The Indian Gaming Regulatory Act (IGRA), 25 U.S.C. § 2701 et seq., requires that Indian tribes and states negotiate a gaming compact to govern class III gaming on Indian reservations. The State of California (defendant) negotiated with 58 Indian tribes to create the Davis Compact. The Davis Compact granted the Indian tribes the exclusive right to conduct class III gaming provided that the tribes (1) donated a portion of gaming profits to tribes without gaming facilities under a revenue sharing trust fund (RSTF), (2) contributed a portion of gaming revenue to state-related costs and programs for gambling addiction under a special distribution fund (SDF), and (3) collaborated with labor unions to create a tribal labor relations ordinance governing employees who worked at the casinos. Fifty-seven of the 58 tribes signed the Davis Compact. The Coyote Band of Pomo Indians (Coyote Band) (plaintiff) did not. The Coyote Band sued in district court, contending that California failed to negotiate in good faith as required under the IGRA. Specifically, the Coyote Band alleged that by conditioning the Davis Compact on the RSTF, SDF, and labor relations provisions, California acted in bad faith per se and that the revenue-related provisions were a direct taxation that gave rise to a statutory presumption of bad faith under the IGRA. The Coyote Band requested the district court to order California to negotiate in good faith. The court denied the Coyote Band’s request and entered judgment for California. The Coyote Band appealed.