Stephen Cornell:

"Sovereign immunity: a topic that we run into constantly in Indian Country and something that Joe [Kalt] and others have thought a lot about. And so Professor Kalt, sovereign immunity."

Joseph P. Kalt:

"All right, Steve, thank you. Hi, everybody. Good to see you all. See some old friends, students and so forth here. I want to start out talking about sovereign immunity, which is a key issue of course for a lot of tribes, with a mock tribal council meeting. And here's the deal. You're a tribal council, you are nation builders and you've listened to these talks and you go home all excited. And in fact one of the things you're going to do is you're going to start an effort to try to keep the elders from having to move into the city when they get very old or ill. You're going to build an elder care facility right here at home. And it's going to cost you $10 million -- construction costs -- to build this elder care facility to take care of your own elders. By the way, this is based right down here just outside of town, Tohono O'odham has built the premiere elder care facility in Arizona, maybe in the nation. Not the premiere Indian elder care [facility], it's a world-class operation, right down here 50 miles away from us, absolutely phenomenal, expensive. It has those kind of rooms that are a mixture of...they look like homey, but they also have hospital capabilities. It's expensive. Ten million bucks and the construction company wants you to waive sovereign immunity on the construction contract. They want you to waive sovereign immunity. They're saying, ‘Look, we're going to go and do a bunch of construction for you. You're going to pay me $10 million.' And what is the waiver of sovereign immunity? What are they asking for? What do they want? Here's a construction company -- in fact, I'll be the evil construction company. 'Ten million bucks, willing to do a deal with you, but I want you to waive sovereign immunity.' What's the construction company asking for? Yeah, they want assurance that they'll get paid and when they say waive sovereign immunity...Oh, in fact I'll tell you what this construction guy wants. I want you to waive sovereign immunity, I want you to waive into State of Arizona courts. What does it mean? It means, 'I want you as a tribal government to waive your freedom from lawsuits so that if you don't pay me, I can come sue you and get my money ‘cause I'm going to put up...I like...I love this community. I want to help you, but also I'm going to spend ten million bucks.' So that's the proposal, is that I, the construction company, will have the right to sue you if we get in some kind of fight. You don't pay me, I don't know, maybe there's some worker insurance issues that come up, but I have the right to sue you in Arizona State court. You'll submit to Arizona law and that's my proposal.

Now I want us to have a little debate in the council, make this about even, starting here with my good friend Edward here. Everybody from you downward, you can only speak against this proposal to waive sovereign immunity. From here down you can only speak in favor of waiving sovereign immunity. So here's the proposal, I know because you all had me over for dinner last night that you're on my side, you support waiving sovereign immunity. Why? You can only speak in favor of it. That's true. I don't trust your tribal court. I just watched one of your former judges on video. He got booted out for some political reason. I don't trust your courts. I don't trust your courts...You're exactly right. Yes? Exactly. Gail's exactly right. This very wise council member recognizes that to get the deal done, I'm not trying to be a bad guy, but I'm not a charitable organization. I'm not going to give you ten million bucks and you have elders that need care, we're going to do this quickly. So thank you very much for your support. Any opposition to waiving sovereign immunity? Any proposals? Counterproposals? Yes, sir. With all due respect, council member, with all due respect, and you also won't have an elder care facility. Okay, go find another contractor. Okay, fffffff, here's your new contractor. Here's your new contractor. I'm sorry, I insist on a waiver of sovereign immunity as well. Yeah, I know. You ran on the same ticket together against my brother. What infrastructure are you talking about? Any responses? He says, well, what, I guess we'll put off building the elder care facility for 15-20 years. Is that enough? Remember, I want the construction job. Any response? He says, you'll go build your tribal courts, etcetera, etcetera. Okay, look guys. You can see what the fundamental issue is, right? You can see that there's this tension here and you said it very well, what's your name? You said it very well that...he said it very well. There's this tension. 'Wait a minute, I'm sovereign, if I waive my immunity and particularly if I waive it into like the State of Arizona courts, I'm submitting myself to the laws of another nation, another government,' and you've been fighting for decades, centuries, for sovereignty. On the other hand, you might have to wait 15 years. This is realistic, folks. This is the tension that tribes get themselves into.

