U.S. Supreme Court Decision In Michigan V. Bay Mills Indian Community Et Al.

The U.S. Supreme Court ("Court") issued a 5-4 decision today in a case with implications for Tribal-State relations and the resolution of disputes under the federal Indian Gaming Regulatory Act, 25 U.S.C. § 2701 et seq. ("IGRA"). The Court in Michigan v. Bay Mills Indian Community1 found that the sovereign immunity of the Bay Mills Indian Community ("Tribe") barred a suit filed by the State of Michigan ("Michigan") to enjoin Class III gaming on the Tribe's Vanderbilt property, land the Tribe purchased in fee located 100 miles south of its reservation. In making its decision today, a majority of the Court:

affirmed the Court's precedent that Indian tribes possess sovereign immunity from suit for commercial activities conducted outside of Indian lands;2 affirmed the Court's precedent that such tribal sovereign immunity can be abrogated only by clear and unequivocal Congressional authorization (or waiver);3 and held that IGRA's provision permitting a state to sue a tribe for Tribal-State Compact violations on "Indian lands"4 did not waive tribal immunity to state suits for gaming conducted off Indian lands.5 The Court, however, suggested that Michigan could resort to "other mechanisms" – including legal actions against the responsible tribal individuals – to resolve its dispute with the Tribe.

DISCUSSION

I. CASE BACKGROUND

In August 2010, the Bay Mills Indian Community purchased a tract of land near Vanderbilt, Michigan, 100 miles south of its reservation in Michigan's Upper Peninsula, using money from a federal land claims settlement fund. According to the settlement, land purchased with the fund "shall be held as Indian lands are held."6 The Tribe opened a casino on the property on November 3, 2010.

The Bay Mills litigation began on December 21, 2010, when Michigan sued the Tribe in federal district court alleging that the Tribe violated its Tribal-State Compact because the Vanderbilt property was not located on "Indian lands".7 The Little Traverse Bay Bands of Odawa Indians ("Little Traverse") filed a separate suit making similar allegations one day later. The district court enjoined gaming at the Vanderbilt casino, and the Tribe appealed the injunction to the Court of Appeals for the Sixth Circuit ("Sixth Circuit").

In its decision issued on August 15, 2012, the Sixth Circuit found as a threshold matter that both Little Traverse and Michigan had shown sufficient injury to sue the Tribe because the casino would likely divert customers from...