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Leaving Las Vegas

By Kari Santos | Sep. 2, 2014

News

Law Office Management

Sep. 2, 2014

Leaving Las Vegas

It took an act of Congress and gaming money from Nevada for the Graton Indians to open a casino in Sonoma County. But opponents are still trying to shut it down, and they have one last chance in court.

"This is where everything changes," says Rev. Harry "Chip" Worthington, gunning his gray sedan through an underpass beneath U.S. Highway 101 and into what he calls the "other side" of Rohnert Park in central Sonoma County.

To the west, across a barren expanse of former dairy land, stands the Graton Resort and Casino - big as a shopping mall - California's newest and largest foray into Indian gaming.

It has been more than 14 years since Californians passed Proposition 1A, amending the state constitution to permit casino gaming on tribal lands under a newly passed federal law, the Indian Gaming Regulatory Act (25 U.S.C. §§ 2701-2721; Cal. Const., Art. IV, § 19(f)).

At the time, proponents of the initiative claimed a narrow intent, assuring voters that the gaming it enabled would be restricted to remote rancherias - rural pockets of tribal sovereignty unique to California.

But the sprawling gaming hall where Worthington pulls into the parking lot is just off a multi-lane freeway corridor - and only 40 miles from the Golden Gate Bridge. Under provisions of an act of Congress, the Secretary of the Interior was permitted to accept into trust for the benefit of the Federated Indians of Graton Rancheria "any real property located in Marin or Sonoma County."

With that law in place, the Gratons entered a management contract with a subsidiary of Station Casinos, a Las Vegas-based gaming company that manages several other Indian casinos in California. In 2005 the company purchased 254 acres in Rohnert Park, and five years later deeded the land into federal trust. In between, the Gratons passed a gaming ordinance, which the National Indian Gaming Commission then approved. In May 2012, Gov. Jerry Brown signed a gaming compact and the Legislature quickly approved it. (Cal. Gov't Code § 12012.56.)

The deal permitted construction of a casino large enough to rival anything on the Las Vegas Strip, built miles away from the Gratons' former 15.5-acre rancheria near the tiny Sonoma County town of Graton.

"This is reservation shopping," Worthington charges, looking across at the huge resort. "The Graton casino is the biggest example of reservation shopping in the United States."

Minutes earlier the minister had been wheeling through the streets of Rohnert Park east of Highway 101, pointing at schools, parks, and subdivisions, repeatedly employing the word wonderful to describe the bland suburban landscape. "This is a family town, a wonderful family town," he says.

A former middle-school teacher, Worthington, 68, preaches in a pole-barn Assembly of God church and interprets the Bible literally. He's big and cantankerous, he recently had a hip replaced, and he surfs in Hawaii. Wearing a T-shirt and shorts, he looks ready to spend the afternoon at the casino.

But Worthington stays in the car. "I hate casinos. I want to curse about it, but I can't," he says. "I won't set a foot in there."

Inside, slot and poker machines seem to whirl outward in all directions from a bar at the hub of an immense gaming floor. Women in tight, low-cut cocktail dresses pour drinks. Gamblers can choose from 144 table games, an 18-table poker room, 3,000 slot machines, full-service restaurants, and a 500-seat food court. Many of the blackjack tables nearby have large-screen televisions mounted behind them. As a World Cup match unfolds in the background, the gamblers' eyes dart constantly from cards to TV screen and back again. The slot machines ring in an endless cacophony, broken only by the occasional player hollering loudly after a win.

To Worthington, however, such triumphs ring hollow. "Gambling destroys lives, destroys families," he says.

For the past decade, Worthington has headed a group called Stop the Casino 101 Coalition, which has tried repeatedly to derail the Graton operation in court. But the coalition's preemptive efforts failed. When the casino opened in November 2013, it was an immediate hit, grossing $101 million in the first quarter of 2014, according to published reports. In the same three-month period, Station Casinos - which provided $200 million in predevelopment funds for the $800 million project - received $7.4 million in management fees. During a first-quarter earnings call in May, Station Casinos' chief financial officer Marc Falcone said, "To date we are very pleased with the performance of the property."

