ORDER, AND FINDINGS OF FACT AND CONCLUSIONS OF LAW
This is a case with potentially serious implications for the future ofgaming in Arizona. A synopsis of the court's decision can be foundbeginning on page 9.
The Plaintiffs are permittees of horse and dog racing facilities inArizona. Am. Compl. (doc. #45) ¶¶ 1-2. The Plaintiff-Intervenor TucsonGreyhound Park, Inc., is a permittee for a dog racing enterprise. Am.Compl. (doc. #52) ¶ 1. The Defendants include state authoritiesresponsible for negotiating gaming compacts with Indian tribes andenforcing state laws prohibiting certain forms of gaming. Id. ¶¶ 3-5.Governor may include in compacts with Indian tribes. The Plaintiffs andthe Intervenor seek to enjoin the Governor from entering new, renewed ormodified gaming compacts that would allow Indian tribes in Arizona toconduct slot machine, keno or blackjack gaming. of the nineteen gamingcompacts currently obtaining between the State and tribes, the first willbegin to expire in 2003.
I. Procedural Background
This action began in the Superior Court in Maricopa County inNovember, 2000.The Plaintiffs seek injunctive relief by means of specialaction against the Governor, Jane Dee Hull, and the Attorney General,Janet Napolitano. The Plaintiffs name the State of Arizona as a defendantto preserve their right to attorneys' fees in the event they prevail.Richard Romley, the County Attorney for Maricopa County, is named so thatin the event the court grants the Plaintiffs' alternative form of relief— an injunction against criminal prosecution — such reliefmay be effective. Romley has not actively participated in thislitigation. It should be understood that where the court refers to "theDefendants," the State and its officers (and not Romley) are intended,unless otherwise noted.
The Plaintiffs requested that the case proceed on an acceleratedbasis. The Plaintiffs alleged that the Defendants were in the course ofnegotiating new or modified gaming compacts with Indian tribes, and thatif compacts were concluded, the case would not be able to go forward.Accordingly, they believed expeditious treatment of their claims wasnecessary. The judge in the Superior Court granted the request.
All Defendants removed the matter on December 15, 2000. Notice ofRemoval (doc. #1). The case was assigned to United States District JudgeJames A. Teilborg. On January 14, 2001, Judge Teilborg permitted TucsonGreyhound Park, Inc., to intervene as a plaintiff pursuant to astipulation by the parties (doc. #12). Judge Teilborg recused himself onJanuary 16, 2001, and the case was reassigned to United States DistrictJudge John W. Sedwick. On January 26, 2001, Judge Sedwick recusedhimself. At that time, the matter came before this court.
On February 1, 2001, the court held a preliminary schedulingconference, at which time the Plaintiffs reiterated their desire for aruling on the merits on an expedited basis. The Defendants asserted thatpotentially dispositive motions should be heard first. Shortly thereafterthe court announced a briefing schedule. The parties were required tofile dispositive motions and/or trial briefs, responses and replies priorto the trial. It was understood that a hearing on the motions and thetrial would be held on same day.1
Since then, the court has approved a consent preliminary injunctionsubmitted by the parties pursuant to a written stipulation. Order ofFebruary 16, 2001 (doc. #53). The injunction prohibits the Defendantsfrom entering any new, modified, or renewed gaming compacts untildisposition of this case.
Several dispositive motions are now before the court. They are:Defendants' Motion to Dismiss (Justiciability) (doc. #49), Defendants'Motion to Dismiss for Failure to Join Indispensable Parties (doc. #28),Defendants' Motion to Dismiss Amended Complaint for Failure to JoinIndispensable Parties (doc. #50), and Plaintiffs' Motion for SummaryJudgment (doc. #46). The court heard oral argument on the motions onApril 12, 2001, atwhich time it took the matter under advisement. Also onApril 12, 2001, the court took evidence and held a trial on the merits.The Joint Statement of Facts (JSOF) submitted by the parties includes astipulation that all the exhibits are admissible, although the parties donot stipulate to their relevance and reserve the right to challenge therelevance or materiality of any fact or document at any point in theseproceedings. For purposes of this order, all the exhibits are part of therecord.
II. Factual Background
Beginning in 1993. Arizona governors have entered into gaming compactswith tribes. Am. Compl. ¶ 10. Tribal gaming in Arizona is governedby the Indian Gaming Regulatory Act (IGRA), 25 U.S.C. § 2701 e.t.seq., and by state law, which IGRA incorporates by reference. IGRAestablishes three classes of gaming. Class I includes social games forprizes of minimal value and traditional forms of Indian gaming.25 U.S.C. § 2703(6). Class II includes bingo and certain card games.Id. § 2703(7)(A). Class III is the default category, capturing anygames not falling into classes I or II. Id. § 2703(8). Slot machinesand blackjack are types of class III gaming, see id. § 2703(7)(B)(excluding such games from Class II), and so is keno, a house bankinggame, see 25 C.F.R. § 502.4(2). Tribes must reach a compact with thestate where tribal lands are located in order to operate class III gamingon those lands. 25 U.S.C. § 2710(d).
Under Arizona law, the Governor has authority to negotiate the terms ofcompacts on behalf of the State. See A.R.S. § 5-601. In the eventnegotiations fail, the Governor must enter into a standard form compactwith any tribe wanting to sign on to its terms. A.R.S. § 5-601.01.Seventeen of the twenty-one recognized tribes in Arizona have enteredinto compacts, all on substantially similar terms. See Motion to Dismiss(doc. #28), Hart Aff. ¶ 4.
The compacts authorize specific types of class III gaming, includingslot machines, keno, lotteries, off-track pari-mutuel wagering, andpari-mutuel wagering on horse and dog racing. Ex. A to Hart Aff. (SaltRiver Pima-Maricopa Indian Community/State of Arizona gaming compact)§ 3(a). Each compact provides for automatic renewal after the initialterm. Hart. Aff. ¶ 5. Specifically, the typical duration clausereads:
(1) This Compact shall be in effect for a term of ten (10) years after the effective date.
(2) The duration of this Compact shall thereafter be automatically extended for terms of five (5) years, unless either party serves written notice of nonrenewal on the other party not less than one hundred eighty (180) days prior to the expiration of the original term of this Compact or any extension thereof.
Salt River Pima-Maricopa compact § 23(b). The termination clauseprovides:
This Compact may be voluntarily terminated by mutual agreement of the parties, or by a duly adopted ordinance or resolution of the Tribe revoking the authority to conduct Class III gaming upon its lands, as provided for in 25 U.S.C. § 2710(d)(2)(D).
Id. § 23(c). The enforceability clause provides in relevant part:
(2) In the event that federal law changes to prohibit the gaming authorized by this Compact, the State may seek, in a court of competent jurisdiction, a declaration that this Compact is invalid.
(3) This Compact shall remain valid and enforceable against the State and the Tribe unless or until it is held to be invalid in a final non-appealable judgment or order of a court of competent jurisdiction.
Id. § 23(d).
These compact terms form the basis of the relationship between theState and tribes engaged in gaming. The Defendants admit that "theGovernor is considering the possibility of executing renewed, amendedcompacts" to take effect when current compacts expire in 2003. Answer¶ 5 (doc. #72). The Defendants maintain that renewal negotiationsbetween the State and the Indian tribes were initiated in December 1999by the tribes, id., and are presently underway. They have includeddiscussions about slot machines and blackjack. Id. Apparently longercompact terms have also been contemplated, for the Governor disputes thePlaintiffs' suggestion that her authority is limited to compacts forterms not exceeding ten years. Id. ¶ 12.
The Plaintiffs and Intervenor claim they do not intend to disturb theexisting compacts. Rather, they express alarm at the prospect of renewalof the existing compacts or execution of new compacts. They contend thatthey have been injured by the advent of slot machine, keno and pokergaming on Indian reservations. Am. Compl. ¶ 15. The Plaintiffs areconcerned by the possibility that the State could increase theconcentration of gaming on the reservations. Id. ¶¶ 13, 15. Theyforesee a "massive expansion and extension in quantity and types" oftribal gaming. Id. ¶ 44. The Plaintiffs predict that heightenedcompetition from tribal gaming will lead to their demise. Id. ¶ 15.Accordingly, they seek to enjoin the State from pursuing thesenegotiations and from concluding new compacts. Id. ¶ 6.
To this end, the Plaintiffs argue that renewed or new compacts alongthe lines contemplated by the State would be illegal under federal andstate statutory law and in violation of state and federal constitutionalnorms. Specifically, they contend that the Governor lacks authority toexecute compacts authorizing slot machine, keno and blackjack gaming.Id. ¶¶ 18-19. They allege that the Governor would invade the provinceof the legislature if she were to enter into compacts that allow tribesto conduct gaming activities that are otherwise prohibited by statestatutes. Id. ¶ 21. They assert that such compacts would alsoviolate the federal Indian Gaming Regulatory Act (IGRA),18 U.S.C. § 1166, 25 U.S.C. § 2710(d), and25 U.S.C. § 2710(d)(6). Plaintiffs also believe that the compactsunlawfully treat Indian tribes differently than non-Indians. Id. ¶¶25-29. For these reasons, they ask the court to prohibit the Governorfrom entering renewed compacts. Id. at 12. They recognize that effectiverelief would require the Governor to give affirmative notice that theState will not renew the compacts, which, under the terms of thecompacts, must be tendered at least 180 days before the date ofexpiration. See Response (doc. #65) at 1.
In the event the court rejects their arguments that the proposedcompacts are illegal, the Plaintiffs wish to be afforded the same gamingprivileges as the tribes. Id. ¶ 6. They envision this remedy takingthe form of an injunction against criminal prosecution, for if thePlaintiffs were to engage in the kinds of gaming that the State isallegedly about to condone for the tribes, the Plaintiffs would besubject to prosecution. Id. ¶¶ 32-33. Defendant Romley's duty toenforce state gambling prohibitions is the reason for his inclusion inthis lawsuit.
The Defendants contend that this matter is not justiciable for a numberof reasons. As questions going to the court's jurisdiction andjusticiability are logically resolved prior to the merits, the courtshall address the Defendants' Motions to Dismissfirst. The court shalladdress the Plaintiffs' Motion for Summary Judgment in the context of itsfindings of fact and conclusions of law at trial.
Due to the complexity of this order, and thus its length, the courtbelieves it is appropriate to provide a synopsis. Engrossing legal issueshave been presented; in particular, the interplay of federal and statelaw is very unusual. On issues of both federal and state law, the casebreaks fresh ground. The Plaintiffs and Intervenor advance severaltheories why they should prevail, while the Defendants assert that notonly should the Plaintiffs and Intervenor not prevail, but also that thecourt does not have the authority to decide the dispute.
The Defendants argue that the court lacks the power to decide this casebecause the Plaintiffs do not have the attributes necessary for them tobe parties; in other words, that they lack standing. To the contrary, thePlaintiffs have demonstrated that they have a real and immediateproblem, and that their position could be materially improved by afavorable ruling here. Thus, the court determines that it has authorityto decide the core issues of the Plaintiffs' case, and that nojurisdictional defect precludes it from reaching the merits.
The Defendants also contend that representatives for the tribes inArizona must participate in this case. In rejecting this argument, thecourt emphasizes that the issues before it concern the limits of thepowers of the State and its officers. The court must decide what theselimits are, and whether the Defendants' planned actions go beyond them.Accordingly, the court finds the tribes are not indispensable parties tothis litigation in its present form, not because the issues are notimportant to them, but because adjudication of the issues does notrequire their presence.
One of the limits on the State and its officers arises from thedivision of Arizona government into three branches; simply put, eachbranch has unique duties that cannot be taken over by the two otherbranches. Under the separation of powers doctrine, no other branch canusurp the power of the legislative branch. Under the non-delegationdoctrine, which complements the separation of powers doctrine, thelegislative branch cannot delegate its power to make law to anotherbranch. The legislature may, however, delegate to other branches the dutyto make rules to carry out a purpose fixed by the legislature. Thelegislature must supply the "intelligible principle" behind every law. Ifthe legislature purports to enact a law like a blank check, leaving someother branch to create a rationale and then carry it out, such anarrangement violates the non-delegation doctrine.
The Plaintiffs and Intervenor argue that the Arizona statuteauthorizing the Governor to negotiate and enter compacts violates thenon-delegation doctrine. They complain that the Governor is enabled tounilaterally create gaming policy within the State. She could take theposition that very little gaming should take place on tribal land, or shecould take the position that a great deal of gaming is desirable. Eitherposition could be based on nothing more than the Governor's whim. Whateverposition the Governor takes, however, the citizens of Arizona arecommitted once compacts are executed. After due consideration, the courtholds that decisions about what kinds of gaming should be legal inArizona and what kinds of gaming the State should agree to permit withinits boundaries pursuant to tribal-State compacts are legislativedecisions. Ariz. Rev. Stat. § 5-601 delegates this lawmakingpower tothe Governor without conveying even a germ of policy to guide theGovernor's discretion. Since A.R.S. § 5-601 violates article III ofthe Arizona Constitution and is void, the Governor is not enabled toenter compacts. The Governor's inability to enter compacts may readily becured by the Arizona Legislature with the enactment of an appropriatedelegation of compact authority.
Assuming that the Governor could enter compacts, the Plaintiffs arguethose compacts cannot include terms for slot machine, keno or blackjackgaming. The parties have disputed whether such gaming is permitted understate law, and whether games have to be legal in Arizona before beingincluded in a compact. The court finds that Arizona law does not permitslot machine, keno or blackjack gaming at charity casino nights or underother circumstances. Outside the social and amusement gambling contexts,the only gambling permitted under Arizona law must be conducted as araffle. Federal law does not permit the State to enter compactsauthorizing tribes to engage in gaming otherwise prohibited by statelaw. Therefore, even if A.R.S. § 5-601 were valid, the Governor couldnot properly enter compacts for games of chance other than raffles.
Finding A.R.S. § 5-601 unconstitutional is sufficient to convey tothe Plaintiffs and Intervenor the principal relief they seek. ThePlaintiffs do not prevail on their attempt to sue under the federalIndian Gaming Regulatory Act (IGRA), 25 U.S.C. § 2701 et seq., their"local or special law" argument, their equal privileges claim, or theirfederal Equal Protection theory. The Intervenor prevails only on itsnon-delegation theory; its arguments that compacts are unlawful becausethey are treaties, legislation subject to tribal approval, or contractsimpinging on the State's reserved powers are all rejected.
The Defendants move for dismissal of the first three of the Plaintiffs'claims.2 They maintain that the Plaintiffs lack standing to challengefuture compacts currently under negotiation. They further submit thatIGRA does not authorize private causes of action. Resort may not be hadto state law remedies, the Defendants argue, because IGRA occupies thefield of regulation of tribal gaming, thereby preempting state claims.Finally, the Defendants argue that the State of Arizona must be dismissedbecause claims againstit are barred by the Eleventh Amendment. TheDefendants state that their motion is made pursuant to Fed. R. CIV. p.12(B)(6).3
Article III standing requires a plaintiff to demonstrate threeelements. The plaintiff must show (1) injury in fact, or an injury thatis concrete and particularized and actual or imminent; (2) causation, orthat the injury is "fairly traceable" to the challenged action; and (3)redressability. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112S.Ct. 2130, 2136(1992). For purposes of ruling on a motion to dismiss forwant of standing, the court must accept as true all material allegationsof the complaint, and must construe the complaint in favor of thecomplaining party. Desert Citizens Against Pollution v. Bisson,231 F.2d 1172, 1178 (9th Cir. 2000).
The Defendants challenge the Plaintiffs' assertion of the first andthird elements, and also recommend dismissal pursuant to the prudential"zone of interests" doctrine. In response, the Plaintiffs contend thatstanding is not necessary to maintain this action, but they also assurethe court they have it. Sua sponte., the court also questions theIntervenor's standing to assert a constitutional contract theory.4
1. Imminent Injury/Ripeness
The Defendants contend that the Plaintiffs do not have an imminentinjury. The actual injury requirement of Article III standing, byexcluding hypothetical and indefinite injuries, overlaps with thejusticiability doctrine of ripeness, which requires a live and immediatecontroversy. Thomas v. Anchorage Equal Rights Comm'n, 220 F.3d 1134,1138-39 (9th Cir. 2000) (en banc). Whereas the "imminent injury"requirement of Article III standing deals with the proximity of harmgenerally, the ripeness doctrine looks exclusively at the vector oftime. See id. at 1138. Standing thus bears "close affinity" to theripeness issue of whether the harm asserted has "matured sufficiently towarrant judicial intervention." Warth v. Seldin,422 U.S. 490, 499 n.10, 95 S.Ct. 2197, 2205 n. 10(1975). The Ninth Circuit analyzes theconstitutional and prudential concepts of ripeness separately. SeeThomas, 220 F.3d at 1138-41.
a. Constitutional element
For Article III purposes, a plaintiff must have suffered an "injury infact" to a legally protected interest that is both "concrete andparticularized" and "actual or imminent," as opposed to "conjectural" or"hypothetical." Lujan, 504 U.S. at 560, 112 S.Ct. at 2136. The point ofthis inquiry is to find truly adversarial parties with a genuine stake inthe outcome of the litigation, and to ensure that the case does notextend the court beyond the role constitutionally allotted to the federaljudiciary. Spencer v. Kemna, 523 U.S. 1, 11, 118 S.Ct. 978, 985(1998).
The mere existence of an allegedly unconstitutional statute does notsatisfy the injury-in-fact requirement. Thomas, 220 F.3d at 1139.Application of the statute must be threatened so as to put a plaintiff'srights in genuine peril. Id. When the "asserted threat is whollycontingent upon the occurrence of unforeseeable events," id. at 1141, thecomplaint must be dismissed.
Once events have transpired on which immediate legal consequencesrest, however, such as the passage of a rule requiring immediatecompliance, "`[o]ne does not have to await the consummation of threatenedinjury to obtain preventive relief. If the injury is certainlyimpending, that is enough." Thomas v. Union Carbide Agric. Prods. Co.,473 U.S. 568, 581, 105 S.Ct. 3325, 3333(1985). It follows that legalquestions that may be decided without significant factual development aremore likely to be ripe. Freedom to Travel Campaign v. Newcomb,82 F.3d 1431, 1434 (9th Cir. 1996).
Ripeness is necessarily a fact-intensive inquiry. For example, a breachof contract lawsuit is not ripe until it becomes certain that thecontractual obligation will not be honored. Clinton v. Acequia, Inc.,94 F.3d 568, 572 (9th Cir. 1996). A civil rights suit to enjoinenforcement of a law is not ripe until there is a "genuine threat ofimminent prosecution." Thomas, 220 F.3d at 1139. The certainty that thestatute or rule will be applied is important, for "[t]he degree ofcontingency is an important barometer of ripeness." Riva v. Commonwealthof Massachusetts, 61 F.3d 1003, 1011 (1st Cir. 1995); see also Neal v.Shimoda, 131 F.3d 818, 825 (9th Cir. 1997) (if parole is conditioned on astatutory requirement, among other things, inmates may challenge thestatute even if they have not yet satisfied other conditions).
i. Plaintiffs' challenged claims
In this case, the Defendants characterize the Plaintiffs' assertedinjury as speculative because it would result, if at all, from futurecompact-renewal actions by state and federal officials. They argue that"[u]nless, and until, new compacts are executed, the Plaintiffs cannotknow the harm they may, or may not incur." Motion (doc. #49) at 4. Theyalso suggest that economic harm from future competition is speculative,because competition is inherently risky and success in businessnecessarily unpredictable. At oral argument, the Defendants submittedthat a judgment here would be merely advisory because no one knows whatstate law will be at the time of compact execution.
In response, the Plaintiffs argue that they are already competing withthe tribes and already suffering, so the economic effects of tribalcompetition are certain. Response (doc. #65) at 11. Their expertcalculates that they lose about $20 millionannually to "illegal"competition from the tribes. The expert predicts that if Indian gaming isexpanded as proposed, such losses will rise more than 30 percent to about$26 million per year. The Plaintiffs expect that if the Governor entersten-year compacts on expanded terms, their total loss will reach $250million. If the Plaintiffs prevail, and the Governor notifies the tribesthat the State will not renew the compacts, the Plaintiffs anticipatetheir ten-year revenues to increase by $200 million.
At oral argument, the parties agreed that the Plaintiffs suffer somequantifiable injury from tribal gaming. Although the parties do not agreeabout the extent of the Plaintiffs' damage, they correctly observe thatthis detail is irrelevant. The dispute centers on whether the Plaintiffs'injury is sufficiently immediate before the precise terms of futurecompacts — if any — are known.
The Governor has three options before her: she can renew the compactson the existing terms, modify those terms and renew, or give notice ofintent not to renew. The Plaintiffs assert injury to them is likely ifthe Governor does anything other than cancel the compacts. The Governorhas participated in compact renewal negotiations, and she has agreed notto enter renewed compacts only for the period until the court rules. Oncethe Governor signs new compacts, it is undisputed (for the purposes ofthis motion, at least) that Plaintiffs' claims become nonjusticiable.
It is true that the existence of new compacts is contingent uponexecution, and their terms cannot be known with certainty untilconsummation. Conceivably, the court could require the Plaintiffs tointerpose their claims between the time negotiators reach an agreement oncompact terms and the time the Governor signs the compacts. Such arequirement could be facilitated by an injunction preventing the Governorfrom executing proposed compacts. At that instant, the terms of thefuture compacts and prevailing state law would be known.
The court does not believe that delaying adjudication until thatinstant would materially ripen the issues, however. The Plaintiffs'claims address the power of the Governor to agree to slot machine, kenoand blackjack gaming. The challenged terms are known with specificity,and it is undisputed that the Governor has considered them. The Governorhas not disclaimed the possibility of executing compacts on the termsnegotiated. A decision whether to execute negotiated compacts isimminent. Indeed, the parties have stipulated that "[u]nless barred byCourt order, the Governor intends to negotiate in an effort to reach anagreement on modified or new compacts to be executed before the end ofher term." JSOF (doc. #75) ¶ 58. The questions before the court areoverwhelmingly legal in nature and any needed factual developmentoccurred at the trial phase of the hearing. If, under existing law, theGovernor cannot enter compacts including certain terms, nobody profits byspending more time negotiating over them.
