Petition — Merrion v. Jicarilla Apache Tribe

In THE ~

Aupreme Court of the Unitel

HAEL RODAK, JR., CLERR

Ocroser TERM 1980

J. GREGORY MERRION AND Rosert L. BayYLess,

d/b/a Merrion anp Baytess, Jerome T. McHvau,

Cuase Or Company, Ducan Propuction CorporaTION,

ConsoLipaTeD Or anp Gas, INc.,

SoutHLaND Royatty Company, TESORO

PETROLEUM CorporaTION, AMERADA Hess CorpoRATION,

Supron Enercy Corporation, Enercy Reserves Group, Inc.,

J. M. Huser Corporation, ContTINENTAL Ort Company,

(now Conoco Inc.),

AtTLaNntic RicHFIELD CoMPANY,

Puiuuips PetroLeEumM Company,

Tenneco Or Company, Gerry Om Company,

Gur Om Corporation, Mos Om Corporation

AND Oxy Perrro.evo, INc.,

Petitioners,

V.

JICARILLA APACHE TRIBE, JICARILLA APACHE

TrrBaL CounciL, AND CEecIL ANDRUS,

SECRETARY OF THE INTERIOR,

Respondents.

Ow Petition For A Writ Or Certiorart To THE

Unitep States Court Or Appeats For

Tue Tentu Crrovir

PETITION FOR WRIT OF CERTIORARI

Jason W. KELLAHIN

KeELLAHIN & KELLAHIN

P. O. Box 1769

Santa Fe, New Mexico 87501

Txomas H. Burton Telephone: (505) 982-4285

JoHN M. WIMBISH Bruce D. Buack

P. O. Box 2197 CAMPBELL & Buack

Houston, Texas 77001 P. O. Box 2208

Telephone: Santa Fe, New Mexico 87501

(718) 965-1030 Telephone: (505) 988-4421

Counsel for Petitioners

i

QUESTIONS PRESENTED

1. Whether the Constitution of the United States per-

mits Indian tribes to exercise governmental powers of taxa-

tion of production of oil and gas by non-Indians without

congressional approval.

2. Whether the Court of Appeals can impute attri-

butes of inherent sovereignty to include tribal powers

of taxation, without support in and contrary to the record

below.

3. Whether such a tax can be justified where it is not

imposed as a condition of entering onto Indian lands under

leases entered into by the tribe and approved by the Secre-

tary of the Interior.

4. If Indian tribes have the power to tax oil and gas

produced under valid leases approved by the Secretary

of the Interior, whether that power is pre-empted on Execu-

tive Order Indian reservations by 25 U.S.C. 398(c) and a

total federal regulatory scheme.

d. If Indian tribes have governmental authority to im-

pose taxes on non-Indians, whether constitutional provi-

sions protect such non-Indians from abuses of tribal

authority.

6. Whether taxation of production of oil and gas by

both the State and Indian tribes unduly burden interstate

commerce.

‘i ii

TABLE OF CONTENTS

I iri sscccsnksncickssesstrocicoessvecsesaiaccosanevene? Siemens

rs icacseusaccecesenonascesosevttniosacossseavoveses

San sac snsbincecanhones

Opinion ITE ick ucasccntachinanidombnsndensbevesdsinnicdcedsessoscanovoanes

sista acctinosononasesasenvscobenssocsseoseoeonestccvesasossonvece

Constitutional Provisions, Treaties, Statutes, and Executive

i sapsteneunonensmanesonne

a sss lei ntvedonnseocecooesonsnsveces

Reasons for Granting the Wit .0...0........c:ccccccccsssscssesessesessesseces

This Case Presents Important Questions of Federal Law

Which Have Not Been, But Should Be, Settled By This

iio sa scssssesng.sebcncuscensovoveseenseseossseceve

1. Do Indian Tribes Have the Power to Tax Non-Members

as a Condition for Remaining on the Reservation Under

i, SEE

2. If Indian Tribes Have Taxation Authority Over Non-

Indians, Has Such Authority Been Preempted on

Executive Order Reservations By 25 U.S.C. 398e? .....