Over the next 20 years, Rohnert Park will receive $251 million from the casino; for good measure, the Gratons are also putting up $3.75 million for a new public safety building. Under terms of the compact the state of California gets a piece as well: $9.8 million spread over seven years, then 3 percent of net winnings per quarter after that. In addition, for the next seven years the Gratons will pay 15 percent of net winnings from the video-poker machines into a mitigation fund covering programs to address gambling addiction.

Payoffs like that have other rancherias in California coveting casino sites closer to large cities. In 2012 Governor Brown signed two other gaming compacts for casinos at some distance from traditional tribal lands. In the Central Valley, at a site in Madera bordering Highway 99, the North Fork Rancheria of Mono Indians plans to open a casino 36 miles from their reservation. The North Fork's chairwoman had called the tribe "virtually landless" because its rancheria in the Sierra foothills is too remote to host a casino. Station Casinos has signed a development agreement and management contract to build and operate the Madera complex. But opponents, led by other gaming tribes, have placed a statewide referendum (Proposition 48) on the November ballot to repeal approval of the North Fork compact.

The Legislature has not yet ratified Brown's gaming compact with the Enterprise Rancheria of the Estom Yumeka Maidu tribe, near Oroville in Butte County. The tribe has fought for more than a decade to open a casino about 30 miles to the south in Marysville - nearly a straight shot up Highway 99 from Sacramento. Like the Madera location, the site is near a small airport.

Closer to Rohnert Park, the Dry Creek Rancheria Band of Pomo Indians - whose River Rock Casino near Geyserville has suffered since the Gratons opened their casino - recently acquired land just south of Petaluma. The new site, also fronting Highway 101, could allow the Dry Creek Pomos to leapfrog the Graton casino to a gaming site even closer to San Francisco.

Last year, state Sen. Kevin de León (D-Los Angeles) wrote to Brown asking that "off-reservation agreements" in California be stopped until "a clear and coherent policy" is implemented to regulate gaming agreements. The state needs to take into account fairness to existing Indian casinos, impacts on communities, environmental issues, and the intent of Prop. 1A, de León stated, adding that the Senate was creating a working group to examine the issue.

But the policy discussion may come too late for Rev. Worthington's coalition in Rohnert Park. Like a desperate gambler, the minister is now playing one final hand: joining others to appeal a trial court ruling last year in a case challenging the tribe's sovereignty over the site. No decision is expected before 2015.

The suit raises a novel issue about the Gratons' authority to operate a casino - an argument some legal experts have scoffed at. A favorable ruling, however, could interfere with the ambitions of the North Fork and Enterprise rancherias, as well as other tribes elbowing for federal recognition under new, looser rules under review by the Obama administration.

In other words, Worthington's claim that "everything changes" at the edge of Rohnert Park may prove true.

In addition to being an attorney, sole practitioner Michael T. Healy is a Petaluma city council member. "Traffic and congestion [related to the Rohnert Park casino] are big concerns," Healy says. "Every car that comes up Highway 101 to the casino goes through Petaluma." In 2008 Healy joined Worthington and other plaintiffs' effort to halt the Graton casino by suing the federal government, alleging that the project would increase traffic congestion, crime, and pollution. (Stop the Casino 101 Coalition v. Salazar, 384 Fed. Appx. 546 (9th Cir. 2010).)

That suit was dismissed and the judgment affirmed on appeal. But Healy pressed on. Just four days after the Legislature approved the Graton compact, he filed suit on behalf of the anti-casino coalition and several individuals. (Stop the Casino 101 Coalition v. Brown, No. SCV251-712 (Sonoma Super. Ct. filed May 21, 2012.).) He says the plaintiffs have received no money from rival tribes to support their litigation.

Healy contended in the trial court, and now on appeal, that California - not the federal government or the Gratons - retains legislative jurisdiction over the Rohnert Park casino site, making gambling there illegal under the state constitution and penal code. He argues that although the Gratons hold title, California never formally ceded jurisdiction over the land to the federal government - in this case, the Bureau of Indian Affairs (BIA). The state, he claims, must cede jurisdiction expressly, which requires separate legislative approval in California and a formal acceptance by the United States. (See 40 U.S.C. § 3112(c).)

