Whether the tribal lending operation was an unlawful RICO enterprise or, instead, a legitimate economic development project by the Tribe, depends on whether the loans Big Picture and Red Rock made are governed by state or by tribal law.

The Second Circuit opined in 2014 — in a case involving the Tribe — that loans a tribal lender makes on an Indian reservation to internet borrowers located off-reservation "could be regarded as on-reservation, based on the extent to which one side of the transaction is firmly rooted on the reservation." Otoe-Missouria Tribe of Indians v. N.Y. State Dep't of Fin. Servs., 769 F.3d 105, 115 (2d Cir. 2014). If the tribal lender was firmly rooted on the reservation, an analysis of the respective federal, tribal, and state interests, pursuant to White Mountain Apache Tribe v. Bracker, 448 U.S. 136 (1980), would determine whether the state could regulate the loans. See Otoe-Missouria Tribe of Indians, 769 F.3d at 114.

Mr. Martorello argued that Big Picture and Red Rock are firmly rooted on the Tribe's reservation and that, under Bracker, the federal and tribal interests in preserving Indian sovereignty and promoting tribal self-sufficiency and economic development outweighed Virginia's interest in regulating loans made to its citizens in other jurisdictions. The Fourth Circuit, however, concluded that the loans constitute off-reservation conduct and so "a Bracker analysis would not have been appropriate." Exh. A at 18. It did not address the Second Circuit's conflicting opinion in Otoe-Missouria.

Whether the Indian Commerce Clause permits states to regulate internet-based loans originated by tribal lenders on an Indian reservation when the borrowers are located off-reservation