KG Urban Enterprises, LLC v. Patrick et al
Filing
160
Judge Nathaniel M. Gorton: ORDER entered. MEMORANDUM AND ORDER: "In accordance with the foregoing, defendants' motion for summary judgment (Docket No. 138 ) is ALLOWED and plaintiff's motion for summary judgment (Docket No. 141 ) is DENIED. So ordered."(Moore, Kellyann)
United States District Court
District of Massachusetts
KG URBAN ENTERPRISES, LLC,
Plaintiff,
v.
GOVERNOR DEVAL PATRICK and
CHAIRMAN AND COMMISSIONERS OF
THE MASSACHUSETTS GAMING
COMMISSION, in their official
capacities,
Defendants.
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Civil Action No.
11-12070-NMG
MEMORANDUM & ORDER
GORTON, J.
In November, 2011, casino developer KG Urban Enterprises,
LLC (“KG Urban”) brought suit against Governor Deval Patrick
(“Governor Patrick”) and the Massachusetts Gaming Commission
(“the Commission”), challenging the Act Establishing Expanded
Gaming in the Commonwealth (“the Gaming Act”) as
unconstitutional.
After this Court denied plaintiff’s motion
for a preliminary injunction and dismissed the case, the First
Circuit Court of Appeals reversed and remanded, directing this
Court to provide defendants with a “limited grace period” for a
federally recognized Indian tribe to meet the requirements of
the Indian Gaming Regulatory Act (“IGRA”).
In the interim, the
Court denied motions to intervene by Massachusetts’s two
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federally recognized Indian tribes and denied defendants’ motion
to dismiss for mootness.
With ancillary matters resolved and the case substantially
narrowed to its core equal protection issue, now pending before
the Court are cross-motions for summary judgment from both
parties.
For the foregoing reasons, the Court finds no
constitutional infirmity in either § 91 of the Gaming Act or the
Commission’s review of commercial casino applications.
I.
Factual Background and Procedural History
The voluminous factual history of this case has been
described at length in the prior memoranda and orders of this
Court and the First Circuit and, therefore, only the information
relevant to the subject motions will be summarized here.
A.
Factual Background
In 2011, Governor Patrick signed into law the Gaming Act
which created the Commission and authorized it to issue one
casino license in each of three regions.
Notably, the
Commission was given the authority not to award any casino
licenses if the applicants did not meet the relevant criteria.
In the southeastern region, Region C, the Gaming Act
contained a built-in preference for a casino under the control
of a federally recognized Indian tribe.
The governor was
authorized to negotiate a tribal-state compact that would
require approval by both houses of the state legislature and the
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Secretary of the Interior (“Secretary”).
However, if no compact
was approved by July 31, 2012, or the Commission determined that
a federally recognized tribe would not be able to complete the
legal prerequisite of having land taken into trust by the
Secretary, the Commission would be required to consider bids for
a commercial casino in Region C.
In contrast, the provisions for western Massachusetts
(Region B) and the Greater Boston region (Region A) envisioned
only a commercial application process.
The applicable criteria
consist of a variety of factors including a proposed casino’s
effect on the local economy, traffic, environment, crime rate
and tax base.
B.
Procedural History
On the same day the Gaming Act became law, KG Urban filed
suit in federal court alleging that § 91 of the Act violated the
Fourteenth Amendment’s Equal Protection Clause by implementing a
racial bias in favor of Indian tribes against others similarly
situated.
KG Urban sought declaratory relief invalidating § 91
as unconstitutional and injunctive relief compelling the
Commission to accept commercial applications in Region C.
In February, 2012, this Court held that plaintiff’s
complaint withstood challenges under ripeness, standing,
sovereign immunity and Pullman abstention but denied plaintiff’s
motion for a preliminary injunction.
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The Court noted that
further factfinding would not change its legal analysis and,
accordingly, dismissed plaintiff’s complaint. See KG Urban
Enters., LLC v. Patrick et al. (“KG Urban I”), 839 F. Supp. 2d
388 (D. Mass. 2012).
In August, 2012, the First Circuit affirmed this Court’s
ruling but reversed the dismissal of plaintiff’s case,
emphasizing that the underlying facts needed to be fleshed out.
