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Questions and Answers Concerning Tribal Sovereign Immunity

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Title: Questions and Answers Concerning Tribal Sovereign Immunity


1
Questions and Answers Concerning Tribal Sovereign
Immunity
  • David McCullough / Chad D. Burris Doerner,
    Saunders, Daniel Anderson, L.L.P.

2
Businesses in Indian Territory
  • Indian Tribes have become major consumers of
    goods and services, thereby creating
    opportunities for individuals and businesses to
    engage in commercial activities in Indian
    Country.
  • Tribes have also become successful in developing
    non-gaming related enterprises by taking
    advantage of their special status as an Indian
    Tribe. This creates opportunities for both the
    Indian Tribes and for those individuals and
    businesses who form business relationships with
    the Tribe.

3
Federal Control over Indian Affairs
  • Primacy of the federal government in Indian
    affairs.
  • The United States Constitution, in Article I,
    Section 8, clause 3 (Commerce Clause) states that
    The Congress shall have Power… to regulate
    Commerce with Sovereign Nations, and among the
    several States, and with the Indian Tribes.
    (emphasis added).
  • This language recognizes from the beginning of
    the United States, that
  • Indian Tribes were on the same level as states
  • Congress reserved exclusivity to itself the power
    to deal with Indian Tribes.

4
Federal Control over Indian Affairs
  • The Indian Trade and Intercourse Act of 1790
    established that virtually all interaction
    between Indians and non-Indians was under federal
    control. The Act brought Indian affairs under
    exclusive federal control by
  • Regulating commercial trade with Indians
  • Establishing penalties for violations of the law
    by traders
  • Specifying provisions for crimes committed
    against Indians in Indian country
  • Prohibiting the sale of Indian land without
    federal approval

5
Implications for Business
  • Federal control in Indian affairs has important
    implications for business development in Indian
    country
  • While a state regulates commerce within its
    exterior borders, states are generally precluded
    from levying sales or other taxes in Indian
    Country.
  • Disputes involving Indian Tribes and/or tribal
    entities generally cannot be adjudicated by state
    courts such disputes fall under the purview of
    tribal or federal courts.
  • Non-Indian businesses tend to be less familiar
    with the operations of tribal governments than
    they are with those of state, county, and local
    governments. Some businesses refrain from
    activity in Indian country because they feel less
    equipped to advance and defend their interests
    before governmental bodies in tribal settings.

6
Subject to Control of Congress
  • Congress may abrogate or modify any tribal right
    or privilege established by treaty, statute, or
    other document.
  • Congress can advance, limit, or control much of
    Indian commerce and related affairs including
  • Self-determination
  • Self-governance
  • Commerce

7
The Marshall Trilogy
  • Johnson v. McIntosh, 21 U.S. (8 Wheat) 543
    (1823). The Supreme Court considered concept of
    aboriginal title and who owned the land still
    occupied by Indian Tribes. The Court concluded
    that discovery gave the United States the
    exclusive right to extinguish the original tribal
    right of possession.
  • McIntosh established the following principles
  • The federal government acquired ownership of all
    the lands within the continental United States by
    discovery and conquest
  • The Tribe and tribal members have a exclusive
    right to live on their ancestral homelands unless
    and until Congress decides to take the land for
    other purposes
  • Indian title is a possessory interest-Indians
    have the right to possess the land but not to own
    the land unless Congress grants them title to the
    land and
  • Indian title cannot be sold by the Indians or
    bought by anyone else without federal government
    approval.

8
Cherokee Nation v. Georgia
  • Cherokee Nation v. Georgia, 30 U.S. 1 (1831).
    The Supreme Court addressed the sovereign status
    of Indian Nations. The Cherokee Nation had
    petitioned the Court to prevent Georgia from
    enforcing its laws within the Cherokee Territory.
    The Supreme Court refused to accept the case,
    finding that it lacked jurisdiction because the
    Cherokee Nation was not a Foreign State and
    thus could not bring suit in federal court
    against Georgia. While the Court held the
    Cherokee Nation was not a Foreign State, it did
    not hold that the Nation was not a sovereign.
    Chief Justice Marshall found that the Cherokee
    Nation was a state because it was a distinct
    political society…capable of managing its own
    affairs and governing itself. Id. at 15. The
    Chief Justice coined the phrase domestic,
    dependant nations to describe the status of
    Indian Tribes.

9
Worcester v. Georgia
  • Worcester v. Georgia, 31 U.S. 515 (1832). The
    United States and the Cherokee Nation had entered
    into a number of treaties between 1785 and 1819.
    All contained some language acknowledging that
    the Cherokee Nation had exclusive right to govern
    itself on the lands that it occupied. The state
    of Georgia attempted to enforce its laws within
    the Cherokee Nation by convicting a non-Indian
    residing within the limits of the Cherokee Nation
    without obtaining a license from Georgia and
    without having taken an oath to support and
    defend the state of Georgia. The Supreme Court
    conducted an analysis of the treaties and
    determined that the treaties and laws of the
    United States contemplate the Indian territory as
    completely separated from that of the states and
    provide that all intercourse with them shall be
    carried on exclusively by the government of the
    union. Id. at 553.

10
Worcester v. Georgia
  • The Court advance three separate legal grounds to
    support the proposition that federal authority
    had preempted state authority in the field of
    Indian affairs.
  • First, the Constitution had exclusively vested in
    the federal government the power over all matters
    concerning Indians and the states exercised only
    such jurisdiction that is delegated to the states
    by the federal government under the Indian
    commerce clause.
  • Second, federal treaties with the Cherokee
    Nation, recognizing the Nations political
    autonomy and setting aside land for the Nation,
    pre-empted state authority over Indian lands
    located within its borders.
  • Third, specific acts of federal statutes, in the
    instance case it was the Trade and Intercourse
    Acts, preempted state laws.

