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Through a federal suit in 2007, Hobbs Straus attorneys obtained protection of tribal court authority over child custody proceedings.

General Memorandum 13-096

General Memorandum 13-096
Oklahoma Supreme Court Finds Tribe is Immune from Suit in State Court from Compact-Based Tort Claims and Dram-Shop Liability

On September 24, 2013, the Supreme Court of the State of Oklahoma affirmed the lower trial court's dismissal of a suit against the Peoria Tribe of Indians of Oklahoma. The Oklahoma Supreme Court held that the Tribe is immune from suit in state court for compact-based tort claims and for dram-shop liability claims. The case is Sheffer v. Buffalo Run Casino, PTE, Inc., No. 109265, 2013 OK 77 (Sept. 24, 2013).

This case arose when Charles Sheffer, Jennifer Sheffer, and their minor son ("Plaintiffs") sustained injuries when a rental vehicle operated by the employees of a company called Carolina Forge collided with the Plaintiffs' 18-wheeler tractor-trailer. The Plaintiffs not only sued the company, but also sued Buffalo Run Casino, the Peoria Tribe of Indians of Oklahoma, and PTE, Inc. ("Peoria Tribe"). The Plaintiffs claimed that, under Dye v. Choctaw Casino of Pocola, 2009 OK 52, 230 P.3d 507 (per curiam), Griffith v. Choctaw Casino of Pocola, 2009 OK 51, 230 P.3d 488 (per curiam), and Cossey v. Cherokee Nation Enterprises, 2009 OK 6, 212 P.3d 447, state courts could hear compact-based tort claims against the Tribe. The Plaintiffs also argued that, under the court's ruling in Bittle v. Bahe, 2008 OK 10, 192 P.3d 810, the Peoria Tribe waived its sovereign immunity by applying for and receiving an Oklahoma state liquor license, and therefore could be sued for dram-shop liability.

The Oklahoma Supreme Court first addressed whether the Plaintiffs could bring their compact-based tort claim against the Peoria Tribe in state court. The model gaming compact (Okla. Stat. tit. 3A §§ 261-282 (2011)) provides for a limited waiver of tribal sovereign immunity for compact-based tort claims. It states that these claims can be brought against the Tribe "in a court of competent jurisdiction." The court had previously ruled in Dye, Griffith, and Cossey that state courts were "courts of competent jurisdiction" under the tribal/state gaming compacts.

Since the Oklahoma Supreme Court's rulings in Dye, Griffith, and Cossey, nine tribes have obtained injunctions in federal court preventing Oklahoma state courts from hearing compact-based tort claims on the basis that state courts are not "courts of competent jurisdiction" under the gaming compacts. The trial court in this case found that the Peoria Tribe has not obtained an injunction to prevent the state courts from hearing compact-based tort claims. It held, however, that a state cannot "impose or allow State jurisdiction on Indian lands for the regulation of Indian gaming activities," "unless a tribe affirmatively elects to have State laws and State jurisdiction extend to tribal lands." Sheffer, 2013 OK 77, ¶ 13. Without an express agreement made by the tribe to allow the claim to be heard in state court, the state court is not a "court of competent jurisdiction" under the gaming compact.

The Oklahoma Supreme Court examined other cases where courts have held that state courts do not have jurisdiction over tribes without an express waiver of sovereign immunity. The court noted that federal courts, including the Tenth Circuit, have held that gaming compacts do not waive a tribe's sovereign immunity to have compact-based tort claims heard in state court. Because the Peoria Tribe had not expressly waived its sovereign immunity, this court dismissed the case against the Peoria Tribe. In doing so, it overruled Dye, Griffith, and Cossey.

The Oklahoma Supreme Court next looked to see if the Plaintiff's dram-shop liability claim against the Tribe could be heard in state court. Previously, the court held in Bittle that applying for and receiving a state-issued liquor license waived a tribe's sovereign immunity for dram-shop liability claims. The court in Bittle found that the United States Supreme Court holding in Rice v. Rehner, 463 U.S. 713 (1983), combined with statutory law regulating liquor in Indian Country, allowed for an implicit waiver of tribal sovereign immunity "in the area of alcoholic beverage laws." Sheffer, 2013 OK 77, ¶ 28.

The court then examined its rulings in Seneca Telephone Co. v. Miami Tribe of Oklahoma, 2011 OK 15, 253 P.3d 53, and Diliner v. Seneca-Cayuga Tribe of Oklahoma, 2011 OK 61, 258 P.3d 516, and determined that tribes are "immune from a negligence action in state court absent an express waiver by the tribe or express abrogation by Congress." Sheffer, 2013 OK 77, ¶ 31. It found that dram-shop liability claims are based in negligence, and that a tribe does not waive its sovereign immunity by applying for and receiving a liquor license because the liquor license does not contain an express waiver of sovereign immunity. The court held that "applying for and accepting a state liquor license is nothing more than a promise to comply with state liquor laws, not a voluntary waiver of sovereign immunity for private party lawsuits." Id., ¶ 45. In doing so, the Oklahoma Supreme Court overruled its prior holding in Bittle, and dismissed the Plaintiffs' dram-shop liability claim against the Peoria Tribe on the basis of tribal sovereign immunity.

The ruling in Sheffer overturns prior case law undermining tribal sovereign immunity. In doing so, the Oklahoma Supreme Court has recognized that tribes are immune from suit in state court unless there is an explicit waiver of tribal sovereign immunity, either by Congress or by the tribe itself. This decision clears up the issue of which courts have jurisdiction over compact-based tort claims, and means that tribes in Oklahoma facing these claims will no longer be subjected to state court jurisdiction. Instead, any claims against the tribe must be brought in tribal court.

Please let us know if we may provide additional information regarding this case.

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Inquiries may be directed to:
William Norman (wnorman@hobbsstraus.com or 405-602-9425)

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