Wednesday, March 20, 2002
Ninth Circuit Vacates Order Declaring National Indian Lottery Illegal
By a MetNews Staff Writer
Neither a U.S. district judge in Idaho nor an Indian tribal court had jurisdiction to rule on the legality of the National Indian Lottery, the Ninth U.S. Circuit Court of Appeals ruled yesterday.
The panel overturned an order by U.S. District Judge Edward Lodge, who declared the lottery illegal, and said that it may operate without government interference until a proper court says otherwise.
The lottery was started by the Coeur d’Alene tribe in 1997 under a compact with the state of Idaho—such compacts are authorized by the Indian Gaming Regulatory Act—but shut down after Lodge’s December 1998 order.
The tribe sold tickets on its reservation, but the bulk of the players were out-of-state participants who established accounts by check or credit card, then purchased tickets using their telephones or the Internet.
Because the rules of the lottery are that no tickets actually leave the reservation, and because purchasers must be residents of states that have their own lotteries—IGRA allows a state to prohibit any form of Indian gaming that is illegal throughout the state—the tribe contends that no laws are violated.
The compact with the state generally exempts the lottery from state laws, so long as it takes place “on Indian lands.” It says nothing specific about how or where tickets may be sold, but the tribe’s contract with the lottery’s management company—approved by the National Indian Gaming Commission—specifies that tickets may be sold by telephone.
The commission now opposes telephone sales and argued in an amicus brief that they are illegal. Thirty-seven states also appeared as amici in opposition to the tribe.
The separate question of whether Internet betting on the Indian lottery violates IGRA is presently being litigated in Missouri, where the state attorney general has brought suit.
Yesterday’s ruling, by a divided panel, came in a suit by AT&T Corporation, which sought a declaratory judgment as to whether it is obligated to furnish toll-free “800” numbers for the lottery.
The action was brought under the Federal Communications Act. The act requires carriers to provide service for lawful purposes, but also requires—at 18 U.S.C. § 1084(d)— that they refuse or discontinue service if notified by a state or federal law enforcement agency, “acting within its jurisdiction,” that the actual or proposed use of the service is illegal.
Such notices, known as “§ 1084(d) letters” are binding in the absence of a judicial determination to the contrary.
AT&T brought its declaratory action to resolve a conflict between the Coeur d’Alene Tribal Court’s ruling that the lottery is legal and that the company must service it, and § 1084(d) letters from several state attorneys general saying telephone wagering on the lottery is illegal and the company cannot provide service.
Lodge ruled that the tribal court lacked jurisdiction because the communications act gives exclusive jurisdiction over telephone-service issues to the Federal Communications Commission and the federal courts. He further declared that telephone betting violates IGRA’s requirement that Indian gaming take place on tribal lands.
But Ninth Circuit Senior Judge Betty B. Fletcher, while agreeing that the tribal court lacked jurisdiction, concluded that Lodge should not have decided the issue either because the action was a collateral attack on a decision of the gaming commission. “What the district court failed to grasp,” Fletcher wrote, “was that the IGRA lays out a specific regulatory scheme whereby the [National Indian Gaming Commission’s] approval of a management contract is a final agency decision that may be appealed only directly and in an action initiated by a proper party in federal district court.”
The attorneys general, not having intervened in the District Court, are barred from issuing letters unless they “succeed at some future time in stripping the Lottery of its legitimacy under IGRA,” Fletcher wrote.
Senior Judge James R. Browning joined in Fletcher’s opinion. Judge Ronald Gould dissented, arguing that the district judge was correct as to jurisdiction and as to the merits.
The lottery is illegal, Gould went on to insist, because it “involves and encourages illegal gaming nationwide off the reservation and is not within the purview of the IGRA” and circumvents the requirement of a compact by permitting residents of states that have not approved the Indian lottery to play without traveling to Idaho.
The case is AT&T Corporation v. Coeur d’Alene Tribe, 99-35088.
Copyright 2002, Metropolitan News Company