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Business Law Today

April 2023

Recent Developments in Tribal Court Litigation 2023

Corinne Sebren, Heidi McNeil Staudenmaier, and Christian Fernandez

Recent Developments in Tribal Court Litigation 2023

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§ 1.1 Tribal Litigation & The Third Sovereign

We have been writing this annual update of cases relevant to tribal litigation for many years. Recognizing that the average practitioner consulting this volume may not have much experience with federal Indian law, we have endeavored to provide historical context and citation to most relevant circuit and even district court cases in every volume. To target primarily those cases decided within the last year, this chapter will focus on cases decided between October 1, 2021 – October 1, 2022. The chapter begins with a Supreme Court overview and then is structured around sovereigns—Indian Tribes, the United States, and the fifty sister States.

Retired Supreme Court Justice Sandra Day O’Connor has aptly referred to tribal governments as the “third sovereign” within the United States. Much like federal and state governments, tribal governments are elaborate entities often consisting of executive, legislative, and judicial branches. Tribes are typically governed pursuant to a federal treaty, presidential executive order, tribal constitution and bylaws, and/or tribal code of laws, implemented by an executive authority such as a tribal chairperson, governor, chief, or president (similar to the United States’ president or a state’s governor) and a tribal council or senate (the legislative body). Tribal courts adjudicate most matters arising from their reservations or under tribal law.

Indian tribes are “distinct, independent political communities, retaining their original natural rights” in matters of local self-government. Thus, state laws generally “have no force” in Indian Country. While in the eyes of federal and state government, tribes no longer possess “the full attributes of sovereignty,” they remain a “separate people, with the power of regulating their internal and social relations.”

This chapter explores the repose of tribal sovereignty, federal plenary oversight of that sovereignty, and perennial state encroachment upon that sovereignty. Federal trial and appellate courts issue more than 650 written opinions in cases dealing with Indian law each year, and settle, dismiss, or resolve without opinion countless others. This chapter introduces those cases most relevant to a business litigation focused audience.

§ 1.2 Indian Law & The Supreme Court

§ 1.2.1 The 2021–2022 Term

The Supreme Court hears an average of between two and three new Indian law cases every year. During the 2021–2022 term, the Court decided three Indian law cases.

Oklahoma v. Castro-Huerta, 142 S. Ct. 2486 (2022). The U.S. Supreme Court held that the federal government and state governments have concurrent jurisdiction to prosecute crime committed by non-Indians against Indians in Indian country.

Victor Manel Castro-Huerta was convicted in Oklahoma state court for child neglect. Castro-Huerta appealed the conviction, and while the state-court appeal was pending, the U.S. Supreme Court decided McGirt v. Oklahoma. McGirt held that the Creek Nation’s reservation in eastern Oklahoma had never been properly disestablished and therefore remained “Indian country.” This area of eastern Oklahoma included the city of Tulsa, where Castro-Huerta was accused of committing child neglect. The Oklahoma appellate court vacated Castro-Huerta’s conviction as a result of McGirt and held that the federal government, not the State of Oklahoma, had jurisdiction to prosecute him. The Supreme Court granted certiorari, and in a 5-4 decision, the Court reversed and remanded, holding that both the federal and state government had jurisdiction to prosecute the crime.

Justice Kavanaugh, writing for the majority, began the analysis with the premise that Indian country is a part of a state’s territory and that, unless preempted, states have jurisdiction over crimes committed in Indian Country. For example, the Court has previously held that states have jurisdiction to prosecute crimes committed by non-Indians against non-Indians in Indian country. A state’s jurisdiction in Indian country may be preempted by federal law under ordinary principles of federal preemption, or when the exercise of state jurisdiction would unlawfully infringe on tribal self-government.

The Court held that the state’s jurisdiction was not preempted in this case. Specifically, the Court rejected Castro-Huerta’s argument that the General Crimes Act and Public Law 280 preempted Oklahoma’s authority to prosecute crimes committed by non-Indians against Indians in Indian country. The General Crimes Act merely extends federal laws that apply on federal enclaves to Indian country, but does not state that Indian country is equivalent to a federal enclave for jurisdictional purposes, that federal jurisdiction is exclusive in Indian country, or that state jurisdiction is preempted in Indian country. Therefore, the General Crimes Act does not preempt state jurisdiction to prosecute crimes committed by non-Indians against Indians in Indian country. Nor does Public Law 280 preempt state jurisdiction under such circumstances. Public Law 280 grants states jurisdiction to prosecute state-law offenses committed by or against Indians in Indian country, but contains no language preempting state jurisdiction.

The Court also held that the test articulated in White Mountain Apache Tribe v. Bracker does not bar a state from prosecuting crimes committed by non-Indians against Indians in Indian country. In Bracker, the Court held that even when federal law does not preempt state jurisdiction under ordinary preemption analysis, preemption may still occur if the exercise of state jurisdiction would unlawfully infringe upon tribal self-government.

Here, the Court determined the exercise of state jurisdiction does not infringe on tribal self-government. First, state prosecution would not deprive the tribe of any of its prosecutorial authority since Indian tribes lack criminal jurisdiction to prosecute crimes committed by non-Indians. Second, a state prosecution of a non-Indian would not harm the federal interest in protecting Indian victims because state prosecution would supplement federal authority, not supplant federal authority. Third, states have a strong sovereign interest in ensuring public safety and criminal justice within their territory, and in protecting all crime victims.

Justice Gorsuch, writing for the dissent, viewed the majority’s decision as a step back from the foundational rule that Native American Tribes retain their sovereignty unless and until Congress ordains otherwise.

Ysleta Del Sur Pueblo v. Texas, 142 S. Ct. 1929 (2022). This case represents the latest conflict between Texas gaming officials and the Ysleta del Sur Pueblo Indian Tribe. The Attorney General, on behalf of the State of Texas (the “State”), sought to enjoin the Ysleta del Sur Pueblo (the “Tribe”), a federally-recognized Indian tribe, from offering bingo within its entertainment center located on Tribe’s reservation. In 1968, Congress recognized the Ysleta del Sur Pueblo as an Indian tribe and assigned its trust responsibilities for the Tribe to Texas. In 1983, Texas renounced its trust responsibilities because they were inconsistent with the State’s constitution. The State also expressed opposition to any new federal trust legislation that did not permit the State to apply its own gaming laws on tribal lands.

Congress restored the Tribe’s federal trust status in 1987 when it adopted the Ysleta del Sur and Alabama and Coushatta Indian Tribes of Texas Restoration Act (“Restoration Act”). The Restoration act prohibited “[a]ll gaming activities which are prohibited by the laws of the State of Texas.” Shortly thereafter, Congress adopted its own comprehensive Indian gaming legislation: the Indian Gaming Regulatory Act (“IGRA”). IGRA established the rules for separate classes of games. IGRA permitted Tribes to offer Class II games—like bingo—in States that “permi[t] such gaming for any purpose by any person, organization or entity.” 25 U.S.C. § 2710(b)(1)(A). Class III games—like blackjack and baccarat—were only allowed pursuant to negotiated tribal/state compacts.

After losing a legal battle (“Ysleta I”) to offer Class III games, the Tribe began to offer bingo, including “electronic bingo” machines. The State sought to shut down the Tribe’s bingo operations. Bound by Ysleta I, the district court enjoined the Tribe’s bingo operations, but stayed the injunction pending appeal. The Fifth Circuit reaffirmed Ysleta I and held that the Tribe’s bingo operations were impermissible because they did not conform to Texas’s bingo regulations. Certiorari was granted.

Section 107 of the Restoration Act directly addresses gaming on the lands of the Ysleta del Sur Pueblo. It provides that “gaming activities which are prohibited by [Texas law] are hereby prohibited on the reservation and on lands of the tribe” and does not grant Texas “civil or criminal regulatory jurisdiction” with respect to matters covered by § 107 (contained in subsection (b)). The State’s interpretation of the Act subjected the Tribe to the entire body of Texas gaming laws and regulations. The Tribe understood the Act to bar offering State-prohibited gaming activities—State-regulated gaming such as bingo would therefore be subjected only to federal law, not state law, limitations.

The Supreme Court stated that in Texas’s view, laws regulating gaming activities become laws prohibiting gaming activities—an interpretation that violates the rule against “ascribing to one word a meaning so broad” that it assumes the same meaning as another statutory term. Gustafson v. Alloyd Co., 513 U.S. 561, 575 (1995). The Court further explained that indeterminacy aside, the State’s interpretation would leave subsection (b)—denying the State regulatory jurisdiction—with no work to perform. As a result, Texas’s interpretation also defies another canon of statutory construction—the rule that courts must normally seek to construe Congress’s work “so that effect is given to all provisions.” Corley v. United States, 556 U.S. 303, 314 (2009) (internal quotation marks omitted).

Seeking to give subsection (b) real work to perform, Texas submitted that the provision served to deny its state courts and gaming commission “jurisdiction” to punish violations of subsection (a) by sending such disputes to federal court instead. However, that interpretation only serves to render subsection (c), which grants federal courts “exclusive” jurisdiction over subsection (a) violations, a nullity. A full look at the statute’s structure suggests a set of simple and coherent commands; Texas’s competing interpretation renders individual statutory terms duplicative and leaves whole provisions without work to perform.

The Supreme Court also looked at Congress’s intent when they passed the Restoration Act just six months after the Supreme Court handed down its decision in California v. Cabazon Band of Mission Indians, 480 U.S. 202 (1987). There, the Court interpreted Public Law 280—a statute Congress had adopted in 1953 to allow a handful of States to enforce some of their criminal laws on certain tribal lands—to mean that only “prohibitory” state gaming laws could be applied on the Indian lands in question, not state “regulatory” gaming laws. The Cabazon Court held that California’s bingo laws—materially identical to Texas’s laws here—fell on the regulatory side of the ledger. In Cabazon’s immediate aftermath, Congress also adopted other laws governing tribal gaming that appeared to reference and employ in different ways Cabazon’s distinction between prohibition and regulation. In doing so, Congress demonstrated that it clearly understood how to grant a State regulatory jurisdiction over a Tribe’s gaming activities when it wished to do so.

Accordingly, the Supreme Court held that the Restoration Act bans, as a matter of federal law on tribal lands, only those gaming activities also banned in Texas.

Denezpi v. United States, 142 S. Ct. 1838 (2022). In a 6-3 decision, the United States Supreme Court held that a Native American defendant previously prosecuted in a special federal administrative tribal court can be charged in a federal court for a separate offense arising from the same act without violating the Double Jeopardy Clause.

The case involved Merle Denezpi, a Navajo Nation member, who was charged by an officer with the Bureau of Indian Affairs for assault and battery, terroristic threats, and false imprisonment. These crimes were alleged to have occurred on the Ute Mountain Reservation. Denezpi was tried in the Court of Indian Offenses—a court established by the United States Department of the Interior in 1883 to administer justice for Indian tribes in certain parts of Indian country where tribal courts have not been established. Here, the Court of Indian Offenses sentenced Denezpi to 140 days in jail. Six months later, a federal grand jury indicted Denezpi on one count of aggravated sexual abuse in Indian country, an offense covered by the federal Major Crimes Act. Denezpi moved to dismiss the indictment, arguing that the Double Jeopardy Clause barred the consecutive prosecution. The District Court denied Denezpi’s motion. Denezpi was convicted and sentenced to 360 months’ imprisonment. The Tenth Circuit affirmed. Certiorari was granted.

Justice Amy Coney Barrett, writing for the majority, held that the Double Jeopardy Clause does not bar successive prosecutions of distinct offenses arising from a single act, even if a single sovereign prosecutes them. The Court reasoned that the Double Jeopardy Clause does not prohibit putting a person twice in jeopardy “for the same conduct or actions,” but rather focuses on whether successive prosecutions are for the same “offense.” Relying on the dual-sovereignty doctrine, the Court stated that because the sovereign source of a law is an inherent and distinctive feature of the law itself, an offense defined by one sovereign is necessarily a different offense from that of another sovereign.

Denezpi’s single act transgressed two laws: the Ute Mountain Ute Code’s assault and battery ordinance and the United States Code’s proscription of aggravated sexual abuse in Indian country. The two laws—defined by separate sovereigns—proscribe separate offenses, so Denezpi’s second prosecution did not place him in jeopardy again “for the same offence.”

Denezpi attempted to argue that this reasoning is only applied when the offenses are enacted and enforced by separate sovereigns. Because prosecutors in the Court of Indian Offenses exercise federal authority, Denezpi argued that he was prosecuted twice by the United States. The Court did not credit this argument, holding instead that the Double Jeopardy Clause does not prohibit successive prosecutions by the same sovereign; rather, it prohibits successive prosecutions “for the same offense.” Thus, even if Denezpi was right that the federal government prosecuted his tribal offense, the Double Jeopardy Clause did not bar the federal government from prosecuting him under the Major Crimes Act as well.

The dissent, led by Justice Neil Gorsuch, and joined by Justices Sonia Sotomayor and Elena Kagan, wholly disagreed with the majority. The dissent argued that this was the “same defendant, same crime, [and] same prosecuting authority” and further argued that the dual-sovereignty “doctrine is at odds with the text and meaning of the Constitution” and “cannot sustain the Court’s conclusion.”

Justice Gorsuch emphasized that the Court of Indian Offenses truly belonged to the United States through the Department of the Interior instead of being a tribal court. On this basis, the majority ruling could allow prosecutors to rehearse their trial in one jurisdiction to prepare for the subsequent trial in another. Furthermore, Gorsuch believed the majority’s ruling undermines tribal sovereign authority.

§ 1.2.2 Preview of the 2022–2023 Term

As of October 1, 2022, the Supreme Court granted certiorari in one Indian law case for the 2022–2023 term, with twelve more petitions for certiorari pending. If any new cases are granted and decided, they will be included in next year’s volume.

§ 1.3 The Tribal Sovereign

§ 1.3.1 Tribal Courts

More than half of the 574 federally recognized tribes have created their own court systems and promulgated extensive court rules and procedures to govern criminal and civil matters involving their members, businesses, and activity conducted on their lands. Notwithstanding federal restrictions on tribal adjudicatory power, tribes have extensive judicial authority. As the complexity of life on reservations has increased, so has Congress’s willingness to enhance and aid tribal courts’ adjudicatory responsibilities.

While tribal courts are similar in structure to other courts in the United States, the approximately 400 Indian courts and justice systems currently functioning throughout the country are unique in many significant ways. It cannot be overemphasized that every tribal court is different and distinct from the next. For example, the qualifications of tribal court judges vary widely depending on the court. Some tribes require tribal judges to be members of the tribe and to possess law degrees, while others do not. Some tribal courts meet regularly and have a fairly typical court calendar, while others may meet on Saturdays or only a couple days a month in order to meet the more limited needs of a court system serving a smaller population or particularly isolated tribal community.

Tribal courts can have their own admissions rules and counsel should not assume that because they are licensed in the state where the tribal court is located that they can automatically appear in tribal court. While many tribes allow members of the state bar to join the tribal bar, often for a nominal annual fee, the requirements vary from one tribe to another. For example, the Navajo Nation has its own bar exam that tests knowledge of Navajo tribal law as well as other requirements.

Counsel should keep this uniqueness in mind when addressing a tribal court orally or in writing. If counsel has never appeared before a particular tribal court, it would be wise to solicit common court practices from persons who regularly appear before the court.

Tribal court jurisdiction depends largely on: (1) whether the defendant is a tribal member; and (2) whether the dispute occurred in Indian Country, particularly lands held in trust by the United States for the use and benefit of a tribe or tribal member or fee lands within the boundaries of an Indian reservation. These two highly complex issues should be analyzed first in any tribal business dispute.

In the context of a tribe’s civil authority, the important distinction is between tribal members and non-members (whether or not the non-member is an Indian). Generally, tribal courts have jurisdiction over a civil suit by any party, member, or non-member against a tribal member Indian defendant for a claim arising on the reservation. Even in tribal court, claims against the tribe itself require a waiver of tribal immunity. Indian tribes also generally have regulatory authority over tribal member and non-member activities on Indian land.

In the “path-making” decision of Montana v. United States, however, the U.S. Supreme Court held that a tribal court cannot generally assert jurisdiction over a non-tribal member when the subject matter of the dispute occurs on land owned in fee by a non-member, explaining that “exercise of tribal power beyond what is necessary to protect tribal self-government or to control internal relations is inconsistent with the dependent status of tribes, and so cannot survive without express Congressional delegation.” To help lower courts determine when the assertion of tribal power is necessary, the Court articulated two exceptions: (1) a tribe may have civil authority over the activities of non-tribal persons who enter into consensual relations with the tribe or its members via a commercial dealing, contract, lease, or other arrangement; or (2) the tribe has civil authority over non-Indians when their actions threaten or have a direct effect upon the “political integrity, the economic security, or the health or welfare of the tribe.”

These exceptions are “limited,” and the burden rests with the tribe to establish the exception’s applicability. The first exception specifically applies to the “activities of non-members,” and the second exception is extremely difficult to prove, as it must “imperil the subsistence of the tribal community.” These exceptions have become known as the “Montana rule.”

There are new opinions issued every year on the limits of tribal court jurisdiction that are built upon Montana and its exceptions. This section highlights those most relevant.

Ute Indian Tribe of the Uintah & Ouray Rsrv. v. Lawrence, 22 F.4th 892 (10th Cir. 2022), cert denied, 143 S.Ct. 273 (2022). Lynn Becker, a non-native, former employee of the Ute Indian Tribe of the Uintah & Ouray Reservation (the “Tribe”) filed suit in Utah State Court for breach of an employment contract. The Tribe filed a motion to dismiss on the ground that the state court lacked jurisdiction, which the state court denied. The Tribe then filed suit against Becker in federal district court seeking to enjoin the state court action on the ground that the state court lacked subject matter jurisdiction. The district court denied the requested injunction to enjoin the state court action. The district court found that, even though Becker’s claims involve events that occurred on the reservation, a federal statute, 25 U.S.C. § 1322, authorizes state-court jurisdiction of the claims.

