Alaska Supreme Court affirms tribal sovereignty and clarifies key tool | Schwabe, Williamson & Wyatt PC

The Alaska Supreme Court recently affirmed and expanded tribal sovereignty Ito v. Copper River Native Association, issued on April 26, 2024, in which the court adopted a new multi-factor inquiry to determine whether an entity is entitled to sovereign immunity as an “arm of the tribe.” The Ito This ruling reversed an earlier decision by the Alaska Supreme Court Runyon v. Village Council Associationwhich had ruled that financially isolated entities are not entitled to sovereign immunity as ‘arm of the tribe’.

In Ito, Copper River Native Association (CRNA), an Alaska nonprofit founded by several tribes to provide health care services to their members, was sued by a former employee over her firing. CRNA asserted that it qualified as a branch of the Affiliated Tribes and therefore possessed sovereign immunity, which would bar the former employee from pursuing her claim in state or federal court and require the former employee to directly seek relief search among the tribes.

The Alaska Supreme Court agreed with CRNA, adopting a version of the Tenth Circuit’s multifactorial test in 2011 Breakthrough Mgmt. Grp., Inc. against Chukchansi Gold Casino & Resort to determine whether an entity such as CRNA is an arm of the tribe. Although several states and circuits use a six-factor version, the adoption of this five-factor test aligns Alaska courts with other states and multiple federal circuits.

The multifactor test adopted by Ito directs Alaska courts to consider five factors to determine whether an entity is a “branch of the tribe” and therefore entitled to sovereign immunity:

  • The purpose of the entity
  • The way the entity was created
  • The structure, control and ownership of the entity
  • The intentions of the tribe or tribes that form the entity; And
  • The financial relationship between the entity and the tribe

The Ito The court ruled that “(n)o single factor is dispositive(.)”. In practice, this means that if a tribal entity fails to meet any of the factors, it is still not necessarily excluded from qualification as an “arm-of-the-tribe” and sovereign immunity.

Applying these factors, the court found that CRNA was a branch of the affiliated tribes and was entitled to immunity from most lawsuits in state or federal court. In making this decision, the court highlighted a number of critical facts:

  • CRNA was formed by Tribes through resolutions to provide a “core function of government”
  • CRNA is controlled by the member tribes
  • CRNA was intended to be the successor to “the Traditional Advisory and Governing Assembly of the Athabascan People of the Copper River Region” and to “possess all the rights, duties, powers and privileges” that that historic inter-tribal body became commandments; And
  • CRNA relies on federal funds set aside for tribal health care to provide health care services to its member tribes.

The Ito court explained that the reversal of Runion is the result of changing legal standards regarding tribal sovereign immunity:

The legal landscape surrounding tribal sovereign immunity has evolved significantly since we made this decision Runion in 2004. As in RunionOur interpretation of the federal law governing tribal immunity is based on developments in federal and state approaches. That’s why we discuss them all below. Multiple federal courts have adopted frameworks for evaluating tribal immunity, and none consider financial isolation dispositive. A number of states have also considered tribal immunity, with most including an approach that does not rely primarily on financial insulation.

The Ito The court, after a review of those other federal and state court cases, concluded that Runion was too restrictive and did not take into account the practical impact that judgments against entities such as CRNA could have on the sponsoring tribes:

The United States and tribal amici are right about that Runyons narrow research on financial isolation undermines tribal sovereignty and fails to take into account the “federal policy of tribal self-determination, economic development, and cultural autonomy.” By choosing to form CRNA and pool federally provided resources to provide services to their members, the tribes were exercising their sovereign rights to self-government and self-determination. Focusing solely on whether the tribes would be directly legally liable for a judgment against CRNA ignores the actual impact of a judgment on the tribal interests that immunity is intended to protect. It is critical to our analysis in the case of CRNA that, despite being a separate legal entity, most if not all of its federal funding comes directly from money that would otherwise go to the tribes. Applying a threshold financial isolation test would deprive tribes of these resources while simultaneously relying on the idea that a judgment would not be satisfied from tribal coffers. This ignores the practical reality of judgment.

finally, the Ito The court also recognized the benefits and need to align Alaska case law with federal law, and to provide a uniform standard for determining when tribal sovereign immunity applied:

Considering the conflict between Alaska’s laws Runion and the federal law regulating tribal analysis, we consider it inherently harmful to subject employees and employers to an ongoing conflict between our state and federal laws, especially when it comes to issues of sovereign immunity raised by are governed by federal law. We take seriously the potential harms associated with subjecting employers to two conflicting standards under state and federal law, which are difficult to interpret and understand for both employers and fact finders, and risk compromising the determination of immunity of an entity is a function of the forum.

By adopting and overthrowing the five-factor test Runion, the court clarified a path for tribes to exercise their sovereignty and take advantage of a powerful tool: creating an arm-of-the-tribe immunity that can advance tribal interests while preserving sovereign immunity retains. Specifically, most claims against tribal entities with sovereign immunity must be brought in a tribal court or tribal forum, as opposed to a state or federal court. This provides tribes with the opportunity to exercise their judicial powers and resolve disputes involving their entities based on tribal law or custom.

A wide variety of entities may qualify as an arm of the tribe. Courts in jurisdictions using similar tests have found that nonprofit tribal educational institutions, repatriation boards, and health associations, in addition to gambling entities and for-profit lenders, qualify as tribal arms and are entitled to sovereign immunity.

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