Legal Challenges Muddy Waters For Proposed Elk Grove Casino Despite Publication of Notice in Federal Register

January 24, 2018 |  

The Wilton Rancheria announced yesterday that the U.S. Department of Interior published in the Federal Register their gaming compact with the State of California. The publication of the notice on January 22,  2018, signals the approval to own and operate a casino.

The publication of the notice was hailed by Wilton Rancheria chairman Raymond "Chuckie" Hitchcock as a significant step toward the eventual construction of the proposed $400 million casino. The casino, which has the financial backing of Las Vegas-based Boyd Gaming, is intended to be next to the unfinished shopping center on the south side of Elk Grove known as the Outlet Collection at Elk Grove.

"This is another milestone on our journey to self-sufficiency," Hitchcock said in a statement. “I want to thank Assemblyman Jim Cooper, Senator Cathleen Galgiani, Governor Brown, and the CA legislature for their hard work and leadership unanimously approving and ratifying our tribal compact."

Signed by Gov. Jerry Brown in July, the compact unanimously approved by the State Senate and Assembly in September. State gaming compacts typically provide the regulatory oversight and mitigation agreements with local communities.

While the publication is a required administrative step needed by the tribe, at least one major hurdle remains for the Wilton Rancheria. That obstacle is pending litigation by the gaming watchdog group Stand Up For California (SUFC) which is challenging the legitimacy of the approval process by which the land purchased by Boyd Gaming on behalf of the Wilton Rancheria for the casino was placed into federal trust.

Specifically, the lawsuit which was filed in U.S. District Court in Washington D. C. asserts when the land was placed into trust in the final hours of the Obama administration it was done so in violation of the Federal Vacancy Reform Act of 1998. SUFC contends that Principal Deputy Assistant Secretary of Indian Affairs, Lawrence Roberts, lacked the authority according to the act.   

A one-hour hearing on the lawsuit was held in U.S. District Court on January 9 before Judge Trevor McFadden. A recent appointee to the federal bench by President Donald Trump, McFadden is considered a strict constitutionalist and a member of the Federalist Society which counts among its members U.S. Supreme Court Justices Samuel Alito, Neil Gorsuch, and Clarence Thomas and the late Antonin Scalia. 

A review of the 35-page transcript of the hearing shows McFadden questioning SUFC attorney Eric Miller of Perkins Coie for about a third of the document. The balance of the questioning by McFadden was directed at attorneys for the U.S. Department of Justice who were defending the lawsuit.

During questioning by Judge McFadden, Miller argued that when Roberts issued his January 2017 decision, "he was not purporting to act as a representative of the Secretary [of the Interior]. He was purporting to act as a representative of the vacant position of the Assistant Secretary."  

McFadden asked Miller about the defendant's use of the Auer deference which allows federal agencies to self-interpret ambiguous rules.  Miller noted the agency deferred on an Auer deference stating "we acknowledge we are in an Auer framework here, but even applying Auer, the agency doesn't win because they have articulated a position. They have to show that their interpretation is a plausible reading in the language of the regulation, and they haven't done that."

During his questioning of U.S. Department of Justice attorney Cody L.C. McBride, who was defending the government, McFadden expressed skepticism with their arguments. McFadden noted that some of the documentation giving Roberts authority was based on department emails that McBride acknowledged "are not in the record right now, but that's what happened." 

McFadden also pushed backed on McBride's argument that there were multiple people/positions that could have decided to place the land into trust. McFadden said, "it seems your argument that everybody is the authorized representative flies in the face of that distinction here in the [Federal] Register." 

A decision is expected in March, and regardless of the outcome, an appeal is likely to be filed at the U. S. Court of Appeals, First District in Washington D.C. Both parties filed motions for summary judgment. 

Stand Up For California v. U.S. Department of Interior, et al., and Wilton Rancheria civil action no. 1:17-cv-00058