The Tenth Circuit reversed the district court’s decision and ruled that the Tribe is entitled to injunctive relief enjoining the state court action. A state court can only exercise jurisdiction over the dispute with “clear congressional authorization.” The Tenth Circuit held that the district court erred when it determined that 25 U.S.C. § 1322 supplied the state court with authorization. 25 U.S.C. § 1322 allows states to acquire jurisdiction over civil causes of action arising within Indian country and involving Indian parties. But state-court jurisdiction under § 1322 requires certain prelitigation action, such as tribal consent. Specifically, 25 U.S.C. § 1326 provides that a state acquires jurisdiction pursuant to § 1322 only when a tribe votes by a special election to accept such jurisdiction. The Tribe argued that it never consented by special election to Utah courts exercising jurisdiction under § 1322. The Tenth Circuit agreed.

The Tenth Circuit rejected the district court’s interpretation of § 1322, which was that although a tribe must conduct a special election before it can consent to “permanently authorize the state to assume global jurisdiction over [it],” it need not hold a special election before it can “selectively consent”—in a contract like the at issue employment agreement, for example—”to a state’s exercise of . . . jurisdiction” over a specific legal action. The Tenth Circuit disagreed, holding that such an interpretation is inconsistent with the explicit statutory text. Because the Tribe never held a special election granting the state court jurisdiction, § 1322 is inapplicable, the state court lacked jurisdiction, and the state court action should have been enjoined. The United States Supreme Court subsequently denied certiorari in October 2022.

Ute Indian Tribe of Uintah & Ouray Rsrv. v. McKee, 32 F.4th 1003 (10th Cir. 2022). The Tenth Circuit held that a tribal court lacks jurisdiction over a dispute with a non-tribal member arising off Indian lands. In this case, the defendant, a non-tribal member, owned land that was once a part of the Ute Reservation. However, two Uintah Indian Irrigation Project (UIIP) canals still crossed through the defendant’s property. In 2012, UIIP was notified that the defendant was diverting water from the canals to irrigate his property. After an investigation, UIIP determined that the defendant was “unlawfully misappropriating tribal waters in violation of the Cedarview Decree.”

The Ute Tribe sued the defendant in Ute Tribal Court, where the defendant moved to dismiss for lack of subject matter jurisdiction. The Ute Tribe claimed they had subject matter jurisdiction pursuant to the Montana rule, which states that a “tribe can regulate activities of all non-Indians who enter a consensual relationship with the Tribe or whose conduct imperils the Tribe’s political integrity, economic security, or health and welfare.” The defendant chose not to participate in the Ute tribal court action, and the tribal court entered judgment against him. Subsequently, the Ute Tribe petitioned the district court to enforce the tribal court’s judgment. The district court denied the Ute Tribe’s motion, holding that “the tribal-court judgment was unenforceable because the tribal court lacked subject-matter jurisdiction.” The Ute Tribe appealed.

The Tenth Circuit affirmed the district court’s decision. There are only two circumstances when a tribe or tribal entity may regulate non-tribal members and their activities: when a non-tribal member enters a consensual relationship with a tribe or tribal entity or when the non-tribal member’s “activity threatens [the tribe’s] political integrity, economic security, or health and welfare.” The Ute Tribe argued these exceptions did not need to be addressed as the action dealt with the exclusive rights to water from the reservation lands. The Ute Tribe explained that they have the authority to exclude people from their lands and thus have the power to exclude people from using their water.

The Tenth Circuit disagreed. The Ute Tribe did not provide any precedent to support the assertion that a tribe could regulate the usage of “natural resources outside of the tribe’s territory.” The Tenth Circuit held that because the defendant only used the water on non-Indian land, the “tribal court did not have jurisdiction arising from the Tribe’s authority to exclude nonmembers from its territory.”

Furthermore, the Tenth Circuit held that the defendant’s water use is a matter of the Ute Tribe’s external relations, not tribal self-government. The Court explained that because of the external nature of the matter, the parties must have had a contractual relationship where the defendant agreed to tribal court jurisdiction. Additionally, the Court noted that the Ute Tribe did not show how the use of the water would be harmful—the defendant had been using the water for over thirteen years without the Ute Tribe noticing. Ultimately, the Tenth Circuit held that the tribal court lacked jurisdiction over the water dispute.

Big Horn Cnty. Elec. Coop., Inc. v. Big Man, No. 21-35223, 2022 WL 738623 (9th Cir. Mar. 11, 2022). Big Horn County Electric Cooperative (“BHCEC”) provides electrical services to members of the Crow Tribe on the Crow Reservation. BHCEC notified a member of the Crow Tribe, Big Man, who lived on the Reservation, that his account was delinquent and would be terminated if non-payment continued. Big Man failed to pay, and his services were disconnected. Big Man sued BHCEC in Crow Tribal Court alleging that BHCEC’s termination violated Title 20, Chapter 1 of the Crow Law and Order Code, which provides that “no termination of residential service shall occur between November 1 and April 1 without specific prior approval of the Crow Tribal Health Board.” BHCEC filed suit in district court seeking to enjoin the tribal court action for lack of jurisdiction.

The district court granted summary judgment in favor of Big Man. First, the district court held that BHCEC did not show that Congress had intended to divest the Crow Tribe of its tribal jurisdiction over BHCEC’s action on the Tribe’s land. In the alternative, the district court concluded that both Montana v. United States exceptions apply, which grant a tribal court jurisdiction over a non-tribal member: “1) BHCEC formed a consensual relationship with the Tribe and there is a sufficient nexus between the regulation and that relationship, and 2) BHCEC’s conduct has a direct effect on the health and welfare of a tribal member.” BHCEC appealed the district court’s ruling.

The Ninth Circuit concluded that the first Montana exception was sufficiently met to sustain tribal jurisdiction over the dispute. BHCEC’s voluntary provision of electrical services on the Tribe’s reservation and its contracts with tribal members to provide electrical services created a consensual relationship within the meaning of Montana. Additionally, the Ninth Circuit held that the at-issue tribal regulation had a nexus to the activity that is the subject of the consensual relationship between BHCEC and the Tribe. The Ninth Circuit affirmed the district court’s decision.

§ 1.3.2 Exhaustion of Tribal Court Review

The doctrine of exhaustion of tribal remedies reflects the ongoing tension between tribal and federal courts. If a tribal court claims jurisdiction over a non-Indian party to a civil proceeding, the party usually is required to exhaust all options in the tribal court prior to challenging tribal jurisdiction in federal district court. If tribal options are not exhausted prior to bringing suit in federal court, the federal court will likely dismiss or stay the case.

Ultimately, the question of whether a tribal court has jurisdiction over a nontribal party is one of federal law, giving rise to federal questions of subject matter jurisdiction. Thus, non-Indian parties can challenge the tribal court’s jurisdiction in federal court. Pursuant to this doctrine, a federal court will not hear a matter arising on tribal lands until the tribal court has determined the scope of its own jurisdiction and entered a final ruling. Ordinarily, a federal court should abstain from hearing the matter “until after the tribal court has had a full opportunity to determine its own jurisdiction.” And again, notwithstanding a provision that appears to vest jurisdiction with an arbitrator, several federal courts have ruled that a tribal court should be “given the first opportunity to address [its] jurisdiction and explain the basis (or lack thereof) to the parties.”

After the tribal court has ruled on the merits of the case and all appellate options have been exhausted, the non-tribal party can file suit in federal court, whereby the question of tribal jurisdiction is reviewed under a de novo standard. The federal court may look to the tribal court’s jurisdictional determination for guidance; however, that determination is not binding. If the federal court affirms the tribal court ruling, the nontribal party may not relitigate issues already determined on the merits by the tribal court.

There are several exceptions to the exhaustion doctrine. First, federal courts are not required to defer to tribal courts when an assertion of tribal jurisdiction is “motivated by a desire to harass or is conducted in bad faith . . . or where the action is patently violative of express jurisdictional prohibitions, or where exhaustion would be futile because of the lack of an adequate opportunity to challenge the court’s jurisdiction.” Second, when “it is plain that no federal grant provides for tribal governance of non-members’ conduct on land covered by Montana’s main rule,” exhaustion “would serve no purpose other than delay.” Third, where the primary issue involves an exclusively federal question, exhaustion of tribal remedies may not be mandated.

Because litigation is expensive, the question of whether the defendant is required to exhaust their tribal court remedies before challenging the jurisdiction of the tribal court is regularly litigated. Several of these cases were decided in the last year.

Chegup v. Ute Indian Tribe of Uintah & Ouray Rsrv., 28 F.4th 1051, 1053 (10th Cir. 2022). The Ute Indian Tribe of the Uintah and Ouray Reservation (“Tribe”) temporarily banished four members (“Banished Members). Rather than challenging their banishment in tribal court, the Banished Members sought relief in federal court by filing a petition for habeas corpus. The Banished Members claimed that, as a result of their temporary banishment, they were detained within the meaning of the Indian Civil Rights Act of 1968 (“ICRA”). The district court dismissed the suit, finding that temporary banishment did not constitute detention for the purposes of ICRA. Because the district court first analyzed whether tribal banishment amounted to detention under ICRA, it failed to address the Tribe’s alternative position that the Banished Members failed to exhaust their tribal remedies. The Banished Members appealed.

On appeal, the Tenth Circuit concluded that the district court should have started its analysis by addressing tribal exhaustion. “Only then, assuming that exhaustion was not an obstacle to this suit, should it have considered whether temporary or permanent banishment is cognizable as detention under ICRA’s habeas provision.” The Tenth Circuit declined to address the Banished Members’ argument that tribal exhaustion should be excused. Rather, the Tenth Circuit noted three reasons for finding the district court erred by not first addressing tribal exhaustion: (1) whether banishment constitutes detention under ICRA presented a significant, complex, and contentious issue; (2) tribal exhaustion was not obviously excused; and (3) the strong comity and sovereignty concerns underlying the tribal exhaustion doctrine. Accordingly, the Tenth Circuit reversed with instructions to resolve the exhaustion issue before turning to the substance of the claim.

In a dissenting opinion, Judge Lucero maintained that the district court was “unequivocally correct in dismissing the case.” Judge Lucero explained that “[a]bsent any authority requiring an exhaustion determination before jurisdiction, the complexity of the exhaustion issue in this case is yet another reason to defer to the district court’s discretion to first decide the bounds of its jurisdiction.”

Monster Tech. Grp., LLC v. Eller, No. CIV-21-879-J, 2021 WL 5395788 (W.D. Okla. Oct. 14, 2021). In September 2021, the United States District Court for the Western District of Oklahoma dismissed the Plaintiff’s suit for failure to exhaust tribal court remedies (“Order”). Plaintiff subsequently filed a motion for reconsideration, arguing the Order was erroneous. Plaintiff maintained that although it filed an appeal with the Supreme Court of the Iowa Tribe (“Tribal Supreme Court”) six months prior, it anticipated further delay because the Tribal Supreme Court consisted of only one judge. The court rejected this argument and denied a motion for reconsideration because the Tribal Supreme Court’s review was not complete.

The district court noted that a delay in the pending appeal did not negate the requirement that federal courts should generally abstain from hearing cases until tribal court remedies are fully exhausted. The court further explained that “[a] delay of less than six months coupled with some indefinite amount of anticipated additional delay does not qualify as ‘exceptional circumstances,’” nor does it result in a denial of justice. Accordingly, the district court dismissed Plaintiff’s action without prejudice, permitting the Plaintiff to reassert its claims in the future should the delay of tribal review extend for such a time that it becomes an extraordinary circumstance.

Adams v. Dodge, No. 21-35490, 2022 WL 458394 (9th Cir. Feb. 15, 2022). Adams filed a habeas petition under 25 U.S.C. § 1303 seeking relief from a Nooksack Tribal Court (“Tribal Court”) warrant. The United States District Court for the Western District of Washington denied Adams’ habeas petition for failure to exhaust tribal remedies. Adams appealed the district court’s decision, but the Ninth Circuit affirmed dismissal, explaining that “prior to turning to federal court, habeas petitioners must exhaust the remedies available to them in tribal court.”

The Ninth Circuit rejected Adams’ argument that she was not required to exhaust her tribal court remedies because the Tribal Court acted in bad faith. The Ninth Circuit similarly rejected Adams’ argument that she was not required to exhaust her tribal remedies because she was arrested off-reservation and the Tribal Court therefore lacked criminal jurisdiction to arrest her.

In her final argument, Adams claimed that under Congress’ passage of Public Law 280 in 1953, Washington State assumed exclusive criminal jurisdiction over tribal lands. The Ninth Circuit disagreed with this argument, reasoning that Adams failed to show Washington State’s jurisdiction was exclusive. The court noted that “the Washington Supreme Court has stated in dicta that tribal and state courts generally have concurrent jurisdiction over criminal cases.” Ultimately, because Public Law 280 was designed to supplement tribal institutions rather than supplant them, Adams failed to show the Tribal Court lacked jurisdiction. Because Adams failed to demonstrate that she was not first required to exhaust tribal remedies, the Ninth Circuit affirmed dismissal of her habeas petition.

Allstate Indem. Co. v. Cornelson, No. 21-5831 RJB, 2022 WL 856863 (W.D. Wash. Mar. 23, 2022). This case stems from a complaint filed by Joaquin Ortega Carrillo (“Carrillo”) alleging that Joshua Cornelson (“Cornelson”) assaulted and battered him. The assault and battery allegedly occurred at Cornelson’s home, which is located on the lands of the Lower Elwha Klallam Tribe. Because Cornelson’s home was covered by an Allstate insurance policy, Carrillo sent a letter to Allstate demanding over $500,000 in damages. Accordingly, Allstate sought a declaratory judgment in federal court that it had no obligation to provide coverage or a defense to Cornelson in connection with Carrillo’s claims. Allstate also sought a declaration that it did not owe Carrillo money pursuant to the coverages allowed under Cornelson’s policy.

On February 11, 2022, Cornelson and his wife filed a complaint in the Lower Elwha Klallam Tribal Court (“Tribal Court”) “seeking a declaration that the Tribal Court ha[d] jurisdiction and that Allstate [wa]s under a duty to defend and indemnify them” in the dispute with Carrillo. The Cornelsons then filed a motion to dismiss for lack of tribal court exhaustion, arguing that the United States District Court for the Western District of Washington should dismiss or stay the case to give the Tribal Court an opportunity to rule on whether it had jurisdiction. Allstate opposed the motion, claiming “the Tribal Court plainly lack[ed] jurisdiction over Allstate . . . and exhaustion [wa]s therefore not required.”

The court rejected Allstate’s argument that tribes lack civil authority over the conduct of nonmembers on non-Indian land within a reservation. Because the present case involved activities on Indian trust land, such an argument was inapplicable. The district court therefore concluded that the case should be stayed until the Tribal Court had an opportunity to determine whether it had jurisdiction over the dispute. The district court explained that the “case should be stayed, not dismissed, because exhaustion of tribal court remedies is a matter of comity, not of jurisdiction.” As such, the Tribal Court should first be permitted to consider whether it is the appropriate forum before the district court considers the issue.

Cross v. Fox, 23 F.4th 797, 799 (8th Cir. 2022). Plaintiffs, members of the Three Affiliated Tribes of the Fort Berthold Indian Reservation (“Tribe”), challenged provisions in the tribal constitution requiring nonresidents to return to the reservation to vote in tribal elections and prohibiting nonresidents from holding tribal office. Plaintiffs sued Tribe officials in tribal court. While the case was pending in tribal court, Plaintiffs also filed a lawsuit against the Tribe in federal court. Plaintiffs alleged that the return-to-reservation requirement and the eligibility requirement for holding public office violated the Voting Rights Act (“VRA”) and the Indian Civil Rights Act (“ICRA”). The Tribe moved to dismiss the case for lack of subject-matter jurisdiction, which the district court granted. The district court explained that Plaintiffs “inexcusably failed to exhaust tribal remedies for their ICRA claims and the court lacked federal-question jurisdiction over the VRA claims.”

On appeal, the Eighth Circuit assessed the district court’s dismissal of the ICRA claims as a result of Plaintiffs’ failure to exhaust tribal remedies. The Eighth Circuit affirmed dismissal of Plaintiffs’ ICRA claims on the separate ground that “ICRA does not contain a private right of action to seek injunctive or declaratory relief in federal court, and therefore, the district court lacked subject-matter jurisdiction . . . .” The court pointed out that a writ of habeas corpus is the only federal remedy for ICRA violations authorized by Congress. Because the plaintiffs did not seek a writ of habeas corpus, but rather declaratory and injunctive relief, the action required resolution through tribal forums. In other words, because there was no private right of action to enforce the ICRA in federal court, there could be no jurisdiction.

Stanko v. Ogala Sioux Tribe Pub. Safety Div. of the Ogala Sioux Tribe, No. CIV. 21-5085-JLV, 2022 WL 220088 (D.S.D. Jan. 25, 2022). On November 30, 2021, Stanko, a non-Indian man, filed a pro se complaint against the Ogala Sioux Tribe (“Tribe”) and various tribal officers. The complaint alleged that, while traveling on a federally maintained highway located on reservation land in South Dakota, tribal officers unlawfully arrested and detained him in violation of his constitutional rights. The complaint further alleged that the tribal officers assaulted, battered, and stole from him. Accordingly, Stanko brought claims under the Civil Rights Act, the Indian Civil Rights Act, as well as the common law torts of assault, battery, and theft. With the complaint, Stanko filed an objection and supporting affidavit seeking to avoid dismissal of his claims for failure to exhaust tribal remedies.

The United States District Court for the District of South Dakota rejected this argument, finding Stanko’s allegation that tribal officers violated his civil rights on reservation land squarely within the tribal court’s jurisdiction. Ultimately, the district court noted that “[w]hether Mr. Stanko approves of that jurisdiction or believes he cannot get a fair trial in tribal court is not relevant to the court’s evaluation of the issues before it.” The court further reasoned that federal policy supporting tribal self-government requires federal courts to first give tribal courts an opportunity to determine their own jurisdiction. Accordingly, Stanko’s claims were dismissed without prejudice.