3. If Indian Tribes Have Governmental Authority Over

Non-Indians, Must Non-Indians Be Accorded the Full

Range of Constitutional Protections Against Abuses of

ro . scvasgueneseonncnosobenbossecs

4. Does the Tribal Tax Unduly Burden Interstate

iiss ssettsccsveccessonsssssscntsonovusensncocn ares svovnsis

es ccuupavssbosavsnscbncceceoecocesecees J

17

ill

TABLE OF AUTHORITIES

Cases Cited

PAGE

Amoco Production Company v. Peter MacDonaid, No. CV-

FREE CENA TD Sriciscisnsacccsasuinnonnionalcbanhainaiiicndininaians g

Arizona Publie Service Company v. Cecil Andrus, No. CV

FOES CHEE S gevecideisssishionintaadsaencgbouapeniaimenesetaninaiade 8

Blackfeet Tribe of Indians v. State of Montana, No. CV-78-

Re CPR SD sassicbiccraccindseh ines taleinincineccaiedécpearsgnnedisnineaseaadiniibenss 9)

Central Machinery Co. v. Arizona State Tax Comm., — U.S.

— U.S. L.W.— (No. 78-1604, June 27, 1980) wo... eeeeeees 5

Cipriano v. City of Houma, 395 U.S. 701 (1969) wee 25

City of Phoenix v. Kolodziejski, 399 U.S. 204 (1970) ............ 25

Conoco Ine. v. Shoshone and Arapahoe Tribes, No. C-80-0181

CRPUE OD scscacsansdiscainincksesheniihpaieeideamianabiadialibietadasteasieamanlibe 8,9

De Coteau v. District County Court, 420 U.S. 425 (1975) 17

Dean Milk Co. v. Madison, 340 U.S. 349 (1951) wee ceeeeee 26

Evans v. Cornman, 398 U.S. 419 (1970) uu....cccesesssesssesesereseessees 25

Groundhog v. Keeler, 442 F.2d 674 (10th Cir. 1971) ............ 23

Healy v. James, 408 U.S. 169 (1972) ............c:ccccoscsssocsssscesessevees 23

Kerr-MceGee Corp. v. Navajo Tribe of Indians, et al., CIV

SER ONG) CRN) sectcttudlanssncsatientsaninisisinntscnebvenns 9, 24

Kerr-MeGee Corp. v. Navajo Tribe of Indians, No. CV-79-

EE KEATON DS ssindeinieted Ataresssnniietinsacenctivsidanethiosnietesatecmmeantake 8

Late Corporation of the Church of Jesus Christ of Latter-

Day Saints v. United States, 136 U.S. 1 (1890) wo 11, 12

McClanahan v. Arizona State Tax Commission, 411 U.S.

SPE LADUE) ssnicinsiisagumapaaesnasaatnbiinaetiaes 9,12

Nevada v. Hall, 440 U.S. 410 (1979) .0..........ccoccssocscssossscossscssees 24

Oliphant v. Suquamish Indian Tribe, 435 U.S. 191

( RTF): ° cctksstnocscsith Depéiascujuniuepiitedubasiotdbeheiesiadetastatbavssacantbitbinn 15, 23, 24

Organized Village of Kai » v. Egan, 369 U.S. 60 (1962) ........ 17

Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922) wo... 24

Quechan Tribe v. Rowe, 531 F.2d 408 (9th Cir. 1976.00.00... 24

Santa Clara Pueblo v. Martinez, 436 U.S. 49 (1978) woo. 16, 22

iv

PAGE

Salt River Project Agricultural Improvement and Power

District v. Navajo Tribe of Indians, 9th Cir. No. CA

fo ep ARES ES NA ieee ch SUED PES Me Ae ASN SPF DO Oe 8

Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225 (1964) .... 20

Southern R. Co. v. Greene, 216 U.S. 400 (1910) vce 23 ©

Southland Royalty Company v. Navajo Tribe of Indians,

Bs ER Ee Eh SO Rate. NOTED 8

State of Washington v. Confederated Tribes of the Colville

Indian Reservation, — U.S. —, 48 U.S. L.W. 4668 (June

Ph PU aiinieievindchcenisetderinnsagnnionss 5, 6, 7, 8, 9, 10, 11, 13, 14, 17, 24

