By JEREMY HAY
THE PRESS DEMOCRAT
A lawsuit that questions the right of the Federated Indians of Graton Rancheria to open a casino next to Rohnert Park may delay the project but is unlikely to stop it, some
Indian law experts say.
The suit challenges the sovereign status of the Indian-owned land.
“It was carefully constructed, the pleadings were clear. They very carefully set out the law,” said Dennis Whittlesey, a Detroit Indian law attorney who helped draft the 1988 Indian Gaming Regulatory Act, the regulatory structure for tribal gambling.
Still, he said, “so much has been decided at the federal level, including the trust acceptance, it would be very hard for this lawsuit to be successful, though they may have some victories short term.”
The suit revives arguments from an earlier suit that in 2010 was rejected by a federal appeals court on grounds it was premature. The new suit is againt Gov. Jerry Brown and seeks to invalidate an agreement, or compact, he reached with the tribe to allow the casino.
The compact is under final review by the federal Interior Department, which has until July 6 to approve it, reject it or allow it to take effect.
The tribe, backed by Station Casinos of Las Vegas, bought the land in 2005 for $100 million. The federal government took it into trust in 2010, making it a reservation that, as it stands, is exempt from most state and local laws.
The suit, filed May 21 by Stop the Casino 101, argues that for reasons related to why the land was taken into trust, and also to its history, the 254-acre property still is subject to state law.
That would mean the land cannot be used for the Class III gambling the tribe plans to offer in its 3,000-slot machine casino. It would be permitted to open a Class II casino with bingo machines and card tables, but that likely would doom the project, said Petaluma Councilman Mike Healy, who wrote the suit.
“That wouldn’t be nearly as big, and I doubt the economics of their contract with Station would allow that to pencil out,” Healy said, referring to contracts under which the tribe, starting in the first year of casino operations, is to repay Station Casinos $17 million a year.
Station Casinos officials declined comment Monday, as did the tribe’s attorney and Brown’s office.
The suit makes a case that the land was taken into trust solely so that the tribe could build a casino there and has no history of ownership or use by the tribe. The state never formally ceded its control over it, Healy said. That means state laws that prohibit Class III gambling on non-Indian lands still hold sway, he said.
“This has not been Indian land since California came into the union. It’s always been subject to California law,” he said.
“Someone cannot just go out and buy a piece of land and have the federal government take it into trust and deprive” the state of its sovereignty, he said.
State authorities maintain that if a tribe buys property to open a casino and that land is taken into trust, they cannot intercede legally. Healy contends that is incorrect.
“They don’t have to cede state sovereignty over sites like this, and there is absolutely nothing the federal government can do to overrule them when they don’t,” he said.
It is a “novel theory,” said Heidi McNeil Staudenmaier, partner coordinator of the Snell & Wilmer Indian and Gaming Law Practice in Phoenix.
“There are no guarantees in litigation. However, this challenge is unique and there is not a lot of precedence for guidance,” she said.
“If the plaintiffs have the funding to move the lawsuit forward, it could certainly delay the casino while the litigation is going through the judicial process,” she said.
However, she said, “the odds are likely not in its favor.”
Casino opponents have expressed hopes that the suit could stall the project enough that prospective investors would hesitate before putting up the more than $450 million in financing Station Casinos says it will seek.
But financial analysts who follow gambling said that is a faint hope, although if the suit is deemed strong enough, Statin Casinos would have to disclose it to potential investors as a risk.
“There’s always going to be challenges and lawsuits with respect to gaming expansions or approvals,” said Michael Paladino, a senior gaming analyst with Fitch Ratings.
“It could potentially cause a problem of financing but if all the approvals have been obtained, …then they would probably go ahead,” he said.
In 2009, the Interior Department delayed taking the land into trust while the previous version of the suit worked its way through the appeals process. But in this case, the department faces a non-negotiable deadline in which to act on the compact or let it take effect.
County officials, who after the department’s decision are to begin negotiations with the tribe over how it will financially address the casino’s effects, say they don’t expect the suit to go anywhere.
“The legal theories it presents have not received a lot of support in the courts,” said Sonoma County Counsel Bruce Goldstein.
You can reach Staff Writer Jeremy Hay at 521-5212 or firstname.lastname@example.org.