NAFSA Applauds Federal Court Decision Upholding Tribal Sovereignty


Barry Brandon

Barry Brandon

Federal Court Dismisses Suit against Tribal Online Lending Businesses

Published November 24, 2015

WASHINGTON – The Native American Financial Services Association (NAFSA) today lauded a federal court decision dismissing a case filed against two tribal online lending businesses, where the court held the businesses were entitled to Tribal sovereign immunity as an arm of the tribe.

“The federal court’s decision is a tremendous victory for Indian Country and consumers,” said Barry Brandon, Executive Director of NAFSA.

“The court rightfully upheld tribes’ inalienable right to exercise their sovereignty as historically mandated by federal policy, and correctly ruled that these online lending businesses are in fact arms of their tribes. For all the tribes that rely on e-commerce to help fund critical social programs for their members – and for all the consumers who exercise their choice to access short-term credit provided by tribal lenders – the decision is an important win.”

The decision, issued by the U.S. District Court for the District Of Maryland, noted in part that:

  • “Applying the Breakthrough factors to MobiLoans and Riverbend leads to the conclusion that both defendants are “arms of the tribe” entitled to immunity.”
  • “Both defendant lending companies have provided substantial evidence that they are wholly owned by tribes and were formed under tribal law to raise revenue for the tribes.”
  • “The Supreme Court has made clear that tribes are entitled to sovereign immunity when they engage in off-reservation commercial activity.”
  • “The purpose of the entities, also weighs in favor of immunity because the tribes created the companies to financially benefit the tribes and fund governmental services.”
  • “The revenue from the lending companies benefits the tribes. The Tunica-Biloxi Tribe of Louisiana uses revenue from MobiLoans to fund various tribal governmental, educational, and social services, including Teach For America positions. Revenue from Riverbend is used to provide essential services, including police, ambulance, and fire services, to members of the Fort Belknap Indian Community, and to reinvest in the tribe’s other economic efforts, such as its store, restaurant, construction business, and information technology business.”
  • “MobiLoans and Riverbend ‘plainly promote and fund the Tribe’s self-determination through revenue generation and the funding of diversified economic development.’  Extending sovereign immunity to the lending companies would protect a significant source of the tribes’ revenue from suit, thereby ‘directly protect[ing] the sovereign Tribe’s treasury, which is one of the historic purposes of sovereign immunity in general.’”

The case is Everette v. Mitchem et al., 1:15-cv-01261.

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  1. Lena Toledo 2 years ago