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

A state representative asked whether an Arkansas county could enforce an agreement against a federally recognized tribe when the agreement lacks a sovereign-immunity waiver, and whether it could enforce an agreement with an LLC wholly owned by a tribe. The Attorney General's brief answer to each question was “Maybe.” He could not decide whether either hypothetical agreement was enforceable without its facts.

For a suit against the tribe, the opinion identifies two routes: Congress must clearly authorize the suit, or the tribe must unequivocally waive its immunity. A waiver can appear in transaction documents or the tribe's governing documents; it need not be written into the agreement being enforced. The opinion gives examples of an arbitration provision authorizing judicial enforcement and, in some cases, a “sue and be sued” clause. It also cautions that a tribe may limit the scope of a waiver.

An LLC owned by a tribe may share the tribe's immunity if it acts as an “arm of the tribe.” The opinion lists factors including the entity's organization, purpose, tribal control, ownership, revenue, and the effect of a suit on tribal resources. The Attorney General did not decide whether any particular LLC qualifies. Its founding or governing documents, tribal law, or transaction documents may also limit or waive immunity.

What this means for you

County officials negotiating an agreement

Check both possible sources of authority to sue before relying on a contract remedy: congressional authorization and an express tribal waiver. The absence of a waiver in the contract alone does not answer the question. Review the tribe's governing documents and all transaction documents for a waiver and its limits. The opinion does not decide enforceability for an unidentified agreement.

Counties dealing with a tribal LLC

Identify the actual contracting entity and examine its founding and governing documents. Ownership by a tribe raises the immunity question, but the Attorney General says an “arm of the tribe” determination needs facts about the entity. A waiver by a tribal corporation also does not necessarily waive the tribal government's immunity, as the opinion's footnote explains.

Tribal officials

The opinion says a tribe can limit the terms of its consent to suit. Check whether a proposed arbitration or “sue and be sued” provision authorizes judicial enforcement and which claims any waiver covers.

Common questions

Is a county barred from suing whenever the contract omits a waiver?

No categorical answer follows from the missing clause. Congress could authorize the suit, or the tribe could have waived immunity in another document. The opinion says an explicit waiver “does not necessarily have to appear in the agreement itself.”

Does an arbitration clause waive immunity?

It can. The opinion describes a Supreme Court decision in which an agreement to arbitrate authorized judicial enforcement of the arbitration result and waived immunity for that suit.

Is a “sue and be sued” clause enough?

Sometimes. The opinion cites decisions finding waiver in such clauses and others refusing to treat them as automatic waivers. The clause and its context need review.

Is a tribally owned LLC always immune?

No categorical answer is given. A court could find that it acts as an arm of the tribe, but the Attorney General says that conclusion requires a factual inquiry.

Currency note

This July 11, 2024 opinion explains the immunity rules for hypothetical agreements. It does not determine the effect of any particular contract or LLC's documents. Current federal law and the relevant documents must be checked for an actual dispute.

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

TIM GRIFFIN
ATTORNEY GENERAL

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:

1. 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.

2. 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

323 CENTER STREET, SU ITE 200
LITTLE ROCK, ARKANSAS 72201

The Honorable Aaron Pilkington
State Representative
Opinion No. 2024-023
Page 2

a contract with an Indian tribe or tribal-owned business makes the contract unenforceable, I will discuss the relevant law below.

Question 1: 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?

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.’”1 Courts have interpreted the doctrine of tribal sovereign immunity to apply broadly, even including a tribe’s commercial and off-reservation activities.2 Because “tribal immunity is a matter of federal law,” it “is not subject to diminution by the States.”3 Tribal immunity thus applies in both federal and state courts.4

A tribe is subject to suit only if “Congress has authorized the suit or if the tribe has waived its [sovereign] immunity.”5 Such waivers of sovereign immunity, whether by Congress or by the tribe, “cannot be implied but must be unequivocally expressed.”6

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.”7 Examples of congressional acts that expressly abrogate tribal immunity include the Indian Gaming Regulatory Act8 and the U.S. Bankruptcy Code.9

1
Alltel Commc’ns, LLC v. DeJordy, 675 F.3d 1100, 1102 (8th Cir. 2012) (quoting United States v. Red Lake Band of Chippewa Indians, 827 F.2d 380, 382 (8th Cir. 1987)). 2 See Michigan v. Bay Mills Indian Cmty., 572 U.S. 782, 790 (2014) (“[W]e declined…to make any exception for suits arising from a tribe’s commercial activities, even when they take place off Indian lands.”); Kiowa Tribe of Okla. v. Mfg. Techs., Inc., 523 U.S. 751, 760 (1998) (“Tribes enjoy immunity from suits on contracts, whether those contracts involve governmental or commercial activities and whether they were made on or off a reservation.”). 3 Kiowa, 523 U.S. at 756.
4
Id. at 754.
5
Id.
6
Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58 (1978) (citation omitted); Hagen v. Sisseton-Wahpeton Cmty. Coll., 205 F.3d 1040, 1043 (8th Cir. 2000) (citation omitted). 7 Lac du Flambeau Band of Lake Superior Chippewa Indians v. Coughlin, 599 U.S. 382, 387 (2023) (citation omitted). 8 See, e.g., Bay Mills, 572 U.S. at 791 (holding that the Indian Gaming Regulatory Act partially abrogates tribal immunity with respect to class III gaming on Indian lands but not to gaming off Indian lands).

