The Struggle to Preserve Tribal Sovereignty in Alabama David Smith Kilpatrick Townsend & Stockton, LLP. Introduction
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1 The Struggle to Preserve Tribal Sovereignty in Alabama David Smith Kilpatrick Townsend & Stockton, LLP Introduction Over the last decade, the state of Alabama, including the Alabama Supreme Court, has made an effort to diminish the sovereign immunity of the Poarch Band of Creek Indians (the Tribe ). These efforts led to five key cases, two of which were ultimately heard by the Eleventh Circuit and the other three by the Alabama Supreme Court. The Eleventh Circuit rulings affirmed the Tribe s inherent sovereign immunity. However, the Alabama Supreme Court rulings either eroded or outright revoked basic and well-settled aspects of tribal sovereign immunity enjoyed by the Tribe, specifically in relation to tort claims brought against the Tribe by non-indians. These rulings represent a marked shift in the way state courts have historically considered tribal immunity, and may have set a concerning path for other states to follow if they are so inclined. Brief History of the Tribe The Tribe s members are descendants of the original Creek Nation whose ancestors fought for the United States from and were reserved land in Alabama when the rest of the Creek Nation was removed to west of the Mississippi in the 1830s. As early as 1920, the local county tax assessor tried to illegally collect taxes on trust land set aside for the Tribe s ancestors, and the federal government had to intervene to stop the taxes and seek damages from trespassers for cutting timber from Tribal lands. The Tribe received federal recognition in 1984 and currently has over 3,000 tribal members. The Tribe s current trust lands, near Atmore and Montgomery (and one parcel in Florida), were taken into trust shortly after the Tribe received federal recognition, well over 30 years ago. The Tribe began offering electronic bingo gaming in the early 1990s to generate muchneeded revenue and now has three substantial gaming facilities located on its trust lands. The Tribe has sought to negotiate for a tribal-state gaming compact for many years, but state officials have refused to sit down with the Tribe. The Tribe is one of the largest employers in the State of Alabama with over 2,600 employees. Sovereign Immunity and the Tribe s Ongoing Challenges with the State of Alabama As discussed, the Tribe s sovereign authority and immunity has been challenged by the State of Alabama since it was first recognized by the United States. Over the past decade, the
2 Tribe s immunity has been specifically and publicly targeted by the Alabama Governor s Office, the Alabama Attorney General, the Escambia County Tax Assessor s Office, and the Alabama Supreme Court. These attacks resulted in five distinct cases. While those decisions pending in federal court resulted in affirmations of the Tribe s sovereignty, those in state court have undermined the very foundation of the Tribe s inherent sovereign immunity. PCI Gaming Auth. I and PCI Gaming Auth. II In 2013, the Alabama Attorney General filed a complaint in the Elmore County Circuit Court, alleging that the Tribe s gaming activity should be enjoined under state nuisance laws, even though state law was preempted by the Indian Gaming Regulatory Act ( IGRA ), 25 U.S.C. 2701, et seq. After removal to federal court, the state claimed that the Tribe s lands were subject to state jurisdiction, arguing it could collaterally attack the decision of the Department of Interior to take the Tribe s lands into trust over 30 years earlier. The district court dismissed the action, mainly because of the Tribe s sovereign immunity. Alabama v. PCI Gaming Auth., 15 F. Supp. 3d 1161 (M.D. Ala. 2014) ( PCI Gaming Auth. I ). The Attorney General appealed the decision to the Eleventh Circuit. The Eleventh Circuit affirmed the district court s dismissal of the action. As for tribal sovereign immunity, the court held that the Tribe was protected by its immunity because, the Tribe has not waived its immunity and Congress has not expressly abrogated it. Alabama v. PCI Gaming Auth., 801 F.3d 1278, 1287 (11th Cir. 2015) ( PCI Gaming Auth. II ). The circuit also affirmed that PCI Gaming, the Tribally-owned commercial entity which operates its casinos, shared in the Tribe s sovereign immunity because it operates as an arm of the tribe. See PCI Gaming Auth. II at The more complex question