Arizona sets guidelines in tribal sovereign immunity cases

The Associated Press

Felicia Fonseca

Associated Press

An Arizona woman who was maimed by a propeller on a rafting trip through the Grand Canyon can proceed with a lawsuit against the tribal corporation that ran the excursion, the state Supreme Court said in a ruling that has broad implications for such entities.

The opinion issued Tuesday establishes benchmarks to determine whether businesses created by tribes share in the same immunity from lawsuits as the tribes themselves. Those guidelines would apply to tribal gambling enterprises, and resorts, RV parks, concert venues, convenience stores and other tribally owned ventures. 

"This has statewide importance," said John Torgenson, an attorney for the woman and her husband. "Anything we can do to make sure people can attain and keep their right to sue when they get hurt when a corporation doesn't do the things necessary to keep them safe, I'm proud of that."

Scottsdale residents Sara and William Fox sued the Hualapai Tribe and the Grand Canyon Resort Corp., which runs one-day rafting trips on the Colorado River under the name Hualapai River Runners. The tribe was dismissed as a defendant because it, like state and federal governments, are shielded from lawsuits unless they consent to being sued.

The high court justices said they couldn't determine whether the corporation met its burden to prove it is a "subordinate economic organization" of the tribe, upholding a lower court decision. The justices said the corporation can renew a request to be dismissed as a defendant by presenting more evidence in Mohave County Superior Court.

The Grand Canyon Resort Corp. said it is confident it can show that it provides vital services and funding to the tribe and, therefore, is entitled to sovereign immunity. 

"As many courts have made clear, Indian tribes have sovereign immunity," the corporation said in a statement. "That sovereign right does not end when a 100-percent tribally owned and controlled entity does business with non-tribe members."

The corporation is best known for operating the Grand Canyon Skywalk, a horseshoe-shaped glass bridge that juts out from the canyon walls on the Hualapai reservation.

Organizations representing tribes and one of the country's largest tribes, the Navajo Nation, sided with the Hualapai corporation. They urged the court to not unduly burden the ability of tribes to provide for their citizens through tribal enterprises.

The state Supreme Court did not have a test to identify whether tribal entities are shielded from lawsuits, the justices noted, while saying there's no national consensus.

The opinion in the Fox case sets out six factors for Arizona courts to consider when determining whether a tribal entity has sovereign immunity. It drew from Arizona case law involving disputes with a tribal timber company, farm and construction company, as well as other factors that courts outside Arizona examine.

The factors include include the creation of the entity and its business form, the relationship between the tribe and the entity, the tribe's intent to share immunity, and whether that immunity furthers federal policies underlying sovereign immunity.

"This has come up in cases across the nation, especially the jurisdictions that have large tribal populations," said David Abney, an attorney for the Foxes.

Sovereign immunity applies to a tribe's commercial and government activities, on and off tribal land, the court documents state. In the Foxes' case, a court determined Sarah Fox was on state land on the Colorado River when she fell from the front of the raft and was sliced from her thigh to her chest by the propeller.

The Foxes allege the river guides were negligent because they didn't immediately turn off the motor when Sara Fox went overboard. She twice screamed at the boat operator before the propellers stopped spinning but as the blades cut her, according to the lawsuit that seeks unspecified damages.

The Foxes separately sued the Flagstaff travel agency, Grand Canyon Custom Tours, that they used to book their trip, alleging it failed to notify the Foxes of the rafting company's claim of sovereign immunity. The travel agency has said it doesn't hide information on who operates the rafting trips, and argued the Foxes knew or should have known.

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