Turtle Talk

Here is the opinion in Memphis Biofuels, LLC v. Chickasaw Nation Industries, Inc. — Memphis Biofuels v Chickasaw Nation Industries CA6 Opinion

Lower court materials and appellate briefs are here.

The court first concluded that Section 17 corporations do not automatically waive immunity:

We conclude that it is more appropriate to interpret this silence as not abrogating sovereign immunity for two reasons. First, in Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc., the Supreme Court held that “[a]s a matter of federal law, an Indian tribe is subject to suit only where Congress has authorized the suit or the tribe has waived its immunity.” 523 U.S. 751, 754 (1998). The Court came to this conclusion, in part, because sovereign immunity is part of the common law. See United States v. U.S. Fid. & Guar. Co., 309 U.S. 506, 512 (1940). So, unless Congress abrogates a tribe’s immunity, or the tribe waives its immunity, the tribe’s immunity remains intact. The Supreme Court has also held that abrogation of tribal-sovereign immunity must be clear and may not be implied. Okla. Tax Comm’n v. Citizen Band Potawatomi Tribe of Okla., 498 U.S. 505, 509 (1991); Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58 (1978). Because the language of Section 17 does not explicitly waive sovereign immunity, we conclude that it should not be interpreted to do so impliedly. Second, “statutes are to be construed liberally in favor of the Indians, or [tribes] with ambiguous provisions being interpreted to their benefit.”Montana v. Blackfeet Tribe of Indians, 471 U.S. 759, 766 (1985). This directive to favor tribes counsels against interpreting Section 17 as impliedly waiving tribal-sovereign immunity.

The court added that a “sue and be sued” clause, standing alone, is insufficient to waive immunity:

MBF argues that CNI’s charter has a sue-and-be sued clause, which expressly waives immunity. Some courts have held that a broad sue-and-be-sued clause does waive tribal-sovereign immunity. SeeValidity and Construction of Indian Reorganization Act, 28 A.L.R. Fed.2d 563 at § 27 (citing cases); but see id. at § 28 (citing cases holding that sue-and-besued clause does not constitute express waiver). Here, however, CNI’s charter does not contain a broad sue-and-be-sued clause; instead, the ability to take legal action is limited to action approved by the board of directors. Thus, even if we were to conclude that a broad sue-and-be-sued clause waives tribal-sovereign immunity, this clause is insufficient to do the job. Cf. Ninigret Dev. Corp. v. Narragansett Indian Wetumocuck Hous. Auth., 207 F.3d 21, 30 (1st Cir.2000) (“[T]he enactment of such an ordinance … does not waive a tribe’s sovereign immunity…. [The ordinance] authorizes the Authority to shed its immunity ‘by contract,’ and these words would be utter surplusage, if the enactment of the ordinance itself served to perfect the waiver.”). Therefore, we conclude that the charter does not contain an express waiver of tribal-sovereign immunity.

The court next concluded that the contract at issue, which did include a waiver, was executed by persons not authorized to waive the immunity of the tribe or the tribal entity:

In addition to the tribal charter, an agreement can validly waive tribal-sovereign immunity. Here, the parties agree that the board of directors did not pass a resolution waiving sovereign immunity. The parties did, however, sign a waiver provision whereby both parties waived all immunities. MBF believed that CNI obtained the required approval for this waiver provision-but regardless of what MBF may have thought, board approval was not obtained, and CNI’s charter controls. In short, without board approval, CNI’s sovereign immunity remains intact.