Multi-Step Mediation/Arbitration Clauses in Tribal/Non-Tribal Contracts: Truly a Win-Win Situation
by William A. Aloe
Tribal gaming is expanding and respect for tribal sovereignty is steadily increasing.  With this growth and recognition there has been a similar increase in tribal economic development,  including tribal investment of money off-reservation as well as non-tribal investment in the development of reservation lands.  This increased business contact between tribal and non-tribal parties generates a corresponding rise in the creation of contracts to govern those relationships. As is true with all contracts, breaches occur and aggrieved parties must seek redress through suit. However, unlike normal breach of contract disputes, tribal/non-tribal contracts have the added twist of tribal sovereign immunity.
Under current U.S. law, the federal government grants recognized Indian tribes a quasi-sovereign legal status as domestic dependant nations. This sovereignty gives tribes unique rights unlike states of the union or even foreign nations.  The sovereign status of Indian tribes allows tribes to make their own laws and to be ruled by those laws. One of the distinctive attributes of this tribal sovereignty is sovereign immunity. The United States Supreme Court equates the immunity of Indian tribes to that of the United States.  Under the doctrine of tribal sovereign immunity, tribes are immune from suit in U.S. courts absent clear and unequivocal consent to be sued. The doctrine acts both as a shield and as an affirmative defense to suit. However, tribal parties must use the defense of sovereign immunity carefully because the ability to bar suit is not an absolute right. Instead, tribal sovereignty and sovereign immunity exist under the plenary power of Congress and can be changed or taken away at Congress' whim. 
The ability of tribes to assert their sovereign immunity creates dangers for tribal and non-tribal parties alike. Non-tribal businesses that are unaware of the tribes' sovereign status risk an inability to recover on a breached contract if the tribe asserts sovereign immunity. Even where the tribe has waived its sovereign immunity, bringing suit in federal, state, or even tribal court raises separate issues of jurisdiction.
First, federal courts must have jurisdiction over the dispute either through diversity jurisdiction or federal question jurisdiction. Thus, an aggrieved party in a tribal/non-tribal contract faces the standard question of jurisdiction in federal court. Second, bringing suit against a tribal government in state court presents its own problem. Specifically, state courts cannot assert jurisdiction over a claim by a non-Indian against an Indian if that claim arises in Indian country.  Parties to a tribal/non-tribal contract often sign contracts in Indian country and therefore state courts usually lack jurisdiction. As a result, non-tribal parties often coerce tribes to contractually waive sovereign immunity and consent to the jurisdiction of state courts. Finally, tribal courts have jurisdiction to hear any civil action brought against an Indian defendant for claims arising out of actions on the reservation.  Accordingly, most contracts between tribal and non-tribal entities fall directly in the tribal courts' purview. However, tribal courts are often unfairly perceived by non-tribal parties as untrustworthy and biased.  Although each of the 275 tribal courts is unique, it is incorrect to assert that these courts are biased simply because they do not operate in a similar fashion to federal and state courts. The lack of consistency in tribal courts and the unfounded fear of potential for bias has created a non-tribal reluctance to adjudicate civil contract matters before tribal courts.  In short, there are clear obstacles to bringing suit against a tribe even absent tribal immunity. And, assuming a litigant overcomes such jurisdictional confusion, an even bigger issue arises. Tribes can rightfully assert sovereign immunity to avoid suit in any court, including tribal court.
The assertion of immunity by the tribes not only risks scaring away potential non-tribal contractors, but may also pose a risk to the doctrine itself. Tribal abuse of sovereign immunity may lead to judicial activism resulting in a narrowing of the doctrine or even congressional abrogation. This abrogation would create a danger for tribes because the loss or curtailment of sovereign immunity would be a major blow to tribal sovereignty.  The loss of tribal sovereign immunity from suit would expose the tribal treasury to judgments and in turn reduce the amount of monies available for essential services.
The preceding text demonstrates the pitfalls of the three currently available forums for dispute resolution — federal, state, and tribal court — as well as the risks associated with the assertion of sovereign immunity. These pitfalls necessitate an alternative to deal with the problem of settling tribal/non-tribal contract disputes. Multi-step mediation with recourse to binding arbitration offers a viable and enforceable option for settling disputes between tribal and non-tribal parties. The combination of increased contracting between tribal/non-tribal parties and tribal assertions of sovereign immunity creates an environment ripe for the injection of multi-step mediation clauses that include binding arbitration for the resolution of disputes.
A well-drafted multi-step mediation clause with recourse to binding arbitration satisfies the interests of both the tribal and non-tribal parties. First, mediation allows tribes to maintain their sovereign status while the dispute is mediated. A fundamental tenet of mediation is the belief that the parties are autonomous and free to craft their own solution to the dispute. Non-tribal parties often force tribes to waive sovereign immunity when entering contracts.  This waiver inherently requires the tribes to deny their unique and important status in American society.  In contrast, the inclusion of a multi-step mediation clause allows tribes to assert their sovereign status and maintain sovereign immunity throughout an attempted mediation to resolve the contract dispute.
Second, multi-step mediation clauses provide protection from further congressional abrogation of tribal sovereign immunity. Mediation with recourse to binding arbitration affords the tribal party the added benefit of avoiding suit in U.S. courts. Having recourse to binding arbitration makes contracts that include multi-step mediation clauses enforceable. Enforceability greatly decreases the likelihood that tribal/non-tribal contract disputes will end up in court. Thus, Congress is less likely to intervene to abrogate tribal rights to sovereign immunity further.
Third, multi-step mediation allows tribes to continue economic growth through injections of cash from outside investors. Employing mutli-step mediation clauses allows a wary non-tribal investors a trusted process for dispute resolution. A trusted process of dispute resolution will directly encourage increased investment. Finally, multi-step mediation provides time for the development of tribal courts, helping to create more confidence in tribal adjudication of all legal claims.
A multi-step mediation clause as opposed to: 1) solely an arbitration; 2) reliance upon adjudication in U.S. courts or tribal courts; or 3) "peacemaker" style mediation — offers tribal and non-tribal parties the opportunity to concurrently advance their interests. The inclusion of a mediation clause in a tribal/non-tribal contract will also alleviate the non-tribal party's legitimate fear that there will be no recourse for a breached contract.
