The Bay Mills Case: An Opportunity for Native Nations

On May 27, the U.S. Supreme Court finally handed down its decision in the Michigan v. Bay Mills Indian Community case. The good news for Native nations is that the Court upheld the doctrine of tribal sovereign immunity, opting not to carry out any of the doomsday scenarios that we detailed here and here. The bad news is that the doctrine of tribal sovereign immunity remains vulnerable to attack by potential future Supreme Court decisions and/or Congressional action. Fortunately, the durability of this vital tool of tribal sovereignty depends to a significant degree on what Native nations do from this point forward.

The basic facts of the Bay Mills case are relatively straightforward. The case involves the Bay Mills Indian Community, a federally recognized tribe located not far from the U.S.-Canada border in northern Michigan. In November 2010, Bay Mills opened a gaming facility about 125 miles south of its reservation on a small parcel of land it had recently purchased. In response, both the Little Traverse Bay Bands of Odawa Indians (LTBBO) and the State of Michigan sued to prevent the casino from opening, arguing that the casino was not on Indian lands and was therefore illegal.

By time the case reached the Supreme Court, only Michigan was still involved in the case, as LTBBO chose not to appeal the lower court’s decision. The issue before the Court was whether Michigan was allowed to sue Bay Mills based on the Indian Gaming Regulatory Act. Michigan’s opinion was that it could sue and close the casino. Bay Mills, however, asserted sovereign immunity, arguing that the lawsuit could not proceed based on that doctrine.

Recall that sovereign immunity is the legal principle that governments cannot be sued without their consent. In the case of federally recognized Indian tribes, sovereign immunity means that Indian tribal governments and any businesses owned by Indian tribal governments cannot be sued unless (a) they are sued by the federal government, (b) they unequivocally agree to be sued, or (c) Congress has explicitly stated in a statute that Indian tribes can be sued in a specific context.

Ultimately, in a narrow 5-4 decision, the Supreme Court agreed with Bay Mills and upheld tribal sovereign immunity, affirming that “Indian tribes have immunity when a [law]suit arises from off-reservation commercial activity.” The Court did, however, insert an ominous caveat in its decision — one that almost assuredly will be used in the future to circumvent tribal sovereign immunity. Specifically, the Court repeatedly advised Michigan that it could “resort to other mechanisms” to resolve its current dispute with Bay Mills. For instance, the Court suggested that Michigan could file lawsuits seeking injunctive relief against tribal officials and employees of Bay Mills’ casino or it could simply arrest patrons of the casino, and that such measures would not fall within the scope of tribal sovereign immunity.

The fact that Michigan has other options at its disposal to close down Bay Mills’ casino appeared to be pivotal in the Court’s decision. Justice Elena Kagan, writing for the Court, stated, “We need not consider whether the situation would be different if no alternative remedies were available.” She then implied that if an individual — instead of a state, like Michigan — were harmed by tribal actions in the commercial context, perhaps tribal sovereign immunity would need to be altered to allow lawsuits in such circumstances.

We know for a fact that at least four of the justices — the dissenters in the Bay Mills case — would happily restrict or do away with tribal sovereign immunity if and when another opportunity presents itself. Beyond that, it’s important to remember that when it comes to federal Indian law, Congress has absolute power to overrule a Supreme Court decision and — if it so chose — irrevocably change how tribal sovereign immunity works…or eliminate it completely.

So while Native nations can collectively breathe a sigh of relief with the Bay Mills opinion, a critical question remains: how can they keep this legal victory from being a short-lived one? Perhaps the most important outcome of this case is that it has given Native nations much-needed additional time to better protect tribal sovereign immunity and bolster tribal sovereignty — by strengthening their governance systems.

This starts with Native nations assessing their own policies and procedures in order to prepare themselves for the inevitable day when tribal sovereign immunity is challenged once again. To this end, Native nations should consider developing comprehensive statutes that allow for remedies in all conceivable circumstances. The goal here would be to stave off or neutralize any forthcoming litigation by creating tribal causes of actions, procedures, and remedies in contexts that otherwise would end up in federal court. If sovereign immunity is not available for Native nations to fall back on to someday, this would not only include tort and contract cases, but also actions related to federal and/or state statutes that may prospectively apply to tribes.

In addition, Native nations should identify and pursue ways to confine risk by defining remedies. Native nations can then update insurance policies to reflect their new positions of risk. Beyond that, however, Native nations should determine which of their assets are only being protected through the use of tribal sovereign immunity, and then establish new and different ways to protect such assets. For example, Native nations should review all of their trust accounts and other economic and real property holdings to determine if they might be subject to litigation in a possible future without tribal sovereign immunity. In such a circumstance, investing in a top-notch trust attorney to help protect the tribal treasury and assets would be wise.

Last, but certainly not least, Native nations should strategically and systematically build the capacity of their own justice systems to fairly and consistently enforce these measures in a timely fashion. Building up a track record of effective, tribal jurisprudence in this area not only serves as a powerful defense to those who would attack tribal sovereign immunity, but reinforces tribal sovereignty as well.

At the end of the day, the Bay Mills case unexpectedly—but perhaps only temporarily—preserved the tribal sovereign immunity status quo. But more importantly, it afforded Native nations more time and space to design and implement ways to preserve the doctrine and exercise their sovereignty more fully and effectively—on their own terms. The task now is to seize that opportunity.

Ryan Seelau is an attorney at RSH Legal in Cedar Rapids, Iowa. He is also co-founder of the Project for Indigenous Self-Determination and has advanced law degrees from the Indigenous Peoples Law and Policy program at the University of Arizona. Ian Record is manager of educational resources and director of the Rebuilding Native Nations online course series at the Native Nations Institute for Leadership, Management, and Policy at the University of Arizona.


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The Bay Mills Case: An Opportunity for Native Nations