A judge has ruled the Osage Nation Gaming Commission ran afoul of Osage law when it fined individual members of the board that oversees the Nation’s casinos.
William L. Oldfield, the chief judge of the Osage Nation Trial Court, smacked down the commission’s March 15 censure of five past and present members of the Osage Nation Gaming Enterprise Board, declaring the commission’s decision “OVERRULED, VOIDED, STRICKEN AND HELD FOR NAUGHT,” in the court order dated Aug. 30.
He also chided the gaming commission and board for doing the Osage people a disservice by failing to work together.
Oldfield took the commission to task for personally fining each gaming board member amounts varying from $1,000 to $5,000 without explanation.
“There is no evidence why one Appellant [board member] was more or less culpable than the others,” Oldfield wrote, noting the record was “devoid of any evidence or authority to support such wildly differing punishments” as he declared the penalties “arbitrary and capricious.”
The commission levied the fines because the gaming board members had balked at providing documents regarding the expense spending of casino executives in an investigation that largely targeted former casino Chief Executive Officer Byron Bighorse.
The board members were fined individually, and they objected to the commission’s action, maintaining they had acted as a board and on advice of their lawyer at the time, Graydon Dean Luthey.
To boot, after Luthey resigned and was replaced by attorney Greg Laird, the board produced all of the documents the commission had demanded – albeit past the deadline the commission had imposed, but before it had meted out the punishments.
At a hearing before Judge Oldfield on Aug. 24, the fact the gaming board had ultimately acquiesced to the commission’s demands loomed large during oral arguments: Osage law specifically says that when primary gaming management officials are accused of non-criminal breaches of gaming regulations, they must be given instructions on how to cure their alleged wrong – and the “discontinuance or correction of the breach shall constitute a cure thereof …”
In this case, Oldfield noted the gaming board had clearly “cured” the perceived breach by providing the documents on Feb. 10, 2023, weeks before the March 2 hearing that led to the fines being levied 13 days later.
Oldfield did not address all the issues the gaming board brought up on appeal, including Constitutional issues concerning the sovereign immunity bestowed upon board members, separation of power and due process. Because of the way he crafted his decision, he wrote that because the case doesn’t involve a federal program, under Osage law it cannot be appealed to any other court – meaning, in this case, the Osage Nation Supreme Court.
“[A]t the oral argument, counsel for the Appellants [Laird for the gaming board] requested the Court to perform an analysis of each of Appellant’s propositions for the sake of judicial economy,” the judge wrote. “Having reached its decision on alternate theories, the Court declines to do so …
“This Court does not see how judicial economy will be improved by laboring over additional arguments, when a final decision has already been made. Unless there is some federal program that has yet to be revealed, this appeal is final.”
The fines
When it issued its March 15 ruling, the Gaming Commission fined Hager, the gaming board chair, $5,000, the two current – and new – members of the board, Bruce Pollock and Claudette Carnett, $2,500 apiece, and two members who resigned amidst the controversy, Mark Simms and Julie Malone, $1,000 apiece.
During the court hearing in late August, Oldfield openly questioned the disparities in the fines and argued with Gaming Commission Attorney Eugene Bertman about whether they were arbitrary.
No explanation was ever offered for the varying amounts, although one could opine or surmise that Simms and Malone were viewed to have done penance by resigning, and that commissioners view Hager as more culpable because he chaired the gaming board – although that position simply means he runs the meetings, as attorney Laird noted.
“What in the record shows that Mr. Hager deserves a $5,000 where some of these others only deserve a $1,000 fine?” Oldfield asked Bertman.
“That’s not what arbitrary and capricious means under the law with respect to fines,” Bertman replied. “Arbitrary and capricious means whether it was within the court’s authority. There are lots of people who do very similar things in courts all over the country … and judges do different sentencing for different defendants, whether it’s because the judge woke up in a bad mood or whatever. There are lots of different reasons for why a judge does what that judge does.”
In this case, Bertman said, the issue was whether the fines were within the authority of what the commission was allowed to issue – and it is clearly permitted to issue fines between $0 and $5,000.
Oldfield shot back that the case against the board members involved the exact same evidence and exact same charges: “I couldn’t line up five people for speeding tickets five miles an hour over, all following each other one by one in the same school zone and say $5,000, $1,000, $2,500 based on the exact same affidavit and exact same evidence.”
Bertman: “The law says you can. The law says that’s within your prerogative. It’s not arbitrary and capricious.”
Oldfield: “That argument means arbitrary and capricious has to mean unlawful and without authority.”
Bertman: “That’s what the case law provides.”
Oldfield: “I will look at that.”
He did. And he found that neither Osage law nor the Osage Constitution defines arbitrary and capricious, so he turned to federal case law, specifically a suit brought against the U.S. Bureau of Land Management.
“A record devoid of any evidence or authority to support such wildly differing punishments ‘runs counter to the evidence before the agency’ and lacks ‘consideration of the relevant factors,’” Oldfield wrote, quoting the decision in the BLM case.
“It is arbitrary and capricious.”
Not following the law
The Gaming Commission brought the case against the gaming board members because the board had initially refused to produce documents pertaining to Bighorse’s severance package that were subject to a confidentiality agreement. Chairman Hager has said in the past the board was caught between a rock and a hard place, in part because the first 1,556 pages of expense reports and other documents stamped ‘Confidential’ were supplied to the Osage Nation Congress, then were declassified and made public, causing a brouhaha due to Bighorse’s taste for pricey food, drink and golf goods. The gaming board felt like it was damned if it did what the commission wanted, and equally damned if it released a document Congress might declassify despite a legally binding non-disclosure agreement.
The severance agreement was never declassified, although one major detail was disclosed to the Osage News: That Bighorse received a severance of about $600,000 after taxes.
Regardless of the board’s reasons for balking, Oldfield found that there was no dispute that it had, in fact, produced all of the documents the commission had demanded – it had just done so past deadlines set by the commission.
“[I]t is undisputed that on February 10, 2023, the Board did cure the alleged deficiency,” Oldfield wrote, adding his own emphasis. “The Board produced documents responsive to each of the RFIs [Requests for Information].
“Congress has expressly authorized Board members to cure their conduct, provided the conduct was not criminal.”
Oldfield then took the commission to task for failing to follow its own procedure, which require it to communicate to the board what steps the board needed to take to effect the cure and to meet with the commission to discuss matters before exacting punishment. Oldfield found that neither of those steps had taken place – and wrote that he likely would have found that to be a harmless omission if the board had remained recalcitrant and had refused to turn over the documents. “It is not clear to this Court why the Board did not immediately comply with the RFIs. It is also not clear why the Commission did not accept the ‘cure,’ which was tendered before the show cause hearing,” Oldfield wrote, then delivered a kicker that he emphasized typographically: “What is clear is that these two groups are not functioning cohesively together, and the Osage people deserve better.”