To the extent that the Defendants suggest that the Governor couldrefuse to enter compacts regardless how far negotiations progress, thispossibility does not destroy jurisdiction. Under the Arizona statutes, italways remains possible that the Governor will decide not to sign anegotiated agreement. Her discretion over compact negotiation andexecution is unrestricted. What is guaranteed is that whether theGovernor enters a compact or not, her decision on the compacts will betaken pursuant to an allegedly unlawful grant of authority.
Furthermore, adopting the Defendants' distinction between negotiatingand enteringcompacts would create an artificial fissure contrary toIGRA. Federal law provides that "the State shall negotiate with theIndian tribe in good faith to enter into such a compact."25 U.S.C. § 2710(d)(3)(A). IGRA anticipates that compacts will benegotiated in consideration of state law and then become effective. Thecourt finds the Plaintiffs' challenges pointed and immediate, and holdsthat they satisfy the Article III component of standing.
ii. Intervenor's reserved powers claim
The Intervenor's claim that compacts would contract away the State'spolice power is not ripe for Article III purposes. The Intervenor suggeststhat compacts bind the State to a particular exercise of the legislativepower, or limit its power to legislate. Am. Compl. ¶ 18; OpeningBrief (doc. #43) at 5. For the reasons that follow, the court lacksjurisdiction to entertain such a claim.
States may act either in a sovereign capacity or as contractors. SeeUnited States v. Winstar Corp., 518 U.S. 839, 896, 116 S.Ct. 2432,2465(1996) (plurality opinion). When a state enters into a contract, itis ordinarily governed by the same law generally applicable to contractsbetween private individuals. Id. at 895, 116 S.Ct. at 2464-65 (quotingLynch v. United States, 292 U.S. 571, 579, 54 S.Ct. 840, 843(1934)). Thecontracting parties remain subject to subsequent legislation by thesovereign, including legislation that might obstruct or alter thecontractual bargain, for which the government as contractor may not beheld liable. Horowitz v. United States, 267 U.S. 458, 461, 45 S.Ct. 344(1925) (describing the sovereign acts doctrine). The government createsan exception to this presumption when, in the contract, sovereign poweris "surrendered in unmistakable terms." Winstar, 518 U.S. at 872, 116S.Ct. at 2453 (quoting Bowen v. Public Agencies opposed to SocialSecurity Entrapment, 477 U.S. 41, 52, 106 S.Ct. 2390, 2397(1986)).
Pursuant to the reserved powers doctrine, some sovereign powers cannotbe ceded even if the contractual intent to do so is patently clear. SeeAtlantic Coast Line R. Co. v. Goldsboro, 232 U.S. 548, 558, 34 S.Ct.364, 368(1914). For example, states cannot contract away their policepowers. Id.; Stone v. Mississippi, 101 U.S. 814(1880) (holding that acompany granted a state charter to conduct a lottery was not immune fromsubsequent legislation prohibiting lotteries).
The reserved powers doctrine comes into play when state liability isasserted for governmental actions that interfere with performance of acontract with the state. When a state takes on contractual duties, andthe regulatory landscape later changes, the state may consider itselfbarred from honoring its prior agreement. If the party on the other sideof the breach sues, the state can defend its actions by asserting that itcould not guarantee performance of the contract in the face of changinglaw, due to the essential nature of the governmental powers that would beconstrained. Courts decide whether the earlier government had thecapacity to bind future legislatures and executives, and/or whether thelater legislation extricated the state from its contract. Resolutionturns on whether holding the state to its commitment would "strip" thegovernment of its "core" legislative powers. Winstar, 518 U.S. at 889 &n. 34, 116 S.Ct. at 2462 & n. 34.
Here, the Intervenor encounters three problems. First, it is unclearthat the proposed compacts would include a conveyance or abrogation ofstate policepower. The court anticipates that any compact terms makinginroads on the State's police power will be subtle. In the absence ofcertain compact terms, the court cannot render an opinion about theirforecast effect.5
Second, even if the compact terms were known and could only beconstrued to cede the State's police power, no conflict arises unless anduntil the Arizona legislature amends state gambling laws. As long as thecompacts adhere to existing law, whether they obstruct future law-makingposes a merely hypothetical problem.
Third, assuming that a reserved-powers problem were ripe, theIntervenor has no standing to enjoin the State. A citizen's interest inconforming a state's actions to law is not enough, by itself, to conferstanding. See Allen v. Wright, 468 U.S. 737, 754, 104 S.Ct. 3315,3326(1980). The Intervenor does not have a direct or particularizedinjury resulting from the alleged surrender of state police power.Accordingly, the court dismisses the Intervenor's sovereign acts claimfor lack of constitutional standing.
b. Prudential element
To evaluate the prudential concept of ripeness, the court considers (1)whether the issues are fit for judicial decision, and (2) whether theparties will suffer hardship if the court declines to consider thematter. San Diego County Gun Rights v. Reno, 98 F.3d 1121, 1132 (9thCir. 1996). The various factors that enter into a court's assessment offitness include: whether the claim involves uncertain and contingentevents that may not occur as anticipated or at all; the extent to which aclaim is bound up in the facts; and whether the parties to the action aresufficiently adverse. Philadelphia Fed'n of Teachers v. Ridge,150 F.3d 319, 323 (3rd Cir. 1998). Issues that defy the fashioning of anarrow, case-specific holding are also unfit for judicial decision. Texasv. United States, 523 U.S. 296, 301, 118 S.Ct. 1257, 1260(1998) (refusingto offer an opinion that a state statute could never be applied inviolation of federal law); see also Thomas, 220 F.3d at 1141 (requiring a"concrete factual scenario" demonstrating how a challenged law violatesthe plaintiffs' rights).
The challenges brought here by the greyhound and horse racingindustries take place in the context of a genuine dispute about the formsof gambling allowed under state law. The adversary stance of the partiesis well established. The Defendants have not persuaded the court that anypertinent factual issues remain for development, nor has the courtidentified any. As noted above, the issues are principally legal: whetherArizona statutes authorize the Governor to enter compacts with terms foroperating slotmachines, whether state statutes cede legislative power tothe Governor, and whether state law requires the Governor to concludecompacts within the strictures of IGRA. "Whether [a] statute delegateslegislative power is a question for the courts," Whitman v. AmericanTrucking Ass'n, 531 U.S. 457, 121 S.Ct. 903, 912 (February 27, 2001), andthat issue and others are properly presented here.
Deferring adjudication would cause the Plaintiffs hardship: If adispute over compact terms is premature before the Secretary's approval,afterwards litigation cannot proceed, for then the tribes would beabsent, indispensable parties. Indeed, the Defendants are already arguingthat the tribes are indispensable on the theory that the plaintiffs'claims affect the tribes' rights under the existing compacts. While theplaintiffs could perhaps still bring claims against the State for relyingon unconstitutional state laws, the problem of redressability at thatjuncture would likely be insuperable. The court finds decliningjurisdiction on prudential grounds unwarranted.
The Defendants argue that even if the Governor were enjoined fromentering gaming compacts with tribes, it is "highly likely" that tribalgaming will continue. In arguing the futility of relief, the Defendantsrely on an analogy to Lujan v. Defenders of Wildlife, 504 U.S. 555, 112S.Ct. 2130 (1992). Lujan's observation that the intervening actions ofnon-parties may prevent effective redress does not control here.
In Lujan, the plaintiffs challenged environmental regulations proposedby the Secretary of the Interior. 504 U.S. at 558, 112 S.Ct. at 2135. Theregulations would have limited the applicability of the EndangeredSpecies Act (ESA) to domestic activities of federal agencies. Id. at 559,112 S.Ct. at 2135. The plaintiffs wanted federal agencies fundingdevelopment in foreign countries to observe the ESA. Id. at 562, 112S.Ct. at 2137.
As an alternate ground for denying standing, the plurality wrote thateven if the proposed rule were changed, it was an "open question" whetherthe agencies would be bound by it. Id. at 568, 112 S.Ct. at 2140.6Because the agencies were not parties to the plaintiffs' lawsuit, theywould not be obliged "to honor an incidental legal determination." Id. at569, 112 S.Ct. at 2141. The plurality further assumed that if required tocomply with the ESA, federal agencies would withdraw funding forprojects. It found no indication that projects would not go forwarddespite the withdrawal of federal funds, so it assumed that theenvironmental harm feared by Plaintiffs would nevertheless beinevitable. Id. at 571, 112 S.Ct. at 2142. Plaintiffs lacked standingbecause it was "conjectural" whether winning relief against the Secretaryof the Interior would alter or affect the activities of the non-partyfederal agencies or prevent environmental damage. Id.
The Defendants here argue that "[l]ike the agencies who were notparties to the Lujan litigation, the Indian tribes who conduct Indiangaming are not parties here and would not be bound by any districtcourtdetermination concerning their activities on sovereign tribal ground."Motion at 5. The Defendants foresee ongoing tribal gaming for threereasons: (1) the current compacts provide for automatic renewal for a5-year term; (2) in the absence of compacts, federal law permits thetribes to conduct class III gaming with the approval of the Secretary ofthe Interior, see 25 U.S.C. § 2710(d)(7)(B)(vii); and (3) thetribes, could engage in "uncompacted gaming," which only the federalgovernment can contain, and then, allegedly, only with difficulty.
In response, the Plaintiffs point out that: (1) one vein of reliefsought is an order requiring the Governor to send notice of non-renewal,defusing the automatic renewal clause; (2) uncompacted class III gamingis a federal felony offense, 18 U.S.C. § 1166; and (3) the federalgovernment has effective means to prevent it. They also argue that theSecretary of the Interior cannot approve class III gaming in violation ofa judgment here that such gaming is prohibited to all persons inArizona. The Plaintiffs contend that the prospect that the tribes mightcontinue class III gaming without a compact does not undercut theirinterest in ensuring the Governor follows proper procedures. Response at20 n. 12.
The Defendants do not raise the automatic renewal clause again inreply. Instead, they write that it cannot be assumed that the Plaintiffswill obtain redress from an order here if uncompacted tribal gaming isthe ultimate result. Reply (doc. #67) at 4. They argue that the relevantenforcement authority (presumably the U.S. Attorney or some other agentof the federal government) "is not a party here and is not bound by thisCourt's interpretation of IGRA or Arizona law." Id. In a footnote, theDefendants question the Plaintiffs' reliance on precedents involvingclaims to enforce procedural rights, which, the Defendants argue, have alower redressability threshold. They characterize the plaintiffs' claimsas a challenge to the State's "substantive ability through its Governorto compact for certain types of games under IGRA." Reply (doc. #67) at 4n. 3.
A plaintiff must demonstrate redressability for each form of reliefsought. Friends of the Earth v. Laidlaw Environmental Serv., 528 U.S. 167,185, 120 S.Ct. 693, 706 (2000). It is not necessary for judicial reliefto inevitably cure the asserted injury; rather, redress need only belikely, or more than "merely speculative." Lujan, 504 U.S. at 561, 112S.Ct. 2130. The procedur-opportunity theory of standing posits injurywhen an executive or administrative agency has failed to comply with itsgoverning procedures. 13 Charles R. Wright, et al., Federal Practice andprocedure § 3531.4 at 433 (2d ed. 1984 & Supp. 2000). It is notnecessary to show that the final agency decision would have beendifferent; it is enough to raise the possibility that had the agencyobserved required procedures, it would have considered its decisiondifferently. Id. A substantive injury, on the other hand, arises whensomeone is ordered to do or refrain from doing something; a formal legallicense, power, or authority is granted, modified or withheld; someone issubjected to civil or criminal liability; or legal rights or obligationsare created. See Ohio Forestry Ass'n. Inc. v. Sierra Club, 523 U.S. 726,733, 118 S.Ct. 1665, 1670(1998).
The court finds that for the purposes of surviving a motion todismiss, the Plaintiffs have sufficiently alleged redressability. Thefirst and third claims are substantive and must be held to substantivestandards, but the second is a procedural injury and the proceduralnotions of redress apply.
On the first claim, set out supra at 12 n. 2, it is likely that if thecourt held that the Governor lacks authority under A.R.S. § 5-601 tooffer slot machine, keno and blackjack gaming in the new compacts, shewould not conclude new compacts on such terms. Executive actions taken inexcess of law are ultra vires. Besides, the plaintiffs want the court toenjoin the Governor from entering the compacts, a remedy that wouldfurther decrease the likelihood that the Governor would proceed.
On the second claim, if the court held that the Governor lacksauthority to enter any compacts because of a problem with the enablingstatute A.R.S. § 5-601, it is likely that new compacts will not beentered pursuant to those statutes. This inability would not be the endof the story, of course. The Arizona Legislature might attempt to cureany defects with the statute, or it might do nothing and compel tribes toobtain class III gaming permits through the federal administrativeprocess. Either way, invalidating the statute would force a reexaminationof state compacting processes by Arizona's political bodies. Theplaintiffs might not carry the debate, but they would prevail by obtaininga public airing of their views.
On the third claim, the Plaintiffs seek to improve theircompetitiveness by limiting the tribes to the varieties of gaming thatthe Plaintiffs are allowed. Preventing the tribes from engaging inblackjack, keno and slot machine gaming could very well end the allegedcompetitive imbalance. Cf. Washington v. Daley, 173 F.3d 1158, 1165 (9thCir. 1999) (holding that the redressability requirement is met when ajudicial determination would effectively transfer the tribal allocationof a resource to competing nontribal claimants). At this early stage, itis not "mere speculation" to believe that if the court rejects theDefendants' argument about the breadth of gaming lawful in Arizona, andabout what IGRA permits states to do, the gaming extended to the tribesby state compacts will be restricted.
The possibility that redress will be derailed by actions of theSecretary of the Interior or the tribes is unpersuasive. Lujan cautionsagainst making assumptions about the independent actions of non-parties.The Ninth Circuit has held it error to pre-judge the outcome of anadministrative proceeding and summarily conclude that no redress isobtainable. See Tyler v. Cuomo, 236 F.3d 1124, 1133 (9th Cir. 2000). Thecourt may not pre-judge the outcome of a consultation by the Secretary ofthe Interior with the tribes pursuant to 25 U.S.C. § 2710(d)(7).
In fact, there is good reason to believe that the Defendants areincorrect in predicting that the Secretary would annul any relief thePlaintiffs might win here. Assuming that the State revises its view ofits gambling laws following a decision here and tribal-State negotiationsfail, it is unclear that the Secretary would entirely override theState's position. See 25 U.S.C. § 2710(d)(7)(B)(vii)(I) (theSecretary must prescribe regulations for gaming consistent with relevantstate law). Regulations binding on the Secretary expressly provide thatproposals are to be consistent with state law, and contemplate extensiveinvolvement by state officials. See Class III Gaming Procedures, 25C.F.R. Part 291(2000).7 If a gaming proposal is notconsistent withstate law, and if the gaming proposed is not permitted in the State forany purposes by any person, organization, or entity, the proposal may berejected. 29 C.F.R. § 291.8(b), 291.11(b). Thus, in the event thatthe Plaintiffs obtain a favorable ruling on what Arizona law permits, itis likely that this relief will be preserved in subsequent administrativeproceedings.8
Just as the court will not speculate about the future decisions of theSecretary of the Interior, in the event that the tribes are faced with achoice of no gaming or uncompacted gaming, the court may not assume thatthe tribes will hazard uncompacted gaming. After all, the compacts willnot begin to expire for another two years, during which time it isconceivable that some resolution can be reached. Likewise, whether asettlement can be reached or not, the court may not assume that federalauthorities will decline to enforce federal law if it is violated by thetribes.
In sum, it is likely that if the court adopts the interpretation ofstate law that the plaintiffs propose, the choices of independent partieswill be circumscribed by that interpretation, even if those parties arenot legally bound by this adjudication. Unlike Lujan, where theplaintiffs' standing argument fell apart because non-parties had noobligation to take actions necessary for relief, here, the Secretary ofthe Interior, the tribes and federal law enforcement officers haveobligations preexistent to and distinct from this lawsuit that wouldserve — not thwart — a remedy.
The court finds the Defendants' reliance on two district court casesfrom the Fifth Circuit unpersuasive. In holding that plaintiffs had notestablished redressability, these courts found that the requested reliefwould only delay and not prevent Indian gaming. See Willis v. Fordice,850 F. Supp. 523, 539 (S.D. Miss. 1994), aff'd 55 F.3d 633 (5th Cir.1995); Langley v. Edwards, 872 F. Supp. 1531, 1534 (W.D.La. 1995), aff'd77 F.3d 479 (5th Cir. 1996). The Willis court relied on a pre-IGRASupreme Court case to suggest that tribes have an absolute right toengage in class III gaming. It specifically did not consider whetherclass III Indian gaming would be inevitable under IGRA. See 850 F. Supp.at 529 n. 7.9 It is now abundantly clear that tribes may lawfullyconduct class III gamingonly pursuant to a valid compact,25 U.S.C. § 2710(d)(1)(C), whether negotiated directly with the Stateor through the intervention of the Secretary. It is entirely possiblethat state law may block tribal plans to engage in certain kinds of classIII gaming, depending on how IGRA is construed. The court rejects theapproach taken in these opinions as inconsistent with Ninth Circuit law.
B. Zone of interests
The Defendants argue that the plaintiffs do not fall within the "zoneof interests" regulated by IGRA. The Plaintiffs respond that ascompetitors of entities regulated by IGRA, their claims are within thezone of interests. They also contend that the Defendants misapprehend thenature of their claims. They maintain they raise state law claims thatimplicate IGRA but do not depend on IGRA for a cause of action. ThePlaintiffs thus imply but do not state directly that delimiting IGRA'szone of interests is unnecessary here. In light of the varyingcharacterizations of the Plaintiffs' third claim and their response tothe merits of this argument, the court shall discuss the "zone ofinterests" theory, to the extent that the third claim rests on an impliedcause of action under IGRA.
Even when a plaintiff satisfies Article III's standing requirements, aprudential rule requires that the plaintiff's complaint fall within "thezone of interests to be protected or regulated by the statute orconstitutional guarantee in question." Valley Forge Christian College v.Americans United for Separation of Church and State, 454 U.S. 464, 475,102 S.Ct. 742, 760(1982). The prudential zone of interests doctrine isused to establish whether a plaintiff has a federal cause of action; thatis, whether a particular plaintiff has a right to judicial enforcement ofa legal duty of the defendant. See William A. Fletcher, The Structure ofStanding, 98 Yale L.J. 221, 237, 252(1988).
In order for the zone of interests doctrine to bar a plaintiff with anactual injury and with Article III standing: (1) the plaintiff must notbe the subject of the challenged statute, and (2) the plaintiff'sinterests must be "so marginally related to or inconsistent with thepurposes implicit in the statute that it cannot reasonably be assumed thatCongress intended to permit the suit." Clarke v. Securities IndustriesAss'n, 479 U.S. 388, 399, 107 S.Ct. 750, 757(1987). The test ispermissive and allows standing so long as it is "arguable" that theplaintiff's interests are within the zone covered by the statute. Id."[T]here need be no indication of congressional purpose to benefit thewould-be plaintiff." Id. at 399-400, 107 S.Ct. at 757.
When a would-be plaintiff competes with entities directly regulated bythe statue in question, it has repeatedly been held that the zone ofinterests test is satisfied. See National Credit Union Administration v.First National Bank ("NCUA"), 522 U.S. 479, 118 S.Ct. 927(1998); Clarke,479 U.S. at 403, 107 S.Ct. 750; TAP Pharmaceuticals v. U.S. Dep't ofHealth and Human Serv., 163 F.3d 199, 208 (4th Cir. 1998); MovaPharmaceutical Corp. v. Shalala, 140 F.3d 1060, 1074 (D.C. Cir. 1998);American Fed'n of Gov't Employees, Local 2119 v. Cohen, 171 F.3d 460, 469n. 4 (7th Cir. 1999). For example, competitors of financial institutionshave standing to challenge an agency action relaxing restrictions on theactivities of those institutions. NCUA, 422 U.S. at 488, 118 S.Ct. at933. In NCUA, commercial banks were permitted to challenge a rule thatallowed federal credit unions to expand membership eligibility.Commercial banks had an interest in minimizing the market share of creditunions, and that interest "arguably" fell within the statute.Id. at494-95, 118 S.Ct. at 936. That the statute limiting credit unionmembership was apparently intended to promote the cooperative nature andfinancial soundness of credit unions — not to shelter commercialbanks — was deemed irrelevant. Id. at 498, 118 S.Ct. at 938.
While the competitor standing rule is reasonably clear, the zone ofinterests doctrine has been generally described as "malleable." See 13Charles Alan Wright, et al., Federal Practice and Procedure § 3531.7at 726 (Supp. 2000). It originated as a way to interpret the broad grantof standing in the Administrative procedure Act (APA), at5 U.S.C. § 702. See Clarke, 479 U.S. at 399, 107 S.Ct. at 757(1987)(construing Ass'n of Data Processing Serv. Org., Inc. v. Camp,397 U.S. 150, 90 S.Ct. 827(1970)). The zone of interests is not a test ofuniversal application. See id. at 400 n. 16, 107 S.Ct. at 757 n. 16.Indeed, the Supreme Court's most recent discussions of the zone ofinterests test could be read to limit its relevance to cases arisingunder the APA or similar statutes with broad provisions for the public tochallenge the actions of federal agencies. See NCUA, 522 U.S. at 488-93,118 S.Ct. at 933-35(1998); Federal Election Commission v. Akins,524 U.S. 11, 19, 118 S.Ct. 1777, 1783(1998) (construing zone of interestsprotected by Federal Elections Campaign Act). The possibility that thezone of interests test is not particularly useful to analyze causes ofaction outside the administrative or citizen suit context has beenexpressly recognized by the Third Circuit. See Conte Bros. Automotive v.Quaker State-Slick 50, Inc., 165 F.3d 221, 226 (3d Cir. 1998); see also13 Charles A. Wright, et al., Federal Practice & procedure § 3531.7at 823 (Supp. 2001).