This paper advocates for the inclusion of multi-step mediation clauses — providing for traditional mediation followed by binding arbitration — in all tribal/non-tribal business contracts. Part II of this paper provides basic background on the historical treatment of tribes and the importance of tribal sovereignty. Part III discusses tribal sovereign immunity and the dangers of tribal assertions of immunity to suit in contract disputes. Part IV describes what a mediation/arbitration clause would look like for tribal/non-tribal contracts. Finally, Part V examines which form of alternative dispute resolution is best suited to the needs of tribal/non-tribal contract disputes.
II. Foundations of Tribal Sovereignty
The reader of this paper must have a cursory understanding of the unique place of tribes in America to properly grasp why tribal/non-tribal contracts must include multi-step mediation/arbitration clause. Most people do not realize that tribes occupy a legal grey area somewhere between a foreign sovereign and a state of the union under American law.  The distinct place of tribes in American law affords them very different rights and protections than all other people, states, or entities in America. How and why tribes came to be imbued with sovereign rights can only be understood by looking to the historical relationship between the tribes and the colonizing Europeans.
It is nearly impossible to compress five hundred years of historical relations between the original inhabitants of North America and the European settlers into a manageable overview.  Instead of attempting to cover all of the details of the tumultuous history, this section attempts to provide the reader with a basic overview of the relationship established with the tribes by the colonizing Europeans and subsequently the U.S. government.
A. Tribal Relations Pre-Independence: Victorian Principles Employed by British Colonizers
The inherent sovereign status of Indian nations forms the foundation for the current treatment of tribes in American law. In addition to the current treatment of tribes in America, the reader must also possess an appreciation of the historical treatment of tribes in America. One must look to the foundational relationships established when the Europeans arrived in the Americas. At the time of "discovery," Victorian principles held that the tribes were free and sovereign nations in the eyes of the world.
The foremost Victorian legal values are as follows: 1) the Indians of the new world enjoyed both property rights and a sovereign status in their land; 2) acquisition of land was only to be achieved through tribal consent or just wars; and 3) colonists individually were not to attempt to acquire land independent of the government.  As legal norms, Victorian principles formed the underpinnings for all interactions and legal transactions between the Indian tribes and the Europeans colonizing the Americas.  Thus, nothing in the simple act of "discovery" removed the sovereign rights of the Indian tribes of the Americas. 
B. Tribal Relations Post-Independence: The U.S. Government's Relationship with the Tribes
The adoption of the Constitution in 1787 established Congress' plenary power over Indian tribes. Article 1, section 8 of the Constitution accomplished this by granting congress the right "[t]o regulate commerce with foreign nations, and among the several states, and with the Indian tribes."  This clause of the Constitution is known as the Indian commerce clause. In Worcester v. Georgia, the Supreme Court interpreted the Indian commerce clause to give Congress exclusive power over Indian affairs, stating that the "instrument confers on congress the powers of war and peace; of making treaties, and of regulating commerce with foreign nations . . . and with the Indian tribes. These powers comprehend all that is required for the regulation of our intercourse with the Indians."  The Court has unambiguously upheld this doctrine over the two hundred years since the Worcesterdecision. 
The Indian commerce clause in conjunction with the supremacy clause  and the necessary and proper clause  empower Congress to unilaterally decide the proper course for the great majority of Indian legislation.  Congress' exclusive authority over the tribes includes the power to unilaterally and exclusively diminish or abrogate tribal sovereign immunity. However, the Court limits Congressional power to abrogate tribal sovereign immunity by stating that should Congress want to abrogate sovereign immunity, it "cannot be implied but must be unequivocally expressed." 
One must view the legal status of Indian tribes in America in light of how the Supreme Court ruled in three major cases pertaining to tribal affairs. These three cases, collectively known as the Marshall Trilogy, are Johnson v. M'Intosh ; Cherokee Nation v. Georgia ; and Worcester v. Georgia. 
The first of the three seminal cases to come before the Court was Johnson. In Johnson, the Supreme Court determined the validity of land grants made in 1773 and 1775 — prior to the American Revolution — by chiefs of the Illinois and Piankeshaw nations to private individuals.  The plaintiffs asserted that their title to the property was superior because they received it from the tribes who owned the land.  The defendants traced their title to the United States.  The Court eventually accepted the defendants' argument that "[t]he exclusion of all other Europeans, necessarily gave to the nation making the discovery the sole right of acquiring the soil from the natives."  Therefore, when America emerged as a sovereign nation after the American Revolution, the right to the superior title passed from the British Crown to the United States federal government. The Indian tribes maintained a right of occupancy which would encumber any land that the U.S. federal government conveyed in the future. 
In 1831, the Supreme Court heard Cherokee Nation v. Georgia. In this case, the Supreme Court decided the issue of whether Georgia had the right to extinguish Indian title on land located within the physical boundaries of the state of Georgia.  To establish jurisdiction over the Cherokee tribe, Chief Justice Marshall acknowledged that the Cherokee nation was a state.  However, in order for the Court to hear the claim the Cherokee nation had to be a foreign state under Article III, §2. The Court did not find that the Cherokee nation constituted a foreign state.  Chief Justice Marshall famously deemed the Cherokee and other tribes "domestic dependant nations . . . . [The tribes] occupy a territory to which we assert a title independent of their will.... Their relationship to the U.S. resembles that of a ward to his guardian."  Deeming tribes "domestic dependant nations" has been both beneficial and detrimental to tribes. 
The third case in the trilogy before the Court was Worcester v. Georgia. In Worcester, the Court set out to determine whether Georgia state law applied on the Cherokee reservation.  The state law in question contravened a congressional act that gave the President power to appoint persons to minister and educate Indians. Chief Justice Marshall further clarified the position of tribes in the United States, stating that "[t]he Cherokee nation...is a distinct community occupying its own territory . . . in which the laws of Georgia can have no force, but with the assent of the Cherokees themselves, or in conformity with treaties, and with the acts of congress."  The Court also emphasized that the federal government, and not the state government, had the right to legislate with regard to the Cherokee nation.  Chief Justice Marshall's language provided a foundation for tribes to defend their right to exclude states from creating legislation to control Indian affairs. 
