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April 26, 2017

In a unanimous decision issued yesterday, the Supreme Court held that a tribal employee can be sued in state court for injuries he caused in a motor vehicle accident outside of Indian country while acting within the scope of his employment, even if the tribe agrees to pay for any judgment pursuant to tribal law. For a copy of the Court's decision, Lewis v. Clarke, click here. For a summary, read on.

It is well-established that Indian tribes and arms of Indian tribes have sovereign immunity from lawsuits arising within or outside of Indian country, whether involving "governmental" or "commercial" activities. Absent a clear waiver of that immunity by Congress or by the tribe, lawsuits cannot go forward. The Supreme Court's decision in Lewis v. Clarke adds another piece to the continuing puzzle of tribal sovereign immunity. See Drummond Woodsum Indian Nations Labor and Employment Law Advisory, The Multiple Manifestations of Sovereign Immunity (March 3, 2017).

The question presented in Lewis was whether William Clarke, an employee of the Mohegan Tribal Gaming Authority (clearly an arm of the Mohegan Tribe), enjoys the sovereign immunity of the Authority. While driving a limousine as an employee of the Authority to transport patrons of the Mohegan Sun Casino to their homes near Norwalk, Connecticut, Clarke caused a motor vehicle accident allegedly injuring Brian and Michelle Lewis. The Lewises filed suit against Clarke in Connecticut state court.

Clarke defended, claiming that he had sovereign immunity because: (a) he was acting within the scope of his employment for the Authority at the time of the accident, thereby making the Authority, an entity with sovereign immunity, the "real party in interest"; and, (b) Mohegan law provides that the Authority will indemnify him for any judgment he pays for damages caused during the course of his employment (other than damages for "wanton, reckless or malicious" conduct), thereby making the Authority the real party in interest.

Importantly, the Lewises' lawsuit named only Clarke as a defendant. They did not attempt to sue the Authority or the Tribe. Nothing in their lawsuit suggested that they sought to collect money from the Authority or from the Tribe. Thus, on its face, their lawsuit only implicated payment for damages by Clarke as an individual.

The Supreme Court easily rejected Clarke's arguments. Drawing from established law addressing the sovereign immunity of state employees, the Court held that the Authority was not the "real party in interest" because Clarke was sued in his personal capacity; he was not sued as "an official" of the Authority. Had the Lewises sued Clark in his "official capacity" as an officer of the Authority, rather than in his personal capacity, the Court might have decided differently because the Authority might then be deemed the "real party in interest," i.e., the entity against whom relief is sought. Here the Court concluded that the Lewises' state court action was "simply a suit against Clarke to recover for his personal actions, which will not require action by the sovereign or disturb the sovereign's property."

On the question of whether the Authority should be considered the real party in interest because Mohegan law provides for the Authority to indemnify Clarke for any judgment (unless his conduct was "wanton, reckless or malicious"), the Court held that the Tribe could not, through a voluntary act (such as adoption of the indemnification ordinance), extend the scope and reach of its sovereign immunity to employees who would not otherwise fall under its protection. To allow otherwise would conflate the issue of who is legally bound by any resulting judgment with who may ultimately be held responsible for paying the tab.

What are the takeaways from this decision? They aren't monumental: an employee of an Indian nation can be sued, as an individual, in state court for personal injuries arising during the course of his or her employment but outside the geographic jurisdiction of the Indian nation. In so holding, the Court essentially placed employees of Indian nations on equal ground with state and federal employees who are also potentially subject to suit for their individual tortious conduct. Accordingly, Indian nations and their enterprises would be wise to review the scope of their insurance policies in light of the Lewis decision, especially those that indemnify employees in a manner similar the Mohegan Tribe's indemnity of Mr. Clarke.

For more information please contact Anna B. Cole or Kaighn Smith, Jr. at Drummond Woodsum's Indian Nations Labor and Employment Group. 

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