U.S. Supreme Court Decision in Michigan v. Bay Mills Indian Community et al.

by Sheppard Mullin Richter & Hampton LLP
Contact

The U.S. Supreme Court (“Court”) issued a 5-4 decision Tuesday in a case with implications for Tribal-State relations and the resolution of disputes under the federal Indian Gaming Regulatory Act, 25 U.S.C. § 2701 et seq. (“IGRA”).  The Court in Michigan v. Bay Mills Indian Community[1] found that the sovereign immunity of the Bay Mills Indian Community (“Tribe”) barred a suit filed by the State of Michigan (“Michigan”) to enjoin Class III gaming on the Tribe’s Vanderbilt property, land the Tribe purchased in fee located 100 miles south of its reservation.  In making its decision today, a majority of the Court:

  1. affirmed the Court’s precedent that Indian tribes possess sovereign immunity from suit for commercial activities conducted outside of Indian lands;[2]
  2. affirmed the Court’s precedent that such tribal sovereign immunity can be abrogated only by clear and unequivocal Congressional authorization (or waiver);[3] and
  3. held that IGRA’s provision permitting a state to sue a tribe for Tribal-State Compact violations on “Indian lands”[4] did not waive tribal immunity to state suits for gaming conducted off  Indian lands.[5]

The Court, however, suggested that Michigan could resort to “other mechanisms” – including legal actions against the responsible tribal individuals – to resolve its dispute with the Tribe.

DISCUSSION

I. CASE BACKGROUND

In August 2010, the Bay Mills Indian Community purchased a tract of land near Vanderbilt, Michigan, 100 miles south of its reservation in Michigan’s Upper Peninsula, using money from a federal land claims settlement fund.  According to the settlement, land purchased with the fund “shall be held as Indian lands are held.”[6]  The Tribe opened a casino on the property on November 3, 2010.

The Bay Mills litigation began on December 21, 2010, when Michigan sued the Tribe in federal district court alleging that the Tribe violated its Tribal-State Compact because the Vanderbilt property was not located on “Indian lands”.[7]  The Little Traverse Bay Bands of Odawa Indians (“Little Traverse”) filed a separate suit making similar allegations one day later.  The district court enjoined gaming at the Vanderbilt casino, and the Tribe appealed the injunction to the Court of Appeals for the Sixth Circuit (“Sixth Circuit”).

In its decision issued on August 15, 2012, the Sixth Circuit found as a threshold matter that both Little Traverse and Michigan had shown sufficient injury to sue the Tribe because the casino would likely divert customers from the Little Traverse casino, located 40 miles from Vanderbilt, and in turn diminish payments made by Little Traverse to Michigan.[8]  The Sixth Circuit next considered whether it had subject matter jurisdiction to hear the case and found that neither Michigan nor Little Traverse could sue under IGRA.  The Sixth Circuit reasoned that IGRA would provide a basis for the suit only if the Vanderbilt casino were on Indian lands, which Michigan argued it was not.  Even if the Vanderbilt casino were on Indian lands, as the Tribe  argued it was, the suit could not proceed because the Sixth Circuit could not redress the harm:

As the case comes to us here, a determination whether the Vanderbilt casino is located on Indian lands would be purely advisory; if the Vanderbilt casino is not located on Indian lands, there is no jurisdiction for the plaintiffs’ claims; if the casino is located on Indian lands, its operation does not violate the compact, which means the claims are meritless.  Neither answer would redress the plaintiffs’ alleged injuries.[9]

The Sixth Circuit found that Michigan could sue under federal common law to resolve the question of whether the Vanderbilt casino was located on Indian lands, but such a suit would require the Tribe to waive its sovereign immunity.  Michigan argued that Congress waived the Tribe’s immunity to suit in IGRA and in a criminal statute authorizing federal prosecutions of gambling crimes in Indian country that are based upon state gambling laws.  The Sixth Circuit found that IGRA did not provide a waiver of tribal immunity because Michigan could not show that the Vanderbilt casino was on Indian lands.[10]  The Sixth Circuit also found that the criminal statute did not expressly and unequivocally abrogate tribal immunity and did not authorize Michigan to sue a tribe.  In conclusion, the Sixth Circuit found that Michigan’s remedy was in asking the United States to sue the Tribe.[11]

Michigan filed a petition for a writ of certiorari, asking the Supreme Court to decide two issues: (1) whether a federal court has jurisdiction to enjoin activity that violates IGRA but takes place outside of Indian lands; and (2) whether tribal sovereign immunity bars a state from suing in federal court to enjoin a tribe from violating IGRA outside of Indian lands.[12]  The Supreme Court granted the petition for a writ of certiorari on June 23, 2013.

