawrence requested financial audit information for Prairie Island and Mille Lacs. The DPS advised Prairie Island and Mille Lacs of the requests and that the DPS would release the information based on the Red Lake determination. In July 2001, the DPS asked the Commissioner to temporarily classify the tribal gaming audits as nonpublic data. On August 28, 2001, the Commissioner approved the request, classified the information as nonpublic data, and submitted its decision to the Minnesota Attorney General for review as required by Minn. Stat. § 13.06, subd. 5 (2002). The Attorney General rejected the classification of the audit data as nonpublic.

Prairie Island and Mille Lacs brought suit to preclude the DPS from disclosing the financial audit data to the public. Lawrence intervened. The parties stipulated to the issuance of a temporary injunction prohibiting such disclosure during the pendency of these actions. Prairie Island and Mille Lacs moved for summary judgment, arguing that: (1) federal law in this area preempts Minnesota law and precludes the State from releasing the audit data; (2) the tribes' characterization of the data as nonpublic controls; (3) the State's disclosure of the audit data would constitute a breach of contract; (4) the State is estopped from disclosing the audit data; and (5) the audit data are nonpublic trade-secret information under Minnesota law. The district court held that the audit data are nonpublic trade-secret information under Minnesota law and rejected the other arguments made by Prairie Island and Mille Lacs.

The State and Lawrence appeal the determination that the audit data are trade-secret information under Minnesota law. Prairie Island and Mille Lacs appeal the federal law, breach of contract, and estoppel determinations of the district court. We reverse the determination that the entire audit report is trade-secret information, affirm the other determinations, and remand.

ISSUES

1. Do the federal classification of audit data as nonpublic and the federal regulatory framework preclude Minnesota from releasing financial statements of Native American casinos or preempt the Minnesota Government Data Practices Act ...


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