UNITED STATES COURT OF APPEALS FOR THE NINTH · PDF fileiii (1) There is no general...

No. 17-55150 ________________________________________

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

_____________________________________________________ STATE OF CALIFORNIA; UNITED STATES OF AMERICA,

Plaintiffs/Appellees,

v.

IIPAY NATION OF SANTA YSABEL ET AL.

Defendants/Appellants. _____________________________________________________

Appeal From a Decision of the United States District Court for the Southern

District Of California, Nos. 3:14-cv-02724-AJB-NLS/3:14-cv–02855-AJB-NLS Honorable Anthony J. Battaglia

__________________________________________________

APPELLANTS’ OPENING BRIEF ______________________________________________________

LITTLE FAWN BOLAND Ceiba Legal, LLP 35 Madrone Park Circle Mill Valley, CA 94941 Tel: (415) 684-7670 ext. 101 Fax: (415) 684-7273 [email protected] SCOTT D. CROWELL Crowell Law Office-Tribal Advocacy Group 1487 W. State Route 89A, Ste. 8 Sedona, AZ 86336 Tel: (425) 802-5369 Fax: (509) 235-5017 [email protected]

KEVIN C. QUIGLEY Foley & Quigley PLC 213 East Fourth Street, Ste. 404 Saint Paul, MN 55150 Tel: (612) 741-1794 [email protected] ATTORNEYS FOR TRIBAL APPELLANTS

Case: 17-55150, 05/17/2017, ID: 10439032, DktEntry: 11, of 55

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CORPORATE DISCLOSURE STATEMENT

Required by Rule 26.1 of Federal Rules of Appellate Procedure the

undersigned, counsel of record for Appellants Iipay Nation of Santa Ysabel, aka

Santa Ysabel Band of Diegueno Mission Indians, aka Santa Ysabel Band of

Diegueno Mission Indians of the Santa Ysabel Reservation; Santa Ysabel

Interactive; Santa Ysabel Gaming Commission; Santa Ysabel Tribal Development

Corporation; David Chelette, David Vialpando, Anthony Bucaro, Michelle Maxcy,

Virgil Perez, and Brandie Taylor(“Tribal Appellants”)each hereby certifies that

neither the Tribal Appellants, nor any parent company, subsidiary, or affiliate

thereof has issued any shares of capital stock to the pubic.

Dated: May 17, 2017

s/ Kevin C. Quigley Kevin C. Quigley (MN No. 0182771) Foley & Quigley PLC 213 Fourth Street East Suite 404 Saint Paul, MN 55101 Telephone: (612) 741-1794 [email protected]

Attorney for Tribal Appellants


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TABLE OF CONTENTS

I. JURISDICTIONAL STATEMENT ...............................................................1

II. STATEMENT OF THE ISSUES ....................................................................1

III. STATEMENT OF THE CASE .......................................................................2

IV. SUMMARY OF ARGUMENT .......................................................................4

V. STANDARD OF REVIEW .............................................................................6

VI. ARGUMENT ....................................................................................................7

A. Overview of Technologic Nature of Current Version of VPNAPS Gaming System Used for DRB Gaming. ......................................................9

B. Legal IGRA Bingo Gaming Cannot be Subject to an Enforcement Action Under UIGEA. .................................................................................11

C. The District Court Erred by “Reading Together” and Using Provisions of UIGEA to Construe the Meaning of “Conducted on Indian Lands” for Purposes of IGRA to Find That the Phrase was Not Ambiguous

. .......................................................................................................................12

D. The Bingo Gaming Offered by DRB is Legally “Conducted on Indian Lands” in a Tribally-Regulated Gaming Facility for Purposes of

IGRA.... .........................................................................................................15


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(1) There is no general prohibition under IGRA preventing tribes from using modern technology communication links like the Internet to promote participation among bingo players as a means to increasing tribal revenues for tribal needs. .........................................................................16

(2) DRB’s bingo game play originates and is conducted on the math and game management servers housed in DRB’s gaming facility located on Iipay’s sovereign Indian lands. .................................................................28

(3) The proxy play component aids of the VPNAPS gaming system used to conduct the DRB bingo gaming means the gaming is conducted on Indian lands. .........................................................................................................33

(a) Use of a “proxy” play component with Class II gaming does not violate IGRA. .....................................................................................................33 (b) Any communication via an Internet communication link between DRB patrons and their proxy agent located on a reservation regarding their proxy service relationship is a step removed from any actual “gaming activity” to be conducted. .......................................................................35 (c) Unless and until the DRB patron’s proxy initiates the play of the bingo game there is no participation in the Class II bingo game conducted on the VPNAPS gaming system. .................................................................36

(4) Use of the “Internet” is not relevant or dispositive to an IGRA interpretation concerning the “conducted on Indian lands” question. ......39

VII. CONCLUSION ...........................................................................................40


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TABLE OF AUTHORITIES

CASES

Alaska Wilderness League v. United States EPA,

727 F.3d (9th Cir. 2013) .................................................................................12, 22

Arizona v. Tohono O'odham Nation,

818 F.3d 549 (9th Cir. 2016)........................................................................12, 22

AT&T Corporation v. Coeur d’Alene Tribe,

295 F.3d 899 (9th Cir. 2002) ..........................................................................17, 39

Cabazon Band of Mission Indians v. NIGC,

14 F.3d 633 (D.C. Cir. 1994) ...............................................................................22

Cabazon Band of Mission Indians v. Wilson,

37 F.3d 430 (9th Cir. 1994) ..................................................................................23

California v. Cabazon Band of Mission Indians,

480 U.S. 202 (1987)...............................................................................................8

F.T.C. v. Payday Financial, LLC,

935 F. Supp. 2d 926 (D.S.D. 2013) ................................................................27, 30


v

Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc.,

467 U.S. 837 (1984) .......................................................................................23, 33

County of Yakima v. Confederated Tribes & Bands of the Yakima Indian Nation,

502 U.S. 251 (1992) ...............................................................................................6

Freeman v. DirecTV, Inc.,

457 F.3d 1001 (9th Cir. 2006) ................................................................................6

Lac Vieux Desert Band of Lake Superior v. Ashcroft,

360 F. Supp. 64 (D.D.C. 2004) ............................................................................21

Mathews v. Chevron Corp.,

362 F.3d 1172 (9th Cir. 2004) ................................................................................6

Montana v. Blackfeet Tribe,

471 U.S. 759 (1985) ...............................................................................................6

Montana v. United States,

450 U.S. 544 (1981) .......................................................................................29, 30

Plains Commence Bank v. Long Family Land & Cattle Co.,

554 U.S. 316 (2008) .............................................................................................30

Putnam Family P’ship v. City of Yucaipa,

673 F.3d 920 (9th Cir. 2012) ................................................................................14


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Rabkin v. Or. Health Scis. Univ.,

350 F.3d 967 (9th Cir. 2003)..................................................................................6

Rincon Band of Luiseno Mission Indians of the Rincon Reservation v.

Schwarzenegger,

602 F.3d 1019 (9th Cir. 2010) ..............................................................................28

Salve Regina Coll. v. Russell, 499 U.S. 225, 231 (1991)..........................................6

Schleining v. Thomas,

642 F.3d 1242 (9th Cir. 2011)................................................................................6

Skidmore v. Swift & Co.,

323 U.S. 134 (1944) .............................................................................................33

Williams v. Babbitt,

15 F.3d 657 (9th Cir. 1997) ..............................................................................7, 24

STATUTES

18 U.S.C. ¶ 1084(d)(1) ............................................................................................14

25 C.F.R. 502.7(b) ...................................................................................................20

25 U.S.C. § 2710 .......................................................................................................4


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25 U.S.C. § 2720 .....................................................................................................24

25 U.S.C. §§ 2701(3) .................................................................................................4

25 U.S.C. §§2703(7)(A) ..........................................................................................13

25 U.S.C. ¶ 2706(b)(4) ..............................................................................................4

25 U.S.C. ¶ 2710(b)(4)(A) .........................................................................................5

25 U.S.C. ¶¶ 2706(b)(1) ............................................................................................4

28 U.S.C. § 1291 ......................................................................................................1

28 U.S.C. § 1331 .......................................................................................................1

31 U.S.C. § 5361(b) ......................................................................................... passim

31 U.S.C. § 5365(a) ...................................................................................................1

Indian Gaming Regulatory Act, 25 U.S.C. 2701-21 (“IGRA”) ...................... passim

Unlawful Internet Gambling Enforcement Act of 2006, 31 U.S.C. ¶¶ 5361-5367

(“UIGEA”) ................................................................................................... passim


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OTHER AUTHORITIES

Williston on Contracts, § 6:62 (4th ed.) ..................................................................31

Black’s Law Dictionary, 10th ed. (West Group 2014) ......................................30, 35

Cohen’s Handbook of Federal Indian Law, §2.02[1], at p. 113 (2012 ed. Lexis

Nexis) .....................................................................................................................7

February 4, 2010 approval by NIGC Chairman of Coeur d’Alene tribal gaming

ordinance (Chapter 30-6.07 permitting lottery) at NIGC website, available at

https://www.nigc.gov/images/uploads/gamingordinances/coeurdalenetribe-

20100204OrdAppr.pdf .........................................................................................19

J. Perillo, Ed., Corbin on Contracts § 3.25 (1993) .................................................31

July 26, 1995 NIGC Chairman Declaration re: “Proxy Play”,

available at https://www.nigc.gov/general-counsel/game-classification-opinions

........................................................................................................................26, 33

