The US District Court for District of Colorado [official website] ruled [decision, PDF] on Monday that tribal sovereign immunity [NCAI backgrounder] applies to online money-lending sites. The court ruled that the defendants, members of several Native American tribes, did not waive all sovereign immunity claims when their online business consented to private suit and could not be held in contempt of court. Following the ruling, the Native American Lending Alliance (NALA) [official website] said [press release] the decision was a "big win" for tribal sovereign immunity:
The decision included particularly strong language supporting absolute sovereign immunity for tribes to engage in commerce using the Internet. [T]ribal immunity applies to a tribe's governmental and commercial activities alike ... [n]ot only has every federal court of appeals addressing this issue so concluded, but the United States itself has also conceded that a tribe does not lose its immunity simply by engaging in a business through a corporate entity.The defendants faced criminal charges for violating the Colorado Deferred Deposit Loan Act, which required money-lenders in the state to obtain licenses. The Colorado Attorney General has not indicated [AP report] whether there will be an appeal.
Tribal sovereign immunity has faced legal challenges in recent years. In 2011, the US Supreme Court [official website] remanded the case [JURIST report] of Madison County v. Oneida Indian Nation [docket; cert. petition, PDF] to the US Court of Appeals for the Second Circuit [official website], ordering the lower court to reconsider its ruling. The Second Circuit had found that tribal sovereign immunity prevented county authorities from foreclosing on property belonging to the Oneida Indian Nation [official website]. In 2008, the US Court of Appeals for the Ninth Circuit [official website] ruled that tribal sovereign immunity applies [JURIST report] to lawsuits brought in federal court dealing with the profit-making businesses of Indian tribes. In 2007, the US Court of Appeals for the District of Columbia [official website] upheld [decision, PDF] a 2004 ruling that the National Labor Relations Board (NLRB) [official website] had jurisdiction over tribunal businesses including casinos, placing the tribes under the National Labor Relations Act [text].