Court Rules in Favor of Interior in West Flagler Associates, Ltd. v. Haaland

DC Circuit Court of Appeals

WASHINGTON, D.C. – The United States Court of Appeals for the D.C. Circuit issued its opinion in West Flagler Associates, LTD v. Haaland, which challenged Secretary Haaland’s approval by inaction of the tribal-state gaming compact between the State of Florida and the Seminole Tribe of Florida. The Court vacated the lower court decision and directed the District Court to enter judgement for the Secretary. 

Chairman Ernie Stevens Jr. issued the following statement regarding the Court’s decision: 

“We hope this decision will restore the Seminole Tribe’s right to economic development and its sovereign choice to enter into an agreement with the State of Florida,” said Stevens. “The Indian Gaming Regulatory Act has been one of the few successful laws passed by Congress that fostered tribal economic self-sufficiency. With the D.C. Circuit Court’s decision in favor of the Seminole-Florida compact, and the dismissal of the Maverick case in Washington State, Indian gaming remains protected from frivolous lawsuits. It is clear there is much work to be done on the policy side in explaining how IGRA benefits all communities and States. The NCAI-IGA Taskforce will continue to focus on this messaging across all federal Indian laws and the government’s trust responsibility in upholding these laws and treaties.” 

Summary of Case

In 2021, after the tribe entered a compact under the Indian Gaming Regulatory Act (IGRA) with the State of Florida, Secretary Haaland failed to affirmatively disapprove the compact within 45 days of receipt. The plaintiffs, West Flagler Associates, an operator of casinos in Florida, objected to the Secretary’s failure to disapprove the compact based on the compact’s online sports betting provisions, which the Plaintiffs claimed violated federal law by authorizing gaming not on Indian lands. The plaintiffs sued in the district court, claiming that the compact violated IGRA, the Wire Act, the Unlawful Internet Gambling Enforcement Act (UIGEA), and the Fifth Amendment, and thus the Secretary was required to disapprove the compact. On November 22, 2021, the District Court ruled in favor of the plaintiffs, holding that the compact “authorizes gaming both on and off Indian lands. The compact accordingly violates IGRA’s ‘Indian lands’ requirement, which means that the Secretary had a legal duty to reject it.” The Secretary appealed this decision.

Oral arguments for this case were heard by the D.C. Circuit Court of Appeals on December 14, 2022. During arguments, West Flagler challenged the Secretary’s approval by inaction on four grounds: (1) the compact’s authorization of gaming off Indian lands was unlawful under IGRA, (2) the compact violated the Wire Act, (3) the compact violated UIGEA, and (4) the compact violated the Fifth Amendment’s guarantee of equal protection. 

The Court rejected plaintiff’s first claim that the compact unlawfully violates IGRA by authorizing Class III gaming outside of Indian lands. The Secretary agreed that IGRA does not provide an independent source of legal authority for gaming outside of Indian lands. However, the Secretary argued that “gaming outside of Indian lands … can be addressed in a compact.” The Court agreed, finding that the language in the compact that discusses wagers on sports betting “made by players physically located within the state using a mobile or other electronic device,” which are “deemed to take place exclusively where received.” The Court held that this provision simply allocates jurisdiction between Florida and the tribe, as permitted by 25 U.S.C. § 2710(d)(3)(C)(i)–(ii).

The Court clarifies that the compact only serves to “authorize” tribal activity on tribal lands, such as operating the sportsbook and receiving wagers. The plaintiffs made other arguments relating to this claim, including the “catch-all” provision and the types of necessary IGRA approvals, but the Court was not convinced. The Court did clarify, however, that this opinion did not have any bearing as to the compact’s constitutionality under the Florida constitution as that would be outside the scope of the Court’s judicial review and the Secretary’s compact review.

The Circuit Court then reviewed the merits of the other three arguments brought by West Flagler, which the District Court did not reach in its analysis. In looking at the arguments regarding the Wire Act and the UIGEA, the Court found the Secretary was not required to disapprove the compact on either basis as both arguments present questions requiring hypothetical outcomes following implementation of the compact. In its explanation, the Court emphasizes that the compact does not “authorize” wagers placed by patrons off of Indian lands, thus neither argument provides a reason for the Secretary’s disapproval. 

Finally, the Court found that the Secretary did not “authorize” or “grant the tribe a statewide monopoly over online sports betting” and therefore did not violate the Fifth Amendment’s equal protection guarantee. However, the Court makes it clear that even if the Secretary did authorize such sports betting, her approval would survive rational basis review.

This case also raised the issues as to whether the tribe could intervene to file for a Rule 19 Motion to Dismiss based on tribal sovereignty, to which the Circuit Court affirmed the District Court’s decision that the tribe could not. The opinion came before Circuit Judges Henderson, Wilkins, and Childs, who reviewed the District Court’s decision de novo. The opinion was written by Circuit Judge Wilkins.