State of Wisconsin v. Ho-Chunk Nation

Filing 41

Transmission of Notice of Appeal, Docketing Statement, Appeal Information Sheet, Docket Sheet and Judgment to Seventh Circuit Court of Appeals re 40 Notice of Appeal, (Attachments: # 1 Information Sheet, # 2 Docketing Statement, # 3 Order, # 4 Order 2, # 5 Judgment, # 6 Docket Sheet) (jat) (Attachment 6 replaced on 7/11/2014) (jat).

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - STATE OF WISCONSIN,
OPINION AND ORDER
Plaintiff,
13-cv-334-bbc
v.
HO-CHUNK NATION,
Defendant.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - The state of Wisconsin has brought this case to enjoin defendant Ho-Chunk Nation
from offering electronic poker at Ho-Chunk Gaming Madison (formerly DeJope), the HoChunk Nation’s gaming facility in Madison, Wisconsin. The question raised in the parties’
cross motions for summary judgment is whether Ho-Chunk Nation’s poker game violates a
compact with the state. The answer to that question turns on whether electronic poker
qualifies as a “class II” or “class III” game under the Indian Gaming Regulatory Act. Class
III games are prohibited by the compact except under certain conditions not present in this
case, but class II games are permitted.

Because I conclude that Ho-Chunk Nation’s

electronic poker game is a class III game, I am granting the state’s motion for summary
judgment and denying Ho-Chunk Nation’s motion.
The following facts are taken from the stipulation submitted by the parties. Dkt.
#17.

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UNDISPUTED FACTS
Defendant Ho-Chunk Nation owns a gaming facility in Madison, Wisconsin, called
Ho-Chunk Gaming Madison. Games that are classified as “class II” under the Indian
Gaming Regulatory Act are permitted at the facility but “class III” games are not permitted.
In 1992, the state and Ho-Chunk Nation entered into a gaming compact. In 2003,
the parties executed an amendment to the compact that authorized Ho-Chunk Nation to
offer poker at its class III gaming facilities (which do not include Madison). In addition, the
compact permitted Ho-Chunk Nation to offer class III gaming at the Madison facility if a
referendum authorizing Ho-Chunk Nation to do so was passed by voters in Dane County
in 2004. Although the referendum was held, it did not succeed. Approximately 94,000
people voted against allowing class III gaming; approximately 52,000 voted for it. Since that
time, neither the state nor Ho-Chunk Nation has taken any action to approve or authorize
class III gaming at the Madison facility.
In November 2010, Ho-Chunk Nation began offering a “non-banked” electronic
poker game called PokerPro at the Madison facility. In non-banked card games, the house
has no monetary stake in the game itself, the house does not place bets and the players play
and bet against one another. Playing PokerPro is virtually identical to playing poker on a
traditional table, except the cards and chips are maintained in an electronic medium and
there is no live, human dealer.

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OPINION
The Indian Gaming Regulatory Act divides gaming into three categories. “Class I
gaming” includes “social games solely for prizes of minimal value or traditional forms of
Indian gaming engaged in by individuals as a part of, or in connection with, tribal
ceremonies or celebrations.” 25 U.S.C. § 2703(6). “Class II” gaming includes certain kinds
of bingo as well as “card games” that are (1) “explicitly authorized by the laws of the State”
or (2) “not explicitly prohibited by the laws of the State and are played at any location in
the State.” 25 U.S.C. § 2703(7). “Class III” gaming encompasses all forms of gaming that
do not qualify as “class I” or “class II” gaming. 25 U.S.C. § 2703(8). “Class III” games must
be authorized by a compact between a state and a tribe. 25 U.S.C. § 2710(d)(1)(C).
The state makes a straightforward argument in support of its view that Ho-Chunk
Nation’s electronic poker game at the Madison facility is a “class III” card game. (The parties
do not dispute that the electronic poker at issue in this case qualifies as a “card game” within
the meaning of § 2703(7).) In particular, the state cites art. IV, § 24 of the Wisconsin
Constitution, which states that the “legislature may not authorize gambling in any form”
except for the games listed in the amendment. Because poker is not one of the listed
exceptions, the state says that poker is prohibited under state law, so it cannot meet either
definition of card games that qualify as class II gaming under § 2703(7).
Ho-Chunk Nation argues that its electronic poker game is a “class II” game, but it
arrives at that conclusion through a more circuitous route. In fact, in its opening brief, HoChunk Nation all but ignores § 2703(7) and focuses instead on a number of other issues

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with little explanation of how those issues are relevant to the legal questions before the court.
However, from a review of both of its briefs, I understand Ho-Chunk Nation to be making
the following arguments:
!

