The office of American Web Loans in Red Rock, Oklahoma, owned by the Otoe-Missouria Tribe. Photo by Jane Daugherty.

The Otoe-Missouria Tribe of Oklahoma and the Lac Vieux Desert Band of Lake Superior Chippewa Indians of Michigan have dropped a lawsuit that disputed whether the state of New York could exercise jurisdiction over their Internet lending operations.

The tribes went to court when the New York Department of Financial Services issued cease and desist orders against their lending businesses. They argued that the state lacked jurisdiction over their activities.

The 2nd Circuit Court of Appeals, however, refused to stop the state from targeting the tribes. After dedicating "considerable resources" to the case, tribal leaders said it was time for the battle to end.

“While we hoped when we first pursued this action that we would be able to quickly undo the damage caused and avoid a prolonged and material interruption to our businesses, the fact of the matter is the state’s unjust interference in the businesses of the tribes have caused irreparable harm that further legal proceedings would simply be unable to remedy," Otoe-Missouria Chairman John Shotton and Lac Vieux Chairman James Williams Jr., said in a joint statement.

The withdrawal means the tribes can't do business with consumers in New York. But Shooton and Williams said they won't be closing down their lending operations.

“E-commerce represents the future for Indian country, and we intend to continue to operate in all areas where we determine it is in the interests of our businesses as authorized and regulated by tribal law, consistent with federal consumer protection laws and the expressed goals of the federal government regarding promotion of tribal economic development," Shotton and Williams said. "We will also continue to seek the support of relevant federal agencies to assist us in ensuring the longevity of our businesses, thereby fulfilling the federal government’s trust responsibility to the tribes."

Turtle Talk has posted briefs from the case, Otoe-Missouria Tribe v. NY State Department of Financial Services.

The tribal leaders' full statement follows:

“The recent ruling by the Second Circuit of the United States Court of Appeals in our litigation filed last year against the state of New York was a pivotal recognition of sovereign rights for our Tribes and all Indian Nations. The court’s opinion recognized and affirmed the important Tribal interests at play, the legitimacy of our Tribal businesses, and the need to balance the interests of two sovereigns. However, the case has consumed considerable resources, and while our Tribes will remain resilient despite the State of New York’s targeted attack, after careful consideration the Otoe-Missouria Tribe and the Lac Vieux Desert Band of Lake Superior Chippewa have decided to dismiss the litigation.

“While we hoped when we first pursued this action that we would be able to quickly undo the damage caused and avoid a prolonged and material interruption to our businesses, the fact of the matter is the state’s unjust interference in the businesses of the Tribes have caused irreparable harm that further legal proceedings would simply be unable to remedy.

“E-commerce remains an essential tool for Native American tribes, many of whom reside on remote reservations that limit opportunities for economic development. Vital social programs provided by tribes, including health care, elder care, education, nutrition assistance, housing, and more, are dependent on the revenues of our tribally-owned businesses. E-commerce represents the future for Indian country, and we intend to continue to operate in all areas where we determine it is in the interests of our businesses as authorized and regulated by Tribal law, consistent with federal consumer protection laws and the expressed goals of the federal government regarding promotion of tribal economic development. We will also continue to seek the support of relevant federal agencies to assist us in ensuring the longevity of our businesses, thereby fulfilling the federal government’s trust responsibility to the Tribes.

“We strongly believe the actions of the state of New York do not comport with long established legal precedent and federal law regarding Native Americans’ sovereign rights, and in the importance of continuing to ensure those rights remain preserved. We are pleased that the U.S. Court of Appeals recognized and reaffirmed the importance the significant interests of Indian Country in economic development and the novel issues presented when Tribes engage in e-commerce.”
-- John Shotton, Tribal Council Chairman of the Otoe-Missouria Tribe of Indians, and James Williams Jr., Tribal Council Chairman of the Lac Vieux Desert Band of Lake Superior Chippewa Indians

Get the Story:
Tribes Suing New York For Restricting Payday Lending Businesses Drop Federal Suit (The Wall Street Journal 11/1)

2nd Circuit Decision:
Otoe-Missouria Tribe v. NY State Department of Financial Services (October 1, 2014)

Related Stories:
Opinion: Tribes turn their acumen to Internet lending industry (10/24)
Law Article: Clash of competing sovereigns in tribal lending case (10/06)
NAFSA puts a positive spin on decision in tribal lending lawsuit (10/2)
2nd Circuit rebuffs tribal online lenders in dispute with New York (10/1)
Jane Daugherty: Tribes lose out in battle over Internet lending (10/09)
Tribes seek expedited appeal in New York online lending suit (10/08)
Judge rebuffs tribal online lenders in case against New York (10/01)
Otoe-Missouria Tribe sees benefits from Internet lending firms (09/16)
Tribal online lenders off to court in lawsuit against New York (09/11)
Otoe-Missouria Tribe defends online payday lending business (08/14)