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Court rules National Labor Relations Act applies to California casino

14 February 2007

Last Friday, the United States Court of Appeals for the District of Columbia ruled with respect to the San Manuel Indian Bingo and Casino in California, that the tribe's gambling operations are not exempt from the National Labor Relations Act. The ruling will provide unions with support for the proposition that they should have the authority to organize approximately 250,000 workers at more than 400 Indian casinos nationwide.

The specific case before the court involved the San Manuel Band of Mission Indians. The tribe, located about 60 miles east of Los Angeles, argued its sovereignty was violated in 2004 when the National Labor Relations Board asserted its jurisdiction in a labor dispute at the tribe's casino. Significantly, the Court of Appeals noted in the opening paragraph of its opinion that the casino involved "employs many non-Indians and caters primarily to non-Indians".

The court applied the following balancing test to determine whether a particular activity by a tribe is protected by sovereign immunity.

"The determinative consideration appears to be the extent to which application of the general law will constrain the tribe with respect to its governmental functions. If such constraint will occur, then tribal sovereignty is at risk and a clear expression of Congressional intent is necessary. Conversely, if the general law relates only to extra-governmental activities of the tribe, and in particular activities involving non-Indians . . . then application of the law might not impact on tribal sovereignty."

The court ultimately determined, with respect to the casino involved, that the operation of the casino "is not a traditional attribute of self-government," since the majority of the casinos employees and customers are not members of the tribe.

The court further noted: "For these reasons, the tribe is not simply engaged in internal governance of its territory and members, and its sovereignty over such matters is not called into question."

The court also rejected the tribe's claim that Congress intended, by enacting the Indian Gaming Regulatory Act (IGRA) of 1988, to give tribes and states the primary role in regulating tribal gaming activities, including labor relations. The court stated that it did not find any indication that Congress intended to limit the scope of the National Labor Relations Act when it enacted IGRA.

Although the case is certain to help bolster the arguments of many labor unions that the National Labor Relations Act applies to tribal casinos, it is important to note that there are strong arguments that the particular case involved may be limited to the specific facts of the particular casino involved. A constant theme and focus of the court in reaching its decision seemed to focus on the fact that the tribe was employing many non-Indians and was primarily in business to serve non-Indian customers. Lost on the court were the arguments that the operation of a tribal facility is akin to a state lottery, or a government run fundraising event, which funds the governmental operations.

Although many in the media have suggested that this case resolves the issue once and for all, my review of the opinion suggests that it will begin a broader debate, with many more arguments and court battles to come. It will be interesting to see if the tribe seeks to appeal the matter to the United States Supreme Court, which is the one court that could establish a clear precedent.

David Waddell
David Waddell is an attorney for Regulatory Management Counselors, P.C. (RMC), which assists businesses in navigating the legislative, regulatory and licensing systems governing Michigan’s commercial and tribal casino industries. He is the co-author of The State of Michigan Gaming Law Legal Resource Book and one of the founders of The Michigan Gaming Newsletter.

David Waddell Websites:

www.michigangaming.com
David Waddell
David Waddell is an attorney for Regulatory Management Counselors, P.C. (RMC), which assists businesses in navigating the legislative, regulatory and licensing systems governing Michigan’s commercial and tribal casino industries. He is the co-author of The State of Michigan Gaming Law Legal Resource Book and one of the founders of The Michigan Gaming Newsletter.

David Waddell Websites:

www.michigangaming.com