Another State Tax Man Smackdown; Tribal Property Tax Win

Today, the Second Circuit Court of Appeals smacked down a New York county assessor's attempt to foreclose upon Cayuga-owned fee lands in a desperate attempt to recover state ad valorem property taxes from the Tribe. Cayuga was a benefactor of both the Oneida Nation's genius mooting of Oneida Indian Nation of N.Y. v. Madison County, before the U.S. Supreme Court, as well as the Bay Mills Tribe's lucky win before the Supreme Court in Michigan v. Bay Mills Indian Community.  Bay Mills should have been mooted too.

The Cayuga decision represents another win in a surprising run for tribes in state property tax or fee assessment disputes before federal circuit courts of appeals.

Last year, the Ninth Circuit struck down property taxes on permanent improvement to Chehalis tribal trust lands in Confederated Tribes of Chehalis Reservation v. Thurston County Bd. of Equalization; and the Seventh Circuit struck down a local assessment of stormwater "fees" against Oneida trust lands in Oneida Tribe of Wisc. Indians v. City of Hobart.

Amidst serial federal court losses in other state-tribal tax contexts (i.e. sales and excise taxation), it seems that Indian property tax or tax-related cases are still winnable.  See also Crow Tribe of Indians v. Montana (9th Cir. 1987).  Granted, Cayuga was a sovereign immunity, not Bracker, case but the county's suggested in rem exception to tribal immunity would have catalyzed state taxation of Indian property nationwide.

In any event, Richard Guest of NARF's advice remains sound:

Stay out of the courts! The federal courts are not your friends anymore.  The majority of judges sitting on the lower federal courts were appointed by Bush II – very conservative, have no understanding of Indian country at all. No interest in your issues. And that can be said of the Roberts court as well. It’s a very difficult place for tribes to secure victories.

Difficult, but thankfully not impossible, at least in the Indian property tax context.

Gabriel “Gabe” Galanda is the Managing Partner at Galanda Broadman, which handled various Indian tax controversies. He is a citizen of the Round Valley Indian Tribes. Gabe can be reached at 206.300.7801 or gabe@galandabroadman.com.

Tribal Online Lenders Need a Legal Attitude Adjustment

A review of recent federal judicial decisions against tribal online lenders shows that they are losing the war--resoundingly. Arguments under Tuscarora that federal consumer protection laws of general applicability, have fallen flat. Arguments that these tribal enterprises are immune from federal enforcement action (see U.S. v. James), have not surprisingly fared even worse. Tribal sovereignty is being eroded in the process of each federal court controversy.

The tribal online lending industry needs a legal attitude adjustment. Or is it only a matter of time before the industry meets its demise. Instead of throwing traditional federal Indian legal arguments against the walls of federal courthouses, in hope that they stick--they haven't yet--the industry needs to heed lessons learned by other tribes when over-zealous federal agencies like the IRS, FBI or ATF come barreling onto an Indian reservation or into a tribal economy.

Among other non-conventional tribal defense strategies, one that has been deployed effectively against such federal agencies of late is preemptive consultation:

[C]onsultation can be used as a sword—a preemptive strike that forces U.S. agencies to consult before taking action in Indian country—as well as a shield to guard from federal and private attacks on Indian sovereignty. As it stands, several federal agencies freely enforce their prerogative over tribes, under the guise of so-called federal laws of general applicability and increasingly with federal court approval. Still, at each stage of federal encroachment or enforcement, federal law requires consultation with tribal officials.

See e.g. "ATF Withdraws PACT Act FAQs; Downgrades Tobacco Investigations?"

As counter-intuitive as it might be for tribes to bring their enemies close (as Sun Tzu and Michael Corleone both advise), that is exactly what those tribes that are involved in online and are under federal siege, should do in hopes of regaining some battle ground. That is because if the FTC or CFPB violates normative protocols for pre-enforcement consultation between sovereigns, the agency can be sued under the APA and enjoined or stymied from proceeding. This strategy is fully discussed in "The Federal Indian Consultation Right: A Frontline Defense Against Tribal Sovereignty Incursion."

After all, what else, or how much longer, can the tribal online lending industry stand to lose?

Gabriel “Gabe” Galanda is the Managing Partner at Galanda Broadman. He is an enrolled member of the Round Valley Indian Tribes of Covelo, California. Gabe can be reached at 206.300.7801 or gabe@galandabroadman.com.

