Lexington Insurance Company v. Suquamish Tribe: A Landmark Case on Tribal Jurisdiction, Signifying a Pivotal Moment in Legal History

By Heidi McNeil Staudenmaier and Kelsey Haake

The case of Lexington Insurance Company v. Suquamish Tribe has emerged as a pivotal legal battle concerning the extent of tribal jurisdiction over nonmembers.¹ This case, which has reached the Supreme Court, challenges the Ninth Circuit’s decision to uphold tribal jurisdiction over nonmember insurers based on off-reservation conduct related to insurance policies covering tribal businesses. The petition for a writ of certiorari filed by Lexington Insurance Company and other insurers seek to address the broader implications of this decision on tribal sovereignty and nonmember rights.

The dispute began when the Suquamish Tribe sued its off-reservation, nonmember insurers in tribal court, seeking coverage for business losses caused by the COVID-19 pandemic. The insurers, including Lexington Insurance Company, Homeland Insurance Company of New York, Hallmark Specialty Insurance Company, Aspen Specialty Insurance Company, Aspen Insurance UK Ltd., and certain underwriters at Lloyd’s, London, argued that the tribal court lacked jurisdiction over their off-reservation conduct. Despite acknowledging that “all relevant conduct occurred off the Reservation,” the Ninth Circuit upheld the tribal court’s jurisdiction reasoning that the insurers’ conduct was “related to tribal lands” because the insurance policies covered tribal businesses on tribal land.

The legal crux of the case revolves around the interpretation of the Supreme Court’s decision in Montana v. United States², which established a general rule against tribal jurisdiction over nonmembers with two narrow exceptions for “non-Indians on their reservations.” The petitioners argue that the Ninth Circuit’s decision conflicts with the Supreme Court’s rulings in Montana and subsequent cases, which have consistently emphasized the territorial limitations of tribal sovereignty. They contend that the Ninth Circuit’s ruling effectively erases these geographic boundaries, allowing tribal courts to exercise jurisdiction over nonmembers based on conduct occurring entirely off the reservation.

The petitioners also highlight the practical implications of this decision, warning that it could significantly expand tribal jurisdiction over nonmembers, potentially subjecting countless individuals and businesses to tribal court authority without their consent. They argue that this expansion undermines the principle of fair notice and due process, as nonmembers may lack awareness of tribal laws and customs.

The Ninth Circuit’s decision was not unanimous, with Judge Bumatay dissenting from the denial of rehearing en banc. Judge Bumatay argued that the panel’s decision created a split with other circuits and departed from the Supreme Court’s focus on “physical, on-reservation conduct by the nonmember.” He emphasized that the decision lacked historical support and failed to consider the inherent sovereign interests required to justify tribal jurisdiction over nonmembers.

The outcome of this case may have far-reaching implications for the balance between tribal sovereignty and nonmember rights. If the Supreme Court upholds the Ninth Circuit’s decision, it could pave the way for broader assertions of tribal jurisdiction over nonmembers, potentially leading to increased legal uncertainty and complexity for businesses and individuals engaging in transactions with tribes.

Conversely, reversing the Ninth Circuit’s decision could reaffirm the territorial limitations on tribal jurisdiction, providing greater clarity and predictability for nonmembers. It also would reinforce the principle that tribal authority over nonmembers must be grounded in conduct within the reservation’s physical boundaries.

The case of Lexington Insurance Company v. Suquamish Tribe represents a critical juncture in the ongoing debate over the scope of tribal jurisdiction. As the Supreme Court considers the petition for a writ of certiorari, the legal community and various stakeholders await a decision that will significantly shape the future of tribal sovereignty and nonmember rights.³