addressed by the court was whether members of the Tribe s Gaming Authority, tribal council members who had been sued in their individual capacities, were protected by the Tribe s sovereign immunity. Whether the council members were protected by sovereign immunity was considered in relation to two distinct claims. First, the court found that the council members were not protected by sovereign immunity in regards to the state s claim that their conduct violated IGRA. The Eleventh Circuit supported this conclusion through Ex Parte Young, 209 U.S. 123 (1908), holding that the council members were not protected because it was alleged that they had acted beyond their authority by violating a federal statute (i.e., IGRA). See PCI Gaming Auth. II at The claim, however, was ultimately dismissed by the court for plaintiff s failure to state a claim under 18 U.S.C Second, the court held that the council members enjoyed tribal immunity from the plaintiff s state law claims because Ex Parte Young does not apply to such claims and the casinos were located on Indian lands. See PCI Gaming Auth. II at U.S.C is a criminal statute that establishes instances in which federal or state laws will apply to gambling occurring in Indian Country. In PCI Gaming Auth. II, the court held that 1166 does not create an implied right of action for states to sue tribal officials to enforce state gambling laws. See PCI Gaming Auth. II at
3 Hildreth I and Hildreth II While PCI Gaming Auth. I was pending appeal, a county tax assessor (i.e. an agent of the state) began the process of assessing the Tribe s federal trust lands for state tax purposes, ignoring that such taxation is precluded by federal statute, 25 U.S.C In response to the assessor s activities, the Tribe brought action against the tax assessor seeking declaratory and injunctive relief to prevent assessment of the taxes. The district court ruled in favor of the Tribe and granted a preliminary injunction in Poarch Band of Creek Indians v. Hildreth, No. CIV.A. 1: CG, 2015 WL (S.D. Ala. July 22, 2015) ( Hildreth I ). That ruling was then affirmed by the Eleventh Circuit in Poarch Band of Creek Indians v. Hildreth, 656 F. App'x 934 (11th Cir. 2016) (Hildreth II). Because the Tribe sought a preliminary injunction, the courts were tasked with applying the customary four-part test. First, the courts agreed with the Tribe s assertion that it would likely succeed on the merits. This finding of success was because [t]he Tribe is a federally recognized Indian tribe and the United States holds land for its benefit. Hildreth I at *6. Second, the courts held that the assessor s actions would constitute a substantial threat of irreparable injury. This injury finding was based on the Tribe s sovereign immunity. The district court held that, [s]overeign immunity is a cornerstone of the preserving of self-governance and the Tribe's existence as dependent sovereigns. Allowing Hildreth to assess taxes on Trust land would be tantamount to exercising sovereignty over the Tribe, and would also violate federal law under [the Indian Reorganization Act]. Hildreth I at *6. Third, the courts agreed that the balancing of harms weighed heavily in the Tribe s favor. The Eleventh Circuit stated that, [t]he district court also did not abuse its discretion in weighing the balance of harms. We are satisfied that a state tax assessment would amount to irreparable violation of tribal sovereignty. This harm outweighs any potential temporary harm to Escambia County that would result from a delayed tax assessment. Hildreth II at 944. Finally, the courts agreed that granting the preliminary injunction would serve the public interest. Hildreth II at 944. Rape, Harrison, and Wilkes, the Alabama Tribal Sovereign Immunity Trilogy On September 29, 2017, the Alabama Supreme Court issued three related rulings concerning the sovereign immunity of the Tribe. The trilogy consisted of Rape v. Poarch Band of Creek Indians, No , 2017 WL (Ala. Sept. 29, 2017), Harrison v. PCI Gaming Auth., No , 2017 WL (Ala. Sept. 29, 2017), and Wilkes v. PCI Gaming Auth., No , 2017 WL (Ala. Oct. 3, 2017), petition for cert filed, U.S.L.W. (U.S. Feb. 6, 2018) (No ). Although the cases concerned markedly different facts, the Alabama Supreme Court rulings in many ways bunched the three cases together, utilizing findings and conclusions in one case to support its rulings in another. Notably, Rape had been pending in front of the Alabama Supreme court for five years and Harrison almost three before the court ruled on all three cases on the same day. The decisions in these cases strike deeply at the Tribe s sovereign immunity while also providing other states the legal blueprint to attack the sovereign immunity of tribes within their borders. 3