On May 12, 2022, following de novo review, the Eighth Circuit affirmed the district court’s dismissal of Stanko’s claims.

Rincon Mushroom Corp. of Am. v. Mazzetti, No. 3:09-cv-02330-WQH-JLB, 2022 WL 1043451 (S.D. Cal. Mar. 15, 2022). In 2009, the Rincon Mushroom Corporation of America (“RMCA”) filed a complaint in federal court against Defendants in their personal and official capacities as representatives of the Rincon Band of Luiseño Indians (“Tribe”). RMCA alleged that Defendants and the Tribe conspired to regulate activity on RMCA’s land (“Land”) to lower the value so the Tribe could purchase the Land at a discount. On September 21, 2010, the district court granted Defendants’ motion to dismiss, explaining that RMCA failed to exhaust tribal remedies.

In 2015, RMCA filed a complaint in the Rincon Tribal Court (“Tribal Court”) challenging the Tribe’s regulatory jurisdiction over RMCA’s activities on the Land. Following a bifurcated trial, the Tribal Court held it had adjudicatory jurisdiction over the dispute, and entered judgment in favor of Defendants, granting several forms of relief (“Judgment”). The Judgment included an injunction requiring RMCA to receive Tribe approval prior to any future development or use of the Land, as well as to provide the Tribe with access to the Land to assess contamination. On appeal, the Rincon Appellate Court reversed and remanded the injunction on the grounds that it was overbroad. The Tribal Court subsequently entered an Amended Judgment modifying the scope of the injunction, which was not appealed within the tribal court system.

On April 22, 2020, RMCA filed a motion to reopen case in federal court on the basis that it had exhausted its tribal remedies. The district court granted the motion, and RMCA subsequently filed a motion for summary judgment contending that the Amended Judgment of the Tribal Court should not be recognized or enforced. Following oral argument on the matter, the district court held that RMCA had “not exhausted tribal remedies with respect to the injunctive relief contained in the Amended Judgment because they ha[d] not appealed the injunction to the Rincon Appellate Court.” Accordingly, RMCA’s failure to exhaust tribal remedies with respect to the injunction precluded federal court review of the injunction.

Brown v. Haaland, No. 3:21-cv-00344-MMD-CLB, 2022 WL 1692934 (D. Nev. May 26, 2022). Plaintiffs are ten individuals whose families have resided on the Winnemucca Indian Colony (“Colony”) for many generations. After more than thirty-five years of disputes over Colony leadership, the Rojo Council was recognized as the Colony’s permanent council. In June 2019, the Rojo Council filed trespass actions against the plaintiffs in the Bureau of Indian Affair’s Court of Indian Offenses (“BIA Court”) seeking to evict and remove them from the Colony. Shortly after, the Rojo Council began demolishing homes, and the plaintiffs moved for an emergency mandatory injunction in federal court. This prompted the Colony to request permission to intervene in opposition (“Intervenor”).

After the district court denied the emergency motion, the plaintiffs successfully moved to amend their complaint. Intervenor then filed a countermotion to dismiss, arguing that the plaintiffs “ha[d] not exhausted their tribal court remedies before challenging their evictions in federal court.” The district court rejected this argument, explaining that Intervenor’s arguments related to tribal court exhaustion were predicated on claims in the original complaint. The district court reasoned that “[b]ecause the claims in the [Amended Complaint] arise from different law and challenge different actions, the Court finds that Intervenor’s tribal exhaustion arguments are not responsive to the claims asserted in the [Amended Complaint].”

Cayuga Nation by & through Cayuga Nation Council v. Parker, No. 522-cv-00128 (BKS/ATB), 2022 WL 1813882 (N.D.N.Y. June 2, 2022). The Cayuga Nation (“Nation”) sued numerous parties (“Defendants”) for allegedly conducting an unlawful scheme involving the illegal sale of untaxed and unstamped cigarettes, marijuana, and other merchandise on the reservation. Defendants sold such untaxed goods through a small convenience store (“Pipekeepers”) and aimed to open another Pipekeepers store in Montezuma, New York. Under the Cayuga Nation’s Amended and Restated Business License and Regulation Ordinance (“Ordinance”), business cannot be conducted on Nation land without a business license issued by the Nation. Moreover, licenses may not be issued to businesses that compete with business conducted by the Nation.

On December 2, 2021, the Nation obtained an order from the Cayuga Nation Civil Court (“Tribal Court”) enjoining Pipekeepers from operating and imposing a fine. In February 2022, the Nation filed an amended Tribal Court complaint alleging that Defendants continued to violate the Ordinance. The Tribal Court therefore issued an order temporarily enjoining Defendants from operating Pipekeepers. After Defendants failed to file any opposition, the Tribal Court issued an order permanently enjoining Defendants.

Defendants filed motions to dismiss in the District Court for the Northern District of New York, arguing the court should abstain until all Tribal Court remedies were exhausted. The Nation maintained the position that tribal exhaustion was not applicable because there had been no federal action challenging tribal court jurisdiction and there were no further tribal court proceedings to exhaust. The court rejected this argument, holding there were remedies left to exhaust in the Tribal Court. The court pointed to various circumstances, including the presence of a proceeding in Tribal Court and concern about the Tribal Court’s authority to enforce the injunction as factors favoring application of the tribal exhaustion rule. Accordingly, the district court stayed the action pending exhaustion of Tribal Court proceedings, explaining it would be premature to act until the Tribal Court action was exhausted.

City of Seattle v. Sauk-Suiattle Tribal Ct., No. 2:22-CV-142, 2022 WL 2440076 (W.D. Wash. July 5, 2022). The Sauk-Suiattle Indian Tribe (“Tribe”) filed a complaint against the City of Seattle (“City”) in the Sauk-Suiattle Tribal Court (“Tribal Court”). The Tribe claimed Seattle City Light, which is owned by the City, infringed on the Tribe’s rights by constructing and operating three dams on the Skagit River. These dams blocked the passage of salmon, thereby threatening the Tribe’s livelihood. The dams are not located on Tribal land, but rather upstream.

The City moved to dismiss the action in Tribal Court. Subsequently, the City sought a preliminary injunction in federal court to prevent the Tribal Court from exercising jurisdiction over it. The Tribe then filed a motion to dismiss, arguing the district court should first require the City to exhaust its tribal remedies. In opposition, the City argued that one of the four exceptions to the exhaustion requirement should apply. Specifically, the City argued that tribal court jurisdiction was so plainly lacking that requiring the City to exhaust tribal remedies would serve no purpose other than to delay. While courts have not precisely articulated how plain the issue of tribal court jurisdiction must be before exhaustion can be waived, some courts require that tribal exhaustion only be waived if the assertion of tribal court jurisdiction is frivolous or clearly invalid.

The district court noted that while the powers of an Indian tribe generally do not extend to the activities of nonmembers of the tribe, a “tribe may also retain inherent power to exercise civil authority over the conduct of non-Indians on fee lands within its reservation when that conduct threatens or has some direct effect on the political integrity, economic security, or the health or welfare of the tribe.” To this point, the Tribe argued the City’s upstream activities had a direct impact on the health of the salmon population downstream.

The district court acknowledged that depending on how the facts of the case developed, the argument may be attenuated. But, the court could not definitively find the argument frivolous. In addition, the district court explained that because the lawsuit was based on interpretation of tribal law and Indian treaty rights, the case would benefit from the Tribal Court’s expertise. Accordingly, the district court found the complex legal issues well-suited for review by the Tribal Court. The Defendants’ motion to dismiss was denied and the case stayed until the Tribal Court had a full opportunity to determine its own jurisdiction.

McKinsey & Co., Inc. v. Boyd, No. 22-CV-155-WMC, 2022 WL 1978735 (W.D. Wis. June 6, 2022). McKinsey is a management consulting firm that provided marketing advice to pharmaceutical clients that sold opioids. The Red Cliff Band of Lake Superior Chippewa Indians (“Red Cliff”), a federally recognized tribe in Wisconsin, sued McKinsey in the Red Cliff Tribal Court (“Tribal Court”). Red Cliff sought to hold McKinsey accountable for its consulting work with opioid companies and the resulting devastation to the Red Cliff Reservation caused by the opioid epidemic. McKinsey moved for a preliminary injunction against the tribal action, arguing the Tribal Court lacked jurisdiction given its purported lack of contacts to the Red Cliff Reservation and Wisconsin.

Defendants argued the tribal court exhaustion rule barred McKinsey from raising jurisdictional arguments. While the district court noted the general principle favoring tribal court exhaustion, it recognized that tribal exhaustion is unnecessary when “it is plain that no federal grant provides for governance of nonmembers’ conduct.” Because the court could find no legal basis for the assertion of tribal court jurisdiction over McKinsey, McKinsey’s likelihood of success on the merits of its claim was a “near certainty.” Accordingly, the district court enjoined Red Cliff from proceeding with its case in Tribal Court.

Clausen v. Eastern Shoshone Tribe Health Care Plan, et al., No. 2:20-cv-00242-NDF (D. Wyo. July 1, 2022). The plaintiff, Clausen, a non-Indian, was a registered nurse and worked as an employee of the Eastern ShoShone Tribe and Eastern Shoshone Tribe Health Care Plan (collectively, the “Tribe”) at the Morning Star Care Center (“Morning Star”)—a nursing home licensed by the State of Wyoming and operated by the Tribe. During her employment, Clausen experienced a series of ailments, and the resulting medical bills were submitted for payment under the tribal health care plan, but ultimately not paid. Clausen filed suit in Wind River Tribal Court against Defendants for failure to provide coverage under the tribal health care plan.

The action in the Tribal Court was stayed by stipulation of the parties, and ultimately was voluntarily dismissed without prejudice. Clausen then filed suit in district court seeking payment of benefits, a declaratory judgment that the tribal health care plan is not a governmental plan as defined in 29 U.S.C. § 1002(32), and damages for breach of fiduciary duties. The Tribe filed a motion to dismiss, arguing, among other things, that the action must be dismissed because Clausen failed to exhaust tribal court remedies. Clausen argued that she was not required to exhaust tribal court remedies given the preemptive nature of ERISA, which she claimed expresses a clear preference for a federal forum.

The district court explained that simply because Clausen alleged that ERISA applies to the tribal health care plan, does not mean that the sovereign immunity issue is somehow less important to tribal self-government and self-determination, or that a tribal court should for some reason lack the opportunity to first evaluate the factual and legal bases for resolution of this issue. In addition, the Tribal Court is particularly well suited to undertake the fact-specific analysis of the tribal health care plan at issue. For these reasons, the district court granted the Tribe’s motion to dismiss.

§ 1.3.3 Tribal Sovereignty & Sovereign Immunity

An axiom in Indian law is that Indian tribes are considered domestic sovereigns. Like other sovereigns, tribes enjoy sovereign immunity. As a result, a tribe is subject to suit only where Congress has “unequivocally” authorized the suit or the tribe has “clearly” waived its immunity. The U.S. Supreme Court, in a 2008 decision, pronounced that tribal sovereign immunity “is of a unique limited character.” Unlike the immunity of foreign sovereigns, the immunity enjoyed by sovereign tribal governments is limited in scope and “centers on the land held by the tribe and on tribal members within the reservation.”

Nontribal entities must be aware that, absent a clear and unequivocal tribal immunity waiver, tribes and tribal entities may not be subject to suit should a deal go bad. With regard to contracts, “[t]ribes retain immunity from suits . . . whether those contracts involve governmental or commercial activities and whether they were made on or off a reservation.”

Tribal immunity generally shields tribes from suit for damages and requests for injunctive relief, whether in tribal, state, or federal court. Sovereign immunity has been held to bar claims against the tribe even when the tribe is acting in bad faith.

Tribes enjoy the benefit of a “strong presumption” against a waiver of their sovereign immunity. Moreover, federal courts have made clear that simply participating in litigation does not waive the tribe’s sovereign immunity. Any waiver of tribal sovereign immunity “cannot be implied but must be unequivocally expressed.”

Exactly what contract language constitutes a clear tribal immunity waiver is somewhat unclear. The Supreme Court in C & L Enterprises, Inc. v. Citizen Band Potawatomi Indian Tribe of Oklahoma ruled that the inclusion of an arbitration clause in a standard-form contract constitutes “clear” manifestation of intent to waive sovereign immunity. In C & L Enterprises, the Tribe proposed that the parties use a standard-form contract that contained an arbitration clause and a state choice-of-law clause. Although the contract did not clearly mention “immunity” or “waiver,” the Supreme Court believed the alternative dispute resolution (ADR) language manifested the tribe’s intent to waive immunity.

Finally, waivers of immunity must come from a tribe’s governing body and not from “unapproved acts of tribal officials.” Attorneys must evaluate a tribe’s structural organization to determine precisely which tribal agents have authority to properly waive tribal sovereign immunity or otherwise bind the tribal entity by contract. If attorneys do not have a working knowledge of pertinent tribal documents, they risk leaving their clients without an enforceable deal. Below are summaries from some of the most relevant sovereign immunity cases of the last year.

**Immunity may be asserted by tribal corporations, as well as tribal governments. Some recent sovereign immunity cases dealing with tribal corporations are collected and discussed in § 1.3.4.

Treasure v. United States, No. CV-20-75-GF-BMM, 2021 WL 4820255 (D. Mont. Oct. 15, 2021). Plaintiffs’ land was destroyed and damaged when a fire spread from the nearby Fort Peck Indian Reservation (FPIR) onto their property. The Assiniboine and Sioux Tribes (“Tribes”) established and cultivated buffalo entirely on land located within the FPIR. The Tribes supplemented the buffalo’s food source through a scheme that involved a crop sharing arrangement with Defendants Dale and Doug Grandchamp. On August 31, 2018, while Defendants and a third crop-sharer were swathing fields for hay, a fire broke out. The fire ignited in Roosevelt County, which had a burn ban in effect due to the high risk of wildland fires.

Authorities, including the Bureau of Indian Affairs (BIA) Fire Services, responded to the blaze, reassuring the concerned Plaintiffs at a later point in time that the blaze was either extinguished or under control. However, on September 1, 2018, the fire spread to Plaintiffs’ land and consumed 3,100 acres, destroying another 700 acres from collateral fire impacts. Plaintiffs filed suit in United States District Court for the District of Montana regarding the damaged or lost property against the BIA, Doug and Dale Grandchamp, and several individuals suspected of involvement in the fire (Defendants). Defendants moved to dismiss for lack of subject matter jurisdiction based on the principle of tribal sovereign immunity. Defendants argued that tribal sovereign immunity shielded both the Tribes and Grandchamp, in his capacity as a tribal employee. Though Plaintiffs agreed that tribal sovereign immunity would shield the Tribes in the absence of a waiver, they argued the Tribes waived their immunity. Plaintiffs asserted that tribal sovereign immunity did not apply to Grandchamp because he was sued in an individual capacity. The court bifurcated its analysis, discussing separately the application of tribal sovereign immunity to the Tribes and to Grandchamp.

The Tribes argued that tribal sovereign immunity shielded them from suit in federal court absent a waiver or abrogation, “neither of which existed in the case.” However, Plaintiffs argued that the Tribes waived tribal sovereign immunity “by virtue of their relationship with the BIA” while they were fighting the fire. The Court cited Alvarado v. Table Mountain Rancheria for the premise that Indian tribes have sovereign immunity from lawsuits in state and federal court unless immunity is waived by the tribe or abrogated by Congress. The Court also cited Fletcher v. United States for the principle that a waiver cannot be implied, “but rather must be unequivocally expressed.”

The Tribes argued that they did not waive their tribal sovereign immunity, and that the Federal Torts Claims Act (FTCA), upon which Plaintiffs pursued their claims, did not abrogate their immunity. Plaintiffs requested more time for discovery, but the district court reminded Plaintiffs that (1) “the burden for the party seeking jurisdictional discovery remains particularly high where the party seeks to disprove the applicability of an immunity-derived bar to suit,” and (2) “immunity serves to shield a defendant from the burdens of defending the suit, including the burdens of discovery.” The district court agreed with Defendants that no evidence existed that the Tribes waived tribal sovereign immunity, and Plaintiffs failed to explain how additional discovery time would have uncovered applicable evidence. In support, the district court reminded Plaintiffs that courts strongly presume that tribal sovereign immunity has not been waived.

Although Plaintiffs argued the Tribes waived tribal sovereign immunity by operating as an instrument of the BIA, the FTCA only applies when “non-government defendants are acting as either an instrumentality or agency of the United States.” The Federal Government must “supervise day-to-day operations of an instrumentality in order for the FTCA to apply.” No evidence existed to show that the Tribes were involved in the daily operations supervised by the BIA. Therefore, the district court held the Tribes were not an instrumentality of the BIA and the FTCA had not waived tribal sovereign immunity. Additionally, the court ruled the Tribes were entitled to tribal sovereign immunity and thus immune from suit under the FTCA and related claims. The claims against the Tribes were dismissed pursuant to Rule 12(b)(1).

Next, the district court turned to Doug Grandchamp. As for Dale Grandchamp, he failed to appear, plead, or otherwise defend himself, so default was entered against him on July 9, 2021.

Defendants asserted that Doug Grandchamp was acting in an official capacity during the events alleged in the Complaint. Plaintiffs countered that even if that was true, they sued him in his individual capacity. The Court stated that tribal sovereign immunity does not bar individual capacity suits against tribal employees when the Plaintiffs seek damages from the individual personally. The exception applies even if the plaintiff’s claims involve actions that employees allegedly took in their official capacities and within their employment authority. This exception relies on a “remedy-focused” analysis to determine if tribal employees should have tribal sovereign immunity when sued in their induvial capacity. Sovereign immunity shields a tribal employee when recovery against the individual, in reality, would run against the tribe. Plaintiffs may not circumvent tribal sovereign immunity by identifying individual defendants when the tribe remains the real intended party of interest.