Terry v. Adams, 345 U.S. 461 (1958) ......eccccccoosssscosssssscssssesonees 25

Union Oil Co of Calif. v. Peter MacDonald, et al, CIV 79-

BE Ss Sectibircilanak diac eatiddpaienst died nacindet en nicbanabiasinasonntickeiion 9

United States v. Kagama, 118 U.S. 375 (1886) voces 12,16

United States v. Sioux Nation of Indians — US — (No. 79-

I I I sD 17

United States v. Wheeler, 435 U.S. 313 (1978) ccccccccseecseseee 13-14

Warren Trading Post Co. v. Arizona Tax Commission, 380

SES EY SAID sisdscitscics Seas cha esi desccctias Pence bedticantansnbcscdadaduaiednacs 20, 21

Western Live Stock v. Bureau of Revenue, 303 U.S. 250

2 RACIAL eSERRSS erent DCU nt ot EE NCR DE pre Me 27

White Mountain Apache Tribe v. Bracker, — U.S. —, U.S.

L.W. — (No. 78-1177, June 27, 1980) wo. 5, 12, 16, 17, 18, 21

Constitution, Treaties and Statutes

United States Constitution :

I eed eked 2,15

Mietaete 1, Béotion 6, Clawpe 8 oc..cccchoscasccssesccssctevecsssosecoss carson: 2, 3, 26

I i 2,15

PUR UN IIE Boia cesinccccethncenicein coils scesenniinniedsiAeilarsioacte 2,15

MCRD BF, OCI BD BGG acc cacncacdasnsnconscsvsssesictszctcccncgeniane 2,15

Fi, fee aE ERT eee RA Weterares exci eller A UNC SSM ORE nn SAIN R ICR 2.13

ei seiolib tenceabsirncierncni a Acectndtetiddad viata eesti ce 2,15

po) gE DEON cr ao RA ae es a 2,15

RGR I PR a Ie ER LOR Re ee 2

I eiaiaakadenisssacezccuschantadietiemebadniel inks ck 2,15

I NI ‘2

Treaty of Guadalupe Hidalgo with Mexico, 1848, 9 9%

__LenAy SIE a RRMLN NUTT S CIN F RE SIN OMNIS SPIT eee REE I, | ; 28,'ae

¥

PAGE

Statutes:

25 U.S.C. § 71 (Act of March 3, 1871, ¢. 120, § 1, 16 Stat.

SUID ‘sacbaicsabiipiaaicanmisannomebeiigerintetincaba he ienddeestnedciidddt eid Uae Sie oe 18, 20

25 US.C. §281 (Act of March 3, 1871, ¢. 120 § 3, 16 Stat.

in, ee rT A AN OURS sea Bins eT Beit Alger, 20

25 U.S.C. § 396d (Act of May 11, 1938, e. 198, § 4, 52 Stat.

SUMED | dnnseidiinstnnatuigacheincibenadaditiainiladinesium itt at eae ens Doan 20

25 U.S.C. § 398¢ (Act of March 3, 1927, ¢. 299, § 3, 44 Stat.

TOOT seceiuitis bicadiStieepinincttlbateasecnsiasdabanmnecmmeiownnstioaa 2, 3, 4, 5, 17, 18, 19

25 U.S.C. § 415 (Act of Aug. 9, 1955, ¢. 615, § 1, 60 Stat.

FF Oe IED esiiviissvecmninnsvensnsivntinnianatacsidisatiaiebbabanaiilanabinnile 20

