In its long-awaited decision in Michigan v. Bay Mills Indian Community, the U.S. Supreme Court today re-affirmed its 1998 holding in Kiowa Tribe v. Manufacturing Technologies, Inc. 523 U.S. 751 (1998) that tribal sovereign immunity extends to tribes’ governmental and commercial activities, both on reservation and off. In a 5-4 decision, the Court affirmed the Sixth Circuit’s decision that the Indian Gaming Regulatory Act waiver of tribal sovereign immunity for suits to enjoin gaming on Indian lands in violation of a tribe’s gaming compact with a state did not apply to tribal gaming on non-Indian lands and that the State was barred by the doctrine of sovereign immunity from suing the Tribe directly for damages.

The Court rejected Michigan’s arguments that Kiowa was wrongly decided and that tribes should enjoy no immunity with respect to their commercial, off-reservation activities. The majority opinion, authored by Justice Kagan and joined by Justices Roberts, Kennedy, Breyer and Sotomayor, emphasized the doctrine that the court should not overrule its previous decisions without special justification (stare decisis), pointing out that (1) the Court had explicitly invited Congress to consider limitations on tribal sovereign immunity its Kiowa decision, (2) Congress had, in fact, considered several bills that would have imposed broad limits but had not enacted any of them ("Having held in Kiowa that this issue is up to Congress, we cannot reverse ourselves because some may think its conclusion wrong" Slip. Op. 20), and (3) Michigan had other means of enforcing state law against Bay Mills, including denial of required licenses, suits against employees and officials of the tribe to enjoin violations of state law and criminal prosecution of tribal officials and employees and for violations of state criminal laws.

The Court concluded:

As "domestic dependent nations," Indian tribes exercise sovereignty subject to the will of the Federal Government. …Sovereignty implies immunity from lawsuits. Subjection means (among much else) that Congress can abrogate that immunity as and to the extent it wishes. If Congress had authorized this suit, Bay Mills would have no valid grounds to object. But Congress has not done so: The abrogation of immunity in IGRA applies to gaming on, but not off, Indian lands. We will not rewrite Congress’s handiwork. Nor will we create a freestanding exception to tribal immunity for all off reservation commercial conduct. This Court has declined that course once before. To choose it now would entail both overthrowing our precedent and usurping Congress’s current policy judgment.

In her concurring opinion, Justice Sotomayor asserted that the historical basis for tribal sovereign immunity is stronger than the dissent recognized and that the result reached by the majority is consistent with comity in view of the fact that State sovereign immunity prevents states from being sued by tribes. Justice Sotomayor also pointed out the special challenges that tribes face with respect to raising revenue and the role that their commercial enterprises play in funding government.

The unmistakable premise of the dissenting opinion, authored by Justice Thomas and joined by Justices Scalia, Ginsburg and Alito, is that sovereign immunity as currently exercised by tribes under the rule of Kiowa has led to widespread, grave and intolerable injustices. These injustices, according to the dissenters, warrant departing from the rule of stare decisis to correct the Court’s "mistake" in the Kiowa decision:

In Kiowa, this Court adopted a rule without a reason: a sweeping immunity from suit untethered from commercial realities and the usual justifications for immunity, premised on the misguided notion that only Congress can place sensible limits on a doctrine we created. The decision was mistaken then, and the Court’s decision to reaffirm it in the face of the unfairness and conflict it has engendered is doubly so.

Dissent, slip Op. 18.

Justice Thomas’ opinion highlights areas, including taxation, tobacco commerce, payday lending and campaign finance, in which tribes have "exploited" immunity to avoid state regulation. In a separate dissenting opinion, Justice Ginsburg expressed her view that the Court had gone too far not only in expanding the scope of tribal sovereign immunity in Kiowabut also in expanding state sovereign immunity from suits by tribes to enforce federal laws in Seminole Tribe v. Florida, 517 U.S. 44 (1996). Justice Ginsburg would impose greater limits on the immunity of both sovereigns.

The Court’s decision leaves unclear two areas of tribal sovereign immunity jurisprudence. First, the Court expressly acknowledged that it has never "specifically addressed" whether immunity "should apply in the ordinary way if a tort victim, or other plaintiff who has not chosen to deal with a tribe, has no alternative way to obtain relief for off-reservation commercial conduct. The argument that such cases would present a ‘special justification’ for abandoning precedent is not before us" Slip. Op. 16, n.8. The Court’s comment will be viewed as an invitation for a plaintiff to make the argument that this situation does indeed present a "special justification" for an exception to immunity.

The Court’s opinion also leaves unaddressed the extent to which tribal sovereign immunity applies to subsidiary entities. In a footnote, the dissent observed, without comment, that "[l]ower courts have held that tribal immunity shields not only Indian tribes themselves, but also entities deemed ‘arms of the tribe.’ … In addition, tribal immunity has been interpreted to cover tribal employees and officials acting within the scope of their employment."

The consequences of the Court’s decision are likely to be (1) arguments by state lobbyists that Congress should take action to limit tribal immunity for the reasons set forth in the dissenting opinion and (2) suits based on the assertion that there should be an exception to tribal sovereign immunity for a "tort victim or other plaintiff who has not chosen to deal with a tribe" who has "no alternative way to obtain relief for off-reservation commercial conduct."