Online Sovereignty: The Law and Economics of Tribal Electronic Commerce

36 Pages Posted: 1 Mar 2016 Last revised: 3 Feb 2017

See all articles by Dr. Gavin Clarkson, Esq.

Dr. Gavin Clarkson, Esq.

Native American Capital; Clarkson PLLC

Katherine A. Spilde

San Diego State University

Carma Claw

New Mexico State University - Department of Management & General Business

Date Written: March 1, 2016


In 1886, the US Supreme Court wrote that, for Indian tribes, “the people of the states where they are found are often their deadliest enemies.” Recently, state agencies and regulators have continued that tradition of hostility by improperly attempting to regulate electronic commerce businesses operated by tribal governments that are more properly subject to regulations established by tribal law and subject to federal oversight. Despite the fact that these online businesses operate exclusively under tribal law and make their tribal affiliation clear to customers, certain state regulators have demanded absolute compliance with state law, even when such laws are from states thousands of miles away. Not only does this overreaching by uninformed state regulators limit the products available to consumers but it also severely undercuts on-reservation economic development, imperils tribal electronic commerce, and challenges basic notions of tribal sovereignty.

Businesses and consumers entering into commercial contracts rely heavily on consistency and predictability in contracting, including when the parties mutually agree to apply tribal law or utilize tribal courts to resolve disputes. Uniform interpretation and enforcement of such agreements are critical to ensuring continued investment in tribal businesses. With over one quarter of American Indians living in poverty, nearly twice the national average, it has never been more important to promote confidence in the Indian economy. When courts do not give full force and effect to contracting parties’ desire to resolve their private disputes using tribal courts and tribal law, this confidence is threatened. While it is unclear how this controversy will ultimately play out, one thing is certain: states are not only undermining tribal innovation and harming tribal economies but also attacking tribal sovereignty itself.

Perhaps lost in the legal rancor, however, are the very real human and economic consequences of the loss of tribal revenues from e-commerce business, as well as the potential damage to tribal e-commerce as a whole. In this article, we present results of our empirical research into the economic impact of tribal online lending in Indian Country. We first frame the issue with a brief summary of the legal foundations for tribal e-commerce and tribal lending in particular. We then present several case studies of tribes that have engaged in online lending, focusing on the direct economic impact to those tribal communities. We conclude the article with policy arguments as to why state and federal regulators should support rather than suppress tribal e-commerce, including tribal small-dollar online lending.

Keywords: Electronic Commerce, Online Lending, Tribal Sovereignty

JEL Classification: J15, G21, G23, G28, O16

Suggested Citation

Clarkson, Gavin and Spilde, Katherine A. and Claw, Carma, Online Sovereignty: The Law and Economics of Tribal Electronic Commerce (March 1, 2016). Vanderbilt Journal of Entertainment & Technology Law, Vol. 19, No. 1, 2016, Available at SSRN: or

Gavin Clarkson (Contact Author)

Native American Capital ( email )

2351 Eisenhower Ave #2514
Alexandria, VA VA 22314
United States


Clarkson PLLC ( email )

1773 Westborough Dr
Suite 927
Katy, TX 77449
(832) 487-7778 (Phone)


Katherine A. Spilde

San Diego State University ( email )

San Diego, CA 92182-0763
United States

Carma Claw

New Mexico State University - Department of Management & General Business ( email )

United States

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