The Marshall Trilogy formed the legal foundation for the subsequent treatment of tribes. The major takeaways from these cases are: 1) Indian tribes have a legitimate indigenous claim to land and political status, meaning that tribes are endowed with an inherent sovereignty that the United States government did not bestow upon it; 2) Congress is the only body authorized to abrogate or diminish tribal sovereignty (states have no authority in this area); and 3) the dependant nature of tribes creates a trust responsibility between tribal nations and the United States.
C. Tribal Sovereignty Today
The five hundred years of historical relations between the United States and the Indian tribes can be divided into six eras: 1) post-contact and pre-Constitutional development; 2) the formative years; 3) allotment and assimilation; 4) Indian Reorganization; 5) termination; and 6) self-determination.  Governmental policy and judicial treatment of the tribes varied greatly during these vastly different periods. The sovereign nature of tribes was at least paid lip service and often times taken into consideration in the policymaking and governmental actions during five of the six eras. 
The current "self-determination" era provides the backdrop for the discussion of tribal contracts with non-tribal entities and the importance of multi-step mediation clauses in contracts between tribal and non-tribal businesses. From 1961 to the present day, Congress recognized that tribes and tribal members should be the foundation of their own governance. 
Congressional policy during the self-determination era focuses on the encouragement government-to-government relations and growth of tribal control over their own economies and culture. The recognition of the sovereign rights of tribes, including sovereign immunity, has brought with it many long overdue financial benefits for some tribes.  However, the increased economic success of a select group of tribes creates a higher level of scrutiny on sovereignty and sovereign immunity. Many of the economically successful tribes are in the unenviable position of attempting to defend their tribal rights and tribal sovereignty from attack by a general population that lacks knowledge of the unique legal status of tribes in America.
The long history of tribal relations with the federal government reveals that tribes faced an uphill battle to be treated fairly and given the rights that they deserve under the Victorian principles. It is not a mistake or an aberration that tribes prosper under the "self-determination" policies.  Instead, self-determination and tribal sovereignty are the linchpins of all tribal economic growth. Therefore, the power of self-determination and the sovereign status of tribes, including the ability to assert tribal sovereign immunity, should be encouraged. Actions on the part of Congress or the courts to diminish sovereignty or self-determination would disregard the promises and agreements made with the tribes throughout the history of the United States.
III. The Parameters of Tribal Sovereign Immunity
As previously discussed, tribal sovereignty is either an inherent right or, at the very least, a privilege bestowed upon the tribes at the sufferance of Congress.  Sovereignty is of little value if it carries with it no real powers. One of the remaining sovereign powers that Indian tribes maintain off-reservation is the ability to assert sovereign immunity. Tribal sovereign immunity flows from the sovereign status of tribes.  The Supreme Court defined the parameters of tribal sovereign immunity in Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc.
A. The Factual Background of Kiowa
In Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc, the Court stated that sovereign immunity extends to protect tribes when they engage in governmental or commercial activities on or off the reservation.  Additionally, the Kiowa Court reiterated that Congress must expressly abrogate tribal sovereign immunity. Further, a tribe must also expressly waive its sovereign immunity. 
The dispute in Kiowa arose because the Kiowa tribe's industrial development commission entered into a contract to purchase stock with Manufacturing Technologies. The chairman of the tribal commission executed a promissory note in the name of the tribe.  The tribe subsequently defaulted and Manufacturing Technology brought suit on the promissory note in Oklahoma state court. The Oklahoma state trial court allowed the suit in state court. 
On appeal, the Oklahoma Court of Appeals held that tribes could be sued in state court for off-reservation commercial conduct including contract breaches. On certiorari, the Supreme Court of the United States held (6-3) that precedent provided Indian tribes immunity from suits on contracts for both governmental and commercial activities whether they were entered into on or off the reservation. 
Although the Supreme Court protected tribal sovereign immunity in Kiowa, Justice Kennedy's opinion demonstrated the reluctance of the court to continue shielding tribes from suits.  Justice Kennedy stated, "there are reasons to doubt the wisdom of perpetuating the doctrine."  In addition, the Court went on to state that sovereign immunity is especially dangerous for parties lacking knowledge of the protection afforded by sovereign immunity. 
B. Tribal Waiver of Sovereign Immunity
Not long after Kiowa, the Court ruled on the case of C&L Enterprises, Inc. v. Citizen Band Potawatomi Tribe of Oklahoma (C&L Enterprises).  The Court's decision in C&L Enterprises further defines what tribal actions effectively waive sovereign immunity. The facts of the case are as follows: the Potawatomi Tribe contracted with C&L Enteprises to put a roof on a tribally-owned building in Shawnee, Oklahoma. The parties executed a standard-form contract that the tribe wrote which included an arbitration clause and a choice of law clause.  Prior to commencement of performance, the Potawatomi Tribe decided that it wanted the roof to be made of different materials. A separate company won the bid for the contract and C&L subsequently submitted the case for arbitration.  The Tribe chose not to participate in the arbitration based upon the asserted defense of sovereign immunity. The arbitrator found for C&L and C&L then sued for enforcement of the arbitrator's award.
When the case made it to the Supreme Court, the Court held that the boilerplate arbitration clause in the contract coupled with a choice of law clause within the construction contract between a tribe and a construction company expressly waived tribal sovereign immunity.  Thus, the Court found that the tribe explicitly waived its sovereign immunity by including an agreement to engage in binding arbitration under the Oklahoma Uniform Arbitration Act. The Court stated, "[t]he clause no doubt memorializes the tribe's commitment to adhere to the contract's dispute resolution regime. That regime has a real world objective; it is not designed for regulation of a game lacking practical consequences." 
The Supreme Court's reluctance to maintain tribal sovereign immunity in Kiowa combined with the finding of express waiver in C&L Enterprises demonstrates that the Court does not wholeheartedly support the doctrine of tribal sovereign immunity. In the future, if tribal/non-tribal contract disputes based on sovereign immunity continue to be brought to the Court's attention, the Court may find express waiver in more situations.  Thus, multi-step mediation with recourse to binding arbitration offers an effective alternative to keep this type of case from going before the Court and risking further judicial activism.
