PRESIDENT R.C. ST. REGIS MANAGMENT CO. V. PARK PLACE ENTERTAINMENT CORP

Tuesday, June 19, 2001

Supreme Court

Nassau County

Justice O’Connell

PRESIDENT R.C. – ST. REGIS MANAGMENT CO. v. PARK PLACE ENTERTAINMENT CORP. ” Defendants seek an Order dismissing plaintiffs” Complaint pursuant to CPLR ?§3211 (a)(2). Plaintiffs oppose.

In their Complaint plaintiffs seek damages for monetary losses incurred due to defendants’ actions in developing and running certain gambling casinos located on Native American Indian reservations located in New York State. Defendants claim that this Complaint must be dismissed as the State Court has no subject matter jurisdiction over these claims. There was apparently no Notice to Remove this matter to Federal Court.

Plaintiffs’ causes of action relate to a federally approved management agreement between plaintiff PRESIDENT R.C. and the Saint Regis Mohawk Tribe, involving the Tribe’s existing casino, the Akwesasne Casino, located in Hogansburg, New York. Plaintiffs seek to enforce a purported letter agreement between PRESIDENT RC, the Tribe, and defendant PARK PLACE ENTERTAINMENT CORP. (“PARK PLACE”). This letter agreement involved the operation of the Akwesasne Casino, as well as proposed future gaming operations of the Tribe, to be located in the Catskill mountain and resort area of New York State.

In their Complaint, plaintiffs allege that the defendants induced them to enter into the agreement which permitted PARK PLACE to purchase plaintiffs’s interest in the Management Agreement and receive exclusive rights to the Tribe’s present and future casino activity and development in the Catskills while at the same time, never intended to pay plaintiffs for that purchase or to give them a future financial interest in the Catskill casino.

Defendants argue that this Court lacks subject matter jurisdiction over this action as the plaintiffs’ claims involve agreements concerning the management or operation of gaming operations located on Indian land and involving the active participation of the Native American Indian tribes. Thus, they seek an Order dismissing the Complaint as it is preempted by the Federal Indian Gaming Regulatory Act, 25 U.S.C. ?§?§2701-2721 (“IGRA”).

The IGRA was enacted by Congress on October 17, 1988. It was intended to be a comprehensive statute governing the operation of gaming facilities on Indian lands. Tamianmi Partners, Ltd. v. Miccosukee Tribe of Indians of Florida, 63 F.3d 1030 (11″ ‘ Cir. 1995). The purpose of the Statute was to provide a statutory basis for operating Indian gaming to promote economic development, to shield tribes from organized crime, to assure fairness to operators and players and to establish a Federal regulatory authority for Indian gaming to meet congressional concerns. Pursuant to IGRA ?§2701(5) the Indian tribes have the exclusive right to regulate gaming activity on Indian lands so long as such activity is not prohibited by Federal law and does not violate State criminal law and public policy.

Defendants contend that while the IGRA does not explicitly discuss preemption of state jurisdiction concerning Indian gaming matters, its legislative history indicates that this was a clear intent in enactment. Defendants claim that the Senate Report on IGRA clearly states that IGRA was extended to preempt the field in the governance of gaming activities on Indian lands. S.Rep. No. 446, 100th, Cong., 2d Sess. 6 (1988), reprinted in 1998 U.S.C.C.A.N. 3071, 3076; Gaming Corp. v. Dorsey & Whitney 88 F.3d at 544. There have been courts which have considered the preemptive force of the IGRA, and determined that the Federal Courts have exclusive jurisdiction over claims involving Indian gaming activities. Gaming Corp, supra at 550; Great Casinos, Inc. v. Morongo Band of Mission Indians, 74 Ca. App. 4th 1407 (App. Div. 1999) cert. den. __ U.S. __, 121 S.Ct. 45 (2000).

Based on the foregoing, the defendants seek a dismissal of this action for lack of subject matter jurisdiction in this Court, pursuant to CPLR ?§3211 (a)(2).

Plaintiffs oppose dismissal, claiming that the Statute does not explicitly prohibit this Court from hearing this matter. They contend that without a statement in the legislation vesting the Federal Courts with exclusive jurisdiction, these claims may be heard in a State Court, as the states have concurrent jurisdiction. Counsel notes that the Third Department has found that the State Court is a proper Court to litigate disputes arising out of the operations of gaming casinos located on this very reservation. Contour v. White, 212 A.D.2d 891 (3rd Dept. 1995). They claim that there is no specific language preempting the States from litigating these disputes, and thus a dismissal for lack of subject matter jurisdiction is not warranted.

The Court notes that there is no claim that the Tribe is a necessary party. The only question to be resolved is whether the nature and origin of these claims preempts litigation here. The Court is compelled to find that they are not prohibited.

The location of the underlying gambling operation on a Native American Indian Tribe reservation does not mandate litigation in Federal Courts only. There is no explicit language in IGRA mandating that this matter be brought only in Federal Courts. Thus, the State Courts have inherent authority and are presumptively competent to adjudicate claims arising under Federal law. In this instance, in enacting the IGRA Congress did not expressly take affirmative action to oust the State Courts of this jurisdiction, Teflon v. Levitt, 493 U.S. 455 (1990). The legislative history of the IGRA which discussed exclusive jurisdiction does not control. Such language was not used in the final legislation. United States v. Bank of New York & Trust Co., 296 U.S. 463 (1936); Yellow Freight System, Inc., 494 U.S. 820 (1990). The mere grant of jurisdiction to the Federal Court does not operate to oust a State Court from concurrent jurisdiction over a cause of action. Gulf Offshore Co v. Mobil Oil Corp, 453 U.S. 473 (1981).

A dismissal for lack of subject matter jurisdiction pursuant to CPLR ?§3211(a)(2) should not be granted in such matters, as there is a presumption in favor of concurrent State Court subject matter jurisdiction. Simpson Elec. Corp. v. Lucania Inc., 126 Misc.2d 312 (1984) aff’d 128 A.D.2d 339, aff’d 72 N.Y.2d 450.

The Court agrees with the plaintiffs that the structure of the, IGRA is that of a regulatory statute, not a creation of substantive rights and remedies. 25 U.S.C. 2711 (b)(6). The Court finds that it not only does not preempt the plaintiffs’ claims in this action, but is of questionable relevance due to the private nature of the claims asserted here. The Court does not find that the issues raised in the Complaint and Answer assert a federal question. Postena v. National League of Professional Baseball Clubs, 799 F.Supp. 1475 (1992) rev’d other grounds 988 F.2d 60. As noted by plaintiffs, the Third Department has already determined that IGRA does not apply to an action brought by an individual to enforce the terms of a private business agreement. Contour v. White, supra at 373.

Based on the proof and arguments presented, the motion of the defendants for a dismissal of the Complaint due to lack of subject matter jurisdiction, is Denied. CPLP ?§3211 (a)(2).

It is So Ordered.