Court rules in favor of Catawba casino
In a 55-page opinion filed Friday, April 16, U.S. District Court Judge James A. Boasberg gave a green light in the Catawba Indian Nation’s quest to build a casino in Cleveland County and struck a heavy blow to the Eastern Band of Cherokee Indians’ years-long effort to keep the facility from existing.
“Plaintiffs (EBCI) raise several close and complex questions of statutory and regulatory construction, and the Court certainly cannot fault them for rolling the dice here,” Boasberg wrote in the gambling metaphor-riddled opinion. “In the end, though, they come up with snake eyes, as on each claim they either lack standing or lose on the merits.”
The ruling came more than a year after the EBCI first filed its lawsuit against the U.S. Department of Interior on March 17, 2020. They filed the suit five days after Interior approved the Catawba’s application to take 16.5 acres in Kings Mountain into trust as tribal land. The Cherokee Nation of Oklahoma joined the EBCI in its suit as an intervenor on the plaintiff side, while the Catawba joined as an intervenor on the defendant’s side.
Having the land taken into trust was perhaps the highest hurdle the Catawba had to clear to make their planned casino a reality. However, the EBCI denounced the decision as “rushed,” “flawed,” and in violation of “the plain language of federal law.” Allowing the decision to stand, they said, would set unintended and dangerous precedent.
Specifically, the EBCI argued that the land-to-trust decision should be reversed based on six different claims. The first three assert that DOI’s decision violated the Administrative Procedure Act. According to the EBCI, the 1993 Settlement Act — a congressionally approved agreement between South Carolina and the Catawba setting the framework for the Catawba’s status as a federally recognized tribe — bars the Catawba from operating a casino under the Indian Gaming Regulatory Act; the Settlement Act prevents the Catawba from having land taken into trust under the Indian Reorganization Act; and the Kings Mountain site is not eligible for gaming under IGRA regulations.
Additionally, the EBCI claimed that the DOI arbitrarily ignored the allegedly suspect background of the Catawba’s business partner Wallace Cheves, and that the DOI violated both the National Environmental Protection Act and the National Historic Preservation Act.
Interpreting the Settlement Act
The first three claims all hinged on a legal interpretation of the 1993 Settlement Act.
Section 14 of that act states that IGRA “shall not apply to the (Catawba) Tribe” and that “except as set forth in the Settlement Agreement and the (South Carolina) Act,” South Carolina law “shall govern the regulation of gambling devices and the conduct of gambling or wagering by the Tribe on and off the Reservation.”
The EBCI contends that this section plainly states that the Catawba may game only in South Carolina as allowed by South Carolina’s government. Similarly, the EBCI argued that because the Settlement Act spells out an alternative process for land acquisition to the one outlined in the IRA, the Catawba must follow this alternative process and are not eligible to take land into trust under the IRA, as Interior said it could do in last year’s decision.
To both arguments, Boasberg responded that context makes it clear that Settlement Act provisions were intended to displace federal law only within the boundaries of South Carolina. Outside of South Carolina, federal law should apply. “At a minimum,” he wrote, the language is ambiguous, and where ambiguity exists precedent says the court must rule in favor of the tribe — the Catawba.
“The intent of the Settlement Agreement seems to have been to establish a specific regime for Catawba gambling in South Carolina that would supersede IGRA’s more Tribe-friendly framework — hence the need to clarify that an otherwise preemptive federal law, IGRA, would not apply,” Boasberg wrote. “Put differently, the Settlement Agreement made clear that IGRA would not apply to the Tribe because tribal gambling would instead be covered by specific rules set out in the Settlement Agreement and/or state law. Under that reading, the Agreement has nothing to say about whether the Tribe would be permitted to game under IGRA outside of South Carolina. That is unsurprising, as the Agreement is exclusively between South Carolina and the Tribe.”
In response to the EBCI’s argument that the Kings Mountain site is not eligible for IGRA gaming — even if IGRA applies to the Catawba and Interior may use the IRA to take land into trust for them — Boasberg wrote that, “although Plaintiffs play their hand well, Defendants hold the high card.”
IGRA states that tribes may not conduct gaming on lands taken into trust after Oct. 17, 1988 — unless those lands meet one of several exceptions. Interior concluded that the Kings Mountain site fits the “restored lands” exception, which applies when a tribe’s lands are restored to federal recognition. Boasberg summarized the EBCI’s interpretation of that exception to mean that only land identified under a restoration act could be taken into trust as restored land and said that he did not believe Interior would have adopted that “crabbed view” of the restored lands exception, especially because numerous courts rebuffed that “narrow approach” following lawsuits regarding past Interior decisions.
Boasberg characterized the EBCI’s claim regarding Cheves’ background as “something of a wild card,” noting that Cheves has never been convicted of a crime and that his involvement is not reflected in any agency records.
