On appeal to the National Indian Gaming Commission (“Commission”) from a notice of violation issued by the Chairman of the Commission to the Fort Sill Apache Tribe of Oklahoma (the “Tribe”) for the untimely ling of quarterly fee statements and payments for the fourth quarter 2004 in violation of 25 C.F.R. § 514.1(c)(2).

Appearances

Robert Prince, Esq., for Respondent Fort Sill Apache

Tribe of Oklahoma.

Andrea H. Lord, Esq., and Katherine L. Zebell, Esq.,

for the National Indian Gaming Commission Chairman.

Presiding Official

Candida S. Steel, Ofce of Hearings and Appeals, U.S.

Department of the Interior.

 FINAL DECISION AND ORDER

          After careful and complete review of the agency record, pleadings led by both parties, and the Presiding Ofcial’s recommended decision, the Commission nds and orders that:

	1.	25 C.F.R. § 514.1(c)(2) requires each Indian gaming
		operation to submit quarterly fee statements and payments to the Commission no later than March 31, June 30, September 30, and December 31 of each calendar year.
	2.	The Tribe owns the Fort Sill Apache Casino in Lawton,
		Oklahoma.
	3.	The Tribe operated its casino in 2003 and 2004.
	4.	The Tribe’s fourth quarter fee statement and payment
		for calendar year 2004 were due at the Commission on December 31, 2004, but were sent no earlier than January 3, 2005, and received by the Commission on January 10, 2005.
	5.	The Presiding Ofcial’s recommended decision that
		considerations of equity and fairness militate against upholding the notice of violation for an undisputed violation of Commission regulations is both contrary to law and an impermissible substitution of her judgment for the Chairman’s discretion in matters of enforcement and is therefore reversed.
	6.	The Presiding Ofcial’s recommended decision that this
		late ling is excused by the failure of actual notice of the ling requirements by the Chairman to the Tribal leadership is contrary to law and thus reversed.
	7.	The Presiding Ofcial’s recommended decision that the
		Chairman is estopped from bringing a notice of violation because of various communications between the Tribe and the Commission staff is contrary to law and thus reversed.
	8.	The Chairman met his burden of proof.
	9.	Notice of violation 05-06 is upheld.

STATUTORY, PROCEDURAL, AND FACTUAL BACKGROUND

          In the Indian Gaming Regulatory Act (“IGRA”), 25 U.S.C. §§ 2701 et seq., Congress deemed the establishment of an independent Federal regulatory authority for gaming on Indian lands, together with the establishment of Federal standards for gaming on Indian lands, “necessary to meet congressional concerns regarding gaming and to protect such gaming as a means of generating tribal revenue.” 25 U.S.C. § 2702(3). Congress therefore created the National Indian Gaming Commission and gave it oversight regulatory authority for gaming on Indian lands. 25 U.S.C. §§ 2702(3), 2704(a). As part of that oversight authority, Congress gave to the Chairman the authority to levy and collect civil nes against a Tribe “for any violation of any provision of [IGRA], any regulation prescribed by the Commission pursuant to [IGRA], or tribal regulations, ordinances, or resolutions requiring the Chairman’s approval.” 25 U.S.C.
§ 2713(a)(1).

          The Commission’s activities are wholly funded through fees paid on “assessable gross revenues,” i.e. net gaming revenue, by each gaming operation. 25 U.S.C. § 2717(a); 25 C.F.R. § 514.1(a), (b). IGRA gives the Commission the authority to establish both the amount of such fees and a schedule of their payment. 25 U.S.C. § 2717(a). The Commission adopted regulations requiring the payment of fees, at a rate set annually, together with the ling of statements showing assessable gross revenues for the previous calendar year. 25 U.S.C. § 514.1(c). These regulations mandate that fee statements and payments be led quarterly, and no later than March 31, June 30, September 30, and December 31, of each calendar year. Ibid.

