Attorney General's Opinion
Attorney General Richard Blumenthal
January 12, 1998
George F. Wandrak
Acting Executive Director
Division of Special Revenue
P.O. Box 11424
Newington, CT 06111
Dear Mr. Wandrak:
You have asked for an opinion regarding the interpretation of certain provisions of the Memorandum of Understanding (MOU), originally executed April 25, 1994, between the State of Connecticut and the Mohegan Tribe ("Tribe") which permits the Tribe to operate video facsimile games as long as the Tribe contributes to the State a percentage of the revenue generated from those games in accordance with the terms of the MOU. In particular, a dispute has arisen between the Division of Special Revenue ("Division") and the Tribe concerning how to calculate certain payments. The Tribe believes that the payment reduction provisions or offsets contained in paragraph 2 of the MOU take precedence over the Minimum Contribution provisions of Paragraph 5.
The Division believes that the Minimum Contribution provisions of paragraph 5 take precedence. As a practical matter, the issue is whether the Tribe is entitled to take the offsets allowed in paragraph 2 of the MOU, even in years when the Tribe's percentage of payments falls below the Minimum Contribution amounts required by paragraph 5. We agree with the Division's interpretation.
By way of background, on April 25, 1994, then Governor Lowell Weicker and the Tribe signed an Agreement (the "Agreement") which was intended to resolve a number of then outstanding issues and disputes between the State and the Tribe, including the Tribe's land claims against the State and "to avoid litigation concerning the existence and scope of the State's present obligation pursuant to the Indian Gaming Regulatory Act to negotiate with the tribe . . . to enter into a Tribal-State compact governing the conduct of gaming activities on the Tribe's lands." Agreement, p.3. On the same day, and pursuant to the Agreement, the State and the Tribe agreed to the Gaming Compact, which governs the Tribe's gaming activities and other matters, and the MOU.
As we explained in a prior opinion:
The Agreement signed by the Governor represents a global resolution of the issues concerning the State's relationship with the Mohegan Tribe. The principal components of the Agreement involve a relinquishment by the State of its right to ask the Secretary of the Interior for reconsideration of the federal recognition afforded the Mohegan Tribe by the Bureau of Indian Affairs and, as a result, a relinquishment of the State's right to appeal to federal court that federal recognition. The Tribe's rights to casino gaming under IGRA and to land claims hinge on that recognition. Additionally, the State has abandoned any defenses that it might have to the establishment of a Gaming Compact with the Mohegan Tribe and the construction and operation of a second casino in Connecticut and has agreed to lift the moratorium on video facsimile games contained in the Compact.
In exchange for such consideration, the Tribe has agreed to abandon its claims against more than 20,000 acres of Connecticut, including all monetary claims related to that land, to make payments in lieu of taxes to municipalities for any land that may be acquired by the Tribe subsequent to its acquisition of land for its initial Reservation, and to pay the State a minimum of $80 million per year for the release of the moratorium on video facsimile games.
94 Conn. Op. Atty. Gen. May 18, 1994, p. 4-5. Letter to Senators John B. Larson, William A. DiBella, and Adela M. Eads and Representatives Thomas D. Ritter, Thomas S. Luby and Edward C. Krawiecki.
Specifically, Section 15(a) of the Gaming Compact places a moratorium on the operation of video facsimile games by the Tribe. The MOU, at issue here, suspends that moratorium and permits the Tribe to operate video facsimile games "so long as the Tribe complies with the terms and conditions of the Memorandum of Understanding, . . . ." MOU, p. 1. Under the terms and conditions of the MOU, the Tribe is required to make specified contributions to the State, under a specified payment schedule, amounting to a certain percentage of its gross operating revenues from its operation of video facsimile games. The MOU further provides that: "Upon any failure by the Tribe to satisfy its obligations to the State hereunder, this Agreement shall cease to be of any force or effect and the moratorium established pursuant to section 15(a) of the Compact shall without any requirement for further action by either party be in full force and effect in accordance with its terms." MOU, pp. 2-3.