"State law applies within the territorial boundaries of the state until the Legislature affirmatively cedes jurisdiction," Healy says. Federal jurisdiction over an Indian reservation is possible in only three circumstances, he continues: when the reservation existed prior to statehood; when the federal government acquired the land under the Enclaves Clause of the U.S. Constitution (U.S. Const., Art. I, § 8, cl. 17); or when a state formally cedes its authority. "None of the three methods have been achieved as to [the Graton casino] property," Healy contends.

At trial in July 2013, Deputy Attorney General William L. Williams Jr., defending the governor, agreed that none of Healy's three methods of ceding jurisdiction over the Rohnert Park site had occurred. Sonoma Superior Court Judge Elliot Lee Daum asked Williams, "Is there some specific place you can point that [shows] jurisdiction has been ceded or jurisdiction has been accepted?"

"No," he replied.

Williams, however, then launched into a long explanation of why ceding jurisdiction was unnecessary. Citing the 2000 act of Congress that recognized the tribe, he asserted, "The Graton Restoration Act is the law of this case." And its language stating that "the land shall be part of the reservation or shall become part of the tribe's reservation, [and] establishing federal recognition of the tribe as an entity" settled the jurisdiction question, he said.

Judge Daum agreed, ruling that none of Healy's jurisdictional arguments was relevant and granting summary judgment to the governor.

Four months later, the Graton Resort and Casino opened to overflow crowds.

Unlike most California tribes, the Gratons are a federation, descendants of Coast Miwok and Southern Pomo Indians who inhabited Sonoma and Marin counties. According to a tribal history on the Gratons' website, the Miwoks first encountered Europeans in 1579 when Sir Francis Drake sailed the California coast. The Spanish arrived later, claiming title to all Indian lands in the area and forcing the natives into servitude. Eventually, the Mexican government returned some Indian land in 4,000-acre "leagues." But these, too, were eventually lost as prospectors raced to California during the Gold Rush and deemed the Indians expendable. "It is mercy on the red devils to exterminate them," a Chico newspaper editorialized in 1866. "There is only one type of treaty that is effective - cold lead." In what has been called a holocaust, the native population of California plummeted.

By 1915, when most Indians had been reduced to itinerant farm laborers, the federal government began to acquire land for native settlements. In 1920 it purchased a 15.5-acre tract for landless Indians in western Sonoma County. The site was dubbed a "village home" - a category eventually called rancherias - for several native groups.

"There were 76 Indians of the Pomo Tribe living on the land when the rancheria was established," according to a 1958 congressional report. "The group is not organized, either formally or informally." No families were living on the site in 1933; by the late 1950s, seven people had taken up residence.

But in the 1950s the federal government changed its policy toward Indians from one of isolation to assimilation. This took form in California with enactment of the California Rancheria Termination Act in 1958 (Pub. L. No. 85-671). The act mandated dissolution of some 43 rancherias - including the Graton land - although some were later restored. The lands were deeded to the Indian families living on them, and federal recognition of the tribes vanished.

Indian policy changed yet again a generation later when descendants of tribal people on 34 of the rancherias settled a landmark class action against the federal government. (See Tillie Hardwick v. United States, No. 79-CV-1710 (N.D. Cal. stipulated judgment entered 1983).) The plaintiffs had alleged that terminating the rancherias was illegal, and that the Indians weren't told they would be subject to county property taxes or land use laws. The settlement restored the status of the plaintiff tribes and bands as sovereign nations.

But the Gratons were not among the plaintiffs.

The unlikely leader of the Graton federation, Greg Sarris, was born in Santa Rosa and wasn't aware of his Indian ancestry until adulthood. Sarris had been adopted at birth, and as a troubled adolescent he was taken in by a local family of Indian heritage on the outskirts of town. His own ethic identity remained a mystery until after his graduation from UCLA in 1977. While pursuing advanced degrees at Stanford University, Sarris identified his biological parents in Southern California. Both had died, but his paternal grandfather told him that his late wife - Sarris's grandmother - was a Native American from Santa Rosa. Sarris believed he was one-quarter Indian.

