Whitley: Law firm doubles down on lawsuits targeting tribes

There’s an episode of “Parks and Recreation” where the chief of the local Indian tribe is negotiating with city leaders and jokes, “A native American tribe making a deal with the government. Heh! What could go wrong?”

It’s a throwaway line about the sad history of broken treaties between tribes and the federal government. But now Native Americans face an additional threat: wealthy law firms attempting to undermine their sovereignty.

The pioneer behind this effort is the Chicago law firm of Edelman, Combs, Latturner & Goodwin. Though it bills itself as a consumer rights advocate, the firm has made a name by suing Indian tribes, accusing them of partnering with so-called predatory lenders.

In fact, several tribes have used their special federal status to get into the short-term loan — sometimes called “payday lending” — industry. That has put a legal target on their backs, and the Edelman firm is firing away.

Daniel A. Edelman and his firm have filed lawsuits against tribes in Wisconsin, California, Illinois, Indianaand South Dakota, where they’re taking the Cheyenne River Sioux to court, claiming they are “creating bad law for tribal interests.”

That’s right: they’re suing the Sioux.

Some tribal leaders see racism — or, at best, race-based condescension — in Edelman’s actions. He didn’t help his cause when he wrote an op-ed defending their practice last November, published at the beginning of American Indian Heritage Month. Throughout his op-ed, Edelman oddly used quotation marks around the word “tribal,” implying he didn’t find the standing or existence of tribes entirely legitimate or dismissing tribal sovereignty as an artificial concept.

Tribal law expert Adam Crepelle said he believes accusations of racial animosity by Edelman are “overstated.”

“Lawyers follow the money. If there’s money to be made, they’ll follow the lawsuit,” he said. But regardless of the motives, the lawsuits hurt tribes and their revenue. Rural tribes, like the Lac du Flambeau Band of Lake Superior Chippewa, have limited commercial opportunities. Tourism is essential but not sufficient. So, they go into businesses that can be conducted online, like short-term lending.

There are many obstacles to economic development in Indian country, so federal law has created incentives to access capital, a precedent that goes back to the 1790 Indian trade law. What makes the issue ripe for lawsuits is that the internet allows people to access the benefits of business operations on tribal lands, regardless of the borrower’s location.

“If people were to drive to the reservation to take out the loan, they wouldn’t object to it. But we’re taking the option away,” Crepelle said. “Because it’s via the internet, it’s (seen as) different.”

E-commerce allows economically starved tribes to become self-reliant, said Steve Parker, an enrolled member of the Chippewa Cree Tribe.

“Tribal sovereignty is the foundation of every tribe’s ability to create revenue-generating enterprises, pass legislation and laws that best serve their indigenous communities,” said Parker, who is also a military veteran and Indigenous entrepreneur.

“Some tribes have successfully used funds generated through their e-commerce enterprises to build new health care facilities, to support first responder resources, elder care, and outreach to surrounding school systems. Indian Country’s focus is on the well-being and prosperity of our indigenous communities and will continue to work towards these goals.”

Edelman isn’t alone in exploiting the legal system to harass tribes. Last week, another firm dropped a lawsuit against the entities behind AvailBlue.com with a class action over an alleged “rent-a-tribe” scheme and payday loans with interest rates the lawsuit claims are too high.

Native American tribes and others sympathetic to their issues often object to phrases like “rent a tribe,” as it implies that Native Americans are incapable of managing complex organizations and that matters of finance had to be handled by White Americans.

“Tribes can continue to distance themselves from this term by establishing a robust regulatory framework, ensure they have the proper amount of control and oversight of the operations while receiving the majority of the economic benefit from these enterprises,” Parker continued. “The term ‘rent a tribe,’ in my opinion, is not necessarily offensive but is often used by opponents to generalize the entire indigenous e-commerce space to discredit the industry as a whole or make inaccurate assumptions.”

But the trend of the courts is usually to defend tribal rights, not undermine them, such as when the Supreme Court ruled in favor of tribal sovereignty last year regarding the Indian Child Welfare Act, the federal statute that aims to keep Indian children connected to Indian families. This follows a general political trend toward recognizing tribes as self-governing entities more broadly, such as Congress considering a 200-year-old promise to seat a delegate from the Cherokee Nation.

The sue-a-tribe business model ignores all these efforts.

“It gets spun that tribes are being taken advantage of, but it ignores the reality that faces many tribes,” Crepelle said. “The people who don’t like tribal lenders would rather trap tribes in the Stone Age than let them advance to the Modern Age.”

Jared Whitley has worked in the U.S. Senate, the Bush White House and the defense industry.