Cherokee Nation Businesses, LLC v. Gulfside Casino P'ship

2021 Ark. 183

632 S.W.3d 284

CHEROKEE NATION BUSINESSES, LLC; and Arkansas Racing Commission, Appellants

v.GULFSIDE CASINO PARTNERSHIP, Appellee

No. CV-21-289

Supreme Court of Arkansas.

Opinion Delivered: October 21, 2021

McDaniel, Wolff & Benca, PLLC, by: Bart W. Calhoun, Scott P. Richardson, and Dustin B. McDaniel, Little Rock, for appellant Cherokee Nation Businesses, LLC.

Leslie Rutledge, Att'y Gen., by: Kat Hodge-Guest, Sr. Ass't Att'y Gen., for appellant Arkansas Racing Commission.

Murphy, Thompson, Arnold, Skinner & Castleberry, by: Kenneth P. "Casey" Castleberry, El Dorado; and Dodds, Kidd, Ryan & Rowan, Little Rock, by: Lucas Z. Rowan, for appellee.

KAREN R. BAKER, Associate Justice

This appeal stems from ongoing litigation for the sole casino license for Pope County, Arkansas. The instant appeal returns to us a second time after our previous reversal and remand. Cherokee Nation Businesses, LLC v. Gulfside Casino P'ship , 2021 Ark. 17, at 9, 614 S.W.3d 811, 817 (" CNB I "). On June 28, 2021, the parties filed a joint motion to expedite this appeal, which we granted on July 2, 2021.

The history of the matter begins with Arkansas Constitutional Amendment 100, "The Arkansas Casino Gaming Amendment of 2018," which was approved by voters in November 2018 and became effective on November 14, 2018. The Amendment provides that appellant, the Arkansas Racing Commission ("ARC"), is to award a casino license to one entity to operate a casino in Pope County. Relevant to this litigation, in December 2018, appellee, Gulfside Casino Partnership ("Gulfside"), obtained letters of support from outgoing Pope County Judge Jim Ed Gibson and Russellville Mayor Randall Horton, both of whom were in office at the time and whose tenures ended on December 31, 2018.

On February 21, 2019, the ARC adopted Rule 2.13(5)(b) of the ARC—Casino Gaming Rules codified at Ark. Admin. Code 006.06.5-2 § 2.13(5)(b) (Westlaw 2019) (sometimes referred to as "the Rule"), which provides that the letters of support must be from the county judge, quorum court, or mayor holding office at the time of the submission of an application for a casino license. On March 5, 2019, the General Assembly passed Act 371 of 2019, which is identical to Rule 2.13(5)(b). The Act provides that "the Arkansas Racing Commission shall require a casino applicant for a casino in Pope County ... to submit: ... a letter of support from the county judge or a resolution of support from the quorum court, and from the mayor ... holding office at the time of the submission of an application for a casino license." Act 371 became effective on March 8, 2019, and is codified at Ark. Code Ann. § 23-117-101 (Supp. 2021).

On March 26, 2019, the ARC opened an application period from May 1 through May 30, 2019. Gulfside and four other applicants, including appellant, Cherokee Nation Businesses, LLC ("CNB"), applied for a casino license in May 2019. At that time, neither Gibson nor Horton was in office. On June 13, 2019, the ARC denied all five applications. Gulfside appealed to the ARC. After a hearing, on August 15, 2019, the ARC denied Gulfside's administrative appeal.

Also on August 15, Gulfside appealed and filed the underlying litigation in circuit court challenging the denial of a license. Gulfside filed suit pursuant to Arkansas Code Annotated section 25-15-212 (Supp. 2021) regarding review of an agency adjudication; Arkansas Code Annotated section 25-15-207 regarding review of an agency rule in an action for declaratory judgment; and Arkansas Code Annotated section 16-111-102 (Repl. 2016), the Arkansas Declaratory Judgment Act. In its complaint, Gulfside sought relief (1) declaring that the Rule is unconstitutional; (2) declaring that the statute is unconstitutional; and (3) ordering ARC to grant Gulfside the license.

On August 23, 2019, CNB filed a motion to intervene in Gulfside's litigation, which the circuit court denied. From the circuit court's order denying intervention, CNB brought an interlocutory appeal. On February 4, 2021, we held that CNB "is entitled to intervention as of right under Rule 24(a)(2). The circuit court's order is reversed in full and remanded." CNB I. On July 14, 2020 in a related matter, Cherokee Nation Businesses, LLC v. Arkansas Racing Commission , Case No. CV-20-438, we granted in part a petition for writ of certiorari and vacated the circuit court's orders on the petitioners’ postjudgment motions for lack of jurisdiction, which found that CNB/Legends was not a qualified casino applicant.

