April 22, 2015 Practice Points

Washington State Courts Can Have Civil Jurisdiction over Tribal Courts

Washington’s supreme court ruled that its state courts have jurisdiction over a civil case arising out of a contract in which a tribal corporation waived its sovereign immunity

by Paul R. Cressman Jr.

In Outsource Services Management, LLC v. Nooksack Business Corporation, 181 Wn.2d 272, 333 P.3d 380 (August 21, 2014), Washington’s supreme court ruled that its state courts have jurisdiction over a civil case arising out of a contract in which a tribal corporation waived its sovereign immunity and consented to jurisdiction in the state’s courts.

Nooksack Business Corporation (Nooksack), a tribal enterprise of the Nooksack Indian  tribe, signed a contract with Outsource Services Management LLC to finance the renovation and expansion of its casino. The contract contained the following clause related to sovereign immunity and jurisdiction:

Limited Waiver of Sovereign Immunity; Waiver of Rights in Tribal Court. Subject to the limitations on recourse in Section 8.30, the Borrower hereby expressly grants to the Lender and all Persons entitled to benefit from any Loan Document an irrevocable limited waiver of its sovereign immunity from suit or legal process with respect to any Claim. In furtherance of this waiver, the Borrower hereby consents with respect to any Claim: (A) to arbitrate in accordance with the provisions of Section 8.27, and (B) to be sued in (i) the United States District Court for the Western District of Washington (and all federal courts to which decisions of the United States District Court for Western District of Washington may be appealed), (ii) any court of general jurisdiction in the State (including all courts of the State to which decisions of such courts may be appealed), and (iii) only if none of the foregoing courts shall have jurisdiction, or only to permit the compelling of arbitration in accordance with Section 8.27, or the enforcement of any judgment, decree or award of any foregoing court or any arbitration permitted by decree or award of any foregoing court or any arbitration permitted by Section 8.27, all tribal courts and dispute resolution processes of the  tribe. The Borrower hereby expressly and irrevocably waives any application of the exhaustion of tribal remedies or abstention doctrine and any other law, rule, regulation or interpretation that might otherwise require, as a matter of law or comity, that resolution of a Claim be heard first in a tribal court or any other dispute resolution process of the  tribe.

(Emphasis in original.)

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