FMD 2018 Level II Training Book

FMD 2018 Level II Training Book

March 21 - 23, 2017 WeKoPa Resort & Conference Center Ft. McDowell, AZ

NIGA Seminar Institute Commissioner Certification Training LEVEL II AGENDA March 21-23, 2018 WeKoPa, Fort McDowell, Az

NATIONAL INDIAN GAMING ASSOCIATION

Wednesday, March 21

8:00 AM 9:00 AM

Breakfast to be provided Journey of Submission Brandon Griffith, SIQ

9:00 AM 10:30 AM

10:30 AM 10:45 AM

Break

Employment Issues for Regulators Sue Montgomery, Montgomery & Interpreter, PLC

10:45 AM 12:15 PM

12:15 PM 1:15 PM

Lunch Break

Tribal Sovereign Immunity and The Gaming Regulator Richard Chissoe, Wacontse Consulting

1:15 PM 2:45 PM

2:45 PM 3:00 PM

Break

Effective Regulatory Writing Richard Chissoe, Wacontse Consulting Thursday, March 22

3:00 PM 4:30 PM

8:00 AM 9:00 AM

Breakfast to be provided

Licensing: Key Employees & Primary Officials Richard Chissoe, Wacontse Consulting

9:00 AM 10:30 AM

10:30 AM 10:45 AM

Break

Licensing: Vendors & Facilities Richard Chissoe, Wacontse Consulting

10:45 AM 12:15 PM

12:15 PM 1:15 PM

Lunch Break

Internal Auditing-What's Required & How it Should Be Approached Sheryl Ashle y , Director of Risk Consulting, Blue Bird CPA's

1:15 PM 2:45 PM

2:45 PM 3:00 PM

Break

Financial Controls & Accounting Standards Sheryl Ashley, Director of Risk Consulting, Blue Bird CPA's Friday, March 23

3:00 PM 4:30 PM

8:00 AM 9:00 AM

Breakfast to be provided

Roles of Surveillance Cheats & Scams George Joseph, Worldwide Casino Consulting, Inc.

9:00 AM 10:30 AM

10:30 AM 10:45 AM

Break

Roles of Surveillance Cheats & Scams George Joseph, Worldwide Casino Consulting, Inc.

10:45 AM 12:15 PM

Please plan to stay for the entire class on each day to get your certificate of completion. Please be on time for sessions

Journey of Submission What happens when a gaming machine is sent to a gaming test lab?

company confidential

Different laboratories… Do different testing.

Electrical

Safety

Gaming

And many more…

company confidential

General Process

Manufacturersubmits to a lab

The lab tests according to requested standards

The lab issues a report

The TGRA makesa finding basedon the report

company confidential

Submission to the lab 25 CFR 547.5 (c) Submission, testing, and approval – generally. Except as provided in paragraph (b) and (d) of this section, a TGRA may not permit the use of any Class II gaming system, or any associated cashless system or voucher system or any modification thereto, in a tribal gaming operation unless: …

company confidential

Submission to the lab (1) The Class II gaming system, cashless system, voucher system, or modification thereto has been submitted to a testing laboratory;

company confidential

Submission to the lab What does the lab need?

Hardware including peripherals, i.e. BV, printers

Submission letter

Math

Software

Servers

company confidential

Testing (2) The testing laboratory tests the submission to the standards established by: (i) This part; (ii) Any applicable provisions of part 543 of this chapter that are testable by the testing laboratory; and (iii) The TGRA ;

company confidential

Testing Scope of work / Submission management • Each submission is entered into a project tracking system • Kick off meeting – Engineersare assigned to the project

– Resources assigned – Timelineestablished – Any foreseen compliance issues

company confidential

Testing Random Number Generators (RNGs) • Source code review • Algorithm implementation • Samples • Analysis against Die-Hard battery

company confidential

Testing

company confidential

Testing Math Analysis • Review all combinations / patterns (wins & losses) • Calculate the game cycle • Calculate the game volatility • Calculate the RTP / hold or edge • Calculate the top award odds • Compare with manufacturers math • Emulate combinations on device and verify payouts

company confidential

Testing Functional testing

• Generate list of test scripts to be used • Based on Part 547 & 543 for Class II • Based on GLI-11/NV for Class III • Additional tests based on location or tribe the device will go to.

company confidential

Results of Testing (3) The testing laboratory provides a formal written report to the party making the submission, setting forth and certifying its findings and conclusions, and noting compliance with any standard established by the TGRA pursuant to paragraph (c)(2)(iii) of this section;

company confidential

Results of Testing (4) The testing laboratory’s written report confirms that the operation of a player interface prototype has been certified that it will not be compromised or affected by electrostatic discharge, liquid spills, electromagnetic interference, radio frequency interference, or any other tests required by the TGRA;

company confidential

Results If everything works • Technical reviews of the testing • A draft report is generated

• A regulator and/or client review of the report • Final report issued to both regulator and client

company confidential

Results What happens if issues were found during testing? • Document the problem(s) • Steps to reproduce and/or show frequency • Assign a severity (Low to High) • Resubmission or withdrawal of the submission

company confidential

Final part of a submission (5) Following receipt of the testing laboratory’s report, the TGRA makes a finding that the Class II gaming system, cashless system, or voucher system conforms to the standards established by: (i) This part; (ii) Any applicable provisions of part 543; and (iii) The TGRA.

company confidential

Key Items for Class II • Bingo Patterns • Ball Draw Process • Bingo card distribution / generation • Minimum number of players • Game Ending Pattern • Bingo game type • Disclaimers

company confidential

Key Items for Class III • RNG Review & Analysis • Game Determination

• Game Play • Accounting • Game Recall • Emulation • Security

company confidential

3/17/18

EMPLOYMENT ISSUES AND GAMING REGULATORS

NIGA LEVEL II COMMISSIONER TRAINING MARCH 21, 2018

Susan B. Montgomery [email protected]

Presentation Road Map

¨ Goal: generalized overview of employment law ¨ Why should I care about “HR” issues? ¨ Are there federal employment laws that don’t apply? ¨ How do I know when federal employments laws may/do apply? ¤ Jurisdictional questions – or which law applies? ¤ Employment laws of general applicability ¨ So now that I know a law applies, how do a read it and apply it to my situation?

