On April 25, 2017, the U.S. Supreme Court issued a unanimous opinion in Lewis v. Clarke, a case involving tribal sovereign immunity. The Court held that when a tribal employee is sued in his or her individual capacity, that employee is the primary party and does not benefit from the rule that “Indian tribes are generally entitled to immunity from suit.” In so holding, the Court reversed the decision of the Supreme Court of Connecticut.

The employee, William Clarke, was driving casino patrons in the course and scope of his employment with the Mohegan Tribal Gaming Authority when he rear-ended the Lewises on Interstate 95 in Connecticut. The Lewises sued Clarke individually in state court under a state-law theory of negligence. In his defense, Clarke argued, in part, that he was entitled to immunity because he was an employee of the Gaming Authority and the accident occurred in the course and scope of his employment. In the alternative, Clarke argued that the Gaming Authority was required to indemnify him and that sovereign immunity should extend as far as the Gaming Authority’s indemnification obligations. The Supreme Court of Connecticut agreed and held that Clarke was entitled to immunity because he was acting in the course and scope of his employment with the tribe. The court did not reach the issue regarding indemnification.

The U.S. Supreme Court reversed. In its decision, the Court relied on the distinction between individual-and official-capacity suits and the need to determine the actual party in interest as the centerpiece of the analysis, stating that “[t]he identity of the real party in interest dictates what immunities may be available.” When the real party in interest is an individual, “sovereign immunity ‘does not erect a barrier against suits to impose individual and personal liability.’” This rule applies the same distinction recognized for government employees who are sued in their individual capacity and are not entitled to sovereign immunity protections.

Yet even with this bright-line distinction, the Court left open many other questions. For example, the accident in this case occurred off the reservation on state land, but the Court did not say that its analysis only applied on non-tribal land. Although the Court noted that this was “an ordinary negligence action” brought “in state court under state law,” it did not provide any guidance about how its holding would apply to other situations such as a similar accident occurring on tribal land. It also did not address other causes of action beyond the negligence involved in this case. In light of the uncertainty the decision creates, plaintiffs will likely test the specific limits of the Court’s decision in lower courts in coming years as plaintiffs attempt to extend the holding to other circumstances and causes of action to weaken tribal sovereign immunity.

The other basis for the Court’s decision will likely change internal tribal operations more than it will be tested in court. The Court held that there was no sovereign immunity protection for Clarke even though the Gaming Authority was required to indemnify him under the Mohegan Tribe Code. That indemnification obligation, according to the Court, does not “extend sovereign immunity to individual employees who would otherwise not fall under its protective cloak.” As a result of this ruling, insurers may require changes to policies to account for tribes not being able to rely on the protections of sovereign immunity to avoid payment under indemnification agreements.