Judge Rules Against Duluth In Dispute

The Fond du Lac Band does not owe the city of Duluth $10 million in back payments, ruled U.S. District Judge Susan Richard Nelson. Tribal Chairwoman Karen Diver said Duluth's "numerous failures in the courts has been ineffective in helping them understand the law." City Attorney Gunnar Johnson said Duluth was “reviewing its options.”

U.S. District Judge Susan Richard Nelson recently ruled that the Fond du Lac Band of Lake Superior Chippewa is not required to pay the city of Duluth .5 million in back payments from its Fond-du-Luth casino. Nelson said the 1986 revenue-sharing agreement between the city and the tribe violated the federal law that requires tribes to be the “primary beneficiary” of gambling profits.

Between 1994 and 2009, the band paid the city 19 percent of gross revenue for a total of $75 million. The city had used the casino profits to fund street repairs. But the tribe stopped making payments in 2009. The city sued for back payments of $13.5 million for 2009-2011.

Nelson originally had ruled in favor of the city and ordered the tribe to make the back payments. But the 8th U.S. Circuit Court of Appeals ruled that Nelson should have taken into account the intent of the Indian Gaming Regulatory Act. As a result, the judge changed her opinion and ruled that the tribe does not owe the money to Duluth.

Fond du Lac Chairwoman Karen Diver said, “The Band continues to hope that the whole matter can be put to rest. At the settlement talks earlier in the year, the Band made great effort to get these funds, along with a payment for services, into the City’s hands in a manner that was compliant with the Indian Gaming Regulatory Act.” However, Diver, said, “The mayor rejected those efforts, citing his confidence in prevailing in the court. The City’s numerous failures in the courts has been ineffective in helping them understand the law.”

Duluth City Attorney Gunnar Johnson indicated the city was “reviewing its options” which could include an appeal.