Did Tribal Sovereign Immunity Dodge A Bullet?

Jun 6, 2014

Brian Pierson, team leader for Indian Nations law team at Godfrey & Kahn, wrote an article about the Supreme Court’s recent decision on Michigan v Bay Mills Indian Community case for the National Law Review. In the article, Pierson noted that the Supreme Court’s ruling may have a significant impact on tribal sovereignty.

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The case of Michigan v Bay Mills Indian Community involved commercial land purchased by the tribe for casino use. Plaintiffs argues that the land did not qualify as “Indian land.” The U.S. Supreme Court ruled in favor of Bay Mills Indian Community, but as Brian Pierson points out, the ruling was further complicated by an earlier decision.

“The case focuses on whether the Court should modify the doctrine of tribal sovereign immunity as the Court had previously articulated it in 1998 in the decision of the Kiowa Manufacturing,” Pierson said.

Kiowa Tribe v Manufacturing Technologies is the 1998 case to which Pierson is referring. It involved a $285,000 stock agreement with Manufacturing Technologies. The tribe defaulted on the stock payment and Manufacturing Technologies sued in state court. That state court decision, which ruled in favor of the plaintiff, led to a succession of appeals with similar outcomes. That is, until it reached the Supreme Court in 1998.

The Supreme Court’s ruling was delivered by Justice Kennedy. It maintained that Indian nations were entitled to immunity from contract lawsuits whether on or off Indian lands.

In Michigan v Bay Mills, the Supreme Court basically upheld its previous decision by ruling in favor of Bay Mills Indian Community. But Pierson suggests the doctrine of tribal sovereign immunity was diminished nonetheless.

“And the reason I say that is because just a couple of sort of obvious distinctions,” Pierson said. 

“When the Supreme Court last visited the doctrine in 1998, it was 6-3 decision and it generated a majority opinion of about 2,500 words and dissent of about 2,000 words," Pierson said. "Well, 16 years later it was a 5-4 decision and it generated majority opinions of over 10,000 words and dissenting opinions of over 7,000 words,” Pierson said.

“The attack on the doctrine by the dissent is much more vigorous and includes circumstances that, according to the dissent, have emerged in the last 16 years to reveal the incorrectness of the decision,” Pierson said. 

The dissent opinion complains about what it calls the tribes' “exploitation of immunity” to avoid paying taxes for which they’re legally liable, taking advantage in the tobacco industry and the pay day lending industry.

“They've used their tribal sovereign immunity to avoid state laws that apply but that simply cannot be enforced against them because of tribal sovereign immunity,” Pierson said.

Pierson said that states can now go to Congress armed with the arguments culled from the dissenting opinion. 

“That’s a very obvious invitation to a litigant,” Pierson said.

As more and more tribal economies co-mingle with commercial interests and state governments, the issue of tribal sovereignty is sure to face additional scrutiny and challenges.


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