The usual suspects are on the case, but I can't figure out why. I assume she self-identified in the AALS Directories as Native American because she is (it was news to me, I should add). Is someone denying that? It's hard to tell.
Perhaps, though, the implication is that she got hired for affirmative action reasons, and not because of her work. (UPDATE: Here's some right-wing crazies making that argument.) That strikes me as dubious for two reasons
(1) First, there is no pressure to hire Native Americans for affirmative action reasons, except, perhaps, at some law schools in states with large Native American presences (I have this only anecdotally about Arizona and New Mexico). For affirmative action purposes, all law schools care about are African-Americans and Latinos, and even in those two categories, law school commitment to affirmative action usually varies by region of the country. On the other hand, because the AALS aggressively polices the racial and ethnic diversity of law faculties, law schools are careful to make sure anyone who could count as an under-represented minority is so-listed (thus, I can recall a faculty member who was the proverbial "Jewish kid from New York" but with some South American ancestry being listed as "Hispanic," though no one would have ever so identified him).
(2) Second, her record of scholarship in bankruptcy is clearly sufficient to get her appointed at Harvard. She is, after all, one of the three most-cited scholars in the bankruptcy/commercial law field, and she is the only woman in the top ten. (I could imagine being the top woman in the field might have played more of a role than her being Native American, which surely was irrelevant.) The other scholars in her field cited as often or more than her--Bob Scott at Columbia, Alan Schwartz at Yale, and Douglas Baird at Chicago--are all obviously appointable at Harvard, despite their lack of Native American ancestry.
So the bottom line--as it usually is with right-wing craziness--is that this is all silly.
UPDATE: Still more here.