IV. Mediation Clause in Tribal Non-Tribal Contracts
Tribal sovereignty and sovereign immunity are important and powerful doctrines that recognize the unique position of Indian tribes in America. Tribes should see selective limited waiver of their sovereign immunity in multi-step mediation clauses as an assertion of sovereignty.  However, tribal parties should neither be forced to relinquish sovereign immunity to enter into contracts nor should Congress act to abrogate those rights as a result of tribal assertions of sovereign immunity. Instead, parties to a tribal/non-tribal contract should insist on the inclusion of a multi-step mediation clause. Tribes benefit from the inclusion of multi-step mediation clauses in all tribal/non-tribal contracts because it allows tribes to continue receiving outside investments while concurrently protecting the rights of outside investors.
A. What Would a Tribal/Non-Tribal Multi-Step Mediation Clause look like?
A well written multi-step mediation clause should include the following criteria: location, participants, mediator selection, and payment for mediator services. The inclusion of a carefully crafted limited waiver of sovereign immunity for the purposes of enforcement of either the mediated agreement of the arbitrator's decision is of paramount importance. This final step alleviates the fears that the non-tribal party may hold regarding the ultimate enforceability of the contract. Multi-step mediation clauses — providing for mediation first and then binding arbitration second — provides assurance that both parties engage in the mediation in good faith. The tribe's good faith participation comes out of their desire to not have a settlement imposed on them by an arbitrator. The non-tribal party's good faith comes from their desire to not spend more money and time going through arbitration. Further, multi-step mediation clauses give the parties a chance to come up with more creative and flexible solutions before being forced into an adversarial process like arbitration.
The following is an example of a barebones multi-step mediation clause:
If a dispute arises out of or relates to this contract, or the breach thereof, and if said dispute cannot be settled through direct discussions, the parties agree to first endeavor to settle the dispute in an amicable manner by mediation administered by a mediator to be chosen by both parties, before resorting to arbitration. The tribal party retains its sovereign status throughout the mediation. The mediation will take place at a site agreed upon by the participants. The costs of mediation will be split evenly by the participating parties. Any agreement arising out of mediation will be enforceable in any court having jurisdiction thereof. Tribal sovereign immunity is expressly waived for purposes of enforcement of a valid mediated agreement.
Thereafter, any unresolved controversy or claim arising out of or relating to this contract, or breach thereof, shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules, and judgment upon the Award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The tribal party expressly and unconditionally waives sovereign immunity for the enforcement of the arbitration section of this multi-step mediation clause. 
Any waiver of immunity included in this agreement shall only be used by the parties to this contract, including any successor or assign of lender. The selective waiver contained herein does not extend to and shall not be used for or to the benefit of any other person or entity of any kind or description whatsoever. Further, the selective waiver shall only be used for enforcement of this agreement and any disputes that may arise from obligations covered in this agreement. 
Each step in the multi-step mediation clause specifically speaks to tribal sovereignty and sovereign immunity. This is important because tribal sovereign immunity must be clearly and unequivocally waived by a tribe's governing body in order for a tribe to be brought before a court of the United States.  Without selective waiver of sovereign immunity, a mediated agreement or arbitral decision could be avoided by the tribe's simple assertion of sovereign immunity. The ability to avoid enforcement completely defeats the purpose of mediating and arbitrating.
B. Analyzing the Multi-Step Mediation Clause
To fully understand the issues addressed by the clause, one must look through each sentence of the clause. First, the clause allows parties to freely choose the site of the mediation. The negotiations and discussions around site selection provide an opportunity for the parties to establish trust and communicate prior to the mediation. Second, the clause requires that the parties split the cost of the mediation. Splitting the costs means that neither party will feel that monetary considerations influenced the mediator to favor the other party. Third, the clause clearly states that any valid agreement arising out of mediation is enforceable before a court that has jurisdiction. Depending on the details of the contract this could mean that the mediated agreement could be enforced in tribal, state or federal court.  This prevents either party from using the mediation process as a stall tactic.
The second paragraph of the clause includes a mandatory arbitration clause for issues unresolved by the mediation, with the effect of providing the clause with enforcement "teeth." Abuse of the mediation process is less likely if the parties know that binding arbitration is the next step. Providing both parties recourse to binding arbitration means that an enforceable agreement will result. In addition, an express limited waiver of tribal sovereign immunity for arbitration establishes that the parties cannot avoid arbitration through the assertion of sovereign immunity. 
The third paragraph of the sample agreement delves more deeply into tribal sovereign immunity and the details that must be dealt with in a selective waiver. The first two sentences limit who may bring a claim against the tribal party. These sentences make it clear to the court that the agreement grants the right to sue under the agreement only to the contracting party or its successors or an assignee of the lender. The third sentence establishes that the tribal party only waives sovereign immunity for claims arising out of the contract. This last sentence could be further tailored to limit the types of claims or the types of relief. Depending on the specifics of the situation, the parties may add in language dealing with choice of law and amount and types of damages allowed.
The multi-step mediation clause outlined above is relatively simple to allow for maximum flexibility. The clause expressly discusses sovereign immunity to clarify when the tribe may raise sovereign immunity as a defense. The multi-step nature of the clause reassures the parties that there is recourse for a breached contract.
C. Location of Enforcement of a Mediated Agreement/Arbitral Award and Exhaustion of Tribal Remedies
The parties to the contract must negotiate and seriously consider the location of enforcement and exhaustion of tribal remedies. Looking first to enforcement, negotiation of and agreement upon location of enforcement is especially pressing in light of cases like Val/Del, Inc. v. Superior Court of Arizona. The Val/Del court held that the power to assert jurisdiction over the enforcement of arbitration awards is granted to tribal courts when the arbitration clause does not delineate between state and tribal courts.  Based on the outcomes of Val/Del and similar cases, parties to a tribal/non-tribal contract must carefully negotiate where the contract will be enforced.