Though Plaintiffs claimed that they sued Grandchamp in an individual capacity, he was never identified individually; all allegations lumped him in with the Tribes. The Court stated that a court assumes that an employee has been sued in their official capacity where plaintiffs articulate only generalized allegations that fail to differentiate the alleged conduct of the individual defendants from a tribe. The Court agreed that Plaintiffs failed to distinguish Grandchamp in an individual capacity and thus sued him in his official capacity. Therefore, Grandchamp was entitled to tribal sovereign immunity, and the complaints against him were dismissed under Rule 12(b)(1).

Acres Bonusing, Inc v. Marston, 17 F.4th 901 (9th Cir. 2021). Blue Lake Rancheria, a federally-recognized Tribal Nation, sued Acres Bonusing, Inc. (ABI) and James Acres, ABI’s owner, in Blue Lake Tribal Court, but lost. Unsatisfied with the Tribal Court win, ABI sued in federal court, and included the tribal court judge, the judge’s law clerks, the clerk of the Tribal Court, tribal officials, and outside law firms and lawyers that represented the Tribe. However, ABI did not sue the Blue Lake Tribe. The district court concluded that tribal sovereign immunity shielded Defendants from suit because they were acting within the scope of their tribal authority, i.e., within the scope of their representation of Blue Lake Casino. The district court held that tribal sovereign immunity applied because adjudicating this dispute would require the court to interfere with the tribe’s internal governance. The main question on appeal was whether tribal sovereign immunity did in fact shield Defendants from suit. The Court held for the following reasons that the district court erred in that respect.

Reversing in part, the Ninth Circuit followed the framework laid out in Lewis v. Clarke and held tribal sovereign immunity did not apply because ABI sought money damages from Defendants in their individual capacities, and the Tribe therefore was not the real party in interest. The U.S. Supreme Court held in Lewis that “the protection offered by tribal sovereign immunity is no broader than the protection offered by state and federal sovereign immunity.” In situations where a suit is brought against a governmental official but might actually be brought against a sovereign entity, the courts look to whether the sovereign is the real party in interest to determine whether sovereign immunity bars the suit. Tribal sovereign immunity does not apply where the judgment will not operate against the Tribe. The Court relied on the Lewis framework, with support from additional on point cases in the Ninth Circuit, to conclude that tribal sovereign immunity did not bar ABI’s suit against Defendants. The Ninth Circuit reasoned that Plaintiffs sought money damages against Defendants in an induvial capacity, and any relief ordered by the district court would not require Blue Lake to do or pay anything. Thus, the Blue Lake Tribe is not the real party in interest and tribal sovereign immunity does not apply to bar the suit against applicable Defendants. In addition, the Ninth Circuit rejected the argument that Lewis and other case law were distinguishable in this case because the alleged tortuous conduct occurred in the Tribal Court, which is part of the Tribe’s inherently sovereign authority. The Court of Appeals reasoned that the district court misapplied several cases that did not comport with Lewis and other prior cases.

The Ninth Circuit concluded, among other matters, that tribal sovereign immunity did not bar the suit and the case was remanded back to the district court for further proceedings.

Grondal v. United States, 37 F.4th 610 (9th Cir. 2022). In the culmination of a series of appeals regarding a business lease which Defendant-Appellant Wapato Heritage, LLC once held on waterfront land held in trust for the Colville Indian Reservation and certain allottees, the Ninth Circuit Court of Appeals affirmed the district court’s decision (1) dismissing Wapato Heritage’s cross claims against the Confederated Tribes of the Colville Reservation (the Tribes) and the Bureau of Indian Affairs (BIA). The Court also affirmed the lower court’s decision to deny Wapato Heritage’s motion to intervene in a trespass damages trial between the BIA and other parties.

Regarding a specific piece of land on Lake Chelan, Washington, Wapato Heritage accused the Tribes and the BIA, the beneficial owners of the land, of misconduct related to the land’s lease. The Ninth Circuit Court of Appeals already determined Wapato Heritage’s business lease ended in 2009, and “the land at issue was still Indian land held in trust by the United States.” The lower court dismissed Wapato’s crossclaims against the Tribes and the BIA, in part, because of tribal sovereign immunity.

The Court analyzed five lower court holdings, focusing first on the tribal sovereign immunity issue. Wapato Heritage claimed that the Tribes waived tribal sovereign immunity by generally participating in this case. The Ninth Circuit rejected the argument, reasoning that an instance where participation in litigation will constitute waiver of tribal sovereign immunity must be viewed as a very limited exception to the rule that upholds tribal sovereign immunity. The Court of Appeals stated that a tribe’s participation in litigation does not constitute consent to counterclaims asserted by defendants in those actions. Nor does a tribe’s invocation of tribal sovereign immunity in a motion to dismiss for lack of jurisdiction waive that very defense to the relevant claims. Thus, the Tribes retained their tribal sovereign immunity to the crossclaims, and the lower court did not need to rule on the claims’ merits. The Ninth Circuit also held (1) the district court lacked subject matter jurisdiction over lessee’s claims against BIA; (2) lessee was not entitled to writ of mandamus compelling BIA to recoup overpayments; and (3) lessee was not entitled to intervene as of right in BIA trespass damages trial against members.

Sipp v. Buffalo Thunder, Inc., 505 P.3d 897 (N.M. App. 2021), cert. granted (Feb. 8, 2022) (No. S-1-SC-39169). Jeremiah Sipp, an employee of a casino’s lighting vendor, Dial Electric, and Sipp’s wife sued a casino owned by the Pueblo Tribe in state district court to recover damages for injuries allegedly sustained by hitting his head on one of the casino’s garage doors. Sipp hit his head and was knocked out while acting in his capacity as an employee delivering lights to the casino. The District Court of Santa Fe County granted the casino’s motion to dismiss for lack of subject matter jurisdiction. The state district court held that Plaintiffs’ allegations did not fall within the limited immunity waiver contained in Section 8(A) of the Pueblo Tribe’s Tribal-State Class III Gaming Compact. Plaintiffs appealed.

On appeal, Plaintiffs argued that the state district court erred in granting Defendants’ motion to dismiss because Section 8(A) of the Compact expressly waives sovereign immunity and provides for state court jurisdiction over Plaintiffs’ claims. In contrast, Defendants contended that Section 8(A) does not permit the district court to exercise jurisdiction in this case for two reasons. First, the termination clause at the end of Section 8(A) was triggered by two federal court decisions, Pueblo of Santa Ana v. Nash, 972 F. Supp. 2d 1254 (D.N.M. 2013), and Navajo Nation v. Dalley, 896 F.3d 1196 (10th Cir. 2018), such that Section 8(A) no longer provides for state court jurisdiction. Second, Sipp does not qualify as a visitor to a gaming facility under Section 8(A) because (a) he had a business purpose for visiting Buffalo Thunder and not a gaming purpose, and (b) he was not injured in a “gaming facility.”

The Court of Appeals of New Mexico held that the termination clause had not been triggered and applied New Mexico case law interpreting Section 8(A) to find that Plaintiffs’ complaint sufficiently pleaded claims that fall within the Compact’s waiver of sovereign immunity for visitors to a gaming facility. The key question regarding tribal sovereign immunity being whether the employee sufficiently alleged claims that fall within the Compact’s immunity-waiver for visitors to a gaming facility. Defendants argued that Sipp’s visit to Buffalo Thunder was for business, and that the immunity-waiver only applied to casino patrons and not persons on the premises for other purposes. Also, Defendants asserted that the waiver was inapplicable because Sipp was not injured in a gaming facility. The Court of Appeals concluded that Sipp’s status as a visitor was sufficiently pleaded.

The Court of Appeals also rejected Defendants’ argument that cited the policy rationale that businesses like Dial Electric can negotiate the terms under which they enter the gaming facility and suggest that employees of the business should be treated in the same manner as the business itself for purposes of the waiver of tribal sovereign immunity. The Court of Appeals agreed that a person capable of suffering a physical injury is simply not analogous to that of a business entity for purposes of the waiver. The court also concluded that Plaintiffs’ amended complaint sufficiently alleged that he was on the premises with the permission of Defendants, and that his status as a visitor should have withheld the motion for dismissal.

The Court of Appeals also determined that Defendants failed to provide any authority for the interpretation that there is no waiver of sovereign immunity for injuries that occur outside of the gaming facility, and both the plain language of the Compact and New Mexico precedent are to the contrary. For these reasons, and several other unrelated to sovereign immunity, the Court of Appeals held that Plaintiffs plausibly alleged that Sipp was a visitor to the facility for purposes of the limited waiver of sovereign immunity in tribal-state gaming compact. The state district court’s dismissal of Plaintiffs’ lawsuit was reversed and remanded for further proceedings consistent with the opinion.

In re Coughlin, 33 F.4th 600 (1st Cir. 2022). A Chapter 13 debtor, Coughlin, filed a motion to recover for alleged violations of an automatic stay during his bankruptcy proceedings, and the creditors, an Indian Tribe, moved to dismiss the order based on the principle of tribal sovereign immunity. The United State Bankruptcy Court for the District of Massachusetts granted the motion, Coughlin appealed, and the First Circuit Court of Appeals permitted the direct appeal. The First Circuit ultimately held that the Bankruptcy Code unequivocally abrogates tribal sovereign immunity, even though it never expressly mentions Indian tribes.

In this case, Coughlin took out a loan from Lendgreen, a subsidiary of the Niiwan Tribe. Soon after, Coughlin filed for bankruptcy and per the Bankruptcy Code (BC), an automatic stay was issued enjoining debt-collection efforts outside the umbrella of the bankruptcy case. However, Lendgreen allegedly continued to contact Coughlin via phone and email seeking repayment of the loan despite reminders of the automatic stay prohibiting such conduct. At a later point, Coughlin attempted suicide. He claimed the decision was in part driven by the belief that his mental and financial agony would never end, and much of that agony was due to Lendgreen’s regular and incessant telephone calls, emails, and voicemails. To stop the alleged harassment, Coughlin brought an action to enforce the automatic stay and sought an order prohibiting Lendgreen from further attempts to recover their money, along with damages, attorney’s fees, and expenses. Lendgreen, wholly owned by an Indian Tribe successfully asserted tribal sovereign immunity by the lower court in those proceedings.

The First Circuit ruled that Section 106(a) of the Bankruptcy Code abrogated sovereign immunity for Indian Tribes. The Court believed that Native American tribes are not exempt from federal law barring suits against debtors once they file for bankruptcy, holding the Bankruptcy Code unequivocally strips tribes of their [tribal sovereign] immunity. The Court provided that Section 106(a) states that sovereign immunity is abrogated as to a governmental unit to the extent set forth in this section with respect to dozens of provisions in the Bankruptcy Code, including Section 362. A “governmental unit” is defined in Section 101(27) to mean:

United States; State; Commonwealth; District; Territory; municipality; foreign state; department, agency, or instrumentality of the United States, (but not a United States trustee while serving as a trustee in a case under this title), a State, a Commonwealth, a District, a Territory, a municipality, or a foreign state; or other foreign or domestic government.

The question then shifted to whether “domestic government” included Indian tribes. The Court concluded that there is no real disagreement that a tribe is a government, and it is also clear that tribes are domestic, rather than foreign, thus, a tribe is a domestic government and therefore a government unit. The First Circuit took note that Section 106 was amended in the late 1990s because the prior version was ambiguous regarding the abrogation of tribal sovereign immunity. The Court explained that when Congress enacted Section 101(27) and 106, it understood tribes to be domestic governments, and when it abrogated the sovereign immunity of domestic governments in § 106, it unmistakably abrogated the sovereign immunity of tribes. The First Circuit rejected the argument that the BC does not abrogate tribal sovereign immunity because it never uses the word “tribe,” and because the Supreme Court previously ruled that “magic words” are not required to waive immunity. Finally, the Court rejected the Tribe’s argument that the legislative history led to ambiguity, because legislative history cannot introduce ambiguity into an unambiguous statute. The First Court reversed the lower court’s decision dismissing Coughlin’s motion to enforce the automatic stay and remanded the case for further proceedings.

Unite Here Loc. 30 v. Sycuan Band of the Kumeyaay Nation, 35 F.4th 695 (9th Cir. 2022). A labor union brought an action against Sycuan Band of the Kumeyaay Nation, a federally-recognized Indian Tribe, alleging the tribe violated the labor provisions of a contract between the two parties with respect to operation of a casino on Tribe’s reservation, and seeking to compel arbitration of that dispute pursuant to an arbitration clause contained in the contract. The Tribe counterclaimed and the lower court granted the labor union’s motion for judgment to compel arbitration and dismissed the Tribe’s counterclaim for declaratory relief. The Tribe appealed, and during those proceedings the issue of tribal sovereign immunity arose.

The Tribe entered a compact with the State of California that included the requirement that the Tribe adopt and maintain a Tribal Labor Relations Ordinance (TLRO). Section 13 of the TLRO “provides for arbitration as the dispute resolution procedure for all issues arising under the TLRO,” and section 13(e) required the Tribe to waive its tribal sovereign immunity “against suits brought in state or federal court seeking to compel arbitration.” The Tribe contended that they did not waive tribal sovereign immunity. The Tribe argued that tribal sovereign immunity cannot be implied but must be unequivocally expressed. The Tribe admitted to waiving tribal sovereign immunity under the TLRO but denied waving it under the National Labor Relation Act (NLRA) because such a waiver was not clear and unequivocal. Essentially, the Tribe asserted that the NLRA preemption is a threshold issue that the district court should consider before sending the underlying claims to arbitration because if the NLRA preempts the TLRO, then the waiver of tribal sovereign immunity may also be preempted and arbitrating sovereign immunity is contrary to the principles of sovereign immunity. The Court rejected that argument, concluding instead that the Tribe expressly waived tribal sovereign immunity in section 13(e) of the TLRO, and when a tribe agrees to judicial enforcement of an arbitration agreement it waives its immunity concerning that agreement. The Court commented that the Tribe cited no law in support of its argument that the arbitration agreement must expressly list all issues to which the Tribe waives sovereign immunity. Thus, there was no tribal sovereign immunity to arbitration because a party is only obligated to arbitrate when that party agreed to arbitrate, as the Tribe did.

Seneca v. Great Lakes Inter-Tribal Council, Inc., No. 21-CV-304-WMC, 2022 WL 1618758 (W.D. Wis. May 23, 2022). This case arose after Plaintiff, Dean Seneca, claimed that Defendant, Great Lake Inter-Tribal Council, Inc. (GLITC) fired him as Director of Epidemiology because of his race, color, national origin, age, and sex. Plaintiff also alleged Defendant retaliated against him for engaging in protected activity, in violation of Title VII of the Civil Rights Act of 1964 (Title VII), the Americans with Disabilities Act of 1990 (“ADA”), the Age Discrimination in Employment Act of 1967 (ADEA), and the Genetic Information Nondiscrimination Act of 2008 (GINA). The lawsuit was Plaintiff’s third action challenging his termination. He filed two earlier cases in state court where GLITC asserted, as they did here, that the action should be dismissed based on tribal sovereign immunity. The district court agreed that tribal sovereign immunity as it was applied in state court applied in federal court too. Accordingly, Defendant’s motion to dismiss was granted.

The district court stated that federally-recognized Indian tribes are immune from suit in both state and federal courts unless Congress abrogates a tribe’s sovereign immunity, or the tribe waives its right to invoke sovereign immunity. More importantly, because the GLITC is an arm of the Great Lake Tribe, business entities owned and operated as arms of a federally-recognized Indian tribe may assert the same immunity as the tribe itself. The district court concluded that because of GLITC’s composition, the fact that it was operated solely by a recognized tribe, and that its purpose is to support its member tribes through service and assistance, it was entitled to tribal sovereign immunity as an arm of the Great Lakes Tribe. The district court granted Defendant’s motion to dismiss.

§ 1.3.4 Tribal Corporations

A majority of non-Alaskan tribes are organized pursuant to the Indian Reorganization Act of 1934 (IRA). Under Section 16 of the IRA, a tribe may adopt a constitution and bylaws that set forth the tribe’s governmental framework and the authority given to each branch of its governing structure. A tribe may also incorporate under Section 17 of the IRA, under which the Secretary of the U.S. Department of the Interior issues the tribe a federal commercial charter.

Through Section 17 incorporation, the tribe creates a separate legal entity to divide its governmental and business activities. The Section 17 corporation has a federal charter and articles of incorporation, as well as bylaws that identify its purpose, much like a state-chartered corporation. Section 17 incorporation results in an entity that largely acts like any state-chartered corporation.

An Indian corporation may also be organized under tribal or state law. If the entity was formed under tribal law, formation likely occurred pursuant to its corporate code; but it could have also occurred by tribal resolution (i.e., specific legislation chartering the entity). Under federal common law, the corporation likely enjoys immunity from suit. However, it is unclear whether a tribal corporation’s sovereign immunity is waived through state incorporation such that the entity may be sued in state court.

Therefore, when negotiating a tribal business transaction, counsel should consult the tribe’s governmental and corporate information—for example, treaty or constitution, federal or corporate charters, tribal corporate code—which, taken together, identify the entity with which you are dealing, the authority of that entity, and any applicable legal rights and remedies.

There are comparatively few cases decided on the basis of tribal corporate formation, but tribal corporations are often able to claim immunity from suit. In addition to IRA Section 17 entities, Native Alaskan communities are organized as corporations under some unique provisions within the Alaska Native Claims Settlement Act. Below find a discussion of recent cases dealing with tribal corporations.

** Some cases dealing with Tribal Corporations are discussed in § 1.3.3 because they deal with whether a Tribal Corporation may assert their tribe’s sovereign immunity.

A+ Gov’t Sols., LLC v. Comptroller of Md., 272 A.3d 882 (Md. Ct. Spec. App. 2022). The Oklahoma Indian Welfare Act (“OIWA”), 25 U.S.C. §§ 5201–10, is a parallel provision to section 17 of the Indian Reorganization Act of 1934, 25 U.S.C. §§ 5101–44. Chickasaw Nation Industries, Inc. (“CNI”) was a federally chartered corporation created and incorporated in 1996 under the OIWA. CNI owned CNI Government, LLC (“CNI Government”), which wholly owned CNI Subsidiaries, a collection of six limited liability companies—the appellants in this case. CNI Subsidiaries derived all, or substantially all, of their income from the performance of service contracts with the federal government.

