Can an Arkansas county sue a federally recognized tribe (or a tribal-owned LLC) to enforce a contract if the contract does not include a waiver of tribal sovereign immunity?
Plain-English summary
State Representative Aaron Pilkington asked two questions about agreements between Arkansas counties and federally recognized Indian tribes:
- If the contract does not include a waiver of sovereign immunity, can the county sue the tribe to enforce it?
- If the contract is with an LLC whose sole member is a federally recognized tribe, can the county sue?
Attorney General Tim Griffin's answer to both: maybe.
Tribes have sovereign immunity by federal law. Arkansas appellate courts have not directly addressed tribal sovereign immunity, but the U.S. Supreme Court treats it as well-established. Kiowa Tribe v. Manufacturing Technologies (1998) extends immunity to commercial and off-reservation activities. Michigan v. Bay Mills Indian Community (2014) reaffirmed there is no commercial-activity exception. Tribal immunity applies in both federal and state courts.
Two paths to enforceability. A county can sue a tribe only if Congress has abrogated immunity or the tribe has waived it. Congressional abrogation must be "unmistakably clear in the language of the statute" (recent example: Lac du Flambeau Band v. Coughlin (2023), holding that the Bankruptcy Code abrogates tribal immunity). Tribal waivers must be "unequivocally expressed," but the AG noted that "magic words" are not required. An arbitration clause that authorizes judicial enforcement can waive immunity (C & L Enterprises v. Citizen Band Potawatomi Indian Tribe (2001)). A "sue and be sued" clause in a tribal corporate charter or housing authority ordinance has been treated as a waiver in some Eighth Circuit cases.
Tribal LLCs may share immunity. When a tribe forms an LLC and the LLC operates as an "arm of the tribe," the LLC inherits sovereign immunity. Courts use a multi-factor test that looks at how the LLC was organized, whose interests it serves, who controls it, whose money funds it, and whether the suit's outcome would impact the tribe's fiscal resources. The factors are fact-intensive, so the AG declined to give a categorical answer.
The bottom line for counties: do not assume a deal is enforceable. Either get an explicit, narrow waiver of sovereign immunity in the transaction documents (or arbitration clause that operates as one), or live with the risk.
What this means for you
If you are a county attorney negotiating with a tribe
The single most important contract clause is a sovereign-immunity waiver. Without one, you cannot drag the tribe into court if the tribe breaches. Negotiate language that:
- Unequivocally waives the tribe's sovereign immunity for purposes of the agreement.
- Specifies the forum (tribal court, federal court, state court, or arbitration).
- Caps the waiver to the agreement's subject matter and dollar limit (so you do not get an over-broad concession the tribe will refuse).
- Says the waiver applies to enforcement of any award.
Examine the tribe's corporate charter and any tribal ordinances that may already include a "sue and be sued" clause. If they do, the waiver may already exist, but the Eighth Circuit has limited "sue and be sued" clauses in cases like Dillon v. Yankton Sioux Housing Authority. Don't rely on the inherent waiver; get an explicit one in your transaction documents.
If your county is contracting with a tribally-owned LLC
The LLC's sovereign-immunity status depends on how it functions. If it operates as a separate, commercial vehicle with its own management, revenue, and ownership, immunity may not extend. If it is "an arm of the tribe" (created by tribal law, controlled by tribal officials, receiving tribal funding, and operating with the tribe's purposes), immunity likely extends. Get the answer wrong and your contract may be unenforceable.
A practical hedge: require a sovereign-immunity waiver from the LLC itself and from the parent tribe. That covers either status.
If you are a tribal attorney advising a tribe on a county contract
Be deliberate about waivers. The AG opinion confirms that you can grant a narrow, contract-specific waiver without surrendering broader sovereign immunity. The tribe controls the scope (Mo. River Serv. v. Omaha Tribe recognizes that tribes can prescribe the terms and conditions of waivers). Negotiate a waiver tied to the contract's subject matter, with a cap on damages and an exclusive forum.
If your tribe forms LLCs to insulate the tribe from commercial liability, document the LLC's status carefully. The "arm of the tribe" multi-factor test cuts both ways: factors that make the LLC look like an arm of the tribe extend immunity but also expose the tribe's resources to suit when the LLC waives.
