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May 2, 2017

U.S. Supreme Court Rejects Tribal Employee's Claim of Sovereign Immunity

In a unanimous decision issued on April 25, 2017, the Supreme Court refused to extend the defense of sovereign immunity to an employee of the Mohegan Tribe of Indians of Connecticut who was sued a result of a traffic accident involving a tribal-owned vehicle.

The facts of the case could not be more elementary; the result perhaps more unlikely.

Clarke, an employee of the tribe's gaming authority, was transporting patrons of the tribe's casino on a Connecticut interstate when he struck the Lewis vehicle from behind. (Yes, the resulting lawsuit was Lewis v. Clarke.)

The Court's decision in Lewis v. Clarke (the tribe was not named in the suit, the implications of which are discussed below) reversed a Connecticut Supreme Court ruling that extended tribal immunity to the driver. Although the driver was sued personally, the Connecticut appeals court held that he was entitled to sovereign immunity because he was working for the tribe at the time of the accident and the tribe had agreed to indemnify him against any judgments arising from his employment.

The Supreme Court rejected the ruling finding that the individual tribal employee, not the tribe, was the real party in interest. The decision noted that it was the first time the Court had been required to decide if an indemnification clause was sufficient to extend a sovereign immunity defense to a suit against an employee sued in his individual capacity, stating, "[w]e hold that an indemnification provision cannot, as a matter of law, extend sovereign immunity to individual employees who would otherwise not fall under its protective cloak."

Thus, the decision not only has important implications for the contours of the sovereign immunity defense, but also establishes a boundary on how far Indian tribes can extend the authority of their own courts. While the case seemingly deals with the narrow issue of liability in a personal injury lawsuit, it has the potential to expose tribes to possible liability in state and federal courts if plaintiffs' lawyers simply name the individual tribal employee rather than the tribe. As a result, the Court's ruling could very well cause tribes to reconsider the scope of any employee indemnification agreements and the extent of services they may want to provide. If a tribe's employees can be sued in state court notwithstanding the tribe's agreement to indemnify, there will likely be a rise in insurance and related costs for the tribes as a result of this decision.

The Court cited precedent in the area of sovereign immunity for other governments, finding that the issue is not who agrees to pay the injured party but whether the claim arises from personal conduct or official duties.

Here, where the driver was operating his vehicle on a highway in Connecticut, where he was subject to the jurisdiction of Connecticut courts, Justice Sotomayor wrote, "[i]mmunity is simply not in play."

In a separate concurrence, Justice Thomas restated his position that tribal sovereign immunity should not extend to commercial activities off-reservation, citing his dissent in the highly significant Michigan v. Bay Hills Indian Community case from 2014. In another concurrence, Justice Ginsburg wrote that she would refuse to extend tribal immunity to tribal commercial activities outside of the reservation.


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