Gabe Galanda Stumps Against Interior's Land Buy Back; Serves as Professor in Residence

This week, Gabe Galanda visited the University of Arizona College of Law in Tucson for a speech at the 2nd Annual Tribal Lands Conference, and a Professorship in Residence at the Indigenous Peoples Law & Policy Program. Gabe's speech at the Conference, which was themed "The Cobell Settlement Land Buy-Back Program for Tribal Nations," was titled: "The Perils of Indian Law Buy Back." He explained that "while Interior’s plan disclaims any facilitation of forced sales under 25 U.S.C. 2204(a), the $1.55 Billion in 'buy back' monies will catalyze controversial intra-tribal forced sales."

Gabe further explained how any such forced sale could violate various federal laws, including the Fifth Amendment of the U.S. Constitution and the United States' trust fiduciary duty at common law, as well as international human rights law, including Articles 1 and 10 of the United Nations Declaration on the Rights of Indigenous Peoples and Article 11 of the Rights of Man and of the Citizen. His slides are available here, and his prior published commentaries are here.

During his Professorship in Residence, Gabe engaged indigenous law students during a program moderated by Dean Marc Miller, in the development series called "A Conversation With...," which features prominent law school alumni. He also delivered a lecture to Professor Ray Austin's class titled, "Tribal Economic Development: Looking Through the Prism of Indian Taxation & Sovereign Immunity."

In his lecture, Gabe explained very recent developments in federal Indian law regarding the powers of tribal taxation, sovereign immunity and territorial authority. His slides are available here.

Gabriel “Gabe” Galanda is the Managing Partner of Galanda Broadman PLLC, of Seattle, an American Indian owned law firm. He is an enrolled member of the Round Valley Indian Tribes of Covelo, California. Gabe can be reached at 206.300.7801 or gabe@galandabroadman.com.

Gabe Galanda To Again Co-Chair Northwest Gaming Law Summit

On Thursday-Friday, December 12 and 13, United States, Washington State and Native Nations leaders will meet to discuss various emerging legal, regulatory, political and economic issues impacting the Indian gaming industry, at the 11th Annual Northwest Gaming Law Summit in Seattle. “Just as Indian gaming has grown exponentially over the last decade, so has the Summit,” said conference co-chair Gabe Galanda, an Indian lawyer and partner at Galanda Broadman in Seattle. “We are proud that we have become the most authoritative gaming law educational seminar in the country.” This year’s lineup of speakers include:

• New National Indian Gaming Commission Chairman Jonodev Chaudhuri • National Indian Gaming Commissioner Daniel Little • New Washington State Gambling Commission Executive Director David Trujillo • New Washington State Gambling Commission Commissioner Christopher Stearns • Washington Indian Gaming Association Chairman Ron Allen • Cowlitz Tribal Council Vice Chairman Phil Harju • Tulalip Tribal Board of Directors Secretary Glen Gobin

Those hot topics that will be discussed include:

• iGaming in Indian Country • Social Gaming • Fee-to-Trust Transactions for Gaming Development • The U.S. Supreme Court’s pending Bay Mills case • Indian gaming commercial financing trends amidst the Great Recession

Gabriel "Gabe" Galanda is a partner at Galanda Broadman PLLC, of Seattle, an American Indian owned law firm. He is an enrolled member of the Round Valley Indian Tribes of Covelo, California. Gabe can be reached at 206.300.7801 or gabe@galandabroadman.com.

Law360 Quotes Gabe Galanda Re Bay Mills Imbroglio

Gabe Galanda is featured along with several leading Indian lawyers and scholars in a Law360 article about Bay Mills, just days prior to oral argument before the Supreme Court. In "Bay Mills Hinges On High Court's Loyalty To Precedent," Gabe is quoted as follows:

Several Indian law experts, however, do not believe the Bay Mills tribe — which was urged to drop its case to avoid the Supreme Court — stands a good chance, and they are concerned that the current court will use the case as an opportunity to veer sharply from the Kiowa ruling.

That's because in the Kiowa decision, the justices affirmed the tribal sovereign immunity doctrine, but they also had some less-than-encouraging words about the doctrine and asked Congress to look into making changes at the lawmaking level. Congress held several hearings after the ruling, but ultimately decided to take no action, experts note.