First, Ho-Chunk Nation says that the meaning of “explicitly authorized” and
“not explicitly prohibited” in § 2703(7)(A)(ii) must be read “in conjunction
with” 25 U.S.C. § 2710(b)(1), which permits a tribe to engage in class II
gaming if it “is located within a State that permits such gaming for any
purpose by any person, organization or entity (and such gaming is not
otherwise specifically prohibited on Indian lands by Federal law).”

!

Second, Ho-Chunk Nation says that, read together, § 2703 and § 2710, along
with relevant legislative history, require courts to apply the standard from
California v. Cabazon Band of Mission Indians, 480 U.S. 202 (1987), to
determine whether a particular game qualifies under class II. In particular,
Cabazon stands for the proposition that a tribe may engage in gaming if the
state’s “general policy towards gambling is regulatory or prohibitory.” Dft.’s
Resp. Br., dkt. #33, at 8.

!

Third, Ho-Chunk Nation says that, because Wisconsin does not prohibit all
gaming, it follows that the state takes a “regulatory” approach, which means
that it cannot prohibit poker either. Alternatively, Ho-Chunk Nation must
be allowed to offer electronic poker because Wisconsin allows poker in other
contexts and does not enforce its laws that restrict poker.

!

Finally, Ho-Chunk Nation says that the Wisconsin Constitution does not
“explicitly prohibit” the poker at its Madison gaming facility.

Having reviewed both parties’ briefs and the legal authorities they cite, I am
persuaded that the state has the better argument. In law, as in many things, the simplest
answer is often the best one.

A. Effect of § 2710 on § 2703
Ho-Chunk Nation’s argument regarding the proper interpretation of § 2703(7)(A)(ii)

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is simply untenable.

Ho-Chunk Nation says that § 2703(7)(A)(ii) must be read “in

conjunction with” 25 U.S.C. § 2710(b)(1), but the statutes serve a different purpose.
Section 2703(7)(A)(ii) defines class II gaming; section 2710(b)(1) imposes an additional
condition on class II gaming. In other words, it must be determined first whether a particular
game meets the definition for a class II game under § 2703(7)(A)(ii). If the game meets that
definition, then the game must meet the requirements in § 2710(b)(1) before it can be
offered by the tribe. On its face, § 2710(b)(1) does not purport to expand or contract the
meaning of a class II game under § 2703(7)(A)(ii).
Distilled, Ho-Chunk Nation’s argument is not that the two statutes should be read
“in conjunction” with each other, but that § 2710(b)(1) should supplant § 2703(7)(A)(ii).
In other words, Ho-Chunk Nation’s position is that the questions whether a game is
“explicitly authorized by the laws of the State” or “not explicitly prohibited by the laws of
the State” in § 2703(7)(A)(ii) should be the same as the question whether the state “permits
such gaming for any purpose” in § 2710(b)(1).

However, if that were the case, §

2703(7)(A)(ii) would serve no purpose and would be read out of the United States Code.
Ho-Chunk Nation’s “reading is thus at odds with one of the most basic interpretive canons,
that a statute should be construed so that effect is given to all its provisions, so that no part
will be inoperative or superfluous, void or insignificant.” Corley v. United States, 556 U.S.
303, 314 (2009) (alterations and internal quotations omitted). Why would Congress provide
an express definition of a term if it believed it already had defined the term in another
provision?

Ho-Chunk Nation does not answer that question.

