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Casino Contract Between City and Tribe Void, Court Rules


In what Duluth Mayor Don Ness called "devastating news for the residents and taxpayers of the city," a three-judge panel of the 8th Circuit Court of Appeals issued an opinion today backing the Fond du Lac Band's request to nullify its Fond du Luth Casino contract with the city, letting the band off the hook for annual payments to the city totaling almost $6 million. The move also means U.S. District Court Judge Susan Nelson will have to revisit her decision that the tribe pay back the city about $12.4 million it had refused to pay between 2009 and 2011. The city plans to appeal to a full panel of Eighth Circuit judges.

Revenue generated by the casino and paid to the city was the primary source for street reconstruction in the city. Ness said the decision is not only devastating for Duluthians, but has the potential to be a precedent for the other 209 such contract agreements nationwide.

The tribe and the city had agreed under contract in 1994 that the city would receive 19 percent of the casino's revenue annually until 2011, with a renegotiated contract to dictate terms from 2012 through 2036. In 2009, the tribe stopped payment, claiming it had been overpaying for years. When the city protested, the tribe went to the National Indian Gaming Commission, which decided the original contract violated federal law.