The U.S. Court of Appeals for the Eighth Circuit ruled on Friday that the Fond du Lac Band of Lake Superior Chippewa does not owe Duluth, Minnesota payments of $10.3 million from the operations of its Fond-du-Luth Casino, located in the central part of the city.
The decision rejected a ruling by a district court from 2011, according to which the tribe was to pay the above-mentioned amount.
The chairwoman of the Fond du Lac Band, Karen Diver, applauded the Friday decision, while Duluth City Attorney Gunnar Johnson said he was disappointed with the turn of events. He also renewed the discussions over certain bonds that are to be paid off by means of contributions from the casino.
Mr. Johnson commented that if the judgment by the district court stands, the band is to pay the amount of $13.6 million to the city. If the money does not come to Duluth, however, it will have to either increase taxes or cut particular services, in order to be able to pay off its debt.
Previously, the court had judged twice in favor of the city. Mr. Johnson pointed out that the Friday ruling was not what Duluth was expecting. Now, the case is to be reviewed by the district court for the third time.
U.S. District Judge Susan Nelson ruled back in November 2011 that Fond du Lac was to make payments to the city from the end of 2009 to April 2011, when an agreement between the band and Duluth for revenue sharing was due to expire.
Fond du Lac Band, however, appealed the ruling and in January 2013, the case was reviewed by the district court for the second time. Nine months later, in October 2013, Judge Nelson ordered once again that the band was to make the payments in question.
Judge Diana Murphy, however, ruled on Friday that the district court did not consider congressional policy, according to which revenues from tribal casinos are to benefit tribes in the first place.
In 2011, the National Indian Gaming Commission stated that the rent payments Fond du Lac Band made to Duluth were unlawful under the so-called Indian Gaming Regulatory Act. As Judge Murphy pointed out on Friday, those payments were only intended for covering services that the casino was provided with by the city.
Following the latest ruling, Ms. Diver asserted that the Indian Gaming Regulatory Act needed to be followed. She also pointed out that if the band is ordered to make the above-mentioned payments to the city, that would be considered violation of the Act’s provisions. Due to this, the National Indian Gaming Commission might even order the closure of Fond-du-Luth.
Judge Murphy suggested on Friday that Judge Nelson had not paid due attention to the notice of violation released by the commission. As previously mentioned, the case is now to be considered by the district court for the third time.