Importantly, the appellate court rejected the constitutional
arguments interposed by both parties and held instead that § 91
could be sustained as a “temporary accommodation” to the IGRA
process which the Mashpee did not satisfy due to their lack of
land held in trust. See KG Urban Enters., LLC v. Patrick (“KG
Urban II”), 693 F.3d 1 (1st Cir. 2012).
On remand, the Court allowed plaintiff to file a more
focused Amended Complaint in which it alleges that (1) § 91(e)
“on its face” creates an unconstitutional race-based set-aside
by granting federally recognized Indian tribes the exclusive
right to seek a gaming license in Region C, (2) the Commission’s
refusal to open Region C to a competitive commercial application
process constitutes a continuing racial preference and (3) such
conduct violates the Massachusetts Declaration of Rights.
Thereafter, both the Mashpee and Aquinnah tribes sought to
intervene but this Court denied their respective motions in
June, 2013. See KG Urban Enters., LLC v. Patrick (“KG Urban
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III”), 293 F.R.D. 42 (D. Mass. June 6, 2013).
Two months later,
the Court denied defendants’ motion to dismiss for mootness. See
KG Urban Enters., LLC v. Patrick (“KG Urban IV”), No. 11-12070,
2013 WL 4495121 (D. Mass. Aug. 16, 2013).
The Court held a
hearing on the subject cross-motions for summary judgment on
November 21, 2013, after which it took the matter under
advisement.
C.
Administrative History
In July, 2012, the Commonwealth and the Mashpee tribe
entered into a tribal-state compact approved shortly thereafter
by the state legislature.
In October, 2012, the Bureau of
Indian Affairs (“BIA”) rejected the compact on the grounds that
the Commonwealth purportedly retained too high a percentage of
the prospective gaming revenues.
The Commonwealth subsequently
negotiated an amended compact with the Mashpee which was
finalized in March, 2013.
In April, 2013, after an aborted proposal to create a “dual
track” proposal under which both commercial and tribal casino
applications would move forward simultaneously, the Commission
approved a process to invite commercial applications in Region
C.
That step was taken several months before the July 31, 2012,
deadline for a compact to be approved and before any
determination that a federally recognized tribe would not be
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able to take land into trust. 1
The Commission declared that its
determination would be based on the strength of the commercial
applications received which, in turn, would depend, in part,
upon the impact of any tribal-state compact existing between the
Commonwealth and the Mashpee at the time of decision.
The broad
criteria include
economic and other circumstances as they exist at the
time of the licensing decision[,] in light of the
statutory objective[s] that govern expanded gaming in
the Commonwealth and the discretion with which the
expanded gaming statute clothes the Commission.
At bottom, a casino operator must prove that the proposed casino
would be an economic asset both to the Commonwealth and to its
specific region.
In June, 2013, the Commission began accepting
commercial applications for Region C with a deadline of
September 30, 2013.
KG Urban was the only applicant to submit a
commercial application by that deadline.
The Commission has
publicly expressed that it expects to make a decision by
December, 2014.
On November 15, 2013, the amended compact with the Mashpee
tribe was approved by both houses of the state legislature and
signed by Governor Patrick.
January 2, 2014.
It was approved by the BIA on
The Mashpee tribe’s separate application to
place land into trust remains pending before the BIA.
1
In taking that unauthorized step, the Commission relied on the
implied discretionary power in § 91(e).
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II.
Legal Analysis
The Court now addresses the pending motions.
Both parties
have moved for summary judgment on all counts, contesting (1)
whether § 91 is facially constitutional in light of the First
Circuit’s remand decision in KG Urban II and (2) whether the
Commission’s review of commercial applications is a raceneutral, “competitive” process.
The parties agree that the
determination of a racial preference is dispositive because it
would warrant strict scrutiny and a finding of constitutional
invalidity.
If, on the other hand, a racial preference is not
found, the parties agree that rational basis review would apply
and, accordingly, the challenged provisions would be upheld.
Although Count III alleges separate violations of the
Massachusetts Declaration of Rights, the parties agree that its
protections are coextensive with federal constitutional
protections.
