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Tribal Sovereignty and Economic Efficiency Versus the Courts

By October 1, 2022November 17th, 2022No Comments

Abstract: American Indian reservations are the poorest parts of the United States, and a higher percentage of Indian families across the country live below the poverty line than any other ethnic or racial sector. Indian nations and Indian peoples also suffer from the highest unemployment rates in the country and have the highest substandard housing rates. The vast majority of the over three hundred Indian reservations and the Alaska Native villages do not have functioning economies. This lack of economic activity starves tribal governments of the tax revenues that governments need to function. In response, Indian nations create and operate business entities to bring jobs and income to Indian Country, improve the standard of living for their citizens, and earn profits to help fund their governments.

As constitutionally recognized governments, Indian nations possess inherent sovereign powers, including sovereign immunity wherein they cannot be sued by anyone (except the United States) or in any court unless the tribe consents. Their sovereign rights, and especially sovereign immunity, assist Indian nations to be successful and profitable in their economic endeavors.

In the last few decades, however, state and lower federal courts have interfered with tribal sovereign decisions and sovereign immunity. These courts have imposed onerous and even outrageous requirements on tribal governments that violate well-recognized principles of efficiency, profitability, and common sense. These court decisions are defeating the very reasons Indian nations operate business concerns. In contrast, the United States and the states engage in a wide array of economic activities and they benefit from the protections of sovereign immunity. Those governments operate almost totally free of judicial restraints on how they establish, manage, and operate their businesses. Indian nations and their legislative and executive decisions should be treated with the same judicial respect and deference that state and federal legislative and executive branches receive.

This Article describes and critiques the improper approach many state and lower federal courts have taken in forcing tribal governments to create, manage, and operate their economic entities. The Article argues that Indian nations, the U.S. Supreme Court, and Congress should not tolerate this judicial overreach and infringement on the sovereign rights of Native governments. The Article briefly lays out four possible strategies Indian nations, Congress, and the Supreme Court should consider to prevent this judicial activism. The very future of Indian Country as viable places where Indigenous governments, peoples, and cultures can survive and thrive is at issue.

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