California tribe loses major sovereignty court case

Monday, February 12, 2007  

In a major blow to tribal sovereignty, an appeals court overturned 30 years of precedent on Friday and subjected tribes to federal labor law.

Tribes aren't mentioned anywhere in the National Labor Relations Act. But a three-judge panel of the D.C. Circuit Court of Appeals said the law can be imposed on tribes and their commercial enterprises, such as casinos, without infringing on their sovereignty.

"The total impact on tribal sovereignty at issue here amounts to some unpredictable, but probably modest, effect on tribal revenue and the displacement of [tribal] legislative and executive authority that is secondary to a commercial undertaking," Judge Janice Brown, an appointee of President Bush, wrote for the majority.

In the 23-page decision, the court made two broad and potentially negative statements. The first involved the Indian canons of construction, which have been used to favor tribes in cases where laws are ambiguous or fail to speak on a particular matter.

The San Manuel Band of Mission Indian of California, the tribe at issue in the case, the National Indian Gaming Association and the National Congress of American Indians had argued that the ambiguity in federal labor law should favor tribes. But the D.C. Circuit said the canon only applies to laws "enacted specifically for the benefit of Indians or for the regulation of Indian affairs" and not for laws of "general applicability" such as the NLRA.

"We have found no case in which the Supreme Court applied this principle of pro-Indian construction when resolving an ambiguity in a statute of general application," Brown wrote. This could affect tribal disputes under other general laws, such as the Occupational Safety and Health Act.

The second statement appears far more damaging. The judges characterized tribal sovereignty not as an inherent power to act as a government but merely as a means to preserve Indian culture.

"The principle of tribal sovereignty in American law exists as a matter of respect for Indian communities," Brown wrote. "It recognizes the independence of these communities as regards internal affairs, thereby giving them latitude to maintain traditional customs and practices."

"But tribal sovereignty is not absolute autonomy, permitting a tribe to operate in a commercial capacity without legal constraint," the court said.

The court acknowledged that the operation of a casino is a tribal government undertaking. The tribes cited language in the Indian Gaming Regulatory Act that Congress intended casinos to fund government services and make tribes more self-sufficient.

But the judges drew a distinction between acts of governance that only affect tribal members or internal matters and acts that affect non-members. By opening casinos, marketing them to non-Indians and employing non-Indians, tribes are stepping beyond "traditional" notions of self-governance," the court said.

"First, operation of a casino is not a traditional attribute of self-government," Brown wrote. "Rather, the casino at issue here is virtually identical to scores of purely commercial casinos across the country. Second, the vast majority of the casino's employees and customers are not members of the tribe, and they live off the reservation."

Henry Duro, the chairman of the San Manuel Band, said the ruling will indeed impact internal tribal affairs. Revenues from the tribe's gaming enterprise fund government services and are distributed to tribal members on a per capita basis.

"We believe that these gaming projects help tribes to fulfill essential governmental functions by providing education, health care, housing, senior care and other key programs," Duro said. "Those are basic governmental obligations that could be impacted by this decision."

At a minimum, the tribe will have to rewrite its labor ordinances to comply with the National Labor Relations Act. More significantly, the decision puts the tribe's new gaming compact and casino expansion plans in doubt.

Labor unions and their Democratic allies in the state Legislature blocked the compact last years because they said it didn't provide enough protections for employees. The decision gives them more grounds to insist on pro-labor provisions in the deal, which allows the tribe to add more slot machines.

On a national basis, the D.C. Circuit noted that other circuits have made somewhat conflicting rulings on tribes and federal labor law. But by upholding the National Labor Relation Board's view of tribal sovereignty, the court left the agency in charge to apply the law to tribes everywhere and to Alaska Natives and Alaska Native corporations.

With Democrats in charge of Congress, efforts to place a tribal exemption in the National Labor Relations Act are also doomed. A bill has already been introduced to expand the law by legalizing "card checks," which allow unions to organize at a business if a majority of employees agree.

The San Manuel Band could ask for a rehearing by the three-judge panel or ask a full panel of the D.C. Circuit to hear the case. The tribe could also petition the Supreme Court for review.

D.C. Circuit Decision:
San Manuel Band v. National Labor Relations Board (February 9, 2007)

San Manuel Band v NLRB:
Briefs, Decisions and Documents (Native American Rights Fund)

National Labor Relations Board Decisions:
San Manuel Indian Bingo and Casino | Yukon Kuskokwim Health Corporation

Relevant Links:
San Manuel Band of Mission Indians - http://www.sanmanuel-nsn.gov
San Manuel Indian Bingo and Casino - http://www.sanmanuel.com
National Labor Relations Board - http://www.nlrb.gov