¤ Reading the Law – Important considerations ¤ Context matters – laws cannot be read in a vacuum! ¨ Scenario discussion

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But I’m a Regulator – Why do I Need to Know this “HR Stuff”??

1 2 3 4 5 6 7 8 9

TRIBAL COURT INDIAN COUNTRY, USA

HR issues implicate Tribal Gaming Office employees, just like everyone else ¤ Issue spotting is important ¤ Who has the say – the Tribal Gaming Board/Commissioners, the Executive Director, or the Tribe’s HR Department? ¤ Being a good employer is important ¤ Lewis v. Clark decision – that got my attention !

EDWARD EMPLOYEE, Plaintiff, vs.

Case No.: TC-CV-2017-876

COMPLAINT

TRIBAL CASINO, TRIBAL CASINO CEO, in his individual and as CEO, TRIBAL GAMING BOARD MEMBERS and DEFENDANTS 1-6, unnamed spouses in their professional and individual capacities, TRIBAL GAMING COMMISSIONER and DEFEDANTS 7-14, unnamed spouses, in their professional and individual capacities. Defendant

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

COMPLAINT - 1

But I’m a Regulator – Why do I Need to Know this “HR Stuff”??

¨ Overlap between HR Issues and Regulatory Issues ¤ HR – Suitability for employment and job performance within policy (operational) ¤ Tribal Regulator – Threat to public interest; regulation of gaming; creation of unfair or illegal practices in conduct of gaming (Regulatory) ¨ Stay in your lane – but your lanes will overlap or sometimes cross

Awareness is important

¨

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Federal Employment Laws that Don’t Apply (mostly…)

Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e – 2000e-17 (2000); Executive Order 11246 ¨ Prohibits discrimination due to race, color, religion, gender or national origin

¨ Applies to employers with 15+ employees for each working day in 20+ calendar weeks

¨ Excludes US, corporations owned by US or Indian Tribes Note: Tribal exemption does not extend to enterprises with mixed ownership (Tribe and non-Indian owner) Myrick v. Devils Lake Sioux Manufacturing Corp ., 718 F. Supp. 753 (D.N.D. 1989) ¨ Title VII expressly permits Indian preference in hiring for employers on or near reservations Note: No preference for members of a particular tribe over other tribes. Dawavendewa v. Salt River Project Agricultural Improvement Power Dist ., 154 Fed.3d 117 (9 th Cir. 1998); see also Dawavendewa v. Salt River Project , 276 F.3d 1150 (9 th Cir 2001)

Federal Employment Laws that Don’t Apply (mostly…)

Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq . ¨ National mandate with enforceable standards for elimination of discrimination against individuals with disabilities ¨ Seeks to ensure that individuals with disabilities will be treated as equals and afforded the ability to compete in the workplace ¨ Federal enforcement ¨ “Disability” – ¤ A physical or mental impairment ¤ that substantially limits one or more major life activities; ¤ A record of such an impairment; or ¤ Employee is regarded as having such an impairment

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Federal Employment Laws that Don’t Apply (mostly…)

Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq . ¨ Title I : Employment opportunities and requires reasonable accommodations to working conditions of disabled employees for employers ¨ Title II : State and local government - equal opportunity to benefit from programs, services and activities ¤ No mention of tribes but recognition of tribal sovereignty may exempt tribes ¨ Title III : Public accommodations and commercial facilities that prohibit exclusion, segregation or unequal treatment ¤ Caution : Can apply to public accommodations run by a tribe , but cannot be enforced by private person against tribe in non-Indian forum due to sovereign immunity. However compliance can be compelled by US Attorney General. Florida Paraplegic Assoc. v. Miccosukee Tribe of Indians of Florida , 166 F.3d 1126 (11th Cir. 1999)

Federal Employment Laws that Don’t Apply (mostly….)

Worker Adjustments and Retraining Notification Act (WARN Act) of 1988 ¨ Requires employers with 100+ employees to give workforce and local governments 60-day notice of plant closings or mass layoffs ¨ Like Title VII and Title I and Title II of ADA, Indian tribes are exempt from the definition of “employer”

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Understanding when Federal Employments Laws May Apply

Jurisdictional questions – or which law applies? ¨ Who has jurisdiction over the employment issue? ¤ Federal law?

¤ Tribal law? ¤ State law? ¤ Is there concurrent jurisdiction?