"In the Kiowa case, a prior Supreme Court made it very clear that they were uncomfortable about tribal sovereign immunity. ... I believe the court will now take occasion to do what it wanted to do in the late 1990s and abrogate tribal sovereign immunity," said Gabriel S. Galanda 
of Galanda Broadman PLLC.

*** [O]thers, however, are hoping that the high court ultimately rules that the state can find remedies under the Indian Gaming Regulatory Act. The National Indian Gaming Commission, however, has so far declined to step in with a closure order that would officially shut down the Bay Mills casino for operating illegally on nontribal land. And the U.S. Department of Justice has likewise declined to step in and provide a remedy for Michigan.

"The absence of a federal remedy from the NIGC or DOJ to date will cause the justices to create the remedy for the state of Michigan, and it will be a remedy Indian country will not like," Galanda said, adding the case threatens to upset the delicate balance between state and tribal sovereign immunity. ***

As the case moves to arguments, attorneys rooting for both sides will be watching to see how broadly the sovereign immunity arguments are introduced, according to Rand. And while many believe, as Galanda points out, that the facts are not sympathetic for Indian country and that the tribe will be hard-pressed to win its case, other hold out hope.

Gabriel "Gabe" Galanda is a partner at Galanda Broadman PLLC, of Seattle, an American Indian owned law firm. He is an enrolled member of the Round Valley Indian Tribes of Covelo, California. Gabe can be reached at 206.300.7801 or gabe@galandabroadman.com.

Bay Mills Musings

My criticisms of the entire Bay Mills situation is mentioned in today in an article titled, "Supreme Problem: One Tribe Pressured to Waive Sovereignty for Good of the Whole." Here are a few musings about this unfortunate predicament: Bay Mills now poses a choice of the lesser of two evils for all of Indian Country. The first evil is federal enforcement authority, specifically the power of the NIGC to regulate Indian gaming beyond Indian lands. The second evil is states' rights, particularly the state right to remedy unlawful Indian gaming.

With Indian Country's political elite in the Beltway not being earnest or forthright about the matter at hand, that fateful choice will now be made for us by the notoriously anti-tribal and pro-state Supreme Court. There is no question that the Justices will assault tribal sovereignty and immunity, in favor of enforceable states' rights in Indian Country.

The court will somehow violently upset the delicate balance of state and tribal sovereignty that was set in 1990s when state and tribal sovereign immunity were affirmed in the Seminole and Citizen Band of Potawatomi decisions. The balance of power under IGRA that results from those decisions, will be tilted sharply towards states.

The court will almost certainly craft a ruling that usher states into Indian casinos and all of Indian gaming, if not all of Indian Country a la Nevada v. Hicks. Justice Scalia in particular, who openly disdains gaming and adores states rights, could use the atrocious facts of Bay Mills to finally sound the death knell for tribal sovereign immunity.

Indian Country should be afraid--very, very afraid.

Gabriel "Gabe" Galanda is a partner at Galanda Broadman PLLC, of Seattle, an American Indian owned law firm. He is an enrolled member of the Round Valley Indian Tribes of Covelo, California. Gabe can be reached at 206.300.7801 or gabe@galandabroadman.com.

Washington State Indian Lawyer Gabe Galanda Quoted Re: AUTO v. State Decision

Gabe Galanda was quoted in a WSBA Bar News article, "In Good Conscience: Analyzing the Automotive United Trades Org. v. State of Washington."

The Court’s decision, according to Gabriel Galanda, an enrolled member of the Round Valley Indian Tribes of Mendocino County, California and Seattle Indian law attorney, spells fallout for burgeoning state-tribal relations. “Currently, there are over 200 statetribal tax agreements in effect nationwide, resolving ex ante a variety of potential tax disputes. And Washington state and its tribes are just starting to smooth out the edges of their tax disputes using compacts,” said Galanda. “But now,” he explains, “the Court’s decision permits suits against tribes, essentially, in absentia.

Gabriel "Gabe" Galanda is a partner at Galanda Broadman PLLC, of Seattle, an American Indian owned law firm.  He is an enrolled member of the Round Valley Indian Tribes of Covelo, California.  Gabe assists tribal governments and businesses in all matters of tribal economic development and diversification, including entity formation and related tax strategy. Gabe can be reached at 206.691.3631 or gabe@galandabroadman.com.