The exhaustion of tribal remedies doctrine must also be discussed and considered by the parties when they write and negotiate the contract. Plainly stated, the doctrine means that "[i]f a tribal court has jurisdiction over non-Indian party to a civil proceeding, the party is usually required to exhaust all options in the tribal court prior to challenging tribal jurisdiction in federal district court."  A tribal court's right to assert jurisdiction over a non-Indian party is a question of federal law and gives federal courts subject matter jurisdiction. As such, a non-tribal party can challenge tribal jurisdiction in federal courts. However, federal courts will not rule on legal questions arising on tribal lands until the proper tribal court decides the parameters of its own jurisdiction and pronounced a final ruling.  Therefore, to properly address exhaustion, the parties to a tribal/non-tribal multi-step mediation agreement must specifically vest jurisdiction in an arbitration panel. 
V. What Form of Mediation Should Be Used?
A properly run mediation should respect tribal sovereignty while providing an established method of dispute resolution for non-tribal contracting parties.
A. The Navajo Peacemaking Process and Tribal/Non-Tribal Contract Disputes
Many scholars, including Justice Sandra Day O'Connor, advocate for tribal development of internal alternative dispute resolution services.  Tribal and non-tribal parties stand to benefit equally from the development of internal alternative dispute resolution. The Navajo "Peacemaker" court is an example of tribal incorporation of an alternative dispute resolution service into the dispute resolution process. The Navajo Peacemaking process:
institutionalizes the custom of hozhooji naat'aanii, or peacemaking. Peacemaking consists of a justice ceremony in which disputants and community members gather to "talk things out" with the assistance of a respected community leader, or naat'aanii (peacemaker), to reach a consensual settlement. Hozhooji naat'aanii aims to reach solutions through consensus and to solve problems through restorative justice. Wrongdoing and conflict among members of the Navajo community are "regarded as . . . symptom[s] of things being out of place, or in dissonance." Thus, the object of peacemaking is not to punish, but to return individuals and the community to a state of hozho, or harmony. 
To better understand the process of peacemaking it bears remembering that "European law is essentially a vertical system that is built on hierarchies of power.... In contrast, Indian traditional legal systems are horizontal. Vertical systems use hierarchies of power and authority, backed by force and coercion... . Horizontal systems are essentially egalitarian and function using relationships."  The differing natures of the two legal systems can make describing non-western tribal forms of dispute resolution difficult. Gretchen Ulrich asserts that "in the traditional Navajo setting... the mission is not the non-Indian metaphor of healing or wholeness but the uniquely Indian sense of balance."  Further, in Navajo traditional law "the dynamics of justice has much more to do with the importance of relationships." 
Professor Porter, a scholar in the field of Indian law and the former Attorney General of the Seneca Nation of Indians, identifies six attributes of peacemaking that separate it from litigation.  The first characteristic is that it "is concerned with justice as it relates to the benefit of the community... the dispute resolution system assumes a role directly related to the protection of tribal norms and values for the benefit of the group and not for the primary benefit of the individual."  The reliance upon tribal norms and values in the peacemaking process makes the application to non-tribal contract disputes very difficult. Without the overarching framework of a shared society and a desire for a continued relationship, successful deployment of the peacemaking process is unlikely.
Neither lawyers nor legal representation are part of the peacemaking process.  Instead, the parties to the dispute and the mediator come to an agreement without the assistance of outside representation. Unfortunately, the complex nature of business contract mediations necessitates that legal representation be present to help the parties work through the terms of the contract. To forbid legal representation in these complex negotiations could lead to a coerced or uninformed agreement on the part of either party.
The next trait that Professor Porter identifies is that peacemaking requires an interested mediator and not an uninterested third party.  Typically, one of the hallmarks of mediation is a disinterested third party acting as the mediator. The peacemaking process benefits from an interested party, whereas an interested mediator would be highly detrimental to legitimacy of any contract dispute between tribal entities and non-tribal corporations. In tribal/non-tribal disputes, mediator neutrality is imperative because neutrality helps alleviate the non-tribal party's fear of insider dealings. Without mediator neutrality, the non-tribal party has little to no incentive to include a mediation clause. Further, due to the historical treatment of tribes in America, the tribal party may very well distrust an interested non-tribal party.
The fourth aspect of peacemaking identified by Professor Porter raises questions of insider dealings as well. Instead of written laws, peacemaking relies on substantive tribal norms that are transmitted orally.  From an outsider's perspective, the lack of written laws would likely create questions about the fairness of the process. In order for the parties to buy into the mediation process they must believe that it is fair and that neither party is inherently disadvantaged. The non-tribal business is unlikely to have legal counsel who could advise them of tribal oral traditions. Therefore, the use of unwritten substantive law poses risks for the non-tribal party.
Peacemaking also differs from litigation in that enforcement of peacemaking agreements typically relies upon coercive societal pressures like scorn, "ridicule, ostracism, and banishment."  These societal pressures can be very effective for peacemaking, but are unlikely to have any effect on a non-tribal party.
The final attribute of peacemaking identified by Professor Porter is that the peacemaker works with the parties to assist them in coming to a mutually beneficial solution to the problem.  This is one aspect of the peacemaking process that completely overlaps with one of the central tenets of traditional mediation. Unlike the other characteristics outlined by Professor Porter, this aspect is applicable to the mediation of a contract dispute between a tribe and non-tribal corporation. Mediating a business contract dispute requires that the mediator respect the sovereignty of the tribe while effectively balancing the non-tribal parties' interests in justice.
Although the Peacemaker courts have been very successful for inter-Navajo disputes, there is little reason to believe that a peacemaker-style court could be exported for use in contract disputes between tribal parties and non-tribal corporations. The lack of shared socio-cultural conditions, including religious homogeneity and close-knit communal relations, weighs heavily against the successful adoption of a peacemaker style court outside of a Navajo community.  Instead, traditional mediation combined with recourse to binding arbitration should be employed to resolve contract disputes between a tribe and a non-tribal party.
