BEFORE COVID-19: The Flandreau Santee Sioux Tribe celebrated the completion of a $30 million expansion and renovation project at the Royal River Casino & Hotel in South Dakota in October 2019. Photo: Lexy Marie Photography

'We are thrilled': Flandreau Santee Sioux Tribe hails victory for sovereignty

The state of South Dakota's anti-tribal sovereignty efforts have been dealt a serious blow from the highest court in the land.

Without comment, the U.S. Supreme Court on Tuesday denied the state's petition in Noem v. Flandreau Santee Sioux Tribe. Yes, that Noem, as in Kristi Noem, the Republican governor who has threatened tribes with the power of the White House all because they initiated coronavirus checkpoints on their sovereign territories.

The U.S. Supreme Court denied a petition in Noem v. Flandreau Santee Sioux Tribe on May 26, 2020.

But long before Noem went down that road, the state was trying to impose taxes on the Flandreau Santee Sioux Tribe and its gaming operation. The high court's rejection of her petition in the case puts an end to those efforts and the victory is coming at just the right time -- the Royal River Hotel and Casino is getting ready to reopen to the public following a lengthy COVID-19 shutdown.

"We are thrilled with the Supreme Court’s decision affirming the tribe's position that all transactions of the casino operations are related to the gaming operations and therefore not taxable as outlined in the Indian Gaming Regulatory Act," Flandreau Santee Sioux Attorney General Seth Pearman told Indianz.Com on Tuesday. "This is a decision that will protect Indian gaming, and the rights of tribes to be the sole beneficiary of gaming on their own lands."

"Royal River Hotel and Casino is proud of the Flandreau Santee Sioux Tribal Executive Committee and FSST Attorney General's Office for continuing to protect the sovereignty of the Flandreau Santee Sioux Nation," added Tim Morrissey, a spokesperson for the gaming facility that will once again serve patrons starting on Friday.

And when the casino finally swings open its doors under new COVID-19 prevention protocols, gamblers will be able to enjoy alcohol beverages of their choice. That's because the state of South Dakota won't be able to hold the tribe's liquor license hostage now that the litigation is over.

"With the Supreme Court’s ruling, the state is not able to make the remittance of sales or use tax a condition of issuing our liquor license," said Pearman.

The state had threatened the license for both the casino and First American Mart, a gas station and convenience store on the reservation, in hopes of forcing the tribe to pay taxes. But with the case coming to an end, it's business as usual for both operations, tribal officials said.

"The state and tribe agreed to maintain status quo during the pendency of the litigation, and therefore the tribe’s liquor licenses were intact," said Morrisey. "Both the casino and First American Mart continue to pay the yearly licensing fee as well as being licensed by the Flandreau Santee Sioux Alcohol Board."

The hotel lobby after the $30 million expansion and renovation. Photo courtesy Royal River Casino and Hotel

South Dakota Attorney General Jason Ravnsborg (R) did not return a request for comment about the Supreme Court's action. But in a brief filed on May 1, just as Noem was challenging the sovereign rights of two other tribes in the state, he argued that imposing taxes on Royal River and First American was not a big deal.

"Apart from an assumed diminution in gaming revenues, the tribe has not identified how the state’s tax would impermissibly infringe on its sovereign powers or interfere in the conduct of its own affairs," Ravnsborg told the Supreme Court. "There is no substance to the tribe’s claim of gross unfairness without any quantification of what the fiscal impact actually would be."

The 8th Circuit Court of Appeals arrived at a different conclusion. The state's taxation efforts intrude on the tribe's sovereignty and its self-governance because they would impact critical programs and services that depend on gaming revenues, a split panel ruled last September.

"The tribe provided evidence that increases in patronage at one amenity is directly tied to increases in gaming activity itself," Judge James B. Loken wrote for the 2-1 majority. "The tribe also submitted evidence of the casino’s significance in promoting tribal economic development and self-sufficiency."

"Of the net revenues generated from the casino and the store, 40% is distributed by individual per capita payments; 35% of the remainder goes toward Tribal economic development, 15% toward tribal government operations, 5% into a minors trust fund, 4% into a community assistance fund, and 1% into a local government revenue sharing fund," Loken continued.

indianz · Flandreau Santee Sioux Tribe v. Noem
Indianz.Com Audio: 8th Circuit Court of Appeals - Flandreau Santee Sioux Tribe v. Noem - February 13, 2019

One member of the 8th Circuit panel that heard the case disagreed. Since the Indian Gaming Regulatory Act does not prohibit the state from imposing taxes on purchases of non-gaming amenities by non-Indians. Judge Steven Colloton argued that an examination of the situation tipped the scales toward the state.

"The state provides a range of services for the casino: law enforcement operations, roads that facilitate the casino’s fifty-mile shuttle service for patrons, job training for a casino employee from the state’s Department of Human Services, and inspection of casino equipment by the state Fire Marshal," Colloton wrote in his dissent.

As she seeks help from President Donald Trump in taking down coronavirus checkpoints elsewhere in Indian Country, Gov. Noem is taking an even broader stance. She said she asked Attorney General Ravnsborg to conduct an "investigation" into the actions being taken by the Cheyenne River Sioux Tribe

"This, however, is not simply a matter between a sovereign state and a sovereign tribal government," Noem wrote in a May 20 letter to Trump. "Rather, the federal government has an interest in interstate commerce, transportation of critical infrastructure goods, provision of services from critical infrastructure industries, and the uniform treatment of all travelers on a non-discriminatory basis."

Trump has yet to publicly respond to Noem's missive. But Cheyenne River isn't taking down the checkpoints, and neither is the Oglala Sioux Tribe, as they continue to slow the spread of the coronavirus in their communities.

"We had one guy who stopped and wouldn't even answer the questions, just starting yelling about a liberation army coming to help liberate South Dakota," Caleb Sorbel, a tribal citizen who was manning a coronavirus checkpoint on the Pine Ridge Reservation, told Indianz.Com during a live broadcast on Monday. "And some other racist stuff. The usual."

Interview with Brigitte Timmerman from Pine Ridge Checkpoint

Thank you for joining for this live interview with Caleb Sorbel, who joins us today from a checkpoint on the Pine Ridge Reservation. The video starts at about 6:15.

Posted by Indianz.Com on Monday, May 25, 2020
Indianz.Com Live with Kevin Abourezk: Caleb Sorbel at Pine Ridge Reservation Coronavirus Checkpoint

The Flandreau Santee Sioux Tribe has taken similar steps to protect its community from COVID-19. A Coronavirus Isolation Assistance Program was established earlier this month to encourage people who have contracted the disease, or who have been exposed to it, to remain in isolation as cases have spiked in other areas of the state.

No COVID-19 cases have been confirmed among casino employees. But with the facility reopening this week, the tribe has partnered with WorkFORCE Occupational Health, a division of Sioux Falls Specialty Hospital to conduct comprehensive testing on the reservation.

“We recognize that the information pertaining to COVID-19 continues to rapidly change and stay committed to adjusting our operating plan on a continued basis to ensure we are using the most up to date and relevant data and health protocols," President Anthony Reider said in a news release on Wednesday. "I am excited to partner with WorkForce to offer a level of testing that was otherwise unavailable to our tribal membership and enterprise team members."

Turtle Talk has posted documents from the 8th Circuit case, previously known as Flandreau Santee Sioux Tribe v. Gerlach. Gov. Noem was substituted as the defendant at the request of the state.

Noem filed her petition with the Supreme Court on February 21, Docket No. 19-1056. Following an opposition from the tribe and one more state brief, the justices rejected the petition in an order list released on Tuesday.

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