Lewis v Clarke blazes a trail

In just three pages of its recent opinion in Lewis v. Clarke, 2017 DJDAR 3953 (April 25, 2017), the U.S. Supreme Court answered definitively and in the negative the troublesome question of whether an employee acting within the scope of employment by an American Indian tribe or tribal business enjoys sovereign immunity to tort liability for personal injury. To do so, the court adopted a "real party in interest" rule. Sovereign immunity only extends to tribal employees acting, not in their individual capacity, but in their official capacity where the real party in interest is the sovereign, not the nominal defendants. In practice, this distinction appears to turn on how the suit is framed: If the claims are alleged only against the employee then sovereign immunity is not implicated. In Lewis v. Clarke, plaintiffs sued only the tribal gaming authority employee who rear ended them.

In reaching this decision, the Supreme Court did not cite a single case involving an American Indian tribe and its businesses, expressly limiting the analysis to lawsuits against federal and state employees. This may have been deliberate given the mixed results in California alone. For example, in Trudgeon v. Fantasy Springs Casino, 71 Cal. App. 4th 632 (1999), disapproved on other grounds in People ex rel. Owen v. Miami Nation Enterprises, 2 Cal. 5th 222 (2016), the court held that employees of a tribal casino acting in the scope of their employment were immune from claims of negligent failure to provide adequate security to a bystander injured in a fight in the parking lot. See also Great Western Casinos, Inc. v. Morongo Band of Mission Indians, 74 Cal. App. 4th 1407 (1999). But in Turner v. Martire, 82 Cal. App. 4th 1042 (2000), the court ruled that tribal law enforcement officers were not entitled to sovereign immunity from claims that they assaulted and improperly detained union organizers because sovereign immunity only extended to high-level tribal officials.

Decisions of the 9th U.S. Circuit Court of Appeals are also mixed. In Cook v. AVI Casino Enterprises, Inc., 548 F.3d 718 (9th Cir. 2008), the court extended tribal sovereign immunity to employees of a tribal casino sued, along with the tribe and the casino, by a motorcyclist severely injured in a traffic accident. The court characterized claims against the employees as a pleading device to circumvent the tribe's sovereign immunity and hold the tribe vicariously liable. In Maxwell v. County of San Diego, 708 F.3d 1075 (9th Cir. 2013), the court took a very different approach holding that paramedic employees of a tribal fire department were not immune because they were sued in their individual capacity. The court reasoned that the remedy sought would operate only against them personally and not the tribe, which therefore was not the real party in interest.

In Lewis v. Clarke, the Supreme Court essentially states (but does not cite) the rule applied in Maxwell. Where the employee is sued in an individual capacity, not an official capacity, the individual is the real party in interest, which dictates that the tribe's sovereign immunity is not implicated even if the employee is acting within the scope of employment. In Lewis v. Clarke, the Supreme Court brusquely summed up the situation as follows: "The suit is brought against a tribal employee operating a vehicle within the scope of his employment but on state lands, and the judgment will not operate against the Tribe. This is not a suit against Clarke in his official capacity." With respect to the concern expressed by the Supreme Court of Connecticut below (and the 9th Circuit in Cook) that suing individuals is just a pleading device to circumvent tribal immunity, the Supreme Court simply said "immunity is not in play. Clarke, not the Gaming Authority, is the real party in interest."

Like the 19th century explorers, Lewis v. Clarke explores ground already covered by others but nonetheless has dramatic impact. The various approaches taken by the courts in Trudgeon, Great Western, Turner and Cook have been replaced by the brightest of bright-line rules. In every federal and state court in the United States, whether tribal sovereign immunity extends to employees of tribes and tribal businesses facing tort claims will depend in large part (if not exclusively) on whether the tribe or tribal business is also named as a defendant. Of course, no competent personal injury plaintiff's counsel will name a tribe or tribal business in the complaint only to face an immediate motion to dismiss on sovereign immunity grounds which could extend to any individual defendants. On the other hand, it would seem pointless to sue only low-level employees in their individual capacities. Avoiding sovereign immunity is a Pyrrhic victory when the defendants are judgment proof.

A suit with potential for real recovery for the injured plaintiff would seem to be limited to the specific circumstance of an employee indemnified by a tribe or tribal business. The individual defendants in both Lewis v. Clarke and Maxwell had indemnification from their employers (which these courts rejected as basis for extending sovereign immunity). Indemnification may explain why the plaintiffs in these cases avoided the temptation to sue the deep-pocket tribe or tribal business and sued only the individuals. In the context of personal injury litigation involving non-tribal businesses and employees, the usual goal is to reach the resources of the business by naming the business and the employee as defendants and asserting vicarious liability of the former for the conduct of the latter. The opposite appears to be true when a tribal business involved. The suit is framed as if the plaintiff has no interest in tribal liability, while relying on the existence of employee indemnification for payment of the judgment. A tribe or tribal business could attempt to counter this strategy by refusing to indemnify its employees for acts within the scope of employment. But this might potentially impact a tribe's ability to hire employees, given, for example, that California Labor Code Section 2802 requires indemnification from non-tribal employers.

One last thing is worth noting: In Lewis v. Clarke and Maxwell, the courts pointedly mention that the incident occurred off tribal land. Yet, nothing in the "real party in interest" rule applied in these cases expressly refers to this circumstance as a factor in determining whether an employee is immune. Further, in Lewis v. Clarke, both Justices Clarence Thomas and Ruth Bader Ginsburg wrote one-paragraph concurrences that off-reservation activities should not be subject to sovereign immunity, citing their dissents in Michigan v. Bay Mills Indian Community, 134 S. Ct. 2024 (2014), where the majority held to the contrary. The significance to employee immunity of the place where the events occurred remains to be seen.