Construction in Indian Country – What You Need To Know About Sovereign Immunity

Grazing native american land

Can I bring a lawsuit to enforce the contract and, if so, where would I file suit?

July 22, 2019
Edward J. Hermes - Snell & Wilmer Under Construction Blog

There are many legal issues to consider when bidding on and building projects in American Indian Country. Which labor and employment laws apply? Are there contracting or hiring preferences that apply? Do the Prompt Pay Act and other state laws apply? Can I bring a lawsuit to enforce the contract and, if so, where would I file suit? This article addresses the final question, which is often the most important question when contracting with a tribal entity.

Many of the construction projects in American Indian Country are with tribes or entities wholly owned or by a tribe, such as housing authorities, casinos, hospitals, schools or other economic enterprises. Like the state and federal government, tribes (and their tribally—owned enterprises) enjoy sovereign immunity from any lawsuit, meaning they cannot be sued unless the tribe expressly agrees to waive its sovereign immunity. Sovereign immunity poses a unique issue for contractors that does not typically arise in other projects, but it need not be a deterrent to doing business with tribes. It is usually in the best interest of both the contractor and tribe to negotiate an acceptable waiver of sovereign immunity. Absent such a waiver, the tribe or tribal entity cannot be sued and the resulting forfeiture of remedies can be devastating for the contractor.

To waive sovereign immunity, the tribe must make it clear in the contract that it can be sued in a specific jurisdiction. Oklahoma Tax Comm'n v. Citizen Band Potawatomi tribe of Okla., 498 U.S. 505, 509 (1991). It does not matter whether the tribe is operating on or off its lands—if there is no express contractual waiver of sovereign immunity, a contractor will have no recourse in the event of non-payment or other breach of contract. See Kiowa tribe of Okla. v. Manufacturing Technologies, Inc., 523 U.S. 751, 118 S.Ct. 1700, 140 L.Ed.2d 981 (1998).

Mr. Hermes may be contacted at ehermes@swlaw.com



714.701.9180

Arrange No Cost Consultation

 

Construction Defect Journal is aggregated from a variety of news sources, article submissions, contributors, and information from industry professionals.

No content on this site should be construed as legal advice or expert opinion. By viewing this site you agree to be bound by its terms and conditions

 

Copyright 2019 - Construction Defect Journal – All Rights Reserved