          The Fort Sill Apache Tribe is a Federally recognized Indian tribe that operates the Fort Sill Apache Casino in Lawton, Oklahoma. (See administrative record, Presiding Ofcial’s recommended decision, ndings of fact 1-2.) The Tribe operated its casino during all or part of 2003 and 2004. (See nding of fact 2.)

          From the end of the second quarter 2001, when the Tribe began submitting quarterly statements and fees, through the end of the second quarter 2004, the tribe led 9 of 13 fee statements and payments late. (See afdavit of John McNeil, Exhibit B.) In the following table, shaded statements and payment were late: are due

(See administrative record, McNeil afdavit, Exhibit B.)

          Mr. McNeil, the Tribe’s certied public accountant, made the payments. He testied that he had express permission from a Financial Specialist on the Commission staff who monitors and receives quarterly statements and fees, to le rst quarter payments late in the years 2001-2003. (See recommended decision, nding of fact 5; admin. record Exhibit S1.) There was no such agreement for the rst quarter 2004. (See transcript, 96:21 – 97:12.) Mr. McNeil states, however, that he had express permission to le quarterly statements and fees within 15 days after their due dates. (See nding of fact 5.) Steve York, a gaming commissioner for the Tribe who is responsible for compliance, testied that the Chairman had taken no enforcement actions against any of the Tribe’s previous late payments. (See transcript, 50:8 to 51:19; nding of fact 14.)

          On May 26, 2004, the Chairman Hogen wrote to the leaders of all gaming tribes, including Jeff Houser, the Chairman of the Fort Sill Apache Tribe, about quarterly statements and fees. This letter states:

	In the past, the NIGC has not strictly enforced these [quarterly] deadlines because of the newness of Indian gaming and the lack of familiarity with NIGC regulations.
	As a result of the NIGC’s lenient policy, however, there continues to be a large number of tribes whose fee payments and supporting worksheets are submitted after the required deadlines….
	Therefore, beginning with the June 30th compliance report, gaming operations will be shown out of compliance if the required worksheets and fees are not submitted by the stated regulatory deadlines….

 

(See admin. record, Exhibit S3A).

          The Tribe’s second quarter 2004 statement and fees were led timely, but its third quarter 2004 statement and fees were not. (See McNeil afdavit, Exhibit B.)  On December 20, 2004, Chairman Hogen wrote to tribes that led their third quarter statements late, including the Fort Sill Apache Tribe. (See admin. record tab 1; transcript 125:4-7). This letter, addressed again to Chairman Houser states:

	The regulations of the National Indian Gaming Commission (NIGC) require gaming tribes to pay quarterly fees to the NIGC and submit statements showing the calculation of these fees. Unfortunately, a signicant number of tribes have failed to make fee payments and submit the required statements on time. As a result we are sending those tribes who failed to meet these regulatory obligations a warning notice. This letter constitutes a warning notice to your tribe.
	NIGC regulations require each gaming tribe to pay fees quarterly…. The Fort Sill Apache Tribe of Oklahoma (Tribe) failed to comply with these provisions for the recently completed quarter. Payments and/or statements submitted by the Tribe were received by the NIGC after the regulatory deadline….
	Following receipt of this notice, the Tribe should take action to ensure that its future fee payments and statement are submitted on a timely basis. In the event that the Tribe fails to submit the fees and statements by the required deadline, the NIGC may initiate an enforcement action….

(See admin. record, tab 1; recommended decision, nding of fact 8.) This letter was received in the Tribe’s ofces on December 27, 2004, but because of holidays and the vacations of many Tribal ofcials, was not conveyed to Mr. York until January 3, 2005. (See ndings of fact 9, 11-12.) Having received the letter that day, Mr. York testied that he took immediate action to have the ling made and spoke with Mr. McNeil. The fee statement and payment for fourth quarter 2004 were received by the Commission on January 10, 2005. (See finding of fact 13.) Mr. York admitted nonetheless that the Commission’s regulations mandate due dates for quarterly statements and fee payments. (See transcript, 47:47:4-15.)