Let's talk a little bit about sovereign immunity, and what I'm going to end up doing is looking at some of the clever things tribes are doing to try to essentially maintain their sovereignty and get that elder care facility built. They're trying to do both. First of all, where does this concept come from? What is sovereign immunity? Sovereign immunity, where did it come from? Should you ever waive it? What do real governments do out there in the world? Notice the start of this talk was something about walking the walk. How do real governments out there handle this issue? Because you know, by the way, this is an issue for basically every government out there from the State of Arizona to the country of Poland, to Tohono O'odham [Nation]. This is an issue for nations all over the world. What do rogue governments do who don't get the elder care facility built, etcetera, etcetera? And is there conflict? You know what these sessions are about -- they're talking about using your sovereignty right. That's what this whole exercise is about is building the nation, the sovereign nation. Is there a conflict between the message of NNI [Native Nations Institute] and this issue of sovereignty?

What is it? Sovereign immunity is limits on the ability of a government to be sued, for example, vis-í -vis its own citizens. Sovereign immunity, you can't sue me. You might be able to sue me as an individual depending on the way tribal law works, but you can't sue the government as an individual unless it's waived. Limits on the ability of a government to be sued by non-citizens including this construction company that was going to build the elder care facility or by other governments, being sued by other governments. Now, is it protection, is it an asset, or is it a burden?

Let me pause for a second. How do you guys think about waiving sovereign immunity or protecting sovereign immunity? Is it helping the nation to have sovereign immunity, is it hurting it? What's your sense? You guys deal with it. Yeah, it's interesting, and this will be the central theme here -- he's been looking at my notes -- this'll be the central theme. You're exactly right. It's an act of sovereignty to be able to waive sovereignty. That doesn't mean you should always waive it. The game is to do it smart, to be smart about it, both how you do it, when you do it -- and you'll see in a minute -- where you do it. Meaning when you're waiving immunity you're really submitting yourself to some other system of law enforcement essentially, judicial enforcement than solely your own government. Can you be smart about that?

I'm not a lawyer and I stole this slide from a very, very good attorney. He's on the board of NNI, Gabe Galanda. Gabe is one of the leading Indian attorneys up in the Pacific Northwest. The boundary, what is this sovereign immunity? It turns out that for tribes the law is pretty clear that a tribal entity, by that I mean the government, your housing department, your gaming operation, a tribally owned business, is subject to suit only if immunity is clearly waived. It's interesting, this is a case in which the law has tended to kind of support tribal sovereignty and unless that contract explicitly says, ‘We the tribe hereby waive our immunity,' the courts treat that as, ‘Well, the tribe is sovereign. It's immune from suit.' But that also means that when you waive sovereign immunity you've got to be real clear about how you do it and where you do it and when you do it and who does it, etcetera. It shields tribes from suit in federal, state or tribal court and for either monetary or equitable relief. Equitable relief would be like my housing department bought a truck from the Ford dealer here, didn't pay. Equitable relief would be they get the truck back. Well, you'd be surprised, those car dealers, if you don't waive sovereign immunity, they're real unlikely to sell you the truck. They're kind of that way, those car dealers. Immunity can protect tribal agencies, businesses and so forth on or off the reservation.

But you can also smell the other side of the coin in that it can be abused. It can be abused. Enter into that $10 million contract and then once the building's done say, ‘Sorry, Mr. Construction Guy.' We'll look at some of the consequences of that.