June 24, 2014 OGC Advisory Letter re: Bingo Nation Game,


..............................................................................................................................34

Kathryn R.L. Rand & Steven Andrew Light, Indian Gaming Law and Policy,

Carolina Academic Press (2006) ............................................................................8


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Mashpee Wampanoag Tribe and the State of Arizona’s compacts with various

tribes, available at http://www.indianaffairs.gov/WhoWeAre/AS-

IA/OIG/Compacts/index.htm ...............................................................................21

National Gambling Impact Study Commission, June 18, 1999 Final Report,

available at http://govinfo.library.unt.edu/ngisc/reports/5.pdf ............................26

New Jersey P.L. 2013, c27 (5:12-95.17(1)(J)),

available at http://www.njleg.state.nj.us/2012/Bills/PL13/27.HTM .....................29

NIGC June 2013 “One Touch” Bingo Pronouncement, 78 Fed. Reg. 37998, 38000

(June 25, 2013) .....................................................................................................15

NIGC’s Public Hearing Notice, 62 Fed. Reg. 53658 (Oct. 15, 1997). ....................20

November 14, 2000 OGC Advisory Letter re: National Indian Bingo,


........................................................................................................................26, 34

Walter T. Champion, Jr. & I. Nelson Rose, Gaming Law in a Nutshell, Thomson

Reuters (2012) ......................................................................................................35


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REGULATIONS

67 Fed. Reg. 41166 (June 17, 2002). .......................................................................22

LEGISLATIVE HISTORY

Indian Affairs Comm., Indian Gaming Regulatory Act, Statement of Raymond C.

Sheppach, U.S. Senate, Oct. 29, 1997, available at http://www.indian.senate.-

gov/hearings/1029_nga.htm .................................................................................25

Indian Affairs Committee Report, S. Rep. No. 446, 100th Cong. 2d Sess., reprinted

in U.S. Code Cong. & Admin. News (1988). .......................................................2

S. 474, 105th Cong., 1st Sess. (1997) ......................................................................25

S. 474, 105th Cong., 2nd Sess. (1998) ....................................................................25

S. Rep. No. 100-446, at 13-14, reprinted in 1988 U.S.C.C.A.N. at 3083–84

..................................................................................................................16, 24, 28


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I. JURISDICTIONAL STATEMENT

The District Court had subject-matter jurisdiction under 28 U.S.C. § 1331

and 31 U.S.C. § 5365(a). The District Court granted motions for summary

judgment and injunctive relief of Appellees United States (“USA”) and State of

California (“California”) on their Unlawful Internet Gambling Enforcement Act,

31 U.S.C. ¶¶ 5361-5367 (“UIGEA”) claim on December 12, 2016. (ER Vol. I/4).

It entered final judgment in this consolidated action on January 4, 2017. (ER Vol.

I/1). This Court has appellate jurisdiction based on 28 U.S.C. § 1291 and

Appellants’ filing of a timely notice of appeal on February 6, 2017. (ER Vol.

II/59).

II. STATEMENT OF THE ISSUES

1. Did the District Court err in ignoring 31 U.S.C. § 5361(b) and the

“maximum flexibility” technology policy that Congress enshrined in the Indian

Gaming Regulatory Act (“IGRA”) when concluding that legal IGRA Class II

bingo gaming activity can be subject to an enforcement action under the Unlawful

Internet Gambling Enforcement Act (“UIGEA”)?

2. Did the District Court err by “reading together” IGRA and UIGEA to

construe the meaning of “conducted on Indian lands” for purposes of IGRA to find

that the IGRA phrase was not ambiguous – thereby “limiting” IGRA gaming by


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requiring patrons to be “physically located on Indian lands at the time” IGRA

bingo gaming is conducted?

3. Is tribally-regulated server-based bingo gaming, conducted via proxy

play that is remotely accessed by patrons using a browser-based Internet link,

permitted under IGRA and applicable tribal law?

III. STATEMENT OF THE CASE

This is a case of first impression for statutory interpretation regarding (1) the

interplay of IGRA and UIGEA, and (2) whether IGRA permits tribes to “take

advantage of modern methods of conducting class II games and the language

regarding technology . . . designed to provide maximum flexibility” by using

modern technology communication links like the Internet to promote participation

among bingo players. Indian Affairs Committee Report, S. Rep. No. 446, 100th

Cong. 2d Sess., reprinted in U.S. Code Cong. & Admin. News at 3079 (1988).

In this consolidated action, USA and California seek to stop the operation of

a particular version1 of a Class II bingo gaming system known as the “VPNAPS

gaming system” used by Desert Rose Bingo (“DRB”), a tribal gaming business

located on the Indian lands of the Iipay Nation of Santa Ysabel (“Iipay”) (Iipay

together with certain related entities and individuals are referred to collectively

1 “Desert Rose Bingo v.1.5 rev 6171,” which allows DRB to offer Class II electronic-linked bingo gaming conducted on Indian lands using a proxy system accessed by patrons using a browser-enabled Internet link.


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herein as “Appellants”). Both USA and California asserted claims based upon the

UIGEA and California also claimed an alleged breach of its Class III gaming

compact with Iipay. Since the very beginning of this litigation, Appellants

contended that the gaming offered by DRB is legal Class II bingo conducted under

IGRA, 25 U.S.C. §§ 2701 et seq., P.L. 100-497, 102 Stat. 2467, and therefore is

not subject to any UIGEA enforcement action or a Class III compact-based claim.

The District Court denied California’s summary judgment motion and

dismissed its Class III compact-based claim, concluding that the current version of

the VPNAPS gaming system used by DRB constitutes a technologic aid to bingo

and DRB is therefore Class II gaming activity as a matter of law. (ER Vol. I/4 at

10-16). California has not appealed the District Court’s decision to dismiss its

Class III compact-based claim. (ER Vol. I/1).

The District Court granted Appellees’ motion for summary judgment and

request for permanent injunction on the UIGEA claim, finding that the statutory

phrase “conducted on Indian lands” unambiguously requires patrons to be

physically present within Indian country at the time they engage in gaming activity

for IGRA to apply. (ER Vol. I/4 at 12-33). Appellants timely appealed this

decision. (ER Vol. II/59).


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IV. SUMMARY OF ARGUMENT

IGRA regulates gaming conducted on Indian lands.2 IGRA does not

expressly and unambiguously require a DRB patron to be “physically present” on

Indian lands to access bingo games played at tribal gaming operations, particularly

games to be played by proxy located on-site at the tribal gaming facility. IGRA’s

text, structure and legislative history, as well as the Indian law canons of

construction, applicable tribal law and other relevant legal authorities, support the

legal conclusion that proxy play server-based bingo gaming accessed by patrons

via a browser-based Internet link is “conducted on Indian lands” and therefore

consistent with and permitted by IGRA. Accordingly, DRB’s Class II bingo

gaming is legally conducted under IGRA and is not subject to any UIGEA

enforcement action, particularly in light of 31 U.S.C. § 5361(b), which states that

no provision of UIGEA “shall be construed as altering [or] limiting” any federal

law “permitting, or regulating gambling within the United States.” IGRA is such a

federal law permitting and regulating gaming.

The District Court concluded that the key statutory phrase at issue here,

“conducted on Indian lands,”3 is unambiguous. In doing so, the District Court erred

2 Class II gaming, such as the bingo at issue here, is subject to tribal regulatory jurisdiction, and monitoring oversight by the National Indian Gaming Commission (“NIGC”). See 25 U.S.C. § 2710. 3 See, e.g., 25 U.S.C. §§ 2701(3) (“the conduct of gaming on Indian lands”); 2706(b)(1) (“class II gaming conducted on Indian lands”); 2706(b)(4) (“class II


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by “reading together” IGRA and UIGEA to construe the meaning of “conducted on

Indian lands” for purposes of IGRA. In reading these statutes together, the District

Court erroneously found that the phrase was not ambiguous, thereby “limiting”

IGRA gaming by creating a requirement that patrons must be “physically located

on Indian lands at the time” IGRA bingo gaming is conducted. (ER Vol. I/4 at 2,

27, 29).

The District Court erroneously ignored the clear directive of 31 U.S.C. §

5361(b) and as a result, impermissibly narrowed the scope of legal gaming

permitted by IGRA. Additionally, the District Court further erred by not applying

Iipay tribal law or the Indian law canons of construction for statutory interpretation

in addressing whether proxy play server-based bingo gaming accessed by patrons

via a browser-based Internet link offered by DRB is legally conducted under

IGRA. And in refusing to acknowledge the proxy play element of DRB’s server-

based bingo gaming system, the District Court erred in not granting deference to

federal and Iipay gaming regulators who permit proxy play with Class II bingo

games and by giving short shrift to the “maximum flexibility” technology policy

for Class II bingo gaming that Congress enshrined in IGRA.

gaming conducted on Indian lands”); 2710(b)(4)(A) (“class II gaming activity conducted on Indian lands”).


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V. STANDARD OF REVIEW

The District Court’s statutory interpretation of IGRA, and its determination

concerning the meaning of the statutory phrase “conducted on Indian lands” for

purposes of IGRA, is subject to de novo review. Schleining v. Thomas, 642 F.3d

1242, 1246 (9th Cir. 2011) (explaining that questions of statutory construction are

reviewed de novo). No deference is to be accorded to the District Court’s legal

conclusions that lead to its grant of summary judgment in favor of Appellees on

their UIGEA claim. Rabkin v. Or. Health Scis. Univ., 350 F.3d 967, 970 (9th Cir.

