Seattle Tribal Lawyers Galanda & Dreveskracht Publish "Tribal Court Litigation" Deskbook Chapter

This month, a chapter on "Tribal Court Litigation" co-authored by Gabe Galanda and Ryan Dreveskracht for an authoritative commercial litigation handbook, was published by the American Bar Association Business Law Section. The chapter appears in the 2012 edition of Annual Review of Developments in Business and Corporate Litigation. The breadth of the very complex Indian law issues covered by the chapter is suggested by its Table of Contents:

§ 27.1 Introduction to Transacting in Indian Country § 27.2 The Third Sovereign § 27.2.1 The Modern Erosion of Tribal Sovereignty § 27.2.2 State Regulation and Taxation, and Federal Indian Preemption § 27.3 Tribal Sovereign Immunity § 27.3.2.1 Scope of Tribal Immunity § 27.3.2.2 Waiver of Tribal Immunity § 27.4 Tribal Structures § 27.4.1 Tribal Corporations § 27.4.2 Tribal Courts § 27.5 Tribal Assets and Federal Approval § 27.4.1 Fee-to-Trust and Carcieri § 27.4.2 Federal Approvals § 27.6 Tribal Labor and Employment § 27.7 Federal Laws of General Applicability § 27.8 Federal Court Jurisdiction § 27.9 Tribal Court Jurisdiction § 27.9.1 Tribal Authority Vis-à-vis State Authority § 27.9.2 Tribal Exhaustion Doctrine § 27.9.2.1 National Farmers Union § 27.9.2.2 Exceptions to the Exhaustion Doctrine § 27.10 Conclusion

Consider the conclusion to the chapter:

Economic growth and development throughout Indian country have spurred many businesses to engage in business dealings with tribes and tribal entities. Confusion may arise during these transactions because of the unique sovereign and jurisdictional characteristics attendant to business transactions in Indian Country. As a result, these transactions have prompted increased litigation in tribal and nontribal forums. Accordingly, counsel assisting in these transactions, or any subsequent litigation, should conduct certain due diligence with respect to the pertinent tribal organizational documents and governing laws that may collectively dictate and control the business relationship.

To maximize the client’s chances of a successful partnership with tribes and tribal entities, counsel should ensure that the transactional documents contain clear and unambiguous contractual provisions that address all rights, obligations, and remedies of the parties. Therefore, even if the deal fails, careful negotiation and drafting, and in turn thoughtful procedural and jurisdictional litigation practice, will allow the parties to more expeditiously litigate the merits of any dispute in the event that the deal fails, without jurisdictional confusion. As business between tribes and nontribal parties continues to grow, ensuring that both sides of the transaction fully understand and respect the deal will lead to a long-lasting and beneficial business relationship for all.

Gabe served as the Editor-in-Chief of Annual Review for the 2007 through 2010 editions, and has co-authored the Tribal Court Litigation chapter each year since 2006. This is Ryan's first year co-authoring the chapter.

Gabriel "Gabe" Galanda is a partner at Galanda Broadman PLLC, of Seattle, an American Indian owned law firm.  He is an enrolled member of the Round Valley Indian Tribes of Covelo, California.  Ryan Dreveskracht is an associate with Galanda Broadman. Gabe and Ryan litigate various critical matters on behalf of tribal governments and businesses and individual Indians, in tribal, state and federal court.

Gabe Galanda to Speak to RES 2012 Assembly Twice

Gabe Galanda will be speaking at RES 2012, twice. As featured in this Indian Country Today Media Network article:

“Talking Sports Entertainment: Lessons to Be Learned” will feature Cherokee rapper Litefoot, NFL player Levi Horn, boxer George “Comanche Boy” Tahdooahnippah and lawyer/ICTMN columnist Gabriel Galanda.

Gabe will also speak during a breakout session on the "myths and realities" of limited tribal sovereign immunity waiver.