Where did sovereign immunity come from? Anybody have any idea? This guy. This is not an invention of even federal Indian law. It came from that era in which these guys, the kings of England and so forth, claimed...and importantly, and this is important, because if you think about you as leaders of your nations, your responsibilities, when you behave well, here's what they were arguing. It has its origins in something that's pretty distasteful. It said, ‘I am the King. I'm here by divine right. God made me king. The people don't have any authority over me.' And this was used by these European kings to create all kinds of atrocities over their own people. Essentially, 'I'm above the law, I want to steal your property. I am the king. I have sovereign immunity.' So there's something, you've got to be a little weary then that there's something about this sovereign immunity that actually doesn't fit. In my experience -- I'm from the White Yuppie tribe -- in my experience with working with so many Indian communities that I do, that actually isn't really deep in the culture of most tribes, the idea that you as a leader are above the law of people, that's not Native. Not in my experience. No, no, no. You serve, when you serve, the people. And you when you quit serving the people we get rid of you. And so there's a little bit of tension here that this whole idea of sovereign immunity, which has become in some ways quite sacred because it is protecting the nation's sovereignty, has this element of it that it can be abused. ‘Oh, I'm above the law,' says the tribal council, the tribal housing department or whatever.

Should the nation ever waive sovereign immunity? What do real governments do? And this is this walk the walk part of what I want to say. What do real governments do out there? All over the world, all over the world, governments eventually find it necessary, if they are going to get that elder care facility built, if they're going to get that new business to locate on the reservation, if they're going to get many things done, they find that they indeed do need to ‘waive sovereign immunity.' But how do they do it? Here's the story. Who wants to be West Virginia? What does that mean? We looked around, turns out in the United States, every state in the United States has various provisions for sovereign immunity. Sometimes it's in state constitutions. Many states, for example, will -- either by constitution or by law -- one of the 50 states will say the state will carry a huge insurance policy, $100 million insurance policy -- and they'll waive sovereign immunity so you could be sued in federal court as a state up to the level of their insurance policy. And they literally write their laws that way. The sovereign immunity is hereby waived up to the level of enumerated insurance amounts. Other states in the United States will waive sovereign immunity around specific things, for business transactions like a construction contract, and so forth. They'll waive sovereign immunity and they'll enumerate that in the law or even in their state constitutions.

Now why pick on West Virginia? West Virginia has the strongest ‘never waive sovereign immunity' clauses of any ‘tribe' -- that is one of the 50 states -- in the United States. If you go look across all the states -- Rob Williams who you just saw in the video and I looked at this -- and you look at how different states handle sovereign immunity in the United States, West Virginia is the one who says, ‘We will never waive sovereign immunity.' And we don't think [that] the following two things are coincidental. Number one, want to guess what the poorest state is in the United States? West Virginia. There's a relationship there. Literally the poorest state in the United States has the strongest 'we'll never waive sovereign immunity' clauses. Secondly, you hear all the time back in that part of the country,  coal mine disasters. Funny, you know there are coal mines actually in a lot of states. Want to guess who leads the United States in coal mine disasters? In fact you're going to know it, right? You hear it on the news. West Virginia. Why? Because I can't go as the descendent or whatever of someone who just got [killed]...I can't go sue the state for having Harry as a mine inspector when you all know Harry couldn't do that job. My point being, you're insulating the system from its own people, you insulate the system from its own people. So I assert -- and despite the fact that my own father was born in West Virginia -- I don't want to be in West Virginia. And we don't think it's coincidence at all that you have the poorest place in the United States and some of the worst kind of public service like mine inspections, mine safety, in this particular state where you as a citizen can't get to them, I as a business guy can't get to them. They are protected. They've got the worst infrastructure, just horrible, West Virginia, the poorest place in the United States.