Accordingly, the Court’s analysis of Count III
will be incorporated into its analysis of the other counts.
A.
Summary Judgment
The role of summary judgment is “to pierce the pleadings
and to assess the proof in order to see whether there is a
genuine need for trial.” Mesnick v. Gen. Elec. Co., 950 F.2d
816, 822 (1st Cir. 1991) (citation omitted).
To prevail, the
moving party must show, through pleadings, discovery and
affidavits, “that there is no genuine issue as to any material
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fact and that the moving party is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(c).
Material facts are those
that would affect the case’s ultimate outcome. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
Factual disputes
of merely ancillary interest will not preclude summary judgment.
Id.
A genuine issue of material fact exists where the evidence
with respect to the disputed material fact “is such that a
reasonable jury could return a verdict for the nonmoving party.”
Id.
At this stage, the Court views the entire record in the
light most favorable to the non-moving party and makes all
reasonable inferences in that party's favor. O'Connor v.
Steeves, 994 F.2d 905, 907 (1st Cir. 1993).
To evaluate cross-
motions for summary judgment, the Court views each motion
separately and applies the applicable presumptions accordingly.
Roman Catholic Bishop of Springfield v. City of Springfield, 724
F.3d 78, 89 (1st Cir. 2013).
Summary judgment is appropriate
if, after viewing the record in the non-moving party's favor,
the Court determines that no genuine issue of material fact
exists and that the moving party is entitled to judgment as a
matter of law.
B.
Supreme Court Precedent
The Court briefly acknowledges the most important
precedential guideposts of the present inquiry.
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In Morton v.
Mancari, 417 U.S. 535 (1974), the Supreme Court upheld a federal
statute granting qualified Indians an employment preference in
the BIA under rational basis review as a “political” preference.
Id. at 553 n.24.
In Washington v. Confederated Bands & Tribes
of the Yakima Indian Nation (“Yakima”), 439 U.S. 463 (1979), the
high Court found that state governments occupy a dissimilar
constitutional position and, thus, cannot ordinarily legislate
with the same authority. Id. at 501.
The Yakima court noted,
however, that a state statute “enacted in response to a federal
measure explicitly designed to readjust the allocation of
jurisdiction over Indians” would also warrant rational basis
review. Id. at 500.
Finally, in Carcieri v. Salazar, 555 U.S. 379 (2009), the
Supreme Court interpreted the phrase “now under federal
jurisdiction” in the Indian Reorganization Act of 1934, the
statute under which the Secretary is entitled to take land into
trust on behalf of federally recognized Indian tribes, to refer
only to tribes that were federally recognized in 1934. Id. at
382.
Notably, however, Justice Breyer wrote a concurring
opinion in Carcieri embracing a broader interpret tation because
a tribe may have been “under federal jurisdiction” in 1934 even
without explicit federal recognition thereof. Id. at 397
(Breyer, J., concurring).
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While the Court is skeptical that this constitutional
framework faithfully reflects the text and purpose of the Equal
Protection Clause, see KG Urban I, 839 F. Supp. 2d at 404,
acting upon such misgivings is not within the purview of a
United States District Judge.
The Supreme Court may choose to
exercise its institutional prerogative to revisit questionable
precedent but until then this Court is constrained.
C.
The First Circuit’s Remand
In August, 2012, the First Circuit decided KG Urban’s
appeal of this Court’s initial decision by affirming all aspects
except the dismissal of the case and remanding for further
proceedings. See KG Urban II, 693 F.3d 1 (1st Cir. 2012).
Although the First Circuit’s guidance to this district court,
and perhaps others, is inscrutable, a careful reading yields a
consistent rationale for its decision: despite not being fully
authorized by the IGRA, the Massachusetts statute can be
considered a valid “parallel mechanism” to the IGRA and,
therefore, warrants rational basis review for a “limited period
of time.” Id. at 25.
The First Circuit found “difficulties” with both parties’
arguments on appeal.
It rejected KG Urban’s argument that (1)
the Gaming Act is a racial preference not enacted pursuant to
congressional delegation and (2) the Carcieri decision
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forecloses the Mashpee tribe’s land-in-trust application as
being “not yet resolved.” KG Urban II, 693 F.3d at 21.
