Eleventh Circuit Affirms Dismissal of Alabama Lawsuit Against the PCI Gaming Authority

In Alabama v. PCI Gaming Auth., No. 14-12004, 2015 WL 5157426 (11th Cir. Sept. 3, 2015), the Eleventh Circuit affirmed the lower court’s dismissal of Alabama’s claims, finding that the defendants were entitled to tribal immunity on nearly all of Alabama’s claims and that the State failed to state a claim for relief. Alabama sued PCI Gaming Authority (PCI), an entity wholly owned by the Poarch Band Creek Indians (the Tribe), under state and federal law to enjoin gaming at casinos operated by PCI on Indian lands located within the state’s borders.

The Tribe owns three casinos situated on lands held in trust by the United States. These casinos are subject to rules codified under the Indian Gaming Regulatory Act (IGRA), 18 U.S.C. §§ 1166-68, 25 U.S.C. §§ 2701-21 (1988) which categorizes gaming on Indian lands into three distinct classes of games, each class having a specific regulatory scheme. Class II gaming includes bingo and permits the use of technological aids in connection with the game, while Class III gaming includes slot machines and other casino games that do not fall under Class I or Class II; Class I gaming is not at issue here. IGRA authorizes tribes to conduct each class of gaming insofar as it is allowed in some form within the state where the Indian casinos are located. Under IGRA, the Tribe may operate bingo games but not slot machines. At their casinos, there are hundreds of machines that are seemingly electronic bingo machines, but that Alabama alleges are actually slot machines because they play like slot machines, attract the same class of customers, and are almost identical to them. Initially, Alabama sued PCI as well as thirteen tribal officers (the Officers) in state court seeking an injunction and declaratory judgment specifying that the machines were illegal slot machines and a public nuisance under Alabama law; however, when the defendants removed the action to federal court, Alabama amended its complaint to add a nuisance claim under IGRA.

First, the Eleventh Circuit held that PCI was entitled to tribal sovereign immunity on all claims against it and that the Officers were entitled to tribal sovereign immunity on Alabama’s state law claim, but not its claim under IGRA. Alabama argued that as a separate business entity PCI should not be entitled to the same sovereign immunity. Nevertheless, the court disagreed, reasoning that PCI is immune from suit because it operates as an arm of the Tribe. The court noted that Indian tribes have immunity as “domestic dependent nations” and that the Supreme Court does not distinguish commercial activities for purposes of determining immunity. Kiowa Tribe of Okla. v. Mfg. Techs., Inc., 523 U.S. 751, 754-55 (1998). In determining the Officers’ immunity status, the court differentiated between Alabama’s state law and federal law claims. It held that the Officers were not immune from the IGRA claims because in Ex parte Young, the Supreme Court recognized an exception to the rule of sovereign immunity for state officials, when declaratory or injunctive relief is sought against them to stop ongoing violations of federal law. 209 U.S. 123, 155-56 (1980). In contrast, the court concluded that the Officers maintained their sovereign immunity from state law claims because the Ex parte Young exception does not extend to such claims.

Second, because the Eleventh Circuit held that the Officers were subject to federal IGRA claims, it next considered whether Alabama had a right of action under § 1166 of the law. In answering this question of first impression, the court found that § 1166 does not provide states with any right of action, express or implied, to sue tribal officials to enjoin unlawful gaming on Indian lands. The court quickly determined that there was no express right of action for states to sue to enforce its own laws because § 1166 lacks any language conferring them such a right. In determining whether an implied right of action exists under § 1166, the court examined congressional intent, statutory text and structure, the legislative history of IGRA, and its own precedent. This analysis led the court to conclude that § 1166 also failed to create an implied right of action. While the statute itself extends the reach of state law, the court reasoned that it does not correspondingly create an implied right of action for states because the legislative history and structure of the statute make it clear that Congress intended to limit the application of state law on Indian land.

Therefore, the Eleventh Circuit affirmed the judgment of the district court on all three counts: (1) PCI was entitled to sovereign immunity; (2) the Officers were entitled to sovereign immunity as to Alabama’s state law claim but not its IRGA claim; and (3) Alabama failed to state a claim under IGRA because § 1166 gives it no right of action to sue.

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