Michigan Appellate Court Rules Sault Tribe Waived Immunity in Settling Contract Dispute

Interesting, and potential awful, case — Bates Associates LLC v. 132 Associates LLC & Sault Ste. Marie Tribe of Chippewa Indians. Here is the published opinion: Michigan COA Opinion. [If anyone has the briefs, we’d love to post them.]

The facts appear to be, in a nutshell, that Sault Tribe entered into a contract (relating to its purchase a parking garage near Greektown, which now has new owners) in which it purported to waive immunity. But after the Tribe allegedly breached the contract, the parties entered into a settlement, seemingly incorporating the original waiver. However, the Tribe argued in the case that the tribal official that signed the contract and the settlement did not have authority to do so, negating the waiver.

In exceptionally frustrating language, the appellate court rejected the argument on its face:

The Tribe argues that the purported waivers of sovereign immunity and tribal court jurisdiction in the settlement agreement are invalid because they were not supported by aresolution of the Tribe’s Board of Directors as required under § 44.105 and § 44.109 of theTribe’s Code. We note that the United States Supreme Court has not addressed this issue and has not required anything other than clear, unequivocal language for a valid waiver. See C & LEnterprises, Inc, 532 US at 418; Santa Clara Pueblo, 436 US at 58. The Tribe argues, however,that Memphis Biofuels, LLC v Chickasaw Nation Industries, Inc, 585 F3d 917 (CA 6, 2009), compels reversal of the trial court’s decision. We are not bound by decisions of the Sixth Circuit, and we are not persuaded that Memphis Biofuels warrants reversal. State Treasurer v Sprague, 284 Mich App 235, 241-242; 772 NW2d 452 (2009).

Under this language, all that is required for an effective waiver of tribal sovereign immunity in a “clear, unequivocal” statement. The holding flies in the face of settled law elsewhere that a tribal waiver is not valid if the tribal official executing the waiver does not have authority to do so. The panel’s assertion that the U.S. Supreme Court does not require more is disingenuous, given that no tribe that has lost an immunity case before the Supreme Court has raised the issue. None of the cases cited by the panel include the issue of whether the tribal official had authority to execute a waiver. [And why does the Sixth Circuit’s tribal immunity decisions have such little weight for this Michigan appellate court panel?]

Moreover, the panel suggests that the opposing party’s lack of knowledge of whether Victor Matson (the Sault Tribe official) had authority to waive immunity somehow lets Bates Associates off the hook (the red part); and further that somehow Michigan law on tribal sovereign immunity (which strongly supports narrow construction of tribal immunity waivers, and seems to contradicts this result) applies to determine whether or not there is a waiver (the lavender part):

Victor Matson, as the Tribe’s CFO, clearly had authority to enter into the settlement agreement as evidenced by the fact that he was the same person who signed the deed when title to the garage was transferred to Bates pursuant to the preliminary injunctive order compelling the transfer. Both the Tribe and Bates made changes to the settlement agreement during negotiations and the waiver provisions remained in the final version of the agreement that the parties executed. These provisions incorporated the waiver of sovereign immunity contained in the agreement of sale and specifically provided that the settlement agreement shall be governed by the laws of the state of Michigan rather than by tribal law. Unlike in Memphis Biofuels, there is no indication that Bates was aware that a tribal resolution was necessary for the Tribe to waive its sovereign immunity ortribal court jurisdiction.

The result are possibly disturbing. Does this mean a low-level procurement officer for a tribe that signs a receipt (with boilerplate Xerox contract language) accepting delivery of a leased photocopier from Xerox waiver a Michigan tribe’s immunity?  Could a tribal maintenance employee sign a form accepting a parcel from UPS effectively waive a Michigan tribe’s immunity?

Finally, the appellate panel seems to adopt a theory of estoppel preventing a tribe from asserting or benefiting from immunity if the tribal lawyers proceed with a negotiated settlement containing an invalid waiver:

During the months following the execution of the settlement agreement, neither the Tribe nor the Tribe’s attorney represented that the agreement was invalid and $49,000 was paid to Bates pursuant to the agreement. Not until after Bates filed its complaint did the Tribe contend that the settlement agreement was unenforceable. These factors show that the Tribe was aware of the settlement negotiations and authorized Matson to execute the agreement despite the waivers of sovereign immunity and tribal court jurisdiction contained therein.

* * *

Accordingly, the circumstances of this case support the trial court’s determination that the Tribe waived its sovereign immunity and tribal court jurisdiction. The conduct of the parties both during the settlement agreement negotiations and after the agreement was executed support this conclusion. The settlement agreement itself contains waivers of sovereign immunity and tribal court jurisdiction and incorporates by reference such clear and unequivocal waivers set forth in the agreement of sale, which the Tribe conceded was supported by a valid resolution.

The proper recourse in such a circumstance is against those lawyers, we suggest, rather than against the tribe. Perhaps now the Tribe has a remedy against its attorneys because of this case.

Of course, given than this case arises from the smoldering ashes of the Sault Tribe’s ownership of the Greektown Casino, the facts are terrible. One suspects (without knowing the details other than what’s contained in this opinion) this case might interest the Michigan Supreme Court on a petition for leave to appeal, but one also hopes Sault Tribe settles this thing and makes it go away.

This entry was posted in Author: Matthew L.M. Fletcher, economic development, Michigan Indian, Research, sovereign immunity and tagged , , , . Bookmark the permalink.

3 Responses to Michigan Appellate Court Rules Sault Tribe Waived Immunity in Settling Contract Dispute

  1. hamlaw says:

    If Sault would hire some Indian Indian Law Attorneys instead of Naval JAG Attorneys, things like this wouldn’t happen. I have nothing against Indian JAG Attorneys. One of the best Attorneys I know is a former JAG Attorney from the Yakama Nation who took the time to learn Indian Law before her tried to go out and represent tribes.

  2. Pingback: Briefs in Big Immunity Case Involving Sault Tribe in Mich. COA « Turtle Talk

  3. Isa says:

    How difficult would it be for me to adopt a child that is Native American?

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