The appellate court also rejected the Commonwealth’s
position that the statute is a “political” preference under
Mancari or authorized under the IGRA pursuant to Yakima.
Mancari applied only to the Federal government and the Mashpee
tribe’s lack of “Indian lands” precludes a finding that the
statute is authorized under IGRA.
The court clarified its thinking, however, when it chided
defendants for not offering a “middle ground” legal position
that would have allowed a “limited grace period” in which the
relevant Indian tribes could attempt to obtain the appropriate
approvals from the Secretary of the Interior. Id. at 17.
Although phrased conditionally because of the court’s procedural
posture, namely, review of a denial of a preliminary injunction,
the First Circuit embraced the argument that
[i]f the Secretary is willing under the IGRA to
approve a tribal-state compact contingent on the
relevant land being later acquired in trust, then the
Commonwealth can argue that § 91 establishes a
parallel mechanism, meant to facilitate the purposes
of the IGRA, even if not precisely authorized by the
IGRA, for a limited period of time. The argument, of
course, would become weaker with the passage of time
and the continuation of the status that there are no
“Indian lands” in the region.
Id. at 25.
The court also noted that, while a preliminary
injunction was not appropriate on the facts before it, KG
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Urban’s desired equitable relief might be appropriate “at some
future date.” Id. at 27.
By positing the existence of a constitutional waiting
period in which a state could act under what amounts to the
penumbra of the IGRA, the First Circuit contemplated that period
ending either (1) when the Commission determines that a tribe
will not have land taken into trust and then initiates the
“competitive license application process” or (2) when a tribe
fulfills the criteria outlined in the IGRA. Id. at 25.
The First Circuit took a wait-and-see approach to the
subject dispute, despite the fact that several of the uncertain
contingencies are not squarely presented in this case.
The
court left no doubt, however, that KG Urban would prevail if (1)
the Mashpee tribe were ever explicitly foreclosed from taking
land into trust (a) by the federal government or (b) by the
evolution of the Carcieri decision or (2), assuming the federal
government were willing to approve a tribal-state compact in
light of the previously discussed uncertainties, if too long an
interlude were to elapse before the uncertainty is resolved.
D.
Equal Protection Analysis
1.
Count I – Facial Challenge to § 91
The Court’s first analytical task is to heed the First
Circuit’s admonition that there is a finite period during which
the preference created by § 91 remains constitutional, i.e. a
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“limited grace period,” not a “lengthy delay.” See KG Urban II,
693 F.3d at 17, 27.
Both parties assert that the time period has expired.
Defendants contend that the time has elapsed because the
Commission has initiated the commercial application process
while KG Urban maintains that the First Circuit’s grace period
has expired by the passage of time.
The Court agrees with
defendants that the relevant time period should be measured
beginning with the passage of the Gaming Act and ending with the
start of the commercial application process.
In light of the Commission’s commencement of the commercial
application process in April, 2013, any other potential
uncertainties with respect to the Mashpee tribe’s casino license
application are immaterial. 2
Therefore, the Court need only
determine whether the 18-month delay, more or less, between the
passage of the Gaming Act and the opening of the commercial
application process in Region C was constitutionally permissible
under KG Urban II.
The First Circuit did not provide explicit instructions for
establishing when a temporary accommodation becomes
2
The Court previously rejected the argument that the
commencement of the commercial application process in Region C
rendered moot plaintiff’s statutory challenge, see KG Urban IV,
2013 WL 4495121, at *3, but that analysis did not foreclose
using the Commission’s review of commercial applications as the
boundary of the “limited” time period envisioned by the First
Circuit.
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constitutionally infirm but it alluded to a method of analysis.
On the one hand, it is certainly plausible that, in the context
of the lengthy delays associated with securing IGRA-related
approval for Indian casinos, a “limited grace period” should be
measured in years. See Match-E-Be-Nash-She-Wish Band of
Pottawatomi Indians v. Patchak, 132 S. Ct. 2199, 2204 (2012)
(describing the lengthy administrative delays associated with
Indian land-in-trust applications).
