Payday loan companies owned by tribes are protected by sovereign immunity, a California appellate court ruled on Tuesday.

The state sued five payday loan businesses owned by the Miami Nation of Oklahoma and one owned by the Santee Sioux Tribe of Nebraska. The businesses were accused of violating state law by extending loans to consumers in California.

The 2nd Appellate Division, however, said the businesses enjoy the same sovereign immunity that protects tribes. The businesses were set up under tribal law and are wholly owned by the their respective governments.

"A tribal entity engaged in a commercial enterprise that is otherwise entitled to be protected by tribal immunity does not lose that immunity simply by contracting with non-tribal members to operate the business," the decision stated.

Turtle Talk has posted briefs from the case, California v. Miami Nation Enterprises.

Get the Story:
Tribal Payday Loan Outfits Buck California (Courthouse News Service 1/22)
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Thomas I. Elkind: CFPB tests the limits of tribal lending immunity with cash call case (Lexology 1/21)

California 2nd Appellate Division Decision:
California v. Miami Nation Enterprises (January 21, 2014)