Court Reminds State Regulator of Tribal Sovereignty

The Connecticut Superior Court recently issued a ruling in favor of the plaintiff in Great Plains Lending v. State of Connecticut Department of Banking, et al. The court argued that the state regulator erred in its understanding of sovereign immunity.

“Having found that substantial rights of the plaintiffs were prejudiced by the commissioner’s error of law in denying their motion to dismiss on grounds of tribal sovereign immunity … The court remands the case to the commissioner for further proceedings consistent with this decision.”  

As a result, the judge vacated the financial penalties applied to the tribal lender, but the state regulator’s cease and desist orders “remain in effect pending the outcome of further proceedings.”

This particular dispute has a long history. Back in November 2015, the Connecticut Superior Court issued its first ruling in favor of the Otoe-Missouria Tribe, the tribe that runs Great Plains Lending. During that case, the court remanded the state regulator’s decision to subject the tribal lender to civil and injunctive damages.

Following that ruling, the Connecticut Department of Banking attempted to “subject the Tribe to participating in its administrative proceedings through discovery and possible depositions.” On August 2016, the Superior Court ruled again in favor of the tribal lender, stating that the tribe’s rights were “substantially prejudiced” by the regulator’s actions.