SCOTUS decision settles tribal bingo dispute

Overview of Pueblo/Texas bingo dispute

In a 5-4 vote on June 15, 2022, the United States Supreme Court resolved a longstanding dispute about the ability of the State of Texas to control gaming conducted by the Ysleta del Sur Pueblo Tribe (the “Tribe”).

The case centered on language found in the 1987 Ysleta del Sur and Alabama-Coushatta Indian Tribes of Texas Restoration Act (the “Restoration Act”). In 1968, Congress recognized the Ysleta del Sur Pueblo (as well as the Alabama-Coushatta) as an Indian tribe and assigned trust responsibilities for the Tribe to Texas. The Tribe’s reservation is located near El Paso, Texas. During the early 1980s, Texas renounced those responsibilities. In 1987, the federal government re-assumed the responsibilities for both the Tribe and the Alabama-Coushatta, by enacting the Restoration Act. The following year, Congress enacted the Federal Indian Gaming Regulatory Act (“IGRA”).
For several years thereafter, the Tribe and the State disagreed on the extent to which Texas gaming laws applied to the Tribe’s gaming operations. Section 107 of the Restoration Act directly addressed gaming on the Tribe’s lands. It provided in subsection (a) that “gaming activities which are prohibited by [Texas law] are hereby prohibited on the reservation and on lands of the tribe.” However, subsection (b) provided that the statute did not grant Texas “civil or criminal regulatory jurisdiction” with respect to matters covered by Section 107.
In a lengthy saga of litigation, Texas has consistently read the Restoration Act as subjecting the Tribe to the entire body of its gaming laws and regulations. In contrast, the Tribe has interpreted the Act’s language to be consistent with the case California v. Cabazon Band of Mission Indians, 480 U. S. 202 (1987) – which laid the groundwork for the passage of the IGRA in 1988. The Tribe maintained that the Restoration Act barred it from offering only those gaming activities the State fully prohibited.

The Fifth Circuit Court of Appeals repeatedly sided with the State’s view. Most notably, in 1994, the Fifth Circuit determined that the Restoration Act superseded the IGRA and guaranteed the entirety of the State’s gaming laws and regulations would “operate as surrogate federal law on the Tribe’s reservation.” Litigation related to the Restoration Act had gone on for almost three decades until the Supreme Court decided to hear the issue.

 

NIGC issues favorable opinion for Pueblo

On October 5, 2015, the National Indian Gaming Commission (“NIGC”) issued an advisory opinion determining that the Ysleta del Sur Pueblo possessed sufficient jurisdiction over its lands and therefore the IGRA was applicable, and further that the Tribe’s lands were deemed to be “Indian Lands” within the meaning of IGRA. The Department of the Interior, Office of the Solicitor concurred in the determination. On the same day, the NIGC issued a similar opinion making the same determination in favor of the Alabama-Coushatta Indian Tribe.

As a result of the NIGC opinion, the Texas Federal Court Judge requested legal briefs from both the Tribe and the State of Texas concerning the meaning and implications of the NIGC opinion. This action, in part, led to further litigation which ultimately ended up with the Supreme Court decision in favor of the Tribe. NIGC opinions are not binding on courts, although they may be viewed as persuasive authority.

 

Texas’ attempt to shutdown Pueblo’s bingo operations leads to Supreme Court review of Restoration Act

The case before the Supreme Court arose from the Tribe offering electronic bingo at its Speaking Rock Entertainment Center in 2016. The State of Texas attempted to shut down the electronic bingo operation. Under Texas law, bingo is permissible only for charitable purposes and subject to a broad array of regulations.

The majority opinion, written by Justice Gorsuch and joined by Justices Breyer, Sotomayor, Kagan, and Barrett, is separated into three parts and begins by analyzing the Restoration Act under the rules of statutory construction. The Court reasoned that the State’s interpretation violated many of the Court’s longest-standing rules of statutory construction. Mainly, that the State’s interpretation of the term “prohibit” goes against the plain meaning of the word. In addition, the Court concluded that reading Section 107(a) of the Restoration Act in accordance with the State’s view would render the remainder of the section meaningless.

Second, the opinion identifies “contextual clues” favoring the Tribe’s interpretation of the Restoration Act. The Court revisited its 1987 decision in California v. Cabazon, which distinguished between types of gambling a state may prohibit outright and those it permits in a limited capacity subject to regulation. The opinion noted that the Restoration Act was signed into law only six months after the decision in Cabazon, and the language of the Act tracks in a similar fashion to Cabazon. The Court highlighted that the state bingo laws at issue are nearly identical to the state bingo laws at issue in Cabazon. In Cabazon, the Court regarded the bingo laws as regulatory in nature because the Court found that California permitted at least some forms of bingo. The Court found this same reasoning “clinches the case” as to Texas’ bingo laws.

Again, looking to the rules of statutory construction, the majority opined “when Congress enacts statutes, it is aware of this Court’s relevant precedents.” The Court recognized that, at the time the Restoration Act was enacted, “Cabazon was not only a relevant precedent concerning Indian gaming; it was the legal precedent.” The opinion also compared the Restoration Act to two other statutes enacted contemporaneously. The other statutes expressly provided that a tribe was subject to both the laws and regulations which prohibit or regulate gambling. The Court stressed that “[t]he implication that Congress drew from Cabazon and meant for us to apply its same prohibitory/regulatory framework here seems almost impossible to ignore.”

