In Michigan v. Bay Mills Indian Community, 134 S.Ct. 2024 (May 27, 2014), the United States Supreme Court affirmed the lower court’s ruling that tribal immunity barred the State of Michigan’s suit against the Bay Mills Indian Community (“Bay Mills”) for opening a casino outside Indian lands. Bay Mills is a federally recognized Indian Tribe that has a compact with the state of Michigan pursuant to the Indian Gaming Regulatory Act (“IGRA”). In addition to the class III gaming which Bay Mills is authorized to operate on-reservation, Bay Mills opened an off-reservation class III gaming facility on land it purchased with accrued interest from a federal appropriation that Congress made to compensate Bay Mills for nineteenth century takings of its ancestral lands.

Michigan sued to enjoin operation of the new casino on grounds that it violated IGRA because the casino was located outside Indian lands and the compact only authorizes gaming activities on Indian lands within Michigan. The problem for Michigan, however, was that IGRA abrogates tribal immunity from a State’s suit against a Tribe only with respect to on-reservation activities. An off-reservation casino falls outside IGRA’s scope. Thus, the Court ruled that because Michigan sought to enjoin an activity on the basis that it was being conducted off-reservation, IGRA’s plain terms did not abrogate Bay Mill’s immunity from suit.

The Court noted that Michigan could have avoided the situation altogether by insisting on different terms in its compact with Bay Mills. It found, “if a State really wants to sue a tribe for gaming outside Indian lands, the State need only bargain for a waiver of immunity.” Bay Mills, 134 S.Ct. at 2035. The Court concluded that States have “more than enough leverage to obtain such terms” because tribes cannot conduct class III gaming without a compact. Id. Had Michigan insisted on a different deal, “the limitation Congress placed on IGRA’s abrogation of tribal immunity – whether or not anomalous as an abstract matter – would have made no earthly difference.” Id.

The Court also declined to disturb its rulings in Kiowa Tribe of Okla. v. Mfg. Tech., Inc., 523 U.S. 751 (1998), and its progeny, upholding tribal immunity in the commercial context. Michigan had asked the Court to revisit those rulings, arguing that tribes increasingly participate in off-reservation gaming and other commercial activity, with respect to which they operate more like private businesses than government. Citing stare decisis and congressional intent, the Court declined to overrule its precedent:

Kiowa itself was no one-off: Rather, in rejecting the identical argument Michigan makes, our decision reaffirmed a long line of precedents, concluding that “the doctrine of tribal immunity” – without any exceptions for commercial or off-reservation conduct – “is settled law and controls in this case.”

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. . .tribes across the country, as well as entities and individuals doing business with them, have for many years relied on Kiowa (along with its forebears and progeny), negotiating their contracts and structuring their transactions against the backdrop of tribal immunity.

Bay Mills, 134 S.Ct. at 2036 (internal citations omitted).

The Court noted that Congress exercises primary authority in the area of tribal immunity and had yet to alter the Court’s precedent. Bay Mills,134 S.Ct. at 2036. In fact, Congress considered several bills that would substantially modify tribal immunity in the business context, and rejected them. Id. at 2038. Thus, reversing Kiowa “would scale the heights of presumption” by replacing “Congress’s considered judgment” with the Court’s contrary opinion. Id. at 2039. Accordingly, the majority concluded that “it is for Congress now more than ever, to say whether to create an exception to tribal immunity for off-reservation commercial activity.” Id.