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City of Duluth v. Fond Du Lac Band of Lake Superior Chippewa

United States Court of Appeals, Eighth Circuit

May 8, 2015

City of Duluth, Plaintiff - Appellee
v.
Fond Du Lac Band of Lake Superior Chippewa, Defendant - Appellant

Submitted November 12, 2014.

Appeal from United States District Court for the District of Minnesota - Minneapolis.

For City of Duluth, Plaintiff - Appellee: Gunnar Bergt Johnson, Duluth City Attorney's Office, Duluth, MN; Alison Lutterman, City Attorney's Office, Duluth, MN; Robert C. Maki, Shawn Brent Reed, Maki & Overom, Duluth, MN; David Parker Sullivan, Madeira Beach, FL.

For Fond Du Lac Band of Lake Superior Chippewa, Defendant - Appellant: Henry Martin Buffalo Jr., Buffalo Law Office, Woodbury, MN; Sean Copeland, Dennis J. Peterson, Fond DU Lac Band of Lake Superior Chippewa, Cloquet, MN; Douglas Endreson, Anne D. Noto, Donald J. Simon, Sonosky & Chambers, Washington, DC; Sara K. Van Norman, The Jacobson Law Group, St. Paul, MN.

Before MURPHY, MELLOY, and BENTON, Circuit Judges.

OPINION

Page 1208

MURPHY, Circuit Judge.

The Fond du Luth Casino in downtown Duluth, Minnesota opened in 1986 as a joint venture between the City of Duluth and the Fond du Lac Band of Lake Superior Chippewa and is today a profitable tourist attraction owned and operated by the Band. Congress passed the Indian Gaming Regulatory Act (" IGRA" ) in 1988 which changed the legal framework underlying the development of American Indian casinos such as the Fond du Luth Casino. This new statute led to restructuring of the prior casino agreements between the Band and the City under a 1994 consent decree issued by United States District Judge Paul A. Magnuson. Pursuant to this decree the Band paid the City $75 million in the period from 1994 through early 2009 amounting to 19 percent of gross revenues. The Band stopped making such payments in 2009 after concluding that they violated IGRA as interpreted by the National Indian Gaming Commission.

In July 2011, the Gaming Commission issued a Notice of Violation regarding the Fond du Luth Casino after determining that the Band's payments to the City violated IGRA requirements that tribes are to have the sole proprietary interest in casinos and are to be their primary beneficiaries. The Gaming Commission ordered the Band not to resume payments to the City or face fines and closure of the casino. Shortly thereafter the Band sought relief under Federal Rule of Civil Procedure 60(b)(6) from any obligation for similar payments in the period from 2009 to 2011. The district court denied relief in November 2011, and the Band appealed. We reversed in January 2013 and remanded

Page 1209

for the district court to consider six factors relevant to the question of whether the Band was entitled to the relief it had requested. City of Duluth v. Fond du Lac Band of Lake Superior Chippewa, 702 F.3d 1147, 1155 (8th Cir. 2013). On remand the district court failed to consider all of the factors identified in our January 2013 order, and the Band appeals. We reverse and remand.

I.

The relevant facts underlying the issues in this case are discussed in detail in our most recent opinion in this case, City of Duluth, 702 F.3d at 1150-52, and we briefly summarize some of that history here. Although the casino was opened as a joint venture, in 1988 Congress passed IGRA which requires that Indian tribes have the " sole proprietary interest" in Indian gaming activity. 25 U.S.C. § 2710(b)(2)(A). The Band then sought federal declaratory and injunctive relief in the District of Minnesota on the basis that its 1986 agreement with the City of Duluth did not comply with IGRA. The district court directed the Band to take this question to the National Indian Gaming Commission, the agency tasked by Congress with the responsibility to interpret and enforce IGRA. See 25 U.S.C. § 2706. In 1993, the Gaming Commission ruled that the 1986 casino agreement violated IGRA, but it allowed the parties to negotiate a new contract before beginning any enforcement action.

The agreement reached between the Band and the City in 1994 was subsequently approved by the Gaming Commission and then incorporated into the consent decree by the district court which retained jurisdiction over its enforcement. Although the Band owns the casino building and the land on which it is located is reservation land, the decree provided in relevant part that the Band would pay 19% of the casino's gross revenues to the City as " rent" from 1994 to 2011. A rental rate for the years 2011 to 2036 would be negotiated later. Such payments to the City had been characterized as " rent" in a sublease agreement. Before the casino opened in 1986 the Band leased it to a commission made up of representatives of the City and of the Band. The 1994 decree ...


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