25 U.S.C. § 461, et seq, § 476-477 (Indian Reorganization

Act of June 18, 1934, c. 576, § 1, et seq., 48 Stat. 984 et

Og NED iinesecssiniaitegnniennisonisnisnntlescdstniciaattnaa teeta. 2, 3, 20

28 U.S.C. § 1254(1) (Act of June 25, 1948, ¢. 646, 62 Stat.

GE <csnccesiinnnnnsorainshlguicivanniatabsinstidaeniabaninaeaanaiesonnitaamadiadmasanaadeoidaiie 2

28 U.S.C. § 1331 (Act of June 25, 1948, ¢. 646, 62 Stat.

930; July 25, 1958, P.L. 85-554, § 1, 72 Stat. 415) wo... 3

Other Authorities

Allen, State Conservation of Oil and Gas, 5 Rocky Mtn.

Ss: Salk: CaN Se I aces Aeetcitaincaintiitcends eis aad 6

18 Attorney General’s Opinion 36 (1884) .o....ccccccccecseeeseeeees 10

Bureau of Competition, Report to the Federal Trade Com-

mission on Leasing of Indian Lands, (Oct. 1975) voce. 9

66 Cong. Rec. 999, 2234, 2739, 5483-4 oo... cccccccsesssessceceee 19

67 Cong. Ree. 10910, 10912, 10915-19, 10995, 11397 wo... 18-19

a iy I Se tesctiadeshincictnccccnichicestekcices ani as 19

Executive Orders Relating to the Jicarilla Apache Reser-

CU esl dtinrolaenictlchhsnsietntlensitsnmintsaioandeittbhagacia de a ce IT 2

Federal Rules of Appellate Procedure, Rule 35 ......cccccccceeeeee 7

Federal and State Reservations and Indian Trust Areas,

U.S. Department of Commerce (1974) cocccccccccccccccececceeeeeee 27

Final Report of the American Indian Policy Review Com-

A I iach ee ae 19

Martone, American Indian Tribal Self-Government in the

Federal System: Inherent Right or Constitutional Li-

cense? 51 Notre Dame Lawyer 600 (1976) coocccccccccccccccecceeeeee 15

Oliver, Legal Status of American Indian Tribes, 38 Ore.

8 | PE Ree oe ee eee he 23

Report of the Federal Trade Commission on Leasing on

Indian Lands, 11, 17 (October 1975) wocccccccccccecccceseceeses 6

Tribal Power to Tax Non-Indian Mineral Lessees, 19 Nat. _

ee a ENS 19

25 Code of Federal Regulations, Part 171 wo...cccccceccecccceees 20

In THE

Supreme Court of the United States

et Scie one,

J. Grecory Mernion anp Roperr L. BAyugss, ET AL.,

Petitioners,

Vv.

JicARILLA APACHE TRIBE, ET AL.,

Respondents.

PETITION FOR WRIT OF CERTIORARI

Petitioners, J. Gregory Merrion and Robert L. Bayless,

d/b/a Merrion and Bayless, Jerome T. McHugh, Chase Oil

Company, Dugan Production Corporation, Consolidated Oil

and Gas, Inc., Southland Royalty Company, Tesoro Petro-

leum Corporation, Amerada Hess Corporation, Supron

Knergy Corporation, Energy Reserves Group, Ine., J. M.

Huber Corporation, Continental Oil Company (now Conoco

Inc.), Atlantic Richfield Company, Phillips Petroleum Com-

pany, Tenneco Oil Company, Getty Oil Company, Gulf

Oil Corporation, Mobil Oil Corporation and Oxy Petroleum

Ine., respectfully pray that a Writ of Certiorari be issued

to review the judgment and opinion of the United States

Court of Appeals for the Tenth Circuit entered in this

proceeding on February 22, 1980, and amended on April 25,

1980.