II. DECISION

In the Opinion of the Court authored by Justice Kagan[13], the Court affirmed the Sixth Circuit’s holding that while IGRA authorizes a state to sue a tribe to enjoin Class III gaming activities located on Indian lands and conducted in violation of a Tribal-State Compact, Michigan’s suit fell outside the scope of this provision because Michigan asserted that the Vanderbilt property was not located on Indian lands.[14]  Michigan had argued that the Sixth Circuit’s decision would result in an anomaly in which tribes could be sued for illegal gambling on Indian lands but not sued for illegal gambling on state lands.  The Court, however, found that whatever anomaly might exist, it was consistent with IGRA’s history and design.[15]  IGRA was enacted, the Court noted, after the Court’s decision in California v. Cabazon Band of Mission Indians, 480 U.S. 202 (1987), which held that states lacked any regulatory authority over gaming on Indian lands.  The Cabazon decision “left fully intact a State’s regulatory power over tribal gaming outside Indian territory”, and Congress’ enactment of IGRA provided states with a measure of power that they would not otherwise have.  Id. at 11-12.   States might lack the ability to sue a tribe for illegal gaming when the activity occurs off the reservation, the Court stated, but a state has “many other powers over tribal gaming that it does not possess (absent consent) in Indian territory.”[16]  For example, the Court stated, Michigan could either deny a license to Bay Mills for an off-reservation casino or, using the doctrine of Ex Parte Young, sue tribal officials or employees, seeking an order enjoining the defendants from gambling without a license.[17]  If civil remedies were inadequate, the Court said, the state could resort to its criminal law, prosecuting anyone who maintains or even frequents an unlawful gambling establishment, or use any one of a “panoply of tools” that would be sure to “shutter, quickly and permanently, an illegal casino.”[18]  Finally, the Court said, a state could bargain in its negotiations with a tribe for a Tribal-State compact for a waiver of sovereign immunity in such compact for gaming outside Indian lands.

With respect to reversing the Court’s long-standing doctrine that tribes possess tribal sovereign immunity for commercial activities conducted outside of Indian country, the Court found that any such departure from its precedents would require Michigan to show “special justification”.   Michigan, the Court stated, had failed to make this showing, raising only arguments that amounted to “retreads of assertions we have rejected before.”[19]  Only Congress may dispense with tribal sovereign immunity, and it has declined to do so, the Court stated.

In his dissent, Justice Thomas, joined by Justices Scalia, Ginsburg, and Alito[20], stated that deference to Congress and to precedent did not justify upholding the doctrine of tribal sovereign immunity in commercial activities conducted outside of Indian country.[21]  Describing tribal sovereign immunity as “a substantial affront” to states, Thomas argued that the doctrine had aggravated relationships between states and tribes and should be abandoned by the Court.[22]

III. IMPLICATIONS

For the parties in this dispute, the Court’s decision to affirm the Sixth Circuit means Michigan’s suit against Bay Mills cannot and will not proceed.  The Court’s suggestion, however, that Michigan retains jurisdiction over gaming on non-Indian lands and has a “panoply of tools” – including the option of suing tribal officials – means the dispute could continue in another forum if it is not resolved by the parties.  For tribal gaming generally, the Court’s decision may be seen as closing one avenue of litigation for states under IGRA but opening another by encouraging suits against tribal officials and individuals under the doctrine of Ex Parte Young.  Additionally, we expect that states will continue to vigorously advocate for clear waivers of tribal sovereign immunity in Tribal-State compact negotiations.

[1] Michigan v. Bay Mills Indian Community et al., Case No. 12-515 (May 27, 2014).

[2] See Slip op. at 4-6.

[3] Id. at 5, 7.

[4] Defined in IGRA at 25 U.S.C. § 2703(4) as:

(A) all lands within the limits of any Indian reservation; and

(B) any lands title to which is either held in trust by the United States for the benefit of any Indian tribe or individual or held by any Indian tribe or individual subject to restriction by the United States against alienation and over which an Indian tribe exercises governmental power.

[5] See Slip. op. at 8-11.

[6] Michigan Indian Land Claims Settlement Act, Pub. L. No. 105-143 § 107(a)(3).

[7] Tribal-State Compact § 4(H) (“The Tribe shall not conduct any Class III gaming outside of Indian lands”).

[8] Michigan v. Bay Mills Indian Cmty., 695 F.3d 406, 411 (6th Cir. 2012)

[9] Id., at 412.

[10] Id. at 415.

[11] Id. at 416.

[12] State of Michigan v. Bay Mills Indian Cmty., Petition for a Writ of Certiorari

[13] The majority opinion was joined by Justices Roberts, Kennedy, Breyer, and Sotomayor.  Sotomayor filed a concurring opinion.

[14] See Slip op. at 8.

[15] Id. at 11.

[16] Id. at 12.

[17] Id. at 13.  The doctrine of Ex Parte Young allows state officials to be sued for injunctive and declaratory relief for violations of federal law and has been extended to tribal officials in various court decisions. 209 U.S. 123 (1908).

[18] Id.

[19] Id. at 15, 16.

[20] Justices Scalia and Ginsburg also filed dissents.

[21] Dissent, at 1.

[22] Id. at 4-6.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Sheppard Mullin Richter & Hampton LLP | Attorney Advertising

Written by:

Sheppard Mullin Richter & Hampton LLP
Contact
more
less

Sheppard Mullin Richter & Hampton LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.