On the other hand, the
First Circuit specifically lamented that “the Commission might
wait years,” KG Urban II, 693 F.3d at 26, and noted, in the
context of the delays discussed in Patchak, that “lengthy delays
... would undercut the argument that § 91 is meant as a
temporary accommodation to the IGRA process.” Id. at 27.
According to that logic, a “temporary” accommodation ought not
endure for years.
While the Court acknowledges that the latter approach most
closely comports with the logic of KG Urban II, any attempt to
ascertain an exact point in time at which the Constitution is
violated would amount to guesswork.
Fortunately, the Court need
not be so precise because it is persuaded that the subject delay
of 18 months falls short of a constitutionally prohibited delay.
The maximum period a state may provide as a “temporary
accommodation” under IGRA to a landless, federally-recognized
Indian tribe is for another court to decide.
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Because the Court finds that the Commission’s opening of
the commercial application process frames the applicable time
period, it need not speculate as to the ultimate resolution of
the so-called Carcieri question with respect to the rights of
the Mashpee or Aquinnah tribes to take land into trust. See
Carcieri, 555 U.S. at 397.
Any lingering uncertainty with
respect to the Mashpee tribe’s eligibility is immaterial.
The Court also rejects KG Urban’s contention that the
delays in Region C’s commercial application process relative to
those in Regions A and B (1) were caused by the Commonwealth’s
racial preference and (2) unconstitutionally disadvantaged KG
Urban vis-à-vis other casino applicants.
Holding the waiting
period constitutional also renders the later start date for
opening commercial applications in Region C constitutionally
permissible.
Accordingly, with respect to plaintiff’s facial challenge
to § 91 of the Gaming Act, plaintiff’s motion for summary
judgment will be denied and defendants’ motion for summary
judgment will be allowed.
2.
Count II – As-Applied Challenge to the
“Competitive Licensing Process”
KG Urban also challenges the Commission’s conduct, claiming
that it has refused to initiate a “competitive application
process” in Region C despite its clear authority under § 91 to
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oversee “the same race-neutral, competitive application process”
that is ongoing in Regions A and B.
KG Urban suggests that the
Commission has a “thumb on the scales” for the Mashpee because
it has explicitly stated that it will consider “the then current
status of the Tribal-State and Federal Trust Land process” in
evaluating commercial applications in Region C.
Defendants respond that the Commission voted in April,
2013, to begin a race-neutral application review process in
Region C.
According to the unambiguous terms of the
Commission’s unchallenged governing statute, applications will
be evaluated based on a variety of factors, including “economic
and other circumstances as they exist at the time of the
licensing decision.”
One such factor includes a potential
Indian casino, whether a resort-casino style facility authorized
pursuant to the tribal-state compact or a smaller facility
authorized separately under IGRA.
Applications in Region C must
take these possibilities into account simply because Region C is
home to the two federally recognized tribes in Massachusetts.
The Commission has acknowledged that it retains the right to
determine that a
federally approved (or imminent) Indian casino in
Region C would undermine the viability of a “second,”
state-licensed casino in the region.
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Therefore, defendants believe KG Urban has already received the
remedy it sought all along: the chance to compete for a casino
license in southeastern Massachusetts.
To assess KG Urban’s challenge to the Commission’s
application review process, the Court must determine whether the
disclosed criteria of the Commission constitute an explicit
racial preference and, if not, whether the neutral criteria are
being applied in a racially discriminatory manner.
a.
Explicit Racial Preference
All parties concede that an explicit racial preference in
the selection criteria of the Commission would warrant strict
scrutiny under the Equal Protection Clause. See Anderson ex rel.
Dowd v. City of Boston, 375 F.3d 71, 82 (1st Cir. 2004) (citing
Grutter v. Bollinger, 539 U.S. 306, 326 (2003)).
The parties
further agree, and the Court concurs, that the application of
strict scrutiny to an explicit racial preference by the
Commission would yield a swift invalidation of the subject
procedure.
In the instant case, however, the Court finds no express
racial preference.
Neither the Commission’s declared procedures
nor the applicable standards constitute explicit, race-based
preferences.
