Justice Eileen Bransten
In a contract dispute between Seaport Loan Products and Lower Brule Community Development Enterprises (LBCDE), LBCDE moved to dismiss claiming it was an arm of the Lower Brule Indian Tribe, thus was entitled to sovereign immunity under Section 17 of the Indian Reorganization Act (IRA). Seaport sought discovery solely on the issue of LBCDE’s claimed immunity from suit. The court noted corporate entities formed by a tribe may enjoy sovereign immunity if they were created by the Indian Nation to further governmental objectives, thereby considered “arms of the tribe,” and could not be sued absent a waiver. It ruled LBCDE failed to show it was incorporated under the IRA, noting it admitted it was a Delaware limited liability company, without showing it may simultaneously incorporate under the IRA and Delaware law. The court further permitted plaintiffs’ motion to compel regarding their first three of nine document requests concerning LBCDE’s formation, ownership and important factors under the Ransom test. It also granted conducting a deposition of LBCDE’s CEO, Clarkson, who was in a position to know information related to all the Ransom factors, but solely on the issue of LBCDE’s sovereign immunity, denying dismissal.