2003) (quoting Salve Regina Coll. v. Russell, 499 U.S. 225, 231 (1991) (“When de

novo review is compelled, no form of appellate deference is acceptable.”). The

appellate court must consider the matter anew, as if no decision previously had

been rendered. See Freeman v. DirecTV, Inc., 457 F.3d 1001, 1004 (9th Cir.

2006). Mixed questions of law and fact are also generally reviewed de novo. See

Mathews v. Chevron Corp., 362 F.3d 1172, 1180 (9th Cir. 2004).

In interpreting IGRA, the statute is to be “construed liberally in favor” of

tribal interests and to Iipay’s benefit. See County of Yakima v. Confederated

Tribes & Bands of the Yakima Indian Nation, 502 U.S. 251, 269 (1992) (quoting

Montana v. Blackfeet Tribe, 471 U.S. 759, 767–68 (1985)) (“When we are faced

with these two possible constructions [of a statute], our choice between them must

be dictated by a principle deeply rooted in this Court’s Indian jurisprudence:


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‘Statutes are to be construed liberally in favor of the Indians, with ambiguous

provisions interpreted to their benefit.’”); see also Williams v. Babbitt, 115 F.3d

657, 660 (9th Cir. 1997); Cohen’s Handbook of Federal Indian Law, §2.02[1], at

113 (2012 ed. Lexis Nexis) (“The Supreme Court has stated: ‘the standard

principles of statutory interpretation do not have their usual force in cases

involving Indian law.’ The basic Indian law canons of construction require that . . .

statutes . . . be liberally construed in favor of the Indians”).

VI. ARGUMENT

Appellants’ central argument in this case is straightforward: (i) UIGEA does

not “trump” IGRA, or modify or restrict IGRA in any way; (ii) the IGRA statutory

text “conducted on Indian lands” is ambiguous; and (iii) tribally-regulated proxy

play server-based bingo gaming accessed by patrons via a browser-based Internet

link is “conducted on Indian lands” consistent with IGRA and applicable tribal

law. Accordingly, such gaming cannot be subject to an UIGEA enforcement

action.

The District Court reached the wrong result because it did not start its legal

analysis with the right questions: (1) does UIGEA alter or limit IGRA in any way;

and (2) does IGRA, by its terms and its terms only, prohibit tribally-regulated

server-based bingo gaming conducted via proxy play which is remotely accessed


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by patrons using a browser-based Internet link?4

Assessing whether the DRB bingo gaming is “conducted on Indian lands”

requires an analysis under IGRA and applicable tribal law that must be made only

through a “for purposes of IGRA” focused lens, i.e., considering only those legal

precedents and principles applicable to IGRA, and without regard to any statutory

language related to UIGEA or any other federal or state law. The reason for this is

simple: as a matter of federal law IGRA, and only IGRA, sets the limits of the

bingo gaming to be offered by the DRB tribal gaming operation. See California v.

Cabazon Band of Mission Indians, 480 U.S. 202 (1987); Kathryn R.L. Rand &

Steven Andrew Light, Indian Gaming Law and Policy, Carolina Academic Press

(2006) at 12 (explaining that in response to Cabazon, Congress enacted IGRA,

using its plenary power over Indian affairs to create a set of limited restrictions on

tribes’ sovereign rights over their tribal gaming activities). Applying the correct

legal analysis leads to only one conclusion: the bingo gaming offered by DRB is

legally “conducted on Indian lands” under IGRA and applicable tribal law.

4 Instead, the District Court started its legal analysis on faulty footing, stating “[a]t the crosshairs of this inquiry is the construction that must be given to the phrase ‘on Indian lands’ as used in IGRA in light of Congress’s later enactment of [UIGEA].'” (ER Vol. I/4 at 2) (both emphasis added). See also ER Vol. I/4 at 10 n. 9 (“the ‘on Indian lands’ issue turns on the proper construction of IGRA and UIGEA”) (emphasis added).


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A. Overview of Technologic Nature of Current Version of VPNAPS Gaming System Used for DRB Gaming.

The current version of the VPNAPS gaming system (“Desert Rose Bingo

v.1.5 rev 6171”) used by DRB was designed so that patrons not physically located

on Iipay Indian lands could log onto a website, register, fund an account, engage a

proxy located on Iipay Indian lands to purchase a bingo card and play bingo on

their behalf, and observe bingo game play results. (ER Vol. II/204 at 8, ¶ 44).

The designers of the VPNAPS gaming system started with the standard

electronically linked server-based bingo gaming system operated in Indian country

since the late-1990s5 and enhanced it by adding a proxy play technology set to the

gaming system. This technology set consists of (1) software and hardware

components to assist a patron to engage their designated agent proxy (located on

5 The basic design features of the standard IGRA “Class II gaming system” are: client-server architecture with the game play servers located in a secure back room electronically linked to patron interface terminal boxes with entertaining video display screens which are located in the public space of the tribal gaming facility—i.e., a “wholly-electronic format.” With each “Class II gaming system” in use today, all the game play video displays on the tangible components of the gaming system, including the “electronic cards” generated for the game, are merely a visual representation of the bingo mathematics and game management software programs electronically run on the backroom math and game management servers—i.e., the bingo game play originates on the math and game management servers located in the secure back office area of the tribal casino, and the game results are then sent on a time delayed basis via a communication link to the patron’s interface, where the game results are revealed by software components that “translate” the winning or losing associated with the patron’s bingo card into an entertaining graphic display. (ER Vol IV/746 at 13-14, ¶¶ 43, 46, 48).


10

Iipay sovereign lands) via a modern communication link (i.e., Internet) and an

electronic proxy engagement feature; (2) auto-daub (electronic bingo card minder)

functionality via software and hardware components to assist the patron’s

designated agent proxy (located on Iipay sovereign lands) to play (on behalf of

patron) a bingo game using a digital-format system with functionality like standard

server-client architecture of electronic-linked bingo gaming systems; and (3)

software and hardware components to assist the designated agent proxy to report

via a modern communication link (i.e.. Internet) on a time-delayed basis to the

patron the results of the bingo game played on the patron’s behalf. (ER Vol.

IV/746 at 15, ¶ 51).6

The Class II bingo gaming conducted by DRB using the VPNAPS gaming

system is licensed and regulated by the Santa Ysabel Gaming Commission

(“SYGC”), Iipay’s gaming regulatory agency. (ER Vol. II/171 at 5, ¶ 12). DRB’s

bingo gaming is subject to a multitude of Iipay laws and regulations, including,

(i) the Iipay Gaming Ordinance approved by the NIGC pursuant to IGRA; (ii) the

Iipay “Tribal Business Transaction Code” governing any consumer dealings

between DRB and any DRB patrons; (iii) SYGC Regulation 14-I009, governing

the procedures for approval of Class II bingo gaming systems and equipment; 6 See also ER Vol. IV/746 at 65-76 describing the similar nature of the technology features relating to game system design between the VPNAPS gaming system and current Class II server-based electronic bingo gaming systems. (ER Vol. IV/746 at 65-76).


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(iv) SYGC Regulation 14-I010, governing the situs of DRB’s bingo gaming using

the VPNAPS gaming system; and (v) SYGC Regulation 14-I011, establishing

extensive regulatory requirements for DRB’s bingo gaming using the VPNAPS

gaming system.7 (ER Vol. II/171 at 4-6, ¶¶ 7-8, 10, 15-16, 18) (ER Vol. II/204 at

56-83) (ER Vol. II/287). Additionally, all DRB bingo gaming using the VPNAPS

gaming system is subject to written “House Rules” for bingo game play, (ER Vol.

III/511 at 75-81), adopted by DRB as required by SYGC Regulation 14-I011,

Section 11. (ER Vol. II/287 at 34-35).

B. Legal IGRA Bingo Gaming Cannot be Subject to an Enforcement Action Under UIGEA. As a matter of federal law, and as Appellees conceded in the District Court

below, UIEGA cannot and does not prohibit legal8 IGRA Class II gaming using

modern technologic aids. See 31 U.S.C. § 5361(b). UIGEA, in fact, does not

regulate gambling, but only prohibits certain financial transactions related to

unlawful gambling. Simply put, UIGEA did not change the status quo: Indian 7 These regulatory requirements include, among others, those concerning (1) licensing of the gaming system vendor, (2) gaming system internal control features, (3) physical security of the gaming system, (4) system architecture, (5) cyber-attack protection features, (6) data security, (7) bingo rules, (8) patron registration site display information, (9) registration process for patrons, (10) patron account restrictions, (11) patron access restrictions, (12) account funds security, (13) record keeping, (14) advertising and promotions, (15) patron disputes resolution, (16) testing lab qualifications, and (17) problem gambling policies. (ER Vol. IV/746 at 8-9, ¶ 28) (ER Vol. II/287 at 17-49). 8 Section VI(D) infra, further addresses why the gaming at issue here is legal under IGRA.


12

gaming that is legal under IGRA remains legal, even after enactment of UIGEA.

Whatever can be said about the reach of UIGEA, its plain terms spell out

that none of its provisions are meant to “alter [or] limit” IGRA in any way, “a

federal law . . . regulating gambling within the Unites States.” 31 U.S.C. § 5361(b).

Congress was quite emphatic on this point, expressly stating that “no provision” of

UIGEA “shall be construed” to modify any existing federal law like IGRA. See id.

