Tribal Exhaustion Doctrine and the FAA: Substantive and Procedural Limitations on Arbitration

Abstract

As a matter of public policy, a motion to compel arbitration will either be stayed or dismissed if tribal court remedies have not been exhausted. As recently as this past October, the U.S. District Court for the District of Columbia ruled in favor of the Seneca Nation of Indians, granting a stay of federal proceedings pending the exhaustion of tribal court remedies. The plaintiff in the case, LECG, LLC, had petitioned the court for a determination that the Seneca Nation had waived its immunity by acceding to an arbitration agreement included as part of a contract with LECG to render forensic accounting and consulting services. This paper analyzes the fact patterns in four prior Circuit Court decisions and casts a critical light on the applicability of those decisions to the LECG case. It also addresses the advisability of setting a high bar for proving that a party favoring tribal exhaustion is delaying proceedings. Given the standard formulation of arbitration as a [functional] alternative to judicial litigation...providing binding determinations through presumably less expensive, more efficient and expert, and nonetheless fair proceedings, the advisability of deference to other arbiters of justice is open to debate. Finally, the paper addresses the role waivers of sovereign immunity play in balancing out the tribal exhaustion doctrine.