If you are a business contracting with a tribe outside this AG opinion's specific facts
Same principles apply. Without an explicit waiver, you will not be able to sue the tribe to enforce a contract in any U.S. court. Negotiate a waiver and forum-selection clause. Without that, your remedy is renegotiation or a public-pressure campaign, not litigation.
Common questions
Q: My county signed a contract with a tribe that does not have a sovereign-immunity waiver. Are we stuck?
A: Possibly not. Look at the tribe's corporate charter, governing documents, and any other transaction documents. There may be a waiver elsewhere. Look for an arbitration clause too; the U.S. Supreme Court has treated arbitration clauses with judicial-enforcement authority as waivers (C & L Enterprises).
Q: Does a "sue and be sued" clause in a tribal charter waive immunity?
A: Sometimes. The Eighth Circuit has gone both ways: Rosebud Sioux v. A&P Steel held it can be a waiver; Dillon v. Yankton Sioux and Ramey Construction v. Apache Tribe held it does not automatically waive. Do not rely on it.
Q: What about an arbitration clause? Does that waive immunity?
A: It can. C & L Enterprises v. Citizen Band Potawatomi Indian Tribe held that an arbitration clause that authorizes judicial enforcement of an arbitration award is a waiver. Make sure the clause is clear that the resulting award can be confirmed and enforced in a court.
Q: Is a tribal LLC always immune?
A: No. Whether immunity extends depends on how the LLC is organized and controlled. The factors include whether the LLC is organized under tribal law, whose purposes it serves, whether tribal officials run it, who owns its property, who controls it administratively, and whether suits against it impact the tribe's fiscal resources. Hagen v. Sisseton-Wahpeton Community College extended immunity to a tribal college; Dillon v. Yankton Sioux Housing Authority extended immunity to a tribal housing authority. Other LLCs may not qualify.
Q: Can Arkansas state law make a tribe answerable to state court?
A: No. Tribal immunity is federal law. Kiowa Tribe v. Manufacturing Technologies says state law cannot diminish it. Arkansas counties have to work within the federal framework.
Q: What about the Indian Reorganization Act? Does that change things for federally chartered tribal corporations?
A: A federally chartered tribal corporation under 25 U.S.C. § 477 is a separate entity from the tribe itself. The corporation has its own sovereign immunity, and its waiver does not waive the tribe's immunity. Rosebud Sioux v. Val-U Construction held the corporate charter is not a general waiver of the tribe's immunity. The AG noted the question here was about an LLC, which is typically a state-law or tribal-law creation, not a federal-law corporation.
Background and statutory framework
Tribal sovereign immunity is grounded in federal common law. The U.S. Supreme Court has held that "Indian tribes possess common-law immunity from suit traditionally enjoyed by sovereign powers." Alltel Communications v. DeJordy, 675 F.3d 1100, 1102 (8th Cir. 2012) (quoting United States v. Red Lake Band).
Two doctrines relax immunity:
Congressional abrogation. Congress can abrogate tribal immunity by statute, but only with "unmistakably clear" language. Lac du Flambeau Band v. Coughlin, 599 U.S. 382 (2023). Examples include:
- Indian Gaming Regulatory Act (partial abrogation for class III gaming on Indian lands).
- U.S. Bankruptcy Code (full abrogation).
Tribal waiver. A tribe can waive its own immunity, but only "unequivocally." Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58 (1978). The U.S. Supreme Court does not require "magic words" but the waiver must be clear. Examples:
- Arbitration clause authorizing judicial enforcement of award. C & L Enterprises v. Citizen Band Potawatomi Indian Tribe, 532 U.S. 411 (2001).
- "Sue and be sued" clause in tribal corporate charter (sometimes). Rosebud Sioux v. A&P Steel, 874 F.2d 550 (8th Cir. 1989); but compare Dillon v. Yankton Sioux, 144 F.3d 581 (8th Cir. 1998) (no automatic waiver).
