Federal Judge in Michigan Dismisses Kewadin Casinos’ Claim of Sovereign Immunity

The Kewadin Casinos Gaming Authority (KCGA) is scheduled to be in state court today. Last week, a federal judge in Michigan dismissed KCGA’s claim that the state court lacked jurisdiction in the case due to tribal sovereign immunity.

That federal dismissal means Kewadin, the gaming and casino operations department of the Sault Ste. Marie Tribe of Chippewa Indians, may have to return to developers the $9 million they’ve paid to the KCGA. The money was an advance on the purchase of land to build two retail casinos. The proposed casinos would have been in Lansing and Huron Charter Township. However, the project fell through when the Department of the Interior refused the Kewadin tribe’s request to put the land into trust.

For the Michigan online casino and sports betting market, Kewadin partners with WynnBet Casino and WynnBet Sportsbook. That online gambling operator won’t be impacted by these court cases, however.

The Kewadin Casinos Case Dismissal

On Wednesday, US District Judge Hala Y. Jarbou dismissed Kewadin Casinos Gaming Authority v. Draganchuk et al.

She explained that the case in the US District Court, Western District of Michigan, Northern Division started in 2011, when KCGA decided to expand its retail casino footprint.

Jarbou wrote in her opinion on Wednesday:

Defendants JLLJ Development, LLC and Lansing Future Development II, LLC (collectively, “Developers”) brought an action seeking declaratory judgment and alleging contract, quasi-contract, and tort claims against Plaintiff Kewadin Casinos Gaming Authority in state court after a similar action filed in this district was dismissed for lack of subject matter jurisdiction. Kewadin filed suit in this court against Defendant Developers and against Ingham County Circuit Court Judge Joyce Draganchuk, the presiding state court judge, seeking declarations that:

(1) sovereign immunity bars the Developers’ claims,

(2) that Judge Dragunchuk and the Michigan state courts lack subject matter jurisdiction, and

(3) that the Defendants are barred from compelling the Tribe and Kewadin to take action within the Tribe’s Indian Country or to violate the Tribe’s laws. …

For the reasons herein, the Court will grant Defendants’ motions and deny Plaintiff’s motion.

In other words, she dismissed the case.

That’s why it headed back to state court today.

Circuit Court Judge Draganchuk has the case scheduled for a non-jury civil trial on today and Tuesday.

Kewadin Casinos Deja Vu

Jarbou says this wasn’t the first time this Kewadin Casinos case was in federal court. However, the roles were reversed last time.

She explained:

After Kewadin acquired the land, the Department of Interior denied the Tribe’s applications to have the land held in trust. In March 2020, the Developers brought suit against Kewadin in this district for claims arising under state law. Kewadin moved to dismiss based on tribal sovereign immunity. The federal district court dismissed the case on March 20, 2021, for lack of subject matter jurisdiction, without deciding the issue of sovereign immunity.

500 Nations reported a 2017 denial from the US Department of Interior meant Kewadin Casino Lansing wouldn’t happen.

The Lansing retail casino proposal said:

The casino will be a 125,000-square-foot facility costing [an] estimated $245 million. Employment is estimated at 1,500 permanent jobs plus 700 construction jobs.

Heading Back to State Court

US district court records show Judge Robert J. Jonker rendered his opinion on March 30, 2021.

So the developers next filed suit in the 30th Judicial Circuit Court in Ingham County.

Jarbou wrote on Wednesday:

The state court determined that there had been “an express and unlimited, irrevocable waiver of sovereign immunity” and denied Kewadin’s motion. … Following several motions aimed at reconsidering this determination, the Developers filed a motion to compel discovery, which the court granted. On January 28, 2022, Judge Draganchuk issued Kewadin an Order to Show Cause why Kewadin should not be held in contempt of court for its failure to comply with the court’s order compelling discovery.

So on Feb. 4, 2022, KCGA filed the suit Jarbou dismissed on Wednesday.

The state court then found Kewadin Casinos in contempt of court.

About the Author

Heather Fletcher

Heather Fletcher is a writer for Michigan Sharp with a focus on online casino content. She had her first published byline at age 10, but didn't get paid for her writing until she got her first newspaper job. Heather's work in Suburban News Publications in Ohio and eventually took her to The New York Times, where she's still a contract freelance reporter for the National Desk. In March 2021, Fletcher began writing about online casino gambling as the lead writer for Online Poker Report, which lead her to MI Sharp.