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Appeals Court: ‘Tell Me What Disqualifies a Tribe From Tribal Immunity When They Buy an Asset?’ 

“A Tribe is a sovereign entity. That question was resolved a couple hundred years ago,” asserted Judge G. Steven Agee, when a case concerning the sovereign immunity of a Tribal economic arm came up in the United States Court of Appeals for the Fourth Circuit on Tuesday.

“It seems like the bottom line is, ‘We don’t like payday lending, ergo, if the Tribe is in payday lending, there is not Tribal immunity,” Agee continued.  

The case in question, Williams v. Big Picture Loans, involves a group of consumers who filed suit against Big Picture Loans, the payday lender wholly owned by the Lac Vieux Desert Band of the Lake Superior Chippewa Indians.

In January 2019, a Virginia district court refused to toss a proposed classaction by a group of consumers against the lending company. The Tribally owned Big Picture Loans then urged the Fourth Circuit to overturn the Virginia federal court’s determination that Tribal immunity could not shield them.

Leaders of the Tribe traveled from Michigan’s Upper Peninsula to Richmond, Virginia, for the court proceedings this week.

During the Fourth Court proceedings, judges referenced precedents and confirmed: Tribes and Tribal entities cannot be sued without their consent.

“Why don’t you tell us with specificity what you believe are the defects that deny Tribal immunity?” Agee asked the non-Indian plaintiffs.  

Among the many arguments leveraged by the plaintiff’s attorney Matthew Wessler concerned the Tribe’s take of gross loan revenues.

The Tribe receives 3 percent of the gross revenue, Wessler stated, and the rest goes toward paying off debt or is reinvested into the business.

As Agee countered, it appears the Tribe is executing a “fairly savvy business transaction” like any other business.

Wessler continued, stating that the “commercial operation,” as he called it, existed before the payday lender became a Tribally owned entity. It was “absorbed into the Tribe,” Wessler stated.

Agee countered: “Tell me what disqualifies a Tribe from Tribal immunity when they buy an asset?”

Lac Vieux Desert Band Chairman Jim Williams offered perspective on the value of the Tribal lending operation to his rural Tribal Nation in an op-ed for Native Business Magazine published in our December “Finance” issue:

“…[A]s elected Chairman of the Lac Vieux Desert Band of Lake Superior Chippewa Indians, I am responsible not only for the operation of our Tribal government, but also stewardship of our culture, our lands, and our way of life. Alongside our Tribal Council and with a heavy dose of entrepreneurial passion, we operate businesses that provide jobs for the region, strengthen our Tribal economy, and fund important social and cultural programs.

We are the largest employer in our area. Over forty percent of our Tribe’s general fund is generated from our government-to-consumer lending business, and revenues generated by Tribal lending improve cultural preservation efforts, housing, health care, law enforcement, elder services, education, and infrastructure in and around our isolated reservation in Michigan’s Upper Peninsula.”

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