¨ Danger – do not assume tribal jurisdiction. This depends on many factors, including status of employee – tribal vs. non-tribal ¨ Is there a law of specific applicability or non-applicability? ¨ Danger – Laws may become applicable by terms of a different laws, by agreement/compact, through acceptance of federal funding, or by regulation or policy ¨ Do not assume only tribal law applies or that state law doesn’t apply! ¨ Context is everything

Understanding when Federal Employments Laws May Apply

Laws of “General” Applicability ¨ These are general statutes that, by their own terms or through silence, are construed to apply to all persons, including Indian Tribes and their “property interests.” Federal Power Commission v. Tuscarora Indian Nation , 362 U.S. 99 (1960) ¨ Exceptions: ¤ Exclusive rights of self governance - intramural matters – n E.g., conditions of tribal membership, inheritance, domestic issues ¤ Application of the law abrogates treaty rights ¤ Proof that Congress intended the law not to apply ( Donovan v. Coeur d’ Alene Tribal Farms , 751 F.2d 1113, 1116 (9th Cir. 1985))

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Understanding when Federal Employments Laws May Apply

Age Discrimination in Employment Act, 29 U.S.C. §§ 621-634 (2000) ¨ Prohibits discrimination on basis of age ¨ Employees/applicants protected if over 40 ¨ Liability may be avoided if employer can show bona fide occupational qualification requiring an employee to be younger

¨ Note: Silent on applicability to Indian tribes = may apply

Case law is MIXED! ¤ Applicability may turn on which Federal Circuit tribal employer is located in ¤ Answer may be subject to specific facts of case

¨

Understanding when Federal Employments Laws May Apply

Age Discrimination in Employment Act, 29 U.S.C. §§ 621-634 (2000) (cont.) ¨ ADEA applies to the tribe “in its capacity as proprietor” of bingo facility, at least when claimant is not a tribal member ¤ EEOC v. Forest County Potawatomi Community , No. 2:2013mc00061 (E.D. Wis. 2014) ¨ ADEA does not apply when dispute: ¤ Involves treaty rights ( EEOC v. Cherokee Nation , 971 F.2d 937 (10 th Cir. 1989)) ¤ Involves intramural affairs n EEOC v. Fond du Lac Heavy Equipment and Construction Co. , 986 F.2d 246 (8 th Cir. 1993) ; EEOC v. Karuk Tribe Housing Authority , 260 F.3d 1071 (9 th Cir. 2001) ¨ ADEA applies, but tribe immune from suit under doctrine of Tribal sovereign immunity ( Williams v. Poarch Band of Creek Indians , 2016 BL 346383, 11th Cir., No. 15- 13552, 10/18/16 ).

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Understanding when Federal Employments Laws May Apply

Fair Labor Standards Act, 29 U.S.C. §§ 201-219

¨ Establishes employment requirements for minimum wage, overtime compensations and child labor

¨ Establishes class of “exempt” employees – executive, administrative, or professional employees

¨ Note: Silent on applicability to Indian tribes = may apply

Understanding when Federal Employments Laws May Apply

Fair Labor Standards Act, 29 U.S.C. §§ 201-219 (cont.)

¨ LEO not entitled to protections because tribal law enforcement is traditional governmental function. Snyder v. Navajo Nation , 371 F.3d 658 (9th Cir. 2004) ¨ Tribal member owned smoke shop on Indian trust lands subject to FLSA. Chao v.

Matheson, 563 F.3d 425 (9th Cir. 2009) (9 th Cir. 2009) ¤ Court made note of “purely commercial” nature of business ¤ Sold goods to non-Indians ¤ Employed non-Indians

¨ In case involving tribal consortium charged with protecting native game and fishing rights, court opted to not apply FLSA as a matter of “comity” and “sovereignty” since FLSA would not apply to local governments. Reich v. Great Lakes Indian Fish and Wildlife Commission , 4 F3d 490 (7th Cir. 1993)

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Understanding when Federal Employments Laws May Apply

National Labor Relations Act, 29 U.S.C. §§ 141-187 (2000)

¨ Authorizes employees to form unions for collective bargaining and engaging in “protected concerted activity” ¨ Prohibits employers from prohibiting exercise of rights or engaging in conduct that may have a “chilling effect”

¨ Applies to employers with $50,000 in annual business ¨ Applies to private employers operating on or near reservations

¨ NLRA is silent as to Indian tribes , but it does exempt, federal, state and local governments

Understanding when Federal Employments Laws May Apply

National Labor Relations Act, 29 U.S.C. §§ 141-187 (2000) (cont.) ¨ “Protected concerted activities” include: ¤ 2+ people acting together to improve working conditions/wages ¤ Can include 1 person if involved with others before taking additional steps ¤ Does not require membership in a union ¨ Examples of Protected Concerted Activities: Social media comments, sharing certain confidential info (wages, etc.), rules restricting criticism of management, rules requiring being “respectful”, rules prohibiting resistance to work directives and discipline ¨ Not included: reckless or malicious behavior ( e.g. , sabotaging equipment, lies about product, revealing trade secrets, hate speech – maybe)

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Understanding when Federal Employments Laws May Apply

National Labor Relations Act, 29 U.S.C. §§ 141-187 (2000) (cont.) Trend has been to apply NLRA to Indian tribes , regardless of the governmental exception for other federal, state and local governments: ¨ NLRA applies to casino wholly owned and operated by tribe on tribal reservation because the operation of a casino is not an exercise of self- governance or a governmental function. San Manuel Indian Bingo and Casino v. NL RB, 475 F.3d 1306 (D.C.Cir. Feb. 2007), reh’g en banc denied (D.C. Cir. June 8, 2007) ¨ NLRA precludes Indian tribe that operated a casino under IGRA from enacting tribal law giving tribe authority over collective bargaining, including prohibition over certain topics and banned strike activity. NLRA v. Little River Band of Ottawa Indians , No. 14-2239, (6th Cir. June 9, 2015)

