Supreme Court Refuses to Extend Immunity to Tribal Gaming Employee

On April 25th, the U.S Supreme Court issued its opinion in Lewis v. Clarke, a case centered on tribal sovereignty and the actions of tribal employees outside tribal lands. Clarke operated a limousine for the Mohegan Sun Casino, an economic arm of the Mohegan Tribe. One night while returning some of the casino’s patrons to their homes, Clarke crashed the limousine into the Lewis family’s car on I-95 in Connecticut. The wreck occurred outside tribal lands.

The Lewis family brought a personal injury tort claim in Connecticut state court against Clarke for damages that arose out of his individual capacity while operating the vehicle, not his official capacity as an employee of the casino; a distinction that ultimately became critical in the Supreme Court’s decision.

As part of his employment agreement, the Mohegan Tribe agreed to indemnify Clarke of any claim caused by his activity as a casino employee. Supported by this indemnification, Clarke moved to dismiss the claims on the grounds that the tribe’s sovereign immunity extended to his actions. The state district court denied his motion, but the Connecticut Supreme Court reversed the ruling by finding that Clarke’s actions as an employee for an arm of the tribe imputed sovereign immunity to the claims against him.

Before the U.S. Supreme Court were two questions:

“(1) whether the sovereign immunity of an Indian tribe bars individual capacity damages against tribal employees for torts committed within the scope of their employment; and (2) what role, if any, a tribe’s decision to indemnify its employees plays into the analysis.”

On the first question, the Supreme Court determined whether Clarke or the Mohegan Tribe was the real party in interest. Under existing precedent, if the sovereign was the real party, sovereignty immunity would apply. Of importance in this determination is who the plaintiff seeks remedy from in the claim. For this case, the Lewis family was attempting to recover judgment from Clarke personally. More importantly, the Lewis family did not sue Clarke in his official capacity as an employee of the casino. Suits of individual capacity arise under state law. In this instance, the Supreme Court found that the Mohegan Tribe was not the real party to the lawsuit.

The Supreme Court rebuffed the Connecticut high court’s opinion that the plaintiff was simply using a backdoor to recover a claim where sovereign immunity would obviously apply if Clarke were sued based on his official capacity. In delivering the majority opinion, Justice Sotomayor clarified that the wreck occurred on state lands, not tribal, and the tribal government’s property would not be at risk if Clarke lost at trial.

As for the indemnification provision, the Supreme Court refused to apply it to a situation in which the employee was sued under their individual capacity. Since only Clarke is bound by an adverse judgment, there is no need to impute sovereign immunity to him.

Justices Thomas and Ginsburg wrote concurring opinions where they reinforced their belief that sovereign immunity should never extend to the commercial activities of tribes that take place off tribal lands. This echoes their dissenting positions in Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc. and Michigan v. Bay Mills Indian Community.
Ultimately, the holding in this case is narrow and hinges entirely on how the plaintiff pleads the facts initially. The Supreme Court did not alter tribal sovereign immunity or eliminate such immunity from tribal employees found to be acting in an official capacity. The decision could lead to plaintiff’s attorneys filing suit against employees in their individual capacity, causing tribes to expend considerable sums of money to demonstrate an employee’s official capacity to earn dismissal on sovereign immunity grounds. While the case should have little effect on tribal sovereignty in the future, it could open the door to frivolous lawsuits in state court, undermining the sanctity of tribal courts and draining tribal coffers to defend unsubstantiated claims.