The expansion of tribal business endeavors has spawned a proliferation of litigation surrounding the activities of such businesses. In response, tribes have often asserted sovereign immunity as a defense in these cases. Recently, the California Supreme Court, in People ex rel Jan Lynn Owen v. Miami Nation Enterprises, et al., S216878, clarified the test for application of sovereign https://installmentcashloans.net immunity to a tribal affiliated business entity.

The Court applied the “arm of the tribe” standard to tribal immunity. The Court went on to hold that an entity’s assertion of sovereign immunity protection would be evaluated against five criteria:

The burden is on the entity seeking immunity protection to establish all five of these factors by a preponderance of the evidence.

Miami Nation Enterprises presents a unique set of facts involving deferred deposit lending, commonly known as “payday loans.” In 2003, the California Legislature enacted the California Deferred Deposit Transaction Law. This limited the size of payday loans and the fees that such lenders may charge. In an apparent effort to avoid the application of this law, and similar laws in other states, some payday loan lenders sought affiliation with tribes in an effort to cloak themselves in the tribe’s sovereign immunity. Two tribes, the Miami Tribe of Oklahoma and the Santee Sioux Nation, created business entities for the express purpose of engaging in the payday loan business. In response to a Cease and Desist Order issued by the Commissioner of the California Department of Corporations, one of the leading payday lenders, CLK Management, conveyed the trademark for its various trade names (Ameriloan, United Cash Loans, U.S. Continua a leggere