On the other hand, the zone of interests doctrine may bear on all casesarising under federal law. See Bennett v. Spear, 117 S.Ct. 1154,1162(1997) ("Congress legislates against the background of our prudentialstanding doctrine, which applies unless it is expressly negated."). TheNinth Circuit has recently engaged in a "zone of interests" analysisregarding a claim without administrative or citizen-suitcharacteristics. See San Xavier Development Authority v. Charles,237 F.3d 1149 (9th Cir. 2001). In San Xavier, the lessee of an Indiantribe attempted to assert statutory rights only a tribe can assert. Seeid. at 1152. Specifically, in attempting to disentangle itself fromobligations to a sublessee, the plaintiff (a tribe's lessee) argued thatthe sublease was void because it violated the requirement that leases beapproved by the Secretary of the Interior, and it ignored a statutoryconstraint on alienation of tribal trust lands. See id. at 1152-53. TheNinth Circuit held that a non-Indian lessor does not have the right toinvoke statutory remedies enacted to protect Indian tribes and theirmembers. Id. at 1153. Thus, it used "zone of interests" language todetermine that the plaintiffs had no federal cause of action under thestatute they sought to invoke.
Informed by San Xavier, it is apparent that the Defendants assert azone of interests argument because they conceive the Plaintiffs' claimsas arising under IGRA. The Defendants argue that IGRA recognizes onlythree legal interests — those of compacting States, tribes, and theSecretary of the Interior — and that the balancing act IGRArepresents should not be upset by allowing a suit by interestsunprotected by the scheme.
The court acknowledges the dangers of meddling with IGRA's integratedstatutory scheme. See United States v. Spokane, 139 F.3d 1297, 1299 (9thCir. 1998) (deciding whether invalidation of one part of IGRA requireslimiting the applicability ofa counteracting provision). It is notapparent, however, how IGRA will be distorted by the plaintiffs' effortsto enforce IGRA's regulations on tribal gaming. The status of theplaintiffs as competitors of the tribes regulated by IGRA gives them aninterest in enforcing IGRA's terms. Considering that plaintiffs "needonly show that their interests fall within the `general policy' of theunderlying statute, such that interpretations of the statute's provisionsor scope could directly affect them," Graham v. FEMA, 149 F.3d 997, 1004(9th Cir. 1998), the court finds that the plaintiffs' interest "arguably"satisfies the zone of interest requirement of prudential standing.
Moreover, it is preferable to determine whether IGRA contemplates suitsby private-party competitors in the context of a motion to dismiss forfailure to state a claim, and not in the process of making an initialdetermination of standing. Whether the Plaintiffs have a claim under IGRAdepends on how IGRA is construed; that is, whether it is construed tocontain an implied right of action. At this juncture, the court is unableto find that the assertion of an implied cause of action is so totallymeritless as to deprive the court of subject matter jurisdiction to evenconsider the matter. See Steel Co. v. Citizens for a Better Environment,523 U.S. 83, 89, 118 S.Ct. 1003, 1010(1998). Therefore, the Defendants'motion to dismiss for lack of standing is denied. Finding that thePlaintiffs have standing, it is unnecessary to reach the Plaintiffs'claim, see Response (doc. #65) at 4, that they may sue state officialswithout having a special or particularized interest in the result.
C. Eleventh Amendment
The Defendants argue that the State of Arizona should be dismissed as adefendant because there are no claims against the State as a separateentity, and if there were, such claims are barred by the EleventhAmendment. In response, the plaintiffs explain that they seek reliefagainst state officers and have joined the State to assure execution of afees judgment. The plaintiffs anticipate an award of attorneys' feesunder the common fund/common benefit doctrine, the private attorneygeneral doctrine,10 and 42 U.S.C. § 1988. Am. Compl. ¶¶39-45. The Plaintiffs argue that the Eleventh Amendment does not bar anaward of attorneys' fees, but if it did, the State has waived itssovereign immunity by removing this action to federal court.
At oral argument, the parties agreed to table this issue until afterthe court rules on the other motions. The court shall reserve the matterfor another day.
II. Failure to Join Indispensable Parties
The Defendants argue that the action must be dismissed because thePlaintiffs have failed to join the Indian tribes, who are alleged to beindispensable parties. On a motion to dismiss pursuant to Rule 12(b)(7),the court must first decide whether an absent person should be joined.Fed. R. Civ. P. 19(a); see 5A Charles A. Wright & Arthur Miller, FederalPractice & Procedure § 1359 (2d ed. 1990 & Supp. 2001). If the absentparty is necessary, the court then considers whether it can be joined.Quileute Indian Tribe v. Babbitt, 18 F.3d 1456, 1458 (9th Cir. 1994). Ifthe absent person should bejoined but is unavailable, the court mustthen determine, by balancing the guiding factors set forth in Rule19(b), whether the absent party is "indispensable" so that in "equity andgood conscience" the action should be dismissed. Id. The moving partybears the burden of showing the nature of the unprotected interests ofthe absent persons. Makah Indian Tribe v. Verity, 910 F.2d 555, 558 (9thCir. 1990) Adjudicating a Rule 12(b)(7) motion is a fact-intensive andflexible inquiry. Id. Facts may be presented in the form of affidavitsand other relevant extra-pleading evidence. McShan v. Sherrill,283 F.2d 462, 464 (9th Cir. 1960).
A. Necessary Parties
Under Rule 19(a)(1), the court begins by considering whether completerelief can be afforded to those already party to the action in theabsence of the unjoined parties. Quileute, 18 F.3d at 1458. If not, thenthe tribes are considered necessary parties. Id. at 1459; Clinton v.Babbitt, 180 F.3d 1081, 1088-89 (9th Cir. 1999). If the answer is yes,however, the court must then determine under Rule 19(a)(2) whether theabsent party has a legally protected interest in the subject of theaction that might be compromised by a disposition. Makah, 910 F.2d at559.
1. Availability of complete relief
The Defendants characterize the Plaintiffs' suit as a challenge to theterms of existing compacts, particularly to the automatic renewalprovision. Motion (doc. #28) at 5; Motion (doc. #50) at 3. The Defendantsargue that as a matter of law, all parties to an agreement are necessaryto adjudicate an attack on its terms, citing Clinton, 180 F.3d at 1088,and Kescoli v. Babbitt, 101 F.3d 1034(1996). According to theDefendants, the tribes have a legally protected interest in the compactsto which they are parties, and should be joined if litigation on theterms of the existing compacts is to go forward.
The Plaintiffs dispute the Defendants' description of their claims. ThePlaintiffs contend that they seek "only to confine the Governor withinthe law in renewing, administering, or modifying the compacts or inmaking new compacts." Response at 22. The plaintiffs expressly challengeonly prospective compacts that would go into effect no earlier than2003. The Plaintiffs maintain that since the Governor has unilateralpower to not renew the compacts, and the tribes have no protectableinterest in the State's renewal determination, the tribes are notnecessary parties.
The court begins with the legal proposition that compacts are treatedlike contracts. Confederated Tribes of Siletz Indians v. Oregon,143 F.3d 481, 484-85 (9th Cir. 1998); Santa Ana v. Kelly, 104 F.3d 1546,1556 (10th Cir. 1997). When rights under a contract are litigated, allparties to the contract are necessary parties in order to afford completerelief. See Clinton, 180 F.3d at 1088 (citing Lomayaktewa v. Hathaway,520 F.2d 1324, 1326 (9th Cir. 1975)). The Defendants compare this case toClinton and argue that the Ninth Circuit has already answered thequestions before the court. Whether Defendants are correct depends on thesimilarity of the material facts.
In Clinton, the terms on which Navajo Nation members would reside onHopi Partitioned Lands (HPL) were at stake. 180 F.3d at 1083. Congressattempted to resolve the differences between Navajos wanting to live onHopi land (HPL Navajos) and the Hopi Tribe by enacting the Navajo-HopiLand Dispute Settlement Dispute Act of 1996. The 1996 Act ratified asettlement between the United States and the Hopi Tribe, whereby the HopiTribe agreed to allow HPL Navajos to remain on their land under the termsof75-year leases. Id. at 1085. A standard lease was negotiated by theHopi Tribe, the Navajo Nation, and representatives of the HPL Navajos.Id. at 1085. The standard lease terms were embodied in an AccommodationAgreement among these parties. Id. at 1085. The Secretary of the Interiorwas required to approve each lease written according to the standardterms. Id. at 1086. plaintiffs, HPL Navajos who disagreed with the termsof the standard lease, sued the Secretary to block his approval of anyleases. Id. They also sought a declaratory judgment that the 1996 Act wasunconstitutional. Id.
On the Rule 19(a)(1) prong, the Ninth Circuit summarily held that nocomplete relief could be granted without the Hopi Tribe. The panel heldthat jurisdiction over the parties to the agreement was necessary toadjudicate its terms, but it did not specify which agreement was to beadjudicated by the plaintiffs' lawsuit. 180 F.3d at 1088. Because thelease terms were part of the Accommodation Agreement concluded among theHopi Tribe, the Navajo Nation, and the representatives of the HPLNavajos, it appears that on the Ninth Circuit's logic, both the HopiTribe and the Navajo Nation were necessary parties. The other agreementin play was that between the Secretary and the Hopi Tribe. If, as aresult of the litigation, the Secretary were prevented from approving theleases, but was obliged to make payments to the Hopi Tribe after theapproval of a number of leases, the Secretary would face inconsistentobligations. The Secretary would be obliged to pay valuable incentives tothe Hopi Tribe for entering leases, but it could not approve any leases.Either of these possibilities would support the Ninth Circuit's holdingthat no complete relief could be granted without the Hopi Tribe. SeeManybeads v. United States, 209 F.3d 1164, 1165 (9th Cir. 2000), cert.denied 69 U.S.L.W. 3399 (April 2, 2001) (in a related case, explainingthat the Hopi Tribe is necessary because it is party to the agreementwith the Secretary and the Accommodation Agreement).
Not every case where an agreement figures is controlled by the ruledescribed in Clinton, however. If a litigation does not concern theobligations under an existing contract, either because the litigation isabout something other than the contract or because the relief soughtwould have effect only after the contract ends, complete relief may beavailable with the absent contracting party. As an example of the firstexception, if a non-party raises a procedural challenge to an agencydetermination that a certain tract constitutes "tribal land," the tribeclaiming an interest in the land is not necessary to render completerelief vis-à-vis the agency. See Kansas v. United States,249 F.3d 1213, 1226-27 (10th Cir. 2001); see also Sac and Fox Nation ofMissouri v. Norton, 240 F.3d 1250, 1258 (10th Cir. 2001) (propriety ofactions by the Secretary of the Interior can be ascertained withouttribe); Yellowstone County v. Pease, 96 F.3d 1169, 1173 (9th Cir. 1996)(whether tribal court had jurisdiction to interpret a state statute didnot require presence of tribe).
Prospective relief, the second exception noted here, effects changesonly going forward and does not undermine existing obligations.11 Forexample, procedural claims raised by the Makah Tribe against theSecretary of Commerce in Makah Indian Tribe v. Verity, 910 F.2d 555, 559(9th Cir. 1990) sought prospective relief. There, the Secretary wasresponsible for adopting salmon harvest quotas. Id. at557. The MakahTribe challenged its low allocation by alleging that the Secretary hadviolated the APA and the Fishery Conservation and Management Act when headopted the quotas. Id. The Ninth Circuit held that these claims could goforward without the other tribes that has received allocations, becausethe Makah sought relief that would "affect only the future conduct of theadministrative process," and "all of the tribes have an equal interest inan administrative process that is lawful." Id. at 559. In this case, therelief sought is prospective and raises largely procedural concerns,thereby making Clinton distinguishable. The narrow issue before the courtconcerns the Governor's authority to enter future compacts and on whatterms. An authoritative interpretation of state law is the relief thatthe Plaintiffs seek. The Plaintiffs do not seek to change the State'sduties or rights under the existing compacts, but rather challenge howthe State decides what duties or rights are appropriate for prospectivecompacts.
If, in this case, the court were to enter judgment in favor of thePlaintiffs on the separation of powers claim, the procedure by which theGovernor could renew or negotiate new compacts would be altered.Conversely, if the court were to enter a judgment in favor of theDefendants, the State could proceed to renew or modify the class IIIgaming compacts as the Governor sees fit. On the plaintiffs' substantiveclaims, concerning the terms that the Governor may agree to, theGovernor's negotiating hand is established by state law. Complete reliefwould involve only a change in the position of the State apart from itsobligations under existing compacts. The court concludes that the tribesneed not be joined under Rule 19(a)(1) because complete relief can beaccorded among the Plaintiffs and Defendants in their absence.
2. Legally protected interest
Under Rule 19(a)(2), the question is whether the tribes have a legallyprotected interest in the process by which compacts are renewed or theterms of renewal. Makah, 910 F.2d at 558; Stock West Corp. v. Lujan,982 F.2d 1389, 1398 (9th Cir. 1993).
The Defendants again stress similarities to Clinton. There, indiscussing Rule 19(a)(2), the Ninth Circuit held that the absent HopiTribe's interests were likely to be impaired for three reasons. 180 F.3dat 1088. First, if the Secretary could not approve the standard formlease, the Hopi Tribe would not be able to fulfill its commitment to theUnited States to enter leases with the HPL Navajos. Id. at 1089. Second,the 1996 Act offered valuable incentives to the Hopi Tribe if it enteredlarge numbers of such leases. If the Hopi Tribe could not enter standardleases, it could not qualify for these statutory benefits. Id. Third,under the standard leases, the Hopi Tribe obtained jurisdiction over theleased land in exchange for allowing the HPL Navajo to live on it. Hopijurisdiction over HPL territory was viewed as essential for Hopi Tribemembers and HPL Navajo to coexist peacefully. Id. Without the leases, theHopi Tribe would have no mechanism to secure jurisdiction over itsterritory.
Whether Clinton controls here hinges on how the tribes' interest in thecompacts — both current and future — is conceived. The firstquestion is whether rights under existing compacts are to beadjudicated. The court must determine whether the actions of the Statethat are being challenged here overlap with the actions that the Statetakes pursuant to the compacts. The next question is whether the tribeshave an interest in the terms of future compacts that could be implicatedby adjudicating this case.
In light of the Ninth Circuit's position analogizing compacts tocontracts, see Confederated Tribes of Siletz Indians, 143 F.3d at484-85, principles of contract law apply. "[I]n the absence of astatutory or contractual right to renewal, a person . . . can claim noproperty interest in the indefinite renewal of his or her contract."Federal Legal Lands Consortium ex rel. Robart Estate v. United States,195 F.3d 1190, 1199 (10th Cir. 1999) (on due process claim, discussingalleged property interest in grazing permits). When a right to terminateis exercised according to the conditions set out in the contract, theparty losing profits expected under a renewed term does not sufferprejudice to a legally protected interest. See Otis Elevator Co. v. GeorgeWashington Hotel Corp., 27 F.3d 903, 908-09 (3d Cir. 1994). If the rightto terminate is unconstrained, the ongoing existence of an agreement ismerely speculative. It is well established that a legally protectedinterest cannot be wholly contingent. "Speculation about the occurrenceof a future event ordinarily does not render all parties potentiallyaffected by that future event necessary or indispensable parties underRule 19." Northrop Corp. v. McDonnell Douglas Corp., 705 F.2d 1030, 1046(9th Cir. 1983).
As set out on pages 5-6, supra, the existing compacts provide forautomatic five-year extensions unless either party serves written noticeof non-renewal on the other. The only condition for an effective noticeof non-renewal is that it be served at least 180 days prior to theexpiration of the existing term. The Governor's right to serve notice ofnon-renewal is otherwise absolute. She can exercise for cause, or for noreason at all. It is probative that one point of negotiation has beenwhether, in future compacts, the State's right to prevent automaticrenewal should arise only under certain conditions. See JSOF, Ex. 58(letter from a tribe's counsel proposing an automatic term of renewalthat State may cancel only for a specified reason). Given the presentunconstrained right of the Governor to terminate the existing compacts atthe end of their initial term and to begin negotiations afresh, renewalon current or more favorable terms is only speculative.
When the Defendants argue that a judgment against the Governor would bea judicial rewriting of the automatic renewal clause of the compact, theyignore how that clause does not specify acceptable grounds fortermination. Unlike Clinton, where the absent parties had vested rightsunder existing contracts, here, the tribes' interest in renewal iscontingent on the Governor's exercise of limitless discretion. Becausethe compact does not limit the State's discretion to invoke thetermination option, a federal injunction would appear to be as good areason as any. Requiring the Governor to invoke the termination clause onthe grounds that she lacks the authority to enter compacts would notdisturb the tribes' contractual rights.
Shermoen v. United States, 982 F.2d 1312, 1317 (9th Cir. 1992), doesnot control here, because the dispute before the court there implicatedvested rights of absent parties. The Shermoen opinion arose in a suitbrought by several individual members of the Yurok Tribe for adeclaration that a statute partitioning tribal land among the Yurok andHoopa Valley Tribes was unconstitutional. The plaintiffs argued that thetribes were not necessary parties, because the partitioning statute waseither constitutional or unconstitutional:
[I]f the latter, then the absent tribes have no "legal protected interest in the outcome of the action"; if the former, then the appellants will not prevail and thus the disposition of the action will not impair the absent tribes' interests.
Id. at 1317. The Ninth Circuit rejected this logic, holding that theabsent tribes were entitled to raise their legal theories and claimsabout the act allotting them partitioned land. To put it another way, theproblem with the Shermoen plaintiffs' argument is that it prejudges themerits. If the act were unconstitutional, the absent tribes lacked alegally protected interest. If the act were constitutional, then theTribes would have had a legally protected interest but no harm would bedone by their absence because the statute would have been upheld. Thiskind of reasoning is contrary to Rule 19, which requires a determinationwhether there is a legally protected interest before the adjudication onthe merits begins.12
Here, when the Plaintiffs challenge the Governor's ability to enterrenewed compacts on certain terms, the Plaintiffs challenge theGovernor's interpretation of state law. Before negotiations with thetribes may begin, the Governor must develop a negotiating positionconsonant with state law. This dispute over the limits of state lawstrikes at what the Governor will present to the tribes and what she canagree to, which are issues that must be resolved prior to the existenceof compacts in which tribes have a legally protected interest. Simplyput, the tribes have no legally protectable interest in the Governor'snegotiating agenda.
While the court accepts as plausible the Defendants' assertion thatgranting the requested relief would "directly impact the tribes' abilityto conduct gaming," the Defendants have not attempted to persuade thecourt that the tribes have a nonfrivolous claim to conduct more gamingthan is allowed by state law. See Rumsey Indian Rancheria of WintunIndians v. Wilson, 41 F.3d 421, 425 (9th Cir.) as amended, 99 F.3d 321(9th Cir. 1996) ("where a state does not `permit' gaming activitiessought by a tribe, the tribe has no right to engage in theseactivities. . . ."). A verdict here in the Plaintiffs' favor would notimplicate the rights IGRA guarantees the tribes.
To the extent that the tribes believe they have rights to conductblackjack, keno and slot machine gaming that are not dependent on thelimits of state law, the tribes' absence is unlikely to be prejudicial.The tribes may advance these non-state law rights in negotiations withthe Secretary of the Interior to conduct class III tribal gaming. See25 U.S.C. § 2710(d)(7)(B)(vii) (providing that Secretary shallprescribe terms for class III gaming where state has refused to consent tocompact selected by count-appointed mediator); 25 C.F.R. Part 291(providing for secretarial approval of class III gaming where state andtribe have been unable to agree on compact and state asserts sovereignimmunity).
The Defendants raise the possibility that the State Defendants will besubject to inconsistent duties if relief is entered without the tribes.The Defendants note that the State is obliged to enter into the standardform compact with any tribe that requests it, pursuant to A.R.S. §5-601.01(A).13 They argue that an eligibletribe not currently partyto an existing compact could sue the Governor to compel her to enter intothe standard form compact, the lawful renewal of which is challengedhere.
This argument fails to persuade. First, the possibility that a tribenot yet party to a standard form compact might demand to enter one ishypothetical at this point. The theoretical possibility of anotherlawsuit cannot be the basis for dismissal under Rule 19(a)(2). NorthropCorp., 705 F.2d at 1045; 7 Charles A. Wright, et al., Federal Practiceand Procedure § 1604 at 48 (3d ed. 2001).
Second, the risk of inconsistent obligations arises not from thetribes' absence from this lawsuit but from ambiguity in the Arizonastatute requiring the Governor to enter standard form compacts. Whenambiguity is inevitable whether a suit proceeds or not, joinder of anabsent party is not required. See Southwest Center for BiologicalDiversity v. Babbitt, 150 F.3d 1152, 1155 (9th Cir. 1998). Tribesnegotiating renewal are not entitled to the standard form compacts, forA.R.S. § 5-601.01 covers only tribes entering a compact for the firsttime and does not offer the standard compact terms as an alternative to anegotiated renewal, if the State opts against automatic renewal. Inmaking their inconsistent obligations argument, the Defendants apparentlyassume that the Governor will be caught between a statutory obligation tooffer the four tribes not yet parties to a compact the terms of thecompacts entered in 1993, and a finding that those terms are somehowillegal.
The court finds the alleged conflict does not defeat this lawsuit. Theproblem is that § 5-601.01 does not explain the obligation of theGovernor in the event that the standard form compacts are found toviolate state law. The Arizona Supreme Court expressly avoided taking aposition about how the statute should operate in the event that thestandard compact terms were declared unlawful. See Salt RiverPima-Maricopa Indian Community v. Hull, 945 P.2d 818, 823 n. 3 (Ariz.1997). The Arizona Supreme Court held only that the State is required tooffer the 1993 compact terms as a default. The issue the Defendants raisehas been percolating since it was recognized by Vice Chief Justice Jonesin 1997. See Salt River Pima-Maricopa, 945 P.2d at 826-27 (Jones,V.C.J., concurring). While § 5-601.01 may pose a dilemma for theDefendants, adjudicating the terms of renewal here does not createinconsistent burdens, but only exposes a flaw inherent in the statute.
Finally, it remains uncertain whether the Governor would in fact besubject to inconsistent obligations. To begin with, the standard formcompact is intended as a default agreement should negotiations fail. Itis mere speculation that negotiations with the tribes could not producean agreement consistent with the Governor's obligations under state lawor that theState will ever be bound to inconsistent judgments.
To illustrate, suppose that negotiations fail, the four tribes demandthe standard form terms, and the State refuses, citing a ruling here. Thetribes must sue an entity with sovereign immunity to enforce a differentinterpretation of A.R.S. § 5-601.01. Here, the Defendants minimizethis obstacle, arguing that if they assert sovereign immunity, theSecretary of the Interior is likely to allow the tribes to continueconducting the same kinds of gaming presently allowed under the currentcontracts. Reply at 6-7. Their rationale is that the Secretary would wantthe tribes who entered compacts in 1993 to compete equally with the SaltRiver Pima-Maricopa Tribe, which entered a compact that will not expireuntil 2008. Yet even if the Secretary takes this course of action (a veryspeculative assumption), the compact would exist pursuant to federal andnot state law, and thus not confront the State with inconsistency.Therefore, the risk that the Defendants will be confronted withirreconcilable obligations is remote.
