TRIBAL GAMING MANAGEMENT CONTRACTS
AND NEPA COMPLIANCE
By: Heidi McNeil Staudenmaier
Partner, Snell & Wilmer
I. EXECUTIVE SUMMARY
The National Indian Gaming Commission ("NIGC") must approve all Tribal gaming management contracts. As one of the NIGC's requirements for management contract approval, the Tribe must comply with the National Environmental Policy Act ("NEPA"). Under NEPA, the Tribe may be required to prepare an Environmental Impact Statement ("EIS") for any proposed action that will significantly affect the quality of the human environment. To determine whether a significant environmental impact exists, the Tribe first must conduct an Environmental Assessment ("EA"). If the EA does not reveal significant impacts, the NIGC will issue a Finding of No Significant Impact ("FONSI"), and no further compliance with NEPA is required. If the EA shows a significant impact on the environment, the Tribe then then prepare an EIS.
NEPA compliance can be complicated and lengthy. This paper is a general overview of the requirements the Tribe must follow to comply with NEPA when seeking the NIGC's approval of a management contract. The EA and EIS requirements are outlined. The possibility of opponents filing a lawsuit once the NIGC has approved a management contract also is discussed.
II. BACKGROUND OF NEPA COMPLIANCE
To understand why NEPA compliance is required for the NIGC to approve a Tribal gaming management contract, it is important to first understand the various laws and federal agencies involved. The Indian Gaming Regulatory Act ("IGRA"), 25 U.S.C. §§ 2701, et. seq., governs the regulation of gaming on Indian lands. IGRA establishes the NIGC as an independent federal regulatory agency with authority to oversee Indian gaming. Pursuant to IGRA, the NIGC must approve all tribal gaming management contracts. Absent NIGC approval, a management contract is deemed null and void.
NEPA was enacted to encourage a national policy of protecting, promoting, and restoring the quality of the human environment. The Council on Environmental Quality ("CEQ") was established pursuant to NEPA. The CEQ has issued regulations providing guidance to federal agencies regarding their responsibility of complying with NEPA. Together, NEPA and the CEQ regulations require federal agencies, including the NIGC, to establish procedures and strategies that give appropriate consideration to the environmental consequences of federal actions.
NEPA compliance is required whenever a "federal action" occurs. Because a “federal action” results when the Tribe seeks the NIGC's approval of a tribal gaming management contract, NEPA compliance is triggered.
III. PROCEDURAL PROCESS OF NEPA COMPLIANCE
The NIGC must ensure NEPA compliance before it can approve the Tribe's management contract. The first step is to determine what level of compliance is required for the management contract. There are three possibilities under NEPA: Categorical Exclusion, EA, and EIS.
A. Categorical Exclusion
Categorical exclusions are a category of actions that the NIGC has found to have no significant effect on the environment. The NIGC requires neither an EA nor an EIS for these actions. Categorical exclusions are very rare. Some actions the NIGC has determined to be categorically excluded are: routine administrative actions, personnel actions, internal organizational changes, budgetary matters, and inventories. Generally, where a management contract is involved, a categorical exclusion does not apply.
B. Environmental Assessment
1. Overview
The NIGC requires the preparation of an EA for any proposed action involving the construction or development of a gaming facility. An EA must be prepared for any proposed management contracts which are neither categorically excluded, covered in existing environmental documents, nor readily identified as having significant enough impacts to require the immediate preparation of an EIS.
An EA is a public document that serves to:
(1) suffice as NIGC compliance with NEPA when no EIS is needed; and
(2) facilitate the preparation of an EIS when one is necessary.
The EA must include a discussion of environmental impacts of the proposed management contract and a list of the agencies and persons consulted. An EA assists the NIGC in determining whether the impacts of the proposed management contract are significant enough to require the preparation of an EIS or whether it can issue a FONSI.
A FONSI is a document issued by the NIGC which briefly presents the reasons why the management contract will not have a significant effect on the human environment and why an EIS is not required. For obvious reasons, the Tribe's and Manager’s goal is for the NIGC to issue a FONSI. Once the NIGC issues a FONSI, no further environmental review is required under NEPA.
2. Preparing an EA
Neither NEPA nor the CEQ regulations provide much guidance as to how the EA should be prepared. The NIGC has implemented instructions regarding recommended format and what types of information should be included in the EA. Included in the format are sections regarding the management contract's purpose and need, existing conditions, environmental impacts the management contract will produce, alternatives, and mitigation measures.