11
Trust Relationship
  • Tribes are regarded as "domestic dependent
    nations."
  • The relationship of these nations to the United
    States "resembles that of a ward to his
    guardian."
  • Title to reservation lands is generally held by
    the United States of America in trust for the
    Tribe. 

12
Trust Relationship
  • It is important to consider how the trust
    relationship affects commercial activity in
    Indian Country
  • For instance, Tribes and tribal members cannot
    mortgage trust, restricted or allotted land,
    because, while the Tribe owns the land, it is
    also held in trust by the United States for the
    current and future tribal members. Without such
    mortgages, it is difficult to obtain loans needed
    to finance home construction and business
    development.
  • Approval from the BIA, as trustee, may be
    required for major business development
    initiatives, especially those in which lease of
    land is required.
  • A Tribe's management of its assets may be subject
    to BIA review, and the BIA can repudiate tribal
    decisions, if it deems that they place tribal
    assets at risk. Determination as to whether a
    Tribe is self-governance or has entered into a
    638 contract is important in business development
    discussions.

13
Tribal Sovereignty
  • Tribal governments are sovereign within tribal
    (Indian Country) territory and thus are not
    subject to state or any other laws other than
    federal laws without the consent of Congress.
  • Individuals or businesses are precluded from
    suing a Tribe or a tribal business in state
    courts and, sometimes, in federal courts.
  • Tribes can charter corporations and create their
    own commercial codes.
  • Tribes can levy taxes on individuals and
    businesses residing or operating on the
    reservation.

14
Organization of an Indian Tribe
  • Prior to entering into a transaction with a
    tribal enterprise, it is essential to understand
    the governmental organization of the Tribe. 
  • In Oklahoma, most Tribes are organized under the
    Oklahoma Indian Welfare Act (OIWA), codified at
    25 U.S.C. 501 et. seq.
  • The OIWA references most of the Indian
    Reorganization Act (IRA), codified at 25 U.S.C.
    Section 461, as applying to Oklahoma Tribes.

15
Organization of an Indian Tribe
  • The Tribe adopts a Constitution under Section 16
    of the IRA, 25 U.S.C. Section 476. 
  • A Tribes Constitution will normally describe the
    governing body of the Tribe and set forth the
    powers and authority that the governing body
    has.  It may grant to the governing body all
    power and authority to adopt legislation and
    carry on the activities of the Tribe or it may
    reserve some or all of the powers to the adult
    members of the Tribe as a whole.
  • Under the OIWA, a Tribe may also form a federal
    chartered corporation pursuant to Section 17 of
    the IRA charter issued by the Secretary of the
    Interior.  Actions of the Federal chartered
    corporation may require approvals by the
    governing body of the Tribe or, again, by the
    General Council.

16
Business Organization
  • The governmental entity itself or an
    instrumentality of the government, a Federal
    chartered corporation or a corporation,
    partnership or other entity created by tribal or
    state law.

17
Constitutional Tribe or an Entity Created by the
Constitutional Tribe
  • Tribal governments and entities created by the
    Tribe under its Constitution (e.g., housing
    authorities, utility commissions, land
    commissions) contract directly for goods and
    services. 
  • The issues of governmental organization and who
    may act to bind the governmental entity are
    paramount.
  • The sovereign immunity, court jurisdiction and
    remedy issues are most clearly present.

18
Federal Chartered Corporations
  • A Tribe that has established a Federal chartered
    corporation may have transferred to that entity
    some or all of the responsibilities of carrying
    out tribal business activities.
  • Many Oklahoma Tribes still have only the original
    Federal chartered Corporations These can be very
    restrictive in nature.
  • Some Tribes have adopted new charters for their
    Federal chartered corporations that are designed
    to make those entities useful tools for tribal
    business activity.

19
Federal Charter
  • A Federal chartered charter will spell out the
    authorized purposes of the Federal chartered
    corporation including
  • Its ability to borrow money
  • To encumber its assets
  • To sue and be sued and to waive its sovereign
    immunity
  • How autonomous it is from tribal governmental
    control

20
Federal Charter
  • It is essential to review the charter provisions,
    and any bylaws of the corporation, to determine
  • Limits on the corporations powers to act
  • Who can act for the corporation
  • The extent to which corporate action must be
    approved either by tribal government or the
    Secretary of the Interior
  • The extent to which assets of the corporation can
    be used as collateral to secure corporate
    obligations
  • Sovereign immunity

21
Tribally or State Chartered Business Entities
  • Tribes have formed corporations or other legal
    entities organized under tribal or state law,
    rather than Section 17 of the IRA
  • It is necessary to examine the charter, bylaws or
    other organizational documents of the entity in
    question as well as the state or tribal laws,
    ordinances or resolutions under which it is
    organized

22
Tribally or State Chartered Business Entities
  • There are two ways an entity may be created under
    tribal law
  • The Tribe may enact legislation (in much the same
    manner as creating a housing authority)
  • The Tribe may enact a corporation code by statute
    or ordinance governing the ability of tribal
    corporations to be formed, the procedures to be
    followed, and the powers and immunities of tribal
    corporations.
  • Tribal law may distinguish between tribal
    corporations owned by the Tribe itself and tribal
    corporations wholly or partially owned by tribal
    members.

23
Tribally-Owned Tribal Corporations
  • The corporation may share in the sovereign
    immunity and other privileges of the Tribe
  • The powers of the corporation to sue and be sued
    may be restricted
  • The tribal government may exercise some oversight
    and control

24
Individually-Owned Tribal Corporations
  • Sovereign immunity may not be present
  • Tribal law may specify the forum it which it may
    be sued

25
Entities Created Under State Law
  • The general laws of the state will apply. 
    However, actions against the corporate owners (in
    an attempt to pierce the corporate veil) would be
    subjected to the same defenses those owners would
    have if sued in other situations

26
Power to Contract Federal Approval
  • Under 25 U.S.C.   81, no contract with any
    Indian Tribe that encumbers, for a period of 7 or
    more years, lands held by the United States in
    trust for the Tribe, or lands held by the Tribe
    subject to a federal restriction against
    alienation, is valid unless the contract bears
    the approval of the Secretary of the Interior or
    his designee.

