Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc.
523 U.S. 751, 118 S. Ct. 1700 (1998)
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Rule of Law:
The doctrine of tribal sovereign immunity protects Indian tribes from suits arising from their commercial activities, regardless of whether those activities occur on or off a reservation, unless Congress has expressly abrogated that immunity or the tribe has clearly waived it.
Facts:
- The Kiowa Tribe is a federally recognized Indian Tribe.
- In 1990, a tribal entity agreed to buy stock from Manufacturing Technologies, Inc.
- The chairman of the Tribe's business committee signed a promissory note for $285,000 in the name of the Tribe.
- The face of the note indicated it was signed on tribal trust land in Carnegie, Oklahoma.
- Manufacturing Technologies alleged the note was actually executed and delivered in Oklahoma City, off tribal lands, and obligated payment there.
- The promissory note contained a clause stating, 'Nothing in this Note subjects or limits the sovereign rights of the Kiowa Tribe of Oklahoma.'
- The Tribe subsequently defaulted on the payments required by the note.
Procedural Posture:
- Manufacturing Technologies, Inc. sued the Kiowa Tribe in an Oklahoma state trial court for breach of contract on a promissory note.
- The Kiowa Tribe moved to dismiss the suit for lack of jurisdiction, asserting tribal sovereign immunity.
- The trial court denied the motion and entered a monetary judgment in favor of Manufacturing Technologies.
- The Kiowa Tribe, as appellant, appealed the decision to the Oklahoma Court of Civil Appeals.
- The Oklahoma Court of Civil Appeals affirmed the trial court's judgment, holding that tribes are subject to suit for off-reservation commercial conduct.
- The Oklahoma Supreme Court denied the Tribe's petition for review.
- The Kiowa Tribe petitioned the U.S. Supreme Court for a writ of certiorari, which was granted.
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Issue:
Does the doctrine of tribal sovereign immunity bar a suit in state court against an Indian tribe for a breach of contract when the contract was for commercial purposes and executed outside of the tribe's reservation lands?
Opinions:
Majority - Justice Kennedy
Yes. The doctrine of tribal sovereign immunity bars a suit in state court against an Indian tribe for commercial activities conducted off-reservation. As a matter of federal law, a tribe is subject to suit only where Congress has authorized it or the tribe has waived its immunity. Precedent has consistently upheld tribal immunity without distinguishing between governmental and commercial activities, or between on-reservation and off-reservation conduct. Although the Court acknowledges that the doctrine's origins are weak and that its modern application may seem unwise given the expansion of tribal commercial enterprises, it defers to Congress to alter this established rule. Since Congress has acted against the background of this immunity and has not chosen to abrogate it for off-reservation commercial contracts, the immunity remains in place.
Dissenting - Justice Stevens
No. The doctrine of tribal sovereign immunity should not bar a suit against a tribe for its purely off-reservation commercial activities. The judge-made doctrine of tribal immunity developed 'almost by accident' and has never been explicitly applied by this Court to conduct that has no meaningful nexus to a tribe's land or sovereign functions. Extending this immunity is a legislative act that preempts state power without justification. The resulting rule is anomalous, granting tribes broader immunity than states, the federal government, or even foreign nations, and is ultimately unjust to parties, like tort victims, who have no opportunity to negotiate a waiver of immunity.
Analysis:
This decision solidifies a broad interpretation of tribal sovereign immunity, extending it unequivocally to off-reservation commercial activities. It firmly establishes that any change to this doctrine must come from Congress, not the judiciary. The ruling creates a significant legal consideration for any party entering into a commercial agreement with a tribe, emphasizing the necessity of securing an explicit and clear waiver of sovereign immunity within the contract to ensure legal recourse. The decision thus protects tribal assets and economic self-determination but can create challenges and risks for non-tribal commercial partners.