So what most states do, and governments around the world, is they have limited waivers of sovereign immunity, limiting up to a certain dollar amount, waiving up to...’We waive sovereign immunity up to $100,000 or we waive sovereign immunity on construction contracts.' They enumerate and have limited waivers of sovereign immunity and I'll show you some examples in a moment. The other thing that you see real nations doing is entering into investment treaties. When you waive sovereign immunity, you're waiving your jurisdiction into somebody else's jurisdiction. And a lot of what...wouldn't you feel more comfortable if you felt like you had to do that to get the elder care facility built, wouldn't you feel a little more comfortable doing that if there was a treaty between you and whomever you were dealing with that laid down the rules of how things will play out if we get in a fight, if we get in a dispute over that construction contract or something like that? And so all over the world what we see is real governments entering into, ‘I'll waive my sovereign immunity if you'll waive your sovereign immunity,' but we're not just going to use those words. We're going to sign a treaty that lays down essentially a law that we both agree to. Notice this is an act of a sovereign. A treaty is an agreement between nations, a treaty. And so what you see all over the world, and there is a whole, there's actually, it led...after World War II, all over the world, treaties like that, it led to a demand, ‘Well, I'm signing a treaty with your nation, I'm signing one with yours, you're doing one with hers, vice versa.' It's actually created a whole international court system now. The primary one is the London Court of International Arbitration where governments go into fights, that is they have courts, where the huge construction company is suing the Country of Poland or something like that but they've done it by the creation of treaties, which said, ‘We'll create this thing called the London Court of International Arbitration and we'll waive our immunity into that process.'

Now, in addition...what do rogue governments do? Here's the typical pattern. They sign one of these treaties. They sign one of these treaties. They then sign a contract like my build the elder care facility story. The second the building's done they breach the contract. This is what rogue governments do. They breach the contract. ‘Oh, sorry. You know, you installed those door jambs a little wrong and so we're never going to pay you your $10 million.' They've got all kinds of pre-textual things like that and they plead sovereignty, they plead sovereignty. They ignore the treaty -- and I'm going to show you a real-world case in one second -- they ignore the treaty and they say, ‘Well, yeah, we said we'd go into the London Court of International Arbitration but that was by a previous council,' tribal council or national legislature. ‘Oh, I'm a new government, I don't abide by the treaties of a previous government. I don't abide by tribal council decisions from the previous administration. That's why I'm here is ‘cause I voted this guy out.' And you ignore the treaties. ‘Oh, you want to take me to court? Fine. Go have your hearing and I won't show up.' And there'll be all these people dressed in suits -- I actually do some of these for a living -- that go to the courtroom in Paris, at the World Bank, and only one side will show up. The complainant shows up but the country who signed the treaty and said it would show up doesn't show up. What are the consequences?

This is a real-world case. I actually testified in this case in Paris. It was kind of cool. I got to see the French Open during the thing. It was cool. I don't even like tennis. Ecuador. Where's Ecuador? Down there in Central America or South America. Ecuador, they sign an international investment treaty with a whole bunch of nations. And you can imagine tribes doing this -- for example, among themselves -- and signing a set of treaties in which, or signing essentially a treaty by negotiating cross-recognition of jurisdiction with the state government. It's the same thing. Anyway, Ecuador signs one of these. They enter into like a $6 billion...actually they enter into like $50 billion of oil and gas contracts. They want to develop oil resources; reminds me of what's going on up in North Dakota now. They want to develop their oil and gas resources. They sign big contracts with construction companies basically, but these big oil companies that go build oil wells, pump the oil out of the ground and all that. The Occidental Petroleum and these companies, Exxon, they come in and they invest billions and billions of dollars. And essentially, this is a real-world story, Ecuador -- here comes the oil companies, they invest all that money -- almost the second they finish building the structures, putting in the oil wells and all that, Ecuador sends in the troops and kicks them out. In fact, the way they do it is a new president comes in -- a new council if you will -- and says, ‘Those big oil companies are ripping us off, taking away our national pride,' and uses this speech to justify literally flying in guys, soldiers in helicopters to take over the oil fields. Now remember, they've got a treaty. They go to court in this, not an Ecuador court, not a U.S. court; it's actually an international court. It's actually a court of arbitration. Ecuador picks a judge, the oil company at issue picks a judge, they've got $6 billion in the fight, and the two judges then pick a third neutral [judge]. That's kind of nice. They each got their shot. They're trying to share the power, not going into U.S. court, not going into Ecuador court, anywhere else. They create their own court with arbitration. And Ecuador loses in that international arbitration. And Ecuador loses in that international arbitration. And Ecuador says, ‘Yeah, we lost. We owe that company $6 billion. Ha, ha, ha, ha, ha.' And they literally just go, ‘La, la, la, see you later.' And they go out and party I guess and ignore, and ignore the arbitration result.