Gabriel "Gabe" Galanda is a partner at Galanda Broadman PLLC, of Seattle, an American Indian owned law firm.  He is an enrolled member of the Round Valley Indian Tribes of Covelo, California.  Gabe helps tribes and Indian small businesses with economic diversification efforts, with an emphasis on minimizing state interference or taxation. Gabe can be reached at 206.691.3631 or gabe@galandabroadman.com.

Tax-Free Inter-Tribal Commerce Upheld By U.S. District Court

On October 18, the U.S. District Court for the Southern District of California issued a preliminary injunction ruling that affirmed the tax-free distribution and discount sale of tribal fuel. A quick overview of the facts: -- The Torres-Martinez Tribe developed the Red Earth Travel Center on tribal trust lands; -- A Yakama-member-owned business, First American Petroleum, provides tax-free fuel to the Red Earth Travel Center; -- The Torres-Martinez Tribe has delegated certain fuel management authority to First American Petroleum for purpose of obtaining tax-free fuel for the Red Earth Travel Center; -- First American Petroleum transports tax-free fuel to Red Earth Travel Center; -- The Torres-Martinez Tribe "sells fuel and convenience stores items at the travel center to help support the tribal economy"; and -- Ultimately, state fuel or travel-related taxes are not imposed on the Torres-Martinez Tribe or First American Petroleum and those tax savings are passed on to non-Indian patrons of Red Earth Travel Center.

Not only did the District Court hold that fuel or travel-related taxes could not be assessed on First American Petroleum (at least preliminarily) but it acknowledged that the Torres-Martinez Tribe could not be sued for tax collection due to its sovereign immunity. In other words, any California right to collect excise taxes on the fuel sold at the Red Earth Travel Center cannot, as a practical matter, be collected.

The Southern District of California's decision currently stands as a wonderful affirmation of tax-free inter-tribal commerce.

Gabriel "Gabe" Galanda is a partner at Galanda Broadman PLLC, of Seattle, an American Indian majority-owned law firm.  He is an enrolled member of the Round Valley Indian Tribes of Covelo, California.  He can be reached at 206.691.3631 or gabe@galandabroadman.com, or via galandabroadman.com.

Tribal-County Payment In Lieu of Taxes Is Good Governance

An Idaho state official has expressed concern about a potential agreement between an Idaho county and neighboring tribal government for tribal payment of monies in lieu of property taxes. The official's concern is old hat. He needs a new hat. As Mark Trahant rightly observes, tribes and counties are better off working together than fighting each other over property taxation. That is especially true because any county effort to enforce property taxes against a tribal government presents a "rights without remedy" dilemma for the county, given the doctrine of tribal sovereign immunity. See Oklahoma Tax Commission v. Citizen Band of Potawatomi Tribe of Oklahoma, 498 U.S. 505, 515 (1991). In other words, property tax controversy with tribes is a zero sum game for county government.

Indeed, the better approach is for neighbor counties and tribal governments to negotiate (or at least consult and attempt to negotiate) some cash or in-kind payment in lieu of taxes to any inter-local property tax dispute. Such an outcome a win win situation.

Gabriel "Gabe" Galanda is a partner at Galanda Broadman PLLC, of Seattle, an American Indian majority-owned law firm.  He is an enrolled member of the Round Valley Indian Tribes of Covelo, California.  He can be reached at 206.691.3631 or gabe@galandabroadman.com, or via galandabroadman.com.

[Also tagged under "mixed metaphors."]

