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C & L Enterprises, Inc. v. Citizens Band of Potawatomi

C & L Enterprises, Inc. v. Citizens Band of Potawatomi Indian Tribe of Oklahoma, 532 U.S. 411 (2001)

The Holding

The U.S. Supreme Court has voted unanimously on the decision rendered by Justice Ginsburg. The Court has satisfied the petitioner’s claim. It ruled that the Potawatomi Indian Tribe of Oklahoma had knowingly discarded its suit immunity by offering and ratifying the commercial agreement, which required resolving arbitration disputes in Oklahoma state court. All of the nine Justices held that C & L Enterprises, Inc. could bring the issue of contract violation to the federal court and seek damages. In turn, the Potawatomi Indian Tribe of Oklahoma had to assume liability, appear before the court voluntarily and commit to furnishing the awarded compensation. By delivering this decision, the U.S. Supreme Court has reversed and remanded the decision of the Oklahoma Court of Civil Appeals.

The Law

In formulating its opinion, the U.S. Supreme Court considered the arbitration clause fixed in the contract between the Potawatomi Indian Tribe of Oklahoma and the C & L Enterprises, Inc. The agreement stipulated that any related legal disagreements between the contracted parties were to be settled “in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association.” As consistent with the specified rules, the litigation was bound to follow the “applicable law in any court having [local] jurisdiction.” Therefore, the Oklahoma law appeared as the applicable state law of the construction project’s location. The case was decided following the provisions of the Oklahoma Uniform Arbitration Act, which bound the parties to litigate a controversy in the state court.

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