FUNDAMENTALS OF CONTRACTING BY AND WITH INDIAN TRIBES

• Jurisdiction: United States

Natural Resources Development on Indian Lands
(Mar 2011)
CHAPTER 1A
FUNDAMENTALS OF CONTRACTING BY AND WITH INDIAN TRIBES
Michael P. O'Connell ¹
Stoel Rives LLP
Seattle, Washington

MICHAEL P. O'CONNELL is a partner of the firm practicing in the Resources Development and Environment group of Stoel Rives LLP in Seattle. He focuses his practice on natural resources, environmental, energy, water rights and Indian law matters involving project development. For more than 30 years, Michael has assisted a broad range of clients throughout the West, including public ports, energy producers (wave and tidal hydrokinetic and conventional hydropower, wind, ethanol, oil and gas developers, pipeline owners), forestry, food processing, shopping center and golf course developers, general contractors, industrial, manufacturing, commercial and other private and public clients, including Indian tribes and parties engaged in business or other transactions with Indian tribes. Michael counsels clients through federal, state and tribal environmental review, project siting and permitting matters involving National Environmental Policy Act, Endangered Species Act, Clean Water Act (stormwater, wastewater and wetlands permits, citizen suits and water quality certifications), coastal zone management, National Historic Preservation Act compliance regarding cultural resources and historic properties (including traditional cultural properties or TCPs), human remains, fossils, and water right acquisitions and transfers. In these areas, Michael also assists clients in transactional due diligence, regulatory compliance and litigation. In Indian law matters, Michael assists clients on projects (on and outside Indian reservations) that affect tribal interests, including financial transactions, leases and rights of ways over tribal land, taxation and employment issues, negotiating waivers of tribal sovereign immunity and litigation. He also regularly speaks at seminars on environmental, natural resources and Indian law.

I. Introduction

Indian tribes are governments whose status as distinct, self-governing political entities predates the United States Constitution. Indian tribes do not derive their existence, and in most respects their authority to govern or do business, from the United States. Indian tribes, no two identical, have their own forms of government. Most Indian tribes have laws, ordinances and regulations governing business transactions by and with tribal entities.

Commerce among Indian tribes predated European contact. After European contact, commerce by and with Indian tribes expanded in many different modes according to needs and opportunities of the time. On behalf of the Union, Article I, Section 8 of the United States Constitution delegates to Congress exclusive authority to regulate commerce with Indian tribes. Laws enacted by Congress in the 1790s regulating sales, leases and other conveyances of tribal land and trade with Indian tribes remain substantially in effect.² Many treaties between the United States and Indian tribes, which like laws enacted by Congress are the law of the land under the Supremacy Clause of the Constitution, both secure and regulate trade by and with Indian tribes.³ Federal laws, regulations, executive orders, and policies too numerous to list promote and regulate commerce by and with Indian tribes. As recently December 2010, Congress enacted and the President signed into law two amendments to the statute regulating surface leases of tribal land.⁴

While the Constitution vests national power in Congress to regulate commerce with Indian tribes, when Indian tribes engage in business transactions outside Indian country, Indian tribes and tribal entities are subject to state and local laws in such matters, except to the extent

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that Treaties and other federal laws limit the scope of state and local laws.⁵ Non-Indians entering business transactions with Indian tribes and Indians on Indian reservations are exposed to a mix of federal, tribal, state and local laws.

Against this background, this paper provides an overview of key considerations in negotiating and drafting a contract with an Indian Tribe, including tribal entity issues; federal law; tribal law; sovereign immunity, enforceability and dispute resolution; federal and tribal approvals; land status and title; taxation; form and duration of the transaction, including rights-of-way; water rights; and employment issues.

II. Tribal Entity Issues

Virtually every Indian tribe does business as a governmental entity, buying and selling goods and services and developing government-owned property and resources. Indian tribes also engage in a variety of commercial business activities on and outside Indian reservations. Indian tribes have used and increasingly are using a wide range of tribal entities to engage in business activity. Transactions may occur between tribes, between a tribe and one or more tribal business entities, between a tribe or tribal business entity and tribal members, and between a tribe or tribal entity and non-members, including Indians not members of the tribe engaging in a business activity. Regardless of the permutation, it is important early in the business transaction planning stage to determine which tribal entity will engage in the transaction. The choice of business entity can affect a wide range of other issues, including sovereign immunity and its preservation or waiver, federal and tribal approvals, enforceability and dispute resolution, form and duration of the transaction, and environmental reviews.

