Indian Tribe May Be Immune From Lawsuits
When the owners of a small Kentucky architecture firm entered into a written contract with the Santa Rosa Rancheria Tachi Yoku Tribe, near Fresno, to design a $250 million casino, they never expected to end up in court to enforce the agreement and collect their fees, but that is what happened after the tribe refused to pay, citing sovereign immunity.
The immunity defense would ordinarily have insulated the tribe from any liability to the architects, for the U.S. Supreme Court has held that Indian tribes enjoy immunity from lawsuits on contracts, regardless of whether those contracts involve governmental or commercial activities or were made on or off a reservation.
However, the architects’ contract contained a mandatory arbitration clause to resolve most disputes. When the tribe refused to arbitrate, the architects sought a court order to compel them to do so. That provision, the court held, constituted an implied waiver by the tribe of its immunity, and required it to be answerable in court for damages resulting from any breach of the contract.
The court’s decision emphasizes the rule for all persons doing business with any Native American tribe: have an attorney prepare a written agreement which waives the tribe’s immunity and a clear statement that it agrees to be subject to the jurisdiction of the state and federal courts. Then, you’ll have the right to take the tribe to court if they do not pay.
After that, if the court enters a judgment in your favor, you’ll only need to figure out how to collect it. (Presnell v. Santa Rosa Rancheria, 2003)