CALIFORNIA COMMERCE CASINO, INC., v. SCHWARZENEGGER

Filed 1/23/07

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION THREE

            APPEAL from a judgment of the Superior Court of Los Angeles County,

Dzintra Janavs, Judge.  Dismissed.

            Manatt, Phelps & Phillips, Ronald B. Turovsky and Joanna S. McCallum for Plaintiffs and Appellants.

            Howard Rice Nemerovski Canady Falk & Rabkin, Steven L. Mayer for Hollywood Park Land Co., LLC, et al. as Amici Curiae on behalf of Plaintiffs and Appellants.

            Bill Lockyer, Attorney General, Robert L. Mukai, Assistant Attorney General, Sara J. Drake and Kenneth R. Williams, Deputy Attorneys General, for Defendants and Respondents.

            Fred J. Hiestand for the Pala Band of Mission Indians, the Pauma Band of Mission Indians, the Rumsey Band of Wintun Indians, the United Auburn Indian Community and the Viejas Band of Kumeyaay Indians as Amici Curiae on behalf of Defendants and Respondents.

            Plaintiffs and appellants California Commerce Casino, Inc. and Michael Sana (collectively, plaintiffs) appeal a judgment of dismissal following the sustaining without leave to amend of a demurrer interposed by defendants and respondents Arnold Schwarzenegger in his official capacity as Governor of the State of California, Tom Campbell in his official capacity as Director, California Department of Finance, and California Infrastructure and Economic Development Bank (I-Bank) (defendants).

SUMMARY STATEMENT

            As a preliminary matter, this court has subject matter jurisdiction over the appeal.  Government Code section 63048.8, subdivision (e), added by section 4 of Assembly Bill No. 687 (2003-2004 Reg. Sess.) (AB 687), insofar as it provides for direct review by the California Supreme Court of certain matters, is unconstitutional because it abridges the Court of Appeal's appellate jurisdiction.  (In re PerrisCity News (2002) 96 Cal.App.4th 1194, 1197.)

            The essential issue presented on appeal is the statute of limitations applicable to this action in which plaintiffs are challenging the constitutionality of AB 687, a five-section bill wherein the Legislature ratified amended gaming compacts among the State of California and five Indian tribes.  Although plaintiffs contend they are attacking solely the validity of AB 687 and not any matters authorized by AB 687, plaintiffs' action, if successful, would have the effect of invalidating the amended compacts which were ratified thereby.  Therefore, the various theories raised in plaintiffs' complaint should have been tested in a validation action within 60 days of the enactment of AB 687.  (Code  Civ. Proc., §  860 et seq.; Gov. Code, §  17700.)  However, plaintiffs waited nearly 11 months to file suit, and therefore, the trial court properly ruled the action was time-barred.

            In addition to being filed late in the trial court, the matter was not filed timely on appeal.  The issue of the timeliness of the appeal is inextricably intertwined with the issue of whether this action was subject to the validation statutes.  Because plaintiffs' lawsuit was subject to the time limits specified for validation actions, the time for filing notice of appeal is governed by Code of Civil Procedure section 870, within the statutory scheme pertaining to validating proceedings, not by California Rules of Court, former rule 2(a).  Code of Civil Procedure section 870 requires notice of appeal in a validation action to be filed within 30 days of notice of entry of judgment.  The notice of appeal herein was filed 47 days after notice of entry of judgment.  Therefore, the appeal must be dismissed as untimely.

FACTUAL AND PROCEDURAL BACKGROUND

            1.  The federal Indian Gaming Regulatory Act.

            The federal Indian Gaming Regulatory Act (IGRA) was enacted in 1988 as a means of generating tribal government revenue and to promote triable economic development, self-sufficiency, and strong tribal governments.  (25 U.S.C. §  2702.)

            IGRA separates gaming into three categories and provides for different modes of regulation for each category.  Class 1 gaming (e.g., social games for minor prizes or traditional forms of Indian gaming) (25 U.S.C. §  2703, subd. (6)) is subject to tribal regulation only.  (25 U.S.C. §  2710, subd. (a)(1).)  Class 2 gaming (e.g. bingo and similar games and card games that are allowed by a state) (25 U.S.C. §  2703, subd. (7)) is jointly regulated by federal and tribal authorities.  (25 U.S.C. §  2710, subd. (a)(2).)  Class 3 gaming, which includes all forms of gambling that are not class 1 gaming or class 2 gaming (25 U.S.C. §  2703, subd. (8)), requires a compact that is negotiated between a tribe and a state, subject to federal approval and oversight.  (25 U.S.C. §  2710, subd. (d).)

            2.  Pre-2000 state gaming laws and Proposition 5.

            In 1988, when the federal legislation was enacted, California prohibited all non-antique slot machines and all banking and percentage card games.  (Pen. Code, §  330 et seq.)^[1]  California's Constitution also prohibited all lotteries except the state lottery.   (Cal.  Const., art. IV, §  19, subds. (a), (d).)  The state Constitution also declared:  â€