"Michigan v. Bay Mills Indian Community Protects the Common Law Doctrine of Tribal Sovereign Immunity."

The Supreme Court ruled yesterday that tribal sovereign immunity barred the state of Michigan’s lawsuit against the Bay Mills Indian Community to enjoin the Community’s arguably off-reservation economic activity.  In a 5-4 decision authored by Justice Kagan, in which Justices Roberts, Kennedy, Breyer, and Sotomayor joined, the Court concluded that the Indian Gaming Regulatory Act’s abrogation of tribal sovereign immunity with respect to Class III gaming activities located on Indian Lands did not extend to the state’s action for injunctive relief against the Community’s off reservation economic activity, and the Court refused the state’s request to revisit and overrule Kiowa Tribe of Okla. v. Manufacturing Technologies Inc., 523 U.S. 751, which recognized tribal sovereign immunity for off-reservation commercial activity.

The case involved a casino development located on tribally owned fee lands in Vanderbilt, Michigan, roughly 100 miles from the Community’s Reservation.  The Community acquired these lands through a congressionally created trust and determined that the lands qualified as Indian lands under the Indian Gaming Regulatory Act, a conclusion not supported by the National Indian Gaming Commission.  The state of Michigan disagreed that the Vanderbilt lands qualified for gaming activities and sued the tribe for violating IGRA and the tribal-state compact by operating a casino off Indian lands.  In response, Bay Mills asserted sovereign immunity and succeeded  in the Sixth Circuit.  Before the Supreme Court, Michigan argued that IGRA abrogates the Community’s immunity from the state’s suit and that, contrary to precedent, tribal immunity should not apply to commercial activities outside Indian territories.  The Court rejected both arguments.

The Court affirms the common law doctrine of tribal sovereign immunity: tribal governance and commercial activities are protected by  a tribe’s immunity, unless it is expressly abrogated by Congress or waived by the tribe.  Next, the Court determines that IGRA does not authorize the state’s law suit.   While IGRA does abrogate tribal immunity with respect to class III gaming located “on Indian lands,” it does not authorize a suit premised on the conclusion that gaming activity is located outside Indian lands.  Importantly, in making this determination, the Court points to the full panoply of tools the state enjoys to enforce its laws against a gaming enterprise within its jurisdiction.  Finally, the Court rejects Michigan’s invitation to overrule Kiowa, which stands for the conclusion that tribal immunity applies to commercial activity outside Indian territories.  The Court explains that a departure from its precedent demands special justifications that Michigan failed to establish here.  Instead, the Court deferred to Congress about whether to abrogate tribal immunity and under what circumstances.

This decision constitutes a significant victory for tribal interests.  For tribes that wish to establish commercial enterprise off reservation lands, the decision certainly warrants a careful review of the enterprise’s factual circumstance as applied to Bay Mills and relevant precedent.  But given the numerous opportunities the Supreme Court has had, and will likely have, to limit or abolish sovereign immunity, tribes should consider ways to protect their interests from future attacks.

In dicta, the Bay Mills Court gives tribes reason to carefully consider how it employs sovereign immunity, together with good-governance tools, to protect its interests in state and federal courts. For example, tribes might contemplate carefully crafted waivers of immunity in tribal courts or other forums to provide “a tort victim, or other plaintiff who has not chosen to deal with a tribe, [an] alternative way to obtain relief for off reservation commercial conduct.” In doing so, tribes reduce the risk that a federal court determines that such a circumstance presents the “special justification” necessary to depart from precedent.  Also, tribes should be mindful of tools that states have to enforce laws against conduct arising within a state’s territories, including criminal actions against tribal officials.

Michael Murphy
The Jacobson Law Group
Jacobson, Magnuson, Anderson & Halloran, P.C.
T (651) 644-4710
E-mail:  mmurphy@thejacobsonlawgroup.com
Website:  http://www.thejacobsonlawgroup.com

Joseph F. Halloran
The Jacobson Law Group
Jacobson, Magnuson, Anderson & Halloran, P.C.
T (651) 644-4710
E-mail:  jhalloran@thejacobsonlawgroup.com
Website:  http://www.thejacobsonlawgroup.com