OMAHA, Neb. (AP) – An American Indian tribe has dropped its lawsuit against Nebraska about whether the state had authority over doctors hired by the tribe.

The Ponca Tribe of Nebraska and a doctor it hired, Rosa Huguet, filed the federal lawsuit in June because the state had refused to recognize Huguet's credential.

But in a filing earlier this week, an attorney for the tribe and Huguet said the lawsuit was being dismissed because the state had changed its stance and acknowledged that a tribal clinic and Huguet fell under federal jurisdiction.

Huguet, who is licensed in Puerto Rico, was hired in July 2010 after the national health care overhaul measure was adopted. She was named director and was the only doctor of the tribe's Fred LeRoy Health and Wellness Center in Omaha.

Before enactment of the new law, tribal doctors had to be licensed by the states where they would practice. The new law allows a tribal doctor to hold a license in any of the 50 states, the District of Columbia or a U.S. territory, the lawsuit said.

State officials refused to recognize Huguet's credential and ordered her to stop practicing, the tribe said.

Tribal officials brought the lawsuit after learning that the state health agency's Board of Medicine and Surgery had referred the matter of Huguet's licensing to the Nebraska Attorney General's Office, trying to bar her from practicing in the state.

The lawsuit sought a temporary restraining order to keep the state from taking any action against Huguet regarding her medical license and a judgment stating that Huguet's Puerto Rico medical license was sufficient to meet the licensing standard under federal law.

In a news release, the tribe said its sovereignty was affirmed by the state's bow to federal authority. The tribe also said the new federal provision on licensing would make it easier for tribes to recruit doctors.