Dairyland Greyhound Park, Inc. v. Doyle
2006 WI 107, 295 Wis. 2d 1, 719 N.W.2d 408 (2006)
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Rule of Law:
A state constitutional amendment that prohibits certain forms of gambling is prospective and does not invalidate pre-existing, validly executed gaming compacts with Native American tribes, as applying the amendment to prevent the renewal or amendment of such compacts would unconstitutionally impair the obligation of contracts.
Facts:
- Pursuant to the Indian Gaming Regulatory Act (IGRA), Wisconsin's Governor Tommy Thompson negotiated gaming compacts with 11 federally recognized Tribes in the state.
- Between 1991 and June 1992, the State of Wisconsin entered into these 'Original Compacts' with each of the 11 Tribes.
- The Original Compacts permitted the Tribes to conduct certain Class III casino games, such as blackjack and electronic gaming machines, on their lands.
- These compacts had an initial seven-year term and included provisions for automatic five-year renewals unless one party gave notice of nonrenewal.
- The compacts also contained provisions allowing for future amendments to the scope of permitted games by mutual written agreement.
- In April 1993, Wisconsin voters ratified an amendment to the state constitution (Article IV, Section 24) that prohibited the legislature from authorizing most forms of gambling, including many casino-style games.
- Following the ratification of the amendment, the compacts were automatically renewed in 1998 and 1999 for five-year terms.
- Dairyland Greyhound Park, a competitor business, alleged it began losing revenue as a result of the Class III gaming conducted on Tribal lands under these compacts.
Procedural Posture:
- Dairyland Greyhound Park, Inc. filed an action against then-Governor Scott McCallum in the Dane County Circuit Court, a state trial court, on October 23, 2001.
- Dairyland sought an injunction to prevent the Governor from renewing or entering into future gaming compacts with Wisconsin's Native American Tribes.
- The circuit court initially granted the Governor's motion to dismiss, ruling that the Tribes were indispensable parties to the litigation.
- The Wisconsin Court of Appeals, an intermediate appellate court, reversed the circuit court's dismissal and remanded the case for further proceedings.
- On remand, both Dairyland and the Governor moved for summary judgment. The circuit court granted summary judgment in favor of the Governor.
- Dairyland appealed the summary judgment ruling. The Court of Appeals certified the appeal to the Wisconsin Supreme Court, the state's highest court.
- The Wisconsin Supreme Court accepted certification, but was equally divided and remanded the case back to the Court of Appeals.
- Following the Supreme Court's decision in a related case, Panzer v. Doyle, the Court of Appeals again certified the appeal to the Wisconsin Supreme Court, which accepted it for review.
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Issue:
Does the 1993 amendment to Article IV, Section 24 of the Wisconsin Constitution, which prohibits most forms of casino-style gambling, invalidate the renewal and amendment provisions of pre-existing 1991-92 gaming compacts between the State and Native American Tribes?
Opinions:
Majority - Butler, Jr., J.
No, the 1993 amendment does not invalidate the renewal and amendment provisions of the pre-existing compacts. The Contract Clauses of the United States and Wisconsin Constitutions protect the parties' rights of renewal and amendment as established in the original, validly executed compacts. The court determined the 1993 Amendment is prospective and was not intended by the legislature or the voters to retroactively invalidate the original compacts. Applying the amendment to force nonrenewal or prohibit agreed-upon amendments would constitute a substantial impairment of the State's contractual obligations. The compacts provided for automatic 'extensions,' which are continuations of the original contract governed by the law at the time of its formation, and explicitly contemplated amending the scope of gaming. Therefore, both the right to renew and the right to amend are constitutionally protected contractual rights, and the court withdraws any language from Panzer v. Doyle that suggests otherwise.
Concurring - Crooks, J.
No, the 1993 amendment does not invalidate the compacts' provisions. This opinion reaffirms the reasoning of the dissent in Panzer v. Doyle. The legislative history makes clear that the 1993 amendment was not intended to apply to the then-existing Indian gaming compacts. The Governor properly exercised his authority in both entering the original compacts and negotiating subsequent amendments. Any application of the 1993 constitutional amendment to the compacts would substantially impair the contractual relationship between the State and the Tribes, violating both the state and federal Contract Clauses.
Concurring in part, dissenting in part - Prosser, J.
No, as to renewal, but Yes, as to amendment for prohibited games. The 1993 amendment does not invalidate the automatic renewal of the original compacts for the types of gaming activity they initially authorized. However, the amendment does invalidate the Governor's authority to amend the compacts to add new forms of gaming, such as poker, roulette, and craps, that are now explicitly prohibited by the Wisconsin Constitution. The majority's reliance on the Contract Clause is flawed because it gives the Governor unconstitutional power to disregard state law and the will of the people. The Governor's authority to negotiate is limited by IGRA and the state constitution, neither of which permits compacting for gaming activities that state law prohibits for everyone else.
Concurring in part, dissenting in part - Roggensack, J.
No, as to renewal, but Yes, as to amendment for prohibited games. The 1993 constitutional amendment does not retroactively invalidate the types of games permitted in the 1991-92 and 1998-99 compacts. However, the majority is wrong to decide the issue of new games added in 2003, as that issue was settled in Panzer v. Doyle and is not properly before this court. The majority's Contract Clause analysis is fundamentally flawed because controlling U.S. Supreme Court precedent establishes that states cannot contract away their inherent police power to regulate public morals, which includes gambling. Furthermore, the compacts created no enforceable contractual 'obligation' to add new games, so there is no obligation to impair.
Analysis:
This decision solidifies the durability of state-tribal gaming compacts against subsequent changes in state law, establishing a strong precedent based on the Contract Clause. It significantly limits a state's ability to reverse course on tribal gaming once valid compacts are in place, effectively 'grandfathering in' not just the original terms but also the rights to renew and amend. By partially overruling Panzer v. Doyle, the court expanded the Governor's authority to negotiate new games under existing compacts, a move that impacts the balance of power between the executive and legislative branches in this area. The ruling underscores the tension between a state's prospective sovereign power, as expressed through constitutional amendments, and its binding contractual commitments from the past.
