Ledyard: Expensive to Fight Foxwoods

The ongoing legal battle has cost Ledyard taxpayers more than $900,000.

Judge gives nod to tribe in suit over slots taxes
By Julianne Hanckel
Publication: theday.com

Ledyard, state arguments rejected in ruling that could set precedent

A federal judge in Bridgeport ruled this week in favor of the Mashantucket Pequot Tribe in its nearly six-year lawsuit over Ledyard's taxation of leased slot machines at Foxwoods Resort Casino.

Tuesday's decision by Senior U.S. District Judge Warren W. Eginton granted the tribe's motion for summary judgment in the case and denied motions filed by the defendants — the state, the Town of Ledyard and the town's tax assessor and tax collector.

Eginton's ruling may set a precedent not only for the Mashantucket Pequot Tribal Nation and Foxwoods Resort Casino, but also for other Indian-owned casinos across the country.

The suit, filed in 2006, stemmed from the town's attempts to tax slot machines the tribe leased from two manufacturers, Atlantic City Coin & Slot Co. and WMS Gaming, an Illinois-based company.

The ongoing legal battle has cost Ledyard taxpayers more than $900,000.


While property the tribe owns on its Ledyard reservation is not subject to taxation, the town had argued that equipment owned by private companies on tribal land is taxable.

In court documents supporting the motion for summary judgment, the tribe argued that the tax at issue is preempted based on the "Bracker balancing test" — a balancing of the relevant federal, tribal and state interests. Documents also cited Indian trader statutes and Supreme Court rulings.

"Instead Defendants claim that this is a 'newfound' argument, that the statutes do not apply to gaming, and do not apply to the Vendors because they are not licensed as Indian traders," the document stated.

"In fact, Defendants have been aware of the Tribe's Indian Trader statutes argument for over two years, the regulations under the statutes show that they apply to gaming, and the Court in Central Machinery in 1980 laid to rest any argument that the Indian Trader statutes only apply to licensed Indian traders."

Mayor John Rodolico could not be reached to comment.

Ledyard's former mayor, Fred B. Allyn Jr., said Friday he is disappointed in the ruling. "It's just too bad that we can't make an agreement with the tribe to avoid still more legal fees," he said.
In a statement sent to The Day, Dale Wolbrink, manager of public relations at Foxwoods Resort Casino, said, "The court's decision definitively upholds the federal and tribal interests in tribal self-determination and self-government, and determines that these significant interests outweighed any interest the Town or State has to impose a tax on Reservation."

Wolbrink said the tribe is the largest property taxpayer within the town of Ledyard, paying approximately $1 million in real estate and personal property taxes for property it owns outside the boundaries of the reservation.

Benjamin Sharp, an attorney with the Washington D.C.-based law firm Perkins Coie who is representing the town in the suit, could not be reached to comment.

Day staff writer Brian Hallenbeck contributed to this report.


Conn. tribe wins lawsuit over slot machine taxes
Originally published: March 30, 2012
By The Associated Press

NEW HAVEN, Conn. - (AP) -- The American Indian tribe that owns Foxwoods Resort Casino has won a federal lawsuit against the town of Ledyard over property taxes levied on leased slot machines.

U.S. District Court Judge Warren Eginton ruled this week in favor of the Mashantucket Pequot Tribe in the 6-year-old lawsuit. He ruled the town's interest in taxing the leased equipment fails to justify the economic burden on the tribe and cited the tribe's self-determination and self-government.

The tribe argued the taxes, collected since 2003, violated federal law.

The town has argued that while the Pequots are a federally recognized tribe, and their property is tax-exempt, equipment owned by private companies on tribal land is taxable.

Taxes on non-Indian entities that can be passed onto the tribe have not been historically upheld, Eginton wrote.

The tribe said it was pleased the court agreed with the tribe's position that the town lacked the authority under federal law to impose property taxes on the slot machines.

"The court's decision definitively upholds the federal and tribal interests in tribal self-determination and self-government, and determines that these significant interests outweighed any interest the town or state has to impose a tax on reservation," the tribe said in a statement.

The decision relates only to the town's attempt to impose taxes on property within the tribe's reservation and does not affect the tribe's payment of taxes on property outside the reservation, the Pequots said. The tribe said it is the largest property taxpayer within Ledyard, paying about $1 million in real and personal property taxes for property located outside the reservation.

Benjamin Sharp, an attorney for the town, declined comment, saying he didn't have a chance yet to review the ruling or discuss it with town officials.


Conn. tribe wins lawsuit over slot machine taxes