AUTO v. Washington: An Imminent Threat to Washington Tribes’ Sovereignty

Make no mistake, the lawsuit brought by the Washington Automotive United Trades Organization (AUTO) seeks to eviscerate Washington tribes’ intergovernmental sovereign immunity and expose Tribal governments to suit by third parties based on agreements Tribes have entered into with the state. This month, the Supreme Court of the State of Washington agreed to hear the appeal of AUTO v. Washington, or as AUTO calls it, “AUTO v. Governor Gregoire.” A more accurate title might be AUTO v. Washington Indian Country. AUTO is targeting state-Tribal compacts, presumably because Tribal fuel enterprises are competitors. AUTO argues that the state and Governor are violating the Washington Constitution by entering into the fuel compacts with Tribes and that the legislative system surrounding the compacts itself is illegal. Never mind that Washington’s approach to the tribal fuel tax conundrum is the state’s attempt to comply with binding federal law related to taxation in Indian Country.

The state Supreme Court accepted review of the Gray’s Harbor Superior Court order dismissing AUTO’s case based on the indispensability of several Washington Indian Tribes, who are necessary parties to the case. The procedural concept of indispensability requires a case to be dismissed if there is a party who should be a part of the case but cannot be joined due to, for instance, sovereign immunity. It can be a muddy procedural doctrine, but it’s one that often protects Tribal interests, since those interests should not be adjudicated unless Tribal sovereigns agree on the forum.

What can we expect? There are several reasons for Washington Indian Country (and Indian Country at large) to be concerned. First, the state Supreme Court decided to review the case. That decision itself can probably be accurately viewed as negative for Tribes since the trial court’s decision appears to have been correct under the Washington Civil Rules and cases interpreting them.

Second, the core of the anti-Tribal dissent in Wright v. CTEC, the last significant Washington Supreme Court on tribal sovereign immunity, remains on the Court. The Justices who will likely participate in AUTO and voted in Wright, are split 3-3 (Justices Chambers, C. Johnson, and J. Johnson against tribal interests v. Justices Madsen, Owens and Fairhurst for them). The addition of Justices Stephens, and Wiggins, possibly with Justice Alexander’s replacement, make this one tough to handicap.

Add the Court’s recent frenetic approach in State v. Eriksen to the mix (affirmation of conviction; reconsideration; withdrawal of opinion; affirmation of conviction; reconsideration; withdrawal of opinion; reversal) and things become even more muddled. Although Eriksen was not a sovereign immunity case, the Court was forced -- or chose -- to examine tribal sovereignty relative to the state in the criminal context. The Court was again well split, this time with Justices Owens, C. Johnson, and Chambers finding, correctly, that the Lummi Nation’s inherent authority justified the detention of a dangerously intoxicated non-Indian driver.

More recent arrivals Justices Stephens and Wiggins made a majority with Justices Fairhurst, Madsen, and J. Johnson, holding that the Lummi Nation could not stop and detain a drunk driver off the Reservation until non-Tribal cops could arrive. Again, Eriksen shares little with AUTO, but taking a simplistic pro- or anti-tribal snapshot of the court suggests that if Justice Alexander, set for mandatory retirement this year, does not participate in AUTO, the court could split as follows, depending on whether Wright or Eriksen describes the voting lines:

AUTO is far more analogous to Wright, as procedural issues of sovereign immunity are at play. And it’s certainly not fair or accurate at this point to cast any justice as anti- or pro-Tribal based on these two cases. Indeed, outside the Tribal bar Wright and AUTO might be viewed as cases more about civil procedure (Rule 19 for AUTO and the CR 12(b) standard for Wright) than Tribal sovereignty. At least the results of AUTO will provide court-watchers with more data for guessing at results.

Still, it’s clear what AUTO is targeting legally. As set forth clearly in its brief, AUTO argues that (1) it can join Tribes in the suit by suing tribal officials in their official capacity and (2) Tribes waived their sovereign immunity, apparently as to AUTO, by entering into the fuel compacts. While these claims seem patently wrong, they are the very type of procedural formalisms anti-Tribal jurists can hide behind in fashioning novel expansions of the law related to Tribal sovereign immunity. Stay tuned.

