Sen. McCaskill unveils unprecedented bill to abrogate tribal sovereign immunity

Thursday, October 5, 2017

A member of Congress who once generated controversy by going after tribal businesses is wading into hot-button territory with a new bill.

Sen. Claire McCaskill (D-Missouri) is trying to abrogate tribal immunity when it comes to patents. Her bill would effectively derail a landmark and lucrative deal signed by the Saint Regis Mohawk Tribe last month.

But the measure would also affect any other tribe that gets into the business by barring them from asserting their sovereignty when their patents come up for what is known as an Inter Partes Review (IPR). Yet it doesn't apply the same restriction to arms of state governments.

"The Saint Regis Mohawk Tribe is outraged that U.S. Senator Claire McCaskill (D-MO), has introduced legislation that specifically targets Indian tribes, yet exempts state universities and other sovereign governments engaged in the very same IPR process," the tribe said in a statement on Thursday.

"The double standard that is being introduced by the Senator as a solution for a perceived abuse of the IPR proceedings does nothing to solve the underlying problem," the tribe said.

McCaskill's proposal, which is clearly labeled Abrogation of Tribal Immunity, comes after she criticized the deal between the tribe and Allergan, the developer of RESTASIS®, a popular drug that treats dry eye conditions.

Claire McCaskill wants to know: Is @PhRMA comfortable w/ @Allergan’s #Restasis patent loophole? pic.twitter.com/jRoPoIr916
— Senate HSGAC Dems (@SenateHSGACDems) October 3, 2017

“This is one of the most brazen and absurd loopholes I’ve ever seen, and it should be illegal,” McCaskill, who is the top Democrat on the Senate Homeland Security and Governmental Affairs Committee, said in a press release on Tuesday.

But McCaskill isn't alone in her criticism. Republican and Democratic leaders on the House Committee on Oversight and Reform accused Allergan of entering into an "unconventional deal" with the tribe in order to hold onto some eye-boggling revenues.

"As Allergan's second best-selling drug, Restasis generated nearly $1.5 billion in revenues for the company last year," the lawmakers wrote on Tuesday as they asked the firm for a wide range of documents, including "all agreements and communications" with the tribe.

The general terms of the deal, announced on September 8, led to significant coverage in the mainstream media and now, outrage on Capitol Hill. The tribe and Allergan were upfront about their arrangement -- they are seeking the dismissal of an ongoing IPR before the U.S. Patent Trial and Appeal Board.

Allergan noted that the board, in at least two recent cases, dismissed an IPR based on the sovereign immunity of public universities that are arms of state government. In theory, the same should apply to a tribal government.

The deal also contained notable benefits. By acquiring all patents associated with RESTASIS®, the tribe received an immediate $13.75 million payment. By licensing the product back to Allergan, the tribe stands to make up to $15 million in royalties a year.

Holding up its end of the bargain, the tribe quickly asserted its rights in the IPR. An attorney who took part in a proceeding by phone three days later was clear about that: "No immunity is waived by the tribe's counsel participating in this call or in any briefing that might follow regarding the tribe's assertion of its sovereign immunity," he said.

A brief filed with the patent board on September 25 formally laid out the argument. It noted that immunity can only waived by the tribe with its consent -- or by Congress, which is what McCaskill is attempting.

"Just like congressional abrogation, waiver of sovereign immunity by the tribe must be clear, express, and unequivocal," the brief, a copy of which was posted on Turtle Talk, stated.

McCaskill is well known in Indian Country for her criticism of the federal government's contracting program. She accused tribal and Alaska Native corporations of exploiting loopholes in order to acquire lucrative deals with federal agencies. Her efforts led to changes in the 8(a) program that have restricted participation by tribal and Native businesses.