"Scoping" is an extremely important aspect in the development of an EA, even though it is not part of the formal process for preparing an EA. It is defined as "the range of actions, alternatives, and impacts to be considered." Scoping should be performed prior to the initial EA preparation stages and should identify all aspects of the management contract including off-reservation impacts. During the Scoping process, the affected environment should be identified, including both the natural and human area where the management contract will take place.
The following should be focused on the existing condition in the affected area; anticipated impacts of past, present, or reasonably foreseeable future actions; actual and anticipated impacts caused by the other actions; and the overall impact that would likely result from the cumulative impacts associated with the management contract.
Proposed management contracts involving Indian gaming facilities generally have numerous direct and indirect impacts on the environment. These impacts must be analyzed. Direct impacts include the construction of the casino, support buildings, parking lots, roads, hotels, shops, and recreational facilities. Indirect impacts include changes in surface water drainage patterns, increased traffic, and noise and air pollution.
The cumulative impacts from the management contract also must be considered. Cumulative impacts from the Tribal casino can include the development of other facilities in the project area by the Tribe or other individuals, as well as the impact of additional gaming revenues on tribal and local economies. Reasonably foreseeable impacts are required to be analyzed.
Consideration of alternatives is an essential part of NEPA compliance. Only reasonable alternatives should be analyzed. Alternatives can include developing the activity in another location, the employment of another form of economic development to meet the stated goal, or taking no action at all.
The NIGC will publish the EA for comment. The Tribe may then respond to any such comments to show that the concerns have been addressed through mitigation or other procedures.
3. Determining Significance
Based upon the EA and comments thereto, the NIGC must determine whether the management contract will significantly affect the human environment. If the NIGC finds no significant impact, it will prepare a FONSI outlining the reasons for its determination. If the NICG does find a significant impact, then the Tribe is required to prepare an EIS.
The NIGC will consider the context and intensity of the proposed management contract when determining whether it significantly impacts the human environment. The NIGC will analyze the significance of the management contract in several contexts, such as the impact on society as a whole, the affected region, the affected interests, and the locality.
The NIGC also will analyze the intensity and severity of the impact. A few of the factors the NIGC considers in evaluating intensity include: beneficial and adverse impacts; the degree to which the management contract affects public health or safety; and unique characteristics of the geographical area. The NIGC looks to direct, indirect, and cumulative impacts when determining significance.
4. Issuing a Finding of No Significant Impact
As noted above, the Tribe’s and manager’s goal is to obtain the issuance of a FONSI by the NIGC. When the NIGC finds there is no significant impact on the environment, it will not require the preparation of an EIS. The NIGC's issuance of a FONSI results in the approval of the management contract (assuming the other IGRA requirements have been met).
In some circumstances, the NIGC may require the preparation of a more detailed "Mitigated FONSI." The Mitigated FONSI should include a more in-depth discussion of the significant impacts and the mitigation measures that will be put in place to mitigate those impacts below the significance level that would normally require the preparation of an EIS. Importantly, the NIGC will require the discussion and analysis of mitigation measures in all EA's prepared for proposed actions involving the construction and development of gaming facilities.
5. Publishing Notice
The NIGC must involve the public in preparing and implementing its NEPA procedures. The CEQ regulations require the NIGC to make FONSI's available to the affected public. The NIGC must publish a notice in the Federal Register for projects that have nationwide impacts.
The NIGC must make a FONSI available for public review for 30 days prior to making a final decision and prior to the initiation of a proposed action if: (1) the proposed actions are similar to those actions that normally require the preparation of an EIS or (2) the proposed action is without precedent. If one of these requirements applies, the NIGC must publish notice of the FONSI. Additionally, the NIGC may require the publication of a FONSI if it feels the action is prudent based on the circumstances surrounding the proposed action.
6. Monitoring the Results
If the NIGC issues a FONSI, NEPA requires that decisions be implemented in accordance with the FONSI requirements. The NIGC will continue to monitor the management contract requirements listed in the FONSI and EA to ensure the action and mitigation measures are being followed and/or implemented. Factors the NIGC considers in determining the level of monitoring include, but are not limited to, the following:
(1) The level of impact the management contract has on the affected environment;
(2) The number of mitigation measures that are required to be implemented in order to bring the impact of the management contract below the significance level; and
(3) The location and nature of the management contract and level of controversy involved in that action.
