November 2008: Narragansett Indian Chief Sachem Matthew Thomas, center, had high hopes as he greeted tribal members from Massachusetts and Maine as he and Randy Noka, second from right, arrived at the U.S. Supreme Court.

The Providence Journal / Gretchen Ertl

The U.S. Supreme Court yesterday ended the Narragansett Indian Tribe’s decade-long fight for control over 31 acres in Charlestown, spelling a major victory for Rhode Island and other states looking to impose their laws on Indian lands.

In an 8-to-1 decision, the high court found that the U.S. Department of Interior cannot place the land in trust for the tribe because the Narragansetts were not under federal jurisdiction when Congress passed the Indian Reorganization Act in 1934. The Narragansetts gained federal recognition in 1983.

Trust status would have freed the land from most state and local laws, placing it instead under tribal and federal control. Some state officials feared it would clear the way for the tribe to build a casino or other venture outside state oversight and taxes, particularly given the Narragansetts’ two-decade fight for gambling rights.

The decision comes at a time when legislators are considering the future of Rhode Island’s two slot parlors –– Twin River in Lincoln and Newport Grand. The state expects more than $246 million from them this year. But Twin River is in default on $565 million in loans and in danger of bankruptcy.

On Monday, the current and former heads of the General Assembly’s Lottery oversight commission called for a referendum next year on turning Twin River and Newport Grand into full-fledged casinos. And House Speaker William J. Murphy has said the state needs to consider all options to protect the slot-machine revenue.

The Narragansett tribe bought the property, just north of Route 1 and across the street from its other 1,800 acres, in 1991 as a housing site. The state filed suit after the Interior Department agreed to take the land in trust on the tribe’s behalf in 1998.

The tribe had won in U.S. District and before the 1st Circuit Court of Appeals, whose decision the high court yesterday overturned.

Yesterday’s ruling rested on the court’s interpretation of the word “now” in the Indian Reorganization Act, passed in 1934 to restore certain rights and lands to Native Americans. Writing for the majority, Justice Clarence Thomas said the act applies to tribes “now under federal jurisdiction.” That phrase “unambiguously refers to those tribes that were under federal jurisdiction when the IRA was enacted in 1934 …,” Thomas wrote.

The Interior Department had argued the law allowed it to take land into trust for tribes regardless of when they were recognized.

The Narragansetts trace their roots in the region back thousands of years, but their ranks were decimated by war and disease in the 1600s. The state legislature voted in 1880 to disband the tribe, but it fought for the return of its lands as well as federal recognition nearly a century later. State law applies on the tribe’s other 1,800 acres under a 1978 settlement agreement.

Richard Guest, a lawyer with the Native American Rights Fund, said the ruling would not change the status of lands already held in trust for tribes, but would affect the ability of dozens of tribes recognized after 1934 to have lands placed in trust. “This is ugly for tribes recognized after 1934.”

“I think you will see a broad effort by Indian tribes to fix what we would say is an oversight,” he said. Tribes, he said, will undoubtedly ask Congress to change the act.

Governor Carcieri welcomed the ruling, which he said settled once and for all the state’s relationship with the Narragansetts. “We’re very excited,” he said. “This is, as you can see, a big issue across the country.”

The tribe could have potentially sold tax-free gasoline and cigarettes on the land had it gone into trust, he said. “It opened up a whole range of possibilities.”

He praised former Solicitor General Theodore B. Olson’s arguments before the high court last fall. “It’s been a team effort but in the end we needed a quarterback,” he said.

In a joint statement with the governor, Attorney General Patrick C. Lynch said: “Thanks to the crystal clarity of this decision … there can be no confusion that Rhode Island has the power and the ability to protect our citizens’ rights, health, safety, and welfare everywhere in our state. Rhode Island remains one state with one set of criminal and civil laws applicable to all, no matter where our citizens live.”

He noted 22 states had filed friend of the court briefs backing Rhode Island’s position.

Charlestown’s solicitor on Indian affairs, Joseph S. Larisa, who has been involved in the case since it began, also relished the ruling.

“Absent an act of Congress, the Narragansetts, on any land they purchase, will be subject to the full panoply of state laws and ordinances,” Larisa said. He added in a statement: “This means there can be no tax-free smoke shop or other activity that is inconsistent with state law or town ordinance — and no Indian casino until and unless the people vote to have one.”

He would fight any efforts to change the federal law, at least with respect to the Narragansetts, he said.

John F. Killoy, the tribe’s lawyer, said the high court had effectively reversed 75 years of federal Indian policy. “The court has narrowly construed a statute intended to benefit all Indians,” Killoy said. “The Narragansett Indian tribe was recognized in 1983 as a sovereign government. This decision clearly erodes that sovereignty.”

The decision, he said, did not come as a surprise. “The courts have favored state’s rights over tribal rights in many decisions over the past decade,” he said.

It was unclear yesterday what would happen to the Narragansetts’ ill-fated housing project. The U.S. Department of Housing and Urban Development awarded the tribe $4.1 million in 1988 to build 50 houses for poor tribal elders. Three years later, the Narragansetts used some of the money to buy the 31 acres.

Mired by what a HUD audit called financial mismanagement, the project stalled when the state and town filed suit after the tribe began construction without securing state and local permits.

In addition, the tribe was forbidden by court order to do any work that would interfere with a town drainage easement across the site. The town refused to abandon the easement in exchange for a slice of tribal land because the tribe would not agree that state law should apply on the land, including gambling laws.

Chief Sachem Matthew Thomas, who could not be reached yesterday, has said the tribe had no intention of putting a casino on the land but would not sign away any of its rights.

Today, all that can be seen on the land are the shells of 12 derelict houses the tribe started building almost a decade ago.

Justices David H. Souter and Ruth Bader Ginsberg said in a partial dissent the case should be sent back to the 1st Circuit to give the government a chance to address the issue of federal jurisdiction. Justice Stephen Breyer also partially dissented. The only full dissent came from Justice John Paul Stevens, who said the majority’s reading of the law was “cramped.”

With reports from Journal Washington Bureau writer John E. Mulligan

kmulvane@projo.com