In 2014, after concluding that CNI Subsidiaries were required to pay pass-through entity income tax (“PTE income tax”), the Comptroller of the Treasury issued notices of tax assessment for tax year 2012 against each of the CNI Subsidiaries. CNI Subsidiaries challenged these tax assessments, but two lower courts affirmed the Comptroller’s assessment.

The Court in this case, as relevant here, considered whether the Tax Court erred in assessing PTE income tax against CNI Subsidiaries even though CNI Government is owned by CNI, a federally chartered tribal corporation. The Court explained that PTE income tax is not imposed on a pass-through entity like CNI Subsidiaries and CNI Government. Rather, it is treated as a tax imposed on the nonresident owner of the pass-through entity, here, CNI. As such, central to determining whether the Comptroller could collect PTE income tax from CNI Subsidiaries turned on whether CNI’s income was taxable under Maryland law.

The Court held that the Tax Court erred in concluding that CNI Subsidiaries was subject to PTE income tax. The court explained that Section 17 corporations like CNI “are not recognized as separate entities for federal tax purposes,” and the corporations therefore receive the same federal tax treatment as the tribes that own them. Because Native American tribes are not subject to federal income tax, neither are federally chartered tribal corporations like CNI. Given CNI’s income was not taxable under federal law, and Maryland had elected to rely on the federal calculation of taxable income, the Court held that none of CNI’s income was taxable under Maryland law—and thus, it was error to require CNI subsidiaries to pay PTE income tax.

Cully Corp. v. United States, 160 Fed. Cl. 360 (Fed. Cl. 2022). In 2005, the defendant, the United States acting through the Air Force, purportedly transferred by donation three buildings to the plaintiff, Cully Corporation (“Cully”), an Alaska Native village corporation (“ANC”). Several years later, the Air Force attempted to reclaim the property by arguing that the buildings were never effectively transferred to Cully because the transaction violated federal regulations. An Alaskan state court found that Cully did not hold a present possessory interest in the buildings, a finding binding this United States Court of Federal Claims. Thus, the following claims remained: Cully sued the United States, asserting a Fifth Amendment takings claim and a quantum meruit claim. In this Court, Cully moved for summary judgment on its takings claim and the United States cross-moved for summary judgment on both of Cully’s claims.

According to the Code of Federal Regulations (“C.F.R.”) § 102-75.990, federal agencies may “[d]onate to public bodies any Government-owned real property (land and/or improvements and related personal property), or interests therein.” Thus, for the takings claim, the issue was whether Cully was a “public body for purposes of the Federal Regulations governing the transfer or donation of real property” such that the building transfer was valid—to the extent a revisionary interest was transferred.

A “public body” as it relates to the transfer of real property is “any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, or any political subdivision, agency, or instrumentality of the foregoing.” Cully, as an ANC, was distinct from Indian tribes throughout the rest of the United States; ANCs operate as corporations in form but appear as local governments on their face. For this reason, the Court determined that Cully, as an ANC, qualified as a “political subdivision” for purposes of 41 C.F.R. § 102-71.20, and thus was a public body as contemplated under 41 C.F.R. § 102-75.990.

The Court granted in part Cully’s motion for summary judgment on the takings claim, concluding that Cully held a reversionary property interest in the buildings which was temporarily taken by the United States, and reserved the issue of whether the taking was compensable for trial. The Court, however, denied summary judgment on the quantum meruit claim, reasoning that Cully’s recoverability in quantum meruit was “limited to the extent Cully believed it was performing remediation to receive a possessory interest and what interest the parties believed were being transferred,” such questions of fact further necessitating trial on these issues.

Evans Energy Partners, LLC v. Seminole Tribe of Fla., Inc., No. 21-13493, 2022 WL 2784604 (11th Cir. July 15, 2022). This case concerned whether the agreement between Seminole Tribe of Florida (the “Tribe”) and Evans Energy Partners (“Evans”) contained a clear waiver of tribal immunity. The Eleventh Circuit held that the agreement did not contain a waiver of the Tribe’s sovereign immunity.

The agreement included two relevant provisions: a limited arbitration clause and a waiver of tribal immunity. The arbitration clause explained that, though disputes arising out of the agreement would normally be settled in the Tribe’s courts, Evans retained the right “to initiate a binding arbitration proceeding . . . for the sole and exclusive purpose of terminating the Management Agreement and compelling the payment of the Termination Fee . . . .” But this right did not extend to a proceeding against the Tribe, as the parties agreed that “in no event shall the Seminole Tribe of Florida, Inc., or any of its other affiliated entities be named a party in any arbitration . . . .” Instead, Evans’s rights were “restricted to compelling Seminole Energy to participate in an arbitration proceeding for the express purpose set forth herein.” Seminole Energy is a third entity that is mentioned several times throughout the agreement, but whose identity is never clearly defined. The agreement also included a clause waiving tribal immunity. That clause stated that “[T]he Company through its parent company the Seminole Tribe of Florida, Inc., agrees to a limited waiver of sovereign immunity in order to allow Evans Energy” to exercise its rights under the arbitration clause.

After the agreement was terminated, the Tribe filed an action in tribal court against Evans, which resulted in a default judgment of $2.5 million. Before the final judgment was issued in the tribal court, Evans served the Tribe with a demand for arbitration for breach of contract. The arbitration panel found that they lacked jurisdiction to decide the gateway question of who decides the arbitrability of the dispute. Evans then sued in federal court seeking to enforce the agreement’s arbitration clause under the Federal Arbitration Act. The district court held that the agreement did not clearly waive the Tribe’s immunity and dismissed the complaint for lack of jurisdiction.

The Eleventh Circuit stated that the issue of tribal immunity depends on whether the agreement clearly waived the Tribe’s immunity from suit. Although a tribe may waive its immunity by contract, such waivers must be clear to be enforceable. Here, the agreement did not expressly waive sovereign immunity. Although the agreement typically refers to the Tribe as “the Company” and the purported waiver expressly states that “the Company” waives its sovereign immunity, the Eleventh Circuit could not read “the Company” as “the Tribe” in the waiver without creating an absurdity. If “the Company” was read as “the Tribe” in the waiver clause, the new waiver and arbitration provision would read: “[The Seminole Tribe of Florida, Inc.], through its parent company the Seminole Tribe of Florida, Inc., agrees to a limited waiver of sovereign immunity in order to allow Evans Energy to initiate a binding arbitration proceeding . . . for the sole and exclusive purpose of terminating the Management Agreement and compelling the payment of the Termination Fee . . . .” Because the Tribe cannot be its own parent company, Evans’s proposed construction is facially absurd. Instead, in the context of the waiver provision, “the Company” is best read to refer to Seminole Energy.

Regardless, this ambiguity prevents the waiver language from containing the requisite clarity that is needed for the Tribe to waive its immunity.

§ 1.4 The Federal Sovereign

§ 1.4.1 Indian Country & Land into Trust

The IRA authorizes the Secretary of the Interior to take land into trust for the benefit of an Indian tribe’s reservation. In 2009, however, the U.S. Supreme Court issued a landmark ruling reversing the Interior’s prior interpretation of the IRA, 25 U.S.C. § 465, now located at 25 U.S.C. § 5108, and limiting the Secretary’s ability to take land into trust on behalf of tribes. Carcieri held that the Secretary may only acquire land in trust for tribes that (1) were “under federal jurisdiction” in 1934, and (2) currently enjoy federal recognition. This effectively precludes certain tribes from avoiding state tax and regulatory compliance, or conducting gaming or other economic development activities on newly acquired or reacquired lands.

Despite the Carcieri ruling, Interior seems willing to issue final decisions on fee-to-trust applications by tribes that were recognized, restored, or reaffirmed after June 1934 on the basis that the tribe may have been under the jurisdiction of the United States in 1934 even if that recognition was not formally documented. Interior will continue processing applications for tribes that have enjoyed uninterrupted, formal recognition since June 1934 and for tribes that can point to a non-IRA statute granting the Secretary acquisition authority. In sum, any non-Indian party looking to enter into a joint venture with a tribe to develop Indian lands not yet in trust status must pause to consider the implications of Carcieri.

In response to the Carcieri decision, in 2014, the Interior Department issued a Memorandum that provided guidance on the meaning of “under federal jurisdiction.” The Solicitor’s M-37029 Memorandum outlined a two-part test for interpreting the phrase “under federal jurisdiction.” The first part of this inquiry examines whether, before June 18, 1934, the federal government took an action or series of actions through a course of dealings or other relevant acts reflecting its obligation to, responsibility for, or authority over, an Indian tribe, bringing such tribe under federal jurisdiction. The second prong examines whether this jurisdictional status remained intact in 1934. Satisfying either prong will suffice to establish that the tribe was “under federal jurisdiction.” In a recent decision, Confederated Tribes of Grand Ronde Community of Oregon v. Jewell, the D.C. Circuit Court of Appeals upheld Interior’s application of the two-part test outlined in M-37029. M-37029 appears to be a non-statutory Carcieri fix.

As if Carcieri were not complicated enough, in 2012, the U.S. Supreme Court issued its opinion in Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians v. Patchak. In that case, a local landowner by the name of David Patchak launched a legal challenge against the Interior Secretary’s decision to take the tribe’s land into trust for the purpose of gaming. Importantly, Patchak did not allege that he had a legal interest in the land to be taken into trust. Rather, Patchak brought an action under the APA asserting that the IRA did not authorize the Department of Interior to take land into trust for the tribe. The remedy Patchak sought was for the issuance of an injunction prohibiting the Interior from taking the land into trust. The basis for the injunction, in Patchak’s opinion, was that the requirements of the IRA were to be satisfied per the Supreme Court’s opinion in Carcieri. Both the federal government and the tribe argued that only the Quiet Title Act (QTA) could grant the waiver of sovereign immunity. Under the theory advanced by the defendants, the APA waiver of sovereign immunity was negated.

The Court determined that the QTA only applies to quiet title actions where a person claims an interest in the property that conflicts with, or is superior to, the government’s claim in the property. In addition, because the exception causing the APA waiver of sovereign immunity to be negated did not apply, the Court held Patchak had standing under the APA to pursue his challenge.

The result of this decision is that any party claiming harm to property nearby proposed trust land, even damage to an “aesthetic” interest, has legal standing under the APA to bring a lawsuit. This creates considerable risk for casino developers because the statute of limitations under the APA is considerably longer than that of the QTA, creating much more time for a party to challenge Interior’s trust transaction.

The Interior Department revised its land-into-trust regulations at Part 151 in response to the Patchak decision during the Obama Administration, in late 2013. This “Patchak Patch” provides that if the Interior Secretary or Assistant Secretary approves a trust acquisition, the decision represents a “final agency determination” subject immediately to judicial review. If a BIA official issues the decision, however, the decision is subject to administrative exhaustion requirements before it becomes a “final agency action.” In this instance, parties must file an appeal of the BIA official’s decision within 30 days of its issue. If no appeal is filed within the 30-day administrative appeal period, the BIA official’s decision becomes a “final agency action.” In October 2017, the Trump Administration’s Interior Department announced a consultation regarding a rulemaking that would reverse the “Patchak Patch,” and impose a much newer criteria for off-reservation land-into-trust applications. Assuming that rulemaking results in new Part 151 regulations, litigation will certainly follow.

A brief discussion of several of the year’s most prominent cases involving the diminishment of an Indian reservation and/or the taking of land into trust follow.

No Casino in Plymouth v. Nat’l Indian Gaming Comm’n, No. 2:18-cv-01398-TLN-CKD, 2022 U.S. Dist. LEXIS 87000 (E.D. Cal. May 11, 2022). In 2018, Plaintiffs filed a complaint for declaratory and injunctive relief against the Defendants following the Department of Interior’s (the “DOI”) Record of Decision (the “ROD”), announcing (1) its taking of nearly 230 acres of land in Amador County into trust for the Ione Band of Miwok Indians (the “Tribe”) and (2) approval of the Tribe’s gaming ordinance—wherein the ROD permitted the Tribe to construct a casino complex and conduct gaming once the land was taken into trust.

More specifically, the Plaintiffs challenged: (1) the Tribe’s gaming ordinance; (2) the then-Acting Assistant Secretary of Indian Affairs’ authority to approve the ROD under the Appointment Clause of the U.S. Constitution; (3) the Tribe’s federally recognized status under the Indian Reorganization Act (“IRA”); and (4) the Tribe’s federal recognition under 25 C.F.R. Part 83. Plaintiffs also claimed (5) Defendants violated Plaintiffs’ Equal Protection rights by favoring the Tribe, a race-based group, through approval of the ROD and (6) Defendants’ actions ran afoul of federalism protections. In June 2020, the Defendants filed a motion on the pleadings, which Plaintiffs opposed. And the Tribe successfully moved to intervene in this action.

Relying on Cnty. of Amador v. United States DOI, 872 F.3d 1012 (9th Cir. 2017), the Court granted the Defendants’ motion for judgment on the pleadings as to claims one through four. In Cnty. of Amador, the Ninth Circuit Court confirmed the Tribe’s status as a federally-recognized tribe and its under-federal-jurisdiction status in 1934 under the IRA. The Ninth Circuit Court further determined that the Tribe was qualified to have land taken into trust under the IRA, the Tribe could conduct gaming operations on the at-issue parcels under the Indian Gaming Regulatory Act (“IGRA”), and the then-Acting Assistant Secretary of Indian Affairs had the authority to take parcels into trust. As such, the Court found that the Ninth Circuit Court’s prior determinations in Cnty. of Amador disposed of Defendants’ claims one through four.

The Court also granted the Defendants’ motion for judgment on the pleadings as to claims five and six. As to claim five, the Court rejected Plaintiffs’ Equal Protection claim because approval of the ROD did not rest on the racial status of the Tribe but rather consideration of their status as members of a quasi-sovereign tribal entity. As to claim six, the Court rejected Plaintiffs’ argument concerning the Defendants’ alleged violation of federalism protections. The Court relied on Congress’ authority to grant IRA and IGRA benefits to tribes that have been federally recognized.

Berry v. United States, 159 Fed. Cl. 844 (Fed. Cl. 2022). Plaintiff, a landowner in Oklahoma, unsuccessfully brought a Fifth Amendment takings claim related to a gaming facility built by the Cherokee Nation (the “Nation”) on land held in trust by Defendant, the United States. The trust land was located next to Plaintiff’s property and Plaintiff alleged that development the gaming facility caused repeated flooding, erosion, and impoundment of water on her property. Plaintiff also asserted that the Nation removed vegetation and soil and dug a drainage ditch without her permission. Plaintiff alleged this activity constituted a taking pursuant to the Fifth Amendment because the United States, holder of the land in trust, failed to act in halting damage caused by the Nation.

The Court, in dismissing the Plaintiff’s action for failure to state a claim, explained that a taking necessarily involves governmental action. And here, Plaintiff failed to allege any governmental action that caused the alleged injuries in her takings claim. Beyond conclusory assertions of liability, her amended complaint only alleged, without more, that Defendant acquired and held the land in trust, not that Defendant itself developed the land and therefore caused flooding on her property. Rather, it was the Nation who developed and operated the gaming facility on the trust land, not Defendant. To be sure, the Court noted that Plaintiff’s claim still failed even under Plaintiff’s assertion that the government acted, for purposes of a takings claim, by approving the Nation’s application for Defendant to acquire the land in trust and thereafter acquiring the trust land. In other words, development of the gaming facility would not have occurred—and thus no damages to her property would have ensued—if Defendant had not initially approved of the Nation’s application and acquired the land in trust. The Court clarified that what Plaintiff asserted was not direct governmental action effecting a taking but rather agency-decision making that permitted the Nation’s action, which may have given rise to a claim in federal district court under the Administrative Procedure Act but not in the Ninth Circuit as a taking under the Fifth Amendment.

In further support of her takings claim, the Court also rejected Plaintiff’s argument that Defendant owed her an actionable fiduciary duty. The Court explained that the Indian Gaming Regulatory Act does not create an enhanced duty of trust with respect to the land held in trust by Defendant, and, Plaintiff, who was not a beneficiary of the trust land, could not enforce such a duty.

Birdbear v. United States, No. 16-75L, 2022 WL 4295326 (Fed. Cl. Sep. 9, 2022). Plaintiffs, members of the Three Affiliated Tribes of the Fort Berthold Indian Reservation (the “Reservation”), were beneficial owners of allotted land on the Reservation held in trust by Defendant, the United States. Portions of the Plaintiffs’ allotted lands were subject to oil and gas leases the Secretary of Interior (the “Secretary”) approved and managed pursuant to federal statutes and regulations. Plaintiffs claimed that these statutes and regulations imposed fiduciary obligations on the Defendant concerning the approval and management of mineral leases on their allotted lands and that Defendant breached those obligations. Plaintiffs sought an award of compensatory damages for the millions of dollars in losses they allegedly suffered because of those breaches.

Plaintiffs’ complaint contained various counts, and various motions for partial summary judgment were before the Court in this matter. In pertinent part, however, as to counts three and eight, Defendant asserted it was entitled to summary judgment because the Court lacked jurisdiction as to these counts—that is, they did not fall within the waiver of sovereign immunity contained in the Indian Tucker Act (“ITA”), 28 U.S.C. § 1505. The Court explained that to establish the Court’s jurisdiction under the ITA, “a tribal plaintiff must invoke a rights-creating source of substantive law that can fairly be interpreted as mandating compensation by the Federal Government for the damages sustained.” To determine whether a claim by a tribal plaintiff alleging a breach of trust has met these requirements, the Supreme Court has established a two-prong test. For prong one, “the plaintiff must persuade the Court that the source of law on which the claim is based imposes ‘specific fiduciary or other duties’ on the government.” For prong two, “if a statute or regulation imposes a specific fiduciary or other duties on the United States, the Court must determine whether the statute or regulation also ‘can fairly be interpreted as mandating compensation by the Federal Government for the damages sustained.’”

