Officials say North Fork negotiations ‘futile’ post-Prop. 48


Proposition 48 vote nullified the North Fork gaming compact, according to state officials.


The Madera-area casino would be about the same size as Chukchansi Gold Resort & Casino.


Federal law allows the tribe to seek a compact from the state.


The North Fork Mono Rancheria Indians contend that Gov. Jerry Brown is acting in bad faith by not negotiating a new compact for the tribe’s proposed casino and resort project near Madera, and the tribe wants a federal mediator to intervene.

The complaint, filed last month in U.S. District Court, argues that the state must negotiate a compact with the tribe. The state had already done so, but it was thrown out when voters rejected Proposition 48 in November.

Under the scenario proposed by the North Fork tribe, both sides would submit a compact to a federal court-appointed mediator. The mediator will then select a compact that conforms with findings from a federal judge, and that compact would be forwarded to the federal Department of the Interior for approval.

It’s a rare move — legal and gaming experts say it’s occurred fewer than a handful of times, most recently when the Rincon Luiseno tribe in San Diego County wanted to add more slot machines and Gov. Arnold Schwarzenegger sought more money for the state’s general fund. After a seven-year legal fight, a judge ruled that the governor negotiated in bad faith.

If the state fails to conclude compact negotiations with the tribe in 60 days, a mediator will be selected. If the state fails to consent to the compact selected by the mediator after another 60-day period, the secretary of the Interior will consult with the tribe about the procedures for the tribe to conduct gaming on Indian lands.

“You have to do that to get the issue before the federal court,” said former congressman Rick Lehman, who worked with the North Fork tribe in recent years and served on the committee that wrote the federal gaming law in the late 1980s. “Under the Indian Gaming Regulatory Act, once that land is in trust, the state has a legal responsibility to negotiate a compact.”

But, in November, California voters rejected the North Fork tribe’s compact, which would allow the tribe to build a casino with slot machines on a 305-acre site that is in federal trust. The tribe has no land in its North Fork base to build a casino and spent a decade working with local, state and federal officials to put the Madera-area land in trust. Since November’s election, the state Attorney General’s Office has taken a position that the compact is not in effect.

The tribe contends that its state compact was legally ratified by Brown and the Legislature before California voters opposed it. In its complaint, the tribe argues that under federal Indian gaming law, the power now rests in the hands of a federal judge to select a mediator who will choose between a state-proposed compact and one from the tribe. The complaint was filed after the governor’s office sent a letter to the tribe’s lawyers declining further negotiations.

Lehman said he is convinced the tribe will get a compact because the law “was designed to protect the rights of the tribe. The state was given some say, but the state has to negotiate in good faith.”

Big plans

North Fork offered some of the most lucrative incentives for surrounding communities among all of California’s tribal gaming compacts, Lehman said.

The casino and hotel resort would be built north of Avenue 17 and Highway 99, near Madera. It would have 40 gaming tables, a bingo hall and 2,000 slot machines, about the same size as Chukchansi Gold Resort & Casino.

Under the terms of the 20-year deal signed by the governor, Madera County and surrounding cities Madera and Chowchilla would get a total of about $5 million annually.

The compact also provided revenue for the Chukchansi tribe to make up for losses it would suffer because of new competition. And, it put money into the coffers of the Wiyot tribe near Eureka so it won’t put a gaming complex on the environmentally sensitive Humboldt Bay.

Millions of dollars also would be provided for transportation projects, water conservation and public safety. Casino construction would create about 1,200 jobs, and the casino — when built out in three phases — would employ more than 1,400.

Revenue projections in the compact indicate $53.8 million annually by its seventh year. Other studies show that the Madera project could bring in annual revenues of about $100 million. A third study projects annual revenues of $225 million.

“The big loser was Madera County because the compact had benefits to the state and Madera County,” Lehman said.

Using a mediator, federal judge and federal Department of the Interior, the tribe would bypass the Legislature to get a compact approved.

Opponents, Lehman predicts, will attempt to put up legal obstacles as a “delay tactic.”

Cheryl Schmit, with Stand Up California, a major supporter of the November referendum, said her organization is evaluating whether to challenge the North Fork complaint. If the tribe says that the state has no role, that would smack of “federal government overreach,” she said.

Kenneth Hansen, a Fresno State professor and an Indian gaming book author, said North Fork’s complaint — despite how rare the move is — seems legitimate.

“It is trust land and they have a compact,” he said. “The Secretary of the Interior could approve gaming even without a compact.”

And, Hansen said, federal overreach could be a difficult argument to make.

“I don’t know how California can overturn federal policy because once it’s in the Federal Register, it’s national policy,” he said.

‘Futile’ — who says?

The state seems unlikely to try to negotiate a new compact. In a January letter to the tribe, Joginder Dhillon, the governor’s senior adviser for tribal negotiations, said, “Californians voted overwhelmingly to reject Proposition 48 and thereby disapprove that compact. Given that the people have spoken, entering into negotiations for a new compact for gaming on the Madera parcel would be futile.”

The term “futile” was used by John Maier, North Fork’s lawyer, in a letter he had written a week earlier to Dhillon.

That shared language is suspicious, said Dan Casas, counsel for Table Mountain Rancheria, which spent about $11 million to oppose Proposition 48. Millions more were spent by other tribes, including Chukchansi and the financial backers of its now-closed casino.

He said outside legal counsel has examined the state’s response, especially the similar wording, and said “they’ve never seen such a case of collusion as in this case.”

If the governor refuses to sign the compact, then the Department of the Interior “makes the choice and it’s over,” Casas said.

But Table Mountain is evaluating its legal options, he said.

Once the compact selection is done, North Fork officials say, that will end the process under federal law and casino construction could get underway.

But a prominent gaming lawyer is not so sure. While recognizing the tribe is within its rights to seek mediation, I. Nelson Rose, author, law professor and owner of the website gamblingandthelaw.com, said the case won’t likely end with a Department of the Interior decision.

“It’s almost never used,” Rose said of the mediation request, “but that is exactly what they are supposed to do.”

It could raise some tricky scenarios, Rose said, because of the election rejecting the compact and the duties of the governor.

“It’s very possible a judge might rule that the governor can’t negotiate because the people said ‘you can’t negotiate,’ ” he said.

No matter what the results of the potential mediation, more legal maneuvers are almost definite, he said.

“What this really means is years of litigation,” Rose said. “It doesn’t matter because somebody will then sue their opponents on the grounds that this act of Congress is overruling the people of California. Now, you are ending up with a case that could end up at the U.S. Supreme Court.”

North Fork tribe lawyers Maier and Christopher Babbitt declined comment, referring to their complaint. In it, North Fork lawyers say that the letter from Dhillon constitutes bad faith by the governor’s office.

“By refusing to honor the existing compact and refusing to negotiate to enter into a new tribal-state gaming compact, the state has breached its obligation under (Indian gaming law) to negotiate with the tribe in good faith,” the complaint says.

A spokesman for the governor said his office will not comment on litigation.