The NIGC will determine the appropriate level of monitoring on a case-by-case basis.
C. Environmental Impact Statement
The NIGC will require an EIS if it determines, based on an EA or other factors and circumstances, that a proposed management contract will have a significant impact on the human environment. The NIGC recommends the following be undertaken for any proposed action:
(1) Scoping the EIS;
(2) Conducting the analysis and preparing the draft EIS;
(3) Issuing the draft EIS;
(4) Analyzing the comments and preparing the final EIS;
(5) Issuing the final EIS; and
(6) Reaching and recording the decision.
The NIGC also requires that all CEQ regulations be followed when preparing an EIS.
1. Scoping the EIS
The purpose of Scoping is for the Tribe to focus the EIS analysis on the significant issues and the reasonable alternatives as they relate to the proposed action. Scoping involves several steps. First, a Notice of Intent ("NOI") must be prepared and published in the Federal Register after the NIGC determines that an EIS is necessary. The NOI notifies interested persons, agencies, and organizations that the preparation of an EIS has begun and requests public participation in the process.
After the Tribe provides notice, the NIGC will require it to develop a Preparation Plan. The Preparation Plan should provide guidance to the EIS drafters on issues such as coordination between participants, scheduling public meetings, conducting site visits, performing tests and studies, and all other important factors.
The Tribe should develop a written strategy for involving the public and for coordinating/consulting with other governmental agencies and organizations with interest in the activities or issues being addressed. The Tribe also must define the proposed action and should clearly define the Tribe's intention to enter into a management contract.
The Tribe must identify all reasonable alternatives during the Scoping process. Each alternative, except for the no-action alternative, should represent an alternative means of satisfying the proposed management contract. The NIGC recognizes that most of the proposed actions involving the development of gaming facilities will involve previously prepared plans and designs. However, the Tribe's analysis of all alternatives must be made with the preferred alternative selected based on its relation to the proposed management contract, need, and overall impact on the human environment.
2. Preparing the Preliminary Draft EIS
The Tribe must prepare a preliminary draft EIS. The NIGC will review the draft and decide whether interested persons and organizations will be allowed to provide comments to the draft EIS.
3. Issuing the Draft EIS
Once the NIGC reviews the preliminary draft EIS, the Tribe should incorporate the comments and must prepare a final draft EIS. Once the NIGC approves the draft, it is printed, filed with the Environmental Protection Agency ("EPA"), and issued for public review and comment.
The EPA must publish notice of the filing in the Federal Register. The NIGC will allow at least 60 days for public review from the date the EPA publishes the draft. The NIGC may extend this period when necessary. The NIGC will distribute the draft EIS to individuals, organizations, and agencies requesting it.
The NIGC will not make a decision on the management contract until at least 90 days have passed from the date the draft EIS is available to the public.
4. Analyzing the Comments and Preparing the Final EIS
After the draft EIS is prepared, the NIGC shall obtain comments from any Federal agency with jurisdiction or special expertise with respect to any environmental impact involved. The NIGC will request comments by appropriate State and local agencies authorized to develop and enforce environmental standards. The NIGC also may request comments from the interested or affected public.
The NIGC suggests that the Tribe address comments if they:
(1) Are substantive and relate to inadequacies or inaccuracies in the analysis or methodologies used;
(2) Identify new impacts or recommend reasonable new alternatives or mitigation measures; and
(3) Involve substantive disagreements on interpretations of significance and scientific or technical conclusions.
5. Issuing the Final EIS
The Tribe should address all substantive comments, changes, corrections, and revisions in the final EIS. Once the NIGC approves the final EIS, the NIGC will file the EIS with the EPA and will make the EIS available to the public for a minimum of 30 days. The NIGC may extend the comment period if it believes it is necessary to ensure complete public involvement and that all issues and questions are addressed.
6. Issuing a Record of Decision
The NIGC will review the comments on the final EIS to determine if any significant issues not previously addressed are raised or if any significant new information is introduced. If any significant information is introduced, the NIGC may require the Tribe to prepare a supplement to the EIS or a re-draft of the final EIS.
