§ 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.
