NEWH - May 2003 - (Page 29)

you can’t sue an Indian tribe, can you? by: I. Nelson Rose, Whittier Law School Professor IN A SURPRISE DECISION, the U.S. Supreme Court has ruled that federally recognized Indian tribes are more powerful, in some ways, than foreign nations – and yet, at the same time, more subject to the whims of Congress than any state. It is an amazing decision, which violates basic principals of the law of sovereign immunity. For example, after Castro seized control of Cuba, the Supreme Court held that the now state-owned cigar industry still had to pay its debts. The same body of federal law that allows tribes to operate casinos allows them to be immune from law suits. Why would the U.S. Supreme Court rule that tribes cannot be sued by anybody for any reason unless the agree to be sued? Tribes are governments – similar to, but not exactly like, foreign countries and states of the United States. They are sovereigns, meaning they have the power of self-government. A sovereign also has immunity: it cannot be sued without its consent for a governmental “act of state.” There is evidence in the opinion itself that the Supreme Court wanted to send a message to Congress that tribal immunity should be cut back. The Court seems to view tribal immunity with derision. But, when a foreign country goes into business and acts like a private company, it loses its sovereign immunity. In fact, even the federal government of the United States can be sued when a dispute arises out of purely commercial activities. If sovereignty makes a government as invulnerable as Superman, commercial activity is Kryptonite. The act of state doctrine should apply to tribes as well as countries. The U.S. Supreme Court ruled it does not. The case involved the Kiowa Nation, which had agreed to pay a company called Manufacturing Technologies $285,000 plus interest. The tribe defaulted; Manufacturing Technologies filed suit in state court in Oklahoma and won. The Supreme Court reversed. People try to sue tribes all the time. What made the Manufacturing Technologies’ case unusual was the company’s allegations that the promissory note was executed off-reservation and the entire transaction was a business deal having nothing to do with the tribe’s governmental activities. But the Supreme Court decided, 6 - 3, that tribes cannot be sued without their consent, even when the dispute is over commercial activities conducted on non-tribal land. Thus, tribes are more powerful than foreign nations. In fact, when it comes to being free of law suits, tribes are stronger than the United States of America. The Court declared that tribal immunity “developed almost by accident,” in a case that is less than 80 years old. The majority opinion, written by Justice Kennedy, points out some of the contradictions created by tribal immunity. For example, states may tax cigarette sales by tribal stores to nonmembers, but tribes are immune from suits to collect unpaid state taxes. More importantly, the Court found no reason for tribes to have sovereign immunity, other than that Congress has not taken it away. Justice Kennedy wrote that tribes have immunity simply because courts have assumed they had it, not because it was a well thought out policy. The Supreme Court concluded it was up to Congress to decide whether tribes should continue to have immunity, but made it clear what it thought Congress should do: “There are reasons to doubt the wisdom of perpetuating the doctrine... Immunity can harm those who are unaware that they are dealing with a tribe, who do not know of tribal immunity, or who have no choice in the matter, as in the case of tort victims.” The ability of tribes to ignore breach of contract and tort (injury) claims has been a growing problem for non-Indian employees, gaming patrons and management companies and even for the tribes themselves. In the most dramatic case, an employee of Mystic Lake Casino, Jill Gavle, alleged race discrimination, sexual 29

Table of Contents for the Digital Edition of NEWH - May 2003

NEWH - May 2003
Contents
Letter From the Editor
Hospitality News
Spotlight on NEWH
Tips on Specs....Chandeliers
On the Road Again
Did You Know?
Ancient Storytelling Comes to Life
Indian Gaming: Developing the Latest Gaming Trend
You Can’t Sue an Indian Tribe, Can You?
Putting the Pieces Together: The Steps It Takes to Develop a Casino
Building the Fantasy
The Icing on the Cake: The Importance of Architectural Millwork in Casino Design
Designing Today’s Casino Resort: How to Make Entertainment Memorable and Distinctive
Casino Advertising: A Sure Bet!
Understanding Code Issues Related to Riverboat Casinos
Purchasing on a Dime
Under Wraps
Small Business Advice
Working With Team Players...
In My Opinion...
Taking the Gambling Out of Specifying Gaming Furniture
Industry Partner Education
Bios

NEWH - May 2003