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Particularly because §

2710(b)(1) does not purport to be a definition, I see no reason to conflate the two
provisions.
In support of its interpretation, Ho-Chunk Nation cites a Senate committee report
for the Indian Gaming Regulatory Act. Dft.’s Br., dkt. #26, at 19-20. This report includes
the same language Ho-Chunk Nation has been using, which is that § 2703(7)(A)(ii) and §
2710(b)(1) should be read “in conjunction” with each other. The meaning of the phrase “in
conjunction” in this context is not clear, but even if I assume that it means what Ho-Chunk
Nation says it does, that piece of legislative history would not be enough to overcome the
plain language of the statute.
Ho-Chunk Nation cites Train v. Colorado Public Interest Research Group, Inc., 426
U.S. 1, 10 (1976), for the proposition that, “[w]hen aid to construction of the meaning of
words, as used in the statute, is available, there certainly can be no rule of law which forbids
its use, however clear the words may appear on superficial examination.” However, since
Train, both the Supreme Court and the Court of Appeals for the Seventh Circuit have stated
repeatedly that a federal court has no discretion to rely on other indicia of legislative intent
when the language of a statute is unambiguous. Boyle v. United States, 556 U.S. 938, 950
(2009) (“Because the statutory language is clear, there is no need to reach petitioner's
remaining arguments based on statutory purpose, legislative history, or the rule of lenity.”);
Lamie v. U.S. Trustee, 540 U.S. 526, 534 (2004) (“[W]hen the statute's language is plain,
the sole function of the courts—at least where the disposition required by the text is not
absurd—is to enforce it according to its terms.”); Holder v. Hall, 512 U.S. 874, 932 n.28

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(1994) (“Resort to legislative history is only justified where the face of the [statute] is
inescapably ambiguous.”); Patriotic Veterans, Inc. v. Indiana, 736 F.3d 1041, 1046-47 (7th
Cir. 2013) (“The preeminent canon of statutory interpretation requires that courts presume
that the legislature says in a statute what it means and means in a statute what it says there.
If Congress determines later that the plain language of the statute does not accurately reflect
the true intent of Congress, it is for Congress to amend the statute.”) (internal quotations,
citations and alterations omitted); Shlahtichman v. 1-800 Contacts, Inc., 615 F.3d 794, 802
(7th Cir. 2010) (“We need not explore [the statute’s] legislative history in view of the
unambiguous terms of the statute.”); United States v. Hayward, 6 F.3d 1241, 1245 (7th Cir.
1993) (“[W]hen the language of a statute is clear and unambiguous, no need exists for the
court to examine the legislative history, and the court must give effect to the plain meaning
of the statute.”). See also American Hospital Association v. NLRB, 499 U.S. 606 (1991)
(affirming federal agency’s interpretation of statute even though it was inconsistent with
committee report).
Even if I assume that Train has not been implicitly overruled by later cases, that case
is not controlling. First, the Court did not hold that the statute was unambiguous in that
case, so the statement Ho-Chunk Nation cites is dicta. Second, the legislative history at
issue in Train was not simply a committee report. Rather, the Court relied on the entire
history of the law, including proposed amendments, multiple reports and a number of
different statements by legislators. Train, 426 U.S. at 11-23. Finally, the Court stated that
the lower court’s interpretation was not just inconsistent with legislative history but also

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“would have marked a significant alteration of the pervasive regulatory scheme embodied in
the” statute at issue. Id. at 23-24. None of these things apply in this case.
Ho-Chunk Nation cites a number of cases in which a court cited with approval the
same committee report on which it is relying, but in none of these cases did the court rely
on the report as justification for ignoring unambiguous statutory text. United States v. 103
Electric Gambling Devices, 223 F.3d 1091, 1099-1100 (9th Cir. 2000) (relying on report
to determine “[t]he distinction under IGRA between an electronic ‘aid’•and an electronic
‘facsimile’”); Mashantucket Pequot Tribe v. State of Connecticut, 913 F.2d 1024, 1029 (2d
Cir. 1990) (relying on report to aid in interpreting § 2710; court did not consider meaning
of “class II gaming” under § 2703); United States v. Sisseton-Wahpeton Sioux Tribe, 897
F.2d 358, 359 (8th Cir. 1990) (relying on report to determine the meaning of phrase “nature
and scope” in § 2703(7)(C)); Crosby Lodge, Inc. v. National Indian Gaming Commission,
803 F. Supp. 2d 1198, 1205 (D. Nev. 2011) (relying on report to determine role of National
Indian Gaming Commission); Shakopee Mdewakanton Sioux Community v. Hope, 798 F.
Supp. 1399, 1407 (D. Minn. 1992), aff'd, 16 F.3d 261 (8th Cir. 1994) (relying on report
to distinguish bingo from “high-stakes casino gambling” that must be classified as a class III
game). Accordingly, none of these cases are instructive.