Arms of the tribe. Tribal sovereign immunity often extends to entities formed or controlled by the tribe. Courts use a multi-factor test:
1. Organized under tribal law or constitution?
2. Purposes similar to the tribal government?
3. Body composed of tribal officials?
4. Tribe holds legal title to property?
5. Tribal officials exercise control over administration?
6. Tribal governing body has power to dismiss members?
7. Entity generates own revenue?
8. Suit impacts tribal fiscal resources?
9. Power to bind tribal funds?
10. Governmental rather than commercial purpose?
11. Closely linked governing structure?
12. Federal policies promoting tribal authority furthered?
These factors come from Gristede's Foods v. Unkechuage Nation and similar cases.
Citations and references
Federal statutes:
- 25 U.S.C. § 477 (tribal corporate organization under federal law)
- Indian Gaming Regulatory Act (partial abrogation of tribal immunity)
- U.S. Bankruptcy Code (abrogation per Lac du Flambeau Band)
U.S. Supreme Court cases:
- Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc., 523 U.S. 751 (1998) (immunity extends to commercial and off-reservation activities)
- Michigan v. Bay Mills Indian Community, 572 U.S. 782 (2014) (reaffirming no commercial-activity exception)
- Santa Clara Pueblo v. Martinez, 436 U.S. 49 (1978) (waivers must be unequivocally expressed)
- Lac du Flambeau Band of Lake Superior Chippewa Indians v. Coughlin, 599 U.S. 382 (2023) (Bankruptcy Code abrogates tribal immunity)
- C & L Enterprises, Inc. v. Citizen Band Potawatomi Indian Tribe, 532 U.S. 411 (2001) (arbitration clause as waiver)
- Inyo County v. Paiute-Shoshone Indians, 538 U.S. 701 (2003) (arm-of-the-tribe doctrine)
Eighth Circuit cases:
- Alltel Communications, LLC v. DeJordy, 675 F.3d 1100 (8th Cir. 2012)
- United States v. Red Lake Band of Chippewa Indians, 827 F.2d 380 (8th Cir. 1987)
- Hagen v. Sisseton-Wahpeton Community College, 205 F.3d 1040 (8th Cir. 2000)
- Rosebud Sioux Tribe v. Val-U Construction Co., 50 F.3d 560 (8th Cir. 1995)
- Rosebud Sioux Tribe v. A&P Steel, Inc., 874 F.2d 550 (8th Cir. 1989)
- Dillon v. Yankton Sioux Tribe Housing Authority, 144 F.3d 581 (8th Cir. 1998)
- Namekagon Development Co. v. Bois Forte Reservation Housing Authority, 517 F.2d 508 (8th Cir. 1975)
- Mo. River Service, Inc. v. Omaha Tribe of Nebraska, 267 F.3d 848 (8th Cir. 2001)
- Weeks Construction, Inc. v. Oglala Sioux Housing Authority, 797 F.2d 668 (8th Cir. 1986)
Tenth Circuit:
- Ramey Construction Co. v. Apache Tribe of the Mescalero Reservation, 673 F.2d 315 (10th Cir. 1982)
Other:
- Ogden v. Iowa Tribe of Kansas & Nebraska, 250 S.W.3d 822 (Mo. App. W.D. 2008)
- Gristede's Foods, Inc. v. Unkechuage Nation, 660 F. Supp. 2d 442 (E.D.N.Y. 2009) (multi-factor arm-of-the-tribe test)
Source
Original opinion text
Opinion No. 2024-023
July 11, 2024
The Honorable Aaron Pilkington
State Representative
264 Private Road 2611
Knoxville, Arkansas 72845
Dear Representative Pilkington:
I am writing in response to your request for my opinion on the following two questions:
- Under Arkansas law, would the terms of an agreement between a county government and a federally recognized Indian tribe be enforceable against the Indian tribe without an effective waiver of sovereign immunity written into the agreement?
Brief answer: Maybe. Indian tribes enjoy immunity from suit unless Congress has clearly authorized the suit or the tribe has expressly waived its immunity. A tribal waiver of immunity may appear in the transaction documents themselves or in the tribe's governing documents.
- Under Arkansas law, would the terms of an agreement between a county government and an LLC whose sole member is a federally recognized Indian tribe be enforceable against the federally recognized Indian tribe?
