Getting Commercial in Indian Country
Galanda, Gabriel S., Business Credit
Indian tribes are not merely casino entrepreneurs or cigarette wholesalers. In conjunction with America's largest corporations, Indians are now engaged in real estate development, banking and finance, telecommunications, wholesale and retail trade and tourism. By 2006, U.S. tribes have become an economic, legal and political force to be reckoned with. Consider these facts:
* Most of Fortune 500's top 20 companies now do business in Indian Country, including Wal-Mart, Exxon, G.M. and Ford (#1-4), Verizon, AT&T, Home Depot, Target and Bank of America.
* Gaming tribes contributed $32 billion in revenue, $12.4 billion in wages and 490,000 jobs to the U.S. economy in 2001.
* Indian gaming generated nearly $20 billion in gross revenues in 2005.
* Tribes occupy more than 55 million acres of land in 30 states.
Both the cause and effect of the dramatic rise in Indian economic development is the increased interaction of tribes and non-tribal parties who seek business, employment or recreation on Indian reservations. Consequently, Indian tribes and non-Indian corporations--perhaps some of your clientele--are executing billions of dollars in commercial transactions and frequently litigating those deals. Indian Country is beginning to look a lot like Corporate America.
The body of tribal, state and federal law known as "Indian law" is the foundation for every transaction in Indian Country. Indian law now intersects virtually every arena of business--tax, finance, merger and acquisition, antitrust, debt collection, real estate, environmental, land use--the list goes on and on, and on. In the increasingly likely event you find yourself doing business with a tribe or tribal member, here's what you need to know to get going.
The Third Sovereign
Indian tribes are "distinct, independent political communities, retaining their original natural rights" in matters of local self-government. (1) While no longer "possessed of the full attributes of sovereignty," tribes remain a "separate people, with the power of regulating their internal and social relations." (2) Essentially, Indians possess "the right ... to make their own laws and be ruled by them." (3)
Much like the Federal and state governments, tribal governments are elaborate entities, consisting of executive, legislative, and judicial branches. The office of the tribal chairperson or president (like that of the President or a governor) and the tribal council (a legislature) operate the tribe under a tribal constitution and/or code of laws, and tribal courts adjudicate most matters arising under tribal law.
Frequently, an Indian tribe is organized pursuant to the Indian Reorganization Act of 1934 (IRA), 25 U.S.C. [section] 461. Under Section 16 of the IRA, a tribe will have adopted a constitution and bylaws that set forth the tribe's governmental framework and the authority that each facet of its government possesses. A tribe may also be incorporated under Section 17 to the IRA, 25 U.S.C. [section] 477, by which the Secretary of Interior issues the tribe a federal charter. Through Section 17 incorporation, the tribe creates a separate legal entity to divide its governmental and business activities. The Section 17 corporation has articles of incorporation and bylaws that identify its purpose, much like a state-chartered corporation.
Alternatively, an Indian corporation may have been organized under tribal or state law. If the entity was formed under tribal law, the tribe will have done so pursuant to its corporate code. Under federal common law, the corporation likely enjoys immunity from suit, as discussed below. It is somewhat unsettled whether a state-chartered tribal corporation stands immune from suit and/or may be sued in state court. At the outset of any deal, you should first review the tribe's organic documents and code of laws, which taken together identify the tribal real party in interest and your client's legal rights and remedies. …