B. “Regulatory” versus “Prohibitory” Treatment of Gaming
The Nation cites California v. Cabazon Band of Mission Indians, 480 U.S. 202
(1987), as providing the standard for determining whether a type of gaming is a class II

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game. In particular, it says that the distinction in Cabazon between a “prohibitory” and
“regulatory” approach to gaming should apply and that its electronic poker must be
permitted under the standard in Cabazon because Wisconsin takes a “regulatory” approach
to gaming.
This argument is misguided. Cabazon had nothing to do § 2703 or the meaning of
“class II gaming.” Rather, the question in Cabazon was whether a particular federal statute
not at issue in this case gave the California government authority to prohibit certain kinds
of gaming conducted by tribes. When the Court concluded that the statute did not give the
state such authority, Congress enacted the Indian Gaming Regulatory Act to address the
vacuum. Seminole Tribe of Florida v. Florida, 517 U.S. 44, 58 (1996) (“[T]he [Indian
Gaming Regulatory] Act grants the States a power that they would not otherwise have, viz.,
some measure of authority over gaming on Indian lands.”). See also Michigan v. Bay Mills
Indian Community, No. 12-515, — U.S. —, 2014 WL 2178337 (U.S. May 27, 2014)
(“[T]he problem Congress set out to address in IGRA (Cabazon's ouster of state authority)
arose in Indian lands alone. And the solution Congress devised, naturally enough, reflected
that fact.”); Lac Courte Oreilles Band of Lake Superior Chippewa Indians of Wisconsin v.
United States, 367 F.3d 650, 654-55 (7th Cir. 2004) (“Following the Supreme Court's
decision in California v. Cabazon Band of Mission Indians, 480 U.S. 202 (1987), which
held that Congress had not yet expressly granted the States jurisdiction to enforce state civil
gaming regulations on Indian reservation land, Congress passed IGRA for the purpose of
creating a federal regulatory scheme for the operation of gaming on Indian lands.”). Because

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the Act created new state authority over tribal gaming, it makes little sense to interpret the
Act using a standard that was applied before the states had that authority.
Ho-Chunk Nation also cites Lac du Flambeau Band of Lake Superior Chippewa
Indians v. State of Wisconsin, 770 F. Supp. 480 (W.D. Wis. 1991), for the proposition that
Wisconsin is a “regulatory” state, but Lac du Flambeau is not helpful because it was about
class III gaming, not class II. Thus, by relying on that case, the Nation is asking the court
to eliminate any distinction between class II and class III games. If anything, the 1991
decision undermines that position because the decision emphasizes that “[t]he essential
feature of the [Indian Gaming Regulatory] Act is the tribal-state compact process.” Id. at
481. In this case, it is Ho-Chunk Nation, not the state, that is attempting to do an end-run
around the compact process.
In arguing that the state must allow the Nation to offer poker at the Madison gaming
facility because the state allows some forms of gaming both at that facility and elsewhere, the
state relies entirely on the “regulatory/prohibitory” distinction made in cases such as
Cabazon and Lac du Flambeau.

Because I have concluded that Cabazon and Lac du

Flambeau are not instructive, that argument cannot prevail.

C. “Explicitly Authorized” or “Not Explicitly Prohibited” by “the Laws of the State”
Art. IV, § 24(1) of the Wisconsin Constitution states, “Except as provided in this
section, the legislature may not authorize gambling in any form.” Neither poker generally
nor electronic poker in particular is listed in the provision as something the legislature may

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authorize. As a result, the state says, the electronic poker at Ho-Chunk Nation’s Madison
gaming facility is “explicitly prohibited” by the Wisconsin Constitution.
In response, the Nation raises several arguments. First, “the ‘explicit language [in art.
IV, § 24] precludes the legislature from authorizing any gambling not within the exceptions
in § 24, [but] it ‘explicitly prohibits’ only one thing:

the State conducting poker or

simulated poker as part of the lottery.” Dft.’s Br., dkt. #33, at 20. Ho-Chunk Nation cites
art. IV, § 24(6)(c), which allows the legislature to create a lottery, but excludes poker as a
game that may be part of the lottery.
The point the Nation is trying to make is not immediately clear. To the extent it
means to argue that poker is “not explicitly prohibited” by the state constitution because it
is not listed individually as a prohibited game, I disagree. The state constitution “explicitly
prohibits” all gambling unless it falls within a listed exception. Ho-Chunk Nation cites no
authority for the view that a state must “itemize” all the games it prohibits.
The Nation may be arguing that there is some significance to the way that art. IV, §
24 is worded. It compares the phrase “the legislature may not authorize gambling” in art.
IV, § 24 with the Idaho Constitution, which states that “[g]ambling is . . . strictly
prohibited” before listing a number of exceptions. Idaho Const. art. III, § 20. Ho-Chunk
Nation seems to believe that there is something more permissive about the language in the
Wisconsin Constitution, but it never explains the practical difference between prohibiting
the legislature from authorizing an activity and prohibiting the activity directly. Because all
gambling is prohibited in Wisconsin without an act of the legislature authorizing it, I see no