Having concluded that the tribes are not necessary parties under Rule19(a), further analysis is unnecessary. Makah, 910 F.2d at 559. In anabundance of caution, the court proceeds regardless. Assuming that theabsent tribes are necessary, the next step is to determine whether theparty can be joined. Quileute, 18 F.3d at 1458 (9th Cir. 1994). The tribesare entitled to sovereign immunity and cannot be joined without theirexpress consent. Id. at 1459; Clinton, 180 F.3d at 1090. The partiesaccept that the tribes will not consent, and there is no basis forsecond-guessing this assumption. The court next considers whether theaction must be dismissed.
B. Indispensable Parties
The court weighs the following factors to determine whether absentparties are indispensable:
(1) to what extent a judgment rendered in the person's absence might be prejudicial to the person or those already parties;
(2) the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided;
(3) whether a judgment rendered in the person's absence will be adequate;
(4) whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder.
Fed. R. Civ. P. 19(b); Clinton, 180 F.3d at 1090.
The Defendants argue that the tribes' immunity to suit should operateconclusively in favor of a finding of indispensability. The Ninth Circuithas noted that when the necessary party is immune from suit, there may be"very little need for balancing Rule 19(b) factors because immunityitself may be viewed as the compelling factor." Quileute, 18 F.3d at 1460(quoting Confederated Tribes of the Chehalis Indian Reservation v.Lujan, 928 F.2d 1496, 1499 (9th Cir. 1991)). Nevertheless, districtcourts must apply the four-part test to determine whether Indian tribesare indispensable parties. See id.
The first factor mirrors the impaired interest analysis of Rule19(a)(2). Kescoli, 101 F.3d at 1311. Having found that the tribes are notaffirmatively required to participate in this litigation under Rule19(a)(1), the court finds that it is possible to go forward withoutthem. With regard to the second factor, the parties have not suggestedany specific ameliorative measures. The third factor concerning theadequacy of judgment isclosely related to the analysis under Rule19(a)(1). 7 Wright, et al., supra § 1604 at 50. For the reasonsdiscussed above, this factor does not support finding the tribesindispensable parties.
On the fourth factor, the fact that a plaintiff is left without aremedy is not particularly compelling one way or the other. See, e.g.,Imperial Granite v. Pala Band of Mission Indians, 940 F.2d 1269, 1272(9th Cir. 1991); Clinton, 180 F.3d at 1090 (holding that other threefactors may heavily outweigh this factor).14 The Plaintiffs contendthat they will have no other remedy if this action is dismissed. TheDefendants note that any compact entered by the State and the tribes mustbe approved by the Secretary of the Interior, but it is agreed that theSecretary does not review compacts for compliance with state law. Thisfactor, although regarded as little more than a makeweight in casesinvolving sovereign tribes, favors allowing this litigation to goforward.
Having weighed the four factors carefully, the court denies theDefendants' Motion to Dismiss for Failure to Join Indispensable Parties.It is unnecessary to reach the Plaintiffs' claim that their suit shouldproceed under the "public rights exception" to the indispensable partyrule. Were the tribes indispensable parties, however, the court does notbelieve that the Defendants' interests are sufficiently aligned to allowthe State Defendants to represent the tribes. Cf. Shermoen, 982 F.2d at1318. As the Defendants point out, the State and the tribes have beenadversaries in a number of suits over gaming, and the State owes no trustobligation to the tribes. Although the Defendants acknowledge they havebeen in communication with counsel for certain tribes, theirunwillingness to commit themselves to representing the interests of theabsent tribes is significant.15
Finally, the Defendants assert and the Plaintiffs do not appear todispute that the State's gaming policy has in the past shifted with eachnew governor. Ultimate resolution of this case may extend into thegubernatorial campaign season of 2002. Casting the Defendants as proxiesfor the tribes in this litigation is rife with potential for conflicts inrepresentation. To best preserve all parties' interests and minimize thepossibility of conflicts, the court rejects the plaintiffs' suggestionthat the Defendants would be adequate representatives for the absenttribes. No one has suggested that Rick Romley, the Maricopa CountyAttorney, should stand in for the tribes.Accordingly, none of theDefendants may be viewed as an adequate substitute for the tribes.
III. Failure to State a Claim
Under Rule 12(b)(6), "dismissal for failure to state a claim isimproper unless `it appears beyond doubt that the plaintiff can prove noset of facts in support which would entitle him to relief.'" Schowngerdtv. General Dynamics Corp., 823 F.2d 1328, 1332 (9th Cir. 1987) (quotingConley v. Gibson, 355 U.S. 41, 45-46(1957)). Thus, in undertaking itsanalysis, the court must limit its "review to the contents of thecomplaint, accepting the material factual allegations as true andconstruing them in the light most favorable to the [non-movant]." Id.
The Defendants maintain that to the extent the first three claims inthe Plaintiffs' amended complaint and the first claim in Intervenor'samended complaint turn on alleged violations of IGRA, those claims mustbe dismissed because IGRA preempts state law claims based on allegedviolations of federal law and it does not provide a private cause ofaction.16
A. Preemption of State Law Claims
The Plaintiffs' state law causes of action are based on common lawwrits of injunction and prohibition guaranteed by the ArizonaConstitution:
The superior court or any judge thereof may issue writs of mandamus, quo warranto, review, certiorari, prohibition, and writs of habeas corpus on petition by or on behalf of a person held in actual custody within the county. Injunctions, attachments and writs of prohibition and habeas corpus may be issued and served on legal holidays and non-judicial days.
Ariz. Const. art. VI, § 18. The plaintiffs argue that because theyhave "injury and standing," they are entitled to invoke the writs torestrain the State Defendants. The Defendants do not dispute theplaintiffs' ability to state a claim by way of the writs. They also admitthat claims brought under state law to compel compliance with state lawwould not be preempted. Reply at 10. However, they dispute the accuracyof the plaintiffs' characterization of their claims. According to theDefendants, the plaintiffs' claims are based on alleged violations ofIGRA, and IGRA occupies the field regulating casino gaming withinreservations.
IGRA entirely preempts state regulation which "interferes or isincompatible with federal or tribal interests as reflected in federallaw." Confederated Tribes of Siletz Indians v. Oregon, 143 F.3d 481, 486(9th Cir. 1998). For claims involving non-tribal members, the court mustdetermine "whether, in the specific context, the exercise of stateauthority would violate federal law." Id. (quoting White Mountain ApacheTribe v. Bracker, 448 U.S. 136, 145, 100 S.Ct. 2578, 2584(1980)).
For present purposes, the court asks "whether a particular claim willinterfere with tribal governance of gaming." Gaming Corp. of America v.Dorsey & Whitney, 88 F.3d 536, 549 (8th Cir. 1996). In Gaming Corp., theEighth Circuit held that state law claims "to challenge the outcome of aninternal governmental decision by the nation" are preempted. Id. Bycontrast, "[p]otentially valid claims under state law are those whichwould not interfere with the nation's governance of gaming." Id. at 550.Thus, claims arising from duties independent of gaming, such as anattorney-client relationship between non-tribal parties, may not bepreempted, depending on their specific facts. Id. State law claims thatattack the process bywhich tribal decisions are made, by contrast, areextinguished. Id.
The Eighth Circuit recently elaborated on the distinction betweenpreempted and unrelated claims. A contract that is "merely peripherallyassociated with tribal gaming" is not controlled by IGRA. Casino ResourceCorp. v. Harrah's Entertainment, Inc., 243 F.3d 435, 439 (8th Cir.2001). No tribal interest is implicated in a breach of contract suitbetween two non-tribal would-be casino management companies. Id. Such aclaim is not preempted because it arises from duties independent oftribal gaming regulation. Id.
The Ninth Circuit also construes the scope of IGRA preemption to permitstate law claims if they are sufficiently tangential to gamingregulation. See Confederated Tribes of Siletz Indians, 143 F.3d at 484.There, the State of Oregon created a report of a police investigation ofa tribal casino which, under the terms of the compact in effect, it wasentitled to do. When media groups sought to obtain a copy of the reportunder Oregon's Public Record Laws, the tribe objected to disclosure. Theterms of the compact expressly provided that information gathered by theState would be kept confidential to the extent provided under the PublicRecords Laws. Id. at 483. Under the compact, Oregon had to produce thereport if the Record Laws so required. IGRA did not preempt the PublicRecords Laws because the Oregon statutes "do not seek to usurp tribalcontrol over gaming nor do they threaten to undercut federal authorityover Indian gaming." Id. at 487. The Court of Appeals found that anyadverse consequence accruing to the tribe as a result of disclosure ofthe report was incidental and not inconsistent with IGRA. Id.
Here, the Plaintiffs seek "judicial supervision of the legality ofState participation in the trilateral compacting process, not review offederal or tribal action." Response at 9. The Defendants' conclusoryassertion that such claims interfere with "IGRA-apportionedresponsibilities" and threaten tribal interests, Reply at 11, isinadequate. Under Gaming Corp., the court must assess each claimseparately to identify points of interference.
The court finds that the Plaintiffs do not seek relief that wouldinterfere with tribal control over reservation gaming. As discussedabove, see Part II.A supra, the Plaintiffs seek to ensure the legality ofthe terms to which the Governor proposes to commit the State and itscitizens. The Governor's duty to negotiate compacts and the terms towhich she may agree are set out in state law. State law questions aboutwhether a state has validly bound itself to a gaming compact are notpreempted. Oneida Indian Nation of New York State v. County of Oneida,132 F. Supp.2d 71, 76 (N.D.N.Y. 2000). IGRA preemption blocks theoperation of state policy once a valid compact is executed, see CabazonBand of Mission Indians v. Wilson, 124 F.3d 1050 (9th Cir. 1997), but itgives effect to state policy through the compact negotiation process.25 U.S.C. § 2710(d)(1)(B). The Plaintiffs' allegations that stateofficials' acts are illegal strikes at issues logically prior to theissues preempted by IGRA.
Moreover, to the extent congressional intent is the touchstone of fieldpreemption, the court finds nothing to support an inference that thePlaintiffs' first three claims should be preempted. IGRA does not purportto govern the political processes whereby states' gaming policy isestablished. See Coeur d'Alene Tribe v. Idaho, 842 F. Supp. 1268, 1275(D.Idaho 1994), aff'd 51 F.3d 876 (9th Cir. 1995). To the contrary, IGRAcreates a federal regulatory scheme that is sensitive to statepreferences and idiosyncracies. Where a form of class III gaming isprohibited by a state, IGRA allows that prohibition to be extendedtotribal gaming in the state. 25 U.S.C. § 2710(d)(1)(B). Therefore, tothe extent that the Plaintiffs' first three claims rely on state writs torequire the Governor to negotiate compacts within the confines of statelaw, the Defendants' motion to dismiss is denied. To the extent that thePlaintiffs' third claim purports to allege a cause of action under IGRA,such a claim must be rejected for the reason set described below.
B. Implied right under IGRA
Only three kinds of entities are expressly given causes of action underIGRA — Indian tribes, States, and the United States.25 U.S.C. § 2710(d)(7)(A). The Intervenor has claimed that whileA.R.S. § 5-601 allows the Governor to enter compacts for forms ofgaming permitted by IGRA, IGRA authorizes compacts to include only formsof gaming permitted by state law. It claims that under IGRA, the Governorcannot enter compacts authorizing slot machines and other games. Am.Compl. (doc. #52) ¶¶ 15-16.17 The court has alternativelyconstrued the Plaintiffs' third claim to assert a similar IGRA claim. Thequestion arises whether a private cause of action may be implied underIGRA.
A four-factored analysis is used to divine whether a private right ofaction is implicit in a statute:
(1) Is the plaintiff one of the class for whose benefit the statute was enacted — that is, does the statute create a federal right in favor of the plaintiff?
(2) Is there any indication of legislative intent, explicit or implicit, either to create such a remedy or to deny one?
(3) Is it consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff?
(4) Is the cause of action one traditionally relegated to state law, so that it would be inappropriate to infer a cause of action based solely on federal law?
See Burgert v. Lokelani Bernice Pauahi Bishop Trust, 200 F.3d 661, 664(9th Cir. 2000) (quoting Cort v. Ash, 422 U.S. 66, 78, 95 S.Ct. 2080,2088(1975)). The crux is whether Congress intended private enforcement ofthe statute. Touche Ross & Co. v. Redington, 442 U.S. 560, 568, 99 S.Ct.2479, 2485(1979). Such an inference is often drawn from statutorystructure: a well-integrated remedial scheme deflects judicialimplication of a private right of action. See id. at 571-72, 99 S.Ct. at2487; see also Seminole Tribe of Florida v. Florida, 517 U.S. 44, 73-74,116 S.Ct. 1114, 1132(1996) (holding that the "carefully crafted andintricate remedial scheme" of IGRA may not be supplemented with thejudicially created remedy of the ex parte Young doctrine). The text ofthe statute and legislative history are also important. Burgert, 200 F.3dat 664.
Stepping through the four-part analysis in this case would besuperfluous, for the Ninth Circuit has already ruled that the onlyprivate causes of action under IGRA are those explicitly provided. SeeHein v. Capitan Grande Band of Diegueno Mission Indians, 201 F.3d 1256,1260 (9th Cir. 2000) In Hein, the Court of Appeals rejected an attempt bya tribal splinter group to obtain an allocation of gaming proceeds asinconsistent with the "comprehensive regulatory scheme." Id. The EleventhCircuit has interpreted IGRA similarly. See Tamiami Partners v.Miccosukee Tribe of Indians, 63 F.3d 1030, 1049 (11th Cir. 1995) (gamingmanagementcompany fails to state a claim against tribe for failing toissue license in violation of IGRA, because no implied right of action);Florida v. Seminole Tribe of Florida, 181 F.3d 1237, 1246 (11th Cir.1999) (State may bring against tribe only those claims expresslyrecognized in IGRA).
Furthermore, the Ninth Circuit has refused to recognize a general causeof action to enforce IGRA. Cabazon Band of Mission Indians v. Wilson,124 F.3d 1050, 1059 (9th Cir. 1997) ("Cabazon III"). When the State ofCalifornia sought to enjoin certain class III tribal gaming alleged tohave been conducted outside a compact, the Ninth Circuit rejected theattempt, because neither the terms of the compact nor IGRA allowed it.Id. at 1060.
The Plaintiffs cite a few cases that, they argue, recognize impliedrights of action under IGRA. Response (doc. #65) at 7 n. 2. To thecontrary, these cases discuss whether federal subject matter jurisdictionis established when compacts or contracts made pursuant to IGRA arealleged to be breached. In Cabazon III, 124 F.3d at 1056, the defendantsdisputed the existence of federal question jurisdiction over an action toenforce compact terms. The Court of Appeals held that because thecontract was a tribal-state compact, the breach of contract claim aroseunder IGRA for jurisdictional purposes. Id.; accord Tamiami Partners, 63F.3d at 1047; cf. Iowa Management & Consultants. Inc. v. Sac & FoxTribe, 207 F.3d 488, 489 (8th Cir. 2000) (holding that a managementcompany's contract claim against tribe to enforce arbitration clause didnot present a federal question).
Because no private right of action can be implied under IGRA, theIntervenor's first claim for relief must be dismissed. The Plaintiffs'third claim, when construed as a claim alleging a violation of IGRA, isalso dismissed. The Defendants' motion is granted on this point.
To summarize, the court has eliminated causes of action purportedlybrought under IGRA. It has also dismissed a claim by the Intervenor thatcompacts unlawfully contract away the State's police power. The claimsgrounded in state law shall be decided on their merits.
IV. Summary Judgment and Trial Findings of Fact and Conclusions of Law
The court begins with a brief recitation of the recent history oftribal gaming in Arizona. This approach reflects the parties' briefing.
Congress enacted IGRA in October 1988, following the U.S. SupremeCourt's decision in California v. Cabazon Band of Mission Indians,480 U.S. 202, 107 S.Ct. 1083(1987).18 IGRA balances the interests ofthree kinds of sovereigns: the federal government, tribes, and states.The backdrop to IGRA is recognition that tribes are entitled to conductgaming on tribal lands free of state regulation in states that permitgaming. Sen. Rep. 100-466 (reprinted in U.S.C.C.A.N. 3071, 3072)(describing Cabazon, 480 U.S. 202(1987)).19While states lackauthority to regulate tribal gaming, the federal government has plenarypower to do so. Id. at 3073.
Congress made a number of findings, e.g., recognizing that numeroustribes had become engaged in gaming; that existing federal law did notprovide clear standards or regulations for the conduct of such gaming;that federal policy aims to promote tribal economic development, tribalself-sufficiency and strong tribal government; and that Indian tribeshave an exclusive right to regulate gaming activity that is neitherspecifically prohibited by federal law nor the law of the surroundingstate. 25 U.S.C. § 2701.
At the time IGRA was passed, no federal gaming regulator existed andCongress found it appropriate to rely mostly on state agencies. Sen.Rep. 100-466, supra at 3075. State agencies regulate tribal gaming onlyat the "affirmative election" of the tribes, however. Id. Tribes mustinvite state regulation if they wish to conduct class III gaming, forclass III gaming may be conducted only pursuant to a compact. Id. at3076.
IGRA controls state gaming regulation to prevent states from (1)sheltering nontribal gambling, see id. at 3083, and (2) regulating classII gaming by tribes when class II gaming is otherwise permitted, id.at 3081-82. Apart from these conditions, Congress appears to have meantto depend on and defer to state mechanisms to achieve regulatory goals:
States and tribes are encouraged to conduct negotiations within the context of the mutual benefits that can flow to and from tribe and States. This is a strong and serious presumption that must provide the framework for negotiations. A tribe's governmental interests include raising revenues to provide governmental services for the benefit of the tribal community and reservation residents, promoting public safety as well as law and order on tribal lands, realizing the objectives of economic self-sufficiency and Indian self-determination, and regulating activities of persons within its jurisdictional borders. A State's governmental interests with respect to class III gaming on Indian lands include the interplay of such gaming with the State's public policy, safety, law and other interests, as well as impacts on the State's regulatory system, including its economic interest in raising revenue for its citizens. It is the Committee's intent that the compact requirement for class III not be used as a justification by a State for excluding Indian tribes from such gaming or for the protection of other State-licensed gaming enterprises from free market competition with Indian tribes.
Id. at 3083.
Pursuant to IGRA, in November 1988, the Yavapai-Prescott Indian Tribeasked the State of Arizona to enter a tribal gaming compact.Yavapai-Prescott Indian Tribe v. State of Arizona, 796 F. Supp. 1292,1294 (D. Ariz. 1992) (Rosenblatt, J.). When negotiations stalled over thekinds and quantity of gaming the State would agree to, theYavapai-Prescott Tribe brought suit, with several other tribesparticipating as intervenors. Id. While a motion to dismiss the federallawsuit waspending, the then-United States Attorney for the District ofArizona authorized the seizure of several hundred gaming machines fromtribal casinos. A fracas ensued. See JSOF Ex. 6 (Ben Winton, "Symingtonoffers gambling pact," Phoenix Gazette A-1, 12 (May 29, 1992).
On July 1, 1992, the Arizona legislature enacted what became codifiedas A.R.S. § 5-601, authorizing the Governor, on behalf of the State,to negotiate and execute compacts pursuant to IGRA. A statement of intentwas enacted as well as the operative statutory text. See JSOF Ex. 7(H.B. 2352, 1992 Ariz. Sess. Laws ch. 286).20 On July 3, 1992, theGovernor entered a compact with the Yavapai-Prescott tribe authorizingthe tribe to operate 250 slot machines. Three other tribes agreed tosimilar terms, and all four compacts were approved by the Secretary ofthe Interior.
Three tribes intervening in the lawsuit before Judge Rosenblatt did notconclude compacts after July 1992 and continued with the lawsuit. InOctober 1992, Judge Rosenblatt denied the State's motion to dismiss. Thecourt ordered negotiations to resume, and when no result was produced,appointed a mediator pursuant to 25 U.S.C. § 2710(d)(7)(B)(iv).Yavapai-Prescott, 796 F. Supp. at 1298. Former Arizona Supreme CourtChief Justice Frank X. Gordon, Jr., was chosen as the mediator.
In the IGRA mediation process, both the tribe and the State submitproposed compacts representing their respective last best offers, and themediator selects that which best comported with IGRA.25 U.S.C. § 2710(d)(7)(B)(iv). As Judge Gordon observed, "under theAct, true mediation is not contemplated: the Mediator is forced to chooseone of two competing compacts in its entirety." JSOF Ex. 17 (Mediator'sSelection of Proposed Gaming Compacts, dated February 15, 1993) at 2. Inthe Yavapai-Prescott case, Justice Gordon selected the compacts presentedby the three tribes. He found that Arizona allowed class III gaming ofthe kind sought by the tribes, particularly in its design of statelottery games, but also in charity casino nights and regulatedpari-mutuel gaming. He added:
In conclusion, I would state that my selection of compacts in this case is based on the state and federal law as it exists today. Things might be different if Arizona would hereafter legislatively abolish all Class III gaming. . . .
Id. at 8.
After Justice Gordon announced his decision, then-Governor Symingtonwas advised by Senator John McCain that in order to avoid casino gamingon reservations within Arizona, the State would have to prohibit allcasino gaming for all purposes. See JSOF Ex. 18 (letter dated February17, 1993 from Sen. McCain to Gov. Symington). The Governor convened aspecial session of the Legislature and championed S.B. 1001, which wouldhave criminalized any type of casino gaming activities conducted by anyperson, organization or entity for any purpose. The new law removed theexception for "regulatedgambling" from the State's criminal lawprohibiting promotion of gambling. JSOF Ex. 20 (S.B. 1001, 1993 Ariz.Sess. Laws 1st Spec. Sess. ch. 1). The Governor approved S.B. 1001 onMarch 5, 1993. JSOF ¶ 20.
