Chapter 2 Waiver of Sovereign Immunity and Jurisdiction in Commercial Transactions

§ 201 Purpose and Authority.

[History: Adopted at a regular session of the Economic Development Corporation July 15, 2003, Resolution #03-021. Adopted by Tribal Act #03-21.1273 enacted by poll of Tribal Council on July 28, 2003.]

The purpose of the Chapter is to provide for the waiver of sovereign immunity in those Economic Development Corporation commercial transactions for which such waiver is necessary and beneficial to the Tribe. This chapter is enacted in accordance with the authority contained in the GTB Constitution in Article IV, Section (1)(c).

§ 202 Findings and Declarations.

The Tribal Council hereby finds and declares that:

(a)

The Tribe and Tribal members benefit from commercial transactions conducted within the mainstream of the local and national economy, and the Tribe has become increasingly successful and sophisticated in such commercial transactions.

(b)

Tribal sovereign immunity, an aspect of Tribal sovereignty, is an important protection for Tribal assets and resources, but it can at times be an impediment to commercial transactions. Many potential business partners of the Tribe are reluctant to enter into contracts unless Tribal sovereign immunity is waived, thereby allowing recourse in the event of tribal default or breach of contract. The Tribe finds it necessary and desirable to waive its sovereign immunity from time to time in a prudent and limited manner in order to consummate business transactions of benefit to the Tribe and its members.

(c)

Federal courts, spurred by recent decisions of the United States Supreme Court, have been enforcing a requirement that a party exhaust its Tribal Court remedies for actions against the Tribe or Tribal members arising on the reservation before availing themselves of federal or state court. As with Tribal sovereign immunity, however, many potential business partners are reluctant to enter commercial transactions with the Tribe if they believe their remedy upon breach or default is limited to Tribal Court. Because of this reluctance, the Tribe finds it necessary and desirable from time to time to waive Tribal Court jurisdiction over particular commercial transaction.

(d)

The Tribe has the authority to waive its sovereign immunity, provided it does so knowingly in express terms. Likewise, the Tribe has the constitutional authority to define the jurisdiction of the Tribal Court, and it can waive Tribal Court jurisdiction in a way that is contractually binding in the future if it does so in clear and unmistakable terms. The Tribe possesses the necessary experience, expertise and sophistication to determine when such waivers are in the best interests of the Tribe.

(e)

The Tribe has chartered and will continue to charter subordinate Tribal entities, such as Economic Development Corporation which functions autonomously for the most part within their spheres of authority. This Tribal entity is of economic benefit to the Tribe and will often have a need of authority to waive their own immunity to facilitate commercial transactions.

(f)

Any waiver of Tribal Court jurisdiction or sovereign immunity made in strict accordance with this Chapter is hereby declared to be in the best interests of the Tribe and it members. Such waiver does not infringe upon Tribal sovereignty, but instead is an affirmative expression and exercise of such sovereignty.

§ 203 Definitions.

As used in this Chapter:

(a)

"Tribal Council" means the Tribal Council of the Grand Traverse Band, the Tribe's governing body duly elected pursuant to the Tribal Constitution.

(b)

"Charter" means the organic document of a Tribal entity and includes the Economic Development Corporation Charter, 15 GTB § 202, and any approved articles of incorporation.

(c)

"Tribal Entity" means any entity created and owned by the Tribe for economic or governmental purposes and any entity that is controlled by the Tribal Council. For purposes of this Chapter, an entity shall be deemed to be controlled by the Tribal Council if a majority of the persons serving on the body that governs the entity are chosen by the Tribal Council or are required to be members of the Tribal Council. Entities governed by the Chapter include, but are not limited to, the Economic Development Corporation, and other organizations entitled or denominated "authority," "enterprise," "corporation," "agency," "commission," or terms of like import; provided, however, that committees of the Tribal Council may not be deemed Tribal entities for purposes of the Chapter.

