On October 26 the 9th Circuit Court of Appeals ruled that the state of California owes the Pauma Band of Luiseño Indians $36.2 million and declined to rehear the suit. Now, California is asking the U.S. Supreme Court to review the Class III gaming compact dispute.

Earlier this month, the appeals court granted California Attorney General Kamala D. Harris’ request to stay the part of its ruling enforcing its decision to award the tribe restitution. The stay gave the state more time to consider appealing the award to the U.S. Supreme Court. The mandate was recalled by the court and stayed until March 17, according to Law360.

In 2004 three major casinos were vying to develop and operate a casino authorized by Pauma’s tribal-state class III gaming compact. In order to compete in the market and obtain the necessary investment dollars needed to develop the type of facility the Pauma desired, it would need to operate 2,000 slot machines, but preferably more. According to the terms of its 1999 Compact, the tribe was limited to operating 2,000 Class III slots at its Casino Pauma, but due to a provision in the compact, the California Gambling Control Division prevented the tribe from reaching that limit. So, rather than challenging the Commission’s interpretation of the provision via litigation, it chose to negotiate an amendment of the 1999 compact, and in 2004 a new agreement was reached. That alternative enabled the Pauma to operate unlimited slots and extended the 1999’s compact expiration by 10 years, in exchange for a higher revenue sharing rate than required by the 1999 compact.

However, in a 2-1 vote last October, the 9th Circuit Court of Appeals determined that the state kept key information from the Pauma during compact negotiations. Judge Richard C. Tallman’s decision was based on several other tribes’ challenging the Commissions interpretation of the License Pool Limitations provision of the compact in 2004, which determined that there were 8050 more licenses than in the Commission’s interpretation, but the tribe was still unable to add more slot machines to its facility.

California now hopes that it is able to overturn that decision. A petition (pdf) filed on March 17 with the high court by Harris, who is running for U.S. Senate, warned that restitution could be sought by other tribes for alleged overpayments based on a provision in a compact that opens the state to lawsuits.

The justices will determine whether or not to accept the case after the tribe files its reply to the state’s petition and the state responds. The process could take a while considering the concerns about the vacancy on the court.

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