OPINION BELOW

The opinion of the Court of Appeals, reported at 617 F2d

537 (1980), appears in Appendix A hereto. The amendment

to the opinion appears in Appendix B-2. No opinion was

2

rendered by the District Court for the District of New

Mexico but that Court’s Findings of Fact and Conclusions

of Law appear in Appendix C, and its judgment in Appen-

dix D.

JURISDICTION

The judgment of the Court of Appeals for the Tenth

Circuit was entered on February 22, 1980. That decision

was modified and rehearing was denied by the Court of

Appeals on April 25, 1980. (Appendix B-1). This petition

was filed within 90 days of that date. This Court’s juris-

diction is invoked under 28 U.S.C. § 1254(1).

CONSTITUTIONAL PROVISIONS, TREATIES,

STATUTES AND EXECUTIVE ORDERS INVOLVED

This case involves the Constitution of the United States,

particularly Article I, §1, §8, Clause 3, Article II, §1,

Article III, § 1, Article IV, §§ 1, 3, and 4, Article V, Article

VI, Article VII, and the Fifth Amendment, Tenth Amend-

ment and Fourteenth Amendment to the Constitution (Ap-

pendix E),

The case also involves the Indian Reorganization Act

of June 18, 1934, Chapter 576, 48 Stat. 984, et seq., 25 U.S.C.

§§ 461, et seq., and Act of March 3, 1971, Chapter 120, § 1,

16 Stat. 566, 25 U.S.C., § 71 (Appendix I); the Treaty of

Guadalupe Hidalgo with Mexico, 1848, 9 Stat, 922 Appen-

dix G); Executive Orders Relating to the Jiearilla Apache

Reservation (Appendix H); and Act of March 3, 1927,

Chapter 299, § 3, 44 Stat. 1347, 25 U.S.C. § 398e (quoted

n. 11, p. 17, «fra.

STATEMENT OF THE CASE

The Jicarilla Apache Tribe of Indians resides on a

reservation created by Executive Order, which lies wholly

tC

3

within the State of New Mexico (Appendix H). The State

of New Mexico lies within an area ceded to the United

States by the Treaty of Guadalupe Hidalgo which reserved

no sovereign powers to any Indian tribe (Appendix G).

The tribe is organized under the Indian Reorganization

Act of June 18, 1934, 48 Stat. 984, et seq., 25 U.S.C. § 461

et seq. (Appendix F).

Petitioners are engaged in the production of oil and

gas from tribal lands under valid oil and gas leases issued

with the approval of the Tribal Council and the Secretary

of the Interior, and pay royalties to the Tribe. It is un-

disputed that many of these leases were issued prior to

the Jicarillas’ adoption of their revised constitution in

1968, the first to claim tribal power of taxation. Approxi-

mately 80% of the production is shipped interstate for

sale outside the State of New Mexico (Appendix C, p. 71).

On July 9, 1976, the Jicarilla Apache Tribal Council

adopted an ordinance entitled Oil and Gas Severance Tax

(Appendix I). The Jicarilla Severance Tax was levied at

the rate of $.05 per million BTU of gas. Oil and other liquid

hydrocarbons “sold or transported off the reservation” are

taxed at a rate of $.29 per barrel.

Petitioners filed a suit in the United States District

Court for the District of New Mexico under 28 U.S.C. § 1331

alleging that the Jicarilla Apache Tribe lacked authority

to tax non-Indians. Petitioners further alleged that if the

Court should find the Tribe had any governmental authority

to tax non-Indians then the Jicarilla Tax violated Article I,

§ 8, Clause 3 and the Fifth Amendment of the United States

Constitution. Finally, Petitioners alleged that if the Tribe

had the inherent sovereignty to levy a tax on non-Indians

selling hydrocarbons produced on the Jicarilla Reserva-

tion then such tribal authority was preempted by 25 U.S.C.

+

§ 398e. A similar complaint was filed by Amoco Produc-

tion Co., et al., as Civil No. 77-343. The two cases were

consolidated for trial and on appeal.