The range of tribal entities includes:

• The Tribe acting through its General Council, Tribal Council or other tribal governing body entity

• Navajo Nation - Navajo Nation Council

• Hopi Tribe - Tribal Council

• Yakama Indian Nation - General Council delegates certain powers to the Yakama Tribal Council

• Tulalip Tribes of Washington - Board of Directors

• Confederated Tribes of the Colville Indian Reservation - Business Council

• Quinault Indian Nation - Business Committee

• Santa Clara Pueblo - traditional leadership

• The Tribe acting through a department, office, or commission of the tribe

• Navajo Nation Tax Commission

• Tulalip Tribes Tribal Employment Rights Office

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• Coeur D'Alene Natural Resources Department

• Unincorporated tribal enterprises and economic subdivisions which are arms and instrumentalities of a tribe

• Ski Apache ⁶

• Coeur D'Alene Tribal Farm ⁷

• Gila River Farms ⁸

• Salt River Farming Enterprise ⁹

• Chukchansi Economic Development Authority ¹⁰

• Navajo Tribal Utility Authority ¹¹

• Political subdivisions of a tribe, such as villages, chapters, and districts

• Hopi villages

• Kayenta Township (Navajo)

• Navajo chapters

• Quil Ceda Village (Tulalip Tribes)

• Tohono O'odham Nation Districts

• Tribal-owned entities chartered, incorporated or organized under tribal law

• Tribal government corporations

• Colville Tribal Enterprise Corporation ¹²

• Colville Tribal Services Corporation ¹³

• Coquille Economic Development Corporation ¹⁴

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• Seneca Gaming Corporation

• Marine View Ventures, Inc. (Puyallup Tribe of Indians)

• For profit business corporations

• Colville Tribal Law & Order Code, Title 7, Chapter 7-3 Business Corporations, Colville Tribal Corporations Chapter

• Nonprofit corporations, including tribal housing authorities, health agencies, schools and colleges

• Sisseton-Wahpteon Community College ¹⁵

• Colville Tribal Law & Order Code, Title 7, Chapter 7-2 Nonprofit Corporations, Colville Tribal Nonprofit Corporations Chapter

• Limited liability companies

• Warm Springs Tribal Code, Chapter 701, Limited Liability Companies

• Ho-Chunk Nation Code, Title 5 - Business and Finance Code, Section 3, Limited Liability Company Act, Article I, Section 8(e) provides that if the Ho-Chunk Nation is the sole member of an LLC established under the Act that the LLC shall have the sovereign immunity of the Ho-Chunk Nation

• Limited liability partnerships

• Tribal utilities

• Yakama Power

• Aha Macav Power Services (Fort Mojave)

• Navajo Tribal Utility Authority

• San Carlos Apache Telecommunications Utility, Inc.

• Tribal-owned, federally chartered section 17 corporations and corporations established under the Oklahoma Indian Welfare Act

• Colville Tribal Federal Corporation

• Navajo Nation Oil and Gas Company

• Tulalip Tribal Federal Corporation

• Chickasaw Nation Industries ¹⁶

• Tribal-owned entities chartered, incorporated or organized under state law

• For profit business corporations

• Non-profit business corporations

• Incorporated housing authorities, including tribal housing authorities

• Limited liability companies

• Yakama Juice LLC (Washington LLC)

• First Nation LLC (Delaware LLC, 51% owned by Tunica-Biloxi Tribe of Louisiana) ¹⁷

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• Ute Energy LLC (Delaware LLC)

• CTGW LLC (Delaware LLC, 51% owned by Confederated Tribes of the Chehalis Indian Reservation) ¹⁸

• Limited liability partnerships

• Special purpose entities

• Formed for a specific transaction

• Formed by two or more Indian tribes

• Council for Energy Resource Tribes ¹⁹

• Modoc Indian Health Project, Inc. ²⁰

• Columbia River Intertribal Fish Commission

• National Tribal Environmental Council (incorporated in the District of Columbia)

• Great Lakes Intertribal Fish and Wildlife Commission ²¹

Due care should be taken appropriate to the transaction scale and risk tolerance of all concerned parties to determine which tribal entity is proposing to enter a transaction and both its authority and authorizations duly given to do so. Tribal law, including a tribe's constitution or other tribal law, typically provides who and how...