27
Power to Contract Federal Approval
  • Approval is usually obtained from the Area
    Director of the BIA Area Office having
    jurisdiction over the reservation or trust land
    involved.
  • Violation of the Section 81 approval requirement
    renders the contract in question null and void. 
  • The Section 81 approval requirement does not
    apply to contracts with a Federal chartered
    tribal corporation. 

28
Sovereign Immunity
  • The United States Supreme Court has ruled that an
    Indian Tribe has the power to waive its sovereign
    immunity from suit, provided that such waiver is
    clear, explicit and unambiguous.
  • Tribes regard the assertion of their sovereign
    immunity as an essential feature of their
    sovereign status.
  • If the entity involved is wholly-owned by the
    Tribe, the Tribes sovereign immunity may well
    extend to that entity.

29
Court Jurisdiction
  • Federal
  • The parties to a contract cannot, by agreement,
    give a federal court jurisdiction over a
    particular subject matter.
  • State
  • State courts are without jurisdiction to hear
    lawsuits brought by non-Indians against Tribes,
    tribally-created entities and reservation Indians
    with respect to transactions arising on a
    reservation.

30
Court Jurisdiction
  • Tribal
  • If the Tribe has an established, functioning
    tribal court, then that is the court which will
    have subject matter jurisdiction, in the first
    instance, over any suit to enforce an Indian
    Country-related contract.

31
Court Jurisdiction
  • Other matters
  • Although a court may have subject matter
    jurisdiction, that still does not mean that the
    court has personal jurisdiction over the Tribe or
    tribal entity.  Personal jurisdiction requires an
    effective waiver of sovereign immunity.  Thus,
    the court must still examine the corporate
    documents of the tribal entity or the contract
    entered into between the parties to determine
    whether the tribal entity has waived, and if so
    then to what extent, its immunity from suit.

32
QUESTIONS?
33
Regulatory Pluses and Minuses in Indian Country
Environmental Considerations
  • Linda C. Martin Doerner, Saunders, Daniel
    Anderson, L.L.P.

34
Overview
  • Tribal environmental authority
  • Environmental laws that may potentially affect
    businesses in Indian country
  • Land use planning and tax issues
  • Additional resources

35
Tribal Environmental Authority
  • Inherent governmental authority over matters
    affecting tribal health and welfare
  • Tribal codes for environmental protection
  • Enforced by tribal agencies / courts
  • Authorized by Congress to administer most federal
    environmental programs in Indian country

36
Farris Rule
  • Federal statutes generally applicable throughout
    the United States apply equally to Indian
    country, absent a treaty or federal statute to
    the contrary

37
Tribal Treatment
  • Federal environmental statutes generally treat
    Tribes like states if Tribes meet the following
    criteria
  • Federally recognized
  • Able to exercise substantial governmental powers
  • Jurisdiction over the area in question
  • Able to implement program effectively

38
Pub. Law No. 109-59, 10211
  • EPA may authorize the State of Oklahoma to
    administer state programs in Indian country
  • Additional requirement for treatment as a state
    in Oklahoma Tribe and the state agency must
    enter into a cooperative agreement to jointly
    administer program
  • Provisions not applied to date

39
Federal Environmental Laws
  • CAA
  • CWA
  • SDWA
  • FIFRA
  • TSCA
  • EPCRA
  • RCRA
  • CERCLA
  • OPA
  • SPCC Program
  • NEPA

40
The Clean Air Act
  • Establishes ambient air quality standards and
    emissions standards
  • Regulates mobile sources
  • Establishes a permitting program for major (and
    some minor) sources of air pollutants
  • Requires risk management planning for chemical
    hazards

41
The Clean Air Act allows Tribes to…
  • Seek approval from EPA to implement a tribal
    operating permit program (or EPA will issue
    permits)
  • Develop tribal implementation plans to meet
    reservation-specific air quality requirements
  • Re-designate air quality for their reservations

42
Clean Water Act
  • Tribes may apply for primary enforcement
    authority
  • Requires permits for facilities that discharge
    pollutants into the nations waters
  • Technology based effluent limits
  • Water-quality based effluent limits
  • Tribes may develop their own water quality
    standards

43
Tribal Water Quality Standards
  • Tribes may set water quality standards for waters
    within the reservation
  • Protect unique tribal interests
  • Upstream permits must comply with Tribes
    standards
  • Tribes standards must comply with downstream
    permits
  • EPA can resolve disputes between states and Tribes

44
The Clean Water Act Also Regulates
  • Storm water discharges, including discharges from
    construction activities that disturb one or more
    acres
  • Facilities that discharge to wastewater treatment
    plants
  • Facilities that could reasonably be expected to
    discharge harmful quantities of oil to navigable
    waters or shorelines

45
Safe Drinking Water Act
  • Drinking water programs Tribes may apply for
    primary enforcement authority
  • Underground injection control programs
  • Regulate five classes of injection wells
  • Primarily implemented by EPA
  • EPA may develop Tribe-specific program upon
    request

46
Federal Insecticide, Fungicide, and Rodenticide
Act
  • Regulates the sale, use, and distribution of
    pesticides
  • Also regulates the certification and training of
    applicators
  • EPA is generally the enforcement authority
  • EPA also provides funding so Tribes can develop
    and implement pesticide programs

47
Toxic Substances Control Act
  • EPAs program designed to assess and control
    risks that may result from manufacturing,
    processing, and using chemicals
  • TSCA may apply any time during a chemicals
    life-cycle

48
Emergency Planning and Community Right-to-Know Act
  • Facilities that store or manage specific
    chemicals must
  • Report extremely hazardous substances above the
    TPQ
  • Report releases at or above the RQ
  • Provide chemical storage information to the SERC,
    LEPC, and local fire department
  • Submit annual toxics release inventory report
  • Tribes may establish their own TERCs and TEPCs

