Regulatory Updates

The Upcoming San Manuel Indian Bingo and Casino Decision: What the Future May Hold

John H. Douglas
John H. Douglas

by John H. Douglas, Attorney at Law

With all the publicity in the last year regarding the Abramoff scandal and the heated debate over changes to the Indian Gaming Regulatory Act, the significance of the San Manuel Indian Bingo & Casino case, which continues to wend its way through the federal courts, has been somewhat eclipsed of late. In the not too distant future, however, three judges of the United States Court of Appeals for the District of Columbia Circuit (the D.C. Circuit) - the federal court immediately below the United States Supreme Court - will be rendering an appellate decision on the merits (or demerits) of the May 28, 2004, administrative agency decision of the National Labor Relations Board (NLRB) in San Manuel to assert jurisdiction over tribal casinos for the first time. The importance of this upcoming decision by the D.C. Circuit – whatever it ends up being - may be hard to overstate.

As many know, the roots of the San Manuel case can be traced back to the early days of tribal gaming in California, and the rivalry that gaming engendered in the relationship between two labor unions both then-affiliated with the AFL-CIO - the Communications Workers of American (CWA) and a union then known as the Hotel Employees and Restaurant Employees Union (HERE) - and now known as UNITE/ HERE. Throughout the 1990s, HERE, desirous of protecting its position in the largely unionized Las Vegas gaming market, engaged in litigation and political activity aimed at retarding the expansion of non-unionized tribal gaming at locations along Interstate 10 (like San Manuel Indian Bingo & Casino) and other Southern California highways leading to Las Vegas. CWA, in contrast, lacking a vested interest in Las Vegas casinos or hotels, and committed, under the leadership of Richard Hartigan, to tribal economic development, allied itself politically with California tribal gaming leaders. San Manuel eventually agreed to allow CWA access to its workers to determine whether a majority of them desired to be represented by CWA. In response, on January 8, 1998 and March 29, 1999, HERE filed charges with the National Labor Relations Board claiming that San Manuel had violated the National Labor Relations Act by refusing to enter into such an agreement with HERE.

Rather than adhere to its traditional enforcement policy that it lacked jurisdiction over tribal economic enterprises on tribal land, Frederick Feinstein, the Clinton-era General Counsel of the NLRB at the time, decided to change that federal agency's enforcement policy, and on September 30, 1999, filed an administrative complaint based on HERE's charges against San Manuel that set into motion litigation that continues to this day. San Manuel responded to the complaint by filing a motion to dismiss on January 18, 2000, arguing that the case should not even proceed since the NLRB lacked jurisdiction. Following extensive briefing on the jurisdictional issue and the passage of more than four years, on May 28, 2004, one Republican and two Democratic members of the NLRB voted to assert jurisdiction (with one Republican member dissenting), and ordered a hearing be held to resolve any disputed facts in the case.

Following this decision, in order to expedite a resolution of the jurisdictional issue, San Manuel withdrew its original answer in the case, and on March 8, 2005, filed an amended answer that while continuing to dispute the jurisdictional issue, eliminated any disputes regarding the factual allegations of the complaint, such as, for example, whether San Manuel had actually dealt with CWA as alleged or refused to deal with HERE on the same basis. In response to this amended answer, on March 11, 2005, attorneys for the NLRB's General Counsel filed a motion asking the NLRB to find a violation of the NLRA on the facts not subject to dispute and on September 30, 2005, the NLRB did just that. Following this second NLRB decision, the case was poised for the first time for judicial review in the federal Courts of Appeal.

Six days later, on October 6, 2005, San Manuel filed a petition for review in the United States Court of Appeals for the District of Columbia Circuit - the federal Court with exclusive jurisdiction to review NLRB decisions arising out of controversies occurring anywhere in the country. San Manuel filed its opening brief to that court on March 21, 2006, and the NLRB responded on June 5, 2006. Additional parties, including the National Indian Gaming Association, the National Congress of American Indians, and at least ten individual tribes, have also asked for and received permission to file so-called “Amicus” (or “Friend of the Court”) briefs supporting San Manuel. By the time this article is published, San Manuel should have filed its “reply” brief, and the case should be scheduled for oral argument in Washington D.C. before a randomly-selected “panel” of the Court of Appeals consisting of three judges.

There are ten “active” judges and four “senior” judges on the D.C. Circuit. Of the “active” judges, six (including three recent Bush appointees, one of whom replaced newly elevated United States Supreme Court Chief Justice John Roberts) are identified as conservative and four are considered liberal. Of the senior judges, three are considered conservative and one liberal. “Liberal” judges, in general, tend to uphold the decisions of the NLRB and favor unions, while “conservative” judges are, in general, less inclined to do so. Though hard and fast predictions are hard to make, the composition of the three-judge “panel” randomly chosen to decide the San Manuel case could have a major impact on its outcome.

Whatever decision is ultimately rendered, that decision may or may not be the last judicial word on the issue. Whichever party “loses” will have the option of immediately filing a motion for reconsideration and/or a rehearing by a so-called “en banc” panel of the D.C. Circuit consisting of all (not just three) of the fourteen judges. Such motions, however, are generally not granted.