Congress placed a clear ban on using anything in UIGEA to limit rights permitted

by other statutes, such as IGRA. In violation of this statutory text, the District

Court used UIGEA to aid in the statutory interpretation of IGRA’s provisions. The

result was to limit gaming that IGRA permits. It is this express “rule of

construction” provision in UIGEA that must be the guidepost for this Court’s

analysis in this case, and one that the District Court simply ignored in erroneously

finding that the DRB bingo gaming had “to comply with both IGRA and UIGEA.”

(ER Vol. I/4 at 2).

C. The District Court Erred by “Reading Together” and Using Provisions of UIGEA to Construe the Meaning of “Conducted on Indian lands” for Purposes of IGRA to Find That the Phrase was Not Ambiguous.

To reach its result, the District Court had to find that the key IGRA phrase at

issue here – “conducted on Indian lands” – was not ambiguous.9 (ER Vol. I/4 at 21,

9 “A statute is ambiguous if it is susceptible to more than one reasonable interpretation.” Arizona v. Tohono O'odham Nation, 818 F.3d 549, 556 (9th Cir. 2016) (quoting Alaska Wilderness League v. United States EPA, 727 F.3d 934,


13

29). It did so in the most curious of ways – by using UIGEA to inform its

construction of IGRA in direct contravention of the 5361(b) rule of construction,

stating that “pertinent UIGEA provisions are highly relevant to whether ‘on Indian

lands’ is ambiguous and thus may properly be considered.” (ER Vol. I/4 at 22).

The District Court could not find that the “conducted on Indian lands”

phrase was unambiguous based upon the express text of IGRA because this

statutory phrase is not specifically defined in IGRA.10 And neither could the

District Court cite to any caselaw that directly addresses the interpretation of the

“conducted on Indian lands” statutory phrase in the context of assessing the effect

on Class II bingo gaming of the “maximum flexibility” technology policy

enshrined in IGRA. The general question whether tribally-regulated server-based

bingo gaming with patron access facilitated by a browser-based Internet

communication link is “conducted on Indian lands” for purposes of IGRA has

never been finally resolved by any court – let alone the precise question here: Is

tribally-regulated server-based bingo gaming conducted via proxy play which is

938 (9th Cir. 2013)). 10 Neither are the generic terms “gaming activity’ or “gaming activities” expressly defined in IGRA. However, “Class II gaming,” the kind that DRB offers patrons, is expressly defined by IGRA and by tribal regulations. See 25 U.S.C. §§2703(7)(A) and Iipay Gaming Ordinance, Section IIA. (ER Vol. II/204 at 59). And while neither has any mention of any requirement about the physical locale of the patron at the time the bingo game is played at the Indian gaming facility, Section 5.0(d) of SYGC 14-I009 expressly allows bingo game patrons to be in different patron locations and to use “proxy play.” (ER Vol. II/287 at 8-11).


14

remotely accessed by patrons using a browser-based Internet link permitted under

IGRA and applicable tribal law?11

Rather than conduct a proper legal analysis of what IGRA permits, the

District Court instead “read together” IGRA and UIGEA12 to arrive at its faulty

conclusion that the “conducted on Indian lands” phrase unambiguously means for

purposes of IGRA that “patrons [must] be physically present within Indian country

at the time” they access the DRB bingo games, saying “this understanding of

IGRA is supported by its consistency with UIGEA.” (ER Vol. I/4 at 22, 24, 29).

The District Court compounded its error in reaching its mistaken statutory

interpretation of IGRA by also relying on a Department of Justice statement

contained in the legislative history for a proposed congressional act (the Internet

Gambling Prohibition Act of 2006). (ER Vol. I/4 at 27-28). Although this proposed

legislation contained a specific provision requiring a patron of IGRA gaming to be

“physically located on Indian lands” to be exempt from the act,13 it was never

11 See, e.g., Putnam Family P’ship v. City of Yucaipa, 673 F.3d 920, 928 (9th Cir. 2012) (“A statute is ambiguous if Congress has not directly spoken to the precise question at issue.” (internal quotation marks omitted)). 12 The District Court justified this analysis by concluding it was proper to “suss out IGRA’s meaning by considering its relationship with other federal statutes,” citing an Eight Circuit decision that read together IGRA and the Johnson Act. (ER Vol. I/4 at 22 n. 23). Noteworthy, however, is the fact that the Johnson Act does not contain any language resembling the specific Section 5361(b) ban on using anything in UIGEA when making a statutory interpretation of any provision in a law like IGRA. 13 See proposed revised 18 U.S.C. 1084(d)(1) in H.R. 4777, 109th Cong., 2nd Sess.


15

enacted by Congress, and did not deal at all with the question whether “off-

reservation means of access” to Class II bingo gaming was permitted under IGRA.

Further, in reaching its erroneous conclusion that the “conducted on Indian

lands” phrase is unambiguous, the District Court failed to give due consideration to

Iipay tribal laws and gaming regulations directly applicable to IGRA gaming, and

other relevant legal authorities, that demonstrate that, in the context of Class II

bingo gaming, the phrase is indeed ambiguous and does not require the patron to

be “physically present” at the DRB gaming facility at the time they access the

DRB bingo games to be played by proxy, as described below.

D. The Bingo Gaming Offered by DRB is Legally “Conducted on Indian Lands” in a Tribally-Regulated Gaming Facility for Purposes of IGRA.

Nothing in IGRA requires Class II bingo game technology to be frozen in

the “analog” 20th Century world. To the contrary, in enacting IGRA Congress

specifically intended for tribes to have “maximum flexibility” in using innovative

technological advancements in offering Class II bingo gaming. Neither does IGRA

expressly and unambiguously require a person to be “physically present” on

Indian lands to access bingo games played at tribal gaming operations, particularly

games to be played by their proxy located on-site at the tribal gaming facility.

(2006) available at https://www.congress.gov/bill/109th-congress/house-bill/4777/text (last accessed on May 17, 2017).


16

(1) There is no general prohibition under IGRA preventing tribes from using modern technology communication links like the Internet to promote participation among bingo players as a means to increasing tribal revenues for tribal needs.

There is a strong congressional policy enshrined in IGRA to allow tribes to

“take advantage of modern methods of conducting Class II games and the language

regarding technology is designed to provide maximum flexibility.” See S. Rep.

No. 100-446 at 3079 (emphasis added); see also NIGC June 2013 “One Touch”

Bingo Pronouncement, 78 Fed. Reg. 37998, 38000 (June 25, 2013)

(acknowledging this policy and stating that the NIGC “should give consideration to

an interpretation of bingo that embraces rather than stifles technological

advancements in gaming”). It is in this context that the Court must consider

whether there is a general prohibition under IGRA preventing tribes from using

modern technology communication links like the Internet to promote participation

among bingo players as a means to increasing tribal revenues for tribal needs.

IGRA’s text and legislative history, as well as the Indian law canons of

construction, applicable tribal laws and regulations, NIGC regulations, and

relevant federal case law, demonstrate that modern communication technology

links (like the Internet) serving as technologic aids to a tribe’s Class II bingo

gaming were fully comprehended by Congress when it enacted IGRA and are not

prohibited under the statute. Any argument that a DRB patron must be physically


17

present on Iipay’s Indian lands for bingo game activity to be permitted under

IGRA is meritless because all that IGRA actually requires is that the bingo game

play offered by a tribe be “conducted on Indian lands” – that is, bingo game play

that originates on tribal lands.

The question of whether under IGRA a DRB patron is required to be

“physically present” on Iipay Indian lands in order to transmit to DRB their request

to play the bingo games offered by DRB, whether by proxy or otherwise, has never

been directly addressed by any court decision. Guidance on this issue, however, is

found in this Court’s decision in AT&T Corporation v. Coeur d’Alene Tribe, 295

F.3d 899 (9th Cir. 2002). In that case, the Coeur d’Alene Tribe requested that

AT&T furnish toll-free services for the tribe’s “National Indian Lottery,” which

allowed persons located off-reservation (both in and outside the State of Idaho) to

purchase tickets for the lottery through “the use of telephone and other off-

reservation means of access.” Id. at 908. AT&T objected to providing the services

after state attorneys general warned AT&T that furnishing interstate toll-free

service for the lottery would violate federal and state laws.

In an almost identical conclusion to the District Court in this case, the

district court in AT&T “held that the lottery was operating outside IGRA, which

would otherwise preempt state law” because it determined that “IGRA requires a

participant in a lottery to be present on Indian lands when purchasing a ticket.” Id.


18

at 903 (emphasis added). In vacating the district court’s determination that the

tribe’s lottery was illegal under IGRA, the Ninth Circuit disagreed with the district

court’s conclusion that “IGRA unambiguously requires that a purchaser of a

chance in the Lottery be physically present on the reservation in order for the

gaming activity to fall within IGRA’s preemptive reach.” Id. at 905. The court

noted that the lottery was operated under a management contract with a third party

that made clear the tribe’s plans with respect to telephonic sales, and that the NIGC

approved both the “management agreement and the Lottery plan knowing that calls

would be placed from other states.”14 Id. at 908. Therefore, the NIGC’s “actions

approving both the management contract and the Tribe’s resolution [authorizing

the lottery] indicated that the Lottery is legal until and unless the NIGC’s decision

is overturned.” Id. at 906–07. Accordingly, this Court declared that IGRA governs

the tribe’s lottery unless and until the NIGC’s decision that such gaming activity

complies with IGRA is overturned. Id. at 909.