49
Resource Conservation and Recovery Act
  • EPA has primary authority in Indian country
    because statute defines Tribes as
    municipalities
  • Subtitle C regulates hazardous waste
  • Subtitle D regulates solid waste
  • Tribes may petition for site-specific waivers and
    landfill regulations
  • Subtitle I regulates USTs

50
CERCLA / Superfund
  • Authorizes EPA to respond to releases or
    threatened releases of hazardous substances
  • Allows EPA to compel responsible parties to clean
    up the release themselves or to pay for the
    clean-up by others

51
CERCLA / Superfund
  • Tribes are generally treated like states
  • Tribes can seek damages for injuries to natural
    resources
  • Natural resources very broadly defined
  • Tribal trustee appointed by Tribe
  • Trustees are responsible for
  • Damage assessment
  • Restoration

52
Brownfields Law
  • Brownfields are properties where the presence
    of contamination complicates re-development
  • Tribes are treated like states
  • Developing a brownfields program is voluntary

EPA recently awarded a grant to the Absentee
Shawnee Tribe to clean up a 7-acre site where oil
field equipment was sold
53
ASTs
  • SPCC program regulates storage of oil in ASTs
  • EPA has primary authority in Indian country
  • EPA is also the lead agency for inland pipeline
    spills
  • Must report oil spills and chemical spills to the
    National Response Center

54
National Environmental Policy Act (NEPA)
  • Requires all federal agencies to prepare
    environmental impact statements for major federal
    actions that significantly affect the environment
  • Applies to federal actions in Indian country
  • May include potential impacts to sites of
    cultural significance and traditional hunting,
    fishing, and gathering rights

55
National Environmental Policy Act (NEPA)
  • Affected Tribes may
  • Submit comments throughout process
  • Be designated as cooperating agencies
  • Process should address all issues that could
    impact Tribes and their members
  • Mitigation plans must incorporate tribal concerns

56
Enforcement
  • Tribes with delegated programs have primary civil
    enforcement authority
  • EPA or Tribe may have criminal enforcement
    authority
  • Indian Tribes may also be subject to citizen
    suits in federal court

57
Land Use Planning
  • Tribal police power includes the ability to
    implement and enforce zoning
  • Tribal zoning authority is generally restricted
    to areas of essential Indian character

58
Indian Lands Tax Credit
  • Businesses in qualifying areas previously
    benefited from
  • Accelerated depreciation schedule
  • Employment tax credits for tribal members and
    their spouses
  • Credit expired on December 31, 2007 but may be
    renewed
  • Oklahoma Department of Commerce can provide
    updates

59
Qualifying Areas for Tax Credit Included All
Former Indian Reservation Lands in Oklahoma
60
Osage Nation v. State (10th Cir. Dec. 26, 2007)
  • Issue whether the state can tax tribal members
    who are employed by the Tribe on trust land and
    who reside on non-trust land within Osage County
  • Real issue whether the non-trust land in Osage
    County is Indian country

61
Osage Nation v. State (10th Cir. Dec. 26, 2007)
  • In a footnote, the court stated
  • A ruling in favor of the Osage Nation on the
    merits could affect more than the States ability
    to collect income tax. The Osage Nation might
    be able to foreclose Oklahoma from exercising
    sovereignty over Osage County in myriad other
    ways.

62
Resources
  • EPAs Tribal Compliance Assistance Center
    (www.epa.gov/tribalcompliance)
  • EPAs American Indian Tribal Portal
    (www.epa.gov/tribalportal)
  • EPA Region 6 Tribal Resources (www.epa.gov/region6
    /6dra/oejta/tribalaffairs)
  • Oklahoma Department of Commerce
    (www.okcommerce.gov)

63
QUESTIONS?
64
Tribal Lands
  • Kevin Coutant Doerner, Saunders, Daniel
    Anderson, L.L.P.

65
Indian Lands
  • Culturally and socially important to Tribes
  • Unique concept of tribal ownership
  • Over 55.4 million acres of land held in trust for
    Tribes
  • Generally a source of confusion

66
Working Definitions
  • Indian Country
  • All land within the limits of any Indian
    reservation under the jurisdiction of the U.S.
    government
  • All dependent Indian communities within the
    borders of the United States
  • All Indian allotments
  • 18 U.S.C. 1151

67
Working Definitions
  • Reservation
  • Usually portions of historic tribal lands
    reserved for Tribe pursuant to treaty or
    statute
  • Oklahoma Tax Commission v. Sac Fox Nation 508
    U.S. 144 (1993)
  • Allotment
  • Part of a reservation transferred to ownership by
    Tribe or tribal members as part of division of
    reservation
  • Trust Property
  • Tribal or tribal member land held in trust by the
    U.S. for the Tribe/tribal member

68
How Do Tribes Acquire Real Property
  • Possession
  • Treaty
  • Acts of Congress
  • Executive Action/Order
  • Purchase

69
Placing Tribal Property in Trust
  • Purpose
  • Increase in Indian trust land base supported by
    Indian Reorganization Act of 1934
  • Primarily to remove the property from the
    jurisdiction of State and political subdivisions
  • Trustee
  • United States for the benefit of the Tribe

70
Placing Tribal Property in Trust
  • Criteria for taking title to land in trust
  • Property is to be within or adjacent to
    reservation, or
  • Tribe owns interest in land, or
  • Acquisition is necessary to facilitate tribal
    self-determination, economic development or
    housing needs

71
Placing Tribal Property in Trust
  • Application
  • Parties
  • Legal description
  • Explanation of how property acquisition satisfies
    requirements
  • Notice give to state and local government
  • 30 days to respond
  • Comment on potential impacts on jurisdiction,
    taxes, etc.