The Governor thereafter refused to sign the compacts selected by themediator. Pursuant to 25 U.S.C. § 2710(d)(7)(B)(vii), the Secretaryof the Interior undertook negotiations with the tribes and the State toreach a compromise compact. On June 24, 1993, the Governor and the threetribes broke the stalemate and entered into compromise compacts. Fiveadditional tribes also entered compacts that day. See JSOF Ex. 24 (NewsRelease from the Executive Office of the Governor, June 24, 1993).21Between June 24, 1993 and April 25, 1994, the Governor entered compactswith sixteen tribes.
The greyhound racing interests promptly threatened legal action. OnJune 29, 1993, counsel for companies including some of the parties here(American Greyhound Racing, Inc., and Tucson Greyhound Park, Inc.)advised the Tohono O'Odham Nation of his intent to file suit to enjointhe compact as void. JSOF Ex. 27 (letter from Paul Bardacke). The recordhere does not reflect a lawsuit being filed at that time, however. Notlong after the compacts were entered, the Ninth Circuit catalyzed achange in the Governor's position. It held that states are not obliged byIGRA to enter compacts on terms that authorize gambling illegal understate law. Rumsey Indian Rancheria of Wintun Indians v. Wilson,41 F.3d 421, 423 (9th Cir. 1994), as amended 99 F.3d 321 (9th Cir.1996).
In Rumsey, the plaintiffs sought a compact allowing them to operateelectronic gaming devices, such as video bingo machines, and banked andpercentage card games.22 41 F.3d at 424. The tribes had previouslyoperated nonelectronic or nonbanked, nonpercentage versions of the games,and that was legal in California. Id. n. 1. The State balked at thetribes' new proposal, however, on the grounds that state law prohibitedthe games they sought. The tribes brought a declaratory judgment action.
The tribes pointed out that California allowed video lottery andnonbanked, nonpercentage card games. They viewed these activities as"functionally similar" to the electronic devices and banked/percentagecard games. They believed IGRA required the State to enter compactsproviding for all games that did not violate California public policy,independent of their legality under state law. Id. at 426.
The Ninth Circuit disagreed. "IGRA does not require a state tonegotiate over one form of a gaming activity simply because it haslegalized another, albeit similar form of gaming." 41 F.3d at 427. "[A]state need only allow Indian tribes to operate games that others canoperate, but need not give tribes what others cannot have." Id.
Following Rumsey, in May 1995, the Salt River Pima-Maricopa IndianCommunity ("Salt River Community") asked Arizona to enter a gamingcompact along the lines of those concluded with the sixteen othertribes. Then-Governor Symington refused to enter a compact allowing slotmachine or keno gaming because, he maintained,those forms of gaming werenot permitted under state law. The Salt River Community responded bysponsoring an initiative to enact A.R.S. § 5-601.01, which passedhandily. JSOF ¶ 44.
When the Salt River Community tendered a standard form compact to theGovernor, he demanded the inclusion of a clause that would give the Statethe right to approve any proposed casino location. See Salt RiverPima-Maricopa Indian Community v. Hull, 945 P.2d 818 (Ariz. 1997). TheSalt River Community filed a special action in the Arizona SupremeCourt, arguing that § 5-601.01 did not allow the Governor to demandadditional terms.
The Salt River Community won. The Governor argued that § 5-601.01preempted IGRA's provision requiring tribes and states to negotiate. TheCourt read § 5-601.01 to leave the Governor's power to negotiateunder § 5-601 intact, but to provide the standard form compact as adefault should negotiations fail. 945 P.2d at 822. No conflict with IGRAwas found. Id. at 823-24. The Governor also argued that § 5-601.01violated the state doctrine of separation of powers by limiting hisdiscretion under § 5-601. The Court agreed that § 5-601.01restricted the broad negotiating authority given by § 5-601, but thatthe governor was entitled to no more discretion than the legislature (orvoters) decided to give. Id. at 825. Finally, the Court rejected theGovernor's suggestion that § 5-601.01 was an unconstitutional "localor special law." Id.
Vice Chief Justice Jones concurred, pointing out that allowing the SaltRiver Community a standard form compact did not answer "the moredispositive federal question, neither raised nor argued before us— whether, in Arizona, a tribe is authorized under IGRA to engagein class III gaming. Clearly, the state has no power to grant suchauthority." 945 P.2d at 826. "[T]he question must ultimately be posedwhether the State of Arizona, which prohibits class III gaminggenerally, has a federally imposed duty to negotiate, and, moreimportantly, whether any tribe in Arizona . . . has the right to engagein such gaming." Id. at 827.
After the Salt River Community prevailed in the Arizona Supreme Court,a family named Sears brought a special action in the Superior Court inMaricopa County seeking a writ of mandamus to prevent the Governor fromentering a standard form gaming compact with the tribe. On August 22,1997, Judge B. Michael Dann granted the relief requested, finding thatArizona does not permit keno or slot machine gaming and that a compactcould not include such games under IGRA. JSOF Ex. 38 (Minute Entry).23He discounted the evidence of charity casino nights — crucial toJustice Gordon's mediation decision — on the grounds that (1) therewas no evidence that law enforcement authorities were aware of orcondoned such events; and (2) such uses are "not normally thought of as`gaming' or `gambling activities.'" Id. at 2. He held that equaltreatment was an object of IGRA and that the State could not permittribes to conduct games prohibited to other Arizonans. Id. at 3. JudgeDann held that slot machines, by their "inherent nature" could not fitunder the "social gambling" exception to Arizona criminal law. Id. at 4.He did not discuss the Attorney General's opinion that a charity couldcarefully design a casino night party to use slot machines pursuant to astatutory exception.
The Arizona Supreme Court vacated Judge Dann's decision and dismissedthe matter because the plaintiffs lacked standing. Sears v. Hull,961 P.2d 1013 (Ariz. 1998). The Supreme Court refused to exercise itsdiscretion to waive the requirement of standing. Id. at 1019. The Courtexplained that it could dispense with standing rules "in cases involvingissues of great public importance that are likely to recur." Id.However, the Court determined that the Searses' case did not presentsufficiently significant issues: "Essentially the Sears allege that theproposed gaming activities will result in the deterioration of theirquality of life." Id. at 1020. "The remaining issues, which essentiallyreflect the Sears' opposition to gaming and their interpretation of thestatutes involved, are not of such great moment or public importance asto convince us to consider this challenge to executive conduct." Id.
Governor Hull expressed interest in negotiating renewals of thecompacts as early as November 1999. See Motion in Limine (doc. #73) Ex. 1(letter from Gov. Hull to Dep't of Gaming Director Stephen Hart dated11/9/99). She asked the Department of Gaming to hold public hearings onthe subject of casino gaming in Arizona. The Governor has not, however,expressed her position on casino gaming generally or tribal gaming inparticular.
Having surveyed the landscape, the court turns to the Plaintiffs' andIntervenor's claims.
In moving for summary judgment, the Plaintiffs identify three issues,one with four subparts. Motion (doc. #46) at 2. They elaborated on theseissues at trial. Discussion of the first issue — whether a compactproposal contemplating slot machines, keno and blackjack, is contrary toIGRA — is foreclosed by the court's implied-right-of-actionanalysis and will not be further discussed. See Part III.B, supra. Thesecond issue disignated is whether A.R.S. § 5-601 et seq. authorizesthe Governor to enter into compacts permitting forms of gaming, which areprohibited by IGRA and by state law. Submitted in this issue is anassumption that IGRA and state law prohibit certain games, a premise thatthe court must examine. The third issue is whether, assuming that A.R.S.§ 5-601 et. seq. authorizes the Governor to enter compacts for gamesalleged banned by state criminal law, those Arizona statutes areconstitutional. The Plaintiffs argue that the statutes would beunconstitutional under: (1) Ariz. Const. art. III and the doctrine ofunconstitutional delegation of legislative powers; (2) Ariz. Const. art.II, § 13, as a grant of privileges or immunities not equallyavailable to other citizens or corporations; (3) Ariz. Const. art. IV,pt. 2, § 19, as a "local or special law"; and (4) the Equal ProtectionClause of the United States Constitution.
The Intervenor raises the following unique claims: (1) compacts aretreaties and states are prohibited by the United States Constitution,Art. I § 10, from entering treaties, Merits Brief (doc. #43) at 5;and (2) A.R.S. § 5-601 is unconstitutional because compacts arelegislation and the legislature cannot make the validity of a lawcontingent upon tribal assent, id. at 4.
1. Extent of gubernatorial negotiating power
A.R.S. § 5-601 authorizes the Governor to negotiate and entercompacts:
Notwithstanding any other law, this state, through the governor, may enter into negotiations and execute tribal-state compacts with Indian tribes in this state pursuant to the Indian gaming regulatory, act of 1988. Notwithstanding the authority granted to the governor by this subsection, this state specifically reserves all of its rights, as attributes of its inherent sovereignty, recognized by the tenth and eleventh amendments to the United States Constitution. The governor shall not execute a tribal-state compact which waives, abrogates or diminishes these rights.
A.R.S. § 5-601(A) (emphasis added). In addition, the statuteplaces certain conditions on future compacts and/or renewal.24
Three disputes have arisen as the parties interpret this statute.First, what kinds of gaming are allowed under Arizona law? Because thecompacts are to be entered pursuant to IGRA, and IGRA contemplates tribalparticipation in gaming otherwise condoned by state law, the partiesindicate that the limits of state gambling laws must be understood inorder to assess the validity of slot machine, blackjack and keno terms.Second, does A.R.S. § 5-601 allow the Governor to enter compactspermitting tribes to engage in gambling otherwise prohibited by state law?Third, what are the State's obligations under IGRA? Specifically, whenIGRA requires states to enter compacts for gaming allowed to "any personfor any purpose," does it prohibit states from entering compacts thatallow tribes to engage in gaming uniformly prohibited by state law?
a. Games legal under Arizona law
Arizona generally prohibits gambling. Conducting, organizing orfinancing gambling is a felony, A.R.S. § 13-3303, and so ispossessing gambling equipment for the purpose of gambling, subject tocertain exceptions, id. § 13-3306. Knowingly obtaining a benefit fromgambling is a misdemeanor. A.R.S. § 13-3304. Nevertheless, Arizonapermits gambling under certain exceptions. The statute reads as follows:
A. The following conduct is not unlawful under this chapter:
1. Amusement gambling.25
2. Social gambling.26
3. Regulated gambling if the gambling is conducted accordance with the statutes, rules or orders governing the gambling.
4. Gambling conducted at state, county or district fairs, which complies with the provisions of § 13-3301, paragraph 1, subdivision (d)
B. An organization which has qualified for an exemption from taxation of income under § 43-1201, paragraph 1, 2, 4, 5, 6, 7, 10 or 11 may conduct a raffle that is subject to [certain] restrictions: . . . .
C. A state, county or local historical society designated by this state or a county, city or town to conduct a raffle may conduct the raffle subject to [certain] conditions. . . .
A.R.S. § 13-3302.
The Arizona Attorney General has suggested how a charity might lawfullyoperate a casino night under these limitations. See Ariz. Op. Att. Gen.No. I-87-101(1987). On the Attorney General's hypothesis, a charity mightdivorce the fundraising part from the gaming part of a "casino night" bygiving any attendee who requests them chips or scrip without accepting adonation in return. Such games would not fall within the definition of"gambling" in § 13-3301(4). Alternatively, the charity could bringgambling under the raffle exception by asking attendees to buy raffletickets to use as chips in the games. At the end of the evening, prizeswould be raffled off to ticket holders. In this case, "the games merelyserve to distribute and redistribute the chances of winning the raffleamong the players." Id. Using the raffle exception set out at A.R.S.§ 13-3302(B), a charity may engage in permissible "regulatedgambling." See A.R.S. § 13-3302(A)(3).
Pursuant to one exception or the other, casino nights are apparentlynot uncommon in Arizona. According to one estimate, several hundred suchevents are held annually. JSOF Ex. 55 (Barton Aff.) ¶ 8. Gary W.Barton, intelligence manager for the Arizona Department of Gaming,submits that the custom in renting casino-night equipment is sufficientto support at least twelve businesses. Id. ¶ 9. One such casinonight event is described by David Van Boxtaele, a special investigatorfor the Arizona Department of Gaming. JSOF Ex. 56 (Van Boxtaele Aff.). Heattended an event sponsored by the School of Hotel and RestaurantManagement at Northern Arizona University. Id. ¶ 2. Van Boxtaeledescribes giving a donation in exchange for receiving a correspondingamount of scrip, playing games such as live blackjack and computerizedslots, and using his scrip winnings to purchase raffle tickets. Id.¶¶ 3-4. Stephen M. Weiss, whose pertinent experience is havingmanaged a charity casino night event for several years, describes othercasino nights in similar terms. JSOF Ex. 39 (Weiss Aff.).
Notwithstanding the open practices of charities, the Plaintiffsmaintain that slot machine, keno and blackjack gaming areprohibited inArizona. The Plaintiffs make two arguments. The first attempts todistinguish "charitable" gaming — embraced by the State — and"commercial" gaming — banned by the State. Second, the Plaintiffsargue that slot machine, keno and blackjack gaming cannot be squeezedinto the raffle exception on which charities depend.
i. Charitable v. commercial
The Plaintiffs suggest that charity casino gaming should bedistinguished from "commercial" gaming. The Plaintiffs appear to use theterm "commercial gaming" interchangeably with gaming "as a business,"Motion (doc. #46) at 7, gaming "played against the house," id. and "realgambling" id. at 9. The rationale for the Plaintiffs' proposeddistinction is clear: if the Plaintiffs cannot convince the court thatcertain kinds of games are prohibited, then the only way to keep tribesfrom engaging in the games offered at charity casino nights is todistinguish the nature of the gaming. If the court were to hold that the"commercial" gaming is a different species from "charitable" gaming, andonly "charitable" gaming is permitted in Arizona, then the Plaintiffswould have a basis for confining tribes to "charitable" gaming only.
Based on the affidavit of A. Melvin McDonald, the Plaintiffs seek afactual finding that no commercial slot machine gaming is allowed inArizona, except what the tribes do. McDonald, Chairman of the ArizonaRacing Commission, states that no slot machine or keno gaming for moneystakes has been allowed in Arizona since 1970, and that no "commercialblackjack" gaming for money stakes has been allowed during that timeeither. JSOF Ex. 66 (McDonald Aff.) ¶ 7.
The Defendants respond that a charitable/commercial distinction isirrelevant, because once a game is permitted for some purpose, IGRArequires that the State enter compacts including that game, even if thepurpose of the tribes is different from the purpose permitted by statelaw. They observe that since charitable gaming involves exchanging cashfor the opportunity to win a valuable prize, it is "real" gambling;indeed, "real" enough to require a statutory exception. The Defendantsalso contend that the purpose of tribal gaming better approximates thepurpose of charitable gaming than private commercial gaming.
In the court's view, the Plaintiffs' proposed charity/commercial gamingdistinction is so porous that it cannot not be maintained. For onething, the Plaintiffs never offer a definition of "commercial gaming.""Commercial" means many things, but generally suggests mercantileactivity. Webster's Third International Dictionary 456(1981). The courtmust infer that the proposed distinction has something to do with wherenet revenue goes, not with the scale of the enterprise. But not allgaming can readily be classified in Plaintiffs' two proposed categories.One obvious illustration of the shortcoming of the Plaintiffs'distinction is the state lottery. Plaintiffs do not indicate whetherfunding governmental functions with gaming revenue in lieu of taxationshould be considered "commercial" or "charitable" gaming. "Commercial" isa term too imprecise to bear legal weight without further definition.
Furthermore, it is far from obvious that if a charitable/commercialline were drawn, tribes would fall on the commercial side. By law, tribesuse casino net revenues to fund tribal government operations, provide forthe general welfare of the tribe and its members, promote tribal economicdevelopment, donate to charitable organizations, or help fund operationsof local government agencies. 25 U.S.C. § 2710(b)(2)(B). Cashdistributions are made per capita toindividual tribal members only if an"adequate" portion of net gaming revenues is allocated to the purposesdescribed in section 2710(b)(2)(B) and the Bureau for Indian Affairsapproves the revenue allocation plan. 25 C.F.R. Part 290.
Dr. Clinton M. Pattea, the President of the Tribal Council of the FortMcDowell Yavapai Nation, described how Fort McDowell has funded a numberof governmental projects with gaming revenues. JSOF Ex. 67 (Pattea Aff.)¶¶ 11-26. Infrastructure projects include building a wastewatertreatment plant, improving the water system, closing a potentiallyhazardous landfill, building roads, buying out HUD housing, and buildinghomes to alleviate a housing shortage. Id. The Nation has also begunproviding a number of social services.
Merna Lewis, Vice President of the Salt River Pima-Maricopa IndianCommunity, describes how gaming revenue has enabled the Salt Rivergovernment to expand social services. JSOF Ex. 68 (Lewis Aff.) ¶11. Infrastructure projects include a $100 million water system, a sewersystem, flood control, roads, and a state-of-the-art wireless telephonesystem. Id. ¶¶ 16-20.
Under the circumstances, the proposed commercial/charitable gamingdistinction is unsound and the court declines to make any findings tosupport it.
The Plaintiffs begin by assuming that charities can use slot machines,keno and other games to distribute and redistribute raffle ticketspursuant to A.R.S. § 3302. They argue that the only kind of slotmachine gaming Arizona allows is "raffle cum slot machine" gaming. Motionfor Summary Judgment (doc. #46) at 7. Alternatively, the Plaintiffs arguethat slot machines may not be used by charities in any way.
In response, the Defendants argue that Arizona permits slot machine,keno and blackjack gaming to charities under the regulated gamblingexception. They rely on circumstantial evidence. First, they point outthat in his mediator opinion, Justice Gordon found that Arizona permitscasino-style gaming to charities. Next, the Defendants rely on theArizona Attorney General Opinions, Nos. I87-101 and I90-035. Third, theyraise an inference from legislative behavior over the last severalyears. Finally, the Defendants contend that Arizona law allowscasino-style gaming on Indian reservations. For the reasons that follow,the court finds these points, which tend to suggest that casino gamingwas legalized by fiat, to be unpersuasive.
The court begins with the language of the criminal statutes.27Penal statutes are not strictly construed but rather are construedaccording to the fair import of their terms, with a view to effect theirobject and to promote justice. A.R.S. §§ 1-211(C); 13-104. The court'sgoal is "to fulfill the intent of the legislaturethat wrote it." Zamorav. Reinstein, 915 P.2d 1227, 1230 (Ariz. 1996) (quoting State v.Williams, 854 P.2d 131, 133 (Ariz. 1993)); accord State v. Clifton LodgeNo. 1174, 514 P.2d 265, 266 (Ariz. Ct. App. 1973) (construing forfeiturestatute to serve legislative purpose of discouraging gambling). When thestatute's language is plain and unambiguous, it is not necessary to gobeyond the text as written. Canon School Dist. No. 50 v. W.E.S. Constr.Co., 869 P.2d 500, 503 (Ariz. 1994). When the statute's language is notclear, legislative intent is determined by reading the statute as awhole, giving meaningful operation to all of its provisions, andconsidering factors such as the statute's context, subject matter,historical background, effects and consequences, and spirit and purpose.Wyatt v. Wehmueller, 806 P.2d 870, 873 (Ariz. 1991).
The criminal statutes are crafted as broad prohibitions againstpromoting and benefitting from gambling, subject to express exceptions.A.R.S. §§ 13-3303, 13-3304. When gaming is not structured as social oramusement gambling, the only game of chance that is permitted underArizona law is the raffle, subject to regulation. A.R.S. §13-3302(B). While "raffle" is not defined, there is nothing in the textof the Arizona statutes to suggest that "raffle" means slot machine,blackjack and keno gaming. Interpreting "raffle" to legalize these gamesindirectly would allow the exception for "regulated gambling" to defeatthe broad prohibition. Such a result would vitiate Arizona'santi-gambling policy and must be rejected. The court holds that othergames may not be bootstrapped into legitimacy by the raffle exception.
The existence of the Attorney General Opinions Nos. I87-101 and I90-035in no way stretches or expands the limited exception for charityraffles. These opinions have no legal force and cannot be consideredregulations prescribing how raffles should be run or how casino nightsshould be operated. See State v. Deddens, 542 P.2d 1124, 1127 (Ariz.1975) (Attorney General opinions are merely advisory). That priorAttorneys General have countenanced distribution and redistribution ofraffle tickets through games of chance does not make casino gamblinglawful, for the opinions simply elaborate on the possibilities within theraffle rule.
The evidence before the court tends to establish that the raffle ruleis being respected by charities. In his opinion as mediator, JusticeGordon found that charity casino nights were not subject to regulation,suggesting that the raffle rule was widely ignored. See JSOF Ex. 17(Mediator's opinion) at 6. There is nothing in the record here to supporta factual finding that Arizona ignores the raffle requirement and allowsnon-raffle gambling by charities to flourish unchecked.28 Thetestimony of the gaming inspectors is that charity gambling is conductedpursuant to the raffle exception. Neither party has argued that themediator's findings should be accorded collateral estoppel effect.
Turning to the Defendants' third argument, the court is aware that lastyear, the prohibition on possession of gambling devices was amended byS.B. 1090. Ariz. Rev. Stat. § 13-3306(E) now carves out an expressexception for "the use of gambling devices by nonprofit or charitableorganizations pursuant to § 13-3302, subsectionB." However, the term"gambling device" refers to "any implement, machine, paraphernalia,equipment or other thing" "used or intended to be used" in violation ofthe gambling prohibitions. A.R.S. § 13-3306(A). The exceptionlegalizes gambling devices for use with raffles, but sheds no new lighton what a raffle is. Therefore, it does not support an inference that thelegislature intended to legalize gaming by charities other than raffles.
Defendants suggest that "[b]y enacting A.R.S. § 5-601, theLegislature recognized it was authorizing gaming compacts that allowedtribal casino gaming, including slot machines." See Response (doc. #60)at 13. They point to the historical context in which § 5-601 wasenacted. Defendants' position is that tribal casino gaming is "regulated"under § 5-601, which makes it lawful "regulated gambling" underA.R.S. § 13-3301(6).29
There are multiple problems with this logic. To find that tribal gaminggenerally is lawful does not answer the substantive question about whatkind of class III gaming is lawful in Arizona. Section 5-601 has nosubstantive component, but instead authorizes the Governor to negotiatecompacts "notwithstanding any other law." What "any other law" requiresis a separate issue. Thus, § 5-601 et seq. and consequent tribalgaming does not validate slot machine or any other particular kind ofgaming.
