United States District Court, D. South Dakota, Southern Division
FLANDREAU SANTEE SIOUX TRIBE, a Federally-recognized Indian tribe, Plaintiff,
JAMES TERWILLIGER, Secretary of Revenue of the State of South Dakota; and KRISTI NOEM, Governor of the State of South Dakota Defendants.
MEMORANDUM OPINION AND ORDER DENYING MOTION FOR WRIT
OF ASSISTANCE AND MOTION TO STAY
LAWRENCE L. PIERSOL, UNITED STATES DISTRICT JUDGE.
with the Court is a Motion for Writ of Assistance, Doc. 185,
filed by Plaintiff, Flandreau Santee Sioux Tribe ("the
Tribe") and a Motion to Stay, Doc. 191, filed by
Defendants James Terwilliger, in his capacity Secretary of
Revenue of the State of South Dakota; and Kristi Noem, in her
capacity Governor of the State of South Dakota
("Defendants"). For the following reasons, both
motions are denied.
September 15, 2017, the Court issued its Memorandum Opinion
and Order granting in part and denying in part each of the
party's motions for summary judgment in this case. Doc.
154. The Court held that the Indian Gaming and Regulatory Act
("IGRA") expressly preempts the imposition of a
state use tax on nonmember purchases throughout the Casino,
but does not preempt the imposition of the tax on nonmember
purchases of goods and services at the First American Mart
("the Store"). Doc. 154. The Court also concluded
that the State may not condition renewal of alcohol beverage
licenses on the Tribe's remittance of use taxes imposed
on nonmember purchases at the Store. Doc. 154. The Court
issued its Judgment on October 20, 2017, Doc. 158, and filed
an Amended Judgment, Doc. 177, in response to a motion made
by the Tribe.
State appealed the Amended Judgment to the Eighth Circuit
Court of Appeals. The State argued on appeal that: 1) federal
law does not preempt imposition of its use tax on nonmember
purchases at the Casino of non-gaming amenities including
food and beverage services, the Casino's hotel, RV park,
live entertainment events, and gift shop; and 2) the State
may condition renewal of alcoholic beverage licenses on the
Tribe's failure to remit validly imposed use taxes. Doc.
200. The State also moved the Eighth Circuit Court of Appeals
for a stay of Paragraph 4 of the Amended Judgment which
4. In accordance with the Parties' Deposit Agreement, the
escrow agent may now, subject to any stay granted pursuant to
an appeal, disburse to the Tribe the funds held in escrow
which represent the use tax imposed on nonmembers' use of
purchased goods and services as to the Casino's slots,
table games, food and beverage services, hotel, RV park, live
entertainment events, and gift shop.
Doc. 177. The State did not first move for a stay with this
Court, believing that paragraph 4 of the Amended Judgment was
a declaratory judgment and that moving for a stay in this
Court would be impracticable because of this Court's
decision in Yankton Sioux Tribe v. S. Mo. Waste Mgmt.
Dist., 926F.Supp. 888 (D.S.D. 1996). Doc. 192.
appeal, the State argued that in applying the factors to
determine whether to grant a motion to stay a judgment
pending appeal under Federal Rule of Appellate Procedure
8(a), the State has made a strong showing that it is likely
to succeed on the merits and that it will be irreparably
injured absent a stay. Doc. 189-1. The basis of the
State's irreparable injury argument was that if the funds
are released from escrow, and the Eighth Circuit Court of
Appeals reverses this Court's decision, the State will
have a difficult time recovering this money because it is
foreclosed from suing the Tribe for injunctive relief and
money damages absent a waiver of the Tribe's sovereign
immunity. Doc. 189-1.
Tribe filed an opposition to the State's motion to stay
paragraph 4 of the Amended Judgment on the basis that under
Rule 8(a)(1) of the Federal Rules of Appellate Procedure, the
State must move for a stay of the judgment pending appeal in
the district court unless the State can "show that
moving first in the district court would be
impracticable." Doc. 190-1 (quoting Rule 8(a)(2)(A)(i)).
The Tribe argued that the State had not shown that moving for
a stay of judgment in this Court would be impracticable
because this Court's decision in Yankton Sioux Tribe
v. Southern Missouri Waste Management District, 926
F.Supp. 888 (D.S.D. 1996) was published more than twenty
years ago and because the decision does not definitely
foreclose the possibility that this Court would grant the
requested relief. Doc. 190-1. The Tribe then argued that the
State was not entitled to a partial stay pending appeal
because the State has not made a strong showing that it was
likely to succeed on the merits and that it would be
irreparably harmed absent a stay of the judgment. Doc. 190-1.
August 16, 2018, the Tribe, by letter, requested the escrow
agent to disburse to the Tribe all funds in the escrow
account in accordance with this Court's Amended Judgment.
Doc. 186-1. The State responded by letter to the escrow agent
objecting to the Tribe's request on the basis that
disbursement was not proper under the terms of the Deposit
Agreement because there has been "no final determination
by a court of proper jurisdiction" of the State's
and Tribe's respective rights to the disputed tax
payments held in escrow, "as the State is appealing the
United States District Court's decision" in this
case. Doc. 186-2.
escrow agent responded to the parties, stating that under
Section Eight of the Deposit Agreement, it was entitled to
refuse the Tribe's request for disbursement because the
Tribe and State "are not in agreement" about
whether the matter has been "finally adjudicated."
Doc. 186-4. The escrow agent, in consultation with counsel,
stated its view that "disposition of the funds cannot be
made until there is a final, non-appealable judgment
directing disposition as set forth in Judge Piersol's
ruling." Doc. 186-4.
September 26, 2018, the Tribe filed a motion for a writ of
assistance, Doc. 185, to enforce the Amended Judgment
("Amended Judgment"), which Defendants have
opposed, Doc. 189. The Tribe asks for a writ ordering: 1) the
State to withdraw its opposition to the Escrow Agent's
disbursal of the escrow funds to the Tribe; 2) the State to
formally notify the Escrow Agent of its agreement to such
disbursal in accordance with Section 8 of the Deposit
Agreement; and 3) directing the Escrow Agent to convey the
funds to the Tribe. Doc. 186. Additionally, the Tribe asks
that the writ judicially declare ownership of the funds,
obviating any further process imposed by the Deposit
Agreement for the Tribe to withdraw funds from the account.
November 2, 2018, the Eighth Circuit Court of Appeals denied
the Tribe's motion for a partial stay pursuant to Rule
8(a) of the Federal Rules of Appellate Procedure and that
same day, the State filed a motion to stay with this Court.
Doc. 192; 192-1. The State's motion to stay has been
fully briefed by the parties.
September 6, 2019, the Eighth Circuit Court of Appeals issued
its decision affirming in part and reversing in part this
Court's decision and remanding for determination of the
appropriate remedy. Doc. 201. The appellate court affirmed
the Court's ruling holding that IGRA expressly preempts
imposing the use tax on nonmember purchases throughout the
Casino. Doc. 200. The appellate court reversed the
Court's holding that the State may not condition renewal
of alcohol beverage licenses on the Tribe's remittance of
use taxes imposed on nonmember purchases at the Store and
ordered that ...