On August 21, 2014, the Washington State Supreme Court ruled that the State court has jurisdiction over civil cases arising on Indian reservations between a tribal enterprise and a non-tribal vendor.  In Outsource Serv. Mgmt., LLC v. Nooksack Business Corporation, the Nooksack Business Corporation, and entity of the tribal government, signed an irrevocable limited waiver of sovereign immunity which among other things, consented to be sued in “any court of general jurisdiction in the State.” The Court did not buy the Tribe’s argument that because the matter arose on the reservation and was between the Tribe and a non-tribal vendor, the waiver was irrelevant and exertion of State Court jurisdiction over the matter would infringe on tribal sovereignty.

Practice Tip:  Make sure your Tribal clients understand that if they sign a waiver consenting to suit then courts will honor that provision even if the dispute arose on tribal land and was between the Tribe and/or its business entity and a non-tribal vendor. The Montana “consensual relationship” exception will not save you.

In fact, the Court said that “ignoring the tribe’s decision to waive sovereign immunity and consent to state court jurisdiction would infringe on the tribe’s right to make those decisions for itself.”  The dissent agrees that there was an effective waiver, but disputes that the waiver by itself gives the State courts jurisdiction over the Tribe.

Here’s the deal, tribal sovereignty is ability to make decisions for ourselves. Good or bad, advised or ill-advised – that is the whole point of sovereignty.  As trusted advisors to tribal governments, we need to be prepared to provide tribal councils with the pros, cons and potential outcomes for the decision so that they can make informed decisions.

Sovereign immunity is an established principle of jurisprudence that holds a sovereign cannot be sued without its consent and permission. Or in other words, “the King [or Chief] can do no wrong.” But the sovereign CAN waive that right.

The question I’ve been interested in lately is the mechanism by which a tribe can waive their sovereign immunity.

For a business, anyone with “apparent authority” from the outside vendor’s perspective who signs a contract can obligate the company to the terms of the contract even if that person was not authorized to sign the contract. But this is not true when dealing with a government, including tribal governments.

I’ve been looking at cases where a waiver of sovereign immunity was signed by Joe So-and-So in the Tribal finance department who signed a contract and the court has to grapple with whether a waiver included in that contract waiver was effective.

Case law is clear that in order to be effective, a tribal waiver of sovereign immunity must be explicit and should be strictly construed.  However, even when the tribal waiver is clear, it must be signed by a duly authorized tribal representative to be effective – even if this means the other party cannot enforce the terms of the contract.

Recommendation? Tribes should develop clear guidelines for how and when sovereign immunity can be waived.

  1. Draft an ordinance or resolution that clearly specifies how and when the Tribe’s sovereign immunity can be waived; and
  2. Diligently comply with that process. (And I do mean, Diligently!)

Tribal sovereignty is under attack. We dodged a bullet in Bay Mills (although the SCOTUS included some zingers in that opinion. Ex Parte Young anyone?) Indian Country must be fastidious about protecting this inherent right. There are many reasonable reasons, particularly in a business context to consider limited waivers of sovereign immunity, but understand that once it is waived, courts will respect that decision. We have to be smart, do good business, and by all means, protect our right as tribal governments to make our own decisions.

Questions? Ideas on how to protect our rights? Add your comment!