Supreme Court: State Can't Rule on Duluth Hotel Dispute

Updated: 03/12/2014 10:53 PM
Created: 03/12/2014 11:46 AM

The Minnesota Supreme Court says state courts do not have jurisdiction to rule on a dispute over the Fond du Lac Band of Lake Superior Chippewa's proposal to place additional property in downtown Duluth into federal trust.

The band bought the Carter Hotel building adjacent to the Fond du Luth Casino in 2010 and is seeking federal approval to declare the property as "Indian Country."  The City of Duluth filed suit in state court, alleging that a 1986 agreement between the city and the band gives the city a say in deciding whether to create any additional "Indian Country" in Duluth.

In a ruling released Wednesday, the state's high court agreed with the band's assertion that only federal courts have authority to rule in the matter.  The city contended that it is allowed to sue the band in state court under the 1986 agreement that created the casino, but the Supreme Court found that a 1994 agreement between the city and the band moved all potential litigation to federal court.

The high court said only federal courts have jurisdiction to rule on the Carter Hotel dispute.

City Attorney Gunnar Johnson said the city hasn't yet decided whether to pursue a federal case.  Ultimately, Johnson said the city would like to get an injunction to prevent the property from going into trust before the federal government makes its final decision.

"We want the benefit of the agreement with the band from 1986 which was they have to get our consent before they put additional property into trust," Johnson said.

"The band continues to hope that all of the city litigations will be resolved so that all parties can move forward on a more positive course," said Fond du Lac Chairwoman Karen Diver, who was in Washington Wednesday when the state ruling was released.

The city and band have also been engaged in a legal dispute over payments from the casino, which the band stopped making in 2009.  In 2011, the National Indian Gaming Commission ruled that the lease calling for payments violated federal law.

Last year, a federal judge ordered the band to pay nearly $10.4 million in rent owed for 2009, 2010, and 2011, but ruled the band would not have to make any further payments under its current agreement with the city, which runs until 2036.

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