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(A version of this article appears in the California
Construction Law Reporter, published by the West Group.)
By James E. Acret
A
federally recognized Indian tribe signed an AIA construction
contract with C&L Enterprises, Inc. The contract called
for installation of a foam roof on a building that housed
the First Oklahoma Bank and was owned by the tribe. The
contract included a broad AAA arbitration clause. The Construction
Industry Rules of the American Arbitration Association provide
that judgment on the award may be entered in any court having
jurisdiction. The contract also provided that it would be
governed by the law of the place where the project was located.
Oklahoma has adopted the Uniform Arbitration Act.
The
tribe decided to change from a foam to rubber guard roof,
dishonored the contract and awarded the work to another
company. C&L demanded arbitration. The tribe asserted
sovereign immunity and refused to participate in the proceeding.
The
arbitrator made an award of $25,400 plus attorney fees and
costs based on evidence introduced by C&L. C&L filed
an action to enforce the award. The tribe moved to dismiss.
The trial court denied the motion and entered judgment confirming
the award. The Oklahoma Court of Civil Appeals held the
tribe was immune from suit and instructed the trial court
to dismiss the case. The U.S. Supreme Court reversed the
Court of Civil Appeals. C&L Enterprises, Inc. v.
Citizen Band Potawatomi Indian Tribe of Oklahoma, ___
U.S. ___, 2001 DJDAR 4145 (2001)
In
Kiowa Tribe of Oklahoma v. Manufacturing Technologies,
Inc., 523 U.S. 751, the Supreme Court held that an Indian
tribe is not subject to suit in a state court, even for
breach of a contract involving off-reservation commercial
conduct, unless Congress has authorized the suit or the
tribe has waived its immunity. Here, it is the clear import
of the arbitration clause that the tribe is amenable to
a state court suit to enforce an arbitration award. By signing
the contract containing the arbitration clause, the tribe
clearly waived its immunity.
The
tribe did not find itself holding the short end of an adhesion
contract stick: The Tribe proposed and prepared the contract;
C&L foisted no form on a quiescent Tribe.
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To learn more about Howrey's Construction Practice Group, click here. For more information about books and other legal materials written by James Acret, click here and enter "Acret" in the site search engine. To learn more about topics covered in this article, contact Paul Berning at 415-848-4996 or at paulberning@howrey.com.
©2001 Howrey LLP
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