After losing a series of court cases that derived from the administration of former Governor Arnold Schwarzenegger, who was a tough negotiator of tribal gaming compacts, and persuaded the Pauma tribe of San Diego County that it needed to pay millions of dollars in return for adding more slot machines, the bill is coming due not to Pauma, but to California.
The 9th Circuit Court of Appeals has ordered California to pay $36.3 million, an amount that the legislature was expected to appropriate before the end of the session. The state lost in its attempt to appeal the case to the U.S. Supreme Court.
The courts had ruled that the state acted fraudulently when it told the Pauma tribe that no more slot machine licenses were available in 2004 and persuaded the tribe to sign a compact that required it to pay up to $7.75 million annually to the state general fund instead of the $315,000 it had been paying.
One of the judges on the panel wrote, “Since this misrepresentation induced Pauma to enter into the much more expensive 2004 amendment, the tribe is entitled to rescission of the amendment and restitution for the $36.2 million in overpayments made to the state.”
