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MGM Resorts International Global Gaming Development, LLC v. Malloy

United States Court of Appeals, Second Circuit

June 21, 2017

Dannel P. Malloy, in his official capacity as Governor of Connecticut; Denise Merrill, in her official capacity as Connecticut Secretary of the State; Jonathan A. Harris, in his official capacity as Commissioner of the Connecticut Department of Consumer Protection, Defendants-Appellees.

          Argued: November 28, 2016

         Appeal from the United States District Court for the District of Connecticut. No. 3:15 Civ. 1182 - Alvin W. Thompson, Judge.

          Kevin King (Thomas Brugato, Covington & Burling LLP, Washington, DC; Neil K. Roman, Cléa Liquard, Covington & Burling LLP, New York, NY, on the brief), Covington & Burling LLP, Washington, DC, for Plaintiffs-Appellants.

          Robert J. Deichert, Assistant Attorney General, for George Jepsen, Attorney General, Hartford, CT, for Defendants-Appellees.

          Before: Walker, Sack, and Chin, Circuit Judges.

          John M. Walker, Jr., Circuit Judge

         Plaintiff-appellant MGM Resorts International Global Gaming Development, LLC ("MGM"), a developer of casinos and other commercial gaming enterprises, appeals a judgment of the United States District Court for the District of Connecticut (Thompson, J.) dismissing its complaint against the State of Connecticut for lack of Article III standing. MGM claims that Special Act 15-7 (the "Act") of the Connecticut General Assembly, which creates a special registration pathway for the state's two federally recognized Indian tribes to apply to build commercial casinos on non-Indian land, places it at a competitive disadvantage in the state's gaming industry. Because MGM has failed to allege any specific plans to develop a casino in Connecticut, we conclude that any competitive harms imposed by the Act are too speculative to support Article III standing. We therefore AFFIRM the judgment of the district court.


         In 2015, the Connecticut General Assembly enacted Special Act 15-7, which establishes a framework through which Connecticut's two federally-recognized Indian tribes, the Mashantucket Pequot and the Mohegans (the "Tribes"), may seek to negotiate with municipalities to establish commercial casinos on non-reservation land. Under the Indian Gaming Regulatory Act ("IGRA"), 25 U.S.C. § 2701 et seq., federally recognized Indian tribes may establish casinos on tribal land by entering into compacts with the surrounding state, subject to the approval of the Secretary of the Interior. By contrast, gaming on non-tribal land ("commercial gaming") is regulated by the law of the relevant state. The Tribes already operate two casinos-Foxwoods and Mohegan Sun-on tribal land in Connecticut, which were established pursuant to IGRA.

         Special Act 15-7 establishes a process by which the Tribes may jointly apply to establish commercial casinos elsewhere in Connecticut. It mandates that if the Tribes wish to pursue commercial gaming opportunities on non-tribal land, they must form a "tribal business entity" (TBE) for that purpose. A TBE is a business entity registered with the Connecticut Secretary of the State, and jointly owned by both of the Tribes. § 1(a)(1). It is the only entity permitted to negotiate with municipalities on behalf of the Tribes. Though the Act allows a TBE to negotiate for the establishment of new commercial casinos, it mandates that the Connecticut General Assembly amend state law to expressly "provide for the operation of and participation in" a new gaming facility by the Tribes before any new casino can be built. § 1(c)-(d). The Act also requires that any requests for proposals ("RFPs") issued by a TBE regarding the establishment of a casino on non- tribal land be submitted to the state Department of Consumer Protection ("DCP"), and published on that agency's website. § 1(b).

         While the Act requires the Tribes to establish a TBE in order to pursue commercial casino development, it makes no mention of any other potential market actors. The parties dispute the meaning of this omission. MGM interprets the statutory language to mean that only the Tribes are authorized to establish commercial casinos in Connecticut at all, because the Act is the only statute that provides any entity with an express right to enter into such negotiations with municipalities. The state argues that nothing in the Act prevents other developers from soliciting municipalities for contracts, and that it imposes a unique burden on the Tribes by requiring them to partner with each other through a TBE in order to compete for contracts. No Connecticut state court decision has interpreted the Act or suggested any path toward resolving this dispute.

         Proceeding on its interpretation of the Act that a non-tribal land casino requires the establishment of a TBE, on July 23, 2015, MGM attempted to register a TBE with the Connecticut Secretary of the State as a preliminary step to issuing RFPs to municipalities for potential casino developments. The Secretary rejected the application on the ground that it "[did] not comply with Connecticut law" because MGM has "no affiliation with either of [the] Tribes." [Amended Complaint ¶ 53, App'x 23-24]. MGM claims that it remains interested in establishing a commercial casino in Connecticut.[1] According to MGM's brief, "[a]s part of its development and expansion efforts, " it has "conducted a study analyzing the viability of a casino in Connecticut and concluded that such a development would be both feasible and desirable." [Appellant's Br. At 13]. However, MGM does not appear to be currently engaged in negotiations with any municipalities on specific projects.

         The Tribes registered a TBE with the Secretary of the State on August 24, 2015. Shortly thereafter, they published an RFP on the website of the state Department of Consumer Protection. While the Tribes' negotiations to build a casino remain "ongoing, " no development agreement has been executed.

         On August 4, 2015, MGM filed a complaint in the District of Connecticut seeking a declaratory judgment and other relief on the basis that Special Act 15-7 violates the Equal Protection Clause of the Fourteenth Amendment and the dormant Commerce Clause. On June 23, 2016, the district court dismissed the complaint under Federal Rule of Civil Procedure 12(b)(1), after determining that MGM had not suffered a concrete harm and therefore did not have Article III standing. MGM now appeals.


         We review de novo a district court's grant of a motion to dismiss. Baur v. Veneman, 352 F.3d 625, 631 (2d Cir. 2003). At the pleading stage, a reviewing court must accept as true any facts plausibly alleged in a ...

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