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7th Circuit Upholds Jurisdiction in Suit Against Ho-Chunk Nation January 18, 2008

Posted by rezjudicata in 7th Circuit, Federal Circuits.
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Wisconsin v. Ho-Chunk Nation, No. 07-1584 (7th Cir. Jan. 14, 2007)

Issue(s): Federal Jurisdiction > Appellate Jurisdiction >> Interlocutory Appeals >>> Collateral Orders Doctrine; Federal Jurisdiction > Congressional Enlargement >> IGRA; Federal Jurisdiction > Supplemental Jurisdiction >> State Law Claims; Tribal Sovereign Immunity > Abrogation or Waiver; Tribal Sovereign Immunity > Waiver >> Reciprocal Revocation

For federal courts to have jurisdiction over a case, the plaintiff’s cause of action must arise under federal law. A subsection of the IGRA grants jurisdiction over state lawsuits to enjoin class III gaming that violates an IGRA-negotiated Tribal-State compact. Wisconsin claimed that the Ho Chunk Nation refused to pay amounts due under a revenue-sharing agreement or submit to arbitration, which were provisions of the compact. Does the federal law grant jurisdiction over Wisconsin’s suit? If so, does the court also have supplemental jurisdiction over Wisconsin’s state law claims? And even if there is jurisdiction, does tribal sovereign immunity bar any of Wisconsin’s claims?

Yes, yes, and no said the 7th Circuit. Wisconsin argued that, under the IGRA, an alleged violation of any provision of the compact would support jurisdiction. The Nation countered that only violations relevant to class III gaming triggered jurisdiction. Rejecting both interpretations, the 7th Circuit charted a middle road. The jurisdiction-granting subsection specifically but subtly referred to another subsection of the IGRA. That subsection listed seven “approved” provisions. Therefore, the Court reasoned, the IGRA granted jurisdiction if the alleged compact violation fell within one of the seven approved provisions. Though the revenue sharing element of Wisconsin’s complaint did not fall with an approved category, the arbitration element did because it was a “remedy for breach of contract.” Thus, the district court could exercise jurisdiction over Wisconsin’s suit to enjoin the Nation’s class III gaming.

Upholding jurisdiction over Wisconsin’s non-IGRA claims under theories of supplemental jurisdiction and declaratory judgment jurisdiction, the Court turned to the Nation’s immunity claims. All parties agreed that the IGRA abrogated the Nation’s immunity from Wisconsin’s class III suit. But Congress didn’t similarly abrogate the Nation’s immunity from Wisconsin’s other claims. In their compact, both Wisconsin and the Nation waived immunity from suits concerning the compact. In an unrelated case, however, the Wisconsin Supreme Court held that the governor (who negotiated this compact) lacked authority to unilaterally waive the State’s immunity. Arguing that the case revoked Wisconsin’s waiver, the Nation reasoned that its waiver was revoked as well-effectively restoring the Nation’s sovereign immunity. According to the compact, the Nation could revoke its waiver only if the State invoked its immunity against the Nation. The Court reasoned that even if the Wisconsin Supreme Court decision revoked the State’s waiver in this compact, it could have no effect on the Nation’s waiver. Therefore, the waiver remained enforceable and immunity did not bar Wisconsin’s claims.

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