What do you think the consequences of this is? What do you think happens here? What do you think happens? Ecuador has stood up for its sovereignty. It's not going to let any group of these arbitrators rip them off. What do you think happens to Ecuador in this situation? Here's what happens. Almost immediately -- you are looking ahead, aren't you -- no one would loan Ecuador a penny. And immediately, those who would loan them, jacked up the interest rates to Ecuador -- this is all documented. Like overnight, Ecuador goes from being able to borrow money at eight percent interest to 28 percent interest. What's that cost Ecuador? Say they want to borrow $10 million; one year's interest at eight percent: $800,000. One year's interest once they raise those interest rates to you to 28 percent, $2.8 million. Suddenly doing any public effort -- build a new hospital, a new elder care facility, pave a road -- just skyrocketed in cost. Went from $800,000 a year basically to $2.8 million. And I could add as many zeroes as I wanted there. I could make these numbers...they are pretty large. But what happens in this situation with these rogue governments is in the short run you got the oil wells and in the long run you've basically made a situation where no one wants to deal with you. You are now West Virginia. Ecuador and West Virginia kind of sitting there together. And the investment in the public's interest -- the roads, the hospitals, whatever it is -- just went from 80 to 280, it's like a factor of almost three or I guess it is three. You tripled the cost of investing in this country.

So how do you waive sovereign immunity and how do you go about the process? Now we'll talk about smart and not smart, but you can sort of feel the message is smart governments figure out how to waive immunity while protecting their sovereignty. How do you just mechanically do it? And we see tribes doing three kinds of approaches. Some will write it into their tribal constitutions. So increasingly we're seeing some tribes, you had discussions here about constitutional reform. More and more, we're seeing tribes do what we see like U.S. states do. The tribe here can elect to waive sovereign immunity up to the amount of its insurance policies. It can elect the tribe, 'under duly passed ordinance by the tribal council says in the constitution...,' in other words you can waive for the following thing: physical infrastructure development, a business investment, something like that in the constitution. A lot of tribes do it by an ordinance. Rather than the constitution they pass a law. The tribal council passes a law and says, ‘Okay, we'll waive sovereign immunity on a case by case -- it doesn't mean like a blanket, but on a case-by-case basis we'll waive it up to the amount of our insurance policies, we'll waive it for construction projects, we'll waive it for infrastructure development, and things like that.' And often a tribal council, on a case-by-case basis, will do a council resolution that for this particular loan, the $10 million for the elder care facility, we'll waive immunity through an ordinance, a borrowing resolution.

Where do you get the authority to waive? That is, think about your own nation. You come back from this and say, ‘Okay, we don't want to be West Virginia. We don't want to be Ecuador. We've got to have a smart waiver of sovereign immunity policy.' Where do you get the authority to do that in your community? Just put it up to the council? What we see tribes doing is sometimes the whole tribe will make this decision. There's a cultural match issue here. What does your community want, what does it expect? And in some tribes that means, ‘No council member, you don't get to vote on waiving sovereign immunity. You've got to take it to all the people, and we're going to put it up for a referendum, essentially.' By the way, that's really messy, right? That's really messy [because] how do you convey to the man or woman on the street these kinds of issues? This is a little bit techy, a little bit law, and it can be demagogued by those demagogues who won't waive sovereign immunity because it's waiving our sovereignty. And so you end up with that challenge. But other tribes will do it by tribal council. It's just like passing another law that, 'Here's the speed limit in the town,' and ‘Oh, here's the next ordinance. We're going to have a waiver of sovereign immunity on all our loans.' Something like that.