In 1992 Sarris and other Miwok and Pomo descendants learned that a distant Pomo tribe with official status was attempting to open a casino in Marin County near Tomales. Sarris - by then teaching English at UCLA - reportedly proclaimed, "They are trespassing; this is going to happen over our dead bodies." He led a group of Indians from Marin and Sonoma counties to push for their own federal recognition. Sarris was elected tribal chair and eventually returned to Santa Rosa, where he is a professor of Native American studies at Sonoma State University.

But Sarris's group had a problem: Under the BIA's procedures for federal recognition, its members had failed to provide the required evidence tying them to the original 15.5-acre Graton site. "We would generally support a tribe requesting restoration of Federal recognition when there is documentation to show the group is significantly tied to the terminated tribe," a 1998 bureau memo stated. "We have not seen any such evidence in terms of the Graton Rancheria."

Sarris, however, wouldn't give up. One woman, whose mother had been deeded a one-acre sliver of the Graton rancheria in 1959, still lived there. Based on that link, Sarris began lobbying Congress to formally recognize the Gratons. All the group wanted, he told a congressional committee in May 2000, was to have that single acre restored as sovereign Indian land so members could avail themselves of federal health care and other social services.

Former Rep. Lynn Woolsey (D-Petaluma) introduced a bill to grant recognition and allow the acquisition of land anywhere in Marin and Sonoma counties to be placed in federal trust - but it blocked the Gratons from operating a casino. "It specifically contains a clause that restricts ... gaming on land that is taken into trust for the tribes. This non-gaming clause is at the express request of the tribe, and is the basis for the broad and bipartisan support that this bill enjoys throughout my congressional District," the congresswoman told the House resources committee in 2000.

She added, "Open space, controlled growth, and quality of life are defining characteristics and values for the residents of Marin and Sonoma counties. [The Gratons'] sovereign decision - and I repeat, sovereign decision - to choose other means of economic vitality is out of respect for preserving the current character of the North Bay."

At the same hearing, however, Assistant Secretary of Indian Affairs Kevin Gover urged the committee not to strip the Gratons - or any other California tribe - of the right to operate a casino. "The tribes that were terminated were grievously wronged by the United States," Gover testified. "The terms for readmission to the family of federally recognized tribes should not be the waiver of their right to conduct these gaming activities."

The day before the hearing, Sarris told the San Francisco Chronicle, "I love the irony that Indians are making money off of the white man's greed. They gave us alcohol that tore families apart, and we're giving them another addiction - gambling. But the moral part of me says, 'Don't fight fire with fire.' "

When Sen. Barbara Boxer (D-California) introduced a Senate version of the bill, it still contained the gaming ban. But there was pressure to strip out the clause. During her re-election campaign a decade later, Boxer told Sacramento Bee editors that Sen. Daniel Inouye (D-Hawaii), who chaired a Senate committee with Indian oversight, had warned her that tribes seeking federal recognition wouldn't accept limited sovereignty. Boxer struck the gambling ban from the Senate bill, and it was approved.

"It's a shame that the Senate, in its rush to finish up work for the year, didn't protect the residents of Marin and Sonoma counties," Woolsey told reporters at the time. "With this legislation, if the Miwoks want to set up gambling in the North Bay now or in the future, all they'd have to do is ask the governor."

President Bill Clinton signed the Graton Rancheria Restoration Act (25 U.S.C. §§ 1300n-1300n-6) in December 2000, with no restrictions on gaming.

At first, Sarris said his 400-member Indian federation had no intention of establishing gaming. "We will be looking for forms of economic development, but casinos are not in the picture," he told the Santa Rosa Press-Democrat. But in 2003 the Gratons proposed building a casino near the former Sears Point Raceway, in eastern Sonoma County.

North Bay residents asked Boxer to intervene, but she declined - citing the involvement of her son, attorney Douglas Boxer, who had worked with a consultant representing the Gratons and Station Casinos, their management partner. Opponents eventually killed the Sears Point project, and the Gratons shifted their focus to the Rohnert Park site.