The pertinent provisions of the MOU in dispute are as follows: Under paragraph 1 of the MOU, the Tribe is obligated to pay to the State, in monthly or yearly installments, a sum equal to twenty-five percent of the gross operating revenues from video facsimile machines, subject to the reduction adjustments set forth in paragraph 2. Paragraph 2 provides that the Tribe's contributions shall be reduced by specified amounts in the second, third and fourth years of operation.1 In particular, paragraph 2 provides:
The cumulative Contribution required to be paid by the Tribe pursuant to paragraph (1) shall be reduced by $5,000,000 (five million dollars) in the second year the Mohegan Tribal Gaming Operation is open for busines[sic], by $2,500,000 (two million five hundred thousand dollars) in the third year of such operation and by $2,500,000 (two million five hundred thousand dollars) in the fourth year of such operation.
Paragraphs 4 and 5 set forth the Minimum Contribution the Tribe agreed to make to the State per year. Paragraph 4 governs the fiscal year beginning on July 1, 1994 and provides in pertinent part:
Notwithstanding the provisions contained [in] paragraph (1), solely for the fiscal year of the State commencing July 1, 1994 and concluding on June 30, 1995, the minimum Contribution . . . shall be the lesser of 80% of gross operating revenues or $40,000,000 (forty million dollars). . . . (Emphasis in original).
Paragraph 5 provides that, in succeeding years, the Minimum Contribution shall be:
[T]he lesser of: (i) thirty percent (30%) of gross operating revenues from video facsimiles during such fiscal year, or (ii) the greater of twenty five percent (25%) of gross operating revenues with respect to the operations of video facsimiles during such fiscal year or Eighty Million Dollars ($80,000,000.00) (the "Minimum Contribution").
(Emphasis in original).
The MOU provides for offsets to the Tribe in paragraph 2 and a Minimum Contribution by the Tribe in paragraph 5. The question posed is whether the Minimum Contribution provisions in paragraph 5 are subject to the offsets contained in paragraph 2. We conclude that they are not.
The MOU was negotiated as part of the Agreement and Gaming Compact between the State and the Tribe for the operation of the Tribal Casino pursuant to the Indian Gaming Regulatory Act. 28 U.S.C. 2701 et seq. In analyzing compact agreements, the ordinary rules of statutory and contract interpretation are employed. See Oklahoma v. New Mexico, 501 U.S. 221, 246, 111 S.Ct. 2281, 115 L.Ed.2d 207 (1991) (concurring opinion); United States v. Utah, Nevada & California Stage Co., 199 U.S. 414, 423, 26 S.Ct. 69, 50 L.Ed.2d 251 (1905). In interpreting written agreements, the goal is to discern the intent of the parties. See Lodge 7004 Intern. Ass'n. of Machinists v. United Aircraft Corp., 193 F.Supp. 69, 70 (D.Conn. 1961). The intention of the parties is to be ascertained from the language used, and the language must be given its common meaning and usage. Scribner v. O'Brien, 169 Conn. 389, 398, 363 A.2d 160 (1975). The agreement must be interpreted as a whole, with all relevant provisions considered together. Beckenstein v. Potter & Carrier, Inc., 191 Conn. 120, 134, 464 A.2d 6 (1983). Doubtful expressions should be interpreted in favor of the Tribe. 74 Am. Jur. 2d Treaties, 33.
Employing these rules of construction, the clear and unambiguous intention of the State and the Tribe, as derived from the language used by them in the MOU, was that the Minimum Contribution provisions would take precedence over all other provisions of the MOU.
