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The U.S. Supreme Court ruled on April 25 that a limousine driver for a Mohegan Tribe casino isn't entitled to sovereign immunity in a negligence case stemming from an off-reservation car accident (Lewis v. Clarke, U.S., No. 15-1500).
The decision "holds that employees of Indian tribes are not entitled to invoke tribal sovereign immunity for lawsuits brought against them in their personal capacity, even if the tribe will indemnify them for damages resulting from the lawsuit," explained Forrest Tahdooahnippah, an attorney with Dorsey & Whitney in Minneapolis.
The ruling makes Native American tribes, through their tribally owned companies, vulnerable to litigation against their employees, said Holly Robbins and Tessa Mlsna, attorneys with Littler in Minneapolis, in an e-mail to SHRM Online.
Tribal nations are recognized by the federal government as "domestic dependent nations" with the authority to govern themselves. Except in limited circumstances, tribes are immune from lawsuits in U.S. courts, and that immunity generally extends to tribal employees acting within the scope of their jobs. When the immunity applies, plaintiffs have to bring their claims in tribal courts instead.
In this case, there was no dispute that driver William Clarke was acting in the scope of his employment when he was driving Mohegan Sun Casino customers to their home and his limousine struck another vehicle on a Connecticut interstate highway.
Brian and Michelle Lewis, who were in the other vehicle and sustained injuries in the accident, sued Clarke in state court in his individual capacity. They claimed that Clarke's negligence caused the crash.
The Connecticut Supreme Court dismissed the claims against Clarke, finding that "tribal immunity extends to individual tribal officials acting in their representative capacity and within the scope of their authority."
But the U.S. Supreme Court disagreed. The high court found that because Clarke was sued personally—rather than as an employee of the Mohegan Tribal Gaming Authority—the tribe's sovereign immunity wasn't implicated.
"This is a negligence action arising from a tort committed by Clarke on an interstate highway within the State of Connecticut," Justice Sonia Sotomayor wrote for the court. She said it is "simply a suit against Clarke to recover for his personal actions."
The Mohegan Tribe's code contains an indemnification provision, through which the Gaming Authority must cover the financial losses employees incur in the scope of their employment for certain negligence claims. Clarke argued that the indemnity clause made the Gaming Authority the real party of interest in the case and that tribal immunity therefore applied.
But the high court said it doesn't matter if the Gaming Authority agreed to pay for damages awarded in the lawsuit—what matters is that the Mohegan Tribe and the Gaming Authority don't have any legal obligations in state court to foot the bill for a lawsuit against Clarke personally.
"Here, the Connecticut courts exercise no jurisdiction over the tribe or the Gaming Authority, and their judgments will not bind the tribe or its instrumentalities in any way," Sotomayor wrote.
The decision may have unexpected results in both the tribal sovereignty and employment realms, Robbins and Mlsna said.
"It follows that where … the tribe has an established obligation to indemnify its employee, such 'individual-capacity' cases will likely result in claims for indemnification against a tribe," they explained.
Tahdooahnippah noted that the Supreme Court's ruling may cause tribes to protect their assets by no longer indemnifying employees in situations where tribal immunity doesn't apply. "In turn, this may have a chilling effect on tribal police officers, emergency responders, prosecutors and court officials," he said.
[SHRM members-only platform: SHRM Connect]
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