4 1. Rape In Rape, Mr. Rape, a patron of one of the Tribe s casinos, sued the Tribe after a malfunctioning bingo machine at the Tribe s Wind Creek facility incorrectly indicated that Mr. Rape had won a jackpot in excess of $1.3 million. After confirming that the alleged jackpot resulted from a machine malfunction, the Tribe declined to make payment to Mr. Rape. He filed suit in 2011, asserting claims for breach of contract, negligence, and various other state law torts. The Tribe moved to dismiss Mr. Rape s claims in 2012, making two separate arguments. First, it argued that jurisdiction was properly and exclusively in the tribal court rather than state court because Mr. Rape s claims arose out of his interaction with the Tribe on tribal lands. Second, the Tribe argued that if the claims were properly in state court, they should still be dismissed based on tribal sovereign immunity. The state trial court granted the Tribe s motion and dismissed the case without issuing an opinion in May The ruling was appealed to the Alabama Supreme Court. Five years later, the Alabama Supreme Court issued a ruling in Rape on September 29, 2017, the same day the court ruled on Harrison and Wilkes. The court affirmed the dismissal of Mr. Rape s claims, but did so for troubling reasons. Instead of determining that the claim could not be sustained because of the Tribe s sovereign immunity, the court instead focused on the subject-matter jurisdiction of the tribal and state courts over the underlying dispute. Rape at *3. The court noted that the jurisdiction issue and the Tribe s immunity represented intertwined issues, but the court largely ignored addressing the Tribe s immunity head-on. Instead, the court implied that the tribal lands on which the casino was situated were not properly taken into trust by the federal government. If the lands were not held in trust, the court reasoned, then the Tribe would not retain jurisdiction over the claim. The court asserted this position regardless of the Eleventh Circuit s decision in PCI Gaming Authority II, which held that the Tribe s lands were federally protected lands taken into trust for the Tribe. Ultimately, the Rape opinion sidestepped the question of the status of the Tribe s lands because Mr. Rape could not obtain relief even if the lands had not been taken into trust. The court determined that, on the one hand, if the lands were properly in trust, then the Tribe would have territorial jurisdiction and the claims would have to be dismissed. On the other hand, if as the Alabama Supreme Court strongly implies it believes the Tribe s lands were not properly taken into trust and should still be considered within the territorial jurisdiction of the State of Alabama, then Mr. Rape s claims arose out of an illegal gambling contract, which would preclude him from seeking the aid of Alabama courts. Rape at * Harrison In Harrison, Benjamin Harrison was injured when the car in which he was a passenger crashed at the end of a police chase. He subsequently died from his injuries. His mother sued PCI Gaming in May 2013, alleging that PCI Gaming was responsible for the accident because a Wind Creek employee had negligently and in violation of state dram shop laws overserved alcohol to Roil Hadley, the driver of the car in which Benjamin was a passenger, on the night of the accident. She also sued two PBCI police officers who were involved in the chase that preceded the accident. 4
5 The Tribe moved to dismiss Ms. Harrison s claims on essentially the same grounds that it cited for dismissal of Mr. Rape s claims, and the trial court granted the motion to dismiss as to PCI Gaming in October 2013, based on tribal sovereign immunity. The claims against the two tribal police officers were stayed pending Ms. Harrison s appeal. The ruling was ultimately appealed to the Alabama Supreme Court. In its decision, the Alabama Supreme Court states that while tribal sovereign immunity is a settled and established legal doctrine, the United States Supreme Court has never addressed the doctrine s applicability to a tort claim brought against a tribe by a non-tribal member. Harrison at *8. The Alabama Supreme Court ultimately, decline[d] to