The Court here found that Plaintiffs’ counts three and eight, as relevant, satisfied the aforementioned prongs. For context, in count three, Plaintiffs claimed the government breached its fiduciary duty “to properly manage, administer and supervise Plaintiffs’ lands to prevent the avoidable loss of oil and gas through drainage.” The Court concluded “that the government ha[d] a specific fiduciary obligation to protect Plaintiffs against the uncompensated drainage of oil and gas held in trust for them”—satisfying prong one of the test for determining jurisdiction under the ITA. In count eight, Plaintiffs claimed the Secretary breached its duty “to ensure the timely drilling of oil and gas wells on Plaintiffs’ leased land.” The Court ultimately concluded “that the United States ha[d] a specific fiduciary obligation to ensure that lessees exhibit reasonable diligence in their development of mineral resources”—also satisfying prong one of the test for determining jurisdiction under the ITA. Concerning the second prong for both counts, the Court concluded that “the money-mandating nature of the [specific fiduciary] obligations [could] be inferred from the government’s comprehensive control over the development of oil and gas on Plaintiffs’ land”—satisfying the requirement that the these specific fiduciary obligations set out in the at-issue statutes and regulations relied upon by Plaintiffs for its claims could be fairly interpreted as mandating compensation by the Federal government for the damages allegedly sustained by Plaintiffs.

§ 1.4.2 Federal Approval for Reservation Activity

Due to the unique trust status of Indian lands, contracts involving those lands are subject to various forms of federal oversight. The Secretary of the Interior must approve any contract or agreement that “encumbers Indian lands for a period of seven or more years,” unless the Secretary determines that approval is not required. Federal regulations explain that “[e]ncumber means to attach a claim, lien, charge, right of entry, or liability to real property.” Encumbrances may include leasehold mortgages, easements, and other contracts or agreements that, by their terms, could give to a third party “exclusive or nearly exclusive proprietary control over tribal land.”

Per revisions to Section 81 in 2000, the Interior Secretary will not approve any contract or agreement if the document does not (1) set forth the parties’ remedies in the event of a breach; (2) disclose that the tribe can assert sovereign immunity as a defense in any action brought against it; and (3) include an express waiver of tribal immunity. Leaseholds for Indian lands, which typically run 25 years, also require secretarial approval. Failure to secure secretarial approval could render the agreement null and void. Therefore, if the transaction implicates tribal lands, counsel should analyze whether the Secretary must approve the underlying contract or lease. Regardless of whether Secretary approval is necessary, all parties should be careful as to how they draft agreements which may encumber the land. If the contract pertains to a tribal casino, the parties must also consider whether the contract should be submitted to the National Indian Gaming Commission (NIGC) for approval pursuant to the Indian Gaming Regulatory Act (IGRA). Any “management agreement” for a tribal casino or “contract collateral to such agreement” requires NIGC approval to be valid and enforceable. The NIGC has recently found that certain consulting, development, lease, and financing documents that confer management authority to the consultant, developer, landlord, or lender thereby constitute a management contract that is void unless approved by the NIGC.

Non-Indian contractors must also consider whether they need to obtain an Indian Traders License from the BIA and/or a tribal business license to properly do business with a tribe. Federal regulations do not preclude certain tribes from imposing additional fees on non-Indian contractors. Failure to obtain appropriate licenses could subject the contractor to a fine or forfeiture, if not tribal qui tam litigation.

With much tribal and media fanfare, in 2012, President Obama signed into law the Helping Expedite and Advance Responsible Tribal Homeownership (HEARTH) Act. As noted above, prior to the passage of this bill, under 25 U.S.C. § 415 every lease of a tribe’s lands must undergo federal review and approval by the Secretary of the Interior under a sprawling, burdensome set of regulations. The HEARTH Act changes that scheme of Indian land leasing by allowing tribes to lease their own land. The Act gives tribal governments the discretion to lease restricted lands for business, agricultural, public, religious, educational, recreational, or residential purposes without the approval of the Secretary of the Interior. Tribes are able to do so with a primary term of 25 years, and up to two renewal terms of 25 years each (or a primary term of up to 75 years if the lease is for residential, recreational, religious, or educational purposes).

There are some caveats, though. First, before any tribal government can approve a lease, the Secretary must approve the tribal regulations under which those leases are executed (and mining leases will still require the Secretary’s approval). Second, before the Secretary can approve those tribal regulations, the tribe must have implemented an environmental review process—a “tribal,” or “mini” National Environmental Policy Act—that identifies and evaluates any significant effects a proposed lease may have on the environment and allows public comment on those effects. The HEARTH Act authorizes the Interior Secretary to provide a tribe, upon the tribe’s request, with technical assistance in developing this regulatory environmental review process. HEARTH Act implementing regulations went into effect in 2013. As of November 3, 2022, the BIA lists 79 tribes whose regulations have been approved to exercise the enhanced rights of sovereignty associated with taking control over the leasing of tribal land.

The following highlights several of the more relevant cases decided in the last year.

Kiowa Tribe v. United States Dep’t of the Interior, No. CIV-22-425-G, 2022 WL1913436 (W.D. Okla. June 3, 2022). The Kiowa tribe and Comanche Nation (“Plaintiffs”) filed an action on May 25, 2022, raising three claims “to prevent an illegal casino from conducting unlawful gaming within Plaintiff’s reservation:” (1) a declaration under the Administrative Procedure Act (“APA”) that the Tsalote Allotment (“Apache Wye”) is not owned by FSAT; (2) “a declaration that [Fort Sill Apache Tribe (“FSAT”)] may not conduct gaming on the Tsalote Allotment” because such gaming would violate the Indian Gaming Regulatory Act (“IGRA”); and (3) a declaration that gaming on the Tsalote Allotment by FSAT will violate the Racketeer Influenced and Corrupt Organization Act (“RICO”).

Plaintiffs contended that the FSA Defendants’ opening of the Casino would violate IGRA in several ways. IGRA prescribes that a tribe may engage in Class III gaming “on Indian lands of the Indian tribe” only if such activities are “authorized by an ordinance or resolution that” is adopted by a tribe “having jurisdiction over such lands.” This matter was before this Court on the Motion for Temporary Restraining Order.

At the hearing, the Federal Defendants argued Plaintiffs’ IGRA claim was improperly pled because any claim of an IGRA violation must be raised as a request for judicial review pursuant to the APA. Relatedly, the FSA Defendants argued that IGRA does not give Plaintiffs the right or authority to sue them based upon violation of that statute, emphasizing that Congress in passing the IGRA set out the NIGC as the agency tasked to regulate gaming pursuant to that statutory scheme.

The Court found that Plaintiffs did not present a claim that is reviewable by this Court pursuant to 25 U.S.C. § 2714. Plaintiffs also alleged in passing that FSAT’s Class III gaming operations on the Tsalote Allotment will violate FSAT’s gaming compact with Oklahoma, which recites that the tribe may conduct Class III gaming only on its own Indian lands.

While 25 U.S.C. § 2710(d)(7)(A) does provide a “[cause] of action in favor of tribes” to enjoin Class III gaming “located on Indian lands and conducted in violation of any Tribal-State compact,” Plaintiffs’ nominal argument, unsupported by any discussion of the statutory provision or citation to relevant authority, was insufficient to show a substantial likelihood of success on such a claim at this stage of proceedings. Because Plaintiffs did not satisfy their burden to show that they are substantially likely to succeed on the merits of any of their legal claims, the Court did not discuss the other three elements necessary for a Temporary Restraining Order. The Motion for Temporary Restraining Order filed by Plaintiffs was Denied. Id.

No Casino In Plymouth v. Nat’l Indian Gaming Comm’n, No. 218CV01398TLNCKD, 2022 WL 1489498 (E.D. Cal. May 11, 2022). On May 22, 2018, Plaintiffs filed a Complaint for declaratory and injunctive relief asserting seven causes of action against Defendants, National Indian Gaming Commission (“NIGC”) and others (collectively, “Defendants”). This lawsuit primarily presented a challenge to the Record of Decision (“ROD”) issued by the Department of the Interior’s (“DOI”) then-Acting Assistant Secretary of Indian Affairs, Donald Laverdure (“Laverdure”). The ROD announced the DOI’s taking of 228.04 acres of land in Amador County into trust for the Ione Band of Miwok Indians (“Tribe” or “Band”). It also allowed the Band to construct a casino complex and conduct gaming once the land was taken into trust. Pursuant to IGRA, 25 U.S.C. § 2702(1), NIGC Chairman Jonodev Chaudhuri approved the Tribe’s gaming ordinance on March 6, 2018.

Plaintiffs’ claims challenged various determinations as follows: (1) the Tribe’s gaming ordinance; (2) Laverdure’s authority to approve the ROD under the Appointment Clause of the U.S. Constitution; (3) the Tribe’s federally-recognized status under the Indian Reorganization Act (“IRA”); (4) the Tribe’s federal recognition under 25 C.F.R. Part 83; (5) Defendants’ violation of Plaintiffs’ Equal Protection rights by favoring the Tribe, a race-based group, through approval of the ROD and gaming ordinance; and (6) Defendants’ violation of federalism protection. Defendants moved for judgment on the pleadings, arguing Plaintiffs cannot challenge the federal agency action because: (1) the Ninth Circuit has affirmed both the Tribe’s status as federally recognized and Laverdure’s authority to issue the 2012 ROD as Acting Assistant Secretary of Indian Affairs; and (2) the Complaint fails to state claims for which relief can be granted.

Defendants argued the Ninth Circuit in County of Amador issued dispositive rulings on Claims One through Four in the instant matter, including: (1) the Tribe’s gaming ordinance; (2) Laverdure’s authority to issue the ROD; (3) the Tribe’s federally recognized status. In opposition, Plaintiffs argued the 2018 gaming ordinance was not at issue in County of Amador, and that the court did not conclusively decide Laverdure had authority to take land into trust for the Tribe. Plaintiffs also contended the Tribe lacked Part 83 recognition to be eligible for IRA and IGRA benefits. Plaintiffs argued the Tribe’s inclusion on the administrative list of “Indian Entities” eligible to receive service for the Bureau of Indian Affairs did not mean that the Tribe is federally recognized.

The “law of the circuit doctrine” mandates that a published decision of a Ninth Circuit court constitutes finding authority which must be followed unless and until overruled by a body competent to do so. Thus, the Ninth Circuit’s decision on the Tribe’s federally recognized status and the Tribe’s status in 1934 under the IRA are binding on this Court. Further, the Ninth Circuit clearly found Laverdure’s actions within his powers.

The Court found County of Amador disposed of Plaintiffs’ Claims One through Four on the following issues: (1) the Tribe’s gaming ordinance; (2) Laverdure’s authority to issue the ROD; and (3) the Tribe’s federally recognized status under the IRA and Part 83. Accordingly, the Court granted Defendants’ motion for judgment on the pleadings on Claims One through Four. Plaintiffs’ remaining claims were Claims Five (equal protection) and Six (federalism protection). Defendants argued Plaintiffs’ equal protection claim fails because provision of benefits to federally recognized tribes on the basis of their status as tribes does not offend equal protection principles. Further, Defendants argued Plaintiffs’ federalism claim, which alleges that the Tribe receives exemptions from state and local law, is inaccurate. Plaintiffs did not respond to these arguments in any meaningful way. Thus, Plaintiffs’ failure to respond to Defendants’ arguments was a concession of those arguments. Accordingly, the Court did not consider the arguments and granted Defendants’ motion for judgment on the pleadings on Claims Five and Six.

W. Flagler Assocs. Ltd. v. DeSantis, No. 4:21-CV-270-AW-MJF, 2021 WL 5768481 (N.D. Fla. Oct. 18, 2021), appeal dismissed sub nom. W. Flagler Assocs., Ltd. v. Governor of Fla., No. 21-14141-AA, 2021 WL 7209340 (11th Cir. Dec. 20, 2021). The Seminole Tribe of Florida (“Tribe”) has offered casino gambling on its tribal lands and recently entered a Compact that allows a new form of sports betting on (or through) the Tribe’s reservation. Parimutuel Operators (the “Plaintiffs”), also in the gaming business, sued Florida’s Governor and the Secretary of Florida’s Department of Business and Professional Regulation (the “State Officials”) seeking a declaration that the Compact’s sports betting provision violates federal law, and seeking an injunction precluding its enforcement. State Officials moved to dismiss for lack of standing, the Tribe moved to intervene, and Plaintiffs moved to expedite, and for summary judgment or a preliminary injunction.

The Plaintiffs alleged that the Compact violated several federal gambling laws, plus the Fourteenth Amendment. They sought a declaratory judgment that the Compact violated the Indian Gaming Regulatory Act, 25 U.S.C. § 2710(d) (permitting certain gambling activities “on Indian lands”); the Wire Act, 18 U.S.C. § 1084(a) (prohibiting certain interstate wire communications related to sports gambling); and the Unlawful Internet Gambling Enforcement Act, 31 U.S.C. § 5362(10) (defining internet betting on tribal lands as “unlawful internet gambling” if it is illegal under applicable state or federal law). They also sought a declaratory judgment that permitting Floridians to engage in online sports betting with the Tribe when not physically present on tribal land, while still prohibiting all other forms of sports betting in the state, violates Equal Protection.

The Court reviewed whether the Plaintiffs had standing, and held that: (1) Plaintiffs failed to state a claim that their alleged injury-in-in fact of lost business from Compact was traceable to Florida’s governor; (2) Plaintiffs failed to state a claim that their alleged injury-in fact of lost business from Compact was traceable to the Secretary of Florida’s Department of Business and Professional Regulation; (3) a declaration that would be entered against Florida officials and that would declare that Compact violated federal law would not address Plaintiffs’ alleged injury of lost business due to the compact; (4) an injunction precluding Florida’s governor from implementing the Compact would not redress Florida Plaintiffs’ alleged injury of lost business; and (5) an injunction precluding Secretary of Florida’s Department of Business and Professional Regulation from implementing sports-betting statute relevant to Compact would not redress Plaintiffs’ alleged injury of lost business. Accordingly, the Court granted the State Officials motion to dismiss because Plaintiffs lacked standing since the State Officials actions were not fairly traceable to any alleged harm and the requested declaratory and injunctive relief would provide no legal or practical redress for the Plaintiffs’ injuries.

Cal-Pac Rancho Cordova, LLC v. United States Dep’t of the Interior, No. 2:16-CV-02982-TLN-AC, 2021 WL 5826776 (E.D. Cal. Dec. 8, 2021). Cal-Pac Rancho Cordova LLC, Capital Casino, Inc., Lodi Cardroom, Inc., and Rogelio’s Inc.’s (collectively, “Plaintiffs”) filed this action seeking injunctive relief and declaratory relief based on: (1) violation of the Indian Gaming Regulatory Act’s (“IGRA”) jurisdiction requirement; (2) the unconstitutionality of the Indian Reorganization Act (“IRA”); (3) violation of IGRA due to inconsistency of Secretarial Procedures with state law; (4) and erroneous interpretation of IGRA. Plaintiffs are four state-licensed card clubs located within the same area as the proposed casino site.

Plaintiffs argued they would be at a competitive disadvantage if the Tribe opened a Nevada-style casino and operated casino-style games in the area because Plaintiffs are more limited in the gaming they can offer. Plaintiffs made two main arguments: (1) the Secretarial Procedures were issued in violation of IGRA, as the Tribe purportedly never acquired jurisdiction or exercised governmental power over the Yuba Parcel; and (2) assuming the Tribe acquired jurisdiction and exercised governmental power, IRA violates the Tenth Amendment by reducing the State’s jurisdiction over land within its territory without its agreement.

The Defendants notified the Court that the Ninth Circuit had already made a decision on a similar case, Club One Casino, Inc. v. Bernhardt (“Club One II”), where it held that “because Congress has plenary authority to regulate Indians affairs, . . . IRA does not offend the Tenth Amendment.” Because Club One II was binding on this Court, the Court did not address the arguments and granted summary judgment to Defendants as to Plaintiffs’ first two arguments.

Plaintiffs raised two alternative arguments. First, the Governor’s concurrence in the Secretary’s two-part determination as to gaming eligibility on the Yuba Parcel was negated by the California legislature’s refusal to ratify the Class III gaming compact. The Court agreed with Defendants that the IGRA does not require the Governor’s concurrence in Secretarial Procedures, nor does it require the Secretary to determine the validity of the Governor’s concurrence in the Secretary’s two-part determination. Second, Plaintiffs argued the Secretarial Procedures were inconsistent with California law requiring a Compact for Class III gaming. However, the Club One I court rejected this exact argument. That court further explained, “The issuance of Secretarial Procedures is the part of the remedial process that gives it teeth. If gaming pursuant to Secretarial Procedures was not contemplated, the purpose of the remedial process—restoring leverage to tribes to sue recalcitrant states and thereby force them into a compact—would be wholly eroded.” This Court agreed to decline to read the IGRA to have created (or the State of California to have waived immunity as to) an empty remedial process.

Accordingly, the Court held that the Secretary’s issuance of Secretarial Procedures was not arbitrary, capricious, or otherwise not in accordance with law for any of the reasons identified by Plaintiffs. Based on the foregoing reasons, the Court denied Plaintiffs’ motion for summary judgment and granted the Defendants’ motion for summary judgment.

W. Flagler Assocs. v. Haaland, No. 21-CV-2192 (DLF), 2021 WL 5492996 (D.D.C. Nov. 22, 2021). In August 2021, the Secretary of Interior approved a gaming Compact between the State of Florida and the Seminole Tribe of Florida (the “Tribe”). The Compact authorized the Tribe to offer online sports betting throughout the State, including the bettors located off tribal lands. Plaintiffs, West Flagler Associates and Bonita-Fort Myer’s Corporation (collectively, the “West Flagler Plaintiffs”) brought a civil action and argued that the Compact violated the Indian Gaming Regulatory Act, the Unlawful Internal Gambling Enforcement Act, the Wire Act, and the Equal Protection Clause. Accordingly, they asked the Court to “set aside” the Secretary’s approval of the Compact pursuant to the Administrative Procedure Act (“ACA”).