And some tribes will delegate the power to sovereign immunity to things like the board of directors of their tribal development company or that tribal enterprise or the gaming enterprise, so the council, the politicians, are not involved in that. Is that smart or bad? What do you think? Should you take your development corporation and say to the board of directors, ‘You decide. Not the council, not the people, you decide when and where to waive sovereign immunity.' What do you think? Smart or not smart? And this is the game. That's exactly right. You can sort of feel -- two-edged sword -- on the one hand, it can be smart [because] you can take some of the politics out of it and make some of this like taking out the next loan or line of credit or something pretty straightforward. But you want to be specific about it and say you can waive sovereign immunity, but you can only waive it into federal court, or you can only waive it into this intertribal court, or you can only waive your sovereign immunity on certain dollar amounts, certain events -- those kinds of things. And so you see tribes be very inventive about this question by putting on -- as I just said -- specificity; dollar amounts, events, what kinds of things, what circumstances, how long, what jurisdiction. I work a lot up at Crow, for example. I've worked there for many, many years up in Montana. And the Crow and the State of Montana, the Crow would no more voluntarily -- without a gun to their head -- waive sovereign immunity into Montana state courts. They're much more willing to waive it into federal court, [because] they've just had this horrible relationship forever with the State of Montana. You can pre-specify these things at actually any of those levels.

When are limited waivers of sovereign immunity smart? One is contractual waivers, particularly for loans, and other long-term contracts. One quick story. I work with a tribe up in the Pacific Northwest. This is kind of cool story. And here's how they waive sovereign immunity. They wanted to borrow I think, the dollar amount was like $110 million; it was a pretty big loan, a tribe up in the Pacific Northwest. The bank, Bank of America actually, says, ‘Sovereign immunity? I'm not giving you $110 million unless I have some recourse if we get in a fight and some hope of getting my money back if I give you this $110 million bucks.' So says Bank of America, ‘I want you to waive sovereign immunity into State of Washington courts.' The tribe says, ‘No way.' The tribe responds with a counter offer. ‘I'll waive sovereign immunity, first into arbitration, meaning if we're in a dispute we'll put arbitration clauses in these contracts. You pick a judge, I pick a judge the two judges pick a third; it's neutral, it's fair. And we'll operate under the London Court of International Arbitration rules and legal procedures. We'll waive into arbitration.' Is that the end of the story? Is that satisfactory do you think for Bank of America? Why?

Next problem. Arbitrators might have a very fair arbitration and might rule in favor of Bank of America. It's kind of like my story of Ecuador; you've got to get the arbitration award enforced. And so typically these waivers of sovereign immunity waive into arbitration, but then they'll have a clause about ‘any duly found arbitration award shall be enforceable under the laws of...' blank; State of Washington, federal, etcetera. 'So, okay, we'll go to arbitration,' but then Bank of America says, ‘That's not good enough for me.' They're about to lose their $110 million. The tribe says, ‘I've got an idea,' and this was kind of cool. Tribal council members like yourselves sitting around and they're talking about, ‘Well, let's waive it into tribal court,' meaning we'll allow ourselves to be sued, but any arbitration award will be enforceable in tribal court. What do you think Bank of America says? They used to say no. They're now more and more saying yes. They first say no. Bank of America says, ‘We're going to enforce the arbitration award in tribal court? No way.' So then the council has this very interesting discussion and it goes back to part of what you said, Joe, about building the tribal infrastructure and the tribal courts and so forth. The tribal council says, and this gentleman on the tribal council says, ‘Folks, I'll tell you what, if we don't trust our own tribal courts, we're not really a sovereign nation.' And so what they strike a deal with Bank of America is, ‘Okay, arbitration award enforceable in tribal court. If our tribal court will not enforce an arbitration award, then you can take us to State of Washington court.' What did Bank of America say? They said yes. Notice the gimmick. Partly it was a self-challenge. It was doing what you're implying. If we're going to walk the walk of a sovereign and our own tribal courts won't live up to a duly found arbitration award under a contract we voluntarily entered into, then we're not worth our sovereignty.

