In People v. Miami Nation Enterprises, the Supreme Court today holds that the California Deferred Deposit Transaction Law might apply to payday lenders who affiliated with federally recognized Indian tribes, even though the tribes would generally be protected by tribal sovereign immunity. The court’s unanimous opinion by Justice Goodwin Liu concludes that “an entity asserting immunity bears the burden of showing by a preponderance of the evidence that it is an ‘arm of the tribe’ entitled to tribal immunity” and specifies a test requiring consideration of these factors: “(1) the entity’s method of creation, (2) whether the tribe intended the entity to share in its immunity, (3) the entity’s purpose, (4) the tribe’s control over the entity, and (5) the financial relationship between the tribe and the entity.”
The court reverses the Second District, Division Seven, Court of Appeal. It disagrees with decisions from the high courts of Colorado, Alaska, and New York.