B. Traditional Mediation of Tribal/Non-Tribal Business Disputes
The central tenets of traditional mediation — mediator neutrality, party self-determination, and confidentiality — provide an ideal environment for dispute resolution between a sovereign tribal entity and a non-tribal corporation. For the non-tribal entity, mediation provides a flexible framework to resolve disputes without the involvement of the tribal judiciary. The flexibility of the mediation process can be tailored to respect the unique standing of tribes in America. The inclusion of mediation clauses within tribal/non-tribal contracts provides a method of dispute resolution which allows the non-tribal party to have their fears of tribal court bias allayed while respecting the sovereign status of tribes and tribal businesses.
Mediator neutrality is critical to the success of any mediation. However, neutrality in a tribal/non-tribal mediation takes on an even more important role. Neutrality of the mediator is of the utmost importance when the history of deceit on the part the federal government when dealing with the tribes is taken into consideration. For the non-tribal party, neutrality is imperative because the party must trust the mediation process to consent to mediation in the contract in the first place.
Party self-determination and tribal sovereignty go hand in hand and play a key role for the tribal party. Mediating a disputed contract is not beneficial if the tribal party is not given the ability to maintain sovereignty through self-determination. In the opening statement of the mediation, the mediator should acknowledge that the tribal party is sovereign and highlight that both parties are given the freedom to only enter into an agreement that suits their individual needs.
The final precept of mediation is confidentiality. This principle provides two major benefits for the parties. First, confidentiality of the process allows the parties to be actively engaged in the mediation without fear that what they have said will be used against them in court or arbitration at a later date. This allows the parties to speak openly and honestly and come up with an agreement that otherwise would not have been available through adjudication or arbitration. The second benefit is that confidentiality of the resulting agreement should keep Congress from becoming involved in these disputes due to corporate lobbying. By keeping Congress out of the disputes, the tribes protect tribal sovereignty and sovereign immunity from potential abrogation.
Both parties to a tribal/non-tribal contract benefit from the inclusion of a multi-step mediation clause. The use of these clauses protects tribal sovereignty and sovereign immunity into the future for the benefit of the tribes as well as the federal and state governments.  Making mediation the first step in the resolution of tribal/non-tribal contract disputes allows the tribal party to come to the table as a sovereign entity. Therefore, mediation of these disputes provides the best avenue to shield sovereignty from congressional abrogation. Further, a well-run mediation with recourse to binding arbitration as the second step provides a viable and reliable method of dispute resolution for the non-tribal party to the contract. A well-written multi-step mediation clause should alleviate the fears expressed by the Supreme Court in C&L Enterprises that there will be no "practical consequences" when a tribe enters into a contract. 
 See Stephen Cornell & Joseph P. Kalt, Sovereignty and Nation-Building: The Development Challenge in Indian Country Today 30, http://www.ksg.harvard.edu/hpaied/docs/CornellKalt%20Sov-NB.pdf ("The reinforcement of tribal sovereignty should be the central thrust of public policy. One of the quickest ways to bring reservation development to a halt and prolong the impoverished condition of reservations would be to undermine tribal sovereignty.").
 Indian Gaming Regulatory Act, 25 U.S.C. § 2701 (2000). The most recent census data available shows that there were 201,387 American Indian and Alaska native owned businesses with receipts of 26.9 billion dollars. Three thousand six hundred and thirty-one of these business had receipts over one million dollars and 178 of these businesses employed over one hundred employees. American Indian- and Alaska Native-Owned Firms: 2002 (U.S. Census Bureau, 2002 Economic Census: Survey of Business Owners), Aug. 2006, available at http://www.census.gov/prod/ec02/sb0200csaian.pdf.
 See, e.g., Gabriel Galanda, Indian Law Is Vital to the United States, Indian country today, October 31, 2003. Also available at: http://www.indiancountry.com/content.cfm?id=1067610021. ("Indian lands within Washington are now being developed by Fortune 500's most powerful companies, including Wal-Mart, AT&T, Home Depot, Verizon, and Bank of America. The partnerships between Indian tribes and such national corporations are generating billions of dollars in income and tax revenue..."). See also Michael J. de la Merced, Florida's Seminole Tribe Buys Hard Rock Cafes and Casinos, N.Y. Times, December 8, 2006, at C3. The Seminole tribe acquired the Hard Rock brand of restaurant chains and hotels for $965 million. Shortly after the acquisition, Max B. Osceola Jr., a Seminole council representative, stated "[o]ur ancestors sold Manhattan for trinkets. We're going to buy Manhattan back, one burger at a time."
 In Cherokee Nation v. Georgia, Chief Justice John Marshall stated that "[t]he condition of the Indians in relation to the United States is perhaps unlike that of any other two people in existence . . . marked by peculiar and cardinal distinctions which exist nowhere else." 30 U.S. 1, 16 (1831). See also Klint A. Cowan, International Responsibility for Human Rights Violations by American Indian Tribes, 9 Yale H.R. & Dev. L.J. 1, 6-8 (2006).
 See Oklahoma Tax Comm'n vs. Citizen Band Potawatomi Indian Tribe of Oklahoma, 498 U.S. 505 (1991), Larson v. Foreign & Domestic Corp., 337 U.S. 682 (1949), United States v. U.S. Fidelity & Guaranty Co., 309 U.S. 506 (1940); but see Kiowa Tribe v. Manufacturing Technologies, 523 U.S. 751 (1998). See also Thomas P. McLish, Note, Tribal Sovereign Immunity: Searching for Sensible Limits, 88 Colum L. Rev. 173 (1988).
 United States v. Wheeler, 435 U.S. 313, 323 (1978) ("The sovereignty that the Indian tribes retain is of a unique and limited character. It exists only at the sufferance of Congress and is subject to complete defeasance."); see generally Kiowa Tribe of OK v. Manufacturing Tech. Inc., 523 U.S. 751 (1998).
 See Williams v. Lee, 358 U.S. 217, 219–220 (1959) (holding that state jurisdiction would impinge upon tribal sovereignty. Further, state jurisdiction was only to be allowed "where essential tribal relations were not involved and where the rights of [I]ndians would not be jeopardized."); see also R.J. Williams Co. v. Fort Belknap Housing Authority, 719 F.2d 979 (9th Cir. 1983); see also William C. Canby, American Indian Law in a Nut Shell 185 (4th ed. 1998).