The Honorable Aaron Pilkington
State Representative
Opinion No. 2024-023
Page 3

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.”10 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.11 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.12 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.13

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: 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?

9
See Lac du Flambeau, 599 U.S. at 399 (holding that “the Bankruptcy Code unambiguously abrogates tribal sovereign immunity”). 10 Rosebud Sioux Tribe v. Val-U Constr. Co., 50 F.3d 560, 563 (8th Cir. 1995).
11
See C & L Enterprises, Inc. v. Citizen Band Potawatomi Indian Tribe of Okla., 532 U.S. 411, 421–23 (2001). 12 See, e.g., Rosebud Sioux Tribe v. A&P Steel, Inc., 874 F.2d 550, 552 (8th Cir. 1989) (holding that tribe expressly waived its sovereign immunity by virtue of a provision in its corporate charter allowing the tribe to “sue and to be sued”); Namekagon Dev. Co. v. Bois Forte Res. Hous. Auth., 517 F.2d 508, 510 (8th Cir. 1975) (holding that, while conditional limitations placed on waivers of immunity must be strictly construed, tribal council relinquished tribal housing authority’s immunity from suit by including a “sue and be sued” clause in housing ordinance and that housing authority waived additional immunity through contract). But see, e.g., Dillon v. Yankton Sioux Tribe Hous. Auth., 144 F.3d 581, 583–84 (8th Cir. 1998) (holding that tribal resolution allowing housing authority to “sue and be sued” and authorizing authority to waive immunity by contract was not an automatic waiver of immunity and did not waive sovereign immunity as to former employee’s Title VII claim); Ramey Constr. Co., Inc. v. Apache Tribe of the Mescalero Rsrv., 673 F.2d 315, 320 (10th Cir. 1982) (holding that a “sue and be sued” clause in a tribal corporate charter did not waive the tribal government’s immunity). 13 See Mo. River Serv., Inc. v. Omaha Tribe of Neb., 267 F.3d 848, 852 (8th Cir. 2001) (“[A tribe] may prescribe the terms and conditions on which it consents to be sued, and the manner in which the suit shall be conducted.”) (internal quotations omitted).

The Honorable Aaron Pilkington
State Representative
Opinion No. 2024-023
Page 4

Tribal sovereign immunity often extends to tribal entities, agencies, and businesses.14 Courts have held that such entities may share a tribe’s sovereign immunity if they serve as an “arm of the tribe”15 or were “established by a tribal council pursuant to its powers of self-government.”16 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.17

14
See, e.g., Hagen, 205 F.3d at 1043 (holding that a college chartered, funded, and controlled by the tribe to educate tribal members on Indian land was a tribal agency entitled to sovereign immunity); Dillon, 144 F.3d at 583 (holding that a tribal housing authority was a tribal agency entitled to sovereign immunity). 15 Inyo Cnty. v. Paiute-Shoshone Indians, 538 U.S. 701, 705 n.1 (2003) (cleaned up).
16
Dillon, 144 F.3d at 583 (quoting Weeks Constr., Inc. v. Oglala Sioux Hous. Auth., 797 F.2d 668, 670 (8th Cir. 1986). 17 See, e.g., Gristede's Foods, Inc. v. Unkechuage Nation, 660 F.Supp.2d 442, 477–78 (E.D.N.Y. 2009); Wright v. Prairie Chicken, 1998 S.D. 46, ¶ 10, 579 N.W.2d 7, 9–10 (1998); Gavle v. Little Six, Inc., 555 N.W.2d 284, 294 (Minn.1996).

The Honorable Aaron Pilkington
State Representative
Opinion No. 2024-023
Page 5

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.18

Senior Assistant Attorney General Kelly Summerside prepared this opinion, which I hereby approve.

Sincerely,

TIM GRIFFIN
Attorney General

18
The Indian Reorganization Act, passed by Congress in 1934, permits Indian tribes to organize as business corporations under federal law. See 25 U.S.C. § 477. Courts generally agree that these corporations, like the tribes themselves, enjoy sovereign immunity absent “unequivocally expressed” waiver or congressional abrogation. Ogden v. Iowa Tribe of Kan. & Neb., 250 S.W.3d 822, 826 (Mo. App. W.D. 2008) (internal citations omitted). And because a tribal corporation is a separate entity from the tribe itself, a tribal corporation’s waiver of its own immunity does not extend to the tribal government. See, e.g., Val-U Constr. Co., 50 F.3d at 563 (“[T]he Tribe’s corporate charter does not operate as a general waiver of the Tribe’s immunity from suit); Ramey Constr., 67 3 F.2d at 320 (“[T]he consent to suit clause in the corporate charter of the Mescalero Apache Tribe, Inc. in no way affects the sovereign immunity of the Tribe as a constitutional entity.”). But because you ask about an “LLC,” I assume that your question does not pertain to these federally incorporated tribal organizations (note that tribes are not required to incorporate under federal law but may also form corporations under state laws or their own tribal laws).