Defendants argue that because A.R.S. § 5-601 was passed as anemergency measure at the Governor's request after he had proposedcompacts allowing slot machines, the legislature intended to endorse slotmachine gaming. While the context in which a law is enacted may beilluminating, the court hesitates to draw inferences about the ArizonaLegislature's understanding of the substantive gambling law based onevents surrounding enactment of an enabling law without substantivecontent.
In any event, the evidence does not support Defendants' position. Itshall be recalled that the Governor first proposed slot machines in lateMay, right around the time Judge Rosenblatt issued his opinion,Yavapai-Prescott Indian Tribe v. State, 796 F. Supp. 1292 (D. Ariz.1992).30 The issue before the court was "whether the State mustinclude casino and video gaming in a tribal-state compact." Id. at 1294n. 7. The nature of the dispute confirms that the State believed suchgambling was not legal under state law. Judge Rosenblatt stated thatclass III gaming appeared "inevitable" but required the parties tonegotiate further and did not rule on what kinds of class III gaming hadto be offered to tribes.
Governor Symington then concluded compacts with certain tribes allowingsome slot machine gaming, pursuant to A.R.S. § 5-601, which begins"Notwithstanding any other law. . . ." On December 18, 1992, severalmonths after A.R.S. § 5-601 had passed, the State continued to takethe position that slot machine gambling is notlegal in Arizona. See JSOFEx. 11 (State Defendants' Brief to Mediator in Support of Last BestOffer) at 4, 5 (proposing 250 slot machines as a concession) The courtfinds Defendants' position that the Arizona Legislature intended tolegalize slot machine gambling with the passage of A.R.S. § 5-601 torequire a substantial leap of faith and rejects it as implausible.
Fourth, the Defendants argue that because Arizona has entered compactsthat allowed tribes to engage in slot machine gaming, slot machines arepermitted under state law. This argument proves nothing about thelawfulness of the initial permit that might justify its extension. UnlikeForest County Potawatomi Comm. of Wisconsin v. Norquist, 45 F.3d 1079(7th Cir. 1995), where the legality of class III gaming had beenpreviously determined in a separate case, here, no binding authority hasdetermined that slot machine and related casino gaming is legal inArizona. To the extent that Norquist can be read to justify class IIIgaming in one compact simply because similar compacts exist, thissuggestion rests on circular reasoning and is otherwise dicta.31
Thus, the court concludes that only charity raffles are permitted underArizona law. This does not, however, mean that the legislature did notattempt to authorize compacts with terms that would otherwise be inexcess of state law. The court now construes the enabling statute,A.R.S. § 5-601.
b. "Notwithstanding any other law"
According to the Plaintiffs, A.R.S. § 5-601(A) authorizes theGovernor to negotiate only for such gaming that IGRA requires the Stateto provide. Motion (doc. #46) at 15. They argue that IGRA requires statesto enter compacts allowing gaming otherwise tolerated under state law,but does not obligate states to agree to terms beyond the limits of statelaw. The Defendants, on the other hand, argue that A.R.S. § 5-601expressly authorizes the Governor to enter compacts that allow class IIIgaming otherwise prohibited in Arizona. Response at 12. In reply, thePlaintiffs attach to a different bit of the statute, the phrase "pursuantto" IGRA. They argue that this phrase confines the Governor's power toenter compacts to the State's obligations to comply with IGRA.
The court believes that the Defendants have the better view of A.R.S.§ 5-601. "Notwithstanding any other law" is a phrase of unlimitedexception. There is reason to believe that the legislature understood thephrase in this way. The drafting manual used by state legislators advisesthat to create an exception, a bill should begin with a clauseidentifying the otherwise applicable statute, reading "notwithstandingsection 35-174, [the exception goes as follows . . .]." See Ariz.Legislative Council, Arizona Bill Drafting Manual 48(1985). Use of thisconstruction in § 5-601 suggests that the legislature meant to createan expansive exception.
Section 5-601 begins by identifying itself as an exception to all otherlaw, then endorses negotiations and entry into compacts. No substantivelimits about kinds of gaming are imposed on the governor's compactingauthority. There is no provision for legislative ratification or publicreferendum. The legislature demanded only that the State's sovereignimmunity and similar prerogatives be respected. The exception from otherexisting state law and the detachment from lawmaking bodies is complete.
The Plaintiffs would have the court read in a requirement that theGovernor not negotiate for any games banned by state law. The Plaintiffs'attempt to reimport state substantive prohibitions through IGRA rendersthe statute convoluted and creates an unnecessary tension. If state lawwere reintroduced "pursuant to" IGRA, the meaning of the"notwithstanding" phrase conflicts with the reintroduced laws. The courtfinds the Plaintiffs' construction unpersuasive. Therefore, the courtholds that A.R.S. § 5-601 authorizes the Governor to negotiate andenter compacts for kinds of tribal gaming that Arizona otherwiseprohibits.
c. State obligations under IGRA
The court reads the Defendants' brief to assert that IGRA should beunderstood to require, at a minimum, a compact permitting tribes toengage in any class III gaming the State permits "for any person for anypurpose." Response (doc. #60) at 9.32 The minimum idea is crucial. ThePlaintiffs, on the other hand, maintain that IGRA prohibits gaming undertribal-state compacts if such gaming is not permitted under state law.Motion (doc. #46) at 3, 13-14. The Plaintiffs argue that Congress did notintend to create "jurisdictional islands" where community norms —as expressed in state law — are not enforced.
The court conceives this question as whether IGRA establishes a ceilingfor compact terms, or a floor. That is, whether IGRA permits states tooffer only such games that are legal for any person for any purpose (aceiling), or whether IGRA requires states to offer tribes terms equal tothose granted their own citizens, plus allows states to agree to anyadditional gaming (a floor). For the reasons that follow, the courtbelieves a ceiling view is mandated.
IGRA imposes three prerequisites to lawful class III gaming: (A) anauthorizing tribal ordinance, (B) location "in a State that permits suchgaming for any purpose by any person, organization, or entity," and (C) aTribal-State compact that "is in effect." 25 U.S.C. § 2710(d)(1).Section 2710(d)(1) allows class III gaming "only if" these threeconditions are satisfied. A lawfully made state compact satisfiessubsection (C), but it cannot satisfy the independent requirement ofsubsection (B), which demands that gaming be permitted under state law.According to the structure of § 2710(d)(1) and its plain terms, acompact cannot make legal class III gaming not otherwise permitted bystate law. The State must first legalize a game, even if only fortribes, before it can become a compact term.
Federal courts have adopted what the court shall call a "ceiling"perspective, holding that 25 U.S.C. § 2710(d)(1) requires compactgames to be lawful under state law. See Citizen Band Potawatomi IndianTribe v. Green, 995 F.2d 179, 181 (10th Cir. 1993); United States v.SanteeSioux Tribe of Nebraska, 135 F.3d 558, 564 (8th Cir. 1998). TheTenth Circuit rejected as "patent bootstrapping" a suggestion that acompact could legalize devices prohibited by state law. Green, 995 F.2dat 181; see also U.S. v. Santa Ynez Band of Chumash Mission Indians ofthe Santa Ynez Reservation, 33 F. Supp.2d 862 (C.D.Cal. 1998) (describinggames illegal under state law as "uncompactable").
The Ninth Circuit has held only that a state does not have to negotiatefor any more class III games than are allowed under state law. RumseyIndian Rancheria of Wintun Indians v. Wilson, 64 F.3d 1250 (9th Cir.1994). Thus, if a state permits one kind of class III gaming, such aspari-mutuel wagering, Rumsey holds that the state has no obligation tonegotiate over other games, such as slot machines. Accord, Cheyenne RiverSioux Tribe v. South Dakota, 3 F.3d 273, 279 (8th Cir. 1993), abrogatedon other grounds by Seminole Tribe of Florida v. Florida, 517 U.S. 44,72, 116 S.Ct. 1114, 1131 (1996). Rumsey dealt with the obligations of areluctant state; it does not establish whether a state with enthusiasmfor tribal gaming may afford tribes greater gaming privileges than statelaw otherwise provides. In the absence of Ninth Circuit precedent, thecourt follows the authority of the Tenth and Eighth Circuits, whichprofess the ceiling view. Accordingly, Arizona may enter compacts only forgames that are legal under state law.
The Defendants' attempt to distinguish the Tenth Circuit's opinion inGreen, 995 F.2d at 181, is unpersuasive. Green involved the Potawatomitribe's plan to import video lottery terminals (VLTs) for use on triballand. A tribal/state compact in force allowed VLTs only if the U.S.Attorney or a federal court first declared that importation of VLTs waslegal under the Johnson Act. The U.S. Attorney and then the districtcourt both declared that importing the VLTs would violate the JohnsonAct's prohibition on possession or use of gambling devices. The tribeappealed.
The Tenth Circuit affirmed. While IGRA creates an exception to JohnsonAct liability, it did not apply. Under IGRA, otherwise banned gamblingdevices may be used pursuant to a compact made "by a State in whichgambling devices are legal." 25 U.S.C. § 2710(d)(6)(A). Oklahomaprohibited possessing or dealing in gambling devices, however, making itimpossible for the tribe to bring the VLTs under the IGRA-createdexception to the Johnson Act. Green, 995 F.2d at 181. Although videogames in general were legal under state law, video games that operated asgambling devices were not. Id. The compact, which would have permittedthe VLTs if they did not violate the Johnson Act, did not establish thelegality of the gambling devices for purposes of the IGRA exception tothe Johnson Act. Id.
The Defendants argue that the first question under Green should bewhether Arizona prohibits possession of gambling devices. They haveproduced ample evidence to demonstrate that gambling devices are freelybought, sold and imported in Arizona. Green cannot be applicable, theyargue. The court disagrees for two reasons.
First, to be legal in Arizona, slot machines must be operated in afashion that does not constitute "gambling." State law does not tolerateusing the machines to gamble. For the purpose of determining what IGRApermits, whether a device is "illegal" in the compacting state because itmeets the definition of "gambling device" and its possession isprohibited, or because it is used for prohibited "gambling," amounts to adistinction without real consequence. The Johnson Act prohibits bothpossession and use of "any gambling device." 15 U.S.C. § 1175. As longas theproposed gaming activity would violate the State's prohibitions ongambling devices, the exception under IGRA is not available.
Second, Green is not used here for its explanation of how state lawinterfaces with the IGRA exception to the Johnson Act. Rather, thepertinent insight is that IGRA makes a class III game's legality understate law a separate requirement from its inclusion in a tribal-statecompact. 995 F.2d at 181. The Defendants' emphasis on the "possession"prohibition in Oklahoma law is misplaced.
The Defendants' "floor" interpretation of § 2710(d)(1) relies onlegislative history and the application of IGRA by the Secretary of theInterior.33 In the past, the Secretary of the Interior has taken theposition that states should give tribes exclusive rights to operatecertain gaming if tribes are to make payments to states, other thanpayments to cover direct expenses that the states incur in regulatingcompact gaming. See JSOF Ex. 64 (letter from Ass't Secretary of IndianAffairs to Chairman Robert Guenthardt, dated February 9, 1999). TheSecretary maintained that the privilege of exclusive gaming rights wouldbe a legitimate "operating cost" for which tribes could pay. If,however, a state extracted extra fees without the benefit ofexclusivity, the state would violate 25 U.S.C. § 2710(d)(4), whichforbids states from imposing any taxes or fees on tribal class IIIgaming. Id.; accord JSOF Ex. 62 (letter from Ass't Secretary of IndianAffairs to Chief Ralph Sturges, dated December 5, 1994).
In these letters, the Secretary's concern is not section 2710(d)(1),but rather the possibility of a state extracting revenues dedicated byCongress to tribes. The Secretary did not refer to section 2710(d)(1)when setting out this position. The position taken in these letterscannot be considered an agency interpretation of § 2710(d)(1). It isperfectly conceivable that states could satisfy the Secretary'sexclusivity demand and § 2710(d)(1)(B) together by enacting a statelaw authorizing only tribes to engage in a particular kind of gaming, orby legalizing that kind of gaming but granting only tribes permits. Thestate may not both legalize and grant exclusivity through a compact,however, for legality is a separate requirement under subsection2710(d)(1)(C).
2. Constitutionality of A.R.S. § 5-601 et seq.
a. Unconstitutional delegation off legislative powers
The Plaintiffs argue that A.R.S. § 5-601 unconstitutionallydelegates legislative authority by allowing the Governor unfettereddiscretion to annul state criminal gaming laws. In response, theDefendants argue that the delegation stops short of an executive"usurpation" of legislative power. Response at 19.
The Intervenor makes an argument similar to the Plaintiffs', contendingthat decisions about whether and to what extent gaming should be allowedare legislative. Opening Brief (doc. #43) at 3-4. It argues that withA.R.S. § 5-601, the Legislature failed to define a tribal gamingpolicy or establish standards to guide the Governor. In response, theDefendants argue that the delegation of negotiating authority to theGovernor is appropriately channeled. Response (doc. #61) at 6. They alsosuggest that gaming compacts are sui generis, because Arizona "wouldnormally not have any political say whatsoever" over gaming on triballand. Id. at 7.
The separation of powers doctrine enshrined in the Arizona Constitutionprotects one branch against the overreaching of any other branch. Statev. Prentiss, 786 P.2d 932, 935-36 (Ariz. 1989). "Nowhere in the UnitedStates is this system of structured liberty [of separation of powers]more explicitly and firmly expressed than in Arizona." ex rel. Woods v.Block, 942 P.2d 428, 434 (Ariz. 1997) (quoting Mecham v. Gordon,751 P.2d 957, 960(1988)).34 Under Arizona's tripartite system, thelegislature formulates the law and the executive carries out the policiesand purposes declared by the legislature. Id.
In order to delegate legislative power to an executive agent, theenabling statute need go no further than "giving the power to adopt rulesand regulations to provide for the execution and enforcement oflegislation." Hernandez v. Frohmiller, 204 P.2d 854, 863 (Ariz. 1949).The legislature may not, however, convey its essential responsibility formaking political choices. See 3613 Ltd. v. Dep't of Liquor Licenses andControl, 978 P.2d 1282, 1287 (Ariz. Ct. App. 1999) (citing Lake HavasuCity v. Mohave County, 675 P.2d 1371, 1378 (Ariz. Ct. App. 1983)).Delegated powers "must, by the provisions of the act, be surrounded bystandards, limitations, and policies." Hernandez, 204 P.2d at 863.Standards need not necessarily be set forth in express terms if they canreasonably be inferred from the statutory scheme as a whole. State v.Ariz. Mines Supply Co., 484 P.2d 619, 625 (Ariz. 1971). Arizona courtsrequire only an "intelligible principle" behind a delegation for it to belawful. Ethridge v. Ariz. State Bd. of Nursing, 796 P.2d 899, 906 (Ariz.Ct. App. 1989) (quoting Industrial Union Dept. v. American PetroleumInst., 448 U.S. 607, 685-86, 100 S.Ct. 2844, 2886(1980) (Rehnquist, J.,concurring)). While admitting once that the boundary between lawfuldelegation and unconstitutional surrender of legislative power is fuzzy,the Arizona Supreme Court pronounced:
It may safely be said that a statute which gives unlimited regulatory power to a commission, board or agency with no prescribed restraints nor criterion nor guide to its action offends the Constitution as a delegation of legislative power. The board must be corralled in some reasonable degree and must not be permitted to range at large and determine for itself the conditions under which a law should exist and pass the law it thinks appropriate.
State v. Marana Plantations, 252 P.2d 87, 89 (Ariz. 1953) (emphasisadded).
With § 5-601, there are few express conditions imposed by thelegislature. The Arizona Supreme Court recognized that § 5-601confers "almost unlimited power" on the Governor. Salt RiverPima-Maricopa Indian Community v. Hull, 945 P.2d 818, 824(1997).35Those directions that do exist failto articulate a policy toward gamingor impose standards for the Governor to determine which kinds of gamingare acceptable or under what conditions. Rather, by expressly waivingevery other law, the legislature permitted the Governor to negotiate forany game. There are no wager limits, payoff caps, or other significantlegislated precautions. No standards can be inferred from the statute asa whole, either. The statute consistently abdicates responsibility forfiguring out how the State's obligations under IGRA may be fulfilled,even waiving "any other law" to accommodate a broader range of possibleoptions, yet expressing an opinion on none.
The statute's direction to comply with IGRA imports no substantiveconstraints, for IGRA is designed to allow states to express theirsubstantive concerns about class III gaming, not to impose federalrules. Especially if IGRA is read to endorse a "floor" view, as theDefendants submit, IGRA does not channel the Governor's discretion. Justas the health board must have a mandate more explicit than to "regulatesanitation and sanitary practices in the interests of public health" andto prevent "disability and mortality," Marana, 252 P.2d at 90, theGovernor must be given to understand the legislative policy about gamingon tribal lands within the State in order to negotiate compacts.
In the court's view, the qualifications that the legislature hasimposed to date — raising the legal gambling age, establishingguidelines for the placement of ATMs, implementing programs to controlcompulsive gambling, etc. — are little more than parsley garnishingthe policy roast. These "sparse and peripheral" instructions do notprovide an "intelligible principle" for the bulk of gaming issues. Section5-601 enables the Governor to decide basic gaming policy and standardsfor the State solely in the course of negotiation with the tribes.
It is important to recognize that the legislature did not defer to theGovernor's particular expertise in gaming issues when it created §5-601. In Arizona Mines Supply Co., 484 P.2d at 625, the Arizona SupremeCourt recognized that environmental and economic regulation often dependson evidence best understood by experts. Another rationale for a loosestatutory description of an agency's duties is that the legislaturecannot anticipate the variety of possible need. See State v. Wacker,344 P.2d 1004, 1007 (Ariz. 1959) (agency charged with preventingintroduction of pests to Arizona and suppressing propagation of presentpests from one locality to another could not be give explicit directionsin advance).
The expertise rationale for broad delegation is absent here, for thelegislature has the capacity to strike the policy balances gamblingregulation entails. For example, pari-mutuel gaming is highly regulatedby statute, see A.R.S. § 5-101 et seq., and against a broadprohibition of gambling, there is a limited statutory exception forraffles, A.R.S. §§ 13-3301(6); 13-3302. It is therefore incongruousthat the legislature should abdicate responsibility for determining thekinds of compact games the State should negotiate. Any delicacy in thedetails about gambling is political, not technical or scientific. Norhave the Defendants offered any reason to believe that determininggambling regulatory policy requires flexibility in order to accommodatevariable factual situations.
Some states grant their governors broad negotiating authority, reinedin by a legislative ratification process. Accountability to thelegislature might save compacts negotiated pursuant to § 5-601. SeeTillotson v. Frohmiller, 271 P. 867, 870 (Ariz. 1928) (holding delegationinvalid because agent could choose to act on "independentuncontrolledjudgment"). Defendants attempt to distinguish Tillotson, but if theGovernor is accountable to anyone under the current scheme, theDefendants have failed to identify to whom.
Other cases where compacts were invalidated on separation of powersgrounds are instructive, although no compacts are subject to invalidationhere. See State ex rel. Clark v. Johnson, 904 P.2d 11 (N.M. 1995); Stateex rel. Stephan v. Finney, 836 P.2d 1169, 1185 (Kan. 1992). In Clark, theNew Mexico Supreme Court held that a compact broadly permitting all sortsof games usurped the power of the legislative branch, because the compactgave the tribe "a virtually irrevocable and seemingly perpetual right" toconduct class III gaming. 904 P.2d at 23. The court believed thatestablishing a state's position on class III gaming involves striking abalance and is thus a legislative task. Id.
In Finney, the Governor of Kansas purported to rely on a statutegenerally allowing her to transact the business of the State in order tonegotiate and bind the State of Kansas to a compact. The Kansas SupremeCourt rejected her position because compacts are not regular statebusiness:
[T]he transaction of business connotes the day-to-day operation of government under previously established law or public policy. The implementation of law and policy rather than the enactment of law and the determination of public policy constitutes the transaction of business between Kansas and the federal government. The carte blanche interpretation asserted by the Governor herein is massive in its implication and, additionally, would have serious problems if challenged on grounds that it constitutes an impermissible delegation of the legislature's law-making powers.
Id. at 1178. The court went on to hold that the compact terms executed bythe Governor created a state agency and delegated rule making authorityto it, which were both legislative acts beyond the Governor's power. Id.at 1184. While the holding of Finney concerns a different issue, itspassing observation about the unlawfulness of a carte blancheauthorization is no less true for being ancillary. The court findsunpersuasive the Defendants' attempts to distinguish Finney by limitingthat case to voiding the Kansas Governor's creation of a gaming agency.That the Arizona Legislature properly created a gaming agency does notmean that an Arizona governor does not engage in another kind oflegislative act by establishing state gaming policy in the absence oflegislative guidance.
The court agrees with the Intervenor and Plaintiffs in concluding thatA.R.S. § 5-601 violates art. III of the Arizona Constitution and sois void. It is therefore unnecessary, strictly speaking, for the court toreach the Plaintiffs' other arguments to invalidate § 5-601, such aswhether the statute is unconstitutional as a local or special law, andwhether it or compacts created pursuant to it violate equal protectionprinciples. Discussion of the Intervenor's theories about compacts beinglegislation contingent on tribal approval, or treaties in violation ofthe federal constitution, would similarly be redundant holdings. Giventhe time pressures bearing on the ultimate resolution of thislitigation, however, the court finds it appropriate to consider alternategrounds in order to leave no issue unresolved.
b. "Local or special law"
The Plaintiffs contend that compacts authorizing tribes to conduct slotmachine, keno and blackjack gaming run afoul of the Arizonaconstitutional prohibition against "local or special laws." Motion at18. In response, the Defendantsargue that the local or special lawprohibition does not apply to tribal-state compacts because tribes areseparate sovereigns and not corporations, associations or individuals,but if it does, its requirements are satisfied. Response (doc. #60) at28. In reply, the Plaintiffs maintain that tribes' sovereign status isirrelevant, because as long as a sovereign is engaged in commerce, thesame analytical framework applies. Reply at 17.
