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Sault Tribe faces hurdles with off-reservation gaming projects

Friday, September 18, 2015

An aerial view of the proposed Kewadin Lansing Casino in Lansing, Michigan. Image from Sault Tribe

The Sault Tribe of Chippewa Indians faces significant hurdles in its pursuit of two off-reservation casinos in Michigan despite winning the dismissal of a major lawsuit.

The tribe filed land-into-trust applications for casinos in Lansing and in Huron Charter Township more than a year ago. Both sites were purchased in connection with the Michigan Indian Land Claims Settlement Act.

The tribe believes that the law requires the Bureau of Indian Affairs to place the land in trust. The agency, however, has yet to make a decision.

Even if the BIA approves, the tribe is likely to face more litigation. At issue is a provision in the Class III gaming compact that purportedly requires all tribes in the state to agree to any off-reservation casinos.

Artist's rendering of the proposed Kewadin Lansing Casino in Lansing, Michigan. Image from Sault Tribe

But for now, the tribe is celebrating a court ruling that prevents its leaders from being sued for merely filing the land-into-trust applications for the proposed $245 million Kewadin Lansing Casino and the second facility. In a nine-page decision issued on Wednesday, Judge Robert Jonker said the state of Michigan failed to show they their sovereign immunity should be waived.

The state could still take the case to the 6th Circuit Court of Appeals. In an earlier stage of the litigation, the court ruled that the tribe itself was protected by sovereign immunity.

Attorney General Bill Schuette asked the U.S. Supreme Court to overturn that decision. But he withdrew his petition after losing a ruling in Michigan v. Bay Mills Indian Community, another off-reservation gaming dispute

In that case, the Bay Mills Indian Community opened a casino on property acquired in connection with the Michigan land claim settlement. However, the tribe did not file a land-into-trust application for the site in Vanderbilt, so the land was never considered eligible for gaming under the Indian Gaming Regulatory Act.

Indianz.Com SoundCloud: U.S. Supreme Court Oral Arguments in Michigan v. Bay Mills Indian Community

That distinction helped secure the tribe's win at the Supreme Court because the law only waives immunity for activities that occur within "Indian lands," the justices determined in May 2014 by a vote of 5-4 vote. The tribe has not attempted to reopen the facility in Vanderbilt, though.

Generally, IGRA bars gaming on land acquired after 1988. But Section 20 of the law contains an exception for land claim settlements, a situation that the Sault Tribe hopes to exploit in the event the BIA ever approves the land-into-trust applications.

In the history of IGRA, only one tribe has successfully opened a casino after being granted an exception for a land claim settlement. The Wyandotte Nation of Oklahoma operates the 7th Street Casino, a Class II facility, in downtown Kansas City on property acquired with land claim settlement funds.

The Tohono O'odham Nation hopes to become the second when it opens a facility in Glendale, Arizona, later this year. The project faces opposition in the courts and in Congress.

The 7th Street Casino in downtown Kansas City, Kansas. The tribe acquired the land, also known as the Shriner Tract, with a land claim settlement fund. Photo from Facebook

A third tribe, the Seneca Nation, opened two casinos in New York on land acquired in connection with a land claim settlement. However, that situation is unique because the Seneca Nation Settlement Act of 1990 requires the tribe's lands to be placed in "restricted fee" status rather than "in trust."

For that reason, the 2nd Circuit Court of Appeals this week ruled that the Section 20 process does not apply to the tribe's gaming properties. Casino opponents have not said whether they will take the case to the Supreme Court.

Get the Story:
State to Decide on Appealing Lansing Casino Ruling (WILX 9/17)
Lansing Mayor hopeful ruling will put casino in the cards for Lansing (WLNS 9/17)
Federal judge dismisses Schuette's lawsuit against U.P. tribal leaders over Lansing casino (Crain's Detroit Business 9/16)

Supreme Court Decision:
Michigan v. Bay Mills Indian Community (May 27, 2014)

6th Circuit Decision:
Michigan v. Sault Ste Marie Tribe (December 18, 2013)