Negotiating Dispute Resolution with Indian Tribes: Don’t Do It Alone
Indian tribes enjoy sovereign immunity from civil suits arising from contractual relationships, even if the contracts are made, paid, or performed entirely off the reservation. Tribally owned corporations generally enjoy sovereign immunity from suit as well.
Savvy attorneys know that a well-executed waiver of sovereign immunity is a green light to conduct profitable business with an Indian tribe. Tribes regularly execute these waivers, but most transactional attorneys may only see one or two of these in their careers. While those attorneys can be forgiven for not having deep Indian law experience, they should not be forgiven for failing to bring in an expert. Here are some aspects of doing business with tribes that an experienced Indian law attorney will know how to handle.
Waiver Language is Negotiable
Most Indian tribes doing business want to be fair and maintain mutually beneficial and lasting relationships, but they have a legitimate interest in protecting against the risk that the Tribe’s coffers will be emptied by a large judgment award. To that end, Tribes are accustomed to executing limited waivers. In our experience, an overzealous tribal attorney may open negotiations with a waiver so limited that it offers no real recourse and present it as “boilerplate” language that can’t be revisited. Of course, this is nonsense. To prevent the dispute resolution negotiations from souring the relationship, make it clear early on that you expect a process that will lead to a fair resolution for the parties and that you are prepared to walk away from a deal without a process that protects the interests of both parties.
Cover Your Regulatory Bases
One especially dangerous pitfall is that even a validly executed waiver of sovereign immunity in a contract can fall away if that contract is deemed void for lack of agency approvals required in certain transactions with tribes. For example, contracts encumbering Indian land for seven years or more are void absent sign-off from the Department of Interior, and more than one non-Indian business has been left with no recourse when an unapproved lease was deemed void because the waiver of immunity was not severable from the voided lease.
Similarly, some gaming contracts require review and approval of the National Indian Gaming Commission and are void absent that approval. Investors have found out the hard way that their sovereign immunity waivers fell with their voided contracts, and courts held that they were without recourse to recover millions of dollars in investment.
Your agreement may provide for alternative dispute resolution that may include informal preliminary conferences with the tribal council, mediation, binding or nonbinding arbitration, or outright litigation in court. It should specify which law will govern, which courts will have jurisdiction, and whether tribal remedies must be exhausted before proceeding to state or federal court.
A tribe may desire and even require that its own tribal court has jurisdiction. Despite a common misperception that tribal court always rule for the tribe, it is possible for nonmembers to recover in tribal court. But not all tribal courts are created equal, and an Indian law expert can help you determine if a particular forum offers your clients a reasonable chance at a recovery. And, many tribes have agreed to adjudication in non-tribal courts.
Simply put, these are dangerous waters. At the mouth of the Columbia River, even the most experienced captains of colossal ocean freighters gladly yield command of their vessel to a local pilot to navigate the narrow channel. Likewise, smart attorneys bring in an Indian law expert to establish profitable relationships with Indian tribes and ensure that the deal will not run aground.
To learn more about negotiating dispute resolutions with Indian Tribes, read the full article in the latest edition of Gaming Legal News.