Ryan Dreveskracht has written a short paper for publication on Turtle Talk titled ”Keeping Tribal Business Partners Close – and Their Lawyers Closer”: Keeping Tribal Business Partners Close – and Their Lawyers Closer.
The paper is intended for tribal attorneys, and details some of the lessons tribal lawyers can learn from two recent cases involving the Seminole Tribe of Florida (Everglades Ecolodge and Contour Spa). In both cases, argues Dreveskracht, attorneys for the non-Indian business interests didn’t do their Indian law due diligence, and in the adversarial proceedings that followed in court, the Tribe pounced:
Of course, waiving tribal sovereign immunity where appropriate is always one option, but this is not always feasible. In Contour Spa and Everglades, for example, the Tribe had in fact waived its sovereign immunity via its contract with the non-Indian parties. In those cases, ultimately, the fault rested with those parties tasked with overseeing the negotiation and maintenance of those business transactions.
Dreveskracht believes that tribal lawyers may have some sort of obligation (practical, if not ethical) to make sure that the other side doesn’t fall into any Indian law traps:
Another solution is that tribes, in appropriate instances, ensure that their non-Indian business partners have engaged attorneys that are familiar with the fundamental principles of Indian law. Although this strategy may seem counterintuitive, a tribal party should pause during the deal to consider the old adage that “bad facts make for bad law,” while also accepting that commercial disputes are inevitable, especially in modern economic times. The tribal party should also pause to consider that it is increasingly appropriate to litigate these disputes on the merits, rather than bank on seeking a quick dismissal on Indian jurisdictional grounds – a dismissal that will very likely result in appeal. There is great potential that the appellate courts will force an exception to a sovereignty-based affirmative defense – and that the exception could swallow the rule. This proverb is particularly true for commercially successful tribes, where the perception of big-business/small-entrepreneur inequality is even more likely to drive bad results in the courts, and in the court of public opinion. Accordingly, the parties and their lawyers should ensure clarity and understanding regarding the various issues of tribal jurisdiction and federal Indian law that are implicated in Indian Country commercial transactions.
I’m largely in agreement with Dreveskracht. When I started practicing in the 1990s, senior attorneys counseled me to draft contract language that would facilitate these kinds of traps. One example involved a private vendor that refused to adjudicate disputes in tribal court, insisting on state court jurisdiction and governing law. We negotiated for federal court review as a “compromise.” Of course, there is no federal subject matter jurisdiction over contract claims just because one of the parties is an Indian tribe. In California especially, cases started coming out in the 2000s where federal court judges were forced to dismiss contract claims, but the federal judges openly criticized tribal lawyers for negotiating those provisions. They frankly are borderline unethical, and may implicate professional responsibility canons.
Business partners are partners before they are adversaries, and tribal businesses depend on goodwill of their own businesses and those of other tribes to create a groundwork for doing business with non-Indian entities. It seems reasonable to rethink the arms-length negotiations strategies in at least some contracts. It may be a difficult pill to swallow for tribal lawyers. Well, face it, most just won’t do it. Lawyers are trained in an adversarial process, and always lean toward strictly assessing risk. Maybe that’s why lawyers are such lousy business people.