extend the doctrine of tribal immunity to actions in tort, in which the plaintiff has no opportunity to bargain for a waiver and no other avenue for relief. Harrison at *8. In coming to its decision, the court focused on both the historical development of the doctrine of tribal sovereign immunity and the Supreme Court s questioning of the doctrine s continued usefulness in Kiowa, 523 U.S. 751 and Bay Mills, 134 S. Ct It also discussed, favorably and at length, the dissenting opinions of Justices Stevens and Thomas in those cases, before stating that the lower court s decision to grant the dismissal based on tribal sovereign immunity in Harrison was due to be reversed based on the ruling in one of the other cases in the trilogy: Wilkes. The parties ultimately settled in Harrison, and the case was therefore dismissed in the lower court before the Alabama Supreme Court s opinion became final. Based on the Alabama Supreme Court s process for determining whether it will dismiss a decision it has already issued, it is unclear whether the Harrison decision is still binding. 3. Wilkes Of the trilogy, Wilkes is the most problematic ruling in regards to protecting and preserving tribal sovereign immunity. In Wilkes, Barbie Spraggins, a casino employee, was involved in a head-on collision off-reservation. A blood test administered to her after the crash showed that she had a blood alcohol content above the legal limit. Plaintiffs asserted negligence and wantonness claims against Spraggins and Poarch Band based on Spraggins' operation of the pickup truck at the time of the accident, and negligence and wantonness claims against Poarch Band based on its hiring, retention, and supervision of Spraggins. Wilkes at *1. The Poarch Band asserted tribal sovereign immunity and the trial court entered summary judgment in the Tribe s favor, holding that it lacked jurisdiction over the dispute because of tribal sovereign immunity. The plaintiffs appealed the decision to the Alabama Supreme Court. The Alabama Supreme Court reversed and broadly held that, the doctrine of tribal sovereign immunity affords no protection to tribes with regard to tort claims asserted against them by non-tribe members. Wilkes at *4. Wilkes is the shortest and appears to be the first of the three decisions, as it is the only one that does not cross-reference the others. In it, the Alabama Supreme Court emphasized that while tribal sovereign immunity is a settled and established legal doctrine in general, the United States Supreme Court has never addressed whether the doctrine applies to a tort claim brought against a tribe by a non-tribal member. Wilkes at *3. The court, as noted earlier, also made this claim in 5
6 Harrison. The Alabama Supreme Court conceded that several federal appellate courts have addressed this issue, with all of them holding that sovereign immunity applies to these claims. Wilkes at *4. Despite those holdings, the court found that, extending [tribal sovereign immunity] to shield tribes from tort claims asserted by individuals who have no personal or commercial relationship to the tribe, would not be in the, interests of justice. Wilkes at *4. Accordingly, the court held that, the doctrine of tribal sovereign immunity affords no protection to tribes with regard to tort claims asserted against them by non-tribe members. Wilkes at *4. Possible Impacts of the Alabama Tribal Sovereign Immunity Trilogy Although the most direct impact of Rape, Harrison, and Wilkes is on the Tribe, other tribes should be concerned about hostile state courts using these cases as a platform for further erosion of tribal sovereign immunity. Plaintiffs lawyers throughout the country may be encouraged to file state court tort lawsuits against tribes and tribal enterprises, resulting in increased litigation, greater settlement expenses, and higher insurance costs for affected tribes. Courts in other states, particularly those hostile to tribal interests, may use the decisions as cover for adopting similar anti-tribal sovereign immunity positions. Tribal sovereignty may be undermined in a way that produces an unfair, unprincipled, Carcieri-like system of have and have-not tribes whose sovereign immunity hinges solely on the state within which their reservation is located and the court in which they are sued. For these and other reasons, the Tribe filed a Petition for Cert. with the Supreme Court in Wilkes on February 16,
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