Updated: Court Denies City Appeal of Fond-du-Luth Decision

Posted at: 01/14/2013 12:15 PM
Updated at: 01/14/2013 10:32 PM
By: Jon Ellis, Alan Hoglund

A federal appeals court has denied the City of Duluth's appeal of a ruling in the Fond-du-Luth Casino dispute.

Monday's ruling from the 8th District U.S. Court of Appeals mostly upholds a 2011 district court ruling which found the Fond du Lac Band of Lake Superior Chippewa does not need to make future lease payments for the downtown Duluth casino.

The 2011 ruling found that the band could not be refunded its past rent payments and the band did not appeal that aspect of the ruling.

Monday's ruling reverses a portion of the ruling regarding rent payments for 2009 to 2011. The ruling says the band may not need to make the payments and returned the issue to the district court for further proceedings.

The city had used the rent payments, which totaled over $75 million between 1994 and 2009, for street improvements. According to Duluth Mayor Don Ness, who spoke at a news conference on the matter Monday afternoon, the ruling is "devastating to our community and devastating to the residents and the taxpayers."

Ness has told Eyewitness News the payments from the band totaled about $6 million per year and that it was the primary source of money for street repairs.

City Attorney Gunnar Johnson said the city does have the right to request all judges in the Court of Appeals review the case, and says he feels the city’s case is strong.

On tribal radio station WGZS Monday morning, Tribal Chairwoman Karen Diver said the ruling is “good news for the band.”

Chairwoman Diver responded to a question about what the city will do next and said it "depends on whether they want to put their resources into an effort that has proved to be fruitless in the courts up until this point."

The band stopped making rent payments in 2009 after the National Indian Gaming Commission decided that a 1994 agreement between the city and the band was incompatible with federal law. The 2011 district court ruling granted a dissolution of the consent decree.

A study by the UMD Labovitz School of Business and Economics, released last week, estimated that the Casino generated 339 jobs and $33.9 million in spending in 2011.