Publication
California Challenges Interior’s Trust Acquisition for Koi Nation Casino
Earlier this month, the State of California (the State) and Governor Gavin Newsom filed a complaint in the U.S. District Court for the Northern District of California seeking to vacate the Department of the Interior’s (the Interior) decision to take approximately 70 acres in Sonoma County (the Shiloh Site) into trust for the Koi Nation of Northern California.1 The lawsuit, which claims that the Interior’s reliance on the Indian Gaming Regulatory Act’s (IGRA) “restored lands” exception was legally deficient, procedurally improper, and an affront to state sovereignty over casino-style gaming, threatens to derail the Koi Nation’s plan to develop a large-scale casino, hotel, and entertainment complex adjacent to the Town of Windsor.
The Shiloh Site is approximately 68.6 acres and is less than a mile from nearby residential neighborhoods, schools, and vineyards. The Koi Nation has proposed developing a large-scale gaming and hospitality facility on the site, including 2,750 slot machines, 105 table games, a 400-room hotel, a ballroom, and an event center, anticipated to attract over 10,000 patrons.
Although the Tribe’s ancestral homeland is centered around Clear Lake, roughly fifty miles and a mountain range away, the Koi Nation has long asserted historical ties to the Sonoma County region. The Koi Nation previously attempted to develop casinos in Oakland (2005) and Vallejo (2014) but was unsuccessful. However, on January 13, 2025, the Interior approved the fee-to-trust transfer for the Shiloh Site. The Interior’s Record of Decision concluded the Shiloh Site qualifies for gaming under the “restored lands” exception of the IGRA, which applies to tribes restored to federal recognition. The Interior based its determination on multiple factors, including historic trade routes, early twentieth-century census records referencing individual Koi members in Sonoma County, regional seasonal labor patterns, and tribal burials in local public cemeteries — collectively establishing a “significant historical connection” to the land.
The Complaint’s primary allegations include:
- Statutory Misapplication. California argues the record cannot sustain the Interior’s finding of a “restoration” of tribal lands because the evidence reflects only transient activity by individual tribal members, not an enduring, collective tribal presence akin to aboriginal occupancy.
- Circumvention of Two-Part Determination. By invoking the restored-lands exception, the Interior bypassed IGRA’s two-part determination process, depriving the Governor of his statutory right to concur (or withhold concurrence) after a determination that gaming would not be detrimental to the surrounding community.
- Procedural Injuries and Sovereign Harm. The Complaint asserts that the Interior’s shortcut puts pressure on the Governor to negotiate a tribal-state gaming compact or risk losing all regulatory control if a court later requires federal Secretarial gaming procedures to be imposed.
- Arbitrary and Capricious Decision-Making. The Complaint faults the Interior for resolving “gaps or inconsistencies” in the historical record in the Tribe’s favor without a legal basis and for ignoring objections from other tribes, local governments, and the State itself.
The litigation directly challenges the scope of IGRA’s “restored lands” exception, raising fundamental questions about how geographically distant from its ancestral territory a restored tribe may establish a casino without triggering the politically sensitive two-part determination. A restrictive judicial ruling could curtail off-reservation gaming efforts across the country. Additionally, the case implicates state participation rights, as governors have historically used their concurrence authority to negotiate terms such as revenue sharing, labor protections, and regional impact mitigation. Bypassing that mechanism may disrupt long-standing state-tribal negotiation frameworks.
The case also highlights competition with other nearby tribes, with the Federated Indians of Graton Rancheria (FIGR) and three other Sonoma-area tribes actively opposing the Koi Nation’s proposal. These tribes’ objections reinforce the Interior’s obligation to weigh competing tribal interests carefully under the IGRA, and the court’s approach to deference may influence future decisions where historic ties are asserted outside a tribe’s reservation.
Further, the timing of the Interior’s decision, issued during the final week of the Biden Administration, raises questions about whether the agency sufficiently considered opposing evidence under a tight timeline. The Interior’s response to the Complaint is expected later this summer, though the agency may seek a voluntary remand to reconsider its decision, particularly if the current administration decides to re-review and potentially reverse the approval, which has happened in other situations involving decisions of the prior administration.2
Footnotes
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California and Gov. Gavin Newsom v. the U.S. Department of the Interior et al., case number 3:25-cv-03850-JCS, in the U.S. District Court for the Northern District of California.
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In another land into trust case, the Interior has urged a D.C. federal court to deny the Scotts Valley Band of Pomo Indians’ request for a temporary restraining order to block the Interior’s decision on March 27, 2025, rescinding gambling eligibility for a proposed $700 million casino in Vallejo, California. Like the Koi Nation, Scotts Valley had obtained a positive determination in early January of 2025, to take certain land into trust under the “restored lands” exception of the IGRA. However, within two months of the new Administration coming into power, the Interior reversed the earlier decision. The tribe asserts the Interior cannot reverse the January decision by calling it a “political do-over.” Scotts Valley Band of Pomo Indians v. Burgum et al., case number 1:25-cv-00958, in the U.S. District Court for the District of Columbia.
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