The NIGC’s decision regarding the legality of the Coeur d’Alene Tribe’s

14 The Ninth Circuit found that the NIGC had indeed considered the lottery’s legality as IGRA requires, referencing a letter the NIGC Chairman sent in response to an inquiry about the lottery’s legality, in which the NIGC Chairman specifically stated:

In the opinion of the NIGC, the Tribe’s lottery proposal, which involves customers purchasing lottery tickets with credit cards both in person and by telephone from locations both inside and outside the state of Idaho, is not prohibited by the IGRA.

Id. at 902, 906–08 (emphasis added).


19

lottery, which allows the purchase of tickets for the lottery through “the use of

telephone and other off-reservation means of access,” has never been overturned.

In fact, since the Ninth Circuit’s decision, the NIGC has again approved the Coeur

d’Alene tribal gaming ordinance which continues to permit the use of such “off-

reservation means of access” to gaming activities conducted on its Indian lands.15

And with good reason, because IGRA’s text simply does not unambiguously

require a lottery ticket purchaser (or Class II bingo game participant) to be

“physically present” on the tribe’s Indian lands when transmitting his offer to

purchase lottery tickets (or bingo cards) in order for the gaming activity to be

“conducted on Indian lands” and permitted under IGRA.

In fact, the NIGC, the federal regulatory agency with oversight

responsibilities for Indian gaming under IGRA, has never, by final agency action

or other official pronouncement from the NIGC Chairman or Commission,

formally made any conclusion that tribes making Internet gambling available to

persons not located on Indian lands violates IGRA.16 There are several reasons

15 See February 4, 2010 approval by NIGC Chairman of Coeur d’Alene tribal gaming ordinance (Chapter 30-6.07 permitting lottery) at NIGC website: https://www.nigc.gov/images/uploads/gamingordinances/coeurdalenetribe-20100204OrdAppr.pdf (last accessed on May 17, 2017). 16 For example, in November 1997 the NIGC held a full-day public hearing on the effect of IGRA and NIGC regulations “on Internet gambling conducted by Indian tribes,” and, following this public hearing, the NIGC took no formal agency action declaring that the use of the Internet as a communication technologic aid to the play of Class II bingo was not permitted for purposes of IGRA (or, for that matter,


20

explaining why.

First, the NIGC continues to respect and adhere to its Coeur d’Alene Lottery

original decision finding that using “off-reservation means of access” (whether by

telephone, Internet or otherwise) to tribal gaming operations is authorized under

IGRA. Second, the changes made in 2002 by the NIGC to the Part 502 regulations

concerning “technologic aids” supports the use of modern technology

communication links like the Internet to promote participation among Class II

bingo patrons accessing tribal gaming operations from remote locations.17 See 25

CFR 502.7(b), which declares that technologic aids built into a gaming system

used to play the game of bingo include aids that assist with any of the following

three elements: (1) broaden the participation levels in a common game; (2)

facilitate communication between and among gaming sites; or (3) allow a player to

play a game with or against other players rather than with or against a machine

(emphasis added). Third, in 2008 and 2012, the NIGC adopted, by final agency

action, Part 543 and 547 regulations relating to technologic aids used in the play of

bingo games (i.e., “Class II gaming systems” that are electronic linked bingo has taken to date any formal agency action expressly prohibiting the use of the Internet in conducting IGRA gaming). See NIGC’s Public Hearing Notice, 62 Fed. Reg. 53658 (Oct. 15, 1997). 17 In this respect, IGRA is game specific, and bingo play under IGRA, as Class II gaming, may be permitted to use technology “assistants” incorporated into a bingo gaming system design which may not be allowed for other games like craps, roulette, blackjack, keno, slots, etc.; and such aids may include modern communication technologies like the Internet.


21

systems using client/server architecture). These regulations are consistent with

tribes’ use of modern technology communication links like the Internet to promote

participation among bingo players.

Even the Department of the Interior (“DOI”) has taken final agency action

dating back to 2002 repeatedly indicating that the use of modern technology

communication links like the Internet by tribal gaming operations is permitted for

purposes of IGRA.18 Finally, Congress is well aware of the NIGC agency action

regarding the Coeur d’Alene Lottery declaring that the use of the Internet and

“other off-reservation means of access” to gaming activities conducted on its

Indian lands is authorized under IGRA, and the DOJ’s and states’ objections to this

agency action, and Congress has declined to take any steps to change the current

state of the law.19 In fact, in the only instance since 2002 where it did take action to

18 The DOI has by final agency action affirmatively approved several Tribal-State Compacts permitting Internet gaming by tribes under certain conditions. For example, see the Tribal-State compact between California and Iipay (ER Vol. IV/606 at 52), the compact between the Commonwealth of Massachusetts and the Mashpee Wampanoag Tribe, and the State of Arizona’s compacts with various tribes, available at http://www.indianaffairs.gov/WhoWeAre/AS-IA/OIG/Compacts/index.htm (last accessed on May 17, 2017). The logical and legal inference from these DOI compact approval actions is that such Internet gaming must be considered “conducted on Indian lands” for purposes of IGRA; otherwise such gaming would not be permitted under IGRA and could not be included in any Class III gaming compact approved pursuant to IGRA. 19 See Lac Vieux Desert Band of Lake Superior v. Ashcroft, 360 F. Supp. 64, 66 (D.D.C. 2004) (noting that the DOJ letter describing the DOJ’s position on the tribe’s proposal to offer proxy play bingo to patrons using an Internet communication link was issued after a House Sub-Committee hearing held on


22

address issues relating to the Internet and gaming, Congress went to great pains to

exclude Indian gaming from that legislation. See 31 U.S.C. § 5361(b).

Moreover, IGRA and its legislative history contain numerous indications

that Congress specifically contemplated that some actions relating to Indian

gaming may occur off Indian lands. This is particularly true when analysis and

interpretation of IGRA is conducted in accordance with the proper Indian law

canons of statutory construction and the statute is construed liberally in favor of

Indians.20 For example, IGRA is silent on the meaning of the term “gaming

activities.”21 The statute never suggests, much less states, that the purchaser of

bingo cards for participation in a tribe’s Class II gaming must be physically present November 17, 2000 on the issue of “Internet Proxy Bingo”). 20 In declining to apply the “construed liberally in favor of Indians” canon in determining the meaning of IGRA’s undefined statutory phrase “conducted on Indian lands,” the District Court was misguided in relying on language in Cabazon Band of Mission Indians v. NIGC, 14 F.3d 633 (D.C. Cir. 1994) referencing the inapplicability of the canon “when statutory language is clear.” However, the IGRA language at issue in Cabazon did not involve the undefined phrase disputed here, and the NIGC’s Part 502 amendments adopted in 2002 acknowledged that “several key [IGRA] terms were not specifically defined, and thus subject to more than one interpretation.” See 67 Fed. Reg. 41166 (June 17, 2002). A statute is ambiguous if it is susceptible to more than one reasonable interpretation. See, e.g., Alaska Wilderness League, 727 F.3d at 938; Arizona v. Tohono O'odham Nation, 818 F.3d at 556. 21 In its capacity as the primary regulator of Class II bingo under IGRA, the Iipay tribal gaming commission determined the meaning of this phrase under IGRA, finding that bingo “gaming activities” consist of three essential elements for purposes of IGRA; all of which, like is the case with other “Class II gaming systems” operating in Indian country today, are conducted and originate on the math and game management servers of the VPNAPS gaming system. (ER Vol. IV/746 at 17-18 ¶ 55(e-g)).


23

on the reservation. Neither bingo card purchasers nor their on-reservation accounts

are mentioned in the statute. Nor does the statute contain anything resembling a

requirement that every “portion” of gaming activity must take place on Indian

lands.22

Congress did not specifically address—either in the terms “conducted on

Indian lands” or “gaming activities,” or in IGRA as a whole—whether the

purchasers of bingo cards for participation in a tribe’s Class II gaming activities are

required to be “physically present” on Indian lands at the moment they transmit

their offer to purchase bingo cards and authorize deductions from their on-

reservation accounts. Congress’s unmistakable silence on this issue precludes the

conclusion that IGRA unambiguously requires the purchasers to be “physically

present” on Indian lands when transmitting their offer to purchase the bingo cards.

See, e.g., Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467

U.S. 837, 841–42, 862–65 (1984) (finding Clean Air Act ambiguous on meaning

of term “stationary source” where Act was silent as to term’s significance);

22 In this respect, it has never been true that tribal activities were subject to state regulation simply because one portion of the tribal activity occurred off Indian lands. See Cabazon Band of Mission Indians v. Wilson, 37 F.3d 430, 435 (9th Cir. 1994) (in connection with California efforts to tax revenues from on-reservation off-track betting, the Ninth Court rejected the argument that holding the race off-reservation subjected the tribe to state taxation. (“It is not necessary . . . that the entire value of the on-reservation activity come from within the reservation’s borders [so long as] the Bands have made a substantial investment in the gaming operations and are not merely serving as a conduit for the products of others.”)).


24

Williams, 115 F.3d at 661 n. 4 (Alaska Reindeer Act is ambiguous where it was

silent as to intent to give native Alaskans monopoly in reindeer business).

