Duluth and Fond du Lac Band Argue Appeals at 8th Circuit U.S. Court

By KBJR News 1

November 13, 2012 Updated Nov 13, 2012 at 7:56 PM CDT

ST. PAUL, MN (Northland's NewsCenter) - The dispute over Fond du Luth casino revenues continues. Attorneys representing the City of Duluth and Fond du Lac Band were in the 8th Circuit U.S. Court of Appeals today in St. Paul, making their arguments in front of the judges.

Attorney's representing the City and Band argued against different parts of the District Court Judge's decision. Both parties had only minutes to make their case.

The City of Duluth is appealing the decision that the Band doesn't have comply to the original contract going forward.

"Now for the remaining 25 years , the Band does not want to pay the city the portion," said City Attorney Gunnar Johnson.

It was a two-part, 50-year contract that originally allowed the Fond du Luth Casino to be located in Duluth in exchange for the City getting 19 percent of slot machine profits.

At the same time, the Band is appealing a ruling that it has to pay the remaining unpaid slot machine revenue from the first 25 years of the contract.

"The District Court had ordered the Band to pay that, in spite of the fact that the Band itself had also been ordered by a federal agency to stop performing contract," said Fond du Lac Attorney Henry Buffalo.

That federal agency is the National Indian Gaming Commission(NIGC).

It had ordered the Band to stop payments to the City saying they agreed the contract was illegal under gaming law.

The Band had sought the NIGC's review of the contract after ceasing payments and did not appeal its decision.

"It allows a federal appointee from an agency, to overturn a ruling of the United States District Court," said Johnson.

After the arguments, the judges had some questions for them.
One judge asked why the NIGC believes the contract is illegal now, when it was okayed by the federal agency in 1994.

"It was only later in 2005, 2006, that they started looking at this question of sole proprietary interest," said Buffalo, saying as the Band got closer to contract negotiations for the second half of the contract, they realized it may be illegal.

The judges also asked if there had been any change to the laws since the contract was last negotiated.

"There has been no decision, no court decision or no federal law changes. It's only the way the agency has interprets the law that's changed," said Johnson.

Both parties believe the other has benefited from the original casino revenue sharing agreement.

"The band has a beautiful casino. They have beautiful government operations. They have benefited greatly from this, "said Johnson.

"The Band is there. They're committed to being there. They provide over 250 employees jobs," say Buffalo of the casino's impact in downtown.

But now, halfway through that contract Buffalo says enough is enough.

"The Band has paid more than enough."

"Both parties were to benefit, not just the Band," said Johnson.

The City of Duluth was getting about $6 million a year at the time the band ceased payments, which funded street improvements.

The federal court judges are expected to make a decision on the appeal effort in about 90 days.

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