Attorney General: Mark A. Shiffrin, Department of Consumer Protection, 1998-013 Formal Opinion, Attorney General of Connecticut

Attorney General's Opinion

Attorney General Richard Blumenthal

July 31, 1998

Mark A. Shiffrin
Commissioner
Department of Consumer Protection
165 Capitol Avenue
Hartford, CT 06106

Dear Commissioner Shiffrin:

You have asked for general advice regarding correspondence the Department of Consumer Protection (the "Department") received from the Mohegan Tribe and Mashantucket Pequot Tribe concerning the proposed sale and distribution of alcoholic beverages at particular sites on the Tribes' federal reservations.

According to the Tribes' letters to the Department, the Mohegan Tribe is planning a major expansion of the Mohegan Sun Casino which will include a hotel. It also plans to open a convenience store that will sell gasoline and other items. The Mohegan Tribe seeks liquor permits to sell beer at the convenience store and alcoholic liquors at the hotel. The Mashantucket Pequot Tribe is constructing a museum and research center on its reservation. The museum will include a great hall, cafeteria and outdoor terrace, which will be used for meetings and conferences. The Tribe wishes to sell and serve alcoholic liquors at these locations in the museum. The Mashantucket Pequot Tribe has not requested liquor permits from the State, but rather asks that: "the State . . . not seek to regulate these activities and defer to the Tribe's regulations."

Both the Mashantucket Pequot Tribe and the Mohegan Tribe are federally recognized Indian tribes and each has a federal reservation in Connecticut. See generally 25 U.S.C.  1751 et. seq. (the Mashantucket Pequot Tribe); 25 U.S.C.  1775 et. seq.; 59 Fed. Reg. No. 50, 12140 (March 15, 1994) (the Mohegan Tribe). Because the Tribes are federally recognized, under federal law they are afforded some level of sovereignty, including immunity from many state laws. As we explained in a prior opinion:

There is no "rigid rule" to resolve an issue as to whether a state civil regulatory law applies on a reservation. White Mountain Apache Tribe v. Bracker, 448 U.S. 136, 100 S.Ct. 2578, 2583 (1980). Absent an express statement by Congress on a particular issue, a state's power to assert its civil regulatory laws . . . on a federal reservation, turns on whether state law in that area is preempted by the operation of federal law. New Mexico v. Mescalero Apache Tribe, 462 U.S. 324, 103 S.Ct. 2378, 2386 (1983).

1995 Conn. Op. Atty. Gen. August 24, 1995.

Pursuant to the Indian Gaming Regulatory Act (IGRA), 25 U.S.C.  2710, certain of the State's and the Tribes' activities on the reservations are governed by Federal Procedures (the Mashantucket Pequot Tribe) and a Gaming Compact (the Mohegan Tribe). Both documents are identical and govern the Tribes' gaming operations and other matters, including liquor control in the casinos and related buildings. In particular, Section 14(b) of these gaming documents, collectively referred to herein as the "Gaming Compacts," provides that the sale and distribution of alcoholic beverages in the "gaming facilities" are subject to state laws and regulations. "Gaming facility" is defined in the Gaming Compacts as: "any room or rooms in which Class III Gaming as authorized by this Compact is conducted on the Reservation." The Tribes are "entitled," under the Gaming Compacts, to a hotel permit "for the sale of liquor for gaming facilities which are contained in the same building as any hotel, or cafe permit for the sale of liquor for gaming facilities which are not contained in the same building as any hotel . . . ."

It appears from the Tribes' correspondence that the only project that could potentially fall within the ambit of Section 14 of the Gaming Compacts is the Mohegan Tribe's hotel project, which the Tribe has described as an "expansion of its casino." If the Mohegan Tribe's new hotel will contain gaming facilities, then it is entitled to a hotel permit for those gaming facilities, pursuant to Section 14(b) of the Gaming Compact, and provided that the Tribe's application is made in accordance with the Liquor Control Act and regulations of the Department, and their project complies with those laws. The other two projects, the Mohegan Tribe's convenience store and the Mashantucket Pequot Tribe's museum, do not appear to fall within Section 14(b) of the Gaming Compacts, because these projects, as they have been described, are outside and are not connected to gaming facilities. Whether the State has jurisdiction to license the sale and distribution of alcoholic beverages in the Mohegan convenience store and the Mashantucket museum depends on whether the State is preempted under federal law from applying its liquor laws on the reservations and outside the gaming facilities. We conclude that state liquor laws are applicable on the reservations to the proposed sites outside the casinos.

In determining whether a state regulatory law applies to a tribe on a federal Indian reservation, the courts apply a two part test to determine if state law has been preempted: (1) whether application of state law would "interfere with reservation self-government," which inquiry is informed by traditional and historical notions of tribal sovereignty; and (2) whether application of state law "would impair a right granted or reserved by federal law." Rice v. Rehner, 463 U.S. 713, 103 S.Ct. 3291 (1983). In Rice v. Rehner, the United States Supreme Court expressly determined that: "tradition simply has not recognized a sovereign immunity or inherent authority in favor of liquor regulations by Indians." Id., 103 S.Ct. at 3297. The Supreme Court found that: "The State has an unquestionable interest in the liquor traffic that occurs within its borders, and this interest is independent of the authority conferred on the States by the Twenty-First Amendment." Id., at 3298.