The Arizona Constitution prohibits local or special laws, includinglegislative grants to any corporation, association or individual ofspecial or exclusive privileges, immunities or franchises. Ariz. Const.art. IV, part 2 § 19(13). Local laws reflect legislative favoritismfor a particular area of the state. State v. Loughran, 693 P.2d 1000,1003 (Ariz. Ct. App. 1985). A law is special if it "applies only tocertain members of a class or to an arbitrarily defined class which isnot rationally related to a legitimate legislative purpose." StateCompensation Fund v. Symington, 848 P.2d 273, 277 (Ariz. 1993) (citationsomitted). Conversely, a law of limited application is general so long asit applies to all cases and to all members of the specified class.Arizona Downs v. Arizona Horsemen's Foundation, 637 P.2d 1053,1061(1981).
The Arizona Supreme Court has explained that the prohibition againstlocal and special laws is designed, among other things, "to secureuniformity of law throughout the state as far as possible." StateCompensation Fund, 848 P.2d at 277. The State must treat similarlysituated persons consistently, Prescott Courier Inc. v. Moore, 274 p.163, 165 (Ariz. 1929), or without arbitrarily favoring some, see ArizonaDowns, 637 P.2d at 1060.
Here, the tribes are not within the State's jurisdiction. "[A]lthough atribe may be within the geographical boundaries of a state, the tribe isjurisdictionally distinct from the state, and the state has no authorityto impose its laws on the reservation." Tracy v. Superior Court,810 P.2d 1030, 1043 (Ariz. 1991). The court finds that the local orspecial law principle cannot be wielded against laws describingrelationships with entities outside the State's jurisdiction.
Even if local/special law analysis were appropriate, the Plaintiffswould not prevail. A three-part test is used to determine whether a lawconstitutes special or local legislation. See Republic Inv. Fund v.Surprise, 800 P.2d 1251, 1257 (Ariz. 1990). A law does not violate Ariz.Const. art. IV part 2, § 19 if: (1) there is a rational basis for theclassification; (2) the classification is legitimate, encompassing allmembers of the relevant class; and (3) the class is flexible, allowingmembers to move into and out of the class. Id.
i. Rational basis
For local/special law purposes, a statutory classification should beupheld as reasonable unless it is "palpably arbitrary." Chevron ChemicalCo. v. Superior Court, 641 P.2d 1275, 1285 (Ariz. 1982). The Plaintiffsdo not persuade the court that the State's decision to confine class IIIgaming to tribal lands is irrational. In their motion, the Plaintiffswrite: "Gaming monopolies for Indian tribes would fail the rational basistest in light of the Congressional extinguishment of tribal sovereigntyover Class III gaming prohibited by state law." Motion (doc. #46) at 20.The court does not understand what is meant by this conclusoryassertion, and the reply fails to clarify. In light of the federalgovernment's unique relationship with Indian tribes, see Morton v.Mancari, 417 U.S. 535, 94 S.Ct. 2474(1974), and the purpose of IGRA to"promote tribal economic development, tribal self-sufficiency, and strongtribal government," 25 U.S.C. § 2701(4), the court concludes that thedistinction in state law following IGRA is rational.
ii. Legitimate class
The Plaintiffs argue that classifying tribes as the only entitiespermitted to operate class III gaming excludes members of the relevantclass. They define the relevant class as "all persons interested inconducting class III gaming." This is inaccurate. The relevant class isdefined by federal law as Indian tribes, see 25 U.S.C. § 2703(5), forit is only with such entities that states are obliged to negotiatecompacts. Id. § 2710(d)(3). Restricting class III gaming to tribesdoes not create a special or local law.
iii. Elasticity of class
Elasticity is another measure of the nonspecific character of a law. "Astatute worded so as to admit entry and exit from the class implies thatthe class formation was separate from consideration of particularpersons, places, or things and, thus, not intended as special or local inoperation." Republic Investment Fund, 800 P.2d at 1258-59. The Plaintiffsargue that tribal membership is "inelastic or closed." The Plaintiffsmisconceive the elasticity analysis. Within the class of entitieseligible to engage in class III gaming, the statute specifies noparticular tribe, and tribes are free to seek compact negotiations or letcompacts expire unrenewed as they choose. The class is sufficientlyelastic.
c. Federal equal protection
The Plaintiffs contend that if the Governor, pursuant to section5-601, gives tribes exclusive rights to conduct commercial slot machine,keno and blackjack gaming in Arizona, such exclusivity rests entirely ona racial distinction, in violation of federal equal protectionprinciples. They contend that Congress's authority under the IndianCommerce Clause is not so great that Congress can compromise theFourteenth Amendment.
In response, the Defendants argue that the status of tribes justifiestargeted measures and does not violate the Equal Protection Clause, solong as the treatment is rationally related to Congress's uniqueobligations toward Indians. They argue that strict scrutiny isinapplicable, because preferential treatment for tribes is a politicalclassification, not a racial one. They point out that only tribes, andnot individual tribe members, may operate casinos.
In reply, the Plaintiffs argue that a tribe has power to engage inclass III gaming only pursuant to a grant by the State, and if a statemakes such a grant, it must observe Equal Protection principles. ThePlaintiffs further submit that tribal gaming is not a matter of "uniquelyIndian interest" that might justify an overt preference under the federalgovernment's "unique obligation toward the Indians." Reply at 15.36
The key to the equal protection question, the parties agree, is whethertribal gaming compacts reflect Congress's obligation to legislate onbehalf of federally recognized Indian tribes. Although a tribe's right toengage in class III gaming depends on the legality of such gaming understate law, the Defendants acknowledge that tribes' entitlement may bebroader than that of persons permitted to conduct games under state law.Therefore, the Defendants attempt to justify the preference IGRA createsfor tribes. Response at 22-23.
In Morton v. Mancari, 417 U.S. 535, 554, 94 S.Ct. 2474 (1974), theSupreme Court held that federal laws "reasonably designed to further thecause of Indian self-government" are scrutinized under the rational basistest. Preferences for members of federally recognized tribes are notracial preferences but rather political ones, for federal recognition ofa tribe is a political and not a racial matter. Id. at 553 n. 24; 94S.Ct. at 2484 n. 24; cf. Rice v. Cayetano, 120 S.Ct. 1044, 1062 (Breyer,J., concurring) (classifications based on ancestry are not permissible ifancestral group does not have a political structure to determine who itsmembers are). Federal regulation of Indian affairs is "rooted in theunique status of Indians as a `separate people' with their own politicalinstitutions." United States v. Antelope, 430 U.S. 641, 646, 97 S.Ct.1395, 1399(1977). The federal government also regulates Indians aspersons subject to federal jurisdiction. See id. 18 U.S.C. § 1153.
When the federal government creates a law applicable to all personssubject to federal jurisdiction, it does not violate equal protection aslong as "its own body of law is evenhanded, regardless of the laws ofStates with respect to the same subject matter." Antelope, 430 U.S. at649, 97 S.Ct. at 1400 (holding that application of federal law toIndians' crimes did not violate equal protection as an unfair race-basedclassification, where Indians were convicted of first degree murder underfederal law, when elements for first degree murder under state law hadnot been proved). The Antelope Court recognized the possibility thatregulations made for Indians pursuant to Indians' special status couldresult in a situation where federal law no longer applied consistently toall persons subject to federal jurisdiction, id. at 649 n. 11, 97 S.Ct.at 1400 n. 11, but declined to intimate a view on how this should besorted out.
The Plaintiffs read footnote 11 for the proposition that "a federalstatute which treats Indians differently without nexus to the separategovernmental powers of tribes could fail the federal Due Process test."Motion (doc. #46) at 25. The court agrees that a regulation treatingIndians differently that cannot be justified under Mancari could violateequal protection. See Dawavendewa v. Salt River Project Agr. Imp. andPower Dist., 154 F.3d 1117, 1124 (9th Cir. 1998) (employer's preferencefor members of only one tribe violated Title VII). The question iswhether A.R.S. § 5-601, if read to grant tribes casino gaming rightsnot allowed to others, is "reasonably designed to further the cause ofIndian self-government." Motion at 27.
The Plaintiffs rely on Williams v. Babbitt, 115 F.3d 657 (9th Cir.1997) to argue that it is not. There, the Ninth Circuit considered thevalidity of a BIA regulationthat limited reindeer ownership in Alaska tomembers of Indian tribes. The BIA regulation was adopted pursuant to theReindeer Act, designed to preserve what Congress considered the "nativecharacter" of the Alaska reindeer industry. Id. at 659-60. A non-Indiansought to import reindeer from Canada and was blocked by the BIA. Themajority of the Ninth Circuit panel held that the BIA interpretation ofthe Reindeer Act was not entitled to deference because of the"seriousness of the constitutional doubts it raises." Id. at 663. Freedto interpret the Act de novo, the court determined that the Act does notprohibit non-native ownership of reindeer in Alaska. Id. at 666. Themajority's approach allowed exploration of equal protection issueswithout ultimately resolving them. Id. On this portion of the opinionwhere constitutional doubts are merely raised, the Plaintiffs stake theirequal protection claim.
The majority recognized that Congress may grant preferences toIndians. It insists, however, that only if a classification is entwinedwith traditional or "unique" Indian interests should the preference beconsidered politically based and analyzed for rationality under Mancari.Williams, 115 F.3d at 665. Classifications bearing on matters notaffecting uniquely Indian interests are subject to strict scrutiny. Id.The majority went on to pointedly suggest that certain preferences do notrelate to uniquely Indian interests:
For example, we seriously doubt that Congress could give Indians a complete monopoly on the casino industry or on Space Shuttle contracts. At oral argument, counsel for the government conceded that granting natives a monopoly on all Space Shuttle contracts would not pass Mancari's rational-relation test. Counsel could only distinguish the Space Shuttle preference from a reindeer preference by noting that, in 1937, natives were heavily involved in the reindeer business whereas they aren't involved in the Space Program. The casino example defies this distinction, but is equally unrelated to "Congress' unique obligation toward the Indians." Mancari, 417 U.S. at 555, 94 S.Ct. at 2485.
Id. at 665.
As further grounds for "serious constitutional doubt" about theregulation, the Williams majority mentioned the impact of AdarandConstructors. Inc. v. Pena, 515 U.S. 200, 115 S.Ct. 2097(1995), where theSupreme Court held that racial preferences must be narrowly tailored toremedy past discrimination. Id. at 665. Justice Stevens, dissenting inAdarand, wrote that the logical implications of the Adarand, majorityopinion jeopardized federal preferences for Native Americans. Drawing onthis dissent, the Williams court predicted that "Mancari's days arenumbered." 115 F.3d at 665.
The Plaintiffs use Williams as follows. They begin by stating that IGRAdoes not require special treatment of Indians, but rather requires onlythat Indians be treated as well as other persons in Arizona. SinceCongress has not set out to justify special treatment, the Plaintiffsargue that the State has no basis for granting tribes exclusive class IIIgaming permits. They then take their cue from the dicta of Williams toargue that because gaming does not uniquely affect tribal interests, theproposed compacts must be held to strict scrutiny and invalidated.
The court finds that equal protection is not violated. Congress didcall for special treatment for tribes in IGRA, because by requiringstates to enter compacts on terms permitted to "any person for anypurpose" under state law, IGRA provides for gaming on tribal lands tobenefit tribes, even where such for-profit gaming is not allowed toentities outside tribal lands. To prevail on their claim, thePlaintiffsmust demonstrate that Congress's grant of potentially exclusive gamingopportunities to tribes bears no rational relationship to any legitimatepurpose. See City of Cleburne v. Cleburne Living Ctr., Inc., 473 U.S. 432,440, 105 S.Ct. 3249, 3254(1985). Congress need only articulate "somereasoned explanation" for creating an Indian classification. NarragansettIndian Tribe v. Nat'l Indian Gaming Comm'n, 158 F.3d 1335, 1340-41 (D.C.Cir. 1998).
In enacting IGRA, Congress found that tribes had been operatinggambling to raise revenue on tribal lands. 25 U.S.C. § 2701(1).Congress also found that tribes benefitted from earning money throughgaming in a manner that promoted tribal self-sufficiency and economicdevelopment. Id. § 2701(4). The limitation of such gaming to tribeson tribal lands is sufficiently related to Indian sovereignty over triballands to satisfy Mancari's test.
The Plaintiffs do not argue here directly that Adarand, tightening theuse of racial classifications of individuals for remedial purposes,overrules Mancari's holding that preferences for Indian tribes arepolitical and not racial. The court is aware that an implicit overrulinghas been suggested by Justice Stevens and acknowledged by the NinthCircuit. However, Mancari is directly on point, is acknowledged asauthoritative in cases involving tribes, see Rice, 598 U.S. at 519, andis overruled by Adarand only depending on how broadly that opinion isconstrued. In these circumstances, the court must follow Mancari as thedirectly controlling case, for the Supreme Court reserves to itself theprerogative to find its opinions implicitly overruled by changingdoctrine. Agostini v. Felton, 521 U.S. 203, 237, 117 S.Ct. 1997,2017(1997).
To the extent that A.R.S. § 5-601 may be read to authorizeexclusive gaming privileges by tribes on tribal land, the Governor'sdecision to do so is also consistent with equal protection. Where a statelaw is enacted "in response to a federal measure" intended to achieve theresult accomplished by the challenged state law, the state law itselfneed only "rationally further the purpose identified by the State" to besustained against an equal protection challenge. Washington v.Confederated Band & Tribes of Yakima Indian Nation, 439 U.S. 500-501, 99S.Ct. 740, 761(1979). Legislative classifications are valid unless theybear no rational relationship to the State's objective to carry outfederal law. Id. at 501, 99 S.Ct. at 762. Because the Arizona legislaturehas made no findings about tribal gaming, the Defendants rely onmaterials created for the Governor to support the rationality of hergaming decisions. These materials are subject to a motion in limine.
The Defendants move for the admission of a report called "PublicHearings on Indian Gaming," created by the Arizona Department of Gaming.The report, created at Governor Hull's behest by the Department'sDirector, Stephen Hart, describes sentiments expressed by persons whoattended four public hearings in December 1999. The report consists ofeleven pages summarizing testimony given at the hearings (Report Summary)and the rest consists of transcripts, written comments submitted at themeetings, etc. (Report Attachments). The Defendants argue that theeleven-page summary is admissible under Fed. R. Evid. 803(8) as a publicreport, and that the Attachments may be considered for the non-hearsaypurpose of establishing a basis for the Governor's decisions. ThePlaintiffs object, contending that none of the materials are relevant andall are hearsay, and thatthe Attachments are more prejudicial thanprobative.
The Report was generated after four public hearings, held in Payson,Yuma, Phoenix and Tucson between November 30 and December 9, 1999. Over1200 persons attended; how they came to participate is unknown, forsample selection methods are not described. The report "summarizes" the"themes" discussed at the hearings by announcing conclusions on everyissue, presumably a summary representing the majority view. The reportalso suggests that the views expressed in the summary are the views ofthe public, but no statistical analysis is included to support suchextrapolation.
The court finds that the report is admissible, but its utility islimited to reflect its flaws. Courts take a broad approach toadmissibility under Fed. R. Evid. 803(8)(C). Public reports are notinadmissible merely because they state conclusions or opinions, as longas the conclusions are trustworthy. Beech Aircraft Corp. v. Rainey,488 U.S. 153, 170, 109 S.Ct. 439, 450(1988).
The court may presume that public records are trustworthy, and it isthe challengers burden to show otherwise. Johnson v. City of Pleasanton,982 F.2d 350, 352 (9th Cir. 1992). In determining whether the "sources ofinformation or other circumstances" indicate lack of trustworthiness, theAdvisory Committee Notes list four suggested factors for consideration:(1) the timeliness of the investigation; (2) the special skill orexperience of the official; (3) whether a hearing was held on the levelat which conducted, and (4) possible motivational problems. See AdvisoryCommittee Notes, Reprinted following Fed.Rules of Evid. 803, 28 U.S.C.A.
The Plaintiffs' objections to the Report Summary are well taken, forthe conclusions the Report draws are not shown to have been derived fromgenerally accepted or trustworthy methods. The Report Summary shall beconsidered to represent only the conclusions of the Department of Gamingabout the prevailing opinions expressed at the hearings. As thePlaintiffs recognize, "this information may have been useful fordetermining political priorities." The conclusions in the Summary willnot be considered to represent the views of the general public, however,for no appropriate statistical analysis has been done. In an age ofpolling, the failure to ensure a representative sample and an acceptablemargin of error cannot be overlooked. The Summary also will not beconsidered for the truth of the opinions expressed, e.g., that "gaminghas not increased the volume of criminal activity, number of calls forservice, or the volume of cases processed through the non-Indian criminaljustice system," for there is no reason to believe that any of thespeakers were qualified to speak to such matters.
The court shall admit the statements in the Attachments for the purposeof showing that members of the public attending the hearings felt thatthey had benefitted from Indian gaming. The court sees no risk of unfairprejudice if the statements are properly understood as anecdotal. Themotion in limine is granted in part and denied in part.
Based on the Report and other evidence, the Governor could rationallyconclude that casino gaming on tribal lands should be continued. Whilethe Plaintiffs argue that the Governor could better pursue apoverty-reduction policy by allowing all local governments, includingmunicipalities, to conduct casino gaming, the pertinent question iswhether the Governor's policy is rational. The Plaintiffs have not shownthat tribal gaming pursuant to IGRA is so contrary to state interests orso arbitrary as to be irrational. The fact that the Governor resorted toan anecdotal samplingof public opinion to guide her strategy onlyconfirms, however, that § 5-601 gives her unbridled discretion toformulate gaming policy.
d. Equal privileges
The Plaintiffs believe that compacts authorizing tribal monopolies inslot machine, keno and blackjack gaming violate the equal privilegesclause in the Arizona Constitution. The Plaintiffs argue that Ariz.Const. art. II, § 13 enshrines the principle of equal opportunity forbusinesses, and is more rigorous than federal equal protection analysis.Motion at 22.
Article II, section 13 of the Arizona Constitution prohibits the Statefrom granting any person or corporation, other than a municipality,"privileges or immunities which, upon the same terms, shall not equallybelong to all citizens or corporations." The Arizona Supreme Courtinterprets the equal privileges clause "to secure equality of opportunityand right to all persons similarly situated." Prescott Courier. Inc. v.Moore, 274 P. 163, 165(1929). The effects of the state equal privilegesclause and the federal equal protection clause are essentially the same,State v. Bonneville, 2 P.3d 682, 686 (Ariz. Ct. App. 1999), although theArizona law has unique roots in a fear of overreaching by businessentities. See Martin v. Reinstein, 987 P.2d 779, 799 n. 18 (Ariz. Ct.App. 1999); see generally John D. Leshy, The Arizona State Constitution54(1993).
There is no equal privileges issue here because there is nodiscrimination among similarly situated persons. Tribes, unlikePlaintiffs, are sovereign political entities and not subject to stateregulation. Nevertheless, even if the Plaintiffs were similarlysituated, there is no violation of equal privileges rights. The privilegein question — to engage in class III gaming — implicates onlyeconomic rights and no fundamental right. The State's rule limiting classIII gaming to tribes on tribal land must be only rationally related tofurthering some legitimate governmental interest. See Big D Const. Corp.v. Court of Appeals, 789 P.2d 1061, 1067 (Ariz. 1990). The State mayrationally draw a regulatory distinction based on land ownership. SeeBonneville, 2 P.2d at 685 (upholding a law banning leghold traps onpublic land but not on private land). Analogously, the State maylegitimately decide to limit class III gaming to tribal lands. TheDefendants theorize that Arizona would choose to endorse class III gamingonly for tribes to promote strong tribal government, economicdevelopment, and self-sufficiency of tribal lands. Response at 27. ThePlaintiffs do not show that these motives cannot reasonably be achievedby the State's tribal gaming policy. For the reasons discussed above inthe equal protection analysis, tribes are not similarly situated to thePlaintiffs because they are political sovereigns not otherwise subject tostate regulation.
Notably, class III gaming is not "presumptively a legitimate business,"an element that the Arizona Supreme Court has mentioned as a factor indetermining whether a regulation unfairly limits economic activity. SeeState v. Childs, 257 P. 366, 367 (Ariz. 1927); Elliott v. State,242 P. 340, 341-42 (Ariz. 1926) (If a law prohibits the exercise ofoccupations, "legitimate and laudable in themselves," while allowingother businesses not reasonably distinguishable to be carried on freely,it violates the equal privileges clause). Rather, gambling is broadlybanned in Arizona, and Arizona citizens and corporations have noreasonable baseline expectation to conduct such enterprises. The equalprivileges clause is not violated by Arizona's actions to convey anexclusive class III gaming franchise on tribes.
3. Compacts are ultra vires
The Intervenor believes that compacts are treaties and states cannotmake treaties. It also describes compacts as legislation, theeffectiveness of which is contingent on tribal approval. While the courtquestions whether the Intervenor has standing to assert these claims,Defendants have not asserted a jurisdictional defect. Assuming that theIntervenor has standing, the court rejects these theories on theirmerits.
a. Compacts as treaties
The United States Constitution allocates treaty-making authorityexclusively to the President, with the advice and consent of the Senate,Art. II § 2, and prohibits states from concluding treaties, Art. I§ 10. The Intervenor contends that Congress cannot enable Arizona toenter treaties with Indian tribes. Opening Brief (doc. #43) at 5.
The court rejects the Intervenor's superficial characterization oftribal-state compacts as "treaties." United States v. Reid, 73 F.2d 153,155 (9th Cir. 1953) defines treaties as contracts between nations.Although states are sovereigns, they are not nations. No one today,including the President of the United States, makes treaties with Indiantribes. 25 U.S.C. § 71; see Antoine v. Washington, 420 U.S. 194,201-02, 95 S.Ct. 944, 949(1975). Congress exercises its plenary power tomediate relations between the United States and tribes throughlegislation. Antoine, 420 U.S. at 203, 95 S.Ct. at 950. By virtue of theSupremacy Clause, Congressional acts are "superior and paramount to theauthority of any State within whose limits are Indian tribes." Id. at294, 95 S.Ct. at 950 (quoting Dick v. United States, 208 U.S. 340, 353,28 S.Ct. 399, 403(1908)). Congress may, however, cause state regulationto extend to tribal land if it specifically directs such an incursion.Washington v. Confederated Bands and Tribes of Yakima Indian Nation,439 U.S. 463, 501, 99 S.Ct. 740, 761(1979).