Understanding when Federal Employments Laws May Apply

National Labor Relations Act, 29 U.S.C. §§ 141-187 (2000) (cont.) Casino Pauma Case Still Pending in Ninth Circuit: ¨ NLRB found conduct provisions in employee handbook to violate NLRA. ¤ NLRA is a specialized statute with many exceptions - does not require application of Coeur D’ Alene (traditional governmental functions) ¤ Stay the matter until District Court can determine whether NLRB waived it’s right to file claims by agreeing to arbitration when it previously determined it did not have jurisdiction

¨ Pending – 9 th Circuit (Case 16-70397) ¤ Oral argument 11/9/2017 ¤ No Opinion Yet

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Understanding when Federal Employments Laws May Apply

National Labor Relations Act, 29 U.S.C. §§ 141-187 (2000) (cont.) Is a solution around the corner? - Tribal Labor Sovereignty Act (S.63; H.R.986) ¨ Introduced in 2017 - Would include Indian tribes in exclusion from NLRA, in parity with existing exclusions for federal, state, and local governments ¤ In Senate, Bill has 13 co-sponsors (all Republican), including Senators McCain and Flake (AZ) ¤ In House, Bill as 32 bipartisan cosponsors ¤ Bill has created odd “bedfellows” (most R’s support and many D’s don’t) ¨ Has come close to moving in Senate, but recently was repackaged as an amendment to Senate Bill 140 (to amend the WMAT Water Rights Quantification Act of 2010), which just passed the House in January. ¨ May get attached to upcoming $1 trillion omnibus spending bill – stay tuned!

Understanding when Federal Employments Laws May Apply

Family Medical Leave Act, 29 U.S.C. §§ 2601-2654 (2000)

¨ Employers with 50+ must provide 12 weeks of unpaid leave in a year for family and medical reasons ¤ Eligible employee requirements (employed for 12 months and 1,250 hours)

¤ Birth, adoption, placement of child in foster care ¤ Care of seriously ill child, spouse or parent; or ¤ Own serious illness ¤ Return to same or equivalent position upon return

¨ Law does not specifically mention tribes – DOL takes position that the law applies to tribes, but case law MIXED (again……)

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Understanding when Federal Employments Laws May Apply

Family Medical Leave Act, 29 U.S.C. §§ 2601-2654 (2000) (cont.) ¨ Exhaustion of tribal court remedies required. Sharber v. Spirit Mountain Gaming, Inc ., 343 F.2d, 724 (9 th Cir. 2003) ¨ Tribe has sovereign immunity from suit that is not abrogated by FMLA. Likewise, gaming compacts and tribes policies did not waive immunity, so none would be inferred. Muller v. Morongo Casino Resort & Spa, ED-CV-14-02308-VAP (KK)(C.D. Cal., July 17, 2015)

¨ Tribes may want to enact own FMLA

Understanding when Federal Employments Laws May Apply

Occupational Safety and Health Administration Act of 1970 (OSHA), 29 U.S.C. § 651, et seq . ¨ Under the OSHA, employers are responsible for providing a safe and healthful workplace for their workers ¨ OSHA is silent as to Indian tribes = may apply ¨ OSHA takes position Act applicable to tribes, subject to exception for “purely intramural matters”, violation of treaty or proof in legislative history not applicable ¨ OSHA applied to tribal farm wholly owned and operated by tribe. Donovan v. Coeur d’ Alene Tribal Farm, 751 F.2d 1113 (9 th Cir. 1985).

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Understanding when Federal Employments Laws May Apply

Consolidated Omnibus Budget Reconciliation Act (COBRA), 29 U.S.C. §§ 1161 et seq . (2000) ¨ Requires continuation of health insurance coverage for up to 18 months after an employee leaves ¨ Not applicable to insurance plans maintained by tribes if tribal employees employed in traditional governmental roles ¨ Insurance plans for commercial tribal enterprises are subject to COBRA

Understanding when Federal Employments Laws May Apply

Workers’ Compensation Laws

¨ General Rule: State labor and employment laws do not apply to employers operating solely on Indian reservation. California v. Cabazon Band of Mission Indians, 480 U.S. 202, 208 (1987) ¨ Except: 40 U.S.C. § 290, provides states authority to apply workers’ comp laws to all lands owned/held by United States within a state ¨ Applied to allow for application of state workers' compensation exclusivity provisions on an Indian reservation . Begay v. Kerr-McGee Corp ., 682 F.2d 1311, 1319 (9th Cir. 1982). ¨ AZ does not apply. White Mountain Apache Tribe v. Industrial Comm’n. , 696 P.2d 223 (Ariz. 1985) (injury to tribal member on Reservation at business wholly owned by tribe)

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Understanding when Federal Employments Laws May Apply

Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§1001 et seq. Sets standards for voluntarily established pension or welfare-benefit plans and provides protections for persons in these plans ¨ Was silent as to Indian tribes and considered a law of general applicability – case law mixed ¨ Pension Protection Act of 2006 (amendment to ERISA) - now, not applicable to tribal employer benefit plans if the plan covers only tribal employees employed in traditional governmental roles but applicable to tribes engaged in commercial activities ¨ Legislative history: Amendment was to “ clarify that federally recognized Indian tribal governments are to be regulated under the same government employer rules and procedures that apply to Federal, State, and other local government employers with regard to the establishment and maintenance of employee benefit plan s.”

