Sovereignty Applies in Discrimination Lawsuit

Sovereignty Applies in Discrimination Lawsuit

Carol Berry
8/30/12

A chiropractic limited liability company (LLC), even though organized under state law, was allowed to claim tribal sovereignty-derived immunity from lawsuit because it is owned by Cherokee Nation Businesses Inc. (CB) which, in turn is owned by the Cherokee Nation, according to the Tenth U.S. Circuit Court of Appeals.

Tina Marie Somerlott, who had worked as a chiropractic technician at an Army clinic in Ft. Sill, Oklahoma, was terminated from her job in 2007 and she brought civil rights and age discrimination claims against the employer, CND, LLC (CND), owned by CB, in District Court, which dismissed her complaint after determining CND was immune from lawsuit under tribal sovereign immunity.

Her claim, Somerlott v. Cherokee Nation Distributors, Inc., an Oklahoma corporation; CND, L.L.C., an Oklahoma limited liability company, was filed in U.S. District Court for the Western District of Oklahoma in 2008.

A three-judge panel of the federal appeals court on July 27 affirmed the lower court’s judgment, even though Somerlott argued the Cherokee Nation’s “relationship to CND is so attenuated that CND cannot be entitled to the Tribe’s exemption from the strictures of Title VII [of the Civil Rights Act] and the ADEA [Age Discrimination in Employment Act].”

She also contended that because the activities she contested were in a chiropractic clinic that served non-Indian clients and were not normally considered governmental functions, neither the Civil Rights Act nor ADEA should apply, court records showed.

The Tenth Circuit noted that tribal immunity from lawsuit extends to subdivisions of a tribe, and even bars suits “arising from a tribe’s commercial activities,” whether the activities triggering litigation occur on or off tribal land or whether the tribe is “directly responsible for the financial liabilities of its sub-entities.”

Judge Neil Gorsuch concurred with the other two members of the panel, but noted that “Sovereign immunity has never extended to a for-profit business owned by one sovereign but formed under the laws of a second sovereign when the laws of the incorporating second sovereign expressly allow the business to be sued.”

CND “wants sovereign immunity,” he said, but Oklahoma limited liability company statutes under which it was created provide that companies like CND are separate legal entities from shareholders [the Cherokee Nation] and they carry the “duty to answer lawsuits in any court,” he said.

“CND wants to exercise the privilege of incorporating, of coming into being, under Oklahoma law but without accepting the responsibilities attending that privilege,” he concluded.

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