Keep Your NEPA Out of My Gaming Management Contract

One area of vital importance to many Indian tribes is the relationship of the Indian Gaming Regulatory Act (“IGRA”) to the National Environmental Policy Act (“NEPA”). The National Indian Gaming Commission (“NIGC”) requires Indian tribes entering into management contracts for gaming to comply with NEPA requirements when construction is involved. This position puts Indian gaming enterprises at a severe disadvantage to other businesses, which do not have to spend millions of dollars on NEPA compliance for the same project, nor undertake months or years of delay resulting from the NEPA process before beginning construction. The delay has the effect of outdating market analyses, dramatically increasing project costs, involving the general public in the sovereign decisions of tribal governments, and deterring potential investors.

The NIGC should be excused from compliance with NEPA because there is no way that tribes can complete full NEPA environmental reviews within the time period set out by Congress for the approval or disapproval of management contracts. Courts have found time conflicts excuse NEPA compliance. See Flint Ridge Development Co. v. Scenic Rivers Ass’n of Okla., 426 U.S. 776, 788-89 (1976). Continuing to require NEPA compliance for gaming management contracts is a waste of tribal, management contractor, and federal resources.

The completion of an Environmental Impact Statement (“EIS”) takes a considerable amount of time – from the Draft Environmental Impact Statement, review and revision in response to feedback, possibly publication of another draft, publication of a Final Environmental Impact Statement and publication of a Record of Decision. The average time for completion of an EIS is 3.4 years based on a 2008 study by Piet and Carole deWitt of 2,095 EISs prepared by 53 different federal agencies. This is very similar to a 3.6 year timeframe found by a 2000 Federal Highway Administration evaluation on environmental streamlining. On the two occasions when an EIS was required by the NIGC, for the Nottawaseppi Huron Band of Potawatomi Indians, it took approximately two years and three months to prepare a Record of Decision. The second occasion, for the Graton Rancheria, the NEPA process took approximately three and a half years from publication of the Draft EIS until issuance of the Record of Decision. Moreover, these time periods also are not adequate for the NIGC to consult with Indian tribes pursuant to the Commission’s government-to-government consultation policy.

The NIGC must approve or disapprove a gaming management contract within one hundred and eighty (180) days, with a possible ninety (90) day extension, or a tribe may sue to compel action under 25 U.S.C. § 2711(d). There is simply no way that a Tribe can complete an EIS within this period. As a result, the one hundred and eighty (180) day period allowed for approval or disapproval of management contracts in 25 U.S.C. § 2711(d) is far too short for the agency to comply with NEPA. The time limitations in the IGRA warrant the conclusion that there is a statutory conflict with NEPA.

Indian tribes have had the authority to build and operate gaming facilities on their lands prior to the enactment of IGRA. Under IGRA, an Indian tribe has the right to build and operate a gaming facility on its lands after adoption of a gaming ordinance approved by the NIGC Chairman — no federal review of the construction design, location, or site is required unless an opinion is needed that the selected site qualifies as Indian lands. See 25 U.S.C. § 2719.

Furthermore, NEPA was enacted to assist Federal agencies to ensure that significant environmental impacts are fully considered in the Federal decision-making process. Thus, under NEPA, an EIS should be created only when a federal agency, such as the NIGC, will be undertaking an activity that rises to the level of a major federal action which significantly affects the quality of the human environment. Department of Transportation v. Public Citizen, 541 U.S. 752, 763 (2004).

For Indian gaming management contracts, federal interest in the contract is slim, other than for enforcement of its gaming terms. When a management contract does involve construction activity, the NIGC has no ability to control or regulate the size, design, or construction of the project. Thus, no major federal action in involved in the Indian gaming management contract process, and therefore, NEPA compliance should not be required.

To further explain why no federal action is involved, the factors considered by courts to determine whether a project is a major federal action when a non-federal party is involved include: (1) whether the project is federal or non-federal; (2) whether the project receives significant federal funding; and (3) when the project is undertaken by a non-federal actor, whether the federal agency must undertake “affirmative conduct” before the non-federal actor may act. Mineral Policy Center v. Norton, 292 F. Supp. 2d 30, 55 (D.D.C. 2003).

An Indian gaming management contract is not a federally initiated, operated, or owned project.

The tribe has the sole proprietary interest and responsibility for the conduct of any gaming activity pursuant to 25 U.S.C. § 2710(b)(2)(A), and may begin construction of a gaming operation or offer gaming activities as soon as its gaming ordinance has been approved. The management contract is between two non-federal entities: an Indian tribe and a private company. The Indian gaming operation receives no federal funding; instead the tribe pays fees to the government to cover regulatory and oversight costs.

Even though a management contractor cannot begin work without federal approval, there has been reluctance to require NEPA compliance on actions “that are marginally federal” especially when no federal funding is involved. State of Alaska v. Andrus, 591 F.2d 537, 541 (9th Cir.1979). Moreover, NIGC approval of any construction or building terms in the management contract are outside the scope of the factors Congress requires the Commission to review. “[If] the agency does not have sufficient discretion to affect the outcome of [an] action, and its role is merely ministerial, the information that NEPA provides can have no affect on the agency's actions, and therefore NEPA is inapplicable.” Citizens Against Rails-to-Trails v. Surface Transp. Bd., 267 F.3d 1144, 1151 (D.C.Cir. 2001). The NIGC is not in control of the project, nor may it exert significant influence on any construction or environmental mitigation terms of the gaming management contract. Sierra Club v. Hodel, 848 F.2d 1068, 1089 (10th Cir. 1988).

If the NIGC insists on that there is no statutory conflict and that major federal action is involved in management contract approvals, it can create a single programmatic EIS based on past experience that would support a categorical exclusion for tribal projects. Such an approach, called “tiering” is allowable by federal regulations at 42 C.F.R.§ 1500.20, and would save substantial time and money.

Considering these issues, NEPA should not apply to the IGRA based on statutory conflict and/or categorical exclusion. Furthermore, continuing to require NEPA compliance for gaming management contracts is a waste of tribal, management contractor, and federal resources.

Andrea Lord Goldstein is a Senior Associate with the law firm of Smith, Shelton, Ragona & Salazar, LLC, located in the Denver area, and a former Staff Attorney for the National Indian Gaming Commission.