Smith v. Hopland Band of Pomo Indians

In Smith v. Hopland Band of Pomo Indians (2002) 95 Cal.App.4th 1, the court applied the rule of the C & L case by finding that the agreement between the plaintiff, an architect, and the tribe, was "indistinguishable from the contract in C & L Enterprises, and the only reasonable interpretation of its terms is that it clearly, and explicitly waives tribal sovereign immunity." (Id. at p. 6.) The contract contained an arbitration clause, and agreed to enforcement of an arbitral award, " ' "in any court having jurisdiction thereof." ' " (Ibid.) This amounted to a tribe's explicit contractual waiver of its sovereign immunity from suit. In Smith, the court accepted the view that an otherwise binding contract was effective to waive sovereign immunity, under the applicable tribal sovereign immunity ordinance, even where the explicit waiver was made by contract, instead of pursuant to a tribal ordinance or resolution. The court's analysis depended on several factors: First, the court did not "interpret the reference in the tribal ordinance to an 'explicit' waiver to mean that a resolution must use the magic words 'waiver' or 'sovereign immunity.' " (Smith, supra, 95 Cal.App.4th at p. 9.) Rather, it was enough that the tribal council, with full knowledge of its terms, approved the contract by resolution, because this satisfied the purpose of the tribal sovereign immunity ordinance ("to ensure that no waiver of sovereign immunity is made by a single tribal officer, and that instead such waivers be made only by formal action of its governing body, the tribal council"). (Ibid.) Second, the court in Smith adhered to the statement in C & L, supra, 532 U.S. 411 at page 421, footnote 3 121 S. Ct. at page 1595, that reference to uniform federal law governing the waiver of immunities by foreign sovereigns was instructive in deciding whether a particular act constituted a waiver of tribal immunity. The Court of Appeal in Smith, supra, 95 Cal.App.4th 1, ruled that federal law, not the tribal provisions, had to be applied to decide the enforceability of a contract that was negotiated and signed by a person who was authorized to do so, where the tribal council approved the contract. "Under federal law, 'when a person has authority to sign an agreement on behalf of a state, it is assumed that the authority extends to a waiver of immunity contained in the agreement.' " (Id. at p. 10.) Third, the Court of Appeal found in Smith that because the contract itself specified that it was governed by California law, then the tribe's sovereign immunity ordinance was not alone dispositive to decide whether the contractual waiver of immunity was effective. The court explained, "Nothing in the tribal sovereign immunity ordinance purports to limit the manner in which the Tribe may consent to a choice of law provision, and the Tribe does not contend the negotiator did not have authority to agree to it, or that the tribal council did not have the power to approve a contract containing such a provision. Therefore, at least for purposes of interpreting and enforcing this contract, respondent agreed to be governed by California law, not tribal law. Under California law 'the making of an agreement . . . providing for arbitration to be had within this State shall be deemed a consent of the parties thereto to the jurisdiction of the courts of this State to enforce such agreement . . . and by entering judgment on an award hereunder.' " (Smith, supra, 95 Cal.App.4th at pp. 11-12.) The court thus concluded it was error to dismiss the case, because the tribe, through its authorized negotiator, and by resolution of the tribal council, had entered into and approved a contract that "clearly and explicitly waived the Tribe's sovereign immunity. (C & L Enterprises, supra, 532 U.S. 411.)" (Smith, supra, 95 Cal.App.4th at p. 12.)