The criteria to be employed by the Commission
speak in broad terms to an array of factors, including
protecting the state lottery’s viability, promoting local
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businesses, maximizing capital and workforce investment,
building a gaming establishment of “high caliber,” addressing
problem gambling, maximizing revenues received by the
Commonwealth, creating a secure and robust gaming market and
mitigating potential impacts on host and surrounding
communities. See Mass. Gen. Laws ch. 23K, § 18(1)-(19).
The
applicable criteria do not discuss Indian tribes.
The Court acknowledges that the Commission has, of course,
on several occasions invoked the possibility of an Indian casino
as a potential influence on a future decision.
A careful
reading of this evidence, however, indicates that the Commission
has done so as a means of illustrating a specific instance of
how it would apply a neutral criterion, namely the economic
consequences, to the subject casino.
Indeed, the statutory
criteria require this racially neutral analysis to be completed
for the commercial casino applications in all three regions. Id.
§ 18 (“[T]he commission shall evaluate and issue a statement of
findings of how each applicant proposes to advance the following
objectives.”).
Accordingly, the Court finds no explicit race-based setaside in the Commission’s procedure for reviewing commercial
casino applications.
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b.
Implicit Racial Preference
Finding no explicit racial preference, the Court turns to a
more difficult issue: whether an implicit preference lurks under
the surface of the Commission’s facially neutral criteria.
A
discriminatory racial purpose need not be “express or appear on
the face of the statute.” Washington v. Davis, 426 U.S. 229, 241
(1976).
In the hands of those determined to discriminate, a
neutral statute can become a tool for invidious discrimination.
See Yick Wo v. Hopkins, 118 U.S. 356 (1886).
i. Legal Standard
To evaluate the adherence of a facially neutral policy to
the Equal Protection Clause
an inquiry into intent is necessary to determine
whether the [policy] in some sense was designed to
accord disparate treatment on the basis of racial
considerations.
Washington v. Seattle Sch. Dist., 458 U.S. 457, 484-85 (1982).
The Court applies a burden-shifting framework to guide its
analysis.
First, a plaintiff must establish a prima facie case
that a discriminatory purpose was present and that it was a
“motivating factor” in the defendant’s decision. See Vill. of
Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252, 27071 (1977).
Second, if a discriminatory purpose is established,
the defendant must then prove that it would reach the same
decision in the absence of the discriminatory purpose. Id. at
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270 n.21; see also Smith v. Wilson, 705 F.3d 674, 681-82 (7th
Cir. 2013). Courts use this process to determine whether the
state action at issue “was intended to, and did in fact,
discriminate.” Dayton Bd. of Educ. v. Brinkman, 433 U.S. 406,
420 (1977).
At the first step, finding a state actor’s discriminatory
purpose “demands a sensitive inquiry into such circumstantial
and direct evidence of intent as may be available.” Arlington
Heights, 429 U.S. at 266.
Factors relevant to such an inquiry
include any disproportionate racial impact of the policy, the
justification for any such impact and the legislative and
administrative background of the decision. See Dowd, 375 F.3d at
83.
The Court need not credit implausible arguments and an
improper purpose may be inferred from the totality of the
evidence at hand. Davis, 426 U.S. at 242.
Discerning the racially discriminatory application of an
otherwise racially neutral statute is notoriously difficult,
however, and the subject case is no exception.
Were the
Commission intent on acting upon a racial preference, it need
only first pay lip service to neutral economic, social and
demographic criteria and then deny KG Urban’s license.
Alternatively, the Commission could plausibly deny KG Urban’s
license based on actual reference to those racially neutral
criteria without any invidious pretext.
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At the summary judgment
stage, however, the Court need only indulge reasonable
inferences against the non-moving party, obviating the need to
grapple with such intellectual uncertainty.
Two additional issues give the Court pause in its analysis.
First, although courts have assessed facially neutral policies
in light of “disproportionate racial results,” this Court can
find no such evidence because the Commission has not yet reached
a decision. See, e.g., Dowd, 375 F.3d at 89.
Indeed, any
decision would yield only a single data point. See id.
(rejecting inference of racially invidious motive where “there
is no clear pattern of disparate racial impact, much less the
‘stark’ pattern contemplated by [the Supreme Court]”).