Finally, the Court rejected a variety of public policy arguments advanced by the State. Ultimately, the Court reasoned that a reading in favor of the State’s view would “collapse” the prohibit/regulate dichotomy laid out in the Restoration Act. Significantly, the U.S. Solicitor General’s Office backed the Tribe’s position. After an invitation from the Court to file a brief on the matter, the Office supported the Tribe’s petition to take up the case, saying that the Act should be viewed consistent with Cabazon.

In a strong dissent, Chief Justice John Roberts came to the opposite conclusion. Justice Roberts retorted that the majority’s reading “makes a hash of the statute.” In Justice Robert’s view, the Restoration Act’s text “does not signal an intent to adopt Cabazon Band’s unique dichotomy.” Interestingly, Justice Roberts included with the dissent a photo of electronic bingo machines from the Tribe’s Speaking Rock Entertainment Center. In a footnote, he contends the photo confirms the electronic bingo played at the facility “is about as close to real bingo as Bingo the famous dog.” However, the propriety of the electronic bingo game was not at issue in the case.

 

Supreme Court remands to Fifth circuit to consider “bingo” activities at Pueblo casino

Ultimately, the Supreme Court vacated the Fifth Circuit’s decision and remanded “[t]o allow the Fifth Circuit to revise its precedent and reconsider this case in the correct light.”

On July 21, 2022, the Fifth Circuit issued an opinion stating that the Supreme Court’s decision resolved the appeal and sent the case back to the Western District of Texas for proceedings consistent with the Supreme Court’s opinion. In a footnote, the Fifth Circuit stated the District Court must decide if the Tribe’s electronic bingo “qualifies as ‘bingo’ and thus a gaming activity merely regulated by Texas, or whether it constitutes an entirely different sort of gaming activity absolutely banned by Texas and thus forbidden as a matter of federal law.”

On remand, the case was assigned to Judge Kathleen Cardon. In response to the Court’s request for a Joint Status Report to be submitted by September 27, 2022, the parties conferred and ultimately agreed that the Supreme Court ruling resolved all claims in the case and that there was no need for further proceedings in the Texas Federal Court. As such, the parties agreed that the case should be dismissed in its entirety. The State of Texas agreed to file appropriate court documents seeking dismissal of all claims.

As a result, the decades long legal battle is finally at an end and the Tribe can legally operate its tribal casino without fear of legal repercussions.

Implications of Supreme Court decision

The Supreme Court opinion also had positive implications for another Texas tribe. The Alabama-Coushatta Indian Tribe had been embroiled in the same battle with the State for many years over electronic bingo. The Alabama-Coushatta was recognized in the Restoration Act and was subject to the same provisions regarding gaming. The Alabama-Coushatta participated in the Pueblo’s case as an amicus.

Within a few weeks after the Supreme Court decision was announced in favor of the Pueblo, the State of Texas notified the Fifth Circuit that it would not appeal a 2021 Texas Federal Court decision favorable to the Alabama-Coushatta. Accordingly, all litigation against the Alabama-Coushatta and its Naskila gaming facility is now ended.

Prompted by Justice Roberts’ dissent, it was unknown – until the filing of the parties’ Joint Status Report in late September – whether the State of Texas would continue its battle against the Tribe. The remaining issue was whether the characterization of the Tribe’s electronic bingo gaming is a gaming activity regulated by the State of Texas, or a gaming activity unlike normal bingo and therefore absolutely banned by the State. In prior litigation, the State had taken the position that the electronic bingo gaming activity is unlike normal bingo gaming and is therefore absolutely banned by the State. In contrast, the Tribe had maintained that the electronic bingo gaming is a form of bingo because it is run using a process that is historically known as “bingo draws.”

In agreeing to dismiss the litigation, the State likely recognized that it did not have strong legal support for its position for several reasons:
First, the IGRA makes clear that a Tribe may offer a gaming activity unless it is truly banned by a state in all forms – not just permitted subject to various restrictions. The IGRA states that “[a]n Indian tribe may engage in, or license and regulate, class II gaming on Indian lands within such tribe’s jurisdiction, if . . . such Indian gaming is located within a State that permits such gaming for any purpose by any person, organization or entity and such gaming is not otherwise specifically prohibited on Indian lands by Federal law.”).

Second, the Second, Seventh, Eighth and Ninth Circuits have already held that a state “cannot regulate and prohibit [gaming activities], alternately, game by game and device by device, turning its public policy off and on by minute degrees.”

Third, at least one other Circuit Court has held that electronic bingo games, such as the ones operated by the Tribe, fall within the legal definition of bingo gaming for the purposes of the IGRA.

Finally, Texas law contemplates electronic bingo as a form of bingo authorized by the State. The Texas Bingo Enabling Act defines “bingo equipment” as meaning “equipment used, made, or sold for the purpose of use in bingo [, including] . . . an electronic or mechanical cardminding device; . . . and any other device commonly used in the direct operation of a bingo game.”

To be sure, the Texas legislature can always decide to ban all forms of bingo gaming, which would likely prohibit the Tribe from offering any bingo gaming. However, bingo gaming has been legal in Texas for over four decades, and there is no proposed legislation or other indication that the legislature will impose any ban on all bingo gaming in the state.