72
Placing Tribal Property in Trust
  • Applicant can respond to governmental comments
  • Decision Criteria
  • Legal authority for acquisition
  • Need for land
  • Purpose for which land is to be acquired
  • Impact on state and political subdivisions
  • Whether BIA is equipped to handle same
  • National Environmental Policy Act compliance

73
Timeline
  • Approximately one year
  • If for gaming, approximately two years due to
    Indian Gaming Regulatory Act compliance

74
  • QUESTIONS?

75
Employment Law Issues With Tribal
Businesses Charles S.
Plumb Doerner, Saunders, Daniel Anderson,
L.L.P.
  • THE EMPLOYERS RESOURCE Preventing problems.
    Providing solutions.

76
OCCUPATIONAL SAFETY AND HEALTH ACT OF 1970
77
Navajo Forest Products Industries, 692 F.2d 709
(10th Cir. 1982)
  • The business organization
  • Fully integrated logging, sawmill, manufacturing
  • Owned and operated by the Tribe operated on the
    Navajo Reservation
  • Managed by a board appointed by the tribal
    committee and council
  • Vast majority of employees were Navajo

78
Navajo Forest Products Industries
  • Holding OSHA does not apply
  • Navajo Treaty expressly gave right to exclude
    non-Indians from reservation
  • OSHAs right to require inspections would be
    inconsistent and jeopardize that treaty right

79
Coeur dAlene Tribal Farm, 751 F.2d 1113 (9th
Cir. 1985)
  • The business organization
  • Commercial farm, wholly owned and operated by
    Tribe on tribal land
  • Sold products on national market significant
    number of non-Indian employees
  • a normal commercial farming enterprise

80
Coeur dAlene Tribal Farm
  • Holding OSHA applies
  • No treaty between Coeur dAlene Tribe and the
    United States
  • No interference with tribal governance or
    intramural matters (e.g., tribal membership,
    politics, inheritance rules, domestic relations)

81
Warm Springs Forest Products Industries, 935
F.2d 182 (9th Cir. 1991)
  • The business organization
  • Timber and wood products operation, owned and
    operated by the Tribe, located on the reservation
  • A management plan is established by the tribal
    council nearly ½ of workforce is non-Indian

82
Warm Springs Forest Products Industries
  • Holding OSHA applies
  • A treaty which grants a Tribe a general right to
    exclude non-Indian from the reservation does not
    defeat OSHAs applicability. (OSHAs inspection
    rights are limited.) Contrary to Navajo Forest
    Products
  • Following Coeur dAlene, no demonstrable
    interference with tribal governance or intramural
    matters

83
Mashantucket Sand Gravel, 95 F.3d 174 (2nd
Cir. 1996)
  • The business organization
  • Wholly owned and operated construction business,
    with priorities and projects decided by tribal
    council
  • Many of employees were non-Indian
  • Projects included the Foxwood High Stakes Casino,
    located on the reservation

84
Mashantucket Sand Gravel
  • Holding OSHA applies
  • No treaty between the Tribe and United States
  • Ownership and direction of a business enterprise
    by a Tribe does not by itself make its
    operations an act of tribal governance
  • Here, the business activities are of a
    commercial and service character not government
  • It is significant that non-Indians are employed,
    and the Foxwood Casino project plainly operates
    in interstate commerce, attracting outside
    tourists

85
EMPLOYEE RETIREMENT INCOME AND SECURITY ACT
86
Chippewa Health Center, 868 F.2d 929 (7th Cir.
1989)
  • The business organization
  • A health facility owned and operated by the
    Tribe, on reservation land
  • State Farm Insurance provided a group health
    policy for employees of the health center

87
Chippewa Health Center
  • Holding ERISA applies
  • No treaty provisions that would be harmed by
    ERISAs application
  • No interference with Chippewa's purely
    intramural or essential self-government rights
    simply imposes protection to health insurance
    beneficiaries

88
FAIR LABOR STANDARDS ACT
89
Great Lakes Indian Fish and Wildlife Comm., 4
F.3d 940 (7th Cir. 1993)
  • The business organization
  • Wardens and enforcement officers employed by a
    consortium of 13 Chippewa Tribes to enforce
    tribal hunting, fishing and gathering rights

90
Great Lakes Indian Fish and Wildlife Comm.
  • Holding FLSA does not apply
  • Enforcing the tribal property rights is
    inherently an exercise of sovereignty

91
AGE DISCRIMINATION IN EMPLOYMENT ACT
92
EEOC v. Cherokee Nation, 871 F.2d 937 (10th
Cir. 1989)
  • The claim
  • Former tribal employee filed a complaint against
    the Cherokee Nations Director of Health and
    Human Services

93
EEOC v. Cherokee Nation
  • Holding ADEA did not apply
  • A claim brought directly against the Tribe by a
    tribal employee interferes with tribal governance

94
Fond du Lac Heavy Equipment and Construction, 986
F.2d 246 (8th Cir. 1993)
  • The business organization
  • Equipment and construction company wholly owned
    by the Tribe and located on reservation some
    work performed off reservation
  • Tribal member who was not hired filed an age
    discrimination complaint with EEOC

95
Fond du Lac Heavy Equipment and Construction
  • Holding ADEA did not apply
  • A dispute between Indian applicant and the tribal
    employer
  • Federal control and supervision would inevitably
    dilute tribal sovereignty

96
Title VII
  • Expressly excludes Indian Tribes
  • from its coverage
  • 42 U.S.C. 2000e

97
Title VIIs Indian Preference Provision
  • - 42 U.S.C. 2000e 2(i)
  • - EEOC Policy Statement 915.027 (5/16/88)
  • Applies to non-tribal employers (Tribes exempt
    from Title VII)

98
Preference Provisions
  • An employer can give preferential treatment to
    Indians, if
  • The employer is located on or near an Indian
    reservation or land held by Native groups or
    corporations
  • The employer publicly announces its preference
    for Indians
  • The individuals receiving preferential treatment
    lives on or near the reservation or land held by
    the Tribe (within commuting distance)