The Take Away – When law is silent

¨ Tribal internal issue ¨ Tribal treaty ¨ Tribal members with no applicability to non- members ¨ Law generally not applicable Tribal Government

Commercial Interests

Effect on non-tribal members

¨

¨ Not a governmental function - even though profits will be used to fund government ¨ Law probably applicable

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Reading the Law – Important Considerations

Mandatory versus Discretionary Terms

¨

¤ Must and shall ¤ May and can

Qualifiers ¤ Notwithstanding ¤ Except ¤ Provided, however ¤ Commas ¤ And/or Legislative Intent

¨

¨

Definitions

¨

Some Examples

And vs. Or: Combine flour, salt and baking powder Combine flour, salt or baking powder The power of the comma:

¨ Qualifying language: ¨ “That’s not something I’m expecting.” ¨ “That’s not something I’m expecting right now .”

Let’s eat Grandma! Let’s eat , Grandma!

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Context is Important – Laws cannot be read in a vacuum!

¨ U.S. Constitution ¤ Bill of Rights, Civil Rights, Indian Civil Rights, Tribal Constitutions ¨ Treaties ¨ Law ¤ Applicable federal law: IGRA and employment laws ¤ Applicable state law ¤ Tribal Codes and Ordinances – Gaming Ordinance ¨ Case Law ¨ Regulatory Agencies and Decisions ¨ Administrative and Human Resource Policies ¨ Gaming Compacts including Appendices

Scenario Discussion

¨ GM has pattern of promoting women over similarly qualified men

¨ Longtime Casino employee denied leave to take care of elderly parent, GM says summer will be too busy ¨ Patron files complaint saying denied lodging at Hotel next to Casino due to her race ¨ Federal authority shows up at Casino and approaches TGO agent asking to inspect the premises for safety ¨ Gaming Employee emailing fellow employees to complain about wages – threatens in email “to blow the place up!”

¨ Blackjack manager says she can provide tribal preference to enrolled tribal member over tribal member from another tribe ¨ Poker dealer has wrist degeneration, asks for help in accommodating his difficulty dealing cards ¨ GM candidate is 55, not given position in favor of less qualified 30 year old (both persons tribal)

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Susan B. Montgomery [email protected] (480) 513-6825

Questions?

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TRIBAL SOVEREIGN IMMUNITY AND THE GAMING REGULATOR

Richard C. Chissoe Wacontse Consulting

Tribal Sovereign Immunity: General Principles

u Sovereign immunity is a fundamental aspect of an Indian Tribe’s inherent sovereignty q As noted by the Supreme Court, tribal sovereign immunity “is a necessary corollary to Indian sovereignty and self-governance.” u Tribal governments are immune from lawsuits in both federal and state courts UNLESS: q 1) Congress has authorized the suit; or q 2) The Tribe has waived its immunity • Any waiver of Tribal Sovereign Immunity “cannot be implied but must be unequivocally expressed” – Santa Clara vs. Martinez u Sovereign immunity also extends to commercial activities conducted by tribal entities that are instrumentalities, or “arms” of the Tribe

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Tribal Sovereign Immunity: Tribal Officials

u Sovereign immunity also protects tribal officials and tribal employees acting: q 1) In their official capacity; and q 2) Within the scope of their authority u Why protect tribal officials? q In suits against tribal officials, the sovereign entity (Tribe) is the “real, substantial party in interest” q A plaintiff cannot circumvent tribal immunity simply by naming an officer of the Tribe as a defendant rather than the sovereign entity q Ultimately, relief would run against the tribe - need to protect the tribe’s treasury

Tribal Sovereign Immunity: Tribal Officials

u “Individual” Acts vs “Sovereign” Acts q Individual - acts taken outside the scope of delegated authority are individual acts and are not protected acts of the sovereign (Tribe). q Sovereign –acts taken in official capacity and within the scope of delegated authority are protected acts of the sovereign (Tribe).

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Tribal Sovereign Immunity: Tribal Officials

u How to determine whether an act is within “scope of delegated authority”: q Examine the enabling statute or law and determine whether the official was authorized to carry out the action at issue q Ask: Was the official empowered by law to do what he/she did? If so, the action was taken pursuant to the official’s delegated authority and protected by the tribe’s sovereign immunity

Tribal Sovereign Immunity: Tribal Officials

u What if the official’s actions were wrong? q Merely being wrong or mistaken does not take an action outside the scope of delegated authority u The scope of authority analysis turns “on the breadth of official power the official enjoys and not whether the official is charged with using that power tortuously or wrongfully.” Tenneco Oil Co. v Sac & Fox Tribe , 725 F.2d 572, 576 (10th Cir. 1984) q Official action is still an action of the sovereign entity, even if the official’s actions were wrong or mistaken, so long as it does not conflict with the official’s valid authority

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Tribal Sovereign Immunity: Tribal Officials

u HYPOTHETICAL: q Gaming Commissioners revoke an employee’s gaming license q Revoked licensee sues Gaming Commissioners in their individual, personal capacities q Gaming Commissioners move to dismiss the suit on sovereign immunity grounds, arguing that the revocation action was taken in their official capacity as Gaming Commissioners and within the scope of their delegated authority q Tribe’s gaming ordinance specifically authorizes Gaming Commissioners to make licensing determinations, including suspensions and revocations q How should the court rule?

Tribal Sovereign Immunity: Tribal Officials

u Under these circumstances, the court should dismiss the suit because: q 1) The revocation was an official act of the Gaming Commission and performed by the Gaming Commissioners in their official capacities; and q 2) The revocation action was taken pursuant to the Gaming Commissioners’ authority under the gaming ordinance to suspend and revoke gaming licenses.

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Tribal Sovereign Immunity: Cosentino v Fuller u Cosentino v Fuller q The hypothetical is based on a CA state court decision, Cosentino vs. Fuller q The state court did not find the Commissioners’ sovereign immunity claims persuasive q Contrary to the long-settled doctrine of sovereign immunity, the CA state court ruled that sovereign immunity did not apply, and that the Gaming Commissioners exceeded the scope of their powers by revoking the employee’s license without cause u What went wrong?

