U.S. Supreme Court Reaffirms the Doctrine of Tribal Sovereign Immunity in Bay Mills Decision

by Dorsey & Whitney LLP
Contact

On Tuesday, the U.S. Supreme Court issued a decision, highly anticipated by Indian tribes and Indian law practitioners, in Michigan v. Bay Mills Indian Community, et al. In a 5-4 split, the Court reaffirmed the doctrine of tribal sovereign immunity in two respects—sovereign immunity bars suits by States against Indian tribes and sovereign immunity extends to suits arising out of commercial activity occurring outside of a tribe’s Indian country.

Bay Mills is a federally recognized Indian tribe with a Reservation in the Upper Peninsula of Michigan. In 2009, Bay Mills used funds from its share of a land claims settlement to purchase property in the Village of Vanderbilt, Michigan, located in Michigan’s Lower Peninsula. Bay Mills determined—though Michigan and others dispute it—based on the terms of the land settlement that the land purchased in Vanderbilt is Indian land for purposes of Indian Gaming Regulatory Act (“IGRA”), 25 U.S.C. §§ 2701-2721. On November 3, 2010, the Community opened a casino in the Village of Vanderbilt, Michigan (the “Vanderbilt Casino”).

Michigan sued Bay Mills, seeking, among other things, an injunction to close the Vanderbilt Casino. Michigan argued the casino was not on Indian lands, and therefore violated IGRA and the Michigan-Bay Mills Compact, both of which restrict gaming operations to Indian land. According to Michigan, the lawsuit could proceed notwithstanding Bay Mills’s sovereign immunity because IGRA abrogated it—specifically, Michigan relied on 25 U.S.C. § 2710(d)(7)(A)(ii), which allows states to bring claims in federal courts to enjoin Class III gaming activity “located on Indian lands” in violation of a compact. The problem with Michigan’s theory was that the alleged violation of the Compact was gaming on non-Indian land—but § 2710(d)(7)(A)(ii) only permits actions against Compact violations that occur on Indian land. If Michigan’s allegations were true, then § 2710(d)(7)(A)(ii) would not apply.

The district court ruled in favor of the State of Michigan, finding federal question jurisdiction, 28 U.S.C § 1331, alone to be a separate abrogation of sovereign immunity, and granting an injunction shutting down the Vanderbilt Casino. Bay Mills appealed to the Sixth Circuit Court of Appeals. The Sixth Circuit held that Bay Mills’ sovereign immunity was not abrogated—not by § 2710(d)(7)(A)(ii), which only applied to alleged compact violations on Indian land, nor by § 1331.

Michigan appealed to the Supreme Court and, in a 5-4 decision with Justice Kagan writing for the majority, Bay Mills prevailed. The Court held that 25 U.S.C. § 2710(d)(7)(A)(ii) does not waive tribal sovereign immunity for claimed compact violations not on Indian land, and confirmed that Indian tribes continue to enjoy sovereign immunity, even for off-reservation commercial conduct.

In reaching its decision, the Court first construed the provisions of IGRA’s abrogation of sovereign immunity mentioned above, 25 U.S.C. § 2710(d)(7)(A)(ii). Michigan argued that this provision abrogated the Bay Mills Community’s sovereign immunity in this case because it sought to enjoin the licensing, operation, and authorization for the Vanderbilt casino by Bay Mills, which occurred on Indian lands from the Bay Mills Reservation. The Court rejected this argument, holding that “gaming activity” in the statute referred only to the actual conduct of casino games, e.g. the rolling of craps dice, the spinning of a roulette wheel, etc., rather than the licensing or operation of a casino from a tribal authority. Michigan further argued that allowing suit to enjoin gaming activity on Indian lands, but not activity off Indian lands, was an anomalous result—surely not what Congress intended when it enacted IGRA. The Court gave no credence to the argument, explaining that only Congress could revise the text of IGRA. Federal legislation often creates anomalous results due to the nature of the legislative process, where a single issue is addressed without examining all other comparable issues. The Court also down-played the alleged “anomaly,” noting that not all gaming activity on Indian lands could be enjoined under IGRA but only Class III gaming conducted in violation of a state-tribal compact. The Court noted that if there was no gaming compact, enforcement would be exclusively the province of the Federal Government. In dictum, the Court also noted that alternative means could exist to enjoin gaming activity conducted by a tribe in a casino outside of a tribe’s Indian Country, including the possibility of civil suits against tribal officials or criminal proceedings against “anyone who maintains—or even frequents” such a casino.

The Court next addressed Michigan’s argument that Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc., 523 U.S. 751 (1998), which held that a tribe’s sovereign immunity applies even to suits arising from off-reservation commercial activities, was wrongly decided and should be overruled. The Court held that stare decisis required it to follow Kiowa. Michigan’s arguments against Kiowa were not new; the Court considered and rejected them when it issued the Kiowa decision. And after Kiowa was decided, Congress considered—but decided against—abrogating Kiowa in legislation. The Court also found it significant that, since the Kiowa decision, Congress had preserved immunity in some specific contexts and abrogated it in others. This Congressional inaction and action in the face of Kiowa supported the Court’s decision to apply stare decisis.

In the primary dissent to the opinion, Justice Thomas, joined by Justices Scalia, Ginsburg, and Alito, cast sovereign immunity as a matter of “comity” between sovereigns. According to Justice Thomas, state sovereignty is offended by tribal sovereign immunity because states cannot regulate activity within their own territory. Perhaps ironically for a conservative leaning Justice, Justice Thomas expressed concern that sovereign immunity invited “de facto deregulation” of highly regulated activities, such as payday lending. Justice Thomas also criticized the majority’s reliance on unenacted legislation to divine legislative intent argued that Kiowa should be overruled notwithstanding the doctrine of stare decisis.

Justice Sotomayor wrote a separate concurring opinion addressing the primary dissent. Justice Sotomayor stated that “comity” concerns weighed in favor of the doctrine of sovereign immunity by preventing disparate treatment between States and tribes (States’ sovereign immunity bars suits by tribes under IGRA) and protecting tribal treasuries from state taxation. Justice Sotomayor criticized the dissent’s characterization of Indian tribes as “substantial and successful commercial actors”—the majority of federally-recognized tribes do not engage in gaming at all, and a relatively small number of tribes generate a majority of tribal gaming revenue. Moreover, Justice Sotomayor resisted the classification of gaming activity as commercial rather than governmental, noting that tribal commercial activity often funds tribes’ “core” governmental functions. In so doing, Justice Sotomayor noted the “devastating legacy” of allotment policies, which reduced the tax base of tribes.

In summary, contrary to the concerns of many observers, the Court did not abrogate tribal sovereign immunity but instead reaffirmed two of its fundamental attributes—sovereign immunity applies to suits brought by states and generally applies to off-reservation commercial conduct. Future litigation will likely address what exceptions, if any, apply to the doctrine.

 

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.

© Dorsey & Whitney LLP | Attorney Advertising

Written by:

Dorsey & Whitney LLP
Contact
more
less

Dorsey & Whitney 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.