GM 14-039

Supreme Court Upholds Tribal Sovereign Immunity in Michigan v. Bay Mills

On May 27, 2014, the Supreme Court issued its opinion in Michigan v. Bay Mills Indian Community, upholding the Sixth Circuit’s decision that tribal sovereign immunity bars the State of Michigan from suing Bay Mills to cease operation of a Class III casino on what the State claims are non-Indian lands. As discussed below, the majority specifically cited and agreed with the argument set forth in the amicus brief filed by Hobbs Straus on behalf of a number of tribal clients. In that brief we noted that the State agreed to arbitration in its Compact with the Tribe as the remedy to resolve this type of dispute and that any changes to that remedy provision should be determined by the parties at the negotiating table.

The State had argued that the Indian Gaming Regulatory Act (IGRA) abrogates tribal sovereign immunity for purposes of its suit, but that even if it did not, the Supreme Court should take the opportunity to reconsider and overturn its precedent holding that tribal sovereign immunity applies to off-reservation commercial activity. In a relatively rare victory for tribes appearing before the Supreme Court, the majority opinion (written by Justice Kagan and joined by Chief Justice Roberts and Justices Kennedy, Breyer, and Sotomayor) declined to limit tribal sovereign immunity to on-reservation or non-commercial activity only, a the State argued.

The majority found that the IGRA’s abrogation of tribal sovereign immunity is limited by its terms to suits to enjoin gaming activity located on Indian lands and conducted in violation of a Tribal-State compact. Since the State claimed in its suit that the casino was located on non-Indian lands, the majority held that the State could not invoke that provision as a basis to allow its suit against the Tribe. That left the State in the position of asking the Court to override its holding in Kiowa Tribe of Oklahoma v. Manufacturing Technologies, which affirmed that tribal sovereign immunity applies even to off-reservation commercial activities carried out by tribes. Had the Court chosen to do so, the result could have undermined the scope of tribal sovereign immunity even outside of the gaming context.

However, the majority flatly rejected the State’s invitation to reconsider Kiowa, finding that the State offered no compelling justification for the Court to overturn settled law. As the Court had done in Kiowa, the majority determined that it is up to Congress to decide whether and how tribal sovereign immunity should be limited, and found that Congress has declined to restrict that immunity to on-reservation or non-commercial activity even after having been invited to do so by the Court in Kiowa. The majority noted, “Congress of course may always change its mind – and we would readily defer to that new decision. But it is for Congress, now more than ever, to say whether to create an exception to tribal immunity for off-reservation commercial activity.”
In the absence of any statutory abrogation of the Tribe’s sovereign immunity, the majority noted that the State has several alternative enforcement options available to it. To begin with, the majority suggested that the State could bring suit against tribal officials or employees for violation of state law. Indeed, Justice Kagan emphasized: “As this Court has stated before, analogizing to Ex parte Young, tribal immunity does not bar such a suit for injunctive relief against individuals, including tribal officers, responsible for unlawful conduct.” Or, Justice Kagan suggested, the State could prosecute individuals who maintain or frequent an unlawful gaming establishment under State criminal laws.

Finally, Justice Kagan also wrote, “if a State really wants to sue a tribe for gaming outside Indian lands, the State need only bargain for a waiver of immunity” in its Tribal-State compact. That was the primary argument advanced in the Brief for the Seminole Tribe of Florida et al. as Amici Curiae, which Hobbs Straus filed on behalf of several tribal clients and which Justice Kagan cited in her opinion. Justice Kagan observed that, while States have significant leverage in compact negotiations, and many States have used that leverage to obtain sovereign immunity waivers, the Bay Mills compact instead expressly reserved both the Tribe’s and the State’s sovereign immunity and provided that arbitration would be used to settle disputes.

The majority did not rule out the possibility that the Court may choose to limit the reach of Kiowa Tribe under different circumstances, however, stating: “We need not consider whether the situation would be different if no alternative remedies were available.” In a dissenting opinion, Justice Thomas (joined by Justices Scalia, Ginsburg, and Alito) asserted that Kiowa had been wrongly decided and that the Court should not wait for a different case to overturn it. In Justice Thomas’ view, the extension of tribal sovereign immunity to off-reservation commercial conduct is an “affront” to State sovereignty, and will lead to “de facto deregulation of highly regulated activities; unfairness to tort victims; and increasingly fractious relations with States and individuals alike.” Justice Scalia, in addition to joining Justice Thomas’ opinion, filed his own one-paragraph dissent also stating that Kiowa had been wrongly decided, despite the fact that he had concurred in the opinion at the time.

Justice Sotomayor, who joined the majority opinion, filed a separate concurring opinion in response to the dissent, to argue that the history of tribal sovereign immunity and modern notions of intergovernmental respect favor protection of tribal sovereign immunity. Justice Ginsberg, who joined Justice Thomas’ dissent, also filed a separate opinion calling the scope of tribal sovereign immunity under Kiowa “exorbitant,” but noting that State and federal sovereign immunity have also been extended too far.

Though the Court was divided 5-4, the Bay Mills decision is an important affirmation of tribal sovereignty from the Supreme Court. Please let us know if we may provide additional information regarding the decision.