As anti-gaming foes in Sonoma County organized, one co-plaintiff in the Stop the Casino 101 Coalition cases - retired businesswoman Marilee Montgomery - says she received several telephone tips; the callers claimed Greg Sarris isn't really an Indian. After researching the claim and hiring a genealogist, Montgomery posted the allegation on the coalition's website and challenged Sarris to take a DNA test.

Sarris declined several requests for an interview, citing the pending appeal in Worthington's case. He also refused to answer questions about his Indian ancestry, though he asserts on his own website (www.greg-sarris.com) that there are no legitimate doubts about his heritage. (Distant relatives have weighed in with supporting declarations on both sides of the issue.)

Attorney Healy says the claims and counterclaims are irrelevant to the current litigation, and in any case they likely would have no effect on tribal operation of the Graton casino.

Though Sarris rarely grants interviews, he often speaks in public. Last year, on the eve of the casino's opening, he vented his frustration with unnamed public officials in brief remarks at a Santa Rosa neighborhood meeting.

Sarris began by saying the casino represented "a new paradigm, a new world." Beyond gambling, the by-then 1,200 members of the Graton federation intended to venture into organic farming, to employ "low-risk prisoners and undocumented workers," he said. But his tone quickly changed. "We know that there are public officials here today and that you better listen," he said. "You better start coming over to our side of town ... because now I've got what you've always had ... it's called money."

Alan Titus, an estate planning lawyer at Robb & Ross in Marin County's Mill Valley, has a long history of battling Indian gaming in California. As general counsel to Artichoke Joe's Casino, a card room in San Bruno, he represented the owners in a failed attempt to prevent the Lytton Band of Pomo Indians from acquiring a card room across the bay in San Pablo for conversion into a casino. (Artichoke Joe's v. Norton, 353 F.3d 712 (9th Cir. 2003).)

The family-owned business south of San Francisco, Titus says, "would be threatened if [Indian] casinos move into urban areas." So Titus says he's always looking for legal tactics his clients can use to protect themselves against competitors. Although Titus isn't involved in the Graton litigation, he says he has offered Healy advice and research.

The Artichoke Joe's case, Titus recalls, gave him a "gut feeling" that Indian casinos were being built on sites "that aren't really Indian lands." Researching jurisdiction and sovereignty issues, Titus found an Inyo County lawsuit that convinced him that a shift in jurisdiction is not inherent in a mere transfer of title. The Inyo case involved the operator of an energy plant located on a site leased from the former China Lake Naval Weapons Center that claimed it was exempt from county taxes because "California [had] ceded exclusive jurisdiction to the United States." The plant operator prevailed at trial, and Inyo County appealed.

The appellate court began its discussion by analyzing the Louisiana Purchase and the Treaty of Guadalupe Hidalgo. It ended with a review of local law enforcement authority, citing testimony at trial that "the county sheriff's department provides emergency and other police services within" the former military base. The justices concluded that the United States never accepted, and never had, exclusive jurisdiction over the property. Jurisdiction remained with California - which meant the county could tax the plant operator. (Coso Energy Developers v. Cnty. of Inyo, 122 Cal. App. 4th 1512 (2004).)

For Titus, Coso meant that cession of jurisdiction involves a process that applies to any lands taken into federal trust. "It clicked," he says. "I'd never been able to articulate the theory as well." The state, Titus contends, is "selling a story" that ceding jurisdiction is automatic when title to real property is transferred. "None of it's true," he argues. "You can't just buy land and claim it is sovereign."

But others are skeptical of that argument. "It's an interesting question that's never really been asked before," says Whittier Law School Professor I. Nelson Rose, a widely recognized gaming law expert. "But it is basically a mere technicality. The [Graton] land has been removed from the tax rolls. The gaming compact has been signed by the governor. There is the consent [to cede jurisdiction.]" The parties, Rose concludes, "didn't use the word 'sovereign,' but everyone knew what was going on with that piece of land."

To Heidi McNeil Staudenmaier, a gaming lawyer in the Phoenix office of Snell & Wilmer, the jurisdictional argument is "defiantly novel and needs to be tested." Her firm has represented Stand Up for California, a small gambling watchdog group, in efforts to stop the North Fork tribe's proposed casino in Madera.

