Wisconsin Supreme Court likely to uphold sovereign immunity in property case

MADISON, Wis. (CN) — The Wisconsin Supreme Court considered the sovereign immunity of the Menominee tribe on Monday, and whether a property association’s restrictive covenants can control how the tribe uses its land.

In 1954, Congress ended federal recognition of the Menominee Indian Tribe of Wisconsin through the Menominee Termination Act, then reversed course in 1973 with the Menominee Restoration Act.

During that period, the Menominee Reservation became Menominee County, and parts of its tribal land were sold for the Legend Lake Development within the former reservation. The Legend Lake Property Owners Association was later formed to manage the area, setting bylaws, property rules and certain restrictive covenants.

Since restoration, the tribe has gradually returned much of the land — including parts of the development — to federal trust status, reestablishing most of the county as a modern reservation about 150 miles north of Milwaukee.

Guy Keshena, acting on behalf of the Tribe, purchased 40 properties within the Legend Lake development and transferred the titles to the United States for placement into the tribal trust.

The property association sued Keshena in 2018, claiming they violated restrictive covenants. The Menominee County Circuit Court ruled that the transfer and tax provisions were preempted by the Menominee Restoration Act, and the federal government accepted the properties into trust.

On Monday, the Wisconsin Supreme Court heard arguments over whether the remaining covenants still apply or if tribal lands are exempt from all association rules.

Attorney Erik Olsen, representing the association, asked the court to find that the tribe remains bound by the covenants, arguing that sovereign immunity was either waived by the tribe or abrogated by Congress.

The tribe argued just the opposite — that sovereign immunity bars the lawsuit and that the Restoration Act preempts the restrictive covenants.

Right out of the gate, the justices struggled with issues of indispensable parties and jurisdiction, which Olsen could not resolve.

“I’m trying to figure out how we could possibly issue a judgment when the party that actually owns the land is not a party in this case,” Justice Brian Hagedorn said at the outset of arguments.

The United States is the proper landowner of the properties in question thanks to the trust. If the court finds that the federal government — which has sovereign immunity of its own —  is indispensable, it must dismiss the case.

Attorney Michael Roy argued on behalf of the tribe that the court doesn’t need to reach that question because the tribe’s sovereign immunity precludes it.

Olsen argued, with little success, that parts of the Restoration Act suggest Congress abrogated the tribe’s sovereign immunity. He also suggested the tribe waived its immunity when Keshena bought the properties, citing a covenant that requires such a waiver.

Justice Rebecca Dallet noted the case’s complexity, including that Keshena acted as the tribe’s agent but lacked authority to waive immunity. Roy countered that the tribe’s constitution forbids waiving immunity in state court.

Roy said — and several justices seemed to agree — that the Restoration Act fully reinstated the Menominee Tribe’s sovereignty, preempting covenants drafted after its passage and leaving no room for abrogation.

“This land was tribal land before termination, and what you seem to be arguing here is that this association of private landowners can come in and tie up this land for 100 years and restrict the tribe’s right to develop the land,” Justice Susan Crawford told Olsen. “How do you square your argument with what was clearly intended?”

The Legend Lake Development was created in the 1960s, shortly after the termination act, through plats filed with the state. Those plats contained covenants that later served as the basis for new restrictive covenants adopted in 2009, decades after the restoration act. Most tribal lands in the development predate those 2009 rules.

Roy said the tribe maintains that none of the association’s covenants or bylaws are valid or enforceable on tribal land.

Olsen told Courthouse News that after arguments concluded, the association asked for a judgment declaring that the bylaws and covenants apply before any of them are broken, ensuring the parties are on the same page.

Attorney James Dash, also for the tribe, raised this point to the justices as a third option for dismissing the case entirely. If the court wants to avoid ruling on the indispensable party issue or the sovereign immunity issue, it can dismiss the case for failure to claim any harm.

If the court finds that sovereign immunity does not bar the association’s suit, and the restrictive covenants do apply to tribal lands, then the parties would be back in court repeatedly to hash out enforcement.

Representatives for the tribe and its attorneys declined to comment.

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