Tribal Sovereign Immunity: Cosentino v Fuller

u Classic Case of “Bad Facts Making Bad Law”: q The licensee/plaintiff, Cosentino, was a blackjack dealer who, after observing criminal activity on the gaming floor, became a confidential informant for the California Department of Justice q The Gaming Commissioners scheduled a private meeting with Cosentino, but he was never personally notified of the scheduled meeting. After missing the meeting, he was suspended from work q The Gaming Commissioners notified him of his suspension and their intent to revoke license by letter mailed to his former address q About a month later, Cosentino met with the Gaming Commissioners and was asked to disclose information about his informant activities. Cosentino declined to do so. q Shortly after the meeting, Cosentino was notified by letter that his license had been revoked. q Cosentino sued Gaming Commissioners personally, claiming that the revocation was in retaliation for his informant work

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Cosentino v. Fuller

u Court’s Ruling: q The Gaming Commissioners overstepped their

authority by revoking the employee’s gaming license in retaliation and without cause q Sovereign immunity will not protect the Gaming Commissioners unless they can show that the license was revoked based on criteria identified in IGRA, Compact, or gaming ordinance q Nothing in the record shows that the Commissioners had the authority to revoke his license without cause or in retaliation q “Sovereign immunity . . . does not prevent inquiry into whether [they] exceeded their authority by using their official position to intentionally harm Cosentino.”

Cosentino v. Fuller

u Breakdown of the Court’s (Mis)Reasoning: q The court looked beyond the Commissioners’ “scope of authority” to consider the circumstances under which the Commissioners exercised that authority q The court focused on the lack of evidence/record to support the revocation decision – i.e., the Commissioners’ failure to provide evidence regarding plaintiff’s unsuitability for licensure q Without such evidence, the court simply accepted the plaintiff’s allegation that the revocation was without cause and in retaliation q Since the Commissioners did not have the authority to revoke licenses without cause or in retaliation, their conduct was outside the scope of their authority and not protected by the tribe’s sovereign immunity

q In other words, the Commissioners’ act of revocation was lawful, but their motives were not, so therefore the act was outside the scope of their authority

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Cosentino v. Fuller

u Where the Court Went Wrong: q State courts are not meant to have any role in tribal gaming licensing, let alone decide whether tribal officials are in compliance with their own laws q The Commissioners’ motives for carrying out an otherwise official and lawful act are irrelevant for purposes of sovereign immunity q Decision allows plaintiff to sue Commissioners individually for an action of the tribe’s government q This means tribal officials may be held personally liable simply by voting or participating in a decision to effect a sovereign act of the tribe

Impact of Cosentino v. Fuller

u It’s Not as Bad as it Sounds: q The case has been “depublished,” which means it is non-binding and cannot be relied on as precedent q Also, bear in mind this is a state court decision u Nonetheless, the case serves as a cautionary tale for TGRA officials and employees u Key question is: what can you do to avoid finding yourself in this situation?

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Fundamental Principles for TGRAs

u Act within the scope of your authority q TGRA may only exercise such power as it has been delegated and NO MORE u Avoid arbitrary and capricious acts q There should be a rational connection between the facts examined and the action taken by the TGRA u Interpret the law fairly and reasonably q Be unbiased (free of personal animus) q Avoid prejudging the outcome

Process Matters

u Fundamental Fairness: q Fairness and consistency q Proportionality q Least adversarial means to achieve objective

u Due Process Requires: q Notice q Opportunity to be heard q Impartial adjudicator q Fair process

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Process Matters

u In other words, the affected person should always be advised of: q What is happening, q When and where it is happening,

q Why it’s happening, q What could happen, q And, what they can do if it does.

Administrative Record u Importance of an Administrative Record q Create a paper trail documenting decision-making process and basis for agency decision – this establishes evidence that there was a rational connection between the facts and the action taken q Record should reflect the following: Ø TGRA collected the available information Ø Considered all relevant factors Ø Made a reasoned decision based upon credible, substantial evidence in the record q The administrative record will be your greatest weapon in defending against challenges to agency actions

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Final Thoughts

u Case may be non-binding, but that doesn’t mean it can safely be ignored u Sovereign Immunity is an affirmative defense, it is not presumed u This means that if a case is filed, you have to present the defense, and you may find yourself doing so in state court as was the case in Cosentino.

Thank You!!

Richard C. Chissoe Wacontse Consulting [email protected] (505) 659-6235

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Effective Written Communication

Why do we write?

u The first question before setting pen to paper or fingers to keyboard: What is my motivation for writing? u To convey factual information? u To seek information?

u To persuade a course of action? u To demand a course of action?

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Why Do We Write? u Determining WHY we write enables us to determine: u The format for the writing u The tone of the writing u The style of the writing u All of which are critical to the effectiveness of the writing.

To Whom am I writing? u The second question before setting pen to paper or fingers to keyboard is: To whom am I writing? u Authority figure? u Peer? u Subordinate? u Member of the Public? u License applicant? u Licensee? u Governmental official?

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Regulatory Writings

Gaming Regulators utilize many different types of writings:

u General

u Legal Findings & Conclusions

Correspondence

u Memoranda u Budget Justifications u Reports

u Notices u Orders u Guidance documents u Regulations

u Information u Investigative

Regulatory Writings

u Each category of document types will have sub- categories. u For example, general correspondence may include letters to:

u Members of the public u Government agencies

u The media u Businesses

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Regulatory Writings

u Regardless of the type of writing, the overall objective is that it be EFFECTIVE , meaning it delivers the desired affect or compels the intended result. u Also, effective regulatory writing reflects favorably on the agency’s professionalism and strengthens the agency’s credibility.

