The U.S. Supreme Court ruled in favor of a concerned Wayland citizen and returned the fate of the Gun Lake Casino to a federal trial court.

In an 8-1 opinion issued this morning in Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians v. Patchak et al, the U.S. Supreme Court held that former Wayland Township Trustee David Patchak had legal standing to sue the U.S. government to prevent land being taken into trust for the Gun Lake Casino.  The opinion was authored by Justice Elena Kagan, the former Solicitor General of the United States who was appointed to the Court by Pres. Obama in 2009.

Today’s ruling means that the U.S. District Court for the District of Columbia will consider whether the U.S. Secretary of the Interior was legally allowed to take land in trust for the Gun Lake Band in 2009.  The validity of the land-in-trust transaction is critical to the casino, because if the land cannot be held in trust by the federal government, it cannot be used for Class III gaming, a prohibition that would include many games commonly played at casinos, such as slot machines, blackjack, craps and roulette.

“We are pleased that the U.S. Supreme Court has agreed that Mr. Patchak is entitled to his day in court,” said Matthew T. Nelson, a partner and chair of the Appellate Law Group at Warner Norcross who argued the case before the U.S. Supreme Court.  “We believe that once Mr. Patchak has his day in court, he will be vindicated.  The government violated federal law by taking land into trust so the Gun Lake Band could operate a casino in Wayland.”

There were two issues before the Supreme Court, both of which have to do with Patchak’s ability to bring a lawsuit.  The first deals with whether or not he had standing to challenge the federal government’s decision to take land into trust for the Gun Lake Band so it could operate a casino.  The government and the Band had argued that he does not. 

The second issue deals with the government’s argument that once it took the land into trust for the Gun Lake Band, sovereign immunity prevented Patchak from challenging the legality of the government’s administrative action.  However, the Supreme Court rejected the government’s argument in its entirety.

In today’s ruling, the Supreme Court affirmed that Patchak asserted “a garden-variety…claim” challenging illegal action by the government.  The opinion held that neighbors to a casino “like Patchak are reasonable, indeed, predictable challengers” of the government’s decisions to take land into trust for tribal casinos.

http://www.jdsupra.com/post/documentViewer.aspx?fid=50eeb2e5-20e2-443f-bbe6-44ec309f79af

Wall Street analysts say a U.S. Supreme Court ruling could stall development of some Indian casinos around the country — a situation that casino opponents are already seizing upon.

The court on Monday allowed a lawsuit to proceed in which a foe of the Gun Lake Casino in Michigan, David Patchak, is challenging the federal government’s decision to take land into trust on behalf of the Gun Lake tribe — a key step in establishment of Indian reservations and casinos.

The Gun Lake casino was developed in partnership with Station Casinos LLC of Las Vegas, which has a 50 percent interest in the casino management company. It opened in February 2011. Gun Lake won’t be affected anytime soon — if at all — by the court ruling since the court didn’t rule on the merits of the casino foe’s lawsuit. It simply allowed his suit to proceed.
Nevertheless, analysts at Fitch Ratings on Tuesday said the ruling could have ''several key credit implications for the gaming sector.''
The ruling is likely to increase challenges from Indian casino foes to land-into-trust decisions for tribes, Fitch said.
That’s partly because it lengthens the statute of limitations for court review of such decisions from 30 days to six years, the Fitch analysts said in a report.
''Raising capital for Native American casino projects could become more difficult/expensive, as investors are likely to have heightened concern about potential challenges regarding land-into-trust decisions,'' Fitch said.
But in a bit of good news for established Indian gaming operations, the decision may benefit them by delaying competing projects, Fitch said.
Some of the tribes that could be affected are the Graton Rancheria and North Fork Rancheria in California, Fitch said.
Station Casinos is working with both tribes on casino projects. North Fork hasn’t advanced to the construction stage, but Station said the Graton Rancheria project broke ground Monday in Rohnert Park in Sonoma County. The location is seen as potentially lucrative being 43 miles from downtown San Francisco.
A group that’s been suing to stop the Graton project — unsuccessfully to date — said Monday it’s encouraged by the Supreme Court decision in the Michigan case.

The group is called the Stop the Casino 101 Coalition.

A Station Casinos spokeswoman said Tuesday the company had no immediate comment on the court ruling.
Station’s partner in Michigan, the Gun Lake tribe, said in a statement it’s ''ready to continue fighting the lawsuit and is confident that it will ultimately prove that (casino foe Patchak’s) claims are completely without merit.''

Fitch said that tribes with notable potential projects or operating casinos that could be affected include the Cowlitz Tribe and the Snoqualmie Tribe with its Snoqualmie Casino, both in Washington state; the Shinnecock Tribe in New York, the Mashpee Wampanoag in Massachusetts and the Nottawaseppi Huron Band of Potawatomi, which has the Firekeepers Casino in Battle Creek, Mich.

Congress, in the meantime, is debating a bill that would block acontroversial Indian casino proposed for Glendale, Ariz., near Phoenix.

http://www.vegasinc.com/news/2012/jun/19/top-court-ruling-could-slow-development-some-india/