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Casino Can’t Be Sued in State Court

Santa Ana Pueblo, which boasts a casino, the Santa Ana Star, in Santa Fe, New Mexico, cannot be sued in state court by the company that ran a restaurant in its casino. The state Court of Appeals ruled this recently, claiming that nothing in the lease agreement between the restaurant and the pueblo, or in the tribe’s gambling compact with the state, waives the tribe’s sovereign immunity. The lawsuit was filed by R&R Deli, Inc., which operated a bar and grill in the casino as agreed upon in the lease with the pueblo. After about a year of operation, the liquor license had not been renewed by the pueblo which it had issued to the company. As a requirement in the lease, it had to be renewed in order to continue operating according to state law.

R&R Deli believes that the pueblo purposely blocked the license renewal in order to take over the restaurant itself. This is when the company sued in state district court. The case was quickly dismissed because it lacked jurisdiction. The casino restaurant operators still claim that the Santa Ana Pueblo had waived its immunity from lawsuits, because of a stipulation in the lease. The aforementioned immunity is given to tribes as sovereigns. The casino operators so far seem to be winning this legal battle, but R&R Deli’s attorney had this to say: ‘We’re going to appeal it to the (state) Supreme Court.’

The state Court of Appeals also said that the waiver of sovereign immunity only held validity if the suit is or was filed for tribal court. Depending on the type of lawsuit – not including those requesting damages, such as the restaurant filed – sovereign immunity waivers would be considered. It seems that this casino law story is far from over. Time will tell how far R&R Deli will get in this case, and how long the casino operating pueblo will be willing to fight.

OCA News Editor

Jenny McKinnley is OCA’s financial correspondent. After spending years on the trading floor in both NY and London, she offers insight from the inside out on world financial news and events.

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