Gabe Galanda Addresses NAFSA Regarding Tribal Online Lending Precautionary Defense Measures

Today, Gabe Galanda addressed the Native American Financial Services Association (NAFSA), in a presentation titled, "A Quick History Lesson: Foundational Elements of Tribal Sovereignty, Tribal Self-Governance and the Government to Government Mandate." He delivered his remarks (slides here) at the Tribal Government Online Lending Symposium Presented by the Online Lending Association and NAFSA. Gabe specifically discussed notions of inherent sovereignty and preemptive consultation as means of countervailing federal and state attacks against tribal online lending activities.

Gabriel "Gabe" Galanda is a partner at Galanda Broadman PLLC, of Seattle, an American Indian owned law firm.  He is an enrolled member of the Round Valley Indian Tribes of Covelo, California.  Gabe assists tribal governments and businesses in all matters of tribal economic development and diversification, including entity formation and related tax strategy. He also helps tribes and tribal businesses and joint ventures withstand attack from federal, state and local government. Gabe can be reached at 206.691.3631 or gabe@galandabroadman.com.

Judicial Warning to Tribes to Avoid State Incorporation

Before any tribal government forms an enterprise under state law or seeks to do business beyond Indian Country, it should consider this week's indictment of tribal sovereign immunity by a Tenth Circuit Court of Appeals Judge in Somerlott v. Cherokee Nation Distributors.

CND, LLC wants sovereign immunity. But CND, LLC is in the business of manipulating spines for profit. It serves mostly non-Indians and operates off reservation. It was formed under Oklahoma’s limited liability statutes. . . .

[S]overeign immunity has never extended to a for-profit business owned by one sovereign but formed under the laws of a second sovereign when the laws of the incorporating second sovereign expressly allow the business to be sued. And it doesn’t matter whether the sovereign owning the business is the federal government, a foreign sovereign, state — or tribe. . . .

Neither can we doubt that the Nation lacked for choices when it came to organizing CND — or that good reasons exist for the choice it made. The Nation could have chosen to operate the chiropractic clinic itself and enjoy immunity for its operations. . . .

The moral of this story: Tribes should avoid state incorporation of their enterprises whenever possible. Instead, tribes should charter their businesses under tribal law, or perhaps Section 17 of the IRA (yet heeding caution about sue-and-be-sued-clause immunity waiver as to the latter). I recognize that certain tribal economic development efforts require an entity formed under state law but that should be the exception to the rule.

Gabriel "Gabe" Galanda is a partner at Galanda Broadman PLLC, of Seattle, an American Indian owned law firm.  He is an enrolled member of the Round Valley Indian Tribes of Covelo, California.  Gabe assists tribal governments and businesses in all matters of tribal economic development and diversification, including entity formation and related tax strategy. Gabe can be reached at 206.691.3631 or gabe@galandabroadman.com.

Tribal Immunity Held Inapplicable to Private Insurers -- Ya Think?

The Oklahoma Supreme Court recently ruled in Waltrip v. Osage Million Dollar Elm Casino that a tribal enterprise's private workers' compensation insurer did not enjoy tribal sovereign immunity and was estopped to deny coverage under a policy for which the carrier accepted premiums computed in part on a tribal employee's earnings. The tribe's insurance company had the audacity to assert sovereign immunity on its own behalf? Really? Although, I'm not sure why I'm surprised that an insurance company (or the low-rate, high-volume, non-tribal defense lawyer the carrier likely unilaterally hired to defend its tribal insured) would stoop so low.

Waltrip states what was otherwise conventional Indian legal thinking, that a private insurer cannot shield themselves from defending or paying on tort claims brought against its tribal insureds as a matter of the insured's sovereign immunity. Previous to Waltrip, the Arizona Supreme Court came the closest to making that point clear, in Smith Plumbing Co., Inc., v. Aetna Casualty & Surety Co.: “Because the Tribe has the power either to insist upon or waive its sovereign immunity, that immunity is considered a personal defense not available to the Tribe’s surety.”

Thankfully the common law now clearly establishes that an insurer cannot duck and run from from a personal injury claim by asserting the sovereign rights of the insured, for the carrier's own economic gain.

Gabriel "Gabe" Galanda is a partner at Galanda Broadman PLLC, of Seattle, an American Indian owned law firm.  He is an enrolled member of the Round Valley Indian Tribes of Covelo, California.  Gabe helps tribal governments and businesses devise insurance solutions, and defends tribal insureds from serious and catastrophic tort claims. Gabe can be reached at 206.691.3631 or gabe@galandabroadman.com.