NORTH BEND, Ore. (AP) – Oregon Indian tribes have been quietly reinvesting profits from their casinos into other businesses around the state over the past decade, signing contracts with governments and privately held businesses alike.
Now, a closely watched dispute in North Bend raises the question of whether the contracts are enforceable.
Tribes in the United States are sovereign nations, immune from lawsuits in the same way that the state of Oregon can’t sue Ecuador, which is why such contracts often come with “limited waivers of sovereign immunity.” These waivers give the other party in the contract the right to sue a tribe if there’s a dispute.
Whether such a waiver would hold up in court remains an open question, however. The contract battle between the Coquille Indian Tribe and the city of North Bend began last year, after the tribe quit making payments to North Bend for city water, sewer, police and fire protection services.
Tribal attorneys said they were being charged more than other hotels and motels and demanded to renegotiate. When that effort failed, the tribe stopped paying, and the city sued the tribe and asked a judge to allow the city to cut off service to the Coquille’s The Mill Casino.
At one point, city leaders announced that they’d need to cut the city budget by a half-million dollars because of the lack of payments.
The tribe’s response: The deal was “unenforceable” and “null and void.”
The Coquilles asked U.S. District Judge Michael Hogan to dismiss the city’s lawsuit, arguing that the tribe, as a sovereign nation, has immunity from being sued although the tribe had signed a waiver agreeing to be sued in state or federal court.
Last week, the Coquilles and the city agreed to a mediated “consent decree” to settle the contract dispute.
The compromise resulted in a new, 10-year deal that more closely reflects what the Coquilles wanted when they stopped making payments last January.
There are a few key differences between the new contract and the old one, including a potential reduction in the amount the tribe pays the city for services.
Tribal attorney Brett Kenney said in a prior interview with The Register-Guard that the tribe was paying more than other property owners in the city, including hotel and motel owners, although the original contract specified that “the City will be paid at the same rate for occupied rooms at any motel or hotel operated at The Mill as are charged to other motels and hotels within the City.”
The initial contract, signed some 15 years ago, also had no sunset clause. The new one expires at the end of 2019.
Both contracts include language about the tribe waiving its legal immunity as a sovereign nation.
The new contract states: “The parties adopt a limited waiver of their respective sovereign immunity for the enforcement of this consent decree and submit to the ongoing jurisdiction of the court for this purpose.”
The old contract read: “The parties to this agreement waive any sovereign or other immunity from legal proceedings for the enforcement of the terms of this agreement and consent to be sued in the courts of the State of Oregon and/or the United States District Court for the District of Oregon.”
Immunity has been an issue in dozens of court cases across the country in recent years, when tribes have declined to appear in court, arguing that any waivers of their legal immunity don’t really count.
Hogan told The Register-Guard that the new consent decree is an attempt to resolve an “uncertain legal issue” in the old contract that was problematic because it was signed in perpetuity. Asked whether he thought this deal had more teeth than the last one, Hogan said he did.
“What makes this enforceable is the parties have subjected themselves to my jurisdiction,” Hogan said. “They’ve agreed I will resolve (a conflict) if they can’t get it done. If it doesn’t work, we’ll submit it to Judge Hogan’s Jiminy Cricket.”
Kelly Clark, a Portland attorney representing the Florence group People Against a Casino Town in its lawsuit against the Three Rivers Casino, said he thinks the difference might be that the latest agreement invokes Hogan specifically.
“As a practical matter, the lawyers involved are not going to be able to go back in front of Judge Hogan and say, ‘Remember that promise we made to you, Judge Hogan? We’re breaking that promise.’”
As for what the legal outcome would be if that happened, Clark said he didn’t know.
“It’s pretty brassy to say to the city, ‘We’ll waive sovereign immunity and you can sue us if this goes bad,’ then turn around and say, ‘Actually you can’t sue us, because we have sovereign immunity,’” Clark said.
In 2008, the tribe paid $440,000 in lieu of taxes to the city. In the consent decree, the tribes agree to pay for water and sewer services according to the same rates as other users of the systems, along with a $362,000 annual fee for law enforcement, fire protection and emergency medical services, to be increased by 5.25 percent annually.
The tribe also agreed to a one-time payment of $275,000 to cover its nonpayment for services between July and December of last year. The tribe will no longer collect a hotel room tax on behalf of the city. That could represent a hit to the Coos Bay-North Bend Visitor and Convention Bureau of between $50,000 and $70,000, although the bureau’s director, Katherine Hoppe, said she hasn’t confirmed that the tribe won’t collect the payment some other way. Hogan said in a press release that that part of the conflict hadn’t yet been resolved.
North Bend Mayor Rick Wetherell said in a written statement that he preferred the settlement to a protracted lawsuit with no certain outcome.
“We have provided the Coquille Indian Tribe with public safety services for the past 15 years,” Wetherell said. “We will continue to do so under a new contract for services and put the legal dispute behind us.”
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