New York Law Review

Tag: Tribal Sovereign Immunity

  • Sue/Perior Concrete & Paving v. Lewiston Golf Course, 24 N.Y.3d 558 (2014): Defining “Arm of the Tribe” for Sovereign Immunity

    Sue/Perior Concrete & Paving, Inc. v. Lewiston Golf Course Corp., 24 N.Y.3d 558 (2014)

    A corporation owned by a Native American tribe is not automatically entitled to the tribe’s sovereign immunity; courts must examine various factors, with financial independence being paramount, to determine if the corporation functions as an “arm of the tribe.”

    Summary

    Sue/Perior Concrete & Paving sued Lewiston Golf Course Corporation, a wholly-owned subsidiary of the Seneca Nation of Indians, for breach of contract. Lewiston Golf claimed sovereign immunity. The New York Court of Appeals held that Lewiston Golf was not entitled to the Seneca Nation’s sovereign immunity because, despite being tribally owned and operated, its charter explicitly shielded the Seneca Nation’s assets from Lewiston Golf’s liabilities, making it financially independent and not truly an “arm” of the tribe. This decision emphasizes the importance of financial factors in determining whether a tribal entity qualifies for sovereign immunity.

    Facts

    The Seneca Nation chartered Seneca Gaming Corporation to develop gaming facilities. Seneca Gaming then created Seneca Niagara Falls Gaming Corporation to operate a casino. Seneca Niagara created Lewiston Golf Course Corporation to develop a golf course near the casino. Sue/Perior contracted with Lewiston Golf to build the course. A payment dispute arose, and Sue/Perior filed a mechanic’s lien and a foreclosure action. Lewiston Golf claimed sovereign immunity.

    Procedural History

    Sue/Perior sued Lewiston Golf in New York State Supreme Court. Lewiston Golf moved to dismiss based on sovereign immunity. The Supreme Court denied the motion. The Appellate Division affirmed, holding Lewiston Golf was not an “arm” of the Seneca Nation. Lewiston Golf appealed to the New York Court of Appeals. The Court of Appeals affirmed the Appellate Division’s decision.

    Issue(s)

    1. Whether Lewiston Golf, a corporation indirectly owned by the Seneca Nation, is entitled to the Nation’s sovereign immunity from suit.

    Holding

    1. No, because Lewiston Golf’s charter ensures it cannot obligate the Seneca Nation’s funds, and therefore a lawsuit against Lewiston Golf will not impact the Nation’s fiscal resources. This financial independence indicates that Lewiston Golf is not an “arm” of the tribe for sovereign immunity purposes.

    Court’s Reasoning

    The Court applied the factors from Matter of Ransom v. St. Regis Mohawk Educ. & Community Fund, 86 N.Y.2d 553 (1995), to determine if Lewiston Golf was an “arm” of the Seneca Nation. While Lewiston Golf was organized under tribal law and its governing body consisted of tribal officials, the Court emphasized the importance of financial factors. The Court noted that Lewiston Golf’s charter explicitly stated that its debts would not encumber Seneca Nation assets and that the Nation would not be liable for Lewiston Golf’s obligations. The Court reasoned that this demonstrated a clear intent to keep Lewiston Golf financially separate from the Seneca Nation. The court distinguished the case from *Kiowa Tribe of Okla. v Manufacturing Technologies, Inc.* (523 US 751 [1998]), because Kiowa dealt with suits against tribes themselves, not corporate affiliates. The Court reasoned that because a judgment against Lewiston Golf would not reach the Seneca Nation’s assets, the Nation was not the real party in interest, and Lewiston Golf was not entitled to sovereign immunity. The dissent argued that the majority improperly prioritized financial factors over the purpose and structure of Lewiston Golf, which was created to benefit the Seneca Nation’s gaming operations and its members. The dissent asserted that Lewiston Golf should be treated the same as Seneca Gaming and Seneca Niagara Falls Gaming, which lower courts had found to be arms of the Nation. The majority responded that it was not bound by lower federal court decisions and that the question of whether Seneca Gaming and Seneca Niagara Falls Gaming were entitled to sovereign immunity was not before the court.

  • Ransom v. St. Regis Mohawk Education & Community Fund, 86 N.Y.2d 553 (1995): Tribal Sovereign Immunity and Waiver by Implication

    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.