With IGRA, Congress imposed federal regulation on tribal gamingcapacities. Santa Ana v. Kelly, 104 F.3d 1546, 1549 (10th Cir. 1997); seegenerally Rebecca Tsosie, Negotiating Economic Survival: The ConsentPrinciple and Tribal-State Compacts under the Indian Gaming RegulatoryAct, 29 Ariz. St. L.J. 25, 56-57(1997). IGRA improves on the method ofadopting state laws by creating a mechanism whereby tribes and statesnegotiate to determine which state gaming regulation should apply ontribal lands. The approval of the Secretary of the Interior enfolds thenegotiated compact terms into federal law.
The status of tribal compacts as a creation of federal statute sufficesto dispatch the Intervenor's argument, at least as presented here.Unquestionably, compacts raise complicated issues of federalism, but theIntervenor has not demonstrated why tribal-state compacts should beviewed as treaties or offered a constitutional theory on which the courtmight proceed. The constitutional prohibition on states making treatiesmust be reconciled with state power to enter compacts; moreover, theboundary between these two constitutional clauses is blurred bydevolution of federal policy-making authority to states. If a treaty is acontract between sovereigns, as the Intervenor proposes, it is far fromclear that states should be viewed as sovereigns when they make tribalcompacts, given the extent that superior federal law channels theresults.
b. Compacts as legislation contingent on tribal approval
The Intervenor argues that compacts violate Article III of the ArizonaConstitution because compacts are expressionsof state law and may not becontingent on tribal approval. This argument is without merit. Compactsmust be made pursuant to state law but are not themselves state law.Arizona has no jurisdiction to legislate in tribal lands; a compactpertaining to tribal land is not state law.
The Plaintiffs and Intervenor prevail on one of their claims, thatA.R.S. § 5-601 is an unconstitutional delegation of legislativepower. Injunctive relief is appropriate, and the court shall enterjudgment to that effect shortly. Before doing so, the court desiresguidance from the parties as to the appropriate phrasing of such relief.The parties are directed to attempt to collaborate on a proposed form ofjudgment, to be lodged within 15 days of the filing of this order. Ifnegotiations between the parties fail, within 5 days after the date forsubmitting a stipulated form of judgment, each shall separately submit aproposed form of judgment. Until the court enters judgment, thepreliminary injunction that has preserved the status quo in this mattershall be extended.
THEREFORE IT IS ORDERED, denying Defendants' Motion to Dismiss forFailure to Join Indispensable Parties (docs. #28, 50).
IT IS FURTHER ORDERED, denying in part and granting in part Defendants'Motion to Dismiss (Justiciability) (doc. #49).
IT IS FURTHER ORDERED, granting in part and denying in part Defendants'Motion in Limine (doc. #73).
IT IS FURTHER ORDERED, denying in part and granting in part Plaintiffs'Motion for Summary Judgment (doc. #46). Plaintiffs and Intervenor prevailon their claims that A.R.S. § 5-601 violates the ArizonaConstitution.
IT IS FURTHER ORDERED directing the parties to submit a proposed formof judgment within 15 days. Failing agreement, . . . each party shallsubmit a proposed form of judgment within 5 days thereafter.
1. Two additional motions to intervene as plaintiffs were filed, thefirst by George A. Rice and the Arizona Greyhound Association (doc. #7),and the second by the Pima County Horsemen's Association, Inc., ArizonaQuarter Racing Association, Arizona Thoroughbred Breeders Association,Cochise County Fair Association and Arizona Horsemen's Benevolent andProtective Association, Inc. (doc. #11). Many of the associationsrepresent suppliers or trainers of racing animals; two horse racingpermittees are also included. The court denied the motions to intervene onFebruary 9, 2001, because the alleged injuries are derivative of theinjuries to the racetrack Plaintiffs, and their interests are adequatelydefended by the Plaintiffs. The court granted these would-be intervenorsthe opportunity to participate as amici.
2. Plaintiffs' first three claims are: (1) the statute delegating tothe Governor authority to enter into compacts, A.R.S. § 5-601, doesnot authorize compacts that include forms of gaming prohibited by statelaw — to the extent the Governor plans to make compacts with suchterms, she exceeds her statutory authority, Am. Compl. ¶¶ 18-19; (2)if the legislature did delegate authority to the Governor to entercompacts permitting games of chance otherwise prohibited by state law,such an act would violate the separation of powers doctrine establishedby Ariz. Const. Art. III, id. ¶ 21; and (3) if the Governor enteredcompacts authorizing slot machine and related gaming, the compacts "wouldviolate Arizona law because they would be ineffectual under andprohibited by [IGRA]," id. ¶ 23.
The court has had difficulty ascertaining whether the third claimasserts a claim for relief under IGRA or state law. From Plaintiffs'Response to the Motions to Dismiss (doc. #65), the court assumed that thePlaintiffs intended to cast the third claim as a violation of state law,presumably A.R.S. § 5-601, which refers to IGRA, which in turnincorporates state law. At oral argument, however, Plaintiffs' counselindicated that the third claim should be understood as an "IGRA cause ofaction." The court shall address both readings of Plaintiffs' thirdclaim, for the Defendants briefed the IGRA cause of action theory intheir Motion to Dismiss and had the opportunity to brief the state lawtheory in their Reply.
3. While the Defendants' motion to dismiss for lack of Article IIIstanding is brought pursuant to Rule 12(b)(6), the court notes that sucha motion may be properly brought under Rule 12(b)(1) as well. See Medinav. Clinton, 86 F.3d 155, 157 (9th Cir. 1996). There is some authority forthe proposition that a challenge to standing may be brought under either12(b)(1) or 12(b)(6). See Simon v. Value Behavioral Health, Inc.,208 F.3d 1073, 1082 (9th Cir.), as amended 238 F.3d 428 (9th Cir. 2000),cert. denied 121 S.Ct. 843(2001) (affirming Rule 12(b)(6) dismissal forlack of standing); accord Cohen v. Stratosphere Corp., 115 F.3d 695, 703(9th Cir. 1997); but see Bland v. Kessler, 88 F.3d 729, 732 n. 4 (9thCir. 1996) (stating that standing challenges must be brought under12(b)(1) in the Ninth Circuit).
The consequences of a Rule 12(b)(6) determination are different from aRule 12(b)(1) determination. See Morgan v. United States, 958 F.2d 950,954 n. 1 (9th Cir. 1992) (B. Fletcher, J. dissenting) (noting that a Rule12(b)(6) adjudication operates as a decision on the merits). The SupremeCourt has strongly indicated that a decision about Article III standingis a jurisdictional decision and not a decision on the merits. SeeCitizens for a Better Environment v. Steel Co., 523 U.S. 83, 109, 118S.Ct. 1003, 1020(1998). Because the court would approach the motion inthe same way regardless which subsection of Rule 12 the Defendantscited, see Graham v. FEMA, 149 F.3d 997, 1001 (9th Cir. 2000), it isunnecessary at this juncture to do more than note the issue.
4. Specifically, the Intervenor contends that compacts purport to bindthe police power of the State, such that the State could not effect morerestrictive regulation of gaming, should it choose in the future to doso. Opening Brief (doc. #43) at 5. The Intervenor argues that the Statecannot lawfully commit itself by contract to an abdication of itssovereign power.
5. Without taking a position as to whether there is a true conflict ornot, the court notes that the compacting parties may have to reconcilethe State's inability to unilaterally amend compacts with the Arizonastatute forbidding compacts to circumscribe state sovereignty.
Assuming that tribal-state compacts are analogous to interstatecompacts, a state's ability to exercise its police power after entering acompact may be constrained. Later changes in state law cannot be groundsfor reneging on a compact between states. See West Virginia ex rel. Dyerv. Sims, 341 U.S. 22, 30-31, 71 S.Ct. 557, 562(1951). As a consequence,interstate compacts limit the ability of state legislatures to respond tochanging preferences and circumstances. See Jill Elaine Hasday,Interstate Compacts in a Democratic Society: The Problem of Permanency,49 Fla. L. Rev. 1, 8-9(1997). However, A.R.S. § 5-601(A) explicitlyinstructs the Governor not to "waive, abrogate or diminish" the state'ssovereignty, of which police power can be viewed as a criticalattribute.
6. Under the Endangered Species Act, federal agencies are required toinvolve the Secretary of the Interior in their development plans.16 U.S.C. § 1536(a)(2). The plurality suggested that the agencies"arguably" had "initial responsibility" to determine whether they wererequired under the statute to involve the Secretary in their plans. Id.at 568-69, 112 S.Ct. at 2141. From this grant of interpretivediscretion, it followed that the agencies could decide their projectsnever required them to consult the Secretary and thus could avoidcommitting to the regulations.
7. If a tribe attempts to sue a state for failure to enter a compactand is rebuffed by the state's assertion of Eleventh Amendment immunity,the tribe may submit a proposal to the Secretary of the Interior.25 C.F.R. § 291.3. Upon receiving the proposal, the Secretaryforwards copies to the state's Governor and Attorney General for commentson whether the proposed gaming activities are permitted to any person forany purpose in the State, and whether the proposal is otherwiseconsistent with relevant state law. Id. § 291.7.
If the state elects to submit an alternate proposal, the two competingproposals are presented to a "mediator," who must choose one. Id. §291.10. The Secretary may disapprove the proposal selected by themediator for a number of reasons, including that the chosen provisioncontemplates gaming activities not permitted in the state or is notconsistent with state law. Id. § 291.11.
If the State does not propose an alternative, the Secretary reviews thetribe's proposal for compliance with state law. Id. § 291.8(a). Thenthe Secretary either approves the proposal or convenes tribe and stateofficials to discuss any unresolved issues. Id. § 291.8(b). Followingthe conference, the Secretary may either set forth a proposal as a finaldecision, or reject the proposal due to unresolved issues, includingnonconformity with state law. Id. § 291.8(c).
8. Moreover, because the validity of a state compact is a distinctissue that is not mooted by Secretarial approval, see Santa Ana v.Kelly, 104 F.3d 1546, 1555 (10th Cir. 1997), compact validity under statelaw is justiciable regardless of the possibility of later Secretarialaction pursuant to federal law.
9. Since Willis, also found that the plaintiffs alleged no injury infact, 850 F. Supp. at 528, and would lose on the merits besides, id. at534, it is impossible to surmise that the Fifth Circuit approved theredressability analysis when it affirmed. Langley follows Willis closelyand offers no analysis to support its conclusion that class III Indiangaming is inevitable under IGRA. See 872 F. Supp. at 1534.
10. The private attorney general doctrine is an equitable rule thatpermits courts to award attorneys' fees to a party who has vindicated aright that: (1) benefits a large number people; (2) requires privateenforcement; and (3) is of societal importance. Arnold v. Dep't of HealthServ., 775 P.2d 521, 538 (Ariz. 1989).
11. Assertions that only prospective relief is sought must be viewedcritically. Some so-called prospective relief would, if granted, disturbthe rights of absent parties under existing contracts. See Kescoli, 101F.3d at 1310.
12. At this stage, Plaintiffs have only alleged that the existingcompacts are illegal and that renewal would also be illegal. To theextent that those allegations prove correct, the court notes that nolegally protectable interest can arise in an unlawful creation. SeeUnited States v. San Juan Bay Marina, 239 F.3d 400, 406 (1st Cir.2001).
13. A.R.S. § 5-601.01, which originated as a voter initiative,provides:
A. Notwithstanding any other law or the provisions of § 5-601, the state, through the governor, shall enter into the state's standard form of gaming compact with any eligible Indian tribe that requests it.
B. For purposes of the this section:
1. The state's standard form of gaming compact is the form of compact that contains provisions limiting types of gaming, the number of gaming devices, the number of gaming locations, and other provisions, that are common to the compacts entered into by this state with Indian tribes in this state on June 24, 1993, and approved by the United States secretary of the interior on July 30, 1993.
2. An eligible Indian tribe is an Indian tribe in this state that has not entered into a gaming compact with the state.
C. The state, through the governor, shall execute the compact required by this section within thirty days after written request by the governing body of an eligible tribe.
14. The result in Comstock Oil & Gas, Inc. v. Alabama and CoushattaIndian Tribes, 78 F. Supp.2d 589 (E.D. Tex. 1999), is expresslypredicated on a Fifth Circuit rule allowing joinder of tribal officials onthe grounds they are not entitled to sovereign immunity. The FifthCircuit and Ninth Circuit diverge on this point. Id. at 593. The courtrejects Comstock as inapplicable.
15. At the trial, the court heard witness testimony which tended torebut an inference the plaintiffs sought to establish; namely, that theState and tribes are in league together to secure tribal gaming. Thetestimony related to efforts to amend Arizona gambling prohibitions,sponsored by the Arizona Department of Gaming (DOG). The Plaintiffssuspect that the changes were intended to cement the Defendants' viewthat tribal gaming is legal. The court finds that the evidence does notsupport such an inference.
Paul Walker, formerly the legislative liaison and public informationofficer at DOG, first drafted the agency's proposed gaming amendments. Hestated that the bill was meant to create a mechanism to regulateoff-reservation charitable gaming. He denied that the bill was meant tohave an impact on this litigation or on the Governor's power to entertribal compacts. Rick Pyper, who assumed the legislative liaison job onJanuary 1, 2001, confirmed that DOG had included tribal representativesin its efforts to promote the bill. He stated that DOG had not acquiescedto all of the tribes' suggestions, however.
16. The plaintiffs' first three claims are set out at note 2,supra.
17. The court has accepted the Plaintiffs' characterization of theirfirst two claims as arising under state law. To the extent that they seekrelief directly under IGRA, however, the following analysis is equallyapplicable.
18. In California v. Cabazon Band of Mission Indians, the SupremeCourt held that tribes acting on tribal land are not subject to statecivil regulations unless Congress expressly provides. 480 U.S.202(1987). As long as a state regulates and does not prohibit aparticular gaming activity, tribes may freely operate such games.
19. The parties have offered several items of IGRA's legislativehistory. They are the Senate Report, Congressional Record excerptsconcerning the introduction of the Senate bills 555 and 1303, Senateapproval of S.555 and House approval of S.555, plus excerpts from ahearing before the Senate Select Committee on Indian Affairs. Thestatements of individual legislators printed in the Congressional Recordas hearing testimony is not particularly illuminating. The Senate Reporthas been used by other courts and the legislative statements of intentthere have largely been incorporated into judicial opinions. The courtwill refer to the Senate Report when appropriate but shall not considerthe other materials further.
20. The statement reads:
The Congress of the United States having enacted [IGRA], compelling this state and various Indian tribes within this state, upon tribal request, to negotiate compacts to permit certain gaming operations on Indian lands within this state, it is the intention of this legislation to authorize the negotiation of such compacts, with due regard for the public health, safety and welfare in furtherance of fairness and honesty in the operation of gaming and with due regard for the interests of the Indian tribes and other and lawful existing gaming operations beyond Indian lands.
1992 Ariz. Sess. Laws. ch. 286 § 1 (emphasis added).
21. The legislature subsequently repealed S.B. 1001. 1994 Ariz. Sess.Laws ch. 285, § 1.
22. In a nutshell, the card games California permitted did not allowthe house to make money. In a "banked game," a gaming operatorparticipates in the game and acts as a house bank, paying the winners andkeeping all other players' losses. In a percentage game, the gamingoperator takes a cut of all amounts wagered or won. Rumsey, 41 F.3d at 424n. 2.
23. The court may not rely on this opinion for precedential purposes,but sets forth a description of it for historical purposes and because ithas been raised by the parties.
24. Beginning on June 1, 2003, tribal-state gaming compacts mustinclude clauses: prohibiting wagering by persons under 21 years of age;establishing guidelines on automated teller machine use and on the use ofcredit cards or other forms of credit in gaming facilities, requiring thetribes to post signs advertising a gambling crisis hotline; prohibitingadvertising geared specifically toward minors; establishing guidelinesfor treatment and prevention of problem and pathological gambling; etc.A.R.S. §§ 5-601(B), (I).
25. A.R.S. § 13-3302(1) defines "amusement gambling" as "gamblinginvolving a device, game or contest which is played for entertainment ifall of the following apply:
(a) The player or players actively participate. . . .
(b) The outcome is not in the control to any material degree of any person other than the player or players.
(c) The prizes are not offered as a lure to separate the player or players from their money.
(d) Any of the following:
(i) No benefit is given to the player or players other than an immediate and unrecorded right to replay which is not exchangeable for value.
(ii) The gambling is an athletic event and no person other than the player or players derives a profit or chance of a profit from the money paid to gamble by the player or players.
(iii) The gambling is an intellectual contest or event, the money paid to gamble is part of an established purchase price for a product, no increment has been added to the price in connection with the gambling event and no drawing or lottery is held to determine the winner or winners.
(iv) Skill and not chance is clearly the predominant factor in the game and . . . regardless of the number of wins, no . . . merchandise prize with a wholesale fair market value of greater than thirty-five dollars.
26. A.R.S. § 3301(7) defines "social gambling" as "gambling thatis not conducted as a business and that involves players who compete onequal terms with each other in a gamble if all of the following apply:
(a) No player receives, or becomes entitled to receive, any benefit, directly or indirectly, other than the player's winnings from the gamble.
(b) No other person receives or becomes entitled to receive any benefit, directly or indirectly, from the gambling activity, including benefits of proprietorship, management or unequal advantage or odds in a series of gambles.
(c) Until June 1, 2003, none of the players is below the age of majority. Beginning on June 1, 2003, none of the players is under twenty-one years of age.
(d) Players "compete on equal terms with each other in a gamble" when no player enjoys an advantage over any other player in the gamble under the conditions or rules of the game or contest.
27. The prohibition on the promotion of gambling reads: A. Except foramusement, regulated or social gambling, a person commits promotion ofgambling if he knowingly does either of the following for a benefit:
1. Conducts, organizes, manages, directs, supervises or finances gambling.
2. Furnishes advice or assistance for the conduct, organization, management, direction, supervision or financing of gambling.
A.R.S. § 13-3303. The prohibition on benefiting fromgambling provides:
A. Except for amusement or regulated gambling, a person commits benefiting from gambling if he knowingly obtains any benefit from gambling.
B. Benefiting from social gambling as a player is not unlawful under this section.
A.R.S. § 13-3304.
28. Plaintiffs argue that slot machines and keno lack the capacity todistribute raffle tickets neutrally among players because these devicesinvariably generate a cut for the house and that these games cannot beused pursuant to the raffle exception. There is no evidence in the recordto support any such findings.
29. A.R.S. § 5-601(A) is set out at page 76, supra.
30. The only evidence of the Governor's proposal in the record is anewspaper article. See JSOF Ex. 6 (Ben Winton, "Symington offers gamblingpact," Phoenix Gazette A-1 (May 29, 1992)). The newspaper writer indicatesthat Governor Symington released a draft proposal to tribes prior toJudge Rosenblatt's ruling, but it is not clear whether earlier draftproposals included slot machines. Id. The proposal released May 28, 1992,the day of Judge Rosenblatt's ruling, would have allowed slot machines onthe condition that their numbers be limited, that no wagers of more thanfive dollars would be allowed, and that payoffs not exceed $250. Id. atA-12. The extensive conditions may be understood as a protest about thelegality of any slot machines, far from the concession that theDefendants perceive.
31. In Norquist, the tribe sought declaratory relief to enjoin cityofficials from interfering with class III gaming activities inMilwaukee. 45 F.3d at 1082. An agreement between the parties providedthat as a condition for class III gaming in the city, class III gaminghad to be allowed in Wisconsin for any purpose by any person. Id. at1083. In finding this condition had been met, the Seventh Circuit reliedon a previous adjudication that had found class III gaming permitted inWisconsin. In an accompanying footnote, the Norquist court added thatclass III gaming was legal in Wisconsin because Wisconsin "presentlypermits other Indian tribes within the state to carry on the exact gamingactivities being alleged here." Id. at 1083 n. 1. In fact, the othercompacts were created in reliance on the holding of the earlier case,id. at 1081, and could not be taken for independent evidence of thelegality of class III gaming.
32. Specifically, the Defendants write: "The provision obligatingstates to negotiate with tribes regarding types of gaming allowed toothers for any purpose was not designed to restrict the states' abilityto allow certain class III gaming within Indian reservations." Id.(emphasis omitted).
33. To the extent that the Defendants also rely on Yavapai-PrescottIndian Tribe, 796 F. Supp. 1292, 1297 (D. Ariz. 1992), the quoted portionis dicta.
34. In Block, the Arizona Supreme Court adopted a four-factor analysisto evaluate separation of powers issues; that is, whether one branch haspurported to usurp the powers of another. 942 P.2d at 276 (adopting thetest of J.W. Hancock Enterprises v. Arizona State Registrar ofContractors, 690 P.2d 119, 124-25 (Ariz. Ct. App. 1984)). Here, however,the court confronts allegations not of legislative usurpation but ofexcessive legislative delegation. The parties do not suggest that Blockshould extend to non-delegation cases. Nothing in Block or subsequentseparation-of-powers cases alters the older non-delegation case law.Indeed, the court perceives the Block Court's statements about therobustness of Arizona's separation of powers doctrine to tend tostrengthen the non-delegation principle.
35. It shall be recalled that the question before the Arizona SupremeCourt was whether A.R.S. § 5-601.01, which requires the Governor toenter standard form compacts in the event that negotiations fail,unconstitutionally modifies that broad grant of negotiating power insection 5-601. Salt River does not establish the legality of section5-601.
36. In reply, the Plaintiffs make two other arguments that the courtwill not entertain. First, they argue that "a state grant of tribalmonopolies beyond the terms, procedures, and policies of IGRA" isbarred. Reply at 14. To the extent that this assertion is meant as aclaim that the proposed compacts violate IGRA, it is precluded by thecourt's analysis on the implied right of action question. See PartIII.B, supra. To the extent it recapitulates the ceiling argument, it haspreviously been addressed. See Part IV.B.1.b.
Second, the Plaintiffs contend that Congress lacks the power to"prohibit off-reservation gaming by persons of other races to increase thevalue of a tribal franchise" because that would violate the equalprotection component of the Fifth Amendment Due Process Clause. Id. at15. This statement emphasizes the State's lack of power to create suchfranchises. However, the Plaintiffs further maintain that no source offederal power over Indian tribes authorizes such a statute. ThePlaintiffs have not asserted in their amended complaint or their summaryjudgment brief that IGRA is unconstitutional. The court shall notconsider such a claim at this point.