 Montana v. U.S., 450 U.S. 544, 565 (1981) (stating that tribal courts have jurisdiction over non-indian parties "who enter consensual relationships with the tribe...through commercial dealing, contracts, leases, or other arrangements.")
 See generally Annual Review of Developments in Business and Corporate Litigation, 2007, Volume 2, ABA Section of Business Law, §24.2.2.
 But see Gloria Valencia-Weber, Tribal Courts: Custom and Innovative Law, 24 N.M. L. Rev. 225, 233 (1994) ("Simultaneously, tribal courts must provide reliable and equitable adjudication in ordinary matters such as divorce and business issues critical to the survival of the tribe. Lawyers sensitive to tribal cultural interests are the professional vanguard to protect and advance tribal governments in matters external and internal.").
 San Manuel Indian Bingo & Casino v. NLRB, 475 F.3d 1306, 1313 (D.C. Cir. 2007) (insinuating that tribal sovereign immunity may be the only sovereign attribute a tribe retains off-reservation. The appellate court states that "courts recognize the capacity of a duly established tribal government to act as an unincorporated legal person, engaging in privately negotiated contractual affairs with non-Indians, but the tribal government does so subject to generally applicable laws. The primary qualification to this rule is that the tribal government may be immune from suit.")(internal citations omitted).
 See Amelia A. Fogelman, Sovereign Immunity of Indian Tribes: A Proposal For Statutory Waiver for Tribal Businesses, 79 Va. L. Rev. 1345, 1361 (1993). ("Courts, legal scholars, and some tribes have recognized that at least a partial waiver of sovereign immunity may be necessary before other parties will enter into business arrangements with a tribal enterprise.").
 See generally Lorie Graham, Symposium: The Role of Jurisdiction in the Quest for Sovereignty: Securing Economic Sovereignty Through Agreement, 37 New Eng. L. Rev. 523 (2003).
 See Catherine T. Struve, Symposium: Tribal Immunity and Tribal Courts, 36 Ariz. St. L.J. 137, 155-157 (2004) (discussing the differences between tribal, state, federal and foreign sovereign immunity).
 For a more in depth look at the historical treatment of Indian nations in America see Felix Cohen, Cohen's Handbook of Federal Indian Law 10-113 (2005 ed.).
 Id.at 14.
 See generally Worcester v. Georgia, 31 U.S. 515 (1832).
 U.S. Const. Art. 1, § 8 (emphasis added).
 Worcester, 31 U.S. at 559.
 United States v. Lara, 541 U.S. 193, 200 (2004) ("the Constitution grants Congress broad general powers to legislate in respect to Indian tribes, powers that we have consistently described as "plenary and exclusive.") (Citing to Washington v. Confederated Bands and Tribes of Yakima Nation, 439 U.S. 463, 470-471, (1979); Negonsott v. Samuels, 507 U.S. 99, 103 (1993).
 U.S. Const. art VI, cl. 2 (providing that federal laws which regulate Indian affairs supersede any conflicting state laws).
 U.S. Const. art I, § 8, cl. 18.
 See Cohen, supra note 15, at 391.
 Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58 (1978); see also C&L Enters. v. Citizen Band of Potawatomi Indian Tribe, 532 U.S. 411, 418 (2001).
 Johnson v. M'Intosh, 21 U.S. 543 (1823).
 Cherokee Nation v. Georgia, 30 U.S. 1, 16 (1831).
 Worcester v. Georgia, 31 U.S. 515, 561 (1832).
 Johnson, 21 U.S. 543 (1823).
 See id. at 571-572 ("The inquiry, therefore, is, in a great measure, confined to the power of Indians to give, and of private individuals to receive, a title which can be sustained in the Courts of this country.").
 Id.at 573.
 Id.at 574.
 Cherokee, 30 U.S. 1 (1831).
 Id. (Chief Justice Marshall stated "[t]hey [the Cherokee nation] have been uniformly treated as a state from the settlement of our country . . . . The acts of our government plainly recognize the Cherokee nation as a state, and the courts are bound by those acts.").
 Id.at 17.
 Canby, supra note 7, at 16. ("Its [the Cherokee Court's] emphasis on nationhood laid the groundwork for future protection of tribal sovereignty by Marshall and his immediate successors, but the characterization also created an opportunity for much later courts to discover limits to tribal sovereignty inherent in domestic dependant status.").
 Worcester, 31 U.S. 515 (1832).
 Id.at 561.
 Id. ("The whole intercourse between the United States and this nation, is, by our constitution and laws, vested in the government of the United States.").
 Canby, supra note 7, at 17-18. Due to the expansionist nature of the country at the time of the Worcester decision, Marshall's protection of the tribal rights was not welcomed by most Jacksonians. Most famously, there are reports that President Jackson stated "John Marshall has made his decision; now let him enforce it." Though this statement is likely untrue, it demonstrates the general discontent of many Jacksonians with Marshall's protection of tribal rights.
 Cohen, supra note 15, at 10-113.
 The U.S. Government openly neglected the sovereign rights of tribes during the termination years lasting from approximately 1943-1961.
 Cohen, supra note 15, at 98.
 U.S. Census Data, supra note 2.
 See generally Cornell & Kalt supra note 1. See also Stephen Cornell & Jonathan Taylor, Sovereignty, Devolution, and the Future, of Tribal-state Relations (June 26, 2000), http://udallcenter.arizona.edu/nativenations/pubs/tribal%20state%20relations.pdf at 4 ("The evidence is compelling that where tribes have taken advantage of the federal self-determination policy to gain control of their own resources and of economic and other activity within their borders, and have backed up that control with good governance, they have invigorated their economies and produced positive economic spillovers to states.")
 See infra section II.
 Three Affiliated Tribes of Ft. Berthold Reservation v. World Eng'g P.C., 476 U.S. 877, 894 (1986) ("[t]he common law sovereign immunity possessed by the tribe is a necessary corollary to Indian sovereignty and self-governance.")
 Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc., 523 U.S. 751, 760 (1998). ("In light of these concerns, we decline to revisit our case law and choose to defer to Congress. Tribes enjoy immunity from suits on contracts, whether those contracts involve governmental or commercial activities and whether they were made on or off a reservation.").