In addition to IGRA’s silence on the meaning of the terms “conducted on

Indian lands” or “gaming activities,” the statute contains indications that Congress

expressly contemplated that purchasers of bingo cards for participation in a tribe’s

Class II bingo gaming need not be present on the reservation. For instance,

Congress exempted Indian gaming conducted pursuant to IGRA from the federal

anti-lottery acts.23 Exemption from these statutes permits tribes, at the very least, to

conduct an interstate lottery by mail. Such exemption signals Congress’ acceptance

of the possibility that some actions associated with Indian gaming might be

conducted off Indian lands. See also S. Rep. 100-446 (1988), at 3082 (“It is the

Committee’s intent [that] no other Federal statute . . . preclude the use of otherwise

legal devices used solely in aid of or in conjunction with bingo or lotto or other

such gaming on or off Indian lands”) (emphasis added)). This part of IGRA’s

legislative history is incompatible with any conclusion that Congress

unambiguously intended to require that a Class II bingo game patron be physically

present on the tribe’s Indian lands when offering to purchase bingo cards to be

23 See 25 U.S.C. § 2720 (“sections 1301, 1302, 1303 and 1304 of title 18, United States Code, shall not apply to any gaming conducted by an Indian tribe pursuant to this Act”). Section 1301 of the U.S Code prohibits interstate transportation of lottery tickets, and Section 1302 proscribes use of the mails to transmit lottery information or materials.


25

used in bingo game play which will be conducted at a later time on Indian lands.

Furthermore, IGRA’s legislative history contains not a single indication that,

in connection with the phrase “conducted on Indian lands,” Congress intended a

Class II bingo game patron be “physically present” on the tribe’s Indian lands

when offering to purchase bingo cards for the bingo game. This is illustrated by the

fact that after the Coeur d’Alene Tribe announced its plans for the National Indian

Lottery, the states with which the tribe would be competing sought to have IGRA

amended to prohibit the lottery. On behalf of the National Governors’ Association,

Raymond C. Sheppach testified before the Senate Indian Affairs Committee that

“any amendment to IGRA should clarify that the participants in tribal gambling

activities must be physically located within tribal lands to participate in these

games.” See Indian Affairs Comm., Indian Gaming Regulatory Act, Statement of

Raymond C. Sheppach, U.S. Senate, Oct. 29, 1997, available at

http://www.indian.senate.-gov/hearings/1029_nga.htm (last accessed on May 17,

2017) (emphasis added).

In at least two legislative sessions since then Congress has considered and

rejected bills that would have required participants in Indian gaming be “physically

present” on the reservation. S. 474, 105th Cong., 2nd Sess. (1998) (died in Senate

at end of session); S. 474, 105th Cong., 1st Sess. (1997) (no action by Senate

before end of session). If the phrase Class II gaming “conducted on Indian lands”


26

unambiguously required a tribe’s customers to be physically present on the

reservation, a clarification amendment would not be required.24

Beyond its actions in connection with the Coeur d’Alene Tribe’s lottery, the

NIGC has also made other pronouncements indicating that under IGRA a Class II

bingo game patron need not be “physically present” on the tribe’s Indian lands

when electronically transmitting his offer to use his on-reservation account to

purchase bingo cards for the game. See July 26, 1995 NIGC Chairman Declaration

re: “Proxy Play”25 (affirming “legality of using agents to play bingo cards for

players who are not physically present at an Indian bingo facility”); see also

November 14, 2000 OGC Advisory Letter re: National Indian Bingo (affirming use

of tribal gaming facility employees as agents of purchasers not physically present

24 Government officials and policy makers have long recognized that the IGRA is indeed, at best, ambiguous as to whether a Class II bingo game patron must be physically present on the tribe’s Indian lands when offering to purchase bingo cards for the bingo game. See National Gambling Impact Study Commission, June 18, 1999 Final Report, pages 5-8, at http://govinfo.library.unt.edu/ ngisc/reports/5.pdf (last accessed on May 17, 2017) (“The provisions of [IGRA], however, allow tribes to provide games such as bingo without state authorization or regulation. And IGRA is ambiguous on the subject of tribes offering such games to individuals outside of the reservation and into the states and jurisdictions.”) (emphasis added). 25 This Chairman Declaration, as well as all OGC Advisory Letters cited herein, are available on the NIGC website under the “Game Classification Opinions” subpage under “Legal Opinions” under the “General Counsel” tab. See https://www.nigc.gov/general-counsel/game-classification-opinions (last accessed on May 17, 2017).


27

on Indian lands at time of game activity).26

If IGRA permits a tribal patron to directly participate in the tribe’s Class II

bingo gaming through the use of “off-reservation means of access” like the

Internet, there certainly is nothing in IGRA that precludes DRB patrons—who

never directly perform or even view any live bingo game action in the current

version of the VPNAPS gaming system used by DRB—from using an “off-

reservation means of access” to electronically transmit instructions to make a

request to DRB to have their proxy agent offer to purchase bingo cards to be

played later on behalf of the patron.27

26 Interpreting IGRA to permit a Class II gaming bingo patron to participate in a tribe’s Class II bingo gaming through the use of “off-reservation means of access” like the Internet is also consistent with the realities of modern communication technology and how remote Indian communities can use those technologies to fulfill the congressional goal to promote tribal economic development. Cf. F.T.C. v. Payday Financial, LLC, 935 F. Supp. 2d 926, 939 (D.S.D. 2013) (“[T]reating nonmember’s physical presence as determinative ignores the realities of our modern world that a [nonmember], through the internet or phone, can conduct business on the reservation and can affect the tribe and tribal members without physically entering the reservation.”). 27 This is really no different than what California already permits to its horse racing industry patrons through “Advanced Depositing Wagering” (“ADW”) now authorized by the State. In ADW (not to be confused with “off-track betting” (“OTB”)), a patron never has to physically visit a racetrack in order to gamble on the horse races conducted at the track site. Rather, California residents can be remotely located anywhere (at their office, home, etc.) and use their computers, tablets or mobile phones to connect over the Internet to the racetrack and transfer funds to their ADW account at the racetrack, and then later use those funds to place horseracing bets on races to be run in the future at the track. This is different from OTB where the patron has to go to a licensed physical office space located in California before they can make a gamble on a horserace that is conducted at a


28

Judged against a construction of IGRA that favors the interests of Indian

tribes,28 adheres to the express terms and legislative history of the statute, and is in

accord with analogous case law—as well as Iipay tribal laws and regulations, and

NIGC regulations and pronouncements—the foregoing demonstrate that the

gaming offered by DRB is “conducted on Indian lands” for purposes of IGRA.

(2) DRB’s bingo game play originates and is conducted on the math and game management servers housed in DRB’s gaming facility located on Iipay’s sovereign Indian lands.

It is undisputed that all the actual bingo game play conducted by DRB

originates and is controlled on the math and game management servers housed in

DRB’s gaming facility located on Iipay’s sovereign Indian lands. See (ER Vol. I/4

at 4) (District Court finding that “DRB gameplay originates on servers that are

located on Indian lands”) and (ER Vol. II/171 at 19-23) (describing the bingo

“game play” process). This alone, in the server-based gaming context,

demonstrates that the gaming offered by DRB is “conducted on Indian lands” since

the servers are physically located on Iipay’s sovereign Indian lands.29

racetrack. 28 See Rincon Band of Luiseno Mission Indians of the Rincon Reservation v. Schwarzenegger, 602 F.3d 1019, 1027 (9th Cir. 2010) (“In passing IGRA, Congress assured tribes that the statute would always be construed in their best interests. See, e.g., S. Rep. No. 100-446, at 13-14, as reprinted in 1988 U.S.C.C.A.N. at 3083–84”). 29 See, e.g., New Jersey legislation concerning the state’s internet-based gaming initiative, which declares that any internet-based gaming conducted by its licensed Atlantic City casinos actually “occurs” in Atlantic City where the casinos’ servers


29

In this respect, Iipay, as a sovereign equal to any state, has adopted

applicable tribal laws and regulations which conclusively deem DRB’s bingo game

play to be “conducted on [Iipay] Indian lands.” For example, under Iipay’s Tribal

Business Transactions Code the transaction between DRB patrons and tribal

gaming operation relating to any gaming offered by DRB is expressly deemed

“entered into, formed and made on the [Iipay’s Indian lands];” and the situs and

place of performance of that transaction is “conclusively deemed to be on the

[Iipay’s Indian lands]” and “subject to the adjudicatory jurisdiction of the tribe.”

(ER Vol. II/204 at 78). In addition, under Iipay tribal gaming regulations, the

gaming offered by DRB using the VPNAPS gaming system is “deemed to take

place where the servers are located on the Indian lands of the Nation, regardless of

a player’s physical location,” and the servers used by DRB are “located in a

restricted area of a Gaming Facility situated within the territorial limits of the Santa

Ysabel Indian Reservation on Indian lands.” (ER Vol. II/287 at 16).30

controlling and operating the games are located—even if the casino patron participating in the internet-based gaming is not physically located in Atlantic City, New Jersey P.L. 2013, c27 (5:12-95.17(1)(J)), available at http://www.njleg.state.nj.us/2012/Bills/PL13/27.HTM (last accessed on May 17, 2017). In other words, in IGRA parlance, the gaming is “conducted” where the computer server controlling the game is located. 30 The District Court erred in completely ignoring these tribal laws and regulations – each an exercise of tribal sovereign authority – which are consistent with the first “Montana exception” that recognizes tribal regulatory authority over “the activities of nonmembers who enter into consensual relationship with a tribe” through commercial dealings. See Montana v. United States, 450 U.S. 544, 565 (1981);


30

The gaming offered by DRB is indeed “conducted on Indian lands” pursuant

to IGRA and tribal law because the bingo game play process is originated and

controlled on the math and game management servers that are physically located

on Iipay Indian lands. Well-established legal principles support this reasoned

conclusion. First, support for this position is found in traditional contract

principles. The purchase of a bingo card from a bingo game operator, or the chance

in a lottery, or any other “wagering” between parties, constitute a contract. See

Black’s Law Dictionary 10th ed. (West Group 2014) (defining wager as a

“contract” between two or more parties).