The District Court entered its Findings of Fact! and

Conclusions of Law, and Judgment in favor of Plaintiffs/

Petitioners on December 29, 1977 (Appendix C, pp. 68

et seq.). It held that “Whatever sovereignty the Jicarilla

Apache Tribe possesses does not extend to or allow the

imposition of a severance tax upon oil and gas produced

on the Jicarilia Reservation” (Appendix C, p. 74). After

reviewing the legislative history of 25 U.S.C. 398c., the

District Court further found that Congress intended

therein to allow the states and local authorities the ex-

clusive right to tax ei] and gas production from Executive

Order Reservations and, therefore, held this Act preempted

tribal taxation. In enjeining the defendants from collect-

ing the Jicarilla Tax, the Court declared the tax to be

illegal, unconstitutional, invalid and void (id., ». 75).

A divided Court of Appeals for the Tenth Circuit re-

versed the District Court, holding that the Tribe had the

power to tax non-Indians as an attribute of inherent sov-

ereignty, since no treaty or act of Congress specifically

authorizes the exercise of such taxing power (Appendix A).

In its reversal, the Court directed entry of judgment in

favor of the tribe without considering the sources or attri-

butes of the inherent sovereignty originally held or still

retained by the Jicarilla Apache Tribe or remanding the

ease for presentation of evidence on the issue.

' The Court found, inter alia, that if valid, the Jicarilla Tax com-

bined with the State severance taxes would create a tax burden

of more than 29°% of the price of old gas, and over 12.5%

of the price of old oil (Appendix C, p. 73), and that it would

discriminate against and constitute a multiple burden upon

interstate commerce.

4)

The Court found that while the Commerce Clause limits

the power of Indian tribes the Jicarilla oil and gas sever-

ance tax is not in violation thereof (Appendix A, p. 15).

The Tenth Circuit did not otherwise address the protection

afforded by the Constitution of the United States to non-

Indians operating on Indian lands and dealing with tribes.

Finally the majority of the Court of Appeals held that

20 U.S.C. 398¢. was not preemptive of the Jicarilla sev-

erance tax even though it granted the states the express

authority to tax oil and gas produced on Executive Order

Reservations.

REASONS FOR GRANTING THE WRIT

THIS CASE PRESENTS IMPORTANT QUESTIONS

OF FEDERAL LAW WHICH HAVE NOT BEEN, BUT

SHOULD BE, SETTLED BY THIS COURT.

This case presents legal issues of first impression, hav-

ing far ranging social, political, and economic consequences

for both Indians and non-Indians, The question of whether

an Indian tribe can tax non-Indians producing oil and gas

under leases approved by the Secretary of the Interior

has not been decided by this Court. That this is an issue

of first impression was expressly recognized by the Court

of Appeals for the Tenth Cireuit (Appendix A, p. 9).

The decision of the Court of Appeals in this ease can

have far-reaching consequences. It is especially important

that the issues in this case be considered since this Court’s

decisions in Washington v. Confederated Tribes of the

Colville Reservation — U.S. —, 48 U.S.L.W. 4688 (June 10,

1980), White Mountain Apache Tribe vy. Bracker, — U.S.

— , No. 78-1177 (June 27, 1980), and Central Machinery Co.

v. Arizona State Tax Commission, — U.S. —, No. 78-1604

(June 27, 1980), have laid down new guidelines since the

6

Court of Appeals decision herein. In Colville this Court

held that Indian tribes have the power to levy and collect

tribal taxes on cigarettes. Since Indian reservations con-

tain a very significant portion of this country’s future

energy reserves,” it is important for this Court to deter-

mine whether the development of this energy “significantly

involves the tribes” or is a problem national in scope. If

Indian tribes have the power to tax this energy production

without coordination with, or limitation by, the state or

federal governments, they clearly have control over an

area “significantly involving” the nation as a whole.* More

importantly, Colville did not squarely present the funda-

mental question raised here as to the far-reaching consti-

tutional implications of tribal sovereignty.