99
Preference Provisions
  • NOTE
  • The preference applies to hiring, promotion,
    transfer, layoff, and recalls
  • Preference must apply to all Indians. You cannot
    prefer one Tribe affiliation over another

100
FAMILY AND MEDICAL LEAVE ACT
101
Chayoon, 355 F.3d 141 (2nd Cir. 2004)
  • Employee sued Tribe for money damages for
    violating his FMLA rights, by naming officers and
    employees of Tribe

102
Chayoon
  • Holding
  • As a federally recognized Tribe, the Mashantucket
    Pequot enjoy tribal immunity from damage suits
  • Cannot circumvent tribal immunity by naming
    individual officers and employees, who were
    acting in their scope as a tribal employee

103
NATIONAL LABOR RELATIONS ACT
104
San Manuel Indian Bingo Casino, 475 F.3d 1306
(D.C. Cir. 2007)
  • The business organization
  • A casino operating on tribal land
  • Part of the Tribes economic development and
    employment projects

105
San Manuel Indian Bingo Casino
  • Holding the NLRA applies
  • A large number of employees were non-Indian
  • Seeks to attract non-tribal patrons, e.g., from
    Los Angeles
  • Here, the casino was primarily a commercial
    activity, unrelated to tribal governance

106
How Do I Know?
  • Does the employment law specifically address
    whether Indian Tribes are covered?
  • Would application of this federal employment law
    harm a right assured to the Tribe under a treaty?
  • Does the employment law interfere with a Tribes
    intramural matters and right to self governance?

107
Considerations
  • When considering the applicability of a federal
    employment law to an enterprise or venture to
    which a Tribe is a party
  • Does the workforce include a significant number
    of non-Indians?
  • Look to the patrons and customers.
  • Does the scope of the business extend into
    interstate commerce, as opposed to localized?
  • Is this primarily a commercial enterprise?

108
OKLAHOMA WORKERS COMPENSATION SYSTEM
109
Dominic v. Creek Nation, 1997 OK 41
  • Creek Nations Recreation Director falls at work,
    injuring back, neck, legs and hands
  • Workers Compensation insurer had accepted
    premium payments from Creek Nation, which were
    based on injured employees wages.
  • Workers Compensation insurer paid disability
    benefits to injured employee for 21 weeks.

110
Dominic v. Creek Nation
  • Holding Insurer is estopped from arguing the
    Creek Nation was not an employer or injured
    employee was not covered by Workers
    Compensation.
  • SAME RESULT Little v. Muscogee (Creek) Nation
    Wahpepah v. Kickapoo Tribe Muscogee Nation v.
    Smith Allen v. Lenape Lure Co.
  • NOTE Did not decide
  • Whether Creek Nation is an employer covered by
    Workers Compensation Act
  • Whether Creek Nations sovereign immunity
    prevents a Workers Compensation claim against
    the Tribe

111
Davis v. Cherokee Nation Enterprises, 2004 OK
CIV APP 95
  • Employee of Cherokee Nation Enterprises
    convenience store injured while working
  • Holding Estoppel ruling of Dominic case also
    applies when someone works for a tribal business
    operation, as opposed to a Tribe

112
Hall v. Cherokee Nation, 2007 OK CIV APP 49
  • Cherokee Nation EMS paramedic injured
  • Cherokee Nation has its own tribal workers
    compensation system
  • The insurance policy paid and maintained was
    issued exclusively for benefits under the
    Cherokee Nations tribal workers compensation
    system not Oklahomas workers compensation
    system

113
Hall v. Cherokee Nation
  • Holding The Oklahoma Workers Compensation
    system did not have jurisdiction over the injured
    paramedics claim.

114
  • QUESTIONS?

THE EMPLOYERS RESOURCE Preventing problems.
Providing solutions.
115
Business Siting Opportunities in Indian
Country, Foreign Trade Zones, HUBZones
  • Bryan J. Nowlin, Esq.
  • Doerner, Saunders, Daniel Anderson, L.L.P.

116
What is a Foreign Trade Zone?
  • An FTZ
  • An area within the United States, in or near a
    U.S. Customs port of entry,
  • Where foreign and domestic merchandise is
    considered to be outside the country, or at
    least, outside of U.S. Customs territory.
  • Certain types of merchandise can be imported into
    a Zone without going through formal Customs entry
    procedures or paying import duties.
  • Customs duties and excise taxes are due only at
    the time of transfer from the FTZ for U.S.
    consumption.
  • If the merchandise never enters the U.S.
    commerce, then no duties or taxes are paid on
    those items.

117
Benefits of Foreign Trade Zone
  • Merchandise entering FTZs are not subject to
    customs tariffs until the goods leave the zone
    and are formally entered into U.S. Customs
    Territory.
  • Merchandise that is shipped to foreign countries
    from FTZs is exempt from duty payments.
  • This provision is especially useful to firms that
    import components in order to manufacture
    finished products for export.

118
Benefits of Foreign Trade Zone
  • No time limit on goods stored inside a FTZ and
    certain foreign and domestic merchandise held in
    FTZs may be exempted from state and local
    inventory taxes
  • Allows firms to minimize their costs while their
    products are waiting to be shipped
  • Quota restrictions are in some cases waived for
    items entering an FTZ
  • Restrictions would apply if the items were to
    enter the U.S. market

119
Activities in a FTZ
120
The Foreign Trade Zone Board
  • Administers the FTZ program
  • http//ia.ita.doc.gov/ftzpage/

121
Eligibility - Entity
  • Public or Private Corporation
  • Preference for Public Entity
  • 19 C.F.R. 400.22
  • Tribes or tribal corporations are eligible

122
Eligibility Location of Site
  • The zone or subzone site is within the limits of
    a Customs port of entry.
  • The zone or subzone site is within 60 statute
    miles of the outer limits of a CBP port of entry.
  • The zone or subzone site is within 90 minutes
    driving time from the outer limits of a CBP port
    of entry as verified by the CBP Service Port
    Director.
  • 19 C.F.R. 101.3.