It was kind of an interesting thing. They end up, bottom line they waived into Washington court but they put a challenge to themselves and a line in the sand that said, ‘We want you to come to tribal court. If tribal court won't enforce the award, then take us to court.' Interestingly enough they said, Bank of America initially said no to tribal court. They're more and more, not just Bank of America, more and more contractors and so forth and banks and so forth are perfectly willing to go to tribal court. It's not as if the State of Washington courts are all that great. People think there's this -- I've talked to some of the guys at Bank of America -- they actually sometimes say, ‘Yeah, I'd much rather go to tribal court. They're much faster. Often their judges are better trained.' Do you realize in many states what's going on? State courts, they're buried in family issues, drug issues. Here in Arizona, you've got immigration issues, all of these things going on, and these judges in these state courts don't have any time to learn business law, to take these big dollar cases and so forth. And if Bank of America wants to take you to state court, it might take them seven years, where if I go to tribal court maybe I can get a judgment in two years or something like that, or one year. And so what you're finding is sort of Rob William's speech about building that good tribal judiciary, that speech about that. It turns out the market kind of likes that and more and more you're finding tribes...I literally had one guy say to me, ‘I'd much rather go to tribal court than to state court. State court is politicized, underfunded...,' meaning all the things you hear about Indian courts, politicized, underfunded, hacks, nobody's a good lawyer, blah, blah, blah. But if you build your judiciary the way that Rob Williams was talking about in the previous lecture -- nobody applauded his video by the way, for someone who's not really here, we don't applaud -- but you can hear the same theme here in other words. It's one of the comparative advantages of tribes because our, particularly in the United States, the state court systems are no great shakes. It's not like Bank of America trusts a state court much more than they trust a tribal court, but you've got to invest in it. And that story about Bank of America is one where they challenged themselves. ‘If our courts won't uphold a proper award, then take...' that's a challenge to each other in the council.

I've already touched on the way this often takes the form is you first go to arbitration but you still have what's called a choice of law question with respect to enforcement. You don't always waive sovereign immunity. When you can, you try to waive into your own courts and get the world to trust those courts. And you're not, tribes start out at a disadvantage because so many businesses, for example, are not used to dealing with tribal courts. Some of them are probably racist, but it's not like they like the other courts all that much either, folks. Talk to anybody in business, the last thing in the world they want to do is go to a jury. And I have tribes that have gotten very smart and they'll take business disputes not to a jury in their own tribal court but to a three-panel judge panel where two of the judges might be from a related but not my own tribe. What they're doing is they're saying to that bank of whatever, we know you hate those American juries [because] they're just whacko sometimes. We'll give you a system with people who are qualified by building a judicial system of our own that is better and faster and fairer than the state court system. Waive into arbitration, waive into international bodies. We're starting to hear some talk about this.

The Salish tribes, you may be aware there's this big effort going on trying to get the Salish tribes in the Pacific Northwest, Canada, U.S. talking now about things like, 'Let's create an international court, essentially, where we can draw upon judges from multiple tribes.' I work with one tribe, joins one of these intertribal appeals court systems. How many of you are in an intertribal appeals court system? Anybody? I'll describe one of them for you up in the Pacific Northwest. I get into a dispute with a tribe and I want to appeal it, I lose. We go to an intertribal appeals court, a three-panel judge court -- three panelists, three judges -- none of which are from the tribe I'm fighting with, but they're all tribal judges. Not State of Washington judges, State of Oregon judges or something like that. And you're essentially saying to the world, you'll get a fair shake. Oneida is, yeah. And then sometimes you waive into another government's courts. A lot of tribes are finding that for relatively small things, if it's literally a pickup truck you're worried about, you waive into the state court. You've got to know when to pick your fights in a sense. Now if you're talking about a major thing like hundreds of millions of dollars, a different story. And be clear and explicit, and I'll show you some examples.

