In California, the federally-recognized Shingle Springs Band of Miwok Indians has reportedly avoided financial disaster after a state appeals court ruled that it does not owe almost $50 million to a former business partner.
According to a report from The Sacramento Bee newspaper, the Friday decision from the California Court of Appeal for the Third District overturned a 2012 ruling from an El Dorado Superior Court jury that the casino-operating Shingle Springs Band of Miwok Indians was in arrears to the tune of $30 million plus interest to businessman Chris Anderson and his Sharp Image Gaming Incorporated.
The newspaper reported that the Shingle Springs Band of Miwok Indians, which opened its Red Hawk Casino in late-2008, had earlier declared that it could not afford to pay Anderson’s firm and any attempt to do so could result in the closure of the $535 gambling facility located near the small city of Placerville.
“Any efforts to presently execute on the judgment would likely have catastrophic consequences for the tribe and all who depend on the casino for their livelihood,” reportedly read a brief filed by lawyers working on behalf of the northern California tribe before the most recent verdict.
The Sacramento Bee reported that at issue was the opening by the Shingle Springs Band of Miwok Indians of a tent-like gambling hall in 1996 that offered an array of slot machines manufactured by Sharp Image Gaming Incorporated. The newspaper explained that this maiden attempt by the tribe to operate a casino took place when California’s gaming laws were still evolving but the whole endeavor was shuttered only a few months later amid uncertainties about its legal status.
However, the El Dorado County tribe later took a second run at gambling by partnering with Las Vegas-based Lakes Entertainment Incorporated to open its Red Hawk Casino before eventually buying out this partner’s stake in 2013. This reportedly prompted Sharp Image Gaming Incorporated to file a lawsuit alleging that its earlier arrangement meant that it should be the only rightful gaming machine supplier to any venue run by the Shingle Springs Band of Miwok Indians.
But, the California Court of Appeal for the Third District reportedly ruled in its 67-page decision that the earlier deal with Los Angeles-based Sharp Image Gaming Incorporated was not valid because it had not been approved by the National Indian Gaming Commission federal regulator under the terms laid out by the Indian Gaming Regulatory Act (IGRA) of 1988.
“We conclude that [the] IGRA pre-empts state contract actions based on unapproved “management contracts” and “collateral agreements to management contracts” as such agreements are defined in the IGRA regulatory scheme,” read the judgment written by Judge William Murray.
For its part, the Shingle Springs Band of Miwok Indians reportedly declared that the ruling offered a “complete vindication” of its legal argument that the lower state court should have “immediately dismissed the case”.
“I always believed the tribe was in the right,” Nick Fonseca, Chairman for the Shingle Springs Band of Miwok Indians, reportedly told the newspaper. “I’m glad the tribe had the perseverance to stay the course. This is a victory for all tribes in California.”