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T H E P R I M E R U S P A R A D I G M
Todd Julian
Melissa Iyer
Against the historical backdrop of treaties
dating back to the U.S. Constitution, the
federal government has contracted with
and passed laws affecting the "self-
determination" of indigenous peoples,
involving both government services and
private enterprise. State governments
have likewise entered into inter-govern-
mental agreements or "compacts" with
tribes, including regulation of Indian
gaming. Opportunities for private entities
to do business with Indian nations and on
reservation lands has spawned economic
development in many areas, including
real estate, finance, natural resources,
retail and commercial operations, as well
as tourism and entertainment. This article
is intended to help companies and indi-
vidual entrepreneurs understand the risks
and corresponding benefits of contracting
with tribal governments and doing busi-
ness with tribal entities.
with whom Are you
Doing Business?
In one form or another, you are dealing
with the tribe itself, which is a sovereign
nation, meaning that it has sovereign
immunity. The tribe's absolute immunity
from suit, in government operations as
well as commercial transactions, ap-
plies even to contracts and business
activities off the reservation. This can be
intimidating for individuals or companies
seeking a business relationship with a
tribe; however, those who take the time to
understand the law and plan for the pit-
falls, may reap many lucrative economic
opportunities.
Apart from some traditional govern-
ment operations, some of which may fall
under the aegis of federal law, Indian
tribes often conduct business through
separate entities, such as tribal corpora-
tions and business "enterprises." Tribal
corporations can be established under
federal law, but more commonly are cre-
ated under that tribe's own laws, which
will be controlling for most business
transactions and disputes.
Federal law vests tribal governments
with the power to engage in business
transactions and to create business corpo-
rations under Section 16 of the Indian
Reorganization Act (IRA) for government
operations, such as housing authorities,
and under Section 17 for other commer-
cial activities. The key issue is that most
Section 17 corporate charters include
a "sue and be sued" clause, which has
been interpreted as being a limited
waiver of sovereign immunity, at least re-
garding those assets specifically pledged
or assigned in the transaction. Keep
in mind that there are some contracts,
including certain leases and professional
services agreements, which must comply
Avoiding the Pitfalls of Doing Business
with Tribal Governments and Entities
North America
todd Julian is a partner with Burch & Cracchiolo, P.A. and is certified
by the Arizona Board of Legal Specialization as a specialist in injury
and wrongful death. He has represented numerous Indian tribes in
Arizona and tribal courts in the Western United States.
Burch & Cracchiolo, P.A.
702 East Osborn, Suite 200
Phoenix, Arizona 85014
602.274.7611 Phone
602.234.0341 Fax
tjulian@bcattorneys.com
www.bcattorneys.com
Burch & Cracchiolo, P.A.
702 East Osborn, Suite 200
Phoenix, Arizona 85014
602.274.7611 Phone
602.234.0341 Fax
miyer@bcattorneys.com
www.bcattorneys.com
melissa Iyer is an associate with Burch & Cracchiolo, P.A. Her practice
emphasizes commercial litigation and institutional defense, including
representation of Indian tribes in Arizona.