Here's an example of a tribe handling sovereign immunity. This is from an actual charter of a tribal corporation says this tribal enterprise, tribal business, ‘The enterprise is an entity of the tribal nation and is established for the benefit of the nation. As such, it has the same immunity from suit as the nation does.' What you're watching the tribe do in this document is draw a line that says, ‘We have sovereign immunity, we are asserting that we are sovereign.' But then it goes on to say -- the stuff not in yellow -- 'notwithstanding the fact that the enterprise is immune from suit, the enterprise is hereby expressly granted to sue in its own name and a limited right to be sued in its own name as more fully set out below.' That phrase ‘a right to be sued,' that is a limited waiver of sovereign immunity and they go on, ‘...As more fully set out below. The enterprise is not immune from such suits, actions or proceedings initiated by the nation or its regulatory agencies and departments, nothing in this section or in this charter shall be construed as a waiver of or limitation on the sovereign immunity of the nation.' What you're watching a tribe do is set up a tribal corporation, tell the world, ‘Yeah, there's limited waiver of sovereign immunity, but you can only sue the enterprise, you can't sue the nation.' So you're not suing for example to get at the assets of the tribal council, of the tribal government. You may be suing to get that truck back from that company, but you don't have the right, that's what this is laying out as they set up in the charter of this corporation. This is the nation's law telling its corporation and hence telling the world when you can be sued and when not.

Here's another example: ‘The nation waives any doctrine that otherwise would require the exhaustion of remedies in the judicial court of the nation including any administrative remedies before proceeding with arbitration or litigation.' What is this clause saying? What they're saying here is, there's this notion of exhaustion of tribal remedy. This is saying, ‘waives any doctrine that would require.' It's saying, I'm setting up, you don't -- you the private investor with me -- don't have to necessarily exhaust all legal remedy through tribal court. We'll negotiate a limited waiver of sovereign immunity and the tribe is announcing to the world, ‘If you sue me, we'll go to arbitration like we agreed.' I won't come back and say to you, ‘Oh, no arbitration. You have to go through 19 years of tribal litigation.' No, no, no. We'll do straight arbitration. You're watching a tribe try to design that for itself.

Real quickly, a couple more: 'If there is no colorable...' -- this is again from a tribal contract -- ‘...if there's no colorable claim that the federal court has jurisdiction, if the federal court determines that it lacks jurisdiction or in the event of a challenge to the federal court's jurisdiction, then the nation consents to the enforcement of the gaming enterprise' -- this is for its casino -- ‘the enforcement of the gaming enterprise's agreement to arbitrate and the confirmation enforcement of any arbitration decision or awards in the judicial court of the tribal nation, Arizona Superior Court and any court to which the decisions of those courts can be appealed.' What you're watching here is the tribe say, with respect to our casino, 'We actually, we're agreeing kind of to stay out of federal court. You can come to tribal court or you can go to Arizona State Court, but we're not going to federal courts' is basically what they're trying to say.

These are just examples. There's zillions of these kinds of examples, each one tailored by the tribe in kind of an intelligent way to achieve the double objective. There are two objectives around sovereign immunity. One is to protect your sovereignty. The other is to not be West Virginia. If there's one lesson you want to leave this whole event from, it's to not be West Virginia. My point is, in other words, you're trying to achieve economic development or other infrastructure needs, that means you're probably going to have to waive sovereign immunity, but there are smart ways to do it: arbitration, waive into your own courts. Back that up if you have to by, after going to state court we'll go to federal court or whatever. But at the same time you want to do it very carefully so that you pre-specify. We're not giving up our sovereignty as a nation, we're only doing a limited waiver here for this particular loan, for this particular enterprise. And that's the challenge of sovereign immunity is to balance those two things, protect sovereignty but also not be West Virginia. So that's the lesson, don't be West Virginia. Thank you, guys."