 Id. at 754.
 Id. at 753-54.
 Id. at 754.
 Id. at 759-60.
 See also David J. Bloch, Colonizing the Last Frontier, 29 Am Indian L. Rev 1, 1-2 (2004) (asserting that the tribal sovereignty has been eroded under the modern court).
 Kiowa, 523 U.S at 758.
 Id. ("[i]n our interdependent and mobile society... tribal immunity extends beyond what is needed to safeguard tribal self-governance... . [I]mmunity can harm those who are unaware that they [are] dealing with a tribe who do not know of tribal immunity.")
 C&L Enters., Inc. v. Citizen Band Potawatomi Tribe of Oklahoma, 523 U.S. 411 (2001).
 Id.at 415.
 "A tribe's waiver [of sovereign immunity] must be clear.... arbitral awards may be reduced to judgment in accordance with applicable proceedings in any court having jurisdiction thereof." Id.at 418-419.
 Id.at 422.
 See Fogelman, supra note 12, at 1359; see also Gabriel S. Galanda, Waiving Goodbye to Tribal Sovereign Immunity?, available at: http://nwiba.org/pdfs/06_07-IndianNews.pdf.
 See generally Galanda, supra note 63.
 The sample multi-step mediation clause relies heavily on example given by Drafting Dispute Resolution Clauses: A Practical Guide, American Arbitration Association, available at: http://www.adr.org/si.asp?id=4125.
 Thomas Schlosser provides a more in depth look at tribal waiver of sovereign immunity at: http://www.msaj.com/papers/doc0831.htm#Tailoring Contractual Limited Waivers to Fit.
 Kiowa, 523 U.S. at 754.
 But see Peabody Coal Co. v. Navajo Nation, 375 F.3d 945 (9th Cir. 2004)(dismissing a claim brought for enforcement of a arbitrated agreement by Peabody Coal against the Navajo for lack of federal question jurisdiction).
 This form of express waiver for arbitration is not required under the reasoning of C&L Enterprises. However, the inclusion of the express waiver can be used as a reminder to the tribes of the consequences of not coming to an agreement in mediation.
 Val/Del, Inc. v. Superior Court of Ariz., 145 Ariz. 558, 565 (1985).
 Annual Review of Developments in Business and Corporate Litigation, 2007, Volume 2, ABA Section of Business Law, §24.5.2.
 See Duncan Energy Co. v. Three Affiliated Tribes of the Fort Berthold Reservation, 27 F.3d 1249, 1300 (9th Cir. 1993); see also, Annual Review of Developments in Business and Corporate Litigation, 2007, Volume 2, ABA Section of Business Law, §24.5.2.
 See Lien v. Three Affiliated Tribes, 93 F.3d 1412, 1421 (8th Cir. 1996) (holding that tribal courts should be afforded the initial opportunity to examine and determine if it has jurisdiction over the question presented).
 See Sandra Day O'Connor, Lessons from the Third Sovereign: Indian Tribal Courts, 33 Tulsa L.J. 1, 3-4 (1997) ("The development of different methods of solving disputes in tribal legal systems provides the tribal courts with a way both to incorporate traditional values and to hold up an example to the nation about the possibilities of alternative dispute resolution.") (emphasis in original).
 Howard L. Brown, The Navajo Nation's Peacemaker Division: An Integrated, Community-Based Dispute Resolutions Forum, 24 Am. Indian L. Rev. 297, 301-302 (1999/2000).
 James W. Zion & The Honorable Robert Yazzie, Indigenous Law in North America in the Wake of Conquest, 20 B.C. INt'l & Comp. L. Rev. 55, 74-75 (1997).
 Gretchen Ulrich, Widening the Circle: Adapting Traditional Indian Dispute Resolution Methods to Implement Alternative Dispute Resolution and Restorative Justice in Modern Communities, 20 Hamline J. Pub. L. & Pol'y 419, 445 ("'Balance' in this context is both a sacred order attributable to a Great Spirit or other supernatural force and associated with sacred ritual. It is achievement of the proper relationships within the network of clan, the natural and supernatural worlds.") Id.
 J.R. Mueller, Restoring Harmony through Nalyeeh: Can Navajo Common Law of Torts be Applied in State and Federal Forums?, 3 Tribal L.J. 1 (2003); see also Ulrich, supra note 77, at 446: The focus on states of mind and patterns of conduct for the future well-being of the family, clan and community as it relates to the natural and supernatural world is a difficult concept to embrace for people accustomed to decision-making based on precedent and articulation of legal rights relating to individuals as single entities. Restorative justice efforts, especially those based on traditional tribal ways, must be grounded in a wider sense of community, belonging and commitment that exist outside the walls of the mediation room.
 See generally Robert B. Porter, Strengthening Tribal Sovereignty Through Peacemaking: How Anglo-American Legal Tradition Destroy Indigenous Societies, 28 Colum. Human Rights L. Rev. 235 (1997).
 Id.at 252.
 Id.at 253.
 Porter, supra note 79, at 254.
 Id.at 253.
 Carole E. Goldberg, Overextended Borrowing: Tribal Peacemaking Applied in Non-Indian Disputes, 72 Wash. L. Rev. 1003, 1005 (1997). But see Phyllis E. Bernard, Community and Conscience: The Dynamic Challenge of Lawyer's Ethics in Tribal Peacemaking, 27 U. Tol. L. Rev. 821, 821-822 (1996) ("Peacemaking holds special promise for those still searching for ADR models that might not only resolve immediate legal disputes, but aid in healing human relationships.").
 Cornell & Taylor, supra note 47, at 4 ("The evidence is compelling that where tribes have taken advantage of the federal self-determination policy to gain control of their own resources and of economic and other activity within their borders, and have backed up that control with good governance, they have invigorated their economies and produced positive economic spillovers to states.").
 C&L Enters., Inc, 523 U.S. at 422. ("[t]he clause no doubt memorializes the tribe's commitment to adhere to the contract's dispute resolution regime. That regime has a real world objective; it is not designed for regulation of a game lacking practical consequences.").