Northwest Indian Law & Business Advisor : Northwest Indian & Tribal Lawyer & Attorney : Williams Kastner Law Firm : Tacoma, Seattle, Portland

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The National Indian Gaming Association (NIGA) has asked its members to contact the White House in response to the National Indian Gaming Commission’s (NIGC) proposed changes to the gaming machine section of the Minimum Internal Controls Standards. 

The changes would affect standards for “gaming associated” equipment such as accounting systems and player tracking systems.  The revisions would expand the NIGC’s authority over Tribal gaming in this area, including the required use of computer management systems that would cost $5 to 50 million to implement, according to the NIGA’s Regulatory Alert.

NIGA credits these revisions to NIGC Chairman, Phil Hogen, who has held his position for nearly five years past the end of his term.  NIGA has urged the President to appoint a new chairman of the NIGC and to ask Secretary Salazar to appoint a new commissioner. 

This week, Hogen responded, telling GamblingCompliance that the proposed regulation would not require tribes to buy expensive new accounting systems.  He explained that the rule would only require tribes to keep track of certain transactions, suggesting they could do so without having to implement computer management systems.  Hogen added, “I am eagerly awaiting the president’s appointment of my replacement . . . I sure hope I am long gone by the time these regulations ever become either proposed regulations or final regulations – and we are a long way from that.’’

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Indian Country must take a renewed approach to insurance procurement. Tribes, Alaska Native Corporations and Indian casinos and enterprises can no longer afford to treat their insurance polices as boilerplate, non-negotiable contracts. Why? Because the future of tribal sovereignty and self-governance depends in significant part on better insurance products and risk management practices. (For example, see Tribes & Insurance Defense Lawyers Should Avoid Asserting Sovereign Immunity.)

It is time for tribal business leaders and staff lawyers to approach and negotiate those two-inch thick insurance policies as they would a significant real estate or commercial loan transaction.

This checklist is designed to help Indian decision-makers ensure that tribal insurance contracts not only maximize the protection of Indian assets, but do not inadvertently waive tribal sovereignty, jurisdiction or immunity. Tribal executives should work with their brokers to negotiate and tailor make (“manuscript”) policies for the tribe or tribal business.

• Tribal Defense & Indemnity. These are the two things any insured bargains for, in exchange for a costly insurance premium. Without claim defense and indemnity, there is not much reason to have insurance. Yet, some tribal insurance policies do not include an express defense right. Make sure yours does – or your insurance policy might not be worth the paper its printed on.
• Tribal Choice of Counsel. Tribal business leaders must insist that the tribe “shall have the sole right to assign counsel to defend any suit against the insured.” Like Corporate America, which demands of its insurers the right to select outside defense counsel, Indian Country must enjoy that same prerogative to assign Indian lawyers they trust. If the insurer balks at such language, the tribe and insurer could agree that they will jointly select counsel, which would have the practical effect of giving the tribal insured veto power over any carrier’s choice of discount, non-tribal defense lawyer.
• Policy Doesn’t Waive Immunity from Tort Claims. If a tribe does not wish to cause a blanket immunity waiver by purchasing insurance, as is the case for most tribes, their policy should provide that nothing therein should be read to waive immunity or confer jurisdiction to any court.
• Tribal Authority to Waive Immunity. An insurer is not, as a matter of law, authorized to waive or otherwise limit a tribal insured’s sovereign immunity. All tribal policies must make clear that in the event of a claim or suit against the tribe or tribal officers or employees, the insurer shall not assert or waive tribal immunity absent written authorization from the tribe.
• Tribally Appropriate Dispute Resolution. Standard arbitration endorsements arguably: (1) divest Indian courts from jurisdiction to entertain a reservation-based insurance coverage disputes; (2) relinquish the application of tribal law; and (3) waive the tribal insured’s sovereign immunity from any suit or countersuit the insurer may advance. The tribe must decide whether any coverage dispute with its insurer should be brought before an arbitration tribunal and/or a tribal or state court, and whether it wishes to risk waiving immunity relative to any such dispute through an arbitration endorsement.
• Self-Governance Tribal Authority for FTCA Tender. A 1990 amendment to the federal self-determination act provides tribes and/or tribal employees full protection under the Federal Tort Claims Act (FTCA) for tort claims arising from self-governance contractual functions. A self-governance tribe’s policy should reflect the interplay between their insurance coverage and FTCA protection. The policy should also explain that the insurer shall not tender an FTCA-covered claim/suit to the federal government without tribal authorization. If for public policy reasons the tribe opts against doing so, the policy should reflect the insurer’s continued duty to defend the matter.
• Duty to Defend FTCA Claim Unless/Until U.S. Does. If a self-governance tribe opts to tender an FTCA-covered personal injury claim/suit against the tribe and/or tribal employees, the Department of Justice must defend the matter. The tribe’s insurance policy must make clear that the insurer has a duty to defend a claim or lawsuit against the tribal insured until such time as the Justice Department formally agrees to defend the matter pursuant to the FTCA.

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The Ninth Circuit held last month that IGRA does not require the National Indian Gaming Commission (NIGC) to determine whether a gaming ordinance contemplates a gaming operation on “Indian lands” prior to (1) approving an ordinance that does not specify a site for the casino or (2) the tribe’s licensure and construction of a casino. North County Community Alliance v. Salazar (No. 07-36048). In essence, the Ninth Circuit determined that enforcement of the Indian lands requirement of IGRA may only be undertaken by the NIGC and states – not private citizens like the North County Community Alliance (“Alliance”).

In North County, the Nooksack Indian Tribe submitted an ordinance to the National Indian Gaming Commission (NIGC) in 1993 that did not identify any specific site where its casino would be built. In 2006, the tribe licensed and began constructing their casino pursuant to the ordinance. The casino was eventually built on a twenty-acre parcel owned by the Nooksacks near their reservation.