Accordingly, the Court’s inquiry addresses whether the
Commission’s facially neutral criteria are genuine. 3
Second, the Court acknowledges the relative dearth of
relevant caselaw in this area.
Applicable precedent arises in
the context of school desegregation, see, e.g., Anderson, 375
F.3d 71, zoning discrimination, see, e.g., Arlington Heights,
429 U.S. 252, employment discrimination, see, e.g., Davis, 426
U.S. 229, but all such factual scenarios are dissimilar to the
subject dispute.
Nonetheless, at their core each cited opinion
3
The Court previously found the subject case to be ripe for
adjudication and, notwithstanding the fact that the focus of the
case at this juncture has shaken the foundation of that
determination, adheres to that prior decision. See KG Urban III,
293 F.R.D. 42.
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concerns alleged unconstitutional discrimination based on race
in the context of a facially neutral policy or statute.
ii. Application
Drawing all reasonable inferences in favor of KG Urban, the
Court first finds that it has established a prima facie case
that the Gaming Commission is acting with a discriminatory
purpose.
The Court also finds, however, that the Commission can
prove that it would reach the same decision in the absence of
any discriminatory purpose.
In other words, while KG Urban can
provide some evidence that the criteria employed by the
Commission are racially motivated, the Commission can meet its
burden of explaining its criteria “on grounds other than race.”
Arlington Heights, 429 U.S. at 266.
a. Prima Facie Case
At the first step, after drawing all reasonable inferences
in favor of KG Urban, an inquiry into the available
circumstantial and direct evidence reveals some evidence of
discriminatory intent. See id.
While no racially
disproportionate impact is evident, the record permits several
inferences of discriminatory intent from the legislative and
administrative background of the Commission’s review of
commercial applications. See Dowd, 375 F.3d at 83.
First, KG Urban points to several statements by Governor
Patrick that call into question the true “competitiveness” of
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the commercial application procedure in Region C.
The tribal-
state compact continues to mention the Mashpee tribe’s purported
“exclusivity” in Region C.
Moreover, while Governor Patrick
himself does not wield direct power over the Commission’s
decision, his public statements reinforce the perception that
the application process in Region C is tilted toward the Mashpee
tribe.
More importantly, the Commission itself has consistently
mentioned a potential Mashpee casino, even in public statements
with respect to the competitive commercial application process
which supposedly has no connection to the Mashpee’s application.
Drawing reasonable inferences in favor of KG Urban’s position,
the Court concludes that plaintiff has demonstrated a prima
facie case that the state action at issue, despite being
facially neutral, is intended to discriminate. See Brinkman, 433
U.S. at 420.
The burden thus shifts to the Commission to rebut
the presumption created by the establishment of a prima facie
case.
b. Rebutting the Presumption
At the second step of the burden-shifting framework, the
Court adopts all reasonable inferences in favor of KG Urban’s
position but nonetheless concludes that the Commission can
demonstrate that it would reach the same decision absent any
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discriminatory purpose. See Arlington Heights, 429 U.S. at 270
n.21.
KG Urban argues that a racial preference persists by virtue
of the Commonwealth’s continued references to the Mashpee’s
status in Region C.
Reduced to its essence, KG Urban’s argument
rests on the purported arbitrariness of Region C’s borders and
specific statements made on behalf of the Commonwealth and the
Commission.
The Court notes initially that while Governor Patrick’s
statements may provide some circumstantial evidence of
discriminatory intent, they are not directly at issue in Count
II which challenges the procedures of the Commission, not
actions of the Commonwealth itself.
Plaintiff’s suggestion that the Commonwealth is “speaking
out of both sides of its mouth” is unfounded because the
Commonwealth and the Commission are two separate legal entities.
Notwithstanding their pairing as named defendants, Governor
Patrick has no role in evaluating commercial applications in
Region C, just as the Commission had no role in the enactment of
§ 91(e).
Even after drawing all reasonable inferences in favor
of plaintiff, it would be implausible to attach any significance
to the statements of an actor with no formal role in a
potentially suspect procedure. See Davis, 426 U.S. at 242.
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Accordingly, the Commonwealth’s statements are inapplicable at
this stage.
