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

• Email This
• Print
• Comments
• Trackbacks

Connecticut State Attorney General Richard Blumenthal has waged a war against the doctrine of tribal sovereign immunity, and he has chosen politically convenient drunk driving dramshop liability case against the Mohegan Tribe as his battle ground. He has filed an amicus curiae brief with a Connecticut state appeals court, arguing that tribal governments do not stand immune from liquor-related liability claims. If possible, tribes must avoid giving politicians like Blumenthal or money-driven plaintiffs’ lawyers such a chance to attack tribal immunity, especially on facts that make groups like Mothers Against Drunk Driving (MADD), well, mad.

Plaintiffs’ lawyers increasingly argue that a federal statute, 18 U.S.C. 1161, somehow operates to waive sovereign immunity – a common law doctrine that exists in order to protect tribal treasuries from litigation attack so tribal governments can use, e.g., net gaming revenues to provide essential governmental services as required by federal law. Section 1161 authorizes states to control the sale and distribution of alcoholic beverages within their borders, including Indian Country thanks to the Supreme Court in Rice v. Rehner, 463 U.S. 713 (1983). Given the natural provision of alcohol in tribal governmental casinos, as in Las Vegas or other non-tribal gaming establishments, many tribal-state gaming compacts recognize Rice’s holding that states can regulate liquor sales in Indian casinos. But no compacts that I am aware of expressly and unequivocally waive tribal sovereign immunity from third-party dramshop lawsuits.

State appellate courts in Arizona, Washington and Texas have all rejected arguments that Section 1161 and/or gaming compacts somehow operate to waive tribal immunity from citizen dramshop claims. Only the Oklahoma Supreme Court has ruled otherwise. But that is because Oklahoma state courts are the most anti-Indian judiciary any where; as there is undying political and judicial will to vitiate tribal immunity in Oklahoma, the courts there routinely find ways to do so. See Tribes & Insurance Defense Lawyers Should Avoid Asserting Sovereign Immunity.

Nevertheless, tribal governments within all states must be more vigilant in disallowing private plaintiffs, state politicians, citizen groups and state and federal court judges any opportunity to abrogate sovereign immunity. In the dramshop context, here are a few preventative measures tribes and tribal casinos should implement:

 Ensure all tribal employees who serve or oversee the service of liquor are fully state and tribally trained to prevent problems associated with patrons’ misuse of alcohol.
 Maintain video surveillance of the activities within tribal casinos relating to the sale and consumption of alcohol.
 Offer free shuttle or cab rides home to patrons who appear under the influence of alcohol when they attempt to leave a tribal establishment.
 Pass tribal tort claims ordinances that will set forth the time, place and manner by which the tribe might administratively consider and resolve alcohol-related liability claims.
 Maintain liability insurance to help insulate the tribal treasury from attack; such policies should include, among other things, clear defense and indemnity rights and tribal choice of defense counsel. See Tribal Insurance Policies: Buyers Beware.
 When sued, consider alternatives to asserting sovereign immunity, such as settling claims with merit before active litigation; consenting to a court’s jurisdiction up to available liability insurance policy limits; or defending the matter on the merits, possibly with a view towards obtaining summary judgment dismissal of a plaintiff’s claims.

With regard to the assertion of tribal sovereign immunity – whether in dramshop or other tort actions – tribes must “know when to say when.”
 

• Email This
• Print
• Comments
• Trackbacks

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.

• Email This
• Print
• Comments
• Trackbacks

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.
 

• Email This
• Print
• Comments
• Trackbacks

Three decisions by the Oklahoma Supreme Court this summer are troubling but not just because they each allow casino patrons to sue tribal governments or casinos in state court. The trilogy of losing Indian cases are equally, if not more, troubling because they each appear to have been catapulted into state appellate courts by ill-conceived assertions of tribal sovereign immunity.

The Oklahoma Supreme Court started by handing down its opinion in Cossey v. Cherokee Nation Enterprises, LLC, 2009 OK 6 (mandate issued June 11, 2009), holding that the state district court is a court of competent jurisdiction as that phrase is used in the Cherokee Nation’s tribal gaming compact. Then, on June 30, 2009, in separate opinions in Griffith v. Choctaw Casino of Pocola, Oklahoma, 2009 OK 51, and in the related case of Dye v. Choctaw Casino of Pocola, Oklahoma, 2009 OK 52, the Court ruled that Oklahoma district courts are courts of competent jurisdiction as that phrase is used in Oklahoma’s statutory model tribal gaming compact and therefore the state courts may exercise jurisdiction over the tort claims against the Choctaw Nation and its casino in Pocola, Oklahoma.

In short, none of the three cases should have reached the Oklahoma Supreme Court. None of the three cases should have involved a tribal assertion of sovereign immunity.

Consider the facts of Griffith: Plaintiff “went to the casino on February 11, 2005. According to Griffith, as she and other patrons approached an entrance to the casino, she heard a casino guard directing patrons to the north entrance. As Griffith followed the others toward the north entrance, she stepped into a flowerbed and fell on her face and head.” 2009 OK 51. It is hard to imagine a more frivolous claim than, “I stepped into a flowerbed and fell on my face and head.”

