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Law360, New York (October 14, 2016, 1:32 PM EDT) — Two years ago, in Michigan v. Bay Mills Indian Community, the U.S. Supreme Court roundly affirmed the doctrine of tribal sovereign immunity, but did so grudgingly. The court warned against tribes abusing their sovereign status, especially in commercial ventures. The lower courts now are addressing tribal immunity in contexts as diverse as tribal sovereign lending and eminent domain exercised by utility companies. Pending before the Tenth Circuit is Public Service Company of New Mexico v. Barboan, where a utility is attempting to exercise the power of eminent domain over lands owned by an Indian tribe. And, this Term, the Supreme Court in Lewis v. Clarke will determine the scope of immunity for tribal employees. The outcomes in these cases, potentially circumventing tribal immunity, may expose tribal governments to extensive liability, reduced commercial opportunities, and worsened environments.

The federal government has authority to abrogate tribal immunity but the judiciary imposes a clear statement rule on statutes purported to waive immunity. As the Supreme Court stated in Bay Mills, Congressional intent to abrogate tribal immunity must be unequivocal. In Barboan, the utility is relying on 25 U.S.C. § 357 for statutory authority to condemn Indian lands. The statute does authorize the condemnation of Indian lands, with compensation to “allottee[s].” The Tenth Circuit may decide whether that statute is a clear statement of intent to authorize the condemnation of lands owned by allottees that are Indian tribes otherwise cloaked with immunity. If the court holds § 357 abrogates tribal immunity, then tribal efforts to stop or slow pipeline projects like the Dakota Access Pipeline could be compromised. Lower courts likely will conceive of this case as within the call of the question in Bay Mills and uphold the tribal defense here. But as always, the Supreme Court looms.

That the Supreme Court is very interested in the contours of tribal immunity is confirmed by the consistency with which the court has granted certiorari in those cases. Coming a mere two years after Bay Mills, the Court will hear another immunity matter arising from tribal commercial activities. In Lewis, the Court will decide whether tort and contract claimants can access tribal assets under a theory that tribal employees could be liable in tort if sued in their individual capacities, placing tribes in an unenviable position requiring them to indemnify money damage claims against employees.

Because Indian tribes usually have no tax base, the federal government long has encouraged tribes to utilize their sovereign status in commercial ventures to generate government revenue. In line with federal Indian policy, tribes have established gaming operations, asserted control over reservation natural resources, and established online commercial enterprises. Meanwhile, tribes established justice systems to address tort and contract claims arising from tribal enterprise. Tribal statutes established limited waivers of tribal immunity tailored to tribal courts analogous to the Federal Tort Claims Act and the federal Contract Disputes Act. Tribes have settled or litigated untold thousands of claims under these tribal laws since the 1990s.

Still, tribes find themselves hailed into state and federal courts to defend tort and contract claims for money damages. Nearly all of these claims are dismissed for lack of jurisdiction, either because of state or federal court subject matter jurisdiction or sovereign immunity. The tougher cases are those that arise off-reservation. The Supreme Court has held more than once that tribes retain immunity in federal and state courts even when engaged in off-reservation commercial ventures. Tort victims complain that tribal limitations periods are too short, that tribal damages caps are too low, and that tribal courts are unfamiliar and perhaps even biased forums. Worse, some consumers of tribal sovereign lending products allege that tribal dispute resolution forums are wholly inadequate or even shams.

In recent years, tort victims cleverly have sued tribal employees in their individual capacities in state or federal courts, seeking to avoid tribal immunity. Some courts rejected this theory, but others held that tribal emergency medical technicians and casino managers may be sued for money damages in their individual capacities. Perhaps it is only a matter of time before tribal sovereign lending employees are sued in their individual capacities. Individuals are not sovereigns, and are not immune from suit. However, sovereigns cannot act without individuals. Normally, when a government employee is on the clock, they are government officials cloaked with immunity from money damages, not individuals. Everyone knows that a pragmatic tribal government will be forced to indemnify their employees, opening up the tribal fisc to potentially expansive liability.

Decisions against tribal immunity in the context of Indian lands and in the context of tribal employees could expose Indian tribes to land dispossession and monetary liability far beyond what tribes have come to expect in recent decades. With an eight-judge Court, getting to five votes is tricky. However, it is very possible that progressive judges skeptical of governmental immunity might vote against tribal interests alongside conservative justices skeptical of tribal sovereignty. Tribal interests could very well face a perfect storm aligned against them.

—By Matthew L.M. Fletcher, Michigan State University College of Law

Matthew L.M. Fletcher is a professor of law at Michigan State University College of Law. Fletcher is the primary editor and author of the leading law blog on American Indian law and policy, Turtle Talk.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.