California tribes must abide by the state's campaign finance laws, a divided state court ruled on Wednesday, holding that state rights trump sovereignty.

In a 2-1 decision, the 3rd District Court of Appeal reversed a lower court ruling that favored the Santa Rosa Indian Community. The tribe successfully asserted a sovereign immunity defense to a lawsuit over public disclosure of campaign contributions.

The Fair Political Practices Commission, a state agency, appealed the case. The agency cited another ruling, involving the Agua Caliente Band of Cahuilla Indians, that subjected tribes to state laws.

Two judges of the district court agreed with that argument. In the decision, they said the state has a constitionally-protected "right and duty" to protect the political process to prevent corruption and to keep the public informed.

"Statutes requiring campaign contribution disclosures serve to protect the integrity of the electoral process and a republican form of government," Justices Richard Sims and Arthur Scotland wrote.

Tribal sovereign immunity, on the other hand, is based in common law and is not protected by the U.S. Constitution, they continued. "The doctrine of tribal immunity is a court-made doctrine," they said.

"Accordingly, we reject the tribe�s position that an inherent tribal immunity trumps the United States Constitution," the decision stated. "The reverse is the case."

But in a dissent, Justice Ronald Robie said he agreed with most of the points cited by the majority. However, he said the state has been "divested" of any right to sue tribes because the U.S. Supreme Court has protected tribal immunity unless abrogated by Congress. A state court can't rule otherwise, he concluded.

A state's "sovereign power does not encompass the power to sue an Indian tribe because the United States Supreme Court, in the exercise of its constitutional power to declare what federal law is, has declared that Indian tribes are immune from suit except where Congress has authorized the suit or the tribe has waived its immunity," he wrote.

Despite the conflict, the FPPC said the ruling was a "significant" step in its ongoing battle against tribes. "The court has upheld the constitutional right of the voters of California to have all political players in the electoral process play by the same set of rules," said Chair Liane Randolph.

But to the tribes, the case is not over. The Agua Caliente Band's challenge is pending before the California Supreme Court, which would set a precedent statewide. Depending on the outcome the case could also be appealed to the U.S. Supreme Court.

The tribe "will continue to make full voluntary disclosure of all information called for by state law," the council said in response to the original ruling. The tribe posts the information on its website and in writing to the state but says it doesn't have to comply with FPPC rules.

Thanks to gaming revenues, California tribes have become major political players in state campaigns. This year alone, they have raised more than $100 million for a ballot initiative that would allow them to operate more than 2,000 slot machines in exchange for sharing revenues with the state.

National campaign donations are not at issue in the case, and tribes must abide by Federal Election Commission rules. But according to the Center for Responsive Politics, seven of the top 20 tribal donors to political campaigns are from California. The Agua Caliente Band is ranked number fifth this year, with $200,708 in reported donations to federal candidates.

The donations in the FPPC case are similarly high. The agency says the Santa Rosa Rancheria failed to file campaign finance reports for a four-year period in which they donated $525,000 to state candidates and political committees. The tribe was late in reporting $360,000 in donations to a 1998 gaming initiative, the suit claims.

As for the Agua Calientes, the tribe failed to disclose nearly $10 million in donations from 1998 and more than $400,000 in 2002, the suit alleges. A wide range of candidates and committees benefited, the agency says.

Get the Decision:
FPPC V. Santa Rosa Indian Community (October 27, 2004)

Related Decision:
Agua Caliente Band v. FPPC (March 3, 2004)

Relevant Links:
Fair Political Practices Commission - http://www.fppc.ca.gov