Constitution Check: Is it time for Indian tribes to stand on their own commercially?

Lyle Denniston explains why the economic livelihood of Indian tribes is now even further assured, after a Supreme Court ruling this week confirmed tribes’ ability to build casinos on non-reservation lands.


Viiejas Casino. Wikicommons: BZillaGorilla


In the past 16 years, “the commercial activities of tribes have increased dramatically. This is especially evident within the tribal gambling industry. Combined tribal gaming revenues in 28 states have more than tripled – from $8.5 billion in 1998 to $27.9 billion in 2012….But tribal businesses extend well beyond gambling and far past reservation borders. In addition to ventures that take advantage of on-reservation resources (like tourism, recreation, mining, forestry, and agriculture), tribes engage in domestic and international business ventures including manufacturing, retail, banking, construction, energy, telecommunications, and more….Tribal [legal] immunity significantly limits, and often extinguishes, the states’ ability to protect their citizens and enforce the law against tribal businesses.”

– Excerpt from the dissenting opinion in the Supreme Court’s 5-to-4 decision on Tuesday, with the majority refusing to reconsider the idea that Indian tribes have legal immunity to being sued when they engage in commercial business activity, even when they do so outside the boundaries of their reservations. Justice Clarence Thomas wrote for the four dissenters in Michigan v. Bay Mills Indian Community – one of the most important Indian rights decisions in years.


If America’s Constitution was a result of the bargaining of interests of those who gathered in Philadelphia in 1787, the nation’s Indian tribes were not part of the deal. As the Supreme Court remarked in a 1998 decision, “tribes were not at the Constitutional Convention,” so they were not parties to the “mutuality of concession” that was necessary to produce the compromises that would result in the Constitution’s creation.

Still, America’s Indians have a special claim on the nation’s sympathies and its memories, and they are protected by the federal government as no other group is. Indeed, each of the more than 500 officially recognized tribes in the U.S. is treated as a “sovereign” entity, a self-governing body within America’s larger civic order.   And one very important part of their sovereignty is a sweeping immunity to most kinds of lawsuits.

The Supreme Court has made clear that this immunity does not come directly out of the Constitution; it is something the court itself made up, but mostly in fits and starts and without an explicit definition of where it originated and what its scope actually is. The doctrine either dates back to a 1919 decision, or to one in 1940; it is unclear which is the main source. But tribal immunity is one of those legal concepts that seems so near to the heart of American governance that it almost ranks as constitutional in stature.

Still, it has been at the heart of a deepening controversy within the Supreme Court for more than a generation, and that controversy has only deepened as the nation’s tribes – once almost universally poor and sometimes actually destitute – have spread out their business reach so that many of them now are true economic conglomerates.   Legal immunity, it is commonly recognized, is a truly valuable asset to any business, and it has been very important to the growth of tribal commercial activity.

This controversy had seemed to reach a peak in 1998, when the Supreme Court for the first time actually extended the concept of legal immunity to tribal enterprises carried on outside reservation lands. But even the majority in that 6-to-3 decision seemed quite uncomfortable with this development, and invited Congress to step in to decide what was best for the country.

Congress, for whatever reason, chose not to do anything to alter tribal immunity, even in the commercial context. Some bills were introduced to narrow the immunity, but none passed. The entire issue was reopened in the Supreme Court this year, in a case involving a small tribe whose reservation is in Brimley, on Michigan’s Upper Peninsula.   Over the objection of the state of Michigan, the Bay Mills Indian Community opened a gambling casino on land it had bought in Vanderbilt, Mich. – some 100 miles away from its reservation.

The state of Michigan, joined by a tribe that operates a competing casino nearby, sued the Bay Mills tribe in federal court, seeking to shut down the casino as illegal under both federal Indian gaming law and Michigan state law. The lawsuit did result in the closing of the casino, but the Bay Mills tribe won its appeal in lower court, on its claim that its legal immunity protected it from the lawsuit.

As the case unfolded before the Supreme Court, it looked initially as if it were a fairly small dispute, with Michigan officials – supported by other states – mainly asking the Justices to narrow the concept of tribal immunity.   But, as the Justices worked on the case in private, over a span of nearly six months, it mushroomed into a full-scale debate over whether to cast aside altogether the 1998 decision and, with it, the concept of tribal immunity for businesses operated outside of reservation lands.

It was not clear, to outside observers, what was taking the court so long to reach its ruling. The explanation came with the release on Tuesday of the court’s final ruling. The main opinion was written by Justice Elena Kagan with the support of four other Justices. There was one concurring opinion, and three separate dissenting opinions, with the main one of those written by Justice Clarence Thomas.

The end result was that, once again, the majority chose to rely upon Congress to act – if it were inclined to do so – to deal with the scope of tribal immunity.   It simply was not the task of the courts, the majority said, to reconsider the core doctrine of tribal immunity or to overrule the 1998 decision that had expanded that concept to businesses not on reservation lands.

If, as seems very likely, such immunity has been a boon to tribal business, the economic livelihood of the tribes is now even further assured, as the chances of Congress moving in to take away the immunity appear remote.

Lyle Denniston is the National Constitution Center’s adviser on constitutional literacy. He has reported on the Supreme Court for 56 years, currently covering it for SCOTUSblog, an online clearinghouse of information about the Supreme Court’s work.

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