123
Process to Establish a FTZ
124
Application Requirements
  • Application requires
  • Letter of transmittal, enabling legislation for
    the applicant to apply for a Zone
  • Legal description of the proposed Zone
  • Letters from property owners
  • Statement of economic justification for the Zone,
  • Local map indicating the Zone site

125
FTZ Fee
  • The application fee for a new Foreign Trade Zone
    is 3,200
  • Application review process typically takes 10 to
    12 months

126
Tribal Free Trade Zones in Existence
  • Washington State
  • Arizona
  • None in Oklahoma

127
HUBZones
128
What is a HUBZones?
  • Historically
  • Underutilized
  • Business
  • Zone
  • The HUBZones Program aims to stimulate economic
    development and create jobs in urban and rural
    communities by providing Federal contracting
    preferences to small businesses. These
    preferences go to small businesses that obtain
    HUBZones certification in part by employing staff
    who live in a HUBZones.

129
Benefits of HUBZones Certification
  • Set-Aside Government contracts
  • Sole Source contracts
  • Open Bid contracts may be 10 higher
  • Eligible firms can qualify for higher
    SBA-guaranteed surety bonds on construction and
    service contract bids

130
Requirements for HUBZones Certification
  • Owned and controlled
  • at least 51 by U.S. citizens, or
  • Community Development Corporation, or
  • Agricultural cooperative or
  • Indian Tribe
  • Its principal office must be located within the
    HUBZones which includes lands considered Indian
    Country and
  • At least 35 of its employees must reside in a
    HUBZones.

131
Map of Oklahoma with HUBZones
132
IRS Map of Oklahoma
  • Areas eligible for benefits associated with
    status as former Indian reservation

133
Questions?
134
Special Business Structures (Section 8(a) and
more…
  • David McCullough / Chad D. Burris Doerner,
    Saunders, Daniel Anderson, L.L.P.

135
Financial Incentives
  • Encourage investment in economic development
  • Indian Tribes make attractive business partners
    for private sector business
  • Incentives available to Tribes
  • Mutual benefits for Tribes/tribal entities and
    private sector

136
SBA 8(a) Certification Program
  • Nine year program
  • Preferential treatment
  • Government contracts
  • Sole source on contracts up to 5M for
    manufacturing
  • Sole source on contracts up to 3M for everything
    else
  • Tribes are not subject to this limitation

137
SBA 8(a) Certification Program
  • Businesses must be
  • Small businesses according to NAICS standard
  • Owned and controlled at a 51 threshold
  • Socially or economically disadvantaged
  • Demonstrate potential for success
  • Demonstrate good character
  • Each applicant may participate in only one entity
    at a time
  • Tribally owned businesses may enter as many
    companies as they wish

138
SBA 8(a) Certification Program
  • Small business by NAICS
  • Consult most recent NAICS limits and SIC number
  • SBA may award a sole source 8(a) contract to
    Tribal Entity
  • Where the anticipated value of the procurement
    exceeds the applicable threshold
  • There is no requirement that a procurement must
    be competed before it can be accepted on a
    sole-source basis
  • May not be removed from competition to award it
    to a tribally owned or ANC-owned concern

139
SBA 8(a) Certification Program
  • Owned and controlled at 51
  • The socially and economically disadvantaged
    member must have full to majority ownership
  • Tribes may employ management that would otherwise
    not meet the qualifications without imputing
    those non-qualifying attributes to the entity

140
SBA 8(a) Certification Program
  • Socially Disadvantaged (SDB)
  • Member of a historically, socially disadvantaged
    group
  • Listed under the SBA guidelines
  • Non-members are asked to demonstrate the claimed
    status

141
SBA 8(a) Certification Program
  • Economically Disadvantaged
  • Qualification is proven on a case by case basis
  • Tribes are deemed socially disadvantaged
  • Must prove Economic Disadvantaged status
  • May employ management that would otherwise not
    meet qualifications without imputing those
    non-qualifying attributes

142
SBA 8(a) Certification Program
  • Demonstrate a potential for success
  • Determined by the applicant examiners on case by
    case basis
  • Include a 2 year minimum in existence prior to
    application

143
SBA 8(a) Certification Program
  • Applicants may seek a waiver of the 2 year
    requirement if
  • Substantial business management experience
  • Technical experience
  • Adequate capital to operate
  • Record of successful contract performance
  • Can prove they can obtain the resources

144
SBA 8(a) Certification Program
  • Good Character
  • Applicant and its principles must demonstrate
    good character

145
A-76 Program
  • Imposes a long and cumbersome procedure for any
    government facility that wishes to contract an
    activity that employs ten or more civilian
    government employees
  • To avoid the process, award contract to Indian
    Tribes and entities
  • Requirements shall not apply to a commercial or
    industrial type function that is contracted to
    the blind or handicapped

146
A-76 Program
  • Available to Indian Tribes and tribal entities
    8(a) on larger conversions
  • The only entities that may receive an 8(a)
    contract in excess for 3 million for services
    are Indian Tribes and tribal entities
  • The bulk of the A76 contracts are far in excess
    of 3M

147
The 5 Subcontracting Bonus
  • Section 504 provides that a contractor
    subcontracting for supplies or services my
    receive an additional amount of compensation
  • Above the amount of the prime contract
  • Equal to 5 of the amount of the subcontract
  • DOD has been the most effective at implementing
    this incentive

148
The 5 Subcontracting Bonus
  • DOD procedure
  • Submit invoice(s) to contracting officer
  • Copy of the subcontract
  • Proof that the subcontractor is 51 or more
    Native American owned
  • Invoice is routed through the DOD Office, then to
    the comptroller who authorizes payment