Effective Writing

u Effective writing has a logical flow of ideas and is cohesive. This means it holds together well because there are links between sentences and paragraphs. Writing which is cohesive works as a unified whole and is easy to follow because it uses language effectively to maintain a focus and to keep the reader “on track”.

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Effective writing is achieved through the use of both MACRO and MICRO writing devices. Macro u the presence of a clear thesis statement; u the use of clear sentence structure; u the logical flow of information in the text; u the focus the text has maintained on the subject. Micro

u the repetition of key subject words and key descriptive words throughout the text; u clearly focused sentences; u the use of connective words and transition signals.

Logic and Coherence u The main sections of the text should develop the material in a logical and coherent manner, reflecting the structure outlined in the introduction or the topic sentence of the piece of text. u Make sure you include: u Clear statements on the relationships between topics; and u The order you then go on to present your points (using legitimate paragraphs) follows the order of these initial statements u This allows the logical sequence of the text to be clearly visible to the reader.

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Logical flow within paragraphs

u The move from one sentence to another within a paragraph should be logical. The order in which information is presented needs to keep the reader centered on the focus of the paragraph, developing points upon this topic in a sequenced way.

Micro Elements of Paragraphing

u A paragraph is one of the basic units of organization in writing. A paragraph is a related group of sentences, arranged in a logical manner which develop one main idea. This idea is generally expressed in one sentence known as the 'topic sentence'. The topic sentence usually occurs as the first sentence in the paragraph. u In addition to the topic sentence, a paragraph contains other sentences that support the point the topic sentence made. They might do this by elaborating or further explaining the point made in the topic sentence, providing supporting details or giving evidence. u A paragraph may also contain a concluding sentence, or sentences that provide a transition to the following paragraph.

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Topic Sentences

u The topic sentence signals to the reader what the rest of the paragraph is about. Without topic sentences, paragraphs can be difficult to read as well as difficult to write. u A good topic sentence states both the topic and the central idea of the paragraph. It is neither too general nor too specific; it states the main idea clearly, but does not give the specific details. u A paragraph without a clear topic sentence can be very hard to follow. The reader is forced to “work” in order to understand the point the writer is making.

Topic Sentences u One of the simplest and most effective techniques for drafting the topic sentence is just to state the topic: u We are writing to inform you that the Gaming Commission has granted your application for a gaming license. u Contrast the foregoing sentence with the following:

u The Gaming Commission was established pursuant to the Gaming Ordinance of 2010, which grants the Commission broad authority to regulate gaming on the Tribe’s Indian lands, including the authority to issue licenses to key employees and primary management officials. With regard to your application for a key gaming license submitted on January 1, 2016, the Gaming Commission completed a thorough background investigation and verified the information submitted on your application. Based on the results of the investigation, the Gaming Commission has determined that you are suitable for licensure.

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Bad Topic Sentences

u Why does the second example fail?

It’s not a sentence – it’s a paragraph, but it took a paragraph to get to the point. AND, the point, when finally made, was vague and ambiguous. It was difficult to read and understand. If a writing is difficult to read and understand, it is NOT EFFECTIVE .

1.

2.

3.

Clearly refer to ideas, subjects and objects throughout the text

u If we do not refer to ideas and things clearly and consistently throughout the text, the thread of meaning is lost and the chain (of ideas) is broken. This often results in the reader of your text being unsure what point you were making or being unable to follow your argument.

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Applying the Principle

u Dear License Applicant: u We are writing to inform you that your application for a gaming license has been granted. You may appear at the Commission’s offices at 1431 Agency Road to pick up your badge during regular business hours on any weekday. Please be advised that you must wear your badge at all times while working at the Casino. u Your gaming license is valid for two years. Sixty days prior to the expiration date, you will receive a notice to renew your license. It is your responsibility to complete and submit your license renewal form to the Commission at least two weeks prior to the expiration date. Failure to timely complete and submit the renewal form may result in the lapse of your license in which case you will not be permitted to work until the license has been renewed. u An important condition of your license is that you must advise the Commission of any changes in the information on your application. You must immediately inform the Commission of any changes to your name, address, and phone number. Importantly, tribal law specifies that any arrests or criminal charges must be reported to the Commission within 72 hours. Failure to comply may result in the suspension or revocation of your license. u If you have any questions, please feel free to contact the Commission.

Tonality

u Using the previous example, how would you characterize the tone?

u Professional? u Informative? u Threatening? u Hostile? u Adversarial?

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Tonality

u In regulatory writing, the objective always is: u To achieve a professional tone u To convey all relevant information u To be clear, precise, and understandable

Tonality

u Professional writing is characterize through the use of: u Plain language u Short sentences u Limited use of adjectives and adverbs u Appropriate use of verbs u Adjectives and adverbs should be used sparingly because they can dramatically affect tone.

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Tonality u Compare the following sentences:

u The Commission is investigating a serious incident that occurred very late on the night of January 1, 2014, accusing you of wrongfully accepting a large tip from an elderly gaming patron in clear violation of Section 12 of the gaming ordinance. u The Commission is investigating an incident that occurred at 12:00 p.m. on January 1, 2014 in which it is alleged that you accepted a tip from a gaming patron in violation of Section 12 of the gaming ordinance. u Note that the tone of the first example can be read to suggest that the Commission has already made up its mind that the allegation is true. The second example simply conveys facts.