Anthony Broadman is a partner at Galanda Broadman PLLC, of Seattle, an American Indian majority-owned law firm.  His practice focuses on company-critical business litigation and representing tribal governments. He can be reached at 206.691.3631 or anthony@galandabroadman.com, or or via galandabroadman.com.

Tribes, Beware of the Federal Bankruptcy Court

The Bankruptcy Court for the District of New Mexico held this week that tribal sovereign immunity does not protect the Jicarilla Apache Nation from the impact of a Chapter 11 plan. In Re Platinum oil Properties, LLC, Case No. 09-10832 (D.NM. Bankr. Aug. 12, 2011). Because the Bankruptcy Code abrogates tribal sovereign immunity, according to the court, tribes have to abide by a reorganization plan. But weirdly, the Jicarilla Tribe does not appear to have made any argument based on its sovereign immunity. Instead, in its motion for summary judgment, the Tribe argued that the debtor’s claims interfered with the tribe’s sovereign ability to control and regulate its jurisdiction. Somebody took the word “sovereign” and ran with it, sticking his or her neck out far more than necessary and reaching the Bankruptcy Code’s definition of governmental unit, on which sovereign immunity abrogation hinges. In other words, the decision is a mess.

What can we learn from this case? Beware when using the term “sovereign.” Ensure, as the Jicarilla Tribe admirably attempted to do, that the court understands even the most elemental facets of tribal sovereignty. Here, that means distinguishing between a tribe’s broad power to regulate and control its jurisdiction, Merrion v. Jicarilla Apache Tribe, 455 U.S. 130, 140 (1982), as opposed to a tribe’s narrow ability to avoid being sued. Kiowa Tribe of Oklahoma v. Mfg. Tech., Inc., 523 U.S. 751, 754 (1998).

Tribes to should explore how and when they can govern their own affairs in the bankruptcy context. Clearly when the matter is left to federal courts, tribes will often lose.

Anthony Broadman is a partner at Galanda Broadman PLLC, of Seattle, an American Indian majority-owned law firm.  His practice focuses on company-critical business litigation and representing tribal governments. He can be reached at 206.691.3631 or anthony@galandabroadman.com, or or via galandabroadman.com.

Setting the Record Straight on Indian Taxation in Washington

Late this week, Washington State Republicans introduced three bills, seeking to balance the state's budget on the backs of Washington's 29 tribal governments. A legal and economic reality check is in order. Those bills are:

HB 2044 Concerning equity and fairness through the creation and regulation of electronic scratch ticket machines for nontribal gambling establishments.

HB 2045 Providing for fairness, equity, and transparency of tax preferences for federally recognized Indian tribes.

HB 2046 Concerning legislative involvement with compacts and compact amendments.

In support of those bills, Republican House members argue for "closing tribal tax loopholes." Here are some of the facts the Republicans either (a) do not understand, (b) do not care to understand, or (c) understand but do not care to help the public understand.

1. State taxation of Indian gaming revenues has been per se barred by Congress via the Indian Gaming Regulatory Act of 1988. Period. Still, local Republicans aspire to require "the non-taxpaying tribal mega casinos to pay a tax on the profits they make from the exclusive games they operate." Until they can figure out a way to do that (they can't), they hope to allow the largest expansion of gaming in the state's history, over-promising new state tax revenues. Indeed, according to a commercial gaming industry expert, the proposal "would cut into sales tax revenues in other segments of the state economy."

2. Governments don't tax other governments. Instead, governments -- be they state, local or tribal -- work with each other to devise accords that reflect the needs of each government in relation to the services they provide the public. That is why, according to one study, “[n]early every state that has Indian lands within its borders has reached some type of tax agreement with the tribes” -- including Washington.

3. State and local governments are already adequately compensated for the services they provide to tribal members. Under the economics of “tax exporting,” it is frequently tribal governments – not state or local governments –- who bear a disproportionate financial burden associated with the services they provide.

