Appeals court rules for tribe in Detroit casino selection process

DETROIT ? The 6th Circuit Court of Appeals temporarily stopped the permanent casino selection process by the city of Detroit at the request of the Lac Vieux Desert Band of Lake Superior Chippewa Indians. The court handed down an injunction, pending an appeal of the tribe's complaint of not being included in the bidding process. Further arguments are scheduled for early next year.

A lower court ruling violated the tribe's First Amendment rights when it excluded them from the bidding process for casino selection and then ruled after another appellate court ruling that it was too late to stop the process.

"We have won twice on appeal on this case already, and we are even more confident of success this time around," said Conley Schulte, attorney for the band. "It was not only unconscionable to rule that the tribe's First Amendment rights were violated, but also to allow the city of Detroit to get away with it without a meaningful remedy for the tribe."

Schulte added that in its ruling, the appeals court indicated that it thought the tribe would be successful in its attempt to stop the permanent construction of the casinos in Greektown, Detroit.

The city of Detroit based its selection of casino developers on how much money and support was given to election campaigns, Schulte said. The appellate court also used that as part of the reason for issuance of the injunction.

The Sault Ste. Marie Tribe of Chippewa Indians received preference from the city and they were teamed with local business people to become part owners of the Greektown Casino.

Three other casino developers are the MGM Grand, Mandalay Bay and prime owner Sault Ste. Marie with other investors that formed Greektown Casino. Some private and local investors couldn't pass the background checks, Schulte said.

In June 2002, the U.S. Supreme Court denied certiorari of the 6th Circuit Court of Appeals decision to remand the case back to the U.S. District Court. District Judge Robert Holmes Bell ruled in favor of Detroit, which prompted the appeal from the Lac Vieux Desert Band with the claim that the city's gaming license ordinance was unconstitutional.

Judge Bell ruled twice against the tribe, each time the ruling was appealed to the 6th Circuit that overturned the lower court judge's ruling. Judge Bell said in his written order that the tribe had never demonstrated a likelihood that it would be selected as a casino developer "in the event the selection process were begun anew."

What Judge Bell did was to prevent the band from attempting to be considered, a violation of the band's constitutional rights, the appeals case stated.

Contrary to Judge Bell's selection observations, the earlier appeals court ruling stated that the band had demonstrated the ability to compete with its 1994 proposal to revamp an existing building in Detroit with the entire project costing $200 million, which was fully financed. Off-reservation gambling had not been approved at that time. The building was later demolished.

In the mid-1990s, the city of Detroit went to the voters to overturn a gambling ban in the city of Detroit. Three prominent gaming tribes helped in the effort. Part of the agreement gave preferential treatment to the Sault Ste. Marie Tribe, court documents state.

Opening Detroit to large scale gambling also broke the gaming monopoly the tribes had negotiated through compacts and allowed the tribes to stop contributing 9 percent of their casino revenues to the state. It meant more money for the tribes and an opportunity to enter a larger gambling arena in Detroit.

The Lac Vieux band opposed the opening of gambling in the city of Detroit when the initiative was first announced ? the city's legal counsel pointed out. However, the band argued that it was not because of its opposition to legalizing gaming in Detroit that it was not included in the bidding process, rather it was because it did not actively support the gaming initiative.

Detroit's city ordinance states that preference shall be given to potential developers that who "actively promoted and significantly supported the state initiative authorizing gaming."

Preference was given to the Greektown Casino and Atwater Entertainment as the only developers that met the criteria. The Sault Ste. Marie Tribe is a majority owner of Greektown Casino.

Based on the city's ordinance and the tribe's inclusion in the bidding process, litigation was initiated in 1997.

"By halting the development of permanent casinos and moving this case forward, this court has already shown a strong belief that our Constitution has teeth and is far more than just meaningless words on paper," Schulte said.