Following remand and our holding that CNB was entitled to intervene, the instant case returned to the circuit court and all three parties filed motions for summary judgment. Gulfside again challenged the constitutionality of the Act, asserting that the Rule and the Act added a requirement beyond that provided in the Amendment and contended that its application satisfied Amendment 100's requirements. The ARC and CNB asserted that the rules and statutes at issue are constitutional and consistent with the Amendment. On May 7, 2021, the circuit court held a hearing. On May 21, the circuit court granted in part and denied in part Gulfside's motion for summary judgment and entered an order stating in pertinent part:

The court grants the declaratory judgment requested ... that a portion of Rule 2.13(5)(b) of the Casino Gaming Rules is unconstitutional for imposing an additional requirement on applicants not contained in Amendment 100.

...

The unconstitutional portion of Rule 2.13(5)(b) which is ordered stricken is the phrase, "shall be dated and signed by the County Judge, Quorum Court members, or Mayor holding office at the time of the submission of an application for a casino gaming license." Additionally, the court grants the declaratory judgment ... that A.C.A. 27-117-101(b) be declared unconstitutional.

In sum, the circuit court granted Gulfside relief on counts 1 and 2, declaring that the Rule and the Act were unconstitutional because they impose an additional qualification to Amendment 100. The court denied Gulfside relief on count 3--its request for injunctive relief against the ARC. From that order, only CNB and the ARC appeal and present one issue: whether the circuit court erred in its interpretation of Amendment 100. We reverse and dismiss for the reasons that follow.

I. Background

We begin our analysis by identifying the Amendment and the applicable rule and statute.

A. Amendment 100

Amendment 100 contains eleven sections. Sections 2, 3, and 4 are relevant to this appeal. First, section 2 defines "casino applicant":

(b) "Casino applicant" is defined as any individual, corporation, partnership, association, trust, or other entity applying for a license to conduct casino gaming at a casino.

Second, section 3 provides the General Assembly with the authority to pass laws and appropriate funds for casino gaming and states in pertinent part:

(c) To fulfill the purposes of this Amendment, the Arkansas General Assembly shall from time to time enact laws, and appropriate monies to or for the use of the Arkansas Racing Commission. Initial laws and appropriations enacted by the General Assembly pursuant hereto shall be in full force and effect no later than June 30, 2019.

Third, section 4, "Licensing of casinos and casino gaming," provides the ARC with rule-making authority, including authority to establish rules regarding the application process and issuance and deadlines for the same:

(c) The Arkansas Racing Commission shall adopt rules necessary to carry out the purposes of this Amendment and perform its duties under this Amendment.

...

(e) Not later than 120 days after the effective date of this Amendment, the Arkansas Racing Commission shall adopt rules governing:

(2) The manner in which the Arkansas Racing Commission considers applications for issuance of casino licenses;

...

(f) Not later than June 1, 2019, the Arkansas Racing Commission shall begin accepting applications for casino licenses.

...

(i) The Arkansas Racing Commission shall issue four casino licenses.

(j) The Arkansas Racing Commission shall issue a casino license, as provided in this Amendment, to a Franchise holder located in Crittenden County, there being only one, to conduct casino gaming at a casino to be located at or adjacent to the Franchise holder's greyhound racing track and gaming facility as of December 31, 2017 in Crittenden County. The Arkansas Racing Commission shall also issue a casino license, as provided in this Amendment, to a Franchise holder located in Garland County, there being only one, to conduct casino gaming at a casino to be located at or adjacent to the Franchise holder's horse racing track and gaming facility as of December 31, 2017 in Garland County. Casino licenses to be issued to Franchise holders shall be issued upon:

(1) Adoption by the Arkansas Racing Commission of rules necessary to carry out the purposes of this Amendment; and

(2) Initial laws and appropriations required by this Amendment being in full force and effect.

...

(n) The Arkansas Racing Commission shall require all casino applicants for a casino license in Pope County and Jefferson County to submit either a letter of support from the county judge or a resolution from the quorum court in the county where the proposed casino is to be located and, if the proposed casino is to be located within a city or town, shall also require all casino applicants to include a letter of support from the mayor in the city or town where the applicant is proposing the casino to be located.

B. Rule 2.13(5)(b)

Next, at issue are the rules promulgated by the ARC. Pursuant to Amendment 100, the ARC adopted rules in support of the Arkansas Casino Amendment of 2018. See Ark. Admin. Code 006.06.5-2 § 2.13(5)(b), "Application for Casino Gaming License and Renewal." With regard to letters of support, subsection (5)(b) requires that the letters of support referenced in section 4(n) of Amendment 100 be issued by officials who are in office at the time of the...