Before the Compact took effect, Florida law prohibited wagering on “any trial or contest of skill, speed[,] power or endurance.” Although that prohibition contained a narrow exception for horse racing, dog racing, and jai alai, it barred betting on all major sports, including football, baseball, and basketball. The Florida Constitution also limited the conditions in which the State could expand sports betting going forward. Specifically, it provided that the State could only expand such betting through a “citizens’ initiative,” with the caveat that this did not limit the ability of the state or Native American tribes to negotiate gaming compacts under IGRA.

The Compact in this case expanded the Tribe’s ability to host sports betting throughout the State. In relevant part, the Compact defines “sports betting” to mean “wagering on any past or future professional sport or athletic event, competition or contest;” classifies “sports betting” as a “covered game;” authorizes the Tribe “to operate Covered Games on its Indian lands, as defined in [IGRA].” The Compact also provides that all in-state wagers on sporting events “shall be deemed . . . to be exclusively conducted by the Tribe at its Facilities where the sports book(s) . . . are located,” even those that are made “using an electronic device” “by a Patron physically located in the State but not on Indian lands.” In this manner, the Compact authorizes online sports betting throughout the State. Because the State has not entered a similar agreement with any other entity, the Compact grants the Tribe a monopoly over both all online betting and all wagers on major sporting events.

On June 21, 2021, the Secretary of the Interior received a copy of the Compact. Because the Secretary took no action on it within forty-five days, the Compact was “deemed approved” on August 5. The next day, the Secretary explained her no-action decision in a letter to the Tribe. The letter reasoned that IGRA allows the Tribe to offer online sports betting to persons who are not physically located on its tribal lands. To support that conclusion, the letter noted that IGRA allows states and tribes to negotiate the “allocation of criminal and civil jurisdiction,” emphasized that Florida consented to the Compact, and argued that “IGRA should not be an impediment to tribes that seek to modernize their gaming offerings.” At the same time, the letter insisted that Florida residents could not place sports bets while “physically located on another Tribe’s Indian lands.” To do so would violate IGRA’s instruction that gaming is “lawful on Indian lands” only if such gaming is authorized by the “Indian tribe having jurisdiction over such lands.” On August 11, the Secretary published notice of the Compact in the Federal Register. At that point, the Compact took effect and acquired the force of law.

The West Flagler Plaintiffs’ civil action challenged the Secretary’s approval of the Compact. Both entities own brick-and-mortar casinos in Florida. To establish Article III standing, they alleged that the Compact’s allowance for online betting will divert business from their facilities. On the merits, they argued that the Compact’s authorization of online betting violated IGRA, the Unlawful Internet Gambling Enforcement Act (“UIGEA”), the Wire Act, and the Equal Protection Clause. Their leading argument was that the Compact violated IGRA because it authorizes Class III gambling outside of “Indian lands.” The Tribe moved to intervene for the limited purpose of filing a motion to dismiss. The Tribe argues that it may intervene as of right because it has an economic interest in the Compact and because the Secretary will not adequately protect that interest.

On September 27, 2021, other Plaintiffs, Monterra MF, LLC and its co-plaintiffs (collectively, the “Monterra Plaintiffs”) filed a separate challenge to the Secretary’s approval. All but one of these co-plaintiffs lived, worked, or owned property near Florida casinos. The remaining Plaintiff, No Casinos, is a nonprofit organization that opposed the expansion of gambling in Florida. To establish Article III standing, the Monterra Plaintiffs alleged that the expansion of gambling in Florida will increase neighborhood traffic, increase criminal activity, and reduce their property values. On the merits, they joined the West Flagler Plaintiffs in arguing that the Compact’s online gambling rules violated IGRA, UIGEA, and the Wire Act. They also argued that the Compact’s expansion of in-person gambling violates both the Florida Constitution and a separate provision of IGRA, which conditions the lawfulness of Class III gaming on whether the state “permits such gaming for any purpose by any person, organization, or entity.”

The West Flagler Plaintiffs moved for summary judgment on September 21, 2021. The Monterra Plaintiffs followed suit on October 15, 2021. The Secretary then moved to dismiss both cases for lack of standing. The Secretary also argued that the Plaintiffs failed to state a claim under IGRA, that IGRA does not require her to consider questions of state law, and that West Flagler’s constitutional argument fails. The Secretary did not, however, address whether the online gaming contemplated by the Compact occurs on or off “Indian lands.”

The Court found that West Flagler Plaintiffs had adequately established a competitive injury that was both caused by the conduct challenged in this action and redressable by a favorable decision on the merits. On that first point, the Court stated there is a “causal connection” between West Flagler’s Plaintiffs injury and the Secretary’s approval of the gaming Compact, without which the Tribe could not offer online sports betting. Setting aside the Secretary’s approval would prevent the Tribe from offering such betting, at least under the current Compact because that result would fully redress West Flagler’s Plaintiff’s injury, West Flagler has Article III standing. The Court did not address whether the other Plaintiffs in these actions had standing because as a general matter, “the presence of one party with standing is sufficient to satisfy Article III’s case-or controversy requirement.”

The Court found that “equity and good conscience” permitted this action to continue in the Tribe’s absence. The Court stated that because the Tribe moved to intervene solely to move for dismissal, because the Tribe seeks dismissal on the sole ground that it is indispensable and the Tribe is not indispensable, the Tribe’s motion for limited intervention was denied as moot.

On the merits, it is well-settled that IGRA authorizes sports betting only on Indian lands. Altogether, over a dozen provisions in IGRA regulate gaming on “Indian lands,” and none regulate gaming in another location. The Supreme Court has emphasized that “[e]verything—literally everything—in IGRA affords tools . . . to regulate gaming on Indian lands, and nowhere else.” The instant Compact attempts to authorize sports betting both on and off Indian lands. Accordingly, because the Compact allows patrons to wager throughout Florida, including at locations that are not Indian lands, the Compact violates IGRA’s “Indian lands” requirement. Therefore, the Secretary had an affirmative duty to reject it. The Court granted West Flagler Plaintiffs’ motion for summary judgment as to this claim.

The last issue in this case was the Plaintiffs’ remedy. The issue is governed by § 706 of the APA, which directs courts to “hold unlawful and set aside agency action” that is “not in accordance with law.” The “agency action” under review is the Secretary’s default approval of the Compact. Vacating the Secretary’s approval was appropriate because it would fully redress the West Flagler Plaintiffs’ injury. For those reasons, the Court concluded that the appropriate remedy was to set aside the Secretary’s default approval of the Compact. The remedy also resolved the Monterra Plaintiffs’ action.

It was the Court’s understanding that the practical effect of this remedy is to reinstate the Tribe’s prior gaming compact, and restore the legal status of Class III gaming in Florida to where it was on August 4, 2021—one day before the Secretary approved the new compact by inaction. Because the more recent Compact is no longer in effect, continuing to offer online sports betting would violate federal law. The Court clarified that this decision does not foreclose other avenues for authorizing online sports betting in Florida. The State and the Tribe may agree to a new Compact, with the Secretary’s approval, that allows online gaming solely on Indian lands. Alternatively, Florida citizens may authorize such betting across their State through a citizens’ initiative. What the Secretary may not do, however, is approve future Compacts that authorize conduct outside IGRA’s scope.

The West Flagler Plaintiffs’ motion for summary judgment was granted, the Monterra Plaintiffs’ motion for summary judgment was denied as moot, the Tribes’ motions to intervene was denied, and the Secretary’s motions to dismiss was denied. The matter is being appealed to the D.C. Court of Appeals.

Chicken Ranch Rancheria of Me-Wuk Indians v. California, 42 F.4th 1024 (9th Cir. 2022). California (“Defendant”) engaged in negotiations with the Chicken Ranch Rancheria of Me-Wuk Indians, Blue Lake Rancheria, Chemehuevi Indian Tribe, Hopland Band of Pomo Indians, and Robinson Rancheria (collectively, “Plaintiffs”) to enter into a compact. Under the Indian Gaming Regulatory Act (“IGRA”), topics of negotiation are limited to those directly related to the operation of gaming activities. These protections are in place to prevent states from using their compact approval authority to force regulations on tribes that the states would otherwise be powerless to enact.

During several years of negotiations, California demanded that the Tribes agree to compact provisions relating to family law, environmental regulation, and tort law that were unrelated to the operation of gaming activities and far outside the bounds of permissible negotiation under IGRA.

The Court held that in doing so, California did not act in good faith. To reach this conclusion, the Court held that the list enumerated in the IGRA is exhaustive. The Court noted the connection between gaming and topic of negotiation must be direct; this is a meaningful limitation on negotiations. None were.

The family support ordinances only tangentially touched gaming as they were applicable to gaming facility employees. The environmental provisions were far afield of the actual operation of gaming activities and the mitigation of organized crime and unfair gaming practices that were at the heart of IGRA’s limited extension of regulatory authority to the states. The tort provisions were similarly indirect and would require tribes to commit to adopting and applying an entire body of state law as tribal law, waive sovereign immunity, and create claims commissions for injuries that are merely “connected with” or “relating to” a casino gaming facility.

Having found that these were outside the IGRA’s permissible topics, the Court then considered whether a state could negotiate well outside the enumerated topics while simultaneously acting in good faith. The Court looked to the plain meaning and structure of the statute to conclude that a state could not. The good faith requirement exists because Congress anticipated that states might abuse their authority over compact negotiations to force tribes to accept burdens on their sovereignty in order to obtain gaming opportunities.

§ 1.4.3 Labor and Employment Law & Indian Tribes

When Indian tribes act as commercial entities and hire employees, they are not subject to the same labor and employment laws as nontribal employers. For example, state labor laws and workers’ compensation statutes are inapplicable to tribal businesses. Moreover, tribal employers may not be subject to certain federal labor and employment laws.

Tribal employers are ordinarily exempt from antidiscrimination laws. Both Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act expressly exclude Indian tribes, and state anti-discrimination laws usually do not apply to tribal employers. In addition, tribal officials are generally immune from suits arising from alleged discriminatory behavior.

The circuits remain severely split regarding the application of federal regulatory employment laws to tribal employers. The Eighth and Tenth Circuits have refused to apply to tribes such laws as the Occupational Safety and Health Act (OSHA), the Employee Retirement Income Security Act (ERISA), the Fair Labor Standards Act (FLSA), the National Labor Relations Act (NLRA), and the Age Discrimination in Employment Act (ADEA), because doing so would encroach upon well-established principles of tribal sovereignty and tribal self-governance.

Conversely, the Second, Seventh, and Ninth Circuits have applied OSHA and ERISA to tribes. Moreover, the Seventh and Ninth Circuits lean toward application of FLSA to tribes. These circuits reason that, because Indian tribes are not explicitly exempted from these statutes of general applicability, the laws accordingly govern tribal employment activity. Following this reasoning, the Department of Labor has stated that the FMLA applies to tribal employers. However, aggrieved employees may experience difficulty enforcing federal employment rights due to the doctrine of sovereign immunity. For example, the Second Circuit has held that, because Congress did not explicitly authorize suits against tribes in the language of the FMLA or the ADEA, tribal employers cannot be sued for money damages in federal court by employees under these statutes.

Questions remain concerning whether federal statutes of general applicability extend beyond the labor and employment arena where they do not affirmatively contemplate whether Indian tribes govern tribal or reservation-based activities. For example, do federal franchise laws apply in Indian Country? What about the federal Copyright Act or other federal intellectual property statutes? What about Sarbanes-Oxley? While subject to the split in circuits discussed immediately above, it is unclear in which federal jurisdictions a court would hold that such federal laws apply to tribes.

In the last year, federal courts have continued to decide cases involving the application of federal labor and employment rules to tribal employers. More generally, courts have grappled with how to apply statutes of general applicability to tribal sovereigns. A noteworthy case from the last year is discussed below:

Mashantucket Pequot Tribal Nation v. Davis, MPTC-CV-AA-2019-126, 2021 WL 5013894 (Mash. Pequot Tribal Ct. Oct. 7, 2021). Carrie-Ann Davis (“Ms. Davis”), was employed as a surveillance officer in the Surveillance Department of the Mashantucket Pequot Tribe (the “Tribe”). Ms. Davis was responsible for monitoring security cameras. Ms. Davis began having health problems and was observed asleep at her workstation on three different occasions. After the first two instances she was given a performance improvement notice dated September 5, 2017. This notice constituted a final warning. Ms. Davis provided a written statement regarding these two incidents explaining that her “condition is not falling asleep,” but instead is “due to some medical issue” where she would slur her speech, lose consciousness, and then become coherent again as if nothing had occurred. Ms. Davis noted that she had informed management about her medical issue and that she was seeing two doctors to address her medical issue. Ms. Davis’s medical issue continued and on May 26, 2018, the surveillance shift manager observed her asleep at her workstation in the surveillance monitor room for eight minutes. As a result, Ms. Davis was suspended on June 12, 2018, pending further investigation. On July 2, 2018, the Tribe terminated her employment. The charging document further stated that the Tribe terminated Ms. Davis’s employment because she violated the Tribe’s Standards of Conduct Section IV Subsection 4, which prohibits sleeping on the job. After her termination, Ms. Davis received a correct diagnosis of severe sleep apnea.

Ms. Davis appealed her termination. On March 13, 2019, the Board of Review (the “Board”) issued a decision returning Ms. Davis to work on a final warning with three months’ back pay because Ms. Davis had an “undiagnosed medical condition” at the time of her termination which was a mitigating circumstance that influenced the Board’s decision since she was actively seeking treatment and under doctors’ care. The Tribe appealed the Board’s decision arguing that there was no reasonable basis for the Board to have reversed Ms. Davis’s termination and ordered back pay.

The central issue in this case is the Board’s finding and application of mitigating circumstances. Title 8 of the Employee Review Code (the “Code”) is comprised of five factors to be considered when determining whether the Board’s decision was appropriate. Those factors ask whether: (1) There was a reasonable basis for the Board’s consideration that the employee did or did not violate the policies and/or procedures established by the employer for the position held by the employee; (2) There was a reasonable basis to find that the employer did or did not substantially comply with the policies and/or procedures regarding discipline; (3) The employee was given a description of the offense or conduct that was the basis for the disciplinary action and both parties were afforded a reasonable opportunity to present and refute evidence regarding the offense or conduct and/or evidence of aggravating or mitigating circumstances relating thereto; (4) There was a reasonable basis for the Board’s decision as to whether the form of discipline was or was not appropriate for the offense or conduct; and (5) The Board’s decision is in violation of tribal laws or exceeds the Board’s authority under tribal law.

Focusing on the issue at hand, the Code states that “mitigating circumstances are those that ‘do not constitute a justification or excuse of the offense in question, but which, in fairness and mercy, may be considered as extenuating or reducing the degree of moral culpability.’” The Board found that Ms. Davis’s undiagnosed medical condition at the time of termination was a mitigating circumstance which influenced their final decision since she was receiving treatment.

In accordance with the Code, the Tribal Court found that Ms. Davis’s medical condition, severe sleep apnea, was a mitigating circumstance which caused and was directly related to her violation of the Tribe’s prohibition against sleeping on the job. Therefore, the Board properly relied upon Ms. Davis’s medical condition, severe sleep apnea, as a mitigating circumstance.

§ 1.4.4 Federal Court Jurisdiction

Federal court jurisdiction is limited to cases that invoke a federal court’s limited subject matter jurisdiction. Such cases may involve a federal question or claims that are brought involving diversity of citizenship. Litigation that arises from a deal with a federally-recognized tribe, or otherwise has federal overtones, does not necessarily present a federal question that will allow a federal district court to assume jurisdiction, nor does the possibility that a tribe may invoke a federal statute in its defense confer federal court jurisdiction. Moreover, courts have generally held that a tribe is not a citizen of any state for diversity purposes and, therefore, cannot sue or be sued in federal court based on diversity jurisdiction. However courts are split on whether a business incorporated under federal statute, state law, or tribal law can qualify for diversity jurisdiction. Because the potential judicial forums for commercial litigation arising out of Indian Country are likely restricted to state or tribal court, choosing federal court as the choice of venue may not make sense.

The following highlights several of the more relevant cases decided in the last year.

Big Sandy Rancheria Enterprises v. Bonta, 1 F.4th 710 (9th Cir. 2021), cert. denied, 142 S. Ct. 1110, 212 L. Ed. 2d 8 (2022). Big Sandy Rancheria of Western Mono Indians (the “Corporation”) is a federally chartered tribal corporation engaged in tobacco distribution and was wholly owned by a federally recognized Native American tribe. The Corporation brought an action against the Attorney General for the state of California and the director of the California Department of Tax and Fee Administration seeking a declaration that California’s Complementary Statute, Licensing Act, and Cigarette Tax Law are preempted by federal law and tribal sovereignty under the Indian Reorganization Act (“IRA”). The United States District Court for the Eastern District of California granted California’s motion to dismiss for lack of subject matter jurisdiction. In the motion, California argued that the Corporation is a company and not a “tribe” within the meaning of 28 U.S.C. § 1362.

28 U.S.C. § 1362 confers federal jurisdiction over claims “brought by any Indian tribe or band with a governing body duly recognized by the Secretary of the Interior.” Congress enacted the IRA to enable tribes “to revitalize their self-government through the adoption of constitutions and bylaws . . . through the creation of chartered corporations, with the power to conduct the business and economic affairs of the tribe.” 25 U.S.C. § 5126.