As to the second prong of the federal test, whether state jurisdiction has been preempted by operation of federal law, the Rice court held that state laws were not preempted and that in fact, 18 U.S.C.  1161 expressly delegated to the states and to the tribes Congress' authority to regulate liquor transactions on Indian reservations. See also, Fort Belknap Indian Community v. Mazurek, 43 F.3d 428 (9th Cir. 1994), cert. denied, 116 S.Ct. 49 (1995) (state may prosecute Indians for violation of its liquor laws). Section 1161 provides:

The provisions of sections 1154, 1156, 3113, 3488, and 3669, of this title, shall not apply within any area that is not Indian country, nor to any act or transaction within any area of Indian country provided such act or transaction is in conformity both with the laws of the State in which such act or transaction occurs and with an ordinance duly adopted by the tribe having jurisdiction over such area of Indian country, certified by the Secretary of the Interior and published in the Federal Register. (Emphasis added.)

As to the impact of section 1161, the Supreme Court has explained: "It is clear then that Congress viewed  1161 as abolishing federal prohibition, and as legalizing Indian liquor transactions as long as those transactions conformed both with tribal ordinances and state law." Id., 103 S.Ct. 3300-01 (emphasis added). While the Tribes have concurrent authority to regulate liquor sales within their borders, they may not sell and distribute alcoholic beverages unless they comply with state law.1 Thus, under federal law, the State has jurisdiction to regulate the sale and distribution of alcoholic beverages on the Mohegan and Mashantucket reservations, and at the proposed sites. 2

The Mashantucket Pequot Tribe has requested that the Department not regulate the Tribe's liquor sales, but rather defer to the Tribe's internal regulatory efforts. We believe that the State's well recognized, substantial and historic interest in regulating liquor sales within its borders, including Indian reservations, cannot and should not be delegated to the tribes. The Liquor Control Act is a mandatory act, and the Department is charged with enforcing its provisions. Conn. Gen. Stat.  30-6(a). ("The Department . . . shall enforce the provisions of this chapter.") Nothing in the Liquor Control Act permits the Department to delegate its authority to enforce these laws to any other entity.

Moreover, while as explained above, under federal law, the Tribes have concurrent authority with the States to regulate liquor sales on their reservations, as long as they conform with State law at a minimum, and therefore may impose additional or harsher restrictions on liquor sales, the Tribes' interests may not always equate with the State's interests. As the United States Supreme Court recognized, liquor sales on the reservations could have a significant impact off the reservations as liquor sold there could "easily find its way out of the reservation and into the hands of those whom, for whatever reason, the State does not wish to possess alcoholic beverages, or to possess them through a distribution network over which the State has no control." Rice, 103 S.Ct. at 3298. Moreover, when Congress lifted historic federal prohibitions on liquor sales on Indian reservations, it "intended to delegate to the tribes as well as to the States, so as to fill the void that would be created by the absence of the discriminatory federal prohibition. Congress did not intend to make tribal members 'supercitizens' who could trade in a traditionally regulated substance free from all but self-imposed regulations" Rice, 103 S.Ct. at 3303. Accordingly, we conclude the State has jurisdiction to and should regulate liquor sales on the reservations, both inside and outside the casinos. In order to lawfully sell and distribute liquor at the proposed sites, the Tribes must comply with the Liquor Control Act and pertinent Department regulations.3

We trust that this opinion addresses your concerns.

Very truly yours,

RICHARD BLUMENTHAL
ATTORNEY GENERAL

Susan Quinn Cobb
Assistant Attorney General

Robert F. Vacchelli
Assistant Attorney General

RB/SQC/am


Footnote:

1 The Ninth Circuit has held that under 18 U.S.C.  1161 and Rice, federal laws prohibiting liquor distribution on Indian lands remain in effect, but are merely superseded by the Tribe's compliance with state liquor laws. Fort Belknap Indian Community v. Mazurek, 43 F.3d 428 (9th Cir. 1994), cert. denied, 116 S.Ct. 49 (1995).

2 Conn. Gen. Stat.  31-57e, which prohibits the State from providing federally recognized tribes engaged in commercial enterprises with "funds or services," until the tribes adopt employment rights codes in conformity with the Act, does not apply to the issuance of state liquor permits. The Act was not intended to impede the State's regulatory functions, which includes permitting and licensing, as evidenced by the express language of the Act which provides that it should "not be construed to prohibit the state from enforcing any civil or criminal law . . .," and exempts services "required by federal or state law." Also, if the Mohegan Tribe's new hotel falls within the ambit of Section 14 of the Gaming Compact, it would be exempt under Conn. Gen. Stat.  31-57e(b)'s exemption for services that are "required by federal . . . law" since the Gaming Compact was entered into in accordance with the IGRA.

3 Nothing in this opinion should be construed as a determination that the plans, as described in the Tribes' letters, qualify for a liquor license under the state Liquor Control Act. The Department must make a determination on each application according to the requirements of state law.


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