Environmental and historic protections
The EBCI’s final two arguments hinged on the allegation that the DOI violated NEPA and NHPA when arriving at its decision.
The EBCI contends that the Kings Mountain site is located in Cherokee ancestral lands and that the casino project would likely destroy Cherokee artifacts buried there. Interior engaged with the EBCI before arriving at its ruling but did not consult with the Cherokee Nation — the tribes allege those interactions were not sufficient under NHPA.
However, Boasberg ruled that risk to Cherokee remains and artifacts “falls on the speculative side of the line.” The proposed site is highly disturbed and has been previously prospected for tin, used as a soil borrow pit and graded back to a level surface, making it unlikely that any intact artifacts remain. Further, the Catawba have agreed to a specific set of measures to prevent damage to any artifacts that are turned up during construction.
“That takes an already small risk of injury down to a true long shot — in legal terms, below the ‘substantial probability’ threshold necessary to establish future injury,” Boasberg wrote.
Boasberg similarly struck down the EBCI’s “final chip” — its claim that Interior’s failure to complete an Environmental Impact Statement and adequately consider project alternatives violates NEPA. An EIS is necessary if a project will “significantly” affect the “quality of the human environment,” and the EBCI contended that such was the case here.
The tribe argued that Interior wrongly found: that the project would not significantly impact Cherokee cultural resources, to which Boasberg reiterated his previous finding that such damage was unlikely; that the agency “failed to consider the local effects of the looming jurisdictional quagmire the Decision threatens,” to which Boasberg replied that while the tribe should get “points for creative phrasing,” the argument was a “nonstarter,” as it was based on a reading of the 1993 Settlement Act that he had already found to be “absurd”; that the agency neglected to consider local impacts such as pollution, harm to recreation at nearby state parks and increased crime, to which Boasberg responded that the EBCI forfeited its right to raise these objections because it did not do so during the 30-day comment following publication of the draft Environmental Assessment; and that Interior did not properly analyze the cumulative impacts of its decision because it did not assess the effects of further development around the casino, to which Boasberg said that a NEPA review includes only the record available at the time of the decision, and that no major new projects were in the works at that time.
Finally, the EBCI argued that Interior should have considered “reasonable alternatives” under the NEPA — namely, taking land into trust somewhere outside of Cherokee aboriginal territory. In the EA, Interior stated that evaluating other parcels was “outside the scope and control” of the current action. Boasberg sided with that argument, also stating that because much of the Southeastern United States is historical Cherokee territory, “building a facility outside those vast lands, especially for a tribe located in the Carolinas, was not ‘objectively reasonable’ or ‘feasible.’”
“To the undoubted relief of the reader who has made it thus far, the Court is out of gambling metaphors,” Boasberg’s opinion concluded. “It will, therefore, simply restate its conclusions once more: Interior did not violate the Settlement Act or IGRA by taking the Kings Mountain parcel into trust for the Catawba; the agency properly applied its IGRA regulations; it did not act arbitrarily by failing to consider the background of Wallace Cheves; Plaintiffs lack standing to press their NHPA claims and those NEPA claims that overlap; and their remaining NEPA claims fail. The Court will accordingly enter summary judgment on all counts for the Defendants.”
In a press release issued the same day as Boasberg’s decision, the Catawba applauded the ruling.
“This decision reaffirms the clear historical record of the Catawba’s ancestral lands and cultural ties in North Carolina and the rigorous process of review undertaken by the U.S. Department of the Interior in taking the land into trust,” said Catawba Chief Bill Harris. “The Interior Department righted a historical wrong, allowing the Catawba to achieve the promise of self-determination through economic development.”
The finished project is envisioned as a $273 million casino resort expected to create 2,600 permanent jobs and generate $308 million per year in direct economic activity. The tribe broke ground on the site last July, initially intending to have the first phase up and running this summer. However, as the lawsuit dragged on the Catawba elected instead to open a temporary facility this summer, a 500-slot affair to be made of prefabricated modular buildings that will be torn down when the permanent, 1,300-slot first phase opens next summer.
Meanwhile, the EBCI anticipates that the new casino could eat away up to $100 million per year in revenues currently enjoyed by its facilities in Cherokee and Murphy.
For years now, the tribe has been trying to diversify its revenue streams to offset future losses from gaming competition. Among other projects, the EBCI expects to close on a $280 million purchase of the commercial gaming operations at Caesars Southern Indiana this summer and is currently developing a 200-acre roadside attraction along Interstate 40 in Sevier County, Tennessee, planning to open the first phase next year.
Meanwhile, it remains to be seen whether the Cherokee will play another hand in court. The tribe could choose to appeal Boasberg’s ruling but has not yet stated publicly whether it will do so.
“There were several matters of law that the court cited as very complex and narrowly decided,” said Principal Chief Richard Sneed. “Our team is currently considering all of our options to see justice done in this case.”