Viewing the gaming offered by DRB using the VPNAPS gaming system

from this perspective, it is clear that the contracts between DRB and its bingo game

customers are formed on the reservation and will be performed on the reservation, also Plains Commence Bank v. Long Family Land & Cattle Co., 554 U.S. 316, 329 (2008). In this respect, under Montana, it is not necessary for a nonmember to be “physically located” on the reservation in order for his activities to occur “inside the reservation” for purposes of triggering tribal regulatory authority over the nonmember’s dealings with the tribe. As one federal court has stated:

[I]n cases involving a contract formed on a reservation in which the parties agree to tribal jurisdiction, treating nonmember’s physical presence as determinative ignores the realities of our modern world that a [nonmember], through the internet or phone, can conduct business on the reservation and can affect the tribe and tribal members without physically entering the reservation.

See F.T.C. v. Payday Financial, LLC, 935 F. Supp. 2d at 938–40 (rejecting FTC argument in enforcement action against alleged tribal payday lender that Montana exception permitting tribal authority did not apply because the “location of the nonmember’s activity [i.e. applying by phone or internet to obtain loan] is dispositive.”).


31

because an offer electronically transmitted via the Internet connection is accepted,

and the contract is formed, where the offeree – here, DRB, the tribal gaming

operation – accepts the offer. See J. Perillo, Ed., 1 Corbin on Contracts § 3.25, at

447–48 (1993) (in “resolving the question of which jurisdiction’s law governs the

formation of the contract, [the Restatement (Second) [of Contracts] unequivocally

accepts the principle that the contract is made in the place where the acceptance is

spoken”); 2 Williston on Contracts, §6:62 (4th ed.) (“[T]he general principle

applicable to this and any similar question is that the place of the contract is the

place where the last act necessary to the completion of the contract was done”).

This “last act” is evidenced by the fact that the decision to permit a patron to

fund their DRB account or to allow patron access to the VPNAPS gaming system

is ultimately a decision that DRB, and DRB alone, makes from Iipay Indian Lands

using features of the system after receiving payment processing, identify and age

verification and geolocation information from DRB’s payment processing, know-

your-customer and geolocation vendors. (ER Vol. II/179 at 16-19, ¶¶ 73-92).

Likewise, with the design of the VPNAPS gaming system the fact that a patron

may transmit a proxy play game request using the “Request Form” pop-up window

on the gaming system does not mean that it will be accepted by DRB, as in the

case where the patron has insufficient funds in his DRB account or is excluded

from making a game play request due a violation of DRB access rules or exclusion


32

pursuant to DRB’s Responsible Gambling Program. (ER Vol. II/179 at 20, ¶¶ 99-

100) (ER Vol. II/287 at 41-42). The District Court erred in totally disregarding

these contractual principles in its legal analysis.

Moreover, any payment for the purchase of bingo cards to be played as part

of the bingo games offered by DRB is withdrawn from the patron’s on-reservation

account. (ER Vol. II/287 at 18, 42-45) (ER Vol. II/171 at 20, ¶ 99). The bingo

game itself is played using servers located on the Indian lands, and the

determination of the winning numbers for the bingo game takes place on Indian

lands. (ER Vol. II/171 at 12-13, 22, ¶¶ 50-51, 58, 110). The bingo game prize

money is collected on Iipay’s Indian lands and paid from Iipay’s Indian lands. (ER

Vol. II/287 at 18, 42-45) (ER Vol. II/171 at 22, ¶¶ 110-111).

In sum, the gaming offered by DRB is “conducted on Indian lands” in such a

way that it gives a tribe access to non-Indian customers that Congress recognized

are essential to promoting the economic welfare of Indian tribes.31 This permits

Iipay to compete in a viable manner with other gaming interests, including those

that have more advantageous locations for potential customers and have more

31 In this respect, the only interaction associated with the use of the VPNAPS gaming system that may not take place on the Iipay reservation – a patron’s use of an “off-reservation means of access” to electronically transmit instructions to their proxy to make a request to DRB to offer to purchase bingo cards to be played on behalf of the patron – is consistent with the realities of modern communication technology; everything else takes place on the reservation. Under IGRA, that is sufficient.


33

economic might. Statutes passed for the benefit of Indian tribes, as IGRA

undoubtedly was, must be construed in a manner most favorable to the tribes.

When that construction is applied to IGRA, it is plain that the DRB bingo gaming

is “conducted on Indian lands” in compliance with federal law.

(3) The proxy play component aids of the VPNAPS gaming system used to conduct the DRB bingo gaming means the gaming is conducted on Indian lands.

As noted above, IGRA generally permits a tribal patron to directly

participate in a tribe’s Class II bingo gaming through the use of “off-reservation

means of access” like the Internet. Even if that were not the case, however, the

proxy play component aids built into the VPNAPS gaming system used to conduct

the DRB bingo gaming means the gaming is “conducted on Indian lands.” In this

regard, proxy play with Class II bingo, besides being specifically authorized by

Iipay tribal law and regulatory action, has also been given the green light by

NIGC since 1995 and Chevron (or at least Skidmore level, see Skidmore v. Swift

& Co., 323 U.S. 134 (1944)) deference must be given to these agency decisions.

(a) Use of a “proxy” play component with Class II gaming does not violate IGRA.

The NIGC has long recognized that IGRA contains “no statutory prohibition

on the use of agents to play the game of bingo.” See July 26, 1995, NIGC

Chairman Declaration re: “Proxy Play” at 2 (describing the “proxy play” concept

as involving “the use of computer aided technology to assist the agent [located on


34

Indian lands] or, ‘proxy player,’ to track the bingo cards for a number of proxy

play purchasers.”). In concluding that this type of “proxy play” complies with

IGRA, the NIGC Chairman stated:

The NIGC has considered the questions of whether this game is actually being played on Indian lands. There is no statutory prohibition against the use of agents for the conduct of bingo. Accordingly, the acts of the agent, which occur on Indian lands, are deemed to be acts of the principal.

Id. (emphasis added). The NIGC has repeatedly reaffirmed this principle and

advised the Indian gaming industry that the use of agents to play bingo games for

game patrons who were not physically present when the gaming activity occurs

was indeed permitted under IGRA.32 Likewise, the Iipay tribal gaming

commission, under the authority held by it pursuant to IGRA as the primary

regulator of Class II gaming, has expressly authorized such proxy play with the

32 See November 14, 2000 OGC Advisory Letter re: National Indian Bingo, at 5 (tribal gaming facility employees, acting as agents of purchasers not physically present on Indian lands at time of game activity, who use bingo card machines to read and daub cards do not violate IGRA because “[w]hen the agent plays the [bingo] card for the player, the act of playing the card is deemed to be the act of the player/principal. The legal effect is that the agent is the player”) (emphasis in original); June 24, 2014 OGC Advisory Letter re: Bingo Nation Game, at p. 7-8 (re-endorsing the use of proxy play and the proxy agent’s use of devices with hardware and software components in connection with a Class II electronic bingo game system; that is the proxy agent’s use of an “electronic card minding device” in a bingo game – i.e. a mechanism which tracks the bingo cards being played by the proxy and notifies them if they have achieved a bingo. In this respect, the electronic card minding devices “do not change the fact that players still compete against one another rather than with or against the machine. [. . .] Whether a player wins or loses is determined by the contents of the cards purchased, and whether the numbers on the bingo balls drawn by the bingo blower match the numbers on the bingo card.”).


35

bingo games played on the VPNAPS gaming system used by DRB. (ER Vol.

II/287 at 10-11, 34-35).

Accordingly, under IGRA and consistent with the Indian law canons of

construction, DRB bingo game patrons may engage a proxy located on Indian

lands to act on their behalf, and there is nothing in IGRA or its implementing

regulations that precludes using a “technologic aid” like the Internet or “card

minding” software to assist with the proxy’s play on behalf of the patron.

Moreover, this is expressly permitted by Iipay regulations. (ER Vol. II/287 at 10-

11, 34-35).

(b) Any communication via an Internet communication link between DRB patrons and their proxy agent located on a reservation regarding their proxy service relationship is a step removed from any actual “gaming activity” to be conducted.

The well-recognized legal elements of “gambling” are (1) value received, (2)

according to chance (3) for a consideration. See Black’s Law Dictionary 10th ed.

(West Group 2014) (gambling “consists of a consideration, an element of chance,

and a reward”); see also Walter T. Champion, Jr. & I. Nelson Rose, Gaming Law

in a Nutshell, Thomson Reuters (2012) at 8–9 (“gambling” consists of any activity

with three elements: consideration, chance, and prize; if any one of the elements is

missing, the activity is not gambling).

In this case, any communication via an Internet communication link between


36

DRB patrons and their proxy agents located on a reservation regarding their proxy

service relationship is a step removed from any actual “gaming activity” to be

conducted. Unlike the direct purchase of lottery tickets by individuals via off-

reservation phone calls allowed by the NIGC in connection with the Coeur d’Alene

Tribe’s lottery, the VPNAPS gaming system does not permit bingo game play

directly by a patron. Rather, bingo game play is only commenced when the proxy

participant initiates play by sending a request to the game management server

component of the VPNAPS gaming system to purchase a specific denomination of

a specified number of digital cards for a specific number of games.33 (ER Vol.

