The James R. Browning U.S. Court of Appeals Building, home of the 9th U.S. Circuit Court of Appeals, is pictured in San Francisco, California February 7, 2017.
The James R. Browning U.S. Court of Appeals Building, home of the 9th U.S. Circuit Court of Appeals, is pictured in San Francisco, California February 7, 2017. Reuters / Noah Berger

California cannot seek environmental concessions from five Native American Tribes during negotiations to renew their contracts to operate "Las Vegas style" casinos, a federal appeals court held.

The 9th U.S. Circuit Court of Appeals said Thursday the state violated the Indian Gaming Regulatory Act (IGRA) by demanding nearly 30 pages' worth of "sprawling" environmental regulations, as well as tort and family-law changes with no direct relation to gaming activities.

Among other things, the state wanted the Tribes to enact "significant aspects" of the California Environmental Quality Act and "give state and local government agencies an apparent veto" over tribal projects, the opinion said.

"Through its negotiating demands, California effectively sought to use the (casino) contracting process as leverage to impose its general policy objectives on the Tribes, which a state may not do," Circuit Judge Daniel Bress wrote for the 2-1 panel.

Les Marston of Rapport and Marston, who represents Chicken Ranch Rancheria of Me-Wuk Indians and four other Tribes, called the decision "a literal game changer" and the "most favorable interpretation" of a pivotal IGRA provision since the law's enactment in 1988.

Under IGRA, a Tribe that wants to operate a Vegas-style casino must negotiate a contract with the state, known as a gaming compact. However, Congress deliberately limited the scope of negotiations to just seven categories - including a "catch-all" provision for any other subjects "directly related to the operation of gaming activities."

California argued that the catch-all provision authorized its proposed changes. The 9th Circuit said the changes might affect casino properties generally, but had no "direct" connection to "gaming activity."

Unless California seeks further review, negotiations will now resume before a court-appointed mediator, Marston said.

A spokeswoman for California Gov. Gavin Newsom had no immediate comment. The state's lawyers declined to comment.

According to the 9th Circuit, the Chicken Ranch Rancheria, Chemehuevi Indian Tribe, Blue Lake Rancheria, Hopland Band of Pomo Indians, and Robinson Rancheria all hold gaming compacts that will expire in December 2023.

Renewal negotiations began in 2014 but broke down in 2019. The Tribes then sued the state in federal court in Fresno.

The judge found the state violated IGRA by failing to negotiate in good faith, in part because it had not offered any "meaningful concessions" in exchange for the new environmental demands.

Bress and Circuit Judge Kim McLane Wardlaw went a step further, saying an unlawful demand cannot be cured by offering concessions.

Circuit Judge Patrick Bumatay dissented.

The case is Chicken Ranch Rancheria of Me-Wuk Indians, et al., v. State of California and Gov. Gavin Newsom, No. 21-15751

For Chicken Ranch Rancheria et al.: Lester Marston of Rapport and Marston; David Dehnert of Dehnert Law

For California and the governor: Timothy Muscat and William Torngren, California Attorney General's Office