4. Washington State cannot legally enforce its fuel and tobacco excise tax regime on Indian reservations, according to the U.S. Supreme Court. Washington v. Confederated Tribes of Colville Indian Reservation, 447 U.S. 134, 162 (1980); Oklahoma Tax Commission v. Potawatomi Tribe, 498 U.S. 505, 514 (1991). Therefore, heeding advice from the High Court, the state has entered into fuel and tobacco tax compacts with tribes, in part so it can collect something from reservation-based fuel and tobacco sales, instead of engaging zero-sum litigation and enforcement activities.

5. Ten years ago, researchers at the Evergreen State College opined that Washington tribal governments contributed an estimated $140 million annually to the state and local tax structure. Today tribal tax contributions to the state are likely far greater, due in large part to the diversification of Washington tribal economies beyond gaming and tobacco commerce. Tribes are already contributing their so-called fair share of taxes.

One can only hope that the facts will enter the legislative discourse about HB 2044, 2045 and 2046.

Gabriel "Gabe" Galanda is a partner at Galanda Broadman PLLC, of Seattle, an American Indian majority-owned law firm. He is an enrolled member of the Round Valley Indian Tribes of Covelo, California. Gabe co-authored "Taxing Times in Native America," Washington State Bar News, January 2011. He can be reached at 206.691.3631 or gabe@galandabroadman.com, or via galandabroadman.com.

Gabe Galanda: "The State Tax Man Cometh"

The Indian Country Today Media Network has published a column by Gabe Galanda, "The State Taxman Cometh."

[T]ribal governments and their business partners must redouble their efforts to prevent taxation by the state and its little sibling. Indian leaders should reevaluate the terms of their revenue allocation plans and business partnerships, and related tax laws, to ensure tribal intramural and external dealings are insulated from non-tribal taxation. Tribal laws should be amended and business deals restructured as necessary. Policies of tribal taxation, or not, should also be reexamined, insofar as tribal excise taxation of various reservation-based economic activities will create factors that militate against state or local taxation.

In 2011, the state taxman cometh. Indian country, be prepared.

Gabriel "Gabe" Galanda is a partner at Galanda Broadman PLLC, of Seattle, an American Indian majority-owned law firm.  He is an enrolled member of the Round Valley Indian Tribes of Covelo, California.  He can be reached at 206.691.3631 or gabe@galandabroadman.com, or via galandabroadman.com.

AMERIND Should Clearly Waive Its Immunity in Insurance Contracts

Today's Eighth Circuit Court of Appeals decision in AMERIND v. Malaterre is significant. AMERIND is a federally-chartered Section 17 corporation, owned by a consortium of tribes, which operates a self-insurance risk pool and is the biggest insurer of tribal homes in Indian Country. According to AMERIND's web-site, its "IHBG Protection Program currently serves over 275 housing authorities and tribal designated housing entities in the United States."

While the court's holding that AMERIND "serves as an arm of the [Charter Tribes] and not as a mere business and is thus entitled to sovereign immunity" is a resounding affirmation of tribal immunity, especially for Section 17 entities and multi-tribal consortia, the ruling could potentially render the various AMERIND property insurance policies unenforceable. As such, on a go forward basis AMERIND should include in all of its policies, language that would operate to clearly and unequivocally waive its immunity, in limited fashion, with regard to claims by tribal insureds for insurance coverage.

There are many ways to craft limited immunity waiver language that will insulate the company from undue litigation attack, e.g., the direct action lawsuit underlying Malaterre, yet assure tribal insureds that their covered losses will be paid. I hope AMERIND will allow, or continue to allow, due recourse against its tribal policies notwithstanding its momentous court victory today.

Gabriel "Gabe" Galanda is a partner at Galanda Broadman PLLC, of Seattle, an American Indian majority-owned law firm.  He is an enrolled member of the Round Valley Indian Tribes of Covelo, California.  He can be reached at 206.691.3631 or gabe@galandabroadman.com, or via galandabroadman.com.