The Supreme Court’s May 27, 2014 decision Michigan v. Bay Mills Indian Community (Bay Mills),1 rebuffed a potent recent threat to tribes’ ability to avoid litigation by invoking tribal sovereign immunity from suit. Bay Mills affirmed the Sixth Circuit’s holding that Congress did not abrogate tribal  sovereign  immunity  for  a lawsuit by  a State against a tribe seeking to enjoin off-reservation gaming in the Indian Gaming Regulatory Act  (IGRA).2 IGRA is a comprehensive statutory scheme that permits States and Tribes to enter into gaming compacts to permit Tribes to conduct “class III gaming”—Las Vegas style gambling—on the Tribes’ “Indian lands,” lands over which the Tribe has jurisdiction and exercises governmental power. Section 2710(d)(7)(A)(ii) of IGRA provides a federal court with subject matter jurisdiction for a suit by a State against a Tribe “to enjoin a class III gaming activity located on Indian lands and conducted in violation of any Tribal-State compact . . . that is in effect.”

Background: Michigan and Bay Mills entered into a tribal-state gaming compact, and Bay Mills opened and operated a casino on its reservation in Michigan’s Upper Peninsula. The dispute with Michigan arose when Bay Mills purchased property in Vanderbilt, approximately 175 miles away on the Lower Peninsula, and opened a new casino. Michigan filed suit for injunctive relief, arguing that the Vanderbilt casino was not located on Bay Mills’ Indian lands and thus was not permitted by the gaming compact. The district court granted the injunction, and the Sixth Circuit reversed, ruling that IGRA did not provide subject matter jurisdiction nor abrogate Bay Mills’ immunity from suit by the State.

Michigan deployed a two-pronged attack to pierce the tribe’s immunity from suit to enjoin illegal off-reservation gaming: the tribe’s immunity was abrogated by IGRA’s provision providing a federal court remedy for breach of compact conditions, but, if that contention were rejected, the Court should overrule its cases affirming tribal immunity from suit entirely, or alternatively hold tribes do not retain immunity for off-reservation commercial activities. The tribal community was appropriately concerned when the Court granted certiorari on both issues.

Majority Opinion: The Supreme Court’s opinion, authored by Justice Kagan and joined by Chief Justice Roberts and Justices Kennedy, Breyer, and Sotomayor, affirmed the Sixth Circuit’s sovereign immunity holding, ruling that IGRA did not abrogate the Tribe’s immunity from suit. The opinion begins by reaffirming the principle of tribal sovereign immunity, and the existence of tribal sovereign immunity for commercial activities of a tribe, even when those activities do not occur on Indian lands, unless that immunity has been abrogated or waived. Acknowledging that IGRA abrogates tribal sovereign immunity for some suits in 2710(d)(7)(A)(ii), the Court concluded that provision did not apply in the dispute between Michigan and Bay Mills because Michigan alleged the Vanderbilt casino was  not on Indian lands. That allegation removed the suit from IGRA’s abrogation of immunity for suits seeking to enjoin conduct on Indian lands.

The Court rejected Michigan’s argument that the authorization of the Vanderbilt casino from Bay Mills’ reservation served to locate the activity the suit sought to enjoin on Indian lands, finding this argument ignored that IGRA permits a suit to enjoin “gaming activity”—or gambling. The Court also refused the argument that Congress could not have intended to preclude a state remedy for off-reservation Indian gaming, rejecting Michigan’s invitation to rewrite IGRA.

The Supreme Court considered Michigan’s position that its interpretation of IGRA leaves states without a remedy for illegal tribal gaming on state land, and found it lacking. To challenge off-reservation gaming, Michigan could deny a casino license; bring a suit under the Ex parte Young doctrine against tribal officials; or prosecute the operators and customers of the illegal casino. The Court also recommended states negotiate waivers of tribal sovereign immunity when Congress has not abrogated immunity for specific commercial activities.

The Court rejected Michigan’s invitation to overturn its 1998 decision in Kiowa Tribe of Oklahoma v. Mfg. Technologies, Inc.,3 a case that held tribal sovereign immunity extends to commercial activities. Michigan had not presented any compelling reason to stray from the doctrine of stare decisis, particularly as in Kiowa the Court had invited Congress to alter the bounds of tribal sovereign immunity if it disagreed with the Court’s interpretation—and Congress has made no wholesale modification of the tribal sovereign doctrine.

Other Opinions: The Supreme Court’s opinion was fractured, 5-4, with the key issue being the Court’s prior opinion in Kiowa. Justice Sotomayor issued a concurring opinion, setting forth the historical and practical background of the tribal sovereign immunity doctrine, in refutation of the primary dissent authored by Justice Thomas and joined by Justices Scalia, Ginsburg, and Alito. Justice Thomas advocated overruling Kiowa and limiting tribal sovereign immunity to on-reservation governmental activities only. Justice Scalia issued a short  dissent, noting the change in his position from concurring in Kiowa when it was issued to believing it was wrongly decided now. Justice Ginsburg also issued a short dissent to note her opinion that Eleventh Amendment immunity had been unreasonably broadened by the Court.

Take-Away: Bay Mills does not mark a great change to the law. The Court affirmed the doctrine of tribal sovereign immunity, and its extension to a tribe’s commercial activities that may take place outside a tribe’s Indian lands. States, and others doing business with or otherwise in contact with tribes, are not at a loss when a dispute arises. States can enforce their generally applicable laws on state lands, and suits against tribal officials for prospective relief for an ongoing violation of federal law remains a viable option under the Ex parte Young doctrine. As a practical matter, negotiating a waiver of tribal sovereign immunity is highly recommended when contracting with tribes or tribal entities, to avoid judicial disputes over sovereign immunity entirely. While Congress did not accept the Court’s invitation to limit tribal sovereign immunity in Kiowa, there remains the possibility that a future Congress will change the law of the land. For now, however, Bay Mills has maintained the status quo.