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relevant difference.
Alternatively, Ho-Chunk Nation says that electronic poker is “authorized” under
Wisconsin law because compacts with the state allow tribes to offer poker games in some
contexts. E.g., Dairyland Greyhound Park, Inc. v. Doyle, 2006 WI 107, ¶ 82, 295 Wis. 2d
1, 719 N.W.2d 408 (because compacts were entered into before amendment to art. IV, § 24
was enacted and compacts anticipated that tribe and state could “allow new games should
the parties agree to amend the scope of gaming,” state constitution did not prohibit governor
from agreeing with tribe to expand scope of gaming as anticipated by compacts). The
National Indian Gaming Commission relied on a similar argument in concluding in an
opinion that electronic poker is “explicitly authorized” or “not explicitly prohibited” by state
law. Dkt. #17-7.
There are two problems with this argument. First, gaming compacts are meant to
address class III gaming, not class II. 25 U.S.C. § 2710(d); Lac du Flambeau, 770 F. Supp.
at 484.

If permission to engage in gaming under a compact qualified as “explici[t]

authoriz[ation]” under § 2703, it would significantly blur the distinction between class II
and class III gaming by making it impossible for the state to allow gaming for a limited
purpose in the context of a compact. In other words, once the state allowed class III gaming
through a compact, that game necessarily would become a class II game that the state could
not prohibit in other contexts. If that were the law, it is likely that the state would be much
less willing to negotiate compacts.
Second, under § 2703(7), a game qualifies as a class II game if it is authorized or not

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prohibited “by the laws of the State.”

Ho-Chunk Nation cites no authority for the

proposition that a compact qualifies as a state law for the purpose of § 2703(7).

D. Lack of Enforcement
Ho-Chunk Nation devotes much of its briefs to arguing that poker is being played in
Wisconsin in various contexts, such as in taverns and at charity events. The state disputes
many of these allegations, but even if they are true, they cannot carry the day for the Nation.
The question whether the state is failing to fully enforce its own laws against playing poker
might be relevant in determining whether poker is a game subject to compact negotiations,
Lac du Flambeau, 770 F. Supp. at 485, or it might be relevant to determining whether a
game is “played at any location in the State” under § 2703(7)(A)(ii). However, Ho-Chunk
Nation does not explain how a lack of enforcement is relevant to the question whether poker
is prohibited or authorized “by the laws of the State.” On its face, § 2703(7) does not
permit an inquiry into enforcement practices.
Many laws suffer from some amount of underenforcement, but that does not mean
that they are no longer “laws.” I agree with the state that Ho-Chunk Nation has proposed
an unworkable standard because it would require courts to determine the particular degree
of enforcement or underenforcement that would qualify as “prohibiting” or “authorizing”
a game.

Particularly because there is no basis in the statutory text for making that

determination, I decline to adopt that interpretation of the statute.
In sum, I conclude that the electronic poker Ho-Chunk Nation is offering at the

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Madison gaming facility qualifies as a “class III” game under the Indian Gaming Regulatory
Act. Because it is undisputed that the compact between the parties prohibits class III games
under the circumstances of this case, I am granting the state’s motion for summary judgment
and enjoining Ho-Chunk Nation from offering electronic poker at the Madison gaming
facility.

ORDER
IT IS ORDERED that
1. The motion for summary judgment filed by plaintiff state of Wisconsin, dkt. #16,
is GRANTED, and the motion for summary judgment filed by defendant Ho-Chunk Nation,
dkt. #23, is DENIED.
2. Ho-Chunk Nation is ENJOINED from offering electronic poker at Ho-Chunk
Gaming Madison in the absence of a compact between the parties that permits electronic
poker at the Madison facility. The injunction shall take effect 30 days after the conclusion
of any appeals filed by Ho-Chunk Nation or 30 days after the expiration of Ho-Chunk
Nation’s deadline for filing an appeal, whichever is later.

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3. The clerk of court is directed to enter judgment in favor of the state and close this
case.
Entered this 12th day of June, 2014.
BY THE COURT:
/s/
BARBARA B. CRABB
District Judge

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