American Indian Law: A Complex, Ever-Evolving Legal Landscape

December 08, 2016

American Indian tribes, long in existence before the US Constitution was written, are not directly subject to the Constitution and retain certain inherent governmental powers over their citizens and lands. But tribal governments are subject to the overriding sovereignty of the United States, although not that of the states they inhabit. The intricate relationship among tribes, the federal government, and states has been the lasting source of a complex, ever-evolving legal landscape.

Adding to the complexity is the recent trend among tribes to diversify their economies in ways that interact with the non–American Indian community. Most recently, that means branching out of the gaming industry that has been a mainstay of tribal economic development for decades. Tribes are venturing into retail, financial services, tourism, pharmaceuticals, and power generation, to name just a few sectors. And they are reaching into urban markets and forging partnerships with non-tribal businesses, where tribes face a unique set of challenges as they explore new markets with businesses that require help navigating the uncharted waters of engaging in ventures with tribes.

Nearly 60% of all tribes in the lower 48 states now have financial managers who help tribes navigate the investment world, according to The Wall Street Journal. The Cherokee Nation Businesses, an Oklahoma-based holding company owned by the Cherokee Nation, reported $829 million in revenues in 2014 from manufacturing and service contracts. The services it provides include environmental consulting, construction engineering, management services, and scientific research and development, according to the Native American Venture Fund, an investment firm that partners with tribes.

Meanwhile, government entities and tribal polities frequently dispute taxes, trust land acquisition, environmental protection, and access rights to natural resources. The ongoing saga in the Dakota Access Pipeline project, which has triggered strong tribal opposition because it aims to extend pipes through tribal land, is one of the more high-profile examples in the news today.

Indeed, American Indian law encompasses a broad diversity of issues. Traditional practice areas include matters involving water rights; tribal property; hunting, fishing, and gathering; treaty rights; and criminal law. Increasingly, practice in this area includes not only an emphasis on Indian gaming but also on land trusts, child welfare, government services, and economic development.

Morgan Lewis’s American Indian law practice has been increasingly active in this challenging arena. Our team includes some of the top authorities in the field, including a congressional appointee to the Indian Law and Order Commission, who served for a decade as the point person on American Indian gaming for the California Attorney General’s Office, and a partner who was deeply involved in handling controversies concerning American Indian casinos while serving as a member of Congress from California.

We recently spoke to Thomas F. Gede, of counsel at Morgan Lewis Consulting, about the current state of American Indian law, where the practice is headed in the coming years, and what sort of knowledge the legal landscape demands.

What are some of the unique types of American Indian law cases that Morgan Lewis has handled or is currently handling?

Morgan Lewis has engaged in cases involving disputes over the taking of land in trust for the benefit of an Indian tribe both under the federal Indian gaming statutes and in non-gaming situations. We have handled disputes over environmental protection and enforcement with federal, tribal, and state governments. We also have represented financial institutions in litigation in federal, state, and tribal courts dealing with tribal governmental disputes or bankruptcy. Additionally, we worked on disputes over proper protection of tribal trademarks and cultural resources.

Our firm has appeared in various appellate courts on key constitutional and statutory interpretation questions, including the US Supreme Court and other state and federal appellate courts. More recently, Morgan Lewis has advised tribes and tribal entities in dealing with economic development opportunities and financing options in projects ranging from energy development to Minority Business Enterprise status.

Many American Indian communities are diversifying their economies by moving away from the gaming businesses that they have relied on for years. What are the reasons for this diversification?

Gaming has been a significant engine of economic, governmental, and social development for many tribes, but they recognize the industry’s limits. Tribes that have resources to invest are examining profitable opportunities, broadening their bases, and contributing to their financial stability and strength. Tribal enterprises fund tribal governmental services, such as healthcare, education, and social support services, lending to self-sufficiency.

Tribes with abundant natural resources generally look to energy development, minerals development, and forestry management. Tribes with specialty interests, such as vineyards, are reaching into higher level urban markets—this includes investments in hotels, hospitality and tourism, golf courses, and other recreational industries. Many tribes without abundant natural resources are examining the development of financial services, pharmaceutical distribution, tobacco sales, retail sales, and warehousing.

An increase in economic diversification by tribes has accelerated in the last decade as American Indian gaming has saturated more markets. Although profitable, casino earnings have stabilized in a more mature market in the last 10 years. Non-gaming economic opportunities are bound to grow and continue as tribes and non-tribal businesses seek to partner with each other and reach new markets.

What are the risks and challenges of diversification, and what are the legal and regulatory issues?

In all economic development for tribes and their non-tribal business partners, there are risks associated with tribes’ unique governmental status. As a matter of federal law, tribes enjoy sovereign immunity from lawsuits unless tribes expressly waive it or the US Congress abrogates it. Many outside businesses are, therefore, reluctant to engage with tribes for fear of few remedies in a breach of contract or tort liability. Many financial backers are also reluctant to infuse capital into tribal enterprises for similar reasons. There are also complicated taxation questions relating to sales on and off the reservation, by and for tribal members necessitating strong legal advice. These legal issues have dampened tribal economic development for decades, but Morgan Lewis helps find creative and productive ways to overcome such obstacles and facilitate growth and development.