149
SDB Program
  • Tribes benefit from deemed social disadvantage
    and by multiple program participants
  • Administered under the SBA development program
  • Provides participants in the program with
    preferential treatment in the government
    procurement process
  • Qualification for acceptance are the same as the
    8(a) excluding the Potential for Success
    determination

150
SDB Program
  • Benefits
  • Set asides for the SDB program
  • Allowing for an open bidding prime credit for SDB
    status
  • Allowing for a price evaluation credit
  • Allowing a direct credit to prime using SDB subs

151
SDB Program
  • Set asides
  • Government allows for a certain number of set
    asides contracts for SDB bids only
  • Open bidding prime credit
  • Offers a credit of 10 for all open bidding prime
    contracts in designated industry SIC
  • The SDB is in effect bidding at 10 below all
    other contractors

152
SDB Program
  • Price evaluation
  • Allows for an evaluation adjustment
  • Direct credit
  • Prime can receive a credit for the utilization of
    an SDB
  • Other considerations
  • Joint ventures under the SDB program are not
    subject to approval by the SBA

153
Federal Acquisition Regulation (FAR)
  • Permits subcontracts awarded to Indian Tribes to
    be counted towards a contractors goal for
    subcontracting with SBs and SDBs
  • Provides that Indian organizations and
    Indian-owned economic enterprises shall have the
    maximum practicable opportunity to participate in
    performing contracts awarded by Federal agencies

154
Federal Acquisition Regulation (FAR)
  • Indian enterprises with at least 50 of their
    equity owned by an Indian Tribe may be eligible
    for certification by the SBS
  • They can receive 8(a) contracts on a sole-source
    basis
  • The normal SBA affiliation rules do not apply to
    tribal 8(a) enterprises

155
Federal Acquisition Regulation (FAR)
  • HUBZones Certification
  • Tribally-owned concerns certifying that at least
    35 of employees engaged in performing the
    contract will reside in an Indian reservation of
    adjoining HUBZones

156
Section 702 Emergency Supplemental Act
  • Provides that subcontracts awarded to Indian
    Tribes that are recognized by the BIA to be
    counted towards the satisfaction of a
    contractors goal for subcontracting with SB and
    SDB concerns
  • Credit may be taken even when the Indian Tribe
    may be other than small
  • The law does not require the Indian Tribes to be
    eligible for SDB or 8(a) certification

157
FAR - Subcontractors
  • Where one or more subcontractors are in the
    subcontract tier between prime contractor and
    Indian Tribe, the Indian Tribe shall designate
    the appropriate contractor(s)
  • To avoid double-counting the Indian Tribe must
    provide a copy of its written designation within
    30 days of the subcontract award

158
FAR - Subcontractors
  • The Indian Tribe may designate more than one
    contractor to count the subcontract towards its
    SB and SDB goals
  • Only a portion of the subcontract can be
    designated to each contractor

159
Considerations When Forming Business Relations
  • Joint venture, partnerships, tribally-chartered
    corporations allow
  • Indian Tribe and non-Indian entity to share
    ownership
  • Allocate control and management of company
  • Structured allocation of financial/equity
    investments
  • Allocation of risks and splitting of profits
  • Non-Indian entity brings cash and/or experience
    Indian Tribe brings ability to open up markets
  • Requires at least 51 Indian Tribe ownership
  • Generally allows opportunity for Indian Tribe to
    ultimately take over company

160
Other Economic Development Incentives
  • The Indian Employment Credit
  • Accelerated Depreciation
  • Indian Loan Guaranty
  • Exemption on Articles Manufactured by Indians

161
The Indian Employment Credit
  • Available for wages paid or incurred to employees
    on an Indian reservation.
  • It provides for a twenty percent non-refundable
    income tax credit for wages paid to and health
    insurance premiums paid for each employee who is
    an enrolled member of an Indian Tribe (or the
    spouse of an enrolled member)

162
The Indian Employment Credit
  • Only the amount of such wages and health
    insurance premiums in excess of such costs for
    the employee in 1993 are eligible for the credit.
  • The maximum amount of wages and health insurance
    costs that can be counted in any year is 20,000
    therefore, the maximum annual credit per employee
    is 4,000.
  • The credit is not available for employees
    involved in a gaming business or employees who
    are owners of at least 5 percent of the business.
  • Employees who earn over 30,000, based on 1993
    figures and adjusted for inflation, in wages are
    not eligible.

163
Accelerated Depreciation
  • Allows for an accelerated schedule of
    depreciation for property held on a reservation,
    or former reservation in Oklahoma.

164
Accelerated Depreciation
  • To be eligible, the property must
  • Be used by the taxpayer predominantly in the
    active conduct of a trade or business within an
    Indian reservation, or former reservation in
    Oklahoma, on a regular basis.
  • Not be used or located outside the Indian
    reservation on a regular basis.
  • Not be used in conducting or housing class I, II
    or III gaming as defined in the Indian Regulatory
    Act.
  • Not be residential rental property.
  • Not be owned by a person who is required to use
    the "alternative depreciation system".

165
Indian Loan Guaranty
  • Federal guarantee against any loan made to an
    Indian organization or individual Indian owned
    business on or near Indian land.
  • ELIGIBILITY REQUIREMENTS
  • The borrower must be a federally recognized Tribe
    or Alaska Native group, member of such Tribe or
    group or an Indian-owned organization.
  • A minimum of 20 percent equity, in either cash
    and/or unencumbered assets to be used in the
    business being financed, is required.
  • The business must be located on or near a
    reservation or recognized service area and
    contribute to the economy of the reservation.
  • The borrower may not be delinquent on any federal
    financial obligation. The borrower may not obtain
    a loan if there is any outstanding unresolved
    federal debts.

166
Indian Loan Guaranty
  • LOAN PURPOSE
  • Loans may be made to finance Indian-owned
    businesses organized for profit, provided that
    eligible Indian ownership constitutes not less
    than 51 percent of the business.
  • LOAN AMOUNT
  • 500,000 is the maximum loan that can be
    guaranteed for i
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