Staudenmaier says that when tribes seek prime casino sites in urban areas, they violate the intent of the voters who passed Prop. 1A. The North Fork and Enterprise tribes, she says, "have land and just want a better location."

Reservation-shopping plans, however, don't always work. The Guidiville Band of Pomo Indians, whose Mendocino County rancheria is in Ukiah, tried for years to build a $1.2 billion casino more than 100 miles away at an old naval fueling depot in Richmond on San Francisco Bay. But the Richmond city council killed the deal in 2011 after voters turned out two pro-casino incumbents.

"I once had investors ask for my help finding a tribe to a put a casino on the Queen Mary," Rose says, referring to the retired ocean liner moored in Long Beach. In another instance, he says, a developer inquired whether some prime beachfront property could be taken into trust so that a tribe might open a casino. "I told them to go buy $50,000 in lottery tickets, because their chances of winning were better."

With the handful of California's restored tribes now running casinos on acquired land, "[a]ll the low-hanging fruit has been picked," says Anthony Cohen, an Indian law attorney at Clement, Fitzpatrick & Kenworthy in Santa Rosa.

Cohen notes that a ruling involving the United Auburn Indian Community - another tribe restored by Congress - might settle the jurisdiction issue raised by Healy. The BIA had taken into trust a 50-acre tract for the United Auburn tribe, which operates the Thunder Valley Casino Resort (formerly managed by Station Casinos) in Lincoln, near Roseville in Placer County. Casino opponents, however, argued that the transfer of title lacked state consent, and thereby violated the Enclave Clause of the U.S. Constitution. U.S. District Judge Emmet Sullivan rejected that argument, and his ruling was affirmed on appeal. (City of Roseville v. Norton, 219 F. Supp. 2d 130 (D.D.C. 2001).)

"What jumps out at me is that the [Graton] case is almost identical to Roseville," Cohen says. "This question has been resolved."

Deputy AG Williams repeatedly raised the Roseville decision in his respondents' brief in Stop the Casino 101 Coalition. "The congressional act restoring federal recognition to the [Auburn tribe] had language almost identical to the Graton Restoration Act," he wrote. Williams contends that Healy's case is fatally flawed because although it is framed as a state law challenge to a gaming compact, it actually rests on challenges to federal law and the actions of federal officials.

"[I]f they wanted to challenge the federal act, they should have done it," Williams told Judge Daum at a hearing last year. He declined to be interviewed for this article.

The appellants' opening brief in Stop the Casino 101 Coalition contends that the state's reliance on Roseville is conflated and misplaced. "The parties in City of Roseville erroneously assumed jurisdiction would follow title," wrote Robert D. Links of Slote, Links & Boreman in San Francisco. [Editor's note: Links is also legal editor of California Lawyer.] "We challenge the assumption that when the Graton Indians obtained beneficial title to the site, they somehow obtained any jurisdiction over the site.

"We are making the exactly opposite claim from the [Roseville] plaintiffs," Links's brief continues. "[D]espite the fact that title to the site has been transferred to the federal government in trust, the Graton casino has not been removed from the sovereign jurisdiction of the state."

As Rev. Worthington idles his car in the casino parking lot, he reiterates, "I hate all gambling." Still, he's far less concerned about how an appellate ruling in his case might affect casino proposals in Madera and Yuba counties than about shutting down the massive gaming hall in front of him.

"This is my here and now," Worthington says. Though he claims he "knows as much about Indian law as most lawyers," to Worthington the jurisdictional issues are just a means to an end. "The lawyers get excited about that stuff," he says. "I don't."

Pointing to a hotel adjacent to the Graton casino, Worthington asserts, "There are prostitutes turning tricks in there right now. I know there are." But he won't discuss specifics or explain the basis for his belief.

Worthington is very open, however, about his deep disdain for tribal chair Sarris, who indicated long ago that the Gratons would not pursue gambling. "He lied to everyone," Worthington says. "He said something like this would never be built."

Across the parking lot, three women emerge from a car and walk slowly toward the casino doors in the afternoon sun. "Look at these wonderful people," Worthington says. "Look at them. They can't help themselves."

Thomas Peele is an investigative reporter for the Bay Area News Group.

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Kari Santos

Daily Journal Staff Writer

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