Court: Department of the Interior wrongly rejected Koi Nation's gambling rights

The Department of the Interior had determined that the way the Koi Nation was federally recognized meant that the tribe wasn’t eligible to ask for lands to be taken into trust for gambling under the Indian Gaming Regulatory Act, but Chief U.S. District Judge Beryl A. Howell disagreed, saying the agency’s interpretation flouts the plain meaning and purpose of the statute.Photo courtesy: Michał Parzuchowski

A federal court ruled the Koi Nation of Northern California should be allowed to move forward with its gambling efforts

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Law 360

A Washington, D.C., federal court held Wednesday that the Koi Nation of Northern California should be allowed to move forward with its gambling efforts, concluding that the U.S. Department of the Interior read the Indian Gaming Regulatory Act too narrowly in rejecting the tribe’s attempts to get the ball rolling.

The DOI had determined that the way the Koi Nation was federally recognized meant that the tribe wasn’t eligible to ask for lands to be taken into trust for gambling under IGRA, but Chief U.S. District Judge Beryl A. Howell disagreed, saying the agency’s interpretation flouts the plain meaning and purpose of the statute.

The federal government had been treating the Koi Nation as though it no longer had federal recognition since the 1950s, until finally, in 2000, the DOI admitted its mistake and reaffirmed the tribe’s status, the judge noted. At that point, the judge said, the Koi Nation should have been permitted to conduct gambling on its “restored lands” under IGRA, but the DOI wrongly found that the tribe was ineligible because its recognition was restored outside typical government channels.

Finding that the Koi Nation doesn’t meet the “restored lands” exception to the statute — which allows tribes that are restored to federal recognition to work around the law’s general prohibition on gambling on lands acquired after IGRA’s 1988 passage — “would only compound the legacy of the agency’s mistreatment by continuing to deny the tribe benefits that tribes not subject to incorrect termination were able to seek during the Koi Nation’s period of mistreatment,” Judge Howell said.

The judge held that result would undermine the exception’s purpose, saying, "DOI’s interpretation fails to compensate the Koi Nation for lost opportunities caused by the federal government’s improper treatment of the tribe as terminated, which prevented the tribe from acquiring lands in trust by the time Congress enacted IGRA in 1988, the precise problem that the restored lands exception aims to remedy."

The Koi Nation has its origins in the Village of Koi, located on an island in the Sonoma County area of California. But the federal government took away and sold its reservation in 1956, and the tribe has been landless ever since, according to the opinion.

The government eventually admitted it had done wrong and reaffirmed the tribe’s federal recognition in 2000. Ever since, the Koi Nation has sought to bolster its finances by getting into gambling, trying several times to get the process started by asking the DOI to determine that it qualifies for IGRA’s restored lands exception, the opinion said.

But when the DOI finally responded in January 2017, it said no, concluding that the Koi Nation didn’t count as a restored tribe.

The problem was that the tribe’s federal recognition was never officially terminated and thus, was not administratively “restored,” the agency said, pointing to a 2008 regulation detailing the ways a tribe must get its status reinstated to qualify for the restored lands exception.

Under the regulation, the tribe has to show its status was restored through legislation, a court order or the DOI’s formal administrative process, dubbed Part 83, which wasn’t the case for the Koi Nation, the agency held, determining that its 2000 order reaffirming the tribe’s federal recognition didn’t fit into those categories.

The Koi Nation subsequently went to federal court in August 2017 to challenge the decision, and dueling summary judgment motions followed. The tribe argued that the 2008 regulation had improperly narrowed IGRA’s definition of a restored tribe, while the agency countered that the phrase “restored to federal recognition” is ambiguous enough to allow the DOI’s view, according to the opinion.

In the end, Judge Howell sided with the tribe Wednesday, saying the case presented a “stark example of the government giving with one hand and taking away with the other,” with the DOI using its decision to fix its own mistake by reaffirming the tribe’s status without making it go through the formal administrative process as a basis to reject the Koi Nation’s eligibility for gambling.

The judge held that the phrase “restored to federal recognition” is unambiguous as applied to the tribe, as its status had been terminated for all intents and purposes until the agency formally corrected its mistake and reinstated the Koi Nation.

“As a result, DOI’s administrative definition of ‘restored to federal recognition,’ set out in [the 2008 regulation], is invalid, particularly as applied to the Koi Nation because the regulation narrows IGRA’s statutory language to exclude the tribe from being considered ‘restored to federal recognition,’ contrary to the plain language of the statute,” Judge Howell said.

Even if the phrase was ambiguous under these circumstances, the judge added, “any deference to which DOI’s interpretation may otherwise be entitled is muted by the Indian canon of construction, which counsels that statutory ambiguities are to be resolved in favor of Indians.”

The DOI’s decision is also impermissible because it treats the Koi Nation differently from similar tribes, Judge Howell held, noting the Grand Traverse Band and the Ione Band both had their federal recognition de facto terminated and later reinstated, but were deemed “restored” under IGRA.

Thus, the judge found the Koi Nation qualifies as a restored tribe and vacated the DOI’s “arbitrary” and “capricious” decision to the contrary. She also declared the 2008 regulation invalid based on its “restrictive scope that improperly excludes certain Indian tribes ‘restored to federal recognition.’”

Michael J. Anderson, who represents the Koi Nation, told Law360 on Thursday the tribe is “very gratified and feels vindicated by the 69-page comprehensive opinion,” saying the judge

“systematically rejected each of the government’s defenses” and was “fairly scathing” in her discussion of the DOI’s conduct.

The DOI does not comment on pending litigation.

The tribe is represented by Michael J. Anderson of Anderson Indian Law.

The DOI is represented by its own John Hay and Femila Ervin, as well as Jeffrey H. Wood and Matthew Marinelli of the U.S. Department of Justice.

The case is the Koi Nation of Northern California v. U.S. Department of the Interior et al., case number 1:17-cv-01718, in the U.S. District Court for the District of Columbia.

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