II/171 at 20, ¶ 97) (ER Vol. III/511 at 84).

(c) Unless and until the DRB patron’s proxy initiates the play of the bingo game there is no participation in the Class II bingo game conducted on the VPNAPS gaming system.

As designed, the VPNAPS gaming system does not permit any bingo game

play directly by the DRB patron. Rather, the patron must request that its designated

proxy initiate the play of a bingo game by sending a request to the game

management server component of the VPNAPS gaming system to purchase a

specific denomination of a specified number of digital cards for a specific number

33 The communication activity between the DRB patron and their proxy agent using the communication link of the VPNAPS gaming system is an activity that is at most a “pre-game” administrative function to any actual bingo game play that is to be commenced at a later time by the proxy.


37

of games. No game play request instructions from the DRB patron to the proxy is

possible unless the patron first checks a box acknowledging and accepting the

Iipay’s regulatory jurisdiction and appointing a proxy to play the game on their

behalf. (ER Vol. II/171 at 20 ¶ 98) (ER Vol. IV/606) (ER Vol. III/511 at 84).

Once the game management server component of the VPNAPS gaming

system receives the proxy participant’s request to play a game, the game server

will add the proxy participant to the next bingo game to start on the VPNAPS

gaming system that matches the denomination requested by the proxy participant

on behalf of the patron. (ER Vol. II/171 at 21, ¶ 104). There is a waiting period

while this process occurs. (ER Vol. II/171 at 21, ¶ 105-107). The proxy participant

will then play the bingo game using technologic aids to assist with covering the

numbers on the purchased cards as the numbers are electronically drawn. (ER Vol.

II/171 at 14-15, ¶ 63, 68) (ER Vol. II/287 at 11, 34-35) (ER Vol. III/511 at 76). At

all times the proxy functions of the VPNAPS are monitored by a tribal gaming

facility employee (or their designee) who also acts as a legally designated agent of

the DRB patron.34 (ER Vol. II/171 at 15-16, ¶¶ 68, 70-71).

34 The District Court erred in disregarding the proxy play element of DRB’s bingo gaming using the VPNAPS gaming system. The District Court stated, that in its view, the “proxy play” was a “fiction” because the “proxy player” aid component of the VPNAPS gaming system is not a human, and the patron’s legally designated agent for proxy play did not take an active, physical act as part of the game play. (ER Vol. II/4 at 29-30). In coming to this conclusion, the District Court mistakenly conflated the DRB patron’s proxy agent (a person designated under tribal law as


38

After the game play is completed by the proxy participant, the results of the

game are revealed and reported by the proxy participant on a time delayed basis

and then can be accessed after the fact by the DRB patron; but to do so, the patron

must first click a “Completed Requests” tab. (ER Vol. II/171 at 22, ¶ 110). No live

bingo game action is ever performed or even viewed by the DRB patron. Under the

“Completed Requests” tab on the VPNAPS interface, the patron can watch a

playback of the bingo game by clicking the “theme” icon and the playback shows a

traditional 5X5 “bingo” matrix with numbers for each card and a running

scoreboard of balls (numbered 1 through 75) as they were drawn. (ER Vol. II/171

at 22-23, ¶¶ 112-15).

the proxy participant) with the gaming system’s aids assisting that person with the play of the bingo game. The court’s conclusion is contrary to (1) the fact that the NIGC and Iipay gaming regulators have both declared proxy play with Class II bingo to be permitted under IGRA, and (2) the fact both the NIGC and SYGC have expressly authorized the use of aids like auto-daub components in Class II gaming systems to assist with the play of the bingo game. See, for example, SYGC 14-I011, Section 11.0(c) (“There is no requirement for the proxy agent playing Class II bingo games on the Account Holder’s behalf to manually declare a “bingo” upon matching the numbers drawn with the pre-designated game winning pattern on a purchased bingo card in order to collect the game prize; use of technologic aids such as an auto-daub feature is expressly permitted to assist the proxy agent playing Class II bingo games on the Account Holder’s behalf in determining whether a card held has a pre-designated pattern matching the numbers drawn for the Class II bingo game”). (ER Vol. II/287 at 34-35). In short, there is no “physical act” requirement for the patron’s proxy agent as the District Court mistakenly implies. And even if this could somehow be implied as a requirement for proxy play, the proxy play element built into the VPNAPS gaming system can be simply redesigned accordingly if this is the deciding factor for determining the “conducted on Indian lands” issue – which should not rise or fall on such a slender legal reed.


39

As such, play of the bingo games offered by DRB using the VPNAPS

gaming system does not commence until the patron’s proxy sends a request to the

game management server component of the VPNAPS to purchase cards for a bingo

game to be played and the game management server accepts the request. Because

the patron’s designated agent proxy is located on Indian lands during the time this

is happening, the bingo game is actually played on Iipay’s Indian lands. This

conclusion is in accord with prevailing case law and tribal law, IGRA’s statutory

text and NIGC regulations relating to technologic aids and the proxy play

permitted with Class II bingo gaming under IGRA.

(4) Use of the “Internet” is not relevant or dispositive to an IGRA interpretation concerning the “conducted on Indian lands” question.

The fact that the “other off-reservation means of access” in this matter is

made via the manner of a modern communication technology link like the Internet

is not in any way relevant or dispositive to an IGRA interpretation concerning the

“conducted on Indian lands” question. The Ninth Circuit made that clear in its

AT&T lottery decision regarding whether “the use of telephone and other off-

reservation means of access” to games conducted on Indian lands is prohibited by

IGRA. The “off-reservation means of access” to the bingo games conducted on

Indian lands by DRB could, with different technology features added, just as easily

be accessed remotely by a patron via other “old-fashion” communication methods


40

(phone, fax, postcard, western union, messenger, etc.), and the foregoing

“conducted on Indian lands” analysis would be the same. This demonstrates that

the proper statutory construction analysis does not rise or fall based upon any

provisions in UIGEA.

VII. CONCLUSION

As Appellees concede, UIEGA cannot and does not prohibit legal IGRA

Class II gaming activity. See 31 U.S.C. § 5361(b). Therefore, UIGEA does not

apply to the bingo gaming offered by DRB because, as demonstrated above, its

proxy play server-based bingo gaming accessed by patrons via a browser-enabled

Internet link is legally “conducted on Indian lands” for purposes of IGRA in a

tribally-regulated gaming facility. Accordingly, the District Court erred in finding

that legal IGRA bingo gaming activity can be subject to an enforcement action

under UIGEA. This consolidated action should be remanded to the District Court

with instructions to (1) vacate the summary judgment and permanent injunction

entered in the action, and (2) dismiss the action in its entirety with prejudice.

Dated: May 17, 2017 LITTLE FAWN BOLAND Little Fawn Boland (CA No. 240181)

Ceiba Legal, LLP 35 Madrone Park Circle Mill Valley, CA 94941 Telephone: (415) 684-7670 ext. 101 Fax: (415) 684-7273 [email protected]


41

s/ Kevin C. Quigley Kevin C. Quigley (MN No. 0182771) Foley & Quigley PLC 213 Fourth Street East Suite 404 Saint Paul, MN 55101 Telephone: (612) 741-1794 [email protected] SCOTT CROWELL Scott Crowell (AZ No. 009654) Crowell Law Office-Tribal Advocacy Group 1487 W. State Route 89A, Ste. 8 Sedona, AZ 86336 Telephone: (425) 802-5369 Fax: (509) 290-6953 [email protected]

Attorneys for Tribal Appellants


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STATEMENT OF RELATED CASES

Pursuant to Ninth Circuit Rule 28-2.6, I state that there are no related cases

pending in this Court.

Dated: May 17, 2017 s/ Kevin C. Quigley Kevin C. Quigley (MN No. 0182771) Foley & Quigley PLC

213 Fourth Street East Suite 404 Saint Paul, MN 55101 Telephone: (612) 741-1794 [email protected]


43

CERTIFICATE OF COMPLIANCE

1. This brief complies with the type-volume limitation of Fed. R. App. P.

32(a)(7)(B) because this brief contains 10,942 words, excluding the parts of the

brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii).

2. This brief complies with the typeface requirements of Fed. R. App. P.

32(a)(5) and the type-style requirements of Fed. R. App. P. 32(a)(6) because this

brief has been prepared in a proportionally spaced typeface using Microsoft Word

2011 in 14-point Times New Roman type.

May 17, 2017 s/ Kevin C. Quigley Kevin C. Quigley (MN No. 0182771) Foley & Quigley PLC

213 Fourth Street East Suite 404 Saint Paul, MN 55101 Telephone: (612) 741-1794 [email protected]


44

CERTIFICATE OF SERVICE

I, Kevin Quigley, hereby certify that I electronically filed the foregoing with

the Clerk of the Court for the United States Court of Appeals for the Ninth Circuit

by using the appellate CM/ECF system on May 17, 2017.

I certify that all participants in the case are registered CM/ECF users and

that service will be accomplished by the appellate CM/ECF system.

May 17, 2017 s/ Kevin C. Quigley Kevin C. Quigley (MN No. 0182771)

Foley & Quigley PLC 213 Fourth Street East Suite 404 Saint Paul, MN 55101 Telephone: (612) 741-1794 [email protected]


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