Brief answer: Maybe. An Indian tribe's sovereign immunity often extends to agencies, corporations, and other entities formed by the tribe. The tribal entity's immunity may be limited or waived by the entity's founding or governing documents, tribal laws, or transaction documents.
DISCUSSION
Whether a contract or agreement is legally enforceable is, by nature, a fact-intensive question. Because this office is not a factfinder when issuing opinions, I cannot say whether either of the hypothetical agreements you ask about would be legally enforceable. But to the extent you are asking whether the absence of a waiver of tribal sovereign immunity in a contract with an Indian tribe or tribal-owned business makes the contract unenforceable, I will discuss the relevant law below.
Question 1. Arkansas appellate courts have not specifically addressed the issue of tribal sovereign immunity. But it is "well-established that 'Indian tribes possess common-law immunity from suit traditionally enjoyed by sovereign powers.'" Courts have interpreted the doctrine of tribal sovereign immunity to apply broadly, even including a tribe's commercial and off-reservation activities. Because "tribal immunity is a matter of federal law," it "is not subject to diminution by the States." Tribal immunity thus applies in both federal and state courts.
A tribe is subject to suit only if "Congress has authorized the suit or if the tribe has waived its [sovereign] immunity." Such waivers of sovereign immunity, whether by Congress or by the tribe, "cannot be implied but must be unequivocally expressed."
For a court to find that a congressional act has abrogated tribal sovereign immunity, Congress must have made its intent "unmistakably clear in the language of the statute." Examples of congressional acts that expressly abrogate tribal immunity include the Indian Gaming Regulatory Act and the U.S. Bankruptcy Code.
Likewise, for a tribe to waive its own immunity, it must be explicit, but "magic words" are not required, such as a statement that "the tribe hereby waives its sovereign immunity." For example, the U.S. Supreme Court held that a contract containing an agreement to arbitrate contractual disputes was a waiver of immunity from suit in state court because the contract specifically authorized judicial enforcement of the resolution arrived at through arbitration. In some cases, a "sue and be sued" clause in a tribal ordinance or corporate charter might serve as a waiver of sovereign immunity as well. When a tribe waives its sovereign immunity, such waiver does not necessarily grant a court authority to exercise jurisdiction over all claims though, as a tribe may limit the extent of any waiver to which it consents.
In summary, then, a county government that enters into an agreement with a tribe can sue the tribe to enforce the agreement only if (1) Congress has expressly authorized the suit or (2) the tribe has waived its sovereign immunity. While any waiver of immunity must be explicit, the waiver does not necessarily have to appear in the agreement itself.
Question 2. Tribal sovereign immunity often extends to tribal entities, agencies, and businesses. Courts have held that such entities may share a tribe's sovereign immunity if they serve as an "arm of the tribe" or were "established by a tribal council pursuant to its powers of self-government." Common factors used by courts to determine whether a tribal entity is entitled to sovereign immunity include whether:
- the entity is organized under the tribe's laws or constitution;
- the organization's purposes are similar to or serve those of the tribal government;
- the organization's body is composed mainly of tribal officials;
- the tribe has legal title or ownership of property used by the organization;
- tribal officials exercise control over the administration or accounting activities of the organization;
- the tribe's governing body has power to dismiss members of the organization's governing body;
- the entity generates its own revenue;
- a suit against the entity will impact the tribe's fiscal resources;
- the entity has the power to bind or obligate the funds of the tribe;
- the business entity is organized for a purpose that is governmental in nature, rather than commercial;
- the tribe and the entity are closely linked in governing structure and other characteristics; and
- federal policies intended to promote Indian tribal authority are furthered by the extension of immunity to the entity.
A court could determine that a tribally owned limited liability company acts as an arm of the tribe and is, therefore, entitled to tribal sovereign immunity. But because that determination requires a factual inquiry, I cannot definitively say whether any particular LLC owned by a tribe would be immune from suit and, relatedly, whether an agreement with that company would be enforceable absent a waiver of sovereign immunity.
Senior Assistant Attorney General Kelly Summerside prepared this opinion, which I hereby approve.
Sincerely,
TIM GRIFFIN
Attorney General