The manager of a title-lending company established under Chippewa Indian law is not immune from a racketeering case that targets his personal assets, a federal judge has ruled.

U.S. District Judge Gerald Pappert of the Eastern District of Pennsylvania denied Craig Mansfield's motion to dismiss plaintiff Daniel S. Pennachietti's complaint, ruling that since Pennachietti sued Mansfield personally and not the Chippewa tribe or the company, Mansfield was not entitled to tribal sovereign immunity.

Pennachietti, who took out a $5,000 loan from Sovereign Lending Solutions, established under the tribal law of the Lac Vieux Desert Band of the Lake Superior Chippewa Indians, alleges he was charged more than the legal limit of 6 percent interest and ultimately ended up paying $7,000. He alleged, citing the federal Racketeering Influenced and Corrupt Organizations Act, that Mansfield participated in a scheme to collect unlawful debts targeting borrowers in Pennsylvania.

According to Pappert's opinion, Mansfield argued that since he was working in his official capacity as an agent of the company, he was protected by sovereign immunity.

In analyzing Mansfield's argument, Pappert cited the 2017 U.S. Supreme Court decision in Lewis v. Clarke, the latest ruling to address the application of tribal sovereign immunity. The high court held “that tribal sovereign immunity is not implicated in a suit brought against a tribal employee in his individual capacity because the employee is the real party in interest,” Pappert said. “That the defendant 'was acting within the scope of his employment … is not, on its own, sufficient to bar a suit against that employee on the basis of sovereign immunity.'”

Mansfield argued he was not the real party in the case and added that Pennachietti never claimed he acted independently. However, Pappert said the argument was off-point.

“Mansfield acting within the scope of his employment does not determine whether he or Sovereign is the real party in interest,” Pappert said. “This is a personal capacity suit to recover money damages solely from Mansfield for his personal actions, and extending tribal sovereign immunity to him simply because he was acting within the scope of his employment would extend that immunity beyond what common-law sovereign immunity principles would recognize for government employees.”

Pappert added that the “principles of common-law sovereign immunity typically treat the source of funding as the most important factor to consider when determining whether sovereign immunity applies. Here, any judgment against Mansfield will implicate his personal assets and will not disturb the property or treasury of Sovereign.”

Pennachietti's attorney, Robert Salvin of the Philadelphia Debt Clinic and Consumer Law Center, said in a statement that, before Lewis, “many cases held that tribal immunity extended to suits seeking personal liability against tribal employees sued in their individual capacity for wrongs committed within the scope of their employment, but the Supreme Court rejected that position.

“The result is that tribal immunity is now less potent,” Salvin added. “It will be more like 11th Amendment immunity or similar [immunities] that protect governmental units from suit, but still allow a suit to go forward personally against an individual government actor, such as a police officer, for violating someone's civil rights, for instance.”

Mansfield's attorney, Joel L. Frank of Lamb McErlane, did not respond to requests for comment.