          On March 16, 2005, Chairman Hogen issued notice of violation 05-06 to the Tribe for failure to make a timely ling of the fourth quarter 2004 fee statement and payment. (See admin. record, tab 4.) The Tribe timely appealed, (see admin. record tab 6), and the matter was heard by Candida S. Steel, Ofce of Hearings and Appeals, U.S. Department of the Interior, on May 26, 2005.) Following the submission of additional exhibits, the record closed on June 17, 2005. (See nding of fact 15).

          The Presiding Ofcial issued her recommended decision on July 28, 2005.     The Chairman led timely objections to the recommended decision. The tribe led none. We now reverse the recommended decision and uphold notice of violation 05-06.

DISCUSSION

The Presiding Official’s conclusion that considerations of equity and fairness militate against upholding the notice of violation for an undisputed violation of Commission regulations is both contrary to law and an impermissible substitution of her judgment for the Chairman’s discretion in matters of enforcement.  

          We note at the outset that the Presiding Ofcial’s recommended decision lacks any clearly demarcated conclusions of law or citations to any legal authority. It appears that the Presiding Ofcial recommends dismissal for equitable reasons. This a presiding ofcial may not do when hearing a challenge to an enforcement action brought by the Chairman under the Indian Gaming Regulatory Act.

          We understand and respect the right of presiding ofcials and administrative law judges to conduct hearings in accordance with his or own discretion, understanding, and conscience. Ass’n. of Admin. Law Judges Inc. v. Heckler, 594 F. Supp. 1132, 1141 (D.D.C. 1984). However, on matters of law and policy, hearing ofcers, though they might dispute the validity of agency policy, are nonetheless bound to it. Ibid.

          The Administrative Procedure Act (“APA”) 5 U.S.C. §§ 701 et seq., makes the recommended decision of the presiding ofcial contingent. It becomes the decision of the agency only in the absence of further agency action. When the agency does review the recommended decision, the agency retains all the powers which it would have had, if it made the initial decision on its own. 5 U.S.C. § 557(b). IGRA authorizes the full Commission, not a presiding ofcial, to make nal, reviewable determinations about the Chairman’s enforcement actions for violations of IGRA. 25 U.S.C. §§ 2713(a)(2), 2714.

          In short, a presiding ofcial has only qualied decisional independence, Ass’n. of Admin. Law Judges, 594 F. Supp. at 1141, and that independence is constrained by statute. Nothing in IGRA or the Commission’s regulations give a presiding ofcial the power to review in equity the propriety of a notice of violation issued by the Chairman for a violation of IGRA. To the contrary, the Commission’s regulations limit the presiding ofcial’s recommended decision to ndings of facts and conclusions of law. 25 C.F.R. § 577.14.

          It is evident here that the Presiding Ofcial recommended dismissal on the basis of simple fairness, notwithstanding the fact that the Tribe’s violation of the regulations establishing deadlines for ling quarterly fee statements and payments was undisputed. She found that “[t]echnically, the Tribe’s quarterly statement and payment were received by NIGC 11 days late, and the Tribe does not dispute this fact.” (See recommended decision, p. 5.) Nevertheless, she recommended dismissal of the notice of violation because “there are several factors … which militate against upholding a relatively minor [n]otice of [v]iolation that would have long-term adverse impacts on the tribe.” (See recommended decision, p. 5.)

          The Presiding Ofcial found that the Tribe acted in good faith, without “disregard of the NIGC and its prerogatives,” by moving to correct the late fourth quarter ling as soon as Chairman Hogen’s December 20 warning letter was conveyed to Commissioner York. (See recommended decision p. 7.)  She also found that upholding the notice of violation would have “the potential of an undue long-term impact” on the Tribe, because this notice of violation would be taken into account in setting civil penalties for any future violation. Ibid.

          Thus the Presiding Ofcial’s decision calls into question the Chairman’s exercise of his discretion in bringing this notice of violation, even though she found that the Tribe’s late ling violated Commission regulations. The decision also questions any  exercise of discretion by the Chairman in assessing a civil ne for a putative future violation. This the Presiding Ofcial may not do.