First, this is evident from the plain and ordinary meaning of the phrase "Minimum Contribution." That phrase is not defined in the MOU. However, the word "Contribution" is defined in paragraph 1 of the MOU as "the Tribe['s] contribut[ion] to the State." Although the word "minimum" is not defined in the MOU, its plain and ordinary meaning may be derived by reference to its common understanding in law and in dictionaries. Keleman v. Rimrock, 207 Conn. 599, 604, 542 A.2d 720 (1988). The word "minimum" is defined as:
1. The least possible quantity or degree. 2. The lowest amount or degree reached or recorded. 3. Math. a. A number not greater than any other in a finite set of numbers. b. A value of a function that is exceeded for any sufficiently small increase or decrease in the function's variables. Webster's II, New Riverside University Dictionary (1984).2
Accordingly, the phrase "Minimum Contribution" in the MOU means the "lowest amount" or "least possible quantity" the Tribe will contribute to the State. Based on this definition, the Minimum Contribution provisions in paragraph 5 must take precedence over the offsets in paragraph 2. To read the MOU as the Tribe suggests would undermine the meaning of the phrase "Minimum Contribution" in paragraph 5 in the second, third, and fourth years that the Tribe's gaming operation is in business, if its gross revenues from video facsimile games fall below the amount necessary to trigger the Minimum Contribution provisions of paragraph 5. In other words, if the Tribe were permitted to take advantage of the offsets against the Minimum Contribution, thereby decreasing the minimum amount payable, the Minimum Contribution would not in reality be a "minimum" payment.3 It is more logical that the parties agreed to the paragraph 2 reductions only in years where the Tribe's contribution exceeded the Minimum Contribution in paragraph 5. Indeed, this interpretation gives effect to both paragraphs 2 and 5. In addition, paragraph 2 only permits the Tribe to take the offsets "pursuant to paragraph (1)." There can be no dispute, and there appears to be no dispute, that Paragraph 1 is subject to paragraph 5's Minimum Contribution provision. Accordingly, since paragraph 2 is subject to paragraph 1, it must also be subject to paragraph 5. Moreover, as you point out, paragraph 2 does not specifically reference paragraph 5 and paragraph 5 does not reference paragraph 2 or allow its provision for a Minimum Contribution to be qualified by any other provision of the MOU. This fact evidences the parties' intention that the Minimum Contribution be absolute.
Finally, the introduction of the Minimum Contribution rule in paragraph 4 uses the phrase, "Notwithstanding the provisions contained in paragraph 1 . . ." (emphasis added). The "notwithstanding" clause means that no matter what paragraph 1 may provide with respect to setting the rule for contributions, including the reference to the reduction allowed in paragraph 2, the operative clause of paragraph 4 controls. The provisions of paragraph 5, although not utilizing the "notwithstanding" language, are a continuation of the same minimum contribution rule, and therefore, should be construed together with paragraph 4. There is nothing in the Agreement, MOU or Gaming Compact to support the Tribe's position, stated in its attorney's opinion letter, that the offsets to the Tribe in paragraph 2 represent payments which the State agreed to make to settle the Tribe's land claims. In fact, the Agreement directly contradicts this assertion. In construing a contract, the controlling factor is the intent expressed in the language contained in the contract, not "what intention existed in the minds of the parties . . . ." Rosick v. Equipment Maintenance & Service, Inc. 33 Conn. App. 25, 37, 632 A.2d 1134 (1993); Zadravecz v. Zadravecz, 39 Conn. App. 28, 31, 664 A.2d 303 (1995).
As discussed, the Agreement was intended to set forth and resolve all outstanding issues between the Tribe and the State, and it provides in its first paragraph: "IT IS HEREBY AGREED between the parties that the various outstanding unresolved issues extant between them shall be finally settled in accordance with the terms of this Agreement . . . ." The Agreement further provides that: "[i]t is the intent of this Agreement to resolve all outstanding land disputes and differences between the State of Connecticut and the Mohegan Tribe . . . ." The Agreement contains a number of commitments made by the Tribe and the State. In particular, as to the land claims, the Tribe agreed, among other things,:
1. To settle "...any and all claims the Mohegan Tribe might have to any public or private lands or natural resources in Connecticut...."
2. "To the extinguishment of any and all other claims..." against the State.
3. "Upon enactment of federal legislation approving this Agreement . . . withdrawal of the Tribe's land claim against the State, Mohegan Tribe of Indians of Connecticut v. State of Connecticut, Civil Action No. H77-434 . . ." Agreement, pp. 4-8.
