of Indian Affairs ("BIA") and are subject
to BIA review and approval.
A tribal government may also transact
business through a tribal corporation or a
business "enterprise" established under
tribal law. These entities may also per-
form traditional governmental functions,
such as providing housing, health care
and governmental services, or they can be
purely economic or business entities cre-
ated, for example, to operate a resort or
casino. Generally, the rights and liabili-
ties will usually be dictated exclusively
by the operation of tribal law, including
the tribe's Constitution or Charter, and
any tribal law or business ordinances for
the creation of such entities.
The key question is whether there has
been a waiver of sovereign immunity in
either the creation of the business entity
or in the transaction or contract at issue.
Some tribal codes, charters and articles
of incorporation waive the immunity of
those corporations on a limited basis,
or authorize the corporation to do so,
sometimes without approval by the tribal
government. Otherwise, there must be
an explicit and unequivocal waiver by
the tribe in order to enforce the contract.
Remember, if the tribal corporation or
business entity functions as an "arm" of
the tribe and for the benefit of the tribe,
it likely will have the same attributes of
the tribe, including sovereign immunity,
again unless the immunity has been
expressly waived.
license requirements as a pre-condition
of doing business on tribal lands. This
requirement is not usually a difficult
or expensive process, but you should
research it and be aware of the process
and the time involved to complete it
well in advance of finalizing the agree-
ment. Businesses which fail to obtain the
ability to enforce any obligation arising
out of on-reservation business activity.
Federal law also requires a business to
obtain an Indian traders' license, which
is issued by the BIA. Any non-Indian
party seeking to do business on a tribal
reservation should, therefore, review and
understand the licensing requirements
for doing so as set forth in both tribal and
federal law.
need to Pay?
taxes on anyone doing business on tribal
lands. Whether a state may tax a busi-
ness transaction on an Indian reservation
is more complicated. Tribal governments
and members are typically exempt from
state taxes, but if the transaction at issue
does not involve trade under the Indian
Traders statute and involves a non-Indi-
an, courts generally apply a balancing
test. Unfortunately, this balancing test
is imprecise and can leave non-Indian
business in the difficult position of being
obligated to pay tribal, state and fed-
eral taxes. Under some circumstances,
however, this risk can be minimized by
structuring the transaction as a manage-
ment or service agreement in which the
tribal government is deemed to be the
project owner or operator and the non-
Indian business is retained to provide
limited management services.
Have a Dispute?
contracts should be structured to mini-
mize disputes and to otherwise delin-
eate the methods by which the parties
can enforce their rights and remedies.
Contracting with tribal governments and
enterprises, however, presents unique
issues, from the provisions regarding
sovereign immunity to jurisdiction and
choice of law questions. Fundamentally,
are sovereign nations who are immune
from suit unless there is a clear and
unequivocal waiver by the tribe or an act
of Congress. Indian tribes, and in most
cases their wholly-owned tribal entities,
cannot be sued in any state or federal
court, even for business transactions that
occur outside the reservation boundaries,
without an express waiver by the tribe.
Thus, immunity, jurisdiction and choice
of law issues must be agreed upon in
advance of any business transaction with
the tribe or any tribal entity.
It bears noting that a waiver of
sovereign immunity does not necessarily
mean that a tribe is subjecting itself to
jurisdiction in federal or state courts, nor
to arbitration, at least without a specific
agreement and choice of law provision.
More often than not, the tribal courts
have exclusive jurisdiction over disputes
with a tribe, or tribal court remedies
must first be exhausted before seeking
other redress. Most tribes have their own
substantive laws and rules of procedure,
and will also follow "traditional law" and
the customs of the tribe.
Having successfully negotiated the
sovereign immunity and jurisdictional
hurdles, the next thing to consider would
be choice of law, and in particular any
applicable rules of tribal law or proce-
dure, such as Notice of Claim provisions
and the statute of limitations for claims
against the tribe and its members. Natu-
rally, you will want to engage an attorney
who is not only admitted to practice in
the tribal court, but also understands
tribal law, procedure and custom as well
as how disputes are resolved in tribal
court, including the length of time it may
take and the applicable rules of appellate
procedure.