May 27, 2014 at 1:00 am

High Court: Mich. can't sue to block off-reservation casino

The U.S. Supreme Court ruled Tuesday that Michigan can’t sue an American Indian tribe to block the opening of a casino outside the tribe’s reservation.

But the ruling allows the state other ways to prevent the Bay Mills Indian Community tribe from operating the casino in Vanderbilt, 10 miles south of Gaylord, according to the majority opinion.

In a 5-4 decision, the Supreme Court said Michigan cannot sue to shutter the casino, which the state argued was in violation of a 1993 compact with the tribe that has since expired. That compact is in effect until the two sides agree to update it.

Tuesday’s ruling marks “one of many steps” in solving the puzzle of off-reservation gaming sites and new land purchased by tribes with money tied to broken federal treaties, said Jake Miklojcik, president of Lansing-based Michigan Consultants. Michigan has 23 tribal casinos.

“No one is spiking the ball in the end zone,” he said.

The Bay Mills legal victory is not a convincing win for the nearly half of all American Indian tribes with a gaming presence, said Frank Fantini, editor and publisher of Fantini’s Gaming & Lodging Reports.

“Not all of the tribes are going to be happy about the ability to allow tribes to have off-reservation casinos,” Fantini said. “Newer tribes are finding land along interstates” that give them a location advantage over casinos on reservations.

The Bay Mills tribe’s Vanderbilt location, though currently closed, is off Interstate 75. The tribe used land trust earnings in 2010 — acquired from a case against the federal government alleging it had not been adequately compensated for land ceded in the 19th century — to buy about 40 acres in Vanderbilt, about 100 miles from the Bay Mills reservation in the Upper Peninsula. The tribe opened a small casino with 84 slot machines in November 2010.

A month later, the state of Michigan sued to close the facility, arguing the tribe could not operate a casino outside tribal lands. A federal judge ordered the casino closed pending a decision on the state’s lawsuit, while the Sixth Circuit U.S. Court of Appeals reversed the ruling and raised issues over jurisdiction.

Michigan “lacks the ability to sue a tribe for illegal gaming when that activity occurs off the reservation,” Justice Elena Kagan wrote in her majority opinion.

The 1988 Indian Regulatory Gaming Act says Indian gaming falls under the auspices of the federal government, meaning Congress would have to authorize Michigan’s lawsuit against the tribe. A 1998 case extending tribal sovereign immunity to prevent lawsuits stemming from an Indian tribe’s commercial activities outside its territory was also cited in Kagan’s ruling.

“Bay Mills ... depends for its livelihood on revenues from gaming activities conducted in accordance with the Indian Gaming Regulatory Act,” according to a tribe statement released Tuesday. “The court’s decision ... will ensure that tribes like Bay Mills can continue to fund tribal education and perform other sovereign functions.”

But Attorney General Bill Schuette remained adamant Tuesday that the state “will continue its suit to close down the illegal casino.”

“Today the U.S. Supreme Court affirmed the state’s ability to restrain the illegal expansion of tribal gaming on state lands,” Schuette said.

Schuette asked the Supreme Court this month to hear a similar case involving the Sault Ste. Marie Tribe of Chippewa Indians, which has plans for a $245 million casino in Lansing, off reservation property.

“The U.S. Supreme Court ruling sends another clear signal that the Sault Tribe is within our rights and federal law to move forward on our Lansing casino, which will create more than 1,500 good jobs for Mid Michigan, and millions of dollars in new revenues for greater Lansing and the entire state,” said tribe spokesman Aaron Payment, in a statement.

Chief Justice John Roberts and Justices Anthony Kennedy, Stephen Breyer and Sonia Sotomayor comprised the majority. Justices Clarence Thomas, Antonin Scalia, Ruth Bader Ginsburg and Samuel Alito dissented.

Michigan has other options if it wants to prevent the Bay Mills casino from opening, Kagan wrote, including denying a gaming license to Bay Mills for an off-reservation casino, bringing a lawsuit against tribal officials or employees or prosecuting any visitors to an unlawful gaming establishment.

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