Fed. Judge Rules Fond du Lac Must Pay City of Duluth

Posted at: 10/08/2013 5:42 PM
Updated at: 10/08/2013 10:20 PM
By: Travis Dill

On Tuesday, a federal judge ordered the Fond du Lac Band must pay the City of Duluth millions of dollars in rent for their casino downtown.

Court documents show the band must pay nearly $10.4 million in back-owed rent, but city leaders said the amount due is $12 million with interest included at a press conference on Tuesday.

Mayor Don Ness said people doubted the city's position in the legal battle, but this judgment is telling.

“I think this ruling is a very clear indication that the city has been on the right path,” Ness said.

The band and city came to a lease agreement for the Fond-du-Luth Casino in 1994, but the band stopped payments in 2009.

In 2011 the National Indian Gaming Commission ruled that lease violated federal law. Mayor Ness said Duluth has been singled out by the federal agency.

“Even though there are many communities across the nation who have similar agreements those agreements have not been challenged by the federal government. So the question remains why has the City of Duluth has been held out as the exception to that rule,” Ness said.

A federal judge considered that violation in the case, but ruled the band must pay rent on the first term of the lease, which ended in 2011.

However the band will not have to pay on a second term that would extend until 2036. Still, Ness hoped to reach an agreement with the Fond du Lac Band.

“That has consistently been our message and it is our message today. We want to work with the Fond du Lac Band. We want to come to an agreement that will work for both of our communities,” Ness said.

However Fond du Lac Band Chairwoman Karen Diver said the band has tried to reach out to the city in the past, but the city's demands made discussions fruitless.

“So they weren't realistic offers, but if they are willing to talk about settlement that is compliant with the Indian Gaming Regulatory Act and the rulings of the court and the National Indian Gaming Commission we will always be open to those conversations,” Diver said.

And she said appealing the ruling was not off the table.

“Litigation is not the best means of resolving differences, but it wasn't the band who brought all the lawsuits,” Diver said.

Diver said the tribal council will take some time to review the judgment before deciding how to move forward.

City Attorney Gunnar Johnson said the city is challenging the ruling that their lease violates federal law, but he said that fight will not be easy.

Johnson said if that violation is overturned the city could try to legally force the lease payments that were expected through 2036.

The court must still decide if the Band can recoup over $500,000 in overpayments to the City of Duluth.