Given what appears to be a very defensible claim, and the renown anti-Indian sentiment of the Oklahoma Supreme Court, Choctaw’s insurance defense lawyers should not have moved to dismiss Griffith’s claim on sovereign immunity grounds. If a nominal settlement with Griffith was not possible, defense counsel should have litigated the matter on the merits. Perhaps her tort claim was procedurally or substantively invalid. More likely, Griffith could not likely prove a prima facie case of negligence against the casino. Based on the silly nature of her claim, the casino’s defense team could have (and can still) likely beaten Griffith on summary judgment or at trial. Invoking tribal immunity in Oklahoma was risky and unnecessary.

There is extensive discussion in Griffith of the Choctaw Casino’s liability insurance, which is mandated by the model Oklahoma tribal gaming compact. That general insurance policy, by design, should cover the casino’s defense costs associated with defeating Griffith on summary judgment or at trial. That policy should also indemnify the casino in the event Griffith can somehow prove it was the casino’s fault that she fell on her face and head in the flowerbed.

The same goes for Cossey and Dye. Tribal sovereign immunity should not have been asserted in those cases either. Instead, alternative defense and/or settlement strategies, which would not have placed Oklahoma tribal immunity in harm’s way, should have been pursued.

Unfortunately, these cases may have been lost before the plaintiffs even filed suit. Consider just two of many morals to this story: First, the Choctaw Casino should have acted on Griffith and Dye’s administrative tort claims rather than “fail[ing] to act” and causing them to be “deemed denied.” 2009 OK 51. Not only is it best practices to process and in turn affirmatively accept or deny such claims, but heightened care must be given to even the most frivolous of tort claims filed by non-Indians. If not, bad case law like Cossey, Griffith and Dye will inevitably be made.

Second, a quick Google search of the three law firms involved in the trilogy reveals that they are all insurance defense lawyers who do not possess Indian law expertise. What business do they have defending the Cherokee Nation and Choctaw Casino? Those lawyers were likely hired by Cherokee and Choctaw’s liability insurer(s), not the tribes, because their hourly rates are much cheaper than that of defense counsel who specialize in representing and defending tribal interests. As the old adage goes, you get what you pay for. Here, the tribal defendant-insureds appear to have gotten a short-sighted defense strategy.

But that didn’t need to be the case. I would bet money that both Cherokee and Choctaw liability policies do not allow them, as tribal government-insureds, which pay six-figure annual insurance premiums, to select tribal defense counsel of the tribes’ choice. Both tribes should have negotiated into their insurance policies the right to select defense counsel: any of the highly skilled tribal defense counsel on Oklahoma who understand the significant legal, political and social implications of even the silliest of tort claims against tribes or Indian casinos in this day and age. Those Indian lawyers would certainly pause before asserting sovereign immunity, especially before a hostile Oklahoma state judiciary. Those Indian lawyers would likely recommend that the tribal defendants pursue a strategy of settlement, or defense on the merits, instead of jeopardizing the immunity defense for all tribes in and beyond Oklahoma.

Tribes, it’s time to take a much harder look at those two-inch thick liability insurance policies to ensure tribal sovereign rights are not being breached or jeopardized. Insurance defense counsel, it’s no longer time to recklessly assert tribal immunity to attack otherwise defensible claims.

See also “Waiving Goodbye to Tribal Sovereign Immunity.” and “Are We in Good Hands?” in Indian Country Today, Parts 1, 2 and 3.

• Email This
• Print
• Comments
• Trackbacks

Following up on their heralded May article regarding Indian self-insurance, Gabe Galanda and Jim Robenalt authored Part 2 of "Holding big insurance captive" in this week's Indian Country Today. Gabe and Jim delve even deeper into the homegrown risk coverage opportunities for tribes. Their first article generated a lot of positive feedback and questions, which are answered in Part 2. Forming tribally self-funded insurance and leveraging the significant private insurance cost savings is yet another way to strenghten and diversify Indian economies. Ask the Mashanucket Pequot Tribe, the Navajo Nation and the Blackfeet Nation, and the tribal equity owners of AMERIND. Let's hope the self-insurance trend continues throughout Indian Country.

• Email This
• Print
• Comments
• Trackbacks

Gabe Galanda and Jim Robenalt published a piece in this week's edition of Indian Country Today titled, "Holding big insurance captive: the need for Indian self-insurance companies." Gabe and Jim advocate for some individual tribal governments to form single parent captive insurance companies to insure those particular tribes' risk of losses, rather than continue to purchase expensive insurance from outside private insurers. (They do not yet advocate for tribes to band together to form a group captive to insure all of Indian Country's risk.) Building tribal self–insurance companies will allow tribes to create five to six figure annual savings and reinvestment opportunity, avoid hidden state insurance taxes, create new tribal jobs and insurance coverage tailored to life on the reservation, and maintain greater control of their sovereignty defense. Some tribes may wish to create a tribally owned captive to self-insure some of their risk, while still buying insurance from private carriers for other risk. Those tribes should also consult our Tribal Insurance Procurement Checklist.