          Again, nothing within IGRA or the Commission’s regulations places the Chairman’s discretionary enforcement decisions within the scope of a presiding ofcial’s review. Moreover, under the APA, the Chairman’s discretionary enforcement decisions are not subject to the Presiding Ofcial’s review, even if she were reviewing the matter as a judge of the District Court.

          The Supreme Court held twenty years ago that under 5 U.S.C. § 701(a)(2), agency decisions, when “committed to agency discretion by law,” are presumptively unreviewable by a court, even under the usual “arbitrary, capricious, or an abuse of discretion” standard for review of administrative decisions. Heckler v. Chaney, 470 U.S. 821, 832-833 (1985). The presumption may only be rebutted when the substantive statute in question provides guidelines for the agency to follow in exercising its discretion. Ibid. That is, a discretionary decision may be reviewed only where there is a meaningful standard given against which to judge the agency’s exercise of discretion – some criteria found in statute or the agency’s own regulations by which one can determine whether the agency has, in fact, abused its discretion. See, e.g., Webster v. Doe, 486 U.S. 592, 599-600 (1988); Arnow v. United States Nuclear Reg. Comm’n., 868 F.2d 223, 232 (7^th Cir. 1989), cert. denied, 493 U.S. 813 (1989).

          Thus, cases where the governing statutes and regulations say that an agency ‘may’ exercise its enforcement powers without saying ‘how’ it is to do so are “cases committed to agency discretion” under § 701(a)(2) and not reviewable. For example, in Richardson v. FCC, 1992 U.S. App. LEXIS 32633 (7^th Cir. 1992), plaintiff led a complaint with the FCC, asking that it take action against a local radio station for broadcasting information allegedly in violation of the Anti Drug Abuse Act of 1986, specically that the station had used its license “for the purpose of distributing, or assisting in the distribution of, any controlled substance in violation of Federal law.” Id. at *2.     The FCC’s Mass Media Bureau determined that no enforcement action was warranted – the station did no more than broadcast the locations of police highway checkpoints – and the FCC itself afrmed the decision of no action. Id. at *2 - *3.

        Following Chaney, the Seventh Circuit held the FCC’s decision unreviewable under § 701(a)(2). The Anti Drug Abuse Act says that the FCC “may revoke” a license if used to distribute or aid in distributing controlled dangerous substances in violation of Federal law, but, the court found, nothing in that Act, its legislative history, in the Federal Communications Act, or in implementing regulations says how it should do so:

	Clearly by using this permissive language [“may revoke”], Congress granted the FCC complete discretion to enforce the Drug Act….
	The Communication Act and the FCC’s own regulations do not provide us with judicially manageable standard which would allow us to judge how and when the agency should exercise its discretion in enforcing the Drug Act….
	Both the Communications Act and the FCC regulations are silent on when the FCC should and should not enforce the Drug Act. Without these standards, we cannot judge whether the FCC abused its discretion in not enforcing the Drug Act against the radio station.

Id. at *4-*5. See also, Webster, above, 486 U.S. at 601 (personnel termination decisions by the CIA Director unreviewable under § 701(a)(2)).

        Here, similarly, IGRA gives to the Chairman the authority to levy and collect nes against a Tribal operator for violations of IGRA, Commission regulations, or tribal gaming ordinances, regulations, or resolutions. 25 U.S.C. § 2713(a)(1). IGRA makes the Chairman’s enforcement authority “subject to such regulation as may be prescribed by the Commission…,” ibid., and the Commission’s enforcement regulations say only that the “Chairman may issue” a notice of violation for violations of IGRA, Commission regulations, or any tribal ordinance or resolution approved by the Chairman. 25 C.F.R.
§ 573.3(a).