(d)

"Tribal Court" means the Grand Traverse Band Tribal Court established by GTB Const. Art. V.

(e)

"Tribe" means the Grand Traverse Band of Ottawa and Chippewa Indians.

§ 204 Sovereign Immunity of Tribe.

The sovereign immunity of the Tribe, including sovereign immunity from suit in any state, federal, or tribal court, is hereby expressly reaffirmed unless such immunity is waived in accordance with 15 GTBC § 216. A "sue and be sued" clause or other authorization of a Tribal entity to waive its own sovereign immunity may not constitute authorization for waiver of the immunity of the Tribe itself. Except for a charter provision expressly authorizing a Tribal entity to waiver the sovereign immunity of the Tribe itself, such as that contained in the Economic Development Corporation Charter, 15 GTBC § 217, nothing in a Tribal entity charter may be deemed or construed to be a waiver of the sovereign immunity of the Tribe of the consent of the Tribe to suit in any forum.

§ 205 Waiver of Sovereign Immunity of Tribe.

(a)

The sovereign immunity of the Tribe may be waived:

(1)

By resolution of the Tribal Council expressly waiving the sovereign immunity of the Tribe and consenting to suit against the Tribe in any forum designated in the resolution; provided, that such waiver may not be general but must be specific and limited as to duration, grantee, transaction, property or funds of the Tribe subject to the waiver, court having jurisdiction and applicable law. Such waiver must be strictly construed and may be effective only to the extent expressly provided and must be subject to any conditions or limitations set forth in the resolution; or

(2)

By a Tribal entity exercising authority expressly delegated to such entity in the charter or specially by resolution of the Tribal Council; provided, that such waiver must be made in strict conformity with the provisions of the charter or resolution governing such delegation.

(b)

No express waiver of sovereign immunity by resolution may be deemed a consent to the levy of any judgment, lien or attachment upon property of the Tribe other than the property specifically pledged, assigned or identified in the resolution.

§ 206 Sovereign Immunity of Tribal Entity.

A Tribal entity is endowed by federal law and the provisions of this Chapter with all the privileges and immunities of the Tribe, except as specifically limited in the charter of the Tribal entity. This includes sovereign immunity from suit in any state, federal, or tribal court.

§ 207 Waiver of Sovereign Immunity of Tribal Entity.

(a)

The sovereign immunity of a Tribal entity may be waived:

(1)

By a "sue and be sued" clause or other express waiver in the charter of the Tribal entity; or

(2)

By express resolution of the governing body of the Tribal entity.

(b)

Waivers of sovereign immunity by resolution may be granted only when necessary to secure a substantial advantage or benefit to the Tribal entity of the Tribe. Waivers of sovereign immunity by resolution may not be general but must be specific and limited as to duration, grantee, transaction, property or funds of the Tribal entity subject to the waiver, court having jurisdiction and applicable law.

(c)

Neither a "sue or be sued" clause nor an express waiver of sovereign immunity by resolution of the Tribal entity may be deemed a consent to the levy of any judgment, lien or attachment upon the property of the Tribal entity other than the property specifically pledged, assigned or identified in the resolution, or of any property of the Tribe.

§ 208 Waiver of Sovereign Immunity for Proprietary Contracts.

(a)

Notwithstanding any other provisions of the Chapter, 15 GTBC § 218, the Tribe hereby waives its sovereign immunity, as well as the sovereign immunity of the Grand Traverse Band Economic Corporation, for any contract claim brought in accordance with this section, provided:

(1)

The claim arises from an express, written contract signed by all parties to the contract;

(2)

The claim is brought by a party to the contract or a party expressly made a third-party beneficiary under the terms of the contract;

(3)

The contract was entered into by the Grand Traverse Band Economic Development Corporation or a Tribal Business Enterprise, as defined in 15 GTBC Chapter 2, Part 1, subordinate to the Grand Traverse Band Economic Development Corporation; and

(4)

The contract was entered into in the performance of a proprietary function, which means any activity conducted primarily for the purpose of producing a pecuniary profit for the Tribe, the Grand Traverse Band Economic Development Corporation, or a Tribal Business Enterprise excluding, however, any activity normally supported by a government unit by taxes or fees.