KG Urban also contends that it is irrational, and therefore
suspect, for the Commission to weigh the possible impact of an
Indian casino in the process of reviewing applications for
Region C but not for Regions A and B, as it has suggested it
will do.
If, as KG Urban argues, there is no rational reason to
discuss Indian tribes exclusively in Region C, then statements
to that effect by the Commission would be strong evidence of a
racial preference.
KG Urban’s objection is, however, unfounded.
In contending
that the Mashpee could apply for the placement of land in trust
anywhere in the Commonwealth, plaintiff ignores federal
regulations which limit such applications so as to
demonstrate a significant historical connection to the
land [which must be] near where a significant number
of tribal members reside.
25 C.F.R. § 292.12.
The record suggests that the historic
homeland of the Mashpee is located in southeastern Massachusetts
and the Aquinnah tribe owns land on Martha’s Vineyard.
Those
tribes are the only federally recognized Indian tribes in the
Commonwealth.
Thus, it is neither arbitrary nor discriminatory
to discuss the presence of federally recognized Indian tribes in
Region C.
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KG Urban’s effort to refute this conclusion is also
unpersuasive.
Plaintiff points out that the Commission has
identified a potential Indian casino in Region C as a relevant
criterion for the granting of a license but has not done the
same for existing casinos that will affect the economic
viability of the commercial casinos in Regions A or B.
It
points out that the Mashpee’s potential casino in Taunton would
be only a short distance from Regions A and B but that fact is
unmentioned in the Commission’s public statements about its
review of applications for those regions.
That argument fails to distinguish between criteria
outlined in a duly enacted state statute and statements
contained in a press release.
The mere fact that the
Commission’s press releases with respect to Regions A and B have
differed from those with respect to Region C does not prove
racial discrimination.
The Court declines to find
constitutional significance in the differing verbiage of the
Commission’s press releases.
Moreover, consulting the text of the Commission’s press
release itself fails to convince the Court that a racial
preference is present.
The relevant portion of the Commission’s
September 30, 2013, press release reads as follows:
After the Phase 2 [Request for Application] deadline,
the Commission, using the same evaluation criteria it
will use in Region A and B, will make a decision about
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[the] award of a commercial license after taking into
account the economic consequences of the then current
status of the Tribal-State and Federal Trust Land
process, the contents of the commercial Phase 2 RFA
responses, the regional and statewide gaming and other
economic conditions then existing and forecast, and
all other relevant information as it then exists.
That passage demonstrates that the general criteria evaluated by
the Gaming Commission are extensive and include a potential
Indian casino simply because they are so broad.
In other words,
because the Gaming Commission’s decision requires assessing “all
relevant information,” it necessarily includes assessing the
prospect of an Indian casino.
While “affirmations of good faith” alone are insufficient
to rebut an inference of racial discrimination, they buttress a
valid, racially neutral explanation. See Alexander v. Louisiana,
405 U.S. 625, 632 (1972).
The Court finds that, even after
adopting all reasonable inferences in favor of KG Urban, the
Commission can show that “permissible racially neutral selection
criteria and procedures” would yield a non-discriminatory
result. Id.
The totality of the evidence at hand supports such
a determination. See Davis, 426 U.S. at 242.
The Court concludes that the Equal Protection Clause does
not prohibit the Commission from assessing KG Urban’s commercial
application based on a variety of statutorily mandated economic,
social or demographic factors that, by implication, include the
presence or potential presence of an Indian casino.
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The
Commission has always possessed the right to refuse to issue any
casino licenses should the applicants fail to meet the relevant
criteria.
Therefore, with respect to plaintiff’s as-applied
challenge to the commercial application procedure alleged in
Count II, the Court will deny plaintiff’s motion for summary
judgment and grant defendants’ motion for summary judgment.
ORDER
In accordance with the foregoing, defendants’ motion for
summary judgment (Docket No. 138) is ALLOWED and plaintiff’s
motion for summary judgment (Docket No. 141) is DENIED.
So ordered.
/s/ Nathaniel M. Gorton______
Nathaniel M. Gorton
United States District Judge
Dated January 9, 2014
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