        As such, nothing in IGRA or in the Commission’s regulations provides standards for reviewing the Chairman’s decision to bring an enforcement action against a violation. The Chairman’s decision to enforce against the Tribe here, fair or not, is unreviewable by the Presiding Ofcial.[1]

        Lastly as to this point, the Supreme Court has identied structural or institutional reasons why the discretionary decision of the Chairman to bring, or not to bring, an enforcement action against a Tribe for an IGRA violation should be left to his unfettered discretion – judicial and quasi-judicial ofces are not well suited to making, or second-guessing, agency decisions:

The reasons for this general unsuitability are many. First, an agency decision not to enforce often involves a complicated balancing of a number of factors which are peculiarly within its expertise. Thus, the agency must not only assess whether a violation has occurred, but whether agency resources are best spent on this violation or another, whether the agency is likely to succeed if it acts, whether the particular enforcement action requested best ts the agency’s overall policies, and, indeed, whether the agency has enough resources to undertake the action at all. An agency generally cannot act against each technical violation of the statute it is charged with enforcing. The agency is far better equipped than the courts to deal with the many variables involved in the proper ordering of its priorities. Similar concerns animate the principles of administrative law that courts generally will defer to an agency’s construction of the statute it is charged with implementing, and to the procedures it adopts for implementing that statute.

Chaney, 470 U.S. at 831- 832. In short, we conclude that the recommendation of dismissal on fairness or equitable grounds is both contrary law and an impermissible substitution of the Presiding Ofcial’s discretion for the Chairman’s and is, therefore, reversed.

The recommendation of dismissal for lack of actual notice to a Tribal official is contrary to law. Sufficient notice is provided by regulation as a matter of statute.

        Next, the Presiding Ofcial recommended dismissal of the notice of violation, concluding that actual notice of Chairman Hogen’s December 20, 2004, warning letter  to proper Tribal ofcials was “an essential requirement of the viability of” the notice of violation. The Chairman, she found, “may have” intended to send the letter in order to coerce compliance and “must have believed that actual receipt of that warning was an essential element for establishing non-compliance.” Further, the Presiding Ofcial found that the letter was received by Tribal ofcials on January 3, 2005, at which time the Tribe took immediate steps to remedy the late ling. (See recommended decision, pp. 6-7.) This requirement of actual notice is contrary to law.[2]

        The Chairman’s beliefs and intent – indeed, the May and December letters themselves – are not relevant to the question of whether the notice of violation should be upheld.[3] Regulations duly promulgated by an agency under the APA automatically take effect 30 days (or more, if specied) after publication in the Federal Register, 5 U.S.C.
§ 553(d), and such publication, as a matter of law, provides notice to all affected. 44 U.S.C. 1507. An agency has no duty or obligation to provide any additional notice, actual or otherwise, to those who are subject to deadlines in duly promulgated regulations. Bowden v. United States, 106 F.3d 433, 438 (D.C. Cir. 1997).

        If the May and December letters have any signicance, it is no more than they purport. This Commission, like any other agency, is free not to exercise its compulsory powers if it thinks simple exhortation is sufcient to achieve its regulatory mission. Public Citizen v. Nuclear Regulatory Comm’n., 901 F. 2d 147, 153 (D.C. Cir. 1990). The letters took exactly that approach. They remind the Tribes of the deadlines for ling quarterly fee statements and payments, let the Tribes know that the Commission’s former “lenient policy” resulted in a lot of non-compliance, and said that the Commission would be looking more carefully at quarterly lings going forward. (See admin. record, tab 1, Exhibit S3A.)

        In any event, the only notice required here is given in 25 C.F.R. § 514.1(c)(2) and its list of quarterly deadlines. We conclude that the recommendation of dismissal for lack of actual notice to a Tribal ofcial is contrary to law and, therefore, is reversed.

The recommendation of dismissal on the ground of estoppel resulting from  communications between the Commission staff and the Tribe is contrary to law. Estoppel does not lie against the United States on that basis.