The court ruled that based on the relevant statutory language, legislative history, and circuit precedent narrowly construing § 1362, the Corporation was not an “Indian tribe or band,” and that the Corporation may not invoke § 1362 to avoid the Tax Injunction Act’s jurisdictional bar. The court further noted that its conclusions align with Congress’s purpose in enacting 25 U.S.C. § 5126: “giving tribes the power to incorporate . . . enabl[ing] tribes to waive sovereign immunity, thereby facilitating business transactions.” The court further reasoned that in light of this purpose, it would be odd to allow a 25 U.S.C. § 5126 corporation to selectively claim the benefits of sovereignty in order to challenge a tax.

The U.S. Supreme Court denied the Plaintiff’s petition for writ of certiorari on February 22, 2022.

Brown v. Haaland, No. 321CV00344MMDCLB, 2022 WL 1692934 (D. Nev. May 26, 2022). This case arises in the context of a longer dispute about the living conditions on and rightful governance of the Winnemucca Indian Colony. The ten individual Plaintiffs resided on the Winnemucca Indian Colony and alleged civil rights abuses by the Bureau of Indian Affairs (“BIA”) and the Department of Interior (“DOI”) arising out of their self-determination contract with the BIA. The Plaintiffs brought this action in the U.S. District Court for the District of Nevada under the Indian Self-Determination and Education Assistance Act (“ISDEAA”). 25 U.S.C.A. § 5331(a). The BIA filed a motion to dismiss for lack of subject matter jurisdiction alleging that ISDEAA only confers federal court jurisdiction over claims involving federally-recognized tribes or tribal organizations.

ISDEAA directs the Secretary of the Interior to enter into contracts with willing tribes to provide services such as education and law enforcement that otherwise would have been provided by the federal government. Section 1330 of ISDEAA provides that:

Each contract . . . shall provide that in any case where the appropriate Secretary determines that the tribal organization’s performance under such contract ... involves (1) the violation of the rights or endangerment of the health, safety, or welfare of any persons; or (2) gross negligence or mismanagement in the handling use of funds provided to the tribal organization pursuant to such contract ... Such Secretary may, under regulations prescribed by [them] and after providing notice and a hearing on the record to such tribal organization, rescind such contract in whole or in part, and assume or resume control or operation of the program, activity or service involved if [they] determine that the tribal organization has not taken corrective action as prescribed by the Secretary to remedy the contract deficiency, except that the appropriate Secretary may, upon written notice to a tribal organization, and the tribe served by the tribal organization, immediately rescind a contract if the Secretary finds that (i) there is an immediate threat of imminent harm to the safety of any person, or imminent substantial and irreparable harm to trust funds, trust lands, or interests in such lands, and (ii) such threat arises from the failure of the contractor to fulfill the requirements of the contract.

The court held that ISDEAA does confer jurisdiction on federal district courts to hear disputes regarding self-determination contracts through § 5331(a). The court further ruled that § 5331(a) applies only to suits by Indian tribes or tribal organizations against the United States. This means that only tribes or tribal organizations can be parties to a self-determination contract. Because § 5331(a) does not waive sovereign immunity for claims brought by nonparties to the self-determination contract, the statute does not create jurisdiction for claims arising under ISDEAA except in the limited context of a tribe suing the federal government. The Court therefore found that it lacks jurisdiction over plaintiffs’ ISDEAA statutory claims given that the plaintiffs are individuals rather than a federally recognized tribe.

Newtok Village v. Patrick, 21 F.4th 608 (2021). Members of a village council for a federally recognized Alaskan Native tribe asserted state-law claims and sought injunctive and mandamus relief to prohibit former members from representing themselves as the tribe’s governing body to federal and state entities. The action was brought in the U.S. District Court for the District of Alaska under the Indian Self-Determination and Education Assistance Act (“ISDEAA”). 25 U.S.C.A. § 5331(a).

The court ruled that ISDEAA only authorized suits against United States, which was not a defendant in this case. Additionally, the claims did not assert any wrongful receipt of federal funds but rather rested on contractual obligations within the meaning of the ISDEAA. Accordingly, the claim did not present a substantial question of federal law that could support exercise of federal jurisdiction over the action despite the complaint’s reference to the tribe’s contracting with the Bureau of Indian Affairs. The court further noted that “[i]ntratribal disputes are generally nonjusticiable in federal courts . . . . While Congress has broad authority over Indian matters, the role of courts in adjusting relations between and among tribes and their members is correspondingly restrained.”

Kewadin Casinos Gaming Authority v. Draganchuk, 2022 WL 1715207 (W.D. Mich. Feb. 8, 2022). In 2011, the gaming and casino operation department of the Sault St. Marie Tribe of Chippewa Indians, a federally recognized Indian tribe (“Plaintiffs”), entered into separate contracts with developers (“Defendants”) for the purpose of developing two tribal casinos on two parcels of land in Michigan’s Lower Peninsula. In March of 2020, Plaintiffs brought state law claims against Defendants in the U.S. District Court for the Western District of Michigan. Defendants moved to dismiss based on tribal sovereign immunity. The court dismissed the case for lack of subject matter jurisdiction without deciding the issue of sovereign immunity. Defendants refiled the case in state court the next day. Plaintiffs then brought an action in the district court against the state court and Defendants seeking a temporary restraining order and preliminary injunction to enjoin state court proceedings until the district court ruled on whether there was a waiver of sovereign immunity such that the state court could hear Defendants’ claims against Plaintiffs.

The Rooker-Feldman Doctrine, as discussed in Rooker v. Fidelity Trust Co., 263 U.S. 413, 415–16 (1923), addresses a party’s ability to challenge a state court judgment in federal court. In Rooker, the Supreme Court held that no matter how wrongful a state court decision concerning compliance with the Constitution may have been, a federal district court has no jurisdiction to reverse or modify the decision and must dismiss such claims for lack of subject matter jurisdiction. The Anti-Injunction Act (“AIA”) provides that “[a] court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments.” The Non-Intercourse Act (“NIA”) provides that “[n]o purchase, grant, lease, or other conveyance of lands, or of any title or claim thereto, from any Indian nation or tribe of Indians, shall be of any validity in law or equity, unless the same be made by treaty or convention entered into pursuant to the Constitution.”

Applying the Rooker-Feldman Doctrine, the district court ruled that it lacked subject matter jurisdiction to decide question of whether there was a waiver of sovereign immunity in the contract between the developers and the gaming and casino operation. The court further ruled that neither the specific grant of jurisdiction to district courts over civil actions brought by an Indian tribe nor NIA contained statutory language permitting federal courts to issue injunctions in state court proceedings. Accordingly, absent some other explanation, the injunction requested by Plaintiffs to enjoin state court proceedings did not fall within the “expressly authorized” exception to the AIA. However, the temporary restraining order was granted because there was a potential for irreparable harm if the sovereign immunity of Plaintiffs was violated.

§ 1.5 The State Sovereign

With billions of dollars being exchanged in Indian Country, state government is naturally looking for a piece of the action, giving rise to tax clashes between tribes and their business partners, and states and counties. These conflicts are primarily decided under the “federal preemption doctrine,” which asks whether a state’s attempted regulation or taxation of non-Indian activities in Indian Country is preempted by federal statutes or treaties, taking into account overarching notions of tribal sovereignty.

Generally, state taxes apply to everyone “outside a tribe’s reservation” and are “federally preempted only where the state law is contrary to express federal law.” Within Indian Country, on the other hand, “the initial and frequently dispositive question in Indian tax cases is who bears the legal incidence of the tax.” When the legal incidence falls on tribes, tribal members, or tribal corporations, “[s]tates are categorically barred” from implementing the tax.

When the legal incidence falls on non-Indians, however, a more nuanced analysis applies. Although, historically, the U.S. Supreme Court asked whether any assertion of state power on Indian land would impinge on the tribal right to make its own laws and be ruled by them, in recent years, the High Court has moved away from that inherent tribal sovereignty analysis in favor of a federal preemption regime. Because Congress does not often explicitly preempt state law, the Supreme Court and the lower federal courts engage in a balancing act to determine whether tribal self-governance rights, bolstered by federal laws, preempt state laws. This balancing act weighs a state’s interest in policing non-Indian conduct against combined federal and tribal interests in regulating affairs that arise out of tribal lands within the state’s boundaries.

In New Mexico v. Mescalero Apache Tribe, the Supreme Court explained that “state jurisdiction is preempted by the operation of federal law if it interferes or is incompatible with federal and tribal interests embodied in federal law, unless the state interests at stake are sufficient to justify the assertion of state authority.” In Mescalero, the Court held that New Mexico could not impose its own fishing and hunting regulations on non-Indians on the reservation because of strong federal interests in “tribal self-sufficiency and economic development” and a lack of state interests.

When non-Indian parties operate in Indian Country, lawyers must proactively evaluate whether, or to what extent, a state or local government’s interest in policing or taxing conduct that relates to neighboring tribal lands outweighs relevant federal and tribal interests pertaining to that same conduct arising within those lands.

The issues of preemption and infringement are regularly litigated in the federal courts. The following highlights several of the more relevant cases decided in the last year.

S. Point Energy Ctr. LLC v. Arizona Dep’t of Revenue, 253 Ariz. 30 (2022). The Arizona Supreme Court examined whether the Indian Reorganization Act of 1934 (the “Act”) preempts a county ad valorem property tax on a power plant where the power plant is owned by non-Indian lessees of land, and the land is held in trust for the benefit of an Indian tribe. The Court held that the tax is not preempted.

South Point Energy Center LLC (“South Point”), a non-Indian entity, leases land from the Fort Mojave Indian Tribe (the “Tribe”), upon which South Point owns and operates a power plant. The power plant does not supply any energy to the Tribe or persons located on the reservation. Since the power plant was put into operation, Mohave County assessed ad valorem property taxes against the power plant. South Point initiated a lawsuit seeking a refund of payments for property taxes imposed from 2010 to 2018 and argued that Section 5 of the Act expressly preempts states from imposing property taxes on any real property improvements located on land held in trust by the federal government for the benefit of Indian tribes or individual Indians.

A federal law, such as the Act, may preempt application of state law by express terms, which is known as “express preemption.” The relevant part of the Act states that land held in trust for an Indian tribe “shall be exempt from State and local taxation.” Interpreting this statute, the Court reasoned that to fall under this tax exemption, the power plant must be an “interest in lands, water rights, or surface rights to lands.” The Court ruled that the power plant does not satisfy this definition because the land held in trust for the Tribe does not include the actual power plant. In addition, the Tribe has no ownership interest in the power plant and derives no benefit from the power plant. Therefore, taxation of the power plant does not infringe upon or burden the Tribe’s use of the land. In sum, the Court held that while Section 5 of the Act preempts state and local taxes imposed on land held in trust for Indian tribes, such preemption does not extend to permanent improvements affixed to that land when the lessee is non-Indian and the Indian tribe and lessee agree that the lessee owns the improvements.

The Court remanded the case to the court of appeals to determine whether the power plant is impliedly exempt from taxation under the balancing test stated in White Mountain Apache Tribe v. Bracker which requires a review of the “nature of the state, federal, and tribal interests at stake . . . to determine whether, in the specific context, the exercise of state authority would violate federal law.”

Lac Courte Oreilles Band of Lake Superior Chippewa Indians of Wisconsin v. Evers, 46 F.4th 552 (7th Cir. 2022). The Seventh Circuit held that tribal land owned by tribe members is exempt from state property tax even though the land was previously sold to non-Indians before coming back into tribal ownership.

Tribal members living within four Ojibwe Indian reservations brought an action challenging whether the State of Wisconsin could assess property taxes on land within the reservation. Unlike the traditional makeup of such a lawsuit, the parcels of land in question are fully alienable, meaning that the current owners of the at-issue land can sell the land at will. Furthermore, although the at-issue land is currently owned by Ojibwe tribal members, the land had previously been sold by tribal members to non-Indians before being sold back to tribal members. The State argues that the sale of the land to non-Indians before being sold back to tribal members eliminates the land’s tax immunity for all time.

The Court rejected this argument. Rather than performing the traditional analysis under the Bracker balancing test, which involves weighing “tribal interests, federal interests, and state interests,” the Court analyzed the issue of state taxation of Indians living in Indian country under a categorical approach. Under this categorical approach, “absent cession of jurisdiction or other federal statutes permitting it, . . . a State is without power to tax reservation lands and reservation Indians.” The categorical approach begins with the threshold question of “who bears the legal incidence of the tax.” If the tax falls on non-Indians, the tax will be upheld so long as “the balance of federal, state, and tribal interests favors the State, and federal law is not to the contrary.” If the tax falls on Indians on Indian land, it is presumptively invalid unless Congress has authorized it in “unmistakably clear” terms. Here, the parties agreed that no act of Congress authorized the taxation of these lands.

Nonetheless, the State argued that the fact of non-Indian ownership in the chain of title supports its authority to tax reservation lands held by Ojibwe tribal members. However, the Court again highlighted the fact that the at-issue land did not become alienable because of a Congressional act, but rather as a result of a treaty. The at-issue land became freely alienable under the 1854 Treaty, which is not a legislative act. Rather, a treaty is in its nature a contract between nations. Therefore, the at-issue land became freely alienable under the 1854 Treaty by mutual assent of the contracting parties—the Ojibwe tribes and the President of the United States—without Congress’ input. Because the land did not become alienable by an act of Congress, the categorical rule that a tax falling on Indians on Indian land is presumptively invalid applies.

Oklahoma v. United States Dep’t of the Interior, 577 F. Supp. 3d 1266, 1269 (W.D. Okla. 2021). In this case, the Court indicates that the U.S. Supreme Court’s decision in McGirt v. Oklahoma may have far-reaching implications. In McGirt, the Supreme Court held that the Muscogee (Creek) Nation’s reservation in eastern Oklahoma had not been disestablished and continued to be reservation land. The McGirt decision led to the Department of the Interior and the Office of Surface Mining and Enforcement stripping Oklahoma of its ability to regulate surface mining on the Creek Nation’s Reservation. Contending that McGirt’s impact is limited to federal criminal jurisdiction under the Major Crimes Act, Oklahoma filed this action challenging defendants’ actions. Pending before the Court in this action is Oklahoma’s motion for preliminary injunction to enjoin the Department of Interior from enforcing their decision to strip Oklahoma of its regulatory authority over surface mining on the Creek Reservation.

The Court held that Oklahoma did not show a likelihood of success on the merits of its claims. The Court emphasized that this case turns on the narrow issue of the interpretation and application of federal statute, not whether inhabitants of the newly-confirmed Creek Reservation should enjoy immunity from local regulation or whether McGirt’s holding should apply generally in the civil context.

The relevant statute in this matter is the Surface Mining Control and Reclamation Act (the “Act”). The Court stated that the language of the Act is clear in that a State does not have authority to regulate Indian land. Because the land at issue qualifies as reservation land for the purposes of the Major Crime Act, as decided in McGirt, it also qualifies as “Federal Indian reservation” for the purposes of the Act. Therefore, Oklahoma failed to show a likelihood of success on the merits. This case is one which the McGirt court suggested could be triggered by the finding that the Creek Reservation persists today, and demonstrates how a state’s ability to regulate is diminished on Indian land.

State v. On-Auk-Mor Trade Ctr., LLC, No. 1 CA-TX 21-0005, 2022 WL 1256617 (Ariz. Ct. App. Apr. 28, 2022). This case examines whether a limited liability company duly organized under Arizona law, but owned and operated by a tribal member solely on tribal land, is subject to Arizona’s unemployment insurance tax. The Court held that such a company is subject to Arizona’s unemployment insurance tax.

On-Auk-Mor Trade Center, LLC (“OAM”) is an LLC organized under Arizona law. OAM’s sole member is a trust whose sole trustee and manager, David Montiel, is a member of the Salt River Pima-Maricopa Indian Community (the “Community”). OAM argues that it is not subject to Arizona’s unemployment insurance tax because it is an excise tax on a member of the Community doing business entirely on Tribal land.

The dispositive question is who bears the legal incidence of the tax. Where the “legal incidence of an excise tax rests on a tribe or on tribal members for sales made inside Indian country, the tax cannot be enforced absent clear congressional authorization.” When the legal incidence of the tax rests on non-Indians, “no categorical bar prevents enforcement of the tax; if the balance of federal, state, and tribal interests favors the State, and federal law is not to the contrary, the State may impose its levy.”

Here, the parties agree that the legal incidence of the tax falls on employers. The question is whether the tax rests on OAM as an LLC or on Montiel as the sole manager of OAM. The Court reasoned that LLCs exist by virtue of state law, and, under Arizona law, an LLC is an entity distinct from its owners. Furthermore, the Community’s constitution provides that only natural persons are considered enrolled members of the Community. As an LLC, OAM is not a member of the Community, and the State is not categorically barred from enforcing the tax. Therefore, the legal incidence of the tax falls upon OAM and not Montiel. OAM also waived any arguments as to whether the balancing of federal, state, and tribal interests favor barring the tax because OAM did not raise this issue with the lower court. In conclusion, because OAM is an LLC organized under Arizona law, is taxed as a corporation for unemployment insurance tax purposes, and is not an enrolled member of the Community, it is subject to Arizona’s unemployment insurance tax.

§ 1.6 Conclusion

Economic growth and development throughout Indian Country have spurred many businesses to engage in business dealings with tribes and tribal entities. Confusion may arise during these transactions because of the unique sovereign and jurisdictional characteristics attendant to business transactions in Indian Country. As a result, these transactions have prompted increased litigation in tribal and nontribal forums. Accordingly, counsel assisting in these transactions, or any subsequent litigation, should conduct certain due diligence with respect to the pertinent tribal organizational documents and governing laws that may collectively dictate and control the business relationship.

To maximize the client’s chances of a successful partnership with tribes and tribal entities, counsel should ensure that the transactional documents contain clear and unambiguous contractual provisions that address all rights, obligations, and remedies of the parties. Therefore, even if the deal fails, careful negotiation and drafting, and, in turn, thoughtful procedural and jurisdictional litigation practice, will allow the parties to more expeditiously litigate the merits of any dispute, without jurisdictional confusion. As business between tribes and nontribal parties continues to grow, ensuring that both sides of the transaction fully understand and respect the deal will lead to a long-lasting and beneficial business relationship for all.