(b)

Notwithstanding 15 GTBC § 202, the Tribe may not be subjected to suit under this section for:

(1)

Any claim sounding in tort, as that term is defined in 6 GTBC § 115(a).

(2)

Any claim arising from or based upon employment.

(3)

Any claim founded upon a provision of:

(A)

A constitution, statute, or regulation of the United States or any State;

(B)

A code or ordinance of the Tribe or of any local unit of government; or

(C)

The Constitution and Bylaws of the Tribe.

(4)

Any claim for exemplary, punitive, or consequential damages.

(5)

Any suit based upon a contract that contains provisions concerning sovereign immunity and consent to suit. For any such contract, the contractual provisions relating to sovereign immunity supercede the application of this section.

(c)

The waiver extends solely to funds contained in the Grand Traverse Band Economic Development Corporation accounts, as defined in 15 GTBC § 266.

(d)

The waiver of sovereign immunity contained in this section does not apply to any claim unless notice of the claim has been presented to the Tribe in writing within 180 days after such claim accrues, or within 90 days after the claim has been discovered or should have been discovered in the exercise of reasonable diligence, whichever is later. Notice must be served personally, by certified mail, return receipt requested, or by any other courier or delivery service for which a return receipt is obtained, upon the Tribal Council Secretary, Grand Traverse Band of Ottawa and Chippewa Indians, 2605 N. West Bayshore Drive, Peshawbestown, Michigan 49682. The notice must identify the contract upon which the complaint is based, the nature of the claim, and the relief requested. Service of a suit based upon the claim satisfies the notice requirement.

(e)

The Tribe and the Grand Traverse Band Economic Development Corporation consent to suit in any court of competence jurisdiction for suits based upon contract claims arising under this section; provided, that this consent does not preclude objections to venue, forum non conveniens, or subject matter jurisdiction.

§ 209 Waiver of Tribal Court Jurisdiction.

(a)

The Tribal Council may waive by resolution the jurisdiction of the Tribal Court over any claim or cause of action that arises out of a commercial transaction involving the Tribe, a Tribal entity, or a Tribal member, if all of the following conditions are met:

(1)

The commercial transaction is specifically identified in the resolution; and

(2)

The resolution contains factual findings supporting the conclusions that:

(A)

The waiver is in the best interests of the Tribe, the Tribal entity or the Tribal member; and

(B)

The transaction could not be consummated without such waiver.

(b)

Any waiver of Tribal Court jurisdiction made in accordance with this section must be presumed to constitute a waiver of Tribal Court jurisdiction in clear and unmistakable terms and may not constitute an infringement upon Tribal sovereignty.

§ 210 Vesting of Contractual Rights.

Any waiver of sovereign immunity or of Tribal Court jurisdiction by resolution as provided in this Chapter may be incorporated in the contract documents governing the transaction involved. When so incorporated, it is the intent and purpose of the Tribe that there is created a vested contractual right to the waiver that cannot be impaired or abrogated by the later repeal or amendment of this Chapter or of the resolution creating the right. The repeal or amendment of this Chapter or of any resolution containing a waiver of sovereign immunity or Tribal Court jurisdiction adopted in conformity with this Chapter, or any other Tribal action inconsistent with the waiver may not repeal, modify, abrogate or impair any provision or a contract containing a waiver of sovereign immunity of Tribal Court jurisdiction incorporated in such contract pursuant to this section.

§ 211 Applicability and Effective Date.

This Chapter shall take effect immediately upon its enactment by resolution of the Tribal Council. It shall have prospective application only and may not apply to or limit any waiver made by the Tribe or a Tribal entity acting within the scope of its authority prior to the effective date of this chapter.