        Finally, the Presiding Ofcial apparently concluded that the Chairman was estopped from bringing the notice of violation. She based this conclusion upon representations made by the Commission staff – before, we note, the fourth quarter 2004 – that the Tribe could le its fee statements and payments 10 to 15 days late. She based her conclusion as well upon the absence of any prior enforcement actions. The Presiding Ofcial wrote: “[i]t appears that the Tribe was lulled into thinking that their manner of conducting business with the NIGC was acceptable to it, and that if personnel at the agency felt that there was a problem, the Tribe would be given plenty of time to remedy the situation before any adverse action would be taken.” (See recommended decision, p. 7.) The Chairman cannot be so estopped.

        It is well settled that estoppel cannot be asserted against an agency of the United States when the claim arises from the conduct of a government employee who provides incorrect information or acts in a manner inviting reliance. Federal Crop Insurance Corp. v. Merrill, 332 U.S. 380, 384-385 (1947); Boulez v. Commissioner of Internal Revenue, 810 F. 2d 209, 218 n. 68 (D.C. Cir. 1987), cert. denied, 484 U.S. 896 (1987). As the Supreme Court explained:

Whatever the form in which the government functions, anyone entering into an arrangement with the Government takes the risk of having accurately ascertained that he who purports to act for the Government stays within the bounds of his authority. The scope of this authority may be explicitly dened by Congress or though the rulemaking power…. And so Congress has legislated in this instance, as in modern regulatory enactments is so often does, by conferring the rulemaking power upon the agency created for carrying out its policy…. Just as everyone is changed with knowledge of the United States Statutes and Large, Congress has provided that the appearance of rules and regulations in the Federal Register gives legal notice of their contents.

Merrill, 322 U.S. at 384-385.

        Here, even if the Tribe made late payments in reliance upon representations made by the Commission staff as the Presiding Ofcial found, that cannot be the basis for estoppel. There is no evidence in the record that the staff had the authority to make such representations, and nothing in IGRA or in the Commission’s regulations provides such authority (a fact about which there was testimony, see transcript, 111:8-15.) Further, the Commission staff could not have the apparent authority to make such representations because the doctrine of apparent authority does not apply to dealings with the government. United States v. District of Columbia, 669 F. 2d 738, 748 n. 13 (D.C. Cir. 1981); Littlejohn v. Washington Metro. Area Transit Auth., 1992 U.S. Dist. LEXIS 7510 at *6 (D.D.C. 1992). The Tribe is charged with knowledge of 25 C.F.R. § 514.1(c).

        In short, we conclude that the recommendation of dismissal on the ground of estoppel is contrary to law and is, therefore, reversed.

The Chairman met the burden of proof necessary to sustain the notice of violation.

        In administrative appeals of enforcement actions under 25 C.F.R. Part 573, the Chairman bears the burden of proof and the standard of review is preponderance of the evidence. In the Matter of JPW Consultants, NIGC 97-4; NIGC 98-8, Nov. 13, 1998 (citing In the Matter of Shingle Springs Band of Mewok Indians,  NIGC 97-1, Dec. 3, 1998). Preponderance of the evidence is the degree of relevant evidence that a reasonable person, considering the record as whole, would accept as sufcient to nd that a contested fact is more likely to be true than untrue. Id. at 4.

        Here, 25 C.F.R. § 514.1(c) requires that fourth quarter fee statements and payments be received at the Commission headquarters in WashingtonD.C. no later than December 31. It is undisputed in the record that the Tribe was aware of this regulation and that its fourth quarter statement and payment were received by the Commission on January 10, 2005.[4]

CONCLUSION

        Given all of the foregoing, the recommended decision is reversed and notice of violation NOV 05-06 is upheld.

It is so ordered by the NATIONAL INDIAN GAMING COMMISSION on this _25th_ day of August, 2005.

 

__/s/_________________________________              

PHILIP N. HOGEN

CHAIRMAN

 

____/s/_______________________________

Nelson W. Westrin

VICE-CHAIRMAN

 

____/s/_______________________________

Cloyce  V. Choney

COMMISSIONER