If, as Petitioners contend, Indian “sovereignty” can

exist only under the mantle of federal sovereignty, it is

important for this Court to determine whether Indian

tribes can tax lessees operating under valid oil and gas

leases approved by the Secretary of the Interior. While

Indian tribes have been held to have the “inherrent tribal

power to exclude non-Indians or impose conditions on

those permitted to enter (Colville, supra at 48 L.W. 4674)

once the tribe has agreed to the consideration specified.

2 As long ago as 1974, Indian oil and gas leases covered a collec-

tive acreage of 4,187,644 and produced 30,685,000 barrels of

oil and 125,080,000 mef of gas. It is estimated that coal under

Indian reservations could provide more than 50 billion tons, or

10% of the nation’s future needs, and that uranium reserves

located on Indian Reservations constitute about two-thirds of

all uranium reserves on federal land. Bureau of Competition,

Report to the Federal Trade Commission on Leasing on Indian

Lands, 11, 17 (October 1975).

That tribal economies have not traditionally been based on oil

and gas production and that regulation of the country’s energy

supply is a national problem, was recognized by state officials

long ago. See, e.g. Allen, State Conservation of Oil and Gas,

5 Rocky Mtn. Min. L. Inst. 59, 70 (1960).

7

in a federal lease, additional tribal taxation raises sig-

nificant legal issues.

The Court of Appeals below recognized that the questions

involved in this case were indeed “important” questions.

The matter was first heard by three members of the Court

of Appeals. Prior to a decision being rendered, how-

ever, the Court of Appeals, sua sponte, set the issue of

whether Indian sovereignty included the power to tax non-

Indians, for rehearing en banc (Appendix J). Since the

court found this a case of first impression, it may be fairly

assumed that the rehearing en banc was ordered because

of the issues involved, as provided by Rule 35, Federal

Rules of Appellate Procedure.

The importance of the present case is indicated by the

fact that amici briefs were filed before the Court of Appeals

on behalf of the States of New Mexico, Utah, Montana,

North Dakota, and Wyoming in opposition to the tribal tax.

Amici briefs were filed on behalf of the Navajo Tribe, the

National Congress of American Indians, the Arapahoe Tribe

of the Wind River Reservation, Wyoming, and the Three

Affiliated Trit s of the Fort Berthold Reservation, North

Dakota, and the Shoshone Indian Tribe and the Asseni-

boine and Sioux Tribes, in support of Respondents.

While this Court has dealt with the concept of Indian

sovereignty many times, it is clear from the continuing

flood of cases that there still exists a fundamental unre-

solved question of constitutional law as to the limits which

must be placed on the previously enunciated doctrine of

tribal sovereignty. The applicability of restrictions imposed

by the Constitution .as well as those flowing from tribal

dependent status are significant issues herein as criminal

and quasi-crimina] sanctions enforcing tribal taxes against

non-Indians are involved. While the extent of tribal sov-

8

ereignty was considered in specific limited factual situations

in each of the cases recently decided by this Court, the

limits of tribal power over non-Indians and the rights of

non-Indians when confronting tribal authority were not

decided.

The limits on tribal authority over the property and

lives of non-members doing business with Indians tribes

is, therefore, an issue which demands this Court’s imme-

diate attention.

The decision of the Court of Appeals in this case can

have far-reaching consequences.* Based, as it was, solely on

a finding of “inherent sovereignty” it will open a new flood

of litigation concerning the right of Indians to control the

property and lives of non-Indians. If the opinion is allowed

to stand, other tribes will take it as a signal that they,

too, are free to impose energy taxes on non-Indians.° The

validity of one such tax is already before the Court of

Appeals for the Ninth Cireuit® and other challenges to vari-

ous forms of Indian taxation of nonmembers are being

litigated in numerous District Court actions.? According

4 Again, recognizing the reference in Colville to “Indian sov-

ereignty,” Petitioners respectfully submit that the Court there

was not faced with, and did not address, ‘he quest’ oiis

raised here or the full constitutional consequenves of tribal

sovereignