86 N.Y.2d 553 (1995)

A general “sue and be sued” clause in a tribal corporation’s charter, referencing state law, does not constitute an explicit waiver of tribal sovereign immunity necessary to subject the tribe to the jurisdiction of state courts.

Summary

This case addresses whether a tribal social service agency, incorporated under the District of Columbia Nonprofit Corporation Act and qualified to do business in New York, waived its tribal sovereign immunity by including a “sue and be sued” clause in its charter. The New York Court of Appeals held that merely referencing the statutory authority to sue and be sued is not an explicit and unequivocal waiver of sovereign immunity, and thus, the tribal entity remains immune from suit in New York courts. This ruling reinforces the principle that waivers of tribal sovereign immunity must be clearly and expressly stated, not implied.

Facts

Four members of the St. Regis Mohawk Tribe, employed by the St. Regis Mohawk Education and Community Fund (Fund), were suspended or discharged. The Fund, a non-profit corporation organized under the District of Columbia Nonprofit Corporation Act, provides services to the St. Regis Mohawk Reservation. The employees claimed the Fund violated the Tribe’s employment policy by not following grievance procedures. The Fund’s articles of incorporation allow it to exercise powers granted under the D.C. act, including the power to sue and be sued. The directors of the Fund are also the elected Tribal Chiefs.

Procedural History

The employees initiated a CPLR article 78 proceeding challenging their dismissal. The Supreme Court initially rejected the Fund’s sovereign immunity defense and ordered reinstatement. The Appellate Division reversed and remitted for a determination of whether the Fund was an arm of the Tribe and if it enjoyed sovereign immunity. On remand, the Supreme Court found the Fund had waived its immunity. The Appellate Division again reversed, holding the Fund was an arm of the tribal government and that the generalized incorporation of corporate powers did not constitute an unequivocal waiver. The New York Court of Appeals then heard the case.

Issue(s)

Whether the inclusion of a “sue and be sued” clause, referencing the District of Columbia Nonprofit Corporation Act and New York’s Not-For-Profit Corporation Law, in the charter of a tribal social service agency constitutes an express and unequivocal waiver of tribal sovereign immunity, thereby subjecting the agency to the jurisdiction of New York courts.

Holding

No, because a waiver of tribal sovereign immunity must be unequivocally expressed and cannot be implied. The generalized incorporation of corporate powers, including the power to sue and be sued, does not satisfy this strict waiver standard.

Court’s Reasoning

The Court of Appeals reaffirmed that Indian tribes possess common-law sovereign immunity. This immunity extends to tribal sub-agencies and corporate entities created to further governmental objectives. The court emphasized the importance of preserving tribal resources and autonomy, citing Santa Clara Pueblo v. Martinez, 436 U.S. 49 (1978), and reiterating that a waiver of tribal sovereign immunity “cannot be implied but must be unequivocally expressed.”

The court distinguished the present case from others where waivers were found. In Altheimer & Gray v. Sioux Mfg. Corp., 983 F.2d 803 (7th Cir. 1993), the tribe explicitly waived immunity in a tribal law and in the corporation’s charter regarding written contracts. In Rosebud Sioux Tribe v. Val-U Constr. Co., 50 F.3d 560 (8th Cir. 1995), the charter included a “sue and be sued” clause, coupled with an arbitration clause. Here, the Court found that the Fund’s charter merely recognized its capacity to enter courts, but the Tribe never explicitly stated it would waive immunity and submit to the jurisdiction of New York courts.

The court reasoned that, similar to state waivers of Eleventh Amendment immunity, a “sue and be sued” clause only grants the entity the capacity to enter courts; it doesn’t automatically waive sovereign immunity. Referencing Howard v. Liberty Mem. Hosp., 752 F.Supp. 1074 (S.D. Ga. 1990), the court stated that the general powers provisions of corporation statutes are not self-executing. An express invocation of the power to sue and be sued, along with submission to a particular forum by official tribal action, is required.

Regarding the individual respondents, the court found they were acting within the scope of their authority as tribal officials, even if they erroneously exercised their delegated duties. Therefore, they remained protected by the Fund’s sovereign immunity.