WASHINGTON (CN) - Holding that Indian tribes have immunity even concerning off-reservation commercial activity, the U.S. Supreme Court refused to let Michigan enjoin an off-the-rez casino Tuesday.
The Bay Mills Indian Community is authorized to conduct class III gaming on Indian lands pursuant to a 1993 compact with Michigan.
It has been operating such a facility on its reservation in Michigan's Upper Peninsula but made waves in 2010 with its opening of a new small casino in Vanderbilt.
With an estimated population of 562 people, the 1.13 square mile village sits 125 miles away from the tribe's reservation.
Bay Mills contended that the property was Indian land because it bought it "with accrued interest from a federal appropriation, which Congress had made to compensate the tribe for 19th-century takings of its ancestral lands," the Supreme Court said.
On the same day Michigan sued the tribe for an injunction against the casino, the U.S. Department of the Interior concluded that the tribe could not convert property into Indian territory by using land trust earnings.
A federal judge enjoined Bay Mills, but the 6th Circuit cited tribal sovereign immunity in vacating the injunction.
The Supreme Court took up the case last year and affirmed, 5-4, Tuesday.
"Michigan must therefore resort to other mechanisms, including legal actions against the responsible individuals, to resolve this dispute," Justice Elena Kagan wrote for the majority.
Though the state cannot sue the tribe, it "has many other powers over tribal gaming that it does not possess (absent consent) in Indian territory," she added.
"Unless federal law provides differently, 'Indians going beyond reservation boundaries' are subject to any generally applicable state law," the opinion states. "So, for example, Michigan could, in the first instance, deny a license to Bay Mills for an off-reservation casino. And if Bay Mills went ahead anyway, Michigan could bring suit against tribal officials or employees (rather than the Tribe itself) seeking an injunction for, say, gambling without a license."
Section 2710(d)(7)(A)(ii) of the Indian Gaming Regulatory Act authorizes a state to bring suit against a tribe for certain conduct violating a compact, thus partially waiving tribal sovereign immunity, according to the ruling.
Kagan found, however, that "this case, viewed most naturally, falls outside that term's ambit."
"A state's suit to enjoin gaming activity on Indian lands (assuming other requirements are met,) falls within §2710(d)(7)(A)(ii); a similar suit to stop gaming activity off Indian lands does not," the 21-page decision states (emphasis in original). "And that creates a fundamental problem for Michigan. After all, the very premise of this suit - the reason Michigan thinks Bay Mills is acting unlawfully - is that the Vanderbilt casino is outside Indian lands. By dint of that theory, a suit to enjoin gaming in Vanderbilt is correspondingly outside §2710(d)(7)(A)(ii)'s abrogation of immunity."
Kagan quipped that Michigan "comes up with snake eyes" by trying to argue that Bay Mills operated the casino from within its reservation.
Little Traverse Bay Bands of Odawa Indians had also sued the tribe, fearing that the 84-slot machine operation would siphon millions in revenue from its much larger casino in Petoskey, population 5,670. After the 6th Circuit defeat, Little Traverse dismissed its suit rather than seek review.
Justice Sonia Sotomayor concurred in the lead opinion and wrote one of her own
"to further detail why both history and comity counsel against limiting tribes' sovereign immunity in the manner the principal dissent advances."
Justice Antonin Scalia meanwhile penned his own dissent and joined in one by Justice Clarence Thomas.
His disagreement stems from an error in the 1998 decision Kiowa Tribe of Oklahoma v. Manufacturing Technologies Inc., which he said "expanded the judge-invented doctrine of tribal immunity to cover off-reservation commercial activities.
"In the intervening 16 years, its error has grown more glaringly obvious; and that stare decisis does not recommend its retention," Scalia wrote. "Rather than insist that Congress clean up a mess that I helped make, I would overrule Kiowa and reverse the judgment below."
Thomas expanded on that point, joined also by Justices Ruth Bader Ginsburg and Samuel Alito, for 18 pages.
"In the 16 years since Kiowa, tribal commerce has proliferated and the inequities engendered by unwarranted tribal immunity have multiplied," Thomas wrote. "Nevertheless, the court turns down a chance to rectify its error. Still lacking a substantive justification for Kiowa's rule, the majority relies on notions of deference to Congress and stare decisis. Because those considerations do not support (and cannot sustain) Kiowa's unjustifiable rule and its mounting consequences, I respectfully dissent."
Ginsburg wrote separately to highlight a reservation she held about joining the Thomas dissent.
Though she said the court's declaration in Kiowa "of an immunity thus absolute was and remains exorbitant," Ginsburg also said "that the court has carried beyond the pale the immunity possessed by states of the United States."
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