Tonality u Why is tonality important?

u It affects the agency’s credibility u If, at the investigative stage, the agency has already accepted an allegation as true and has determined the outcome, it becomes vulnerable to challenges in the basis of: u Bias u Unfairness u Due process u Arbitrary and Capricious Decision-making

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Connective Words u Connective Words include both conjunctions and transition signals . These types of word signal the logical relationships between ideas so that the reader can easily understand the relationship between the parts of a text. Using connective words increases the effectiveness of a piece of text by helping the flow of the writing.

Connecting Words

u Connecting words are particularly important in regulatory writing, particularly any writing requiring analysis. u When issuing a determination, it isn’t enough to simply reach a conclusion. A conclusions must have a basis.

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Connecting Words

u Compare the following examples: u Please be advised that your application for a gaming license has been denied on the basis of your suitability for licensure. You may appeal this decision… u Please be advised that your application for a gaming license has been denied because you failed to disclose on your license application a felony conviction entered by the District Court of Someplace County on January 1, 2014. Pursuant to Section 17 of the Gaming Ordinance, an applicant’s failure to disclose all arrests, criminal charges and convictions is grounds for denial of the application. You may appeal this decision…

Connecting words

u Connecting words are critical to all analytical writing because they convey WHY and on WHAT basis a conclusion is reached. u If one’s findings and conclusions do not contain such words and phrases as “because,” “as a result,” “therefore,” “accordingly,” “due to,” “for the reason(s) stated herein,” or “consequently,” for example, it may well be analytically deficient.

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Regulatory Writing

u Effective writing is a skill and all skills require practice. u Fortunately, much regulatory writing is readily given to standard forms and formats – use them where practical and to the extent possible. u Always proof read, checking for grammar and spelling – do not trust the word processing software:

u It shouldn’t be taken for granite; u It doesn’t know when to quiet; u It’s not good proof reed insurance.

Practical Tips

u Complex writing requires planning u Make an outline u Issue (Topic) u Rule

u Statutory authority of agency u Statutory/regulatory provision at issue u Facts u Analysis u Conclusion

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Practical Tips

u Follow the outline, but remember… u Sometimes it helps to just get your thoughts

down on paper – then start editing for logic, flow, continuity, and thoroughness. u Thoughts may not always flow in an organized manner, but in editing one can rearrange sentences, add or remove information, fine tune language and grammar.

Hypothetical u The TGA is statutorily authorized to review and approve promotions. The regs require that promotions be submitted for review at least 21 days in advance of the promotion. Management has not been timely submitting promotions. The TGRA has sent informal reminders of the requirements as well as a guidance document. The problem persists. The TGRA has decided to address the problem through the issuance of an Order to Cure.

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Order to Cure-Issue

u Issue u On this 17 th day of December, 2014, the Tribal Gaming Agency (“TGA”) hereby issues this Notice and Order to Cure Deficiencies to the Marketing and the Players Club Departments. This Notice and Order is issued as a result of audit findings showing repeated instances of non-compliance with Part 26 of the Gaming Regulations and the TGA’s 2012 Guidance Memorandum regarding Promotions. u This Notice and Order is issued in lieu of a formal enforcement action(s) possibly culminating in the assessment of a civil fine or adverse licensure action in order to provide the Marketing and Players Club Departments a reasonable period of time to effect a cure to the conditions resulting in the instances of non- compliance identified herein.

Order to Cure- Rule u Section 19(O) of the Gaming Statute provides that any licensed person or entity subject to the jurisdiction of the Tribe who fails to comply with the Tribe’s gaming regulations or an order of the TGA is in violation of the Ordinance. u Pursuant to the TGA’s October 23, 2012 Guidance Memorandum on Promotions issued to the General Manager and Marketing Director, all required information and documentation for a promotional activity must be submitted to the TGA for approval at least twenty-one (21) days in advance of any advertising of the promotional activity. For any non-advertised promotional activity or ongoing program of activities, all required information and documentation must be submitted to the TGA at least fourteen (14) days before the initiation of such promotional activity.

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Order to Cure - Facts u The TGA conducted an audit of approximately forty-two (42) promotions taking place between during October 2012– Oct 2014 to determine the extent to which such submissions have been in compliance with the requirements set forth in Part 26 and the TGA’s 2008 Guidance Memorandum on Promotions. As briefly summarized, the audit revealed:

u There were twenty-eight (28) promotion submissions that were not timely submitted to the TGA.

u There were six (6) instances of incomplete promotion submissions (required information and/or documentation were not included).

u There were twelve (12) instances where promotion-related marketing materials such as brochures and invitations were distributed to patrons prior to being approved by the TGA.

u There were three (3) instances where the rules of the promotion were amended without TGA review and approval.

Order to Cure - Analysis u The audit revealed that he Marketing and Players Club Departments have routinely failed to comply with the specific promotion submission requirements set forth Part 26 of the regulations and the TGA’s 2012 Guidance Memorandum, particularly in relation to the advance notice and approval requirement. More than half of the promotions conducted in the review period were not compliant with the notice requirement and marketing materials were routinely being circulated without TGA approval. u The TGA’s review and approval process serves as an important check against unfair, misleading, and/or deceptive trade practices in relation to promotional activities. Additionally, it ensures that appropriate rules are in place to govern each promotional activity, which in turn serves to advance fairness and integrity of both the operation and the patrons. Moreover, the review and approval process serves to protect tribal assets by ensuring that all promotional activity is auditable. It is therefore critical that the development, marketing, and conduct of promotions are carried out in a manner that is consistent with applicable laws and regulations. Failure to maintain compliance, therefore, constitutes a serious violation

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