Judge rejects Seneca Nation's bid to suspend casino payments to state

File photoA federal court judge on Friday rejected a challenge by the Seneca Nation of Indians to an arbitration award that directs the payment of hundreds of millions of dollars in casino revenue sharing funds to the state of New York and the casino host communities.

BUFFALO -- A federal court judge has resoundingly rejected a challenge by the Seneca Nation of Indians to an arbitration award that directs the payment of hundreds of millions of dollars in casino revenue sharing funds to the state of New York and the casino host communities.

In a 30-page decision, handed down Friday afternoon, Senior U.S. District Court Judge William Skretny wrote that "the correctness of the (arbitrators') decision is not now at issue." Rather, the judge ruled, the only question to be resolved was whether or not the three-member arbitration panel "manifestly disregarded governing law in reaching its determination."

Skretny wrote, "This court finds that it did not."

In dismissing the Seneca appeal, Skretny also granted a request by the state to confirm the arbitration award. Skretny noted in his decision that "arbitration orders are not self-enforcing; judicial orders are required to give them force and effect."

In his review of the law and prior court rulings, Skretny said "courts have an extremely limited role in reviewing (arbitration) awards." 

"The burden of proof required to avoid confirmation of an arbitration is therefore very high," Skretny wrote. "Indeed, an arbitration award should be enforced, despite a court's disagreement with it on the merits, if there is a barley colorable justification for the outcome reached. Having closely reviewed the record and considered the parties arguments, this court finds that the Nation has failed to carry its heavy burden of demonstrating that the (arbitration) panel acted in manifest disregard of the law."

The decision was welcomed by Falls Mayor Paul Dyster, who called it "the removal of (an) obstacle in the path of better future relations" between the city, state and Senecas.

"As I have stated since the beginning, we have been confident all along that this matter would be brought to a fair resolution for the host municipalities," Dyster said. "I am hopeful that the Seneca Nation of Indians, in light of the court's decision, will comply with the ruling in a timely fashion."

But in a statement released shortly after the court's decision, Seneca Nation President Rickey Armstrong Sr. seemed to dash the mayor's hopes.

"We understood the reality that the arbitration and court proceedings may not ultimately uphold the language of the Compact as written," the statement read. "Yet, it is our obligation to defend our agreements, so they are not compromised for the benefit of others. We will take the time to review today's decision and determine how the Nation will proceed.”

Skretny denied a request to force the Senecas to pay the state's attorney's fees and costs. The judge found the Senecas were not engaged in frivolous delaying tactics.

A senior advisor to Gov. Andrew Cuomo, Rich Azzopardi, said the court decision means it's time for the Senecas to pay up.

"It is our hope that they end this charade, stop using the courts to delay, and pay what they owe," Azzopardi said. "The court confirmed what we've said all along: the Seneca Nation needs to fulfill their obligations, make their neighbors and the state whole, and pay what they owe in exchange for their exclusive gaming rights."

It's not clear how much cash the Senecas owe the city. Under the compact’s structure, the nation paid 25 percent of its slot machine revenue to the state government in quarterly installments. State officials allocated 25 percent of what it received to the Falls.

The city is currently due 10 quarterly payments.

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