United States: Connecticut Supreme Court Holds Lender Entitled To Tribal Sovereign Immunity As An “Arm Of The Tribe”

In a case of first impression, the Connecticut Supreme Court recently held that that (1) an entity claiming “arm of the tribe” status for purposes of tribal sovereign immunity bears the burden of proving entitlement to that status; and (2) tribal immunity extends to an officer of the entity, so long as the officer acted within the scope of his or her authority and the tribe, rather than the individual officer, is the real party in interest. See Great Plains Lending, LLC v. Dep’t of Banking , 2021 WL 2021823 (Conn. May 20, 2021). In the case, the Connecticut Department of Banking issued temporary cease and desist orders, orders that restitution be paid to Connecticut residents, and a notice of intent to impose civil penalties to two lenders after an investigation by the Department revealed that the lenders issued consumer loans via the Internet without a license and with interest rates that exceeded Connecticut’s usury and banking laws. Great Plains Lending, LLC (“Great Plains”) and American Web Loan, Inc., doing business as Clear Creek Lending (“Clear Creek”) (collectively, the “lenders”) were created under tribal law, namely, the Otoe-Missouria Tribe of Indians Limited Liability Company Act and the Otoe-Missouria Tribe of Indians Corporation Act. Thus, the lenders asserted that (1) they were arms of the Otoe-Missouria Tribe of Indians (the “Tribe”) and entitled to tribal sovereign immunity, and (2) the Tribe’s Chairman who served as secretary and treasurer of both lenders was also entitled to sovereign immunity because he was […]

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