A group of local residents living near the Nooksack casino formed the Alliance and filed suit against the NIGC and the Department of Interior based on the agencies’ failure to make an Indian lands determination prior to approving the Nooksacks’ ordinance in 1993. That is, the Alliance believed the NIGC violated IGRA by approving an ordinance that did not indicate that the casino would be constructed on specific Indian land. The Alliance argued that it was “implicit in IGRA” that the NIGC make such a determination before construction.

Judge William Fletcher, writing for the majority, held that the NIGC does not have to make a determination as to the character of “Indian lands” because IGRA does not require a tribe to specify on which site it will build a casino in its gaming ordinance. Requiring the NIGC to make an Indian lands determination as part of its approval of an ordinance would be “absurdly impractical” since in “effect, the NIGC would be required to make an Indian lands determination for all lands that are owned, or could be owned in the future, by the tribe and on which the tribe might wish to conduct gaming.”  Practically, if the NIGC or a state determines that a tribe’s casino is not on Indian lands, they may take enforcement actions; IGRA authorizes tribal gaming on Indian lands only.

On a related point, the Alliance further claimed that the NIGC’s failure to make an Indian lands determination constituted a “major Federal action” under the National Environment Policy Act (“NEPA”), and thus required preparation of an Environmental Impact Statement (EIS). The Ninth Circuit addressed and disposed of this argument, noting that there “has been no major federal action in this case” and therefore NEPA EIS requirements do not apply.
 

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Yesterday, the Ninth Circuit Court of Appeals, in a decision authored by Judge William Canby, Jr., ruled that tribal police officers have limited authority to stop and detain non-Indians travelling on state roads within Indian reservations. But in doing so, the court erected an almost insurmountable roadblock for the plaintiff, Terrence Bressi.

Bressi was stopped by Tohono O’odham tribal police officers in 2002 at a roadblock on State Route 86. Bressi refused to provide his driver’s license or other identification to the officers. He was handcuffed and taken to the side of the road, where he was detained by the officers for four hours. The tribal officers issued Bressi two citations for violating state law before letting him drive away. Bressi sued the officers in federal court, alleging various causes of action for violation of his civil rights.

The court, in Bressi v. Ford, concluded “that a roadblock on a public right-of-way within tribal territory, established on tribal authority, is permissible only to the extent that the suspicionless stop of non-Indians is limited to the amount of time, and the nature of inquiry, that can establish whether or not they are Indians. When obvious violations, such as alcohol impairment, are found, detention on tribal authority for delivery to state officers is authorized. But inquiry going beyond Indian or non-Indian status, or including searches for evidence of crime, are not authorized on purely tribal authority in the case of non-Indians.” Importantly, the decision does not prohibit tribal roadblocks involving non-Indians.

The Ninth Circuit further ruled that tribal officers who are certified to enforce state laws are subject to federal constitutional restrictions on search and seizure. The court “recognize[d] that one result of our ruling is that tribal officers who are authorized to enforce state as well as tribal law, and proceed to exercise both powers in the operation of a roadblock, will be held to [federal] constitutional standards in establishing roadblocks.”

While the court reversed the dismissal of, and remanded, Bressi’s constitutional claim pertaining to the officers’ operation of the road block, it affirmed the trial court’s dismissal of all of his other claims, including those civil rights claims relating to his arrest and detention: “the Officers were entitled to qualified immunity; reasonable officers would not have believed that the subsequent arrest violated Bressi’s constitutional rights.” The court also left untouched the district court’s ruling that to the extent the officers acted under color of tribal law, they also enjoyed tribal sovereign immunity.
 

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Under Medicare’s newly effective reporting rules, self-insured entities—including tribal entities—must start tracking and reporting all judgments, settlements, awards or other payments to Medicare beneficiaries for personal injuries. Or else.

Tribal self-insured entities will likely need to track such payments made after July 1, 2009, or January 1, 2010. The July 1st date applies where the entity has assumed ongoing responsibility for the injured Medicare beneficiary’s medical services, which commonly occurs with no-fault insurance and workers’ compensation. The January 1st date applies to single-claim payments, which are most common with liability insurance. Tribal self-insureds will likely need to report this information to the federal government, starting in the Spring 2010.

These newly effective reporting obligations are designed to protect Medicare’s right of reimbursement for medical expenses that the program paid on behalf of a Medicare beneficiary when someone else should be responsible for those expenses. Medicare beneficiaries include persons 65 years of age and older; some disabled people under 65 years of age; and people with end-stage renal disease (permanent kidney failure treated through dialysis or a transplant). It is conceivable that tribal self-insureds would make payments to, for example, casino patrons or tribal employees who are 65 years of age or older, disabled, and possibly even suffer from end-stage renal disease given the prevalence of kidney failure in Indian Country.

The federal government has had a Medicare right of reimbursement, including the option to pursue double damages in some cases, since 1980 but has rarely enforced it. The new reporting obligations are an indication that this is all about to change, as the U.S. scrambles to keep the fledgling federal Medicare program afloat.

Tribes with self-insured liability plans, no-fault plans, or workers’ compensation plans need to quickly familiarize themselves with these new reporting requirements. In addition to potential liability for double damages, the penalty for failing to report is significant: $1,000 for each day of noncompliance for each payment that was not reported, but should have been.

What’s more, tribal self-insurance programs or corporate entities are not only likely subject to the new federal Medicare laws—and thus double damages and $1,000-per-day penalties—under the Tuscarora and Donovan line of federal court cases, but they do not enjoy sovereign immunity from reimbursement or other lawsuits by the federal government.