If the comments do not raise any new substantive information, the NIGC will prepare a Record of Decision ("ROD"). The NIGC will issue the ROD after the notice of availability period is completed. Generally, the Tribe may not take any action concerning the proposed management contract until the ROD has been issued.
As a general rule, the NIGC will not make a decision until the later of 90 days after the EPA publishes a notice of a draft EIS in the Federal Register, or 30 days after the EPA publishes notice of a final EIS. The NIGC must advise the public of the availability of the ROD through a posting of a Notice of Availability ("NOA") in the Federal Register as well as through local and regional news media.
The NIGC will provide a copy of the NOA and/or ROD to those who have requested it, commentors who have made substantive comments on the draft or final EIS, and to others known to have a strong interest in the management contract.
7. Monitoring
As with an EA, the NIGC will monitor the mitigation measures, conditions, and standards set out in an EIS and/or a ROD to ensure that certain actions and mitigation measures are taken as discussed in the EIS and conditioned in the ROD.
IV. EA AND EIS – LITIGATION CHALLENGES
It is always possible that the NIGC's issuance of a FONSI, or publication of an EIS, may result in litigation. In such a situation, opponents likely would claim that the NIGC failed to comply with NEPA.
NEPA does not include a statutory provision authorizing private parties to file lawsuits in federal court against the NIGC. However, federal courts have ruled that the Administrative Procedures Act ("APA") does provide the avenue for review of a final agency decision made pursuant to NEPA.
A plaintiff bringing a lawsuit under the APA must show that the injury he or she suffered falls within the "zone of interests" that NEPA was designed to protect. Since the purpose of NEPA is to protect the environment, a plaintiff who asserts purely economic injuries does not have standing to challenge an NIGC action under NEPA.
The APA authorizes federal courts to issue declaratory judgments and/or injunctive relief. Thus, if the NIGC approves the Tribe's management contract and an interested person or organization files a lawsuit, the court may order an injunction against the effectiveness of the Tribe's management contract.
For a NEPA challenge to go forward initially, the NIGC must have taken a "final agency action for which there is no other adequate remedy in a court." In the context of management contracts, a court should not grant judicial review until one of three events has occurred: (1) the NIGC has issued a final FONSI; (2) the NIGC has filed a final EIS; or (3) the NIGC took actions that will result in irreparable injury.
The statute of limitations for bringing a NEPA claim is the general six-year statute of limitations for bringing a claim against the United States. The statute begins to run when the NIGC's action becomes final. Even if an opponent files a claim within six years, a court may still bar the claim if the court finds it would be unfair to allow the claim due to an unexcused delay in filing the claim. Under the doctrine of mootness, a court usually will not allow a lawsuit if the project has already been completed by the time the lawsuit is filed.
The standard of review that courts apply is sometimes referred to as the "hard look" doctrine. In one case, the district and circuit courts each held that the agency was not required to prepare an EIS because it had taken a "hard look" at the problem in the EA. In general, courts do not substitute their judgment for an agency's substantive decision. Rather, courts focus on the agency's compliance with NEPA procedures and whether the agency's decision was reasonable.
V. RECENT EIS REQUIREMENTS FOR NEW TRIBAL CASINOS
When the NIGC issues a FONSI, those opposed to the management contract may seek to sue claiming the NIGC should have required the Tribe to prepare an EIS. With the increased opposition to new tribal casinos, it is possible that there may be a corresponding increase in the number of EIS's required by the NIGC.
Even though an EIS is more time consuming and expensive, an EIS is generally harder to challenge from a litigation standpoint. If an EIS is performed at the outset, there is some belief that the proposed gaming project will be in better position from a defense perspective.
VI. CONCLUSION
Before the NIGC will approve a management contract, there must be compliance with NEPA. NEPA compliance is a complicated, lengthy process. The best outcome would be for the NIGC to issue a FONSI, which results in no further NEPA compliance. If the NIGC does not issue a FONSI, an EIS must be prepared. The EIS is more detailed than an EA, takes more time, and costs more money.
Once the NIGC issues a FONSI or files an EIS, opponents may still attempt to bring a lawsuit under the APA. Due to increased litigation challenges, some observers believe it is better to undertake the preparation of an EIS from the outset, rather than going through the EA process. Such a course -- albeit more expensive and lengthier -- may assist in avoiding or developing a stronger defense to an anticipated lawsuit challenge.