Following a final disposition of the case by the D.C. Circuit, the losing party will also have 90 days in which to file a petition for a writ of certiorari to the United States Supreme Court. The NLRB can, but only rarely does, file such petitions – although the fact that the D.C. Circuit – as opposed to one of the eleven other Circuit Courts of Appeal - would have rendered the decision (assuming it is adverse to the NLRB) could materially increase the chance of such a petition. As an administrative agency within the executive branch, the NLRB can and often does choose, as a matter of discretion, not to “acquiesce” in decisions rendered by a federal courts of appeal in areas of the country other than where the particular Court of Appeal specifically rendering the decision can exercise its jurisdiction. The D.C. Circuit, however, has jurisdiction over appeals involving the NLRB throughout the country, so if San Manuel prevails, any tribe aggrieved by a decision of the NLRB to continue to assert jurisdiction over a tribal casino on tribal land would eventually always have a right to appeal that jurisdictional determination to the D.C. Circuit. In effect, the NLRB would not be able to simply ignore a decision of the D.C. Circuit on this pure “legal” issue of whether the NLRB has jurisdiction over tribal casinos. Thus, if the NLRB is really committed to this position and loses in the D.C. Circuit, it may feel it has no choice but to seek review in the U.S. Supreme Court.

If San Manuel loses, on the other hand, such a petition is quite likely. Unlike an appeal to the D.C. Circuit, however, which San Manuel had an unconditional right to have heard - if a petition for a writ of certiorari is filed, the United States Supreme Court will first have to decide whether or not the controversy involves a sufficiently significant legal or public policy issues even to merit a hearing.

Rule 10 of the United States Supreme Court provides that “a petition for certiorari will be granted only for compelling reasons.” The factors that the Court considers in deciding whether or not to take a case on appeal include whether the decision of the Court of Appeal: (1) conflicts with decisions of other federal Courts of Appeal or state Supreme Courts; (2) relates to “an important questions of federal law that has not been, but should be, settled by” the Supreme Court; or (3) conflicts with a “relevant” decision of the Supreme Court.

Whatever the D.C. Circuit decides, it will be the first decision by a federal Court of Appeal on the issue. Thus, if the losing party in the San Manuel case seeks Supreme Court review, it will have to make the case that the D.C. Circuit's decision falls into the second or third category of cases meriting such review. Given the massive economic impact of tribal gaming and the profound ramifications the decision will have (one way or another) on tribal casinos, states and unions, the chances of establishing that the petition satisfies the second criteria will be considerably higher than in a “run of the mill” appeal by a single private party. There is also a chance (although weaker, in this author's view) that a successful argument could be made that the decision conflicts with prior precedents of the Supreme Court - and thus, the case should be heard under the third criteria. Either way, the odds will be daunting. Of the more than two thousand petitions for certiorari filed by private parties (as opposed to prisoners) in recent years, the Supreme Court, on average, has granted perhaps one in twenty. Thus, a decision of the D.C. Circuit upholding (or reversing) the assertion of jurisdiction of the National Labor Relations Board over tribal casinos, could well become the final judicial word on the issue.

At that point, what options would remain? If NLRB jurisdiction is upheld by the D.C. Circuit, tribes seeking a change in NLRB enforcement policy or power would have to jump back into the political arena and seek relief from either the executive or legislative branches of the federal government.

Relief from the executive branch is an uncertain prospect at best. Although the change in the NLRB's enforcement policy began during the Clinton Administration, the Bush Administration has allowed the policy to continue. Indeed, within the last year (and under the Bush Administration) the NLRB's Division of Advice has continued to rely on its San Manuel decision in recommending to the NLRB's Regional Directors that they assert jurisdiction over other tribal casino operations in California, such as Chukchansi Gold Resort & Casino, that are embroiled in other disputes with UNITE/HERE.

If the past is a reliable predictor of the future, relief in Congress is likewise uncertain. To date, three separate attempts led by Representative J.D. Hayworth (R-Az), in January, 2001, September, 2004 and June, 2005, to get Congress either to reverse the San Manuel decision entirely by amending the National Labor Relations Act to explicitly exclude tribal operations on tribal lands from NLRB jurisdiction, or to deny the NLRB funds to pursue its new enforcement policy, have failed, largely due to Democratic opposition. Another piece of legislation authored by Representative Hayworth, H.R. 16, the “Tribal Labor Relations Restoration Act,” is still active in the Congress, and a hearing was held on it before the House Subcommittee on Employer-Employee Relations on July 20, 2006. Its prospects, however, are by no means certain.

Ironically, the D.C. Circuit, with its conservative complement newly enhanced by President Bush, could end up being tribes’ best shot at preserving their sovereignty and beating back the NLRB's attempt to expand its jurisdiction. Stay tuned.

John H. Douglas is a management-side labor and appellate lawyer, and a partner in the San Francisco office of Foley & Lardner LLP, a law firm founded in Wisconsin in 1842 - and now with close to 1,000 attorneys in offices coast to coast, Asia and Europe. He can be reached by calling (415) 984-9879 or email jdouglas@foley.com