In exchange, the State agreed to, among other things: "To pay the Mohegan Tribe the sum of $1 (one dollar) and other valuable consideration." Agreement, p. 9. Thus, under these express provisions of the Agreement, intended to resolve all outstanding issues between the Tribe and the State, the Tribe expressly abandoned any monetary claims by agreeing to the provision that the State pay the Tribe the nominal sum $1.4 See Granite Equipment Leasing Corp. v. Acme Pump Co., 165 Conn. 364, 367-8, 335 A.2d 294 (1973). There is nothing in the Agreement or the MOU5 committing the State to make any other payments to the Tribe in return for its withdrawal of the land claims or to substitute such payments by way of offsets in the MOU.6
In addition, the Mohegan Nation Land Claims Settlement Act ("Settlement Act"), which approved and implemented the agreements between the State and the Tribe, confirms that the Tribe abandoned its monetary claims. 25 U.S.C. 1775 et. seq. The Settlement Act specifically recognized that the agreements between the State and the Tribe were intended to resolve "all disputes" between the parties and to settle the Tribe's land claims. 25 U.S.C. 1775(a)(7). Nothing in the Settlement Act reflects any payments to be made by the State to the Tribe. The reported legislative history of the Settlement Act confirms this contention. The House of Representatives Report on the Settlement Act specifically recognizes that the Tribe "[gave] up very substantial and valuable claims, not for a cash payment, but for the right to establish a federal Indian reservation . . ." and for the "certainty of its ability to proceed on the tribe's chosen path for economic self-determination." House of Representatives, Report No. 103-676, pp. 9-10 (Emphasis added). See also, Report of the Senate Committee on Indian Affairs, 103-339, pp. 5-6.
For all the foregoing reasons, we agree with the Division's interpretation of the MOU and believe that the Minimum Contribution required in paragraph 5 may not be offset by the reductions in paragraph 2.
We trust that this opinion addressed your concerns.
Very truly yours,
Robert F. Vacchelli
Assistant Attorney General
Susan Quinn Cobb
Assistant Attorney General
1 We are currently in the second year of operation.
2 Black's Law Dictionary provides the same definition of minimum:
The least quantity assignable, admissible or possible in given case and is opposed to maximum. Board of Ed. of City of Rockford v. Page, 33 Ill.2d 372, 211 N.E.2d 361, 363. Black's Law Dictionary (6th Ed.)
3 The Tribe's attorney opined that: "the aggregate offsets permitted by Paragraphs (2) and (3) are intended to increase or decrease the Contribution to be made to the State, regardless of the calculation used to determine such Contribution." (Emphasis in original) This position is untenable as it is directly contrary to the plain meaning of the phrase "Minimum Contribution," which expressly contemplates no decreases.
4 See page 2 of this opinion for a summary of the other valuable consideration provided by the State in exchange for its withdrawal of its land claims.
5 In fact, the MOU is not even specifically mentioned in the Agreement. The Agreement only commits the State "to resolve the . . . matter reserved in Section 15(a) of the gaming compact" The State met this commitment by entering into the MOU.
6 Despite the express language of the Agreement disavowing payments for land claims and its view that the MOU unambiguously requires guaranteed minimum payments by the Tribe, this Office has gone to significant efforts to determine if the Tribe's assertion that the offsets in paragraph 2 of the MOU were intended as payments by the State to the Tribe for the land claims, was accurate. We have been unable to locate any documents to support the Tribe's view. This Office is still awaiting a response from the Senate Indian Affairs Committee to our request for any additional committee documents or submissions not present in the reported legislative history. Our request to the Tribe's attorney for documents supporting this assertion produced one unsigned letter from Mohegan Chief Ralph Sturges to the Governor dated a month prior to the execution of the Agreement, MOU and Gaming Compact. Although in this letter, Chief Sturges states his position that "the settlement agreement should also provide a payment to the Tribe in consideration for its releasing" the land claims, as discussed above, the final executed Agreement does not reflect this request, and in fact expressly disavows any payments by the State. Moreover, Chief Sturges expressly confirmed that the Tribe relinquished its claim to monetary payments from the State in his remarks to the Senate Indian Affairs Committee. Chief Sturges stated: "[T]he Tribe is giving up very substantial and valuable claims, not for a cash payment, but for the right to establish a federal reservation and for the necessary authorization to engage in economic development activities (including Class III gaming) on our reservation, . . . ." Hearing before Committee on Indian Affairs, United States Senate 103rd Congress 2nd Sess. August 1, 1994, p. 38 (emphasis added). Finally, Chief Sturges' letter to the Governor reflects his intention that the MOU "be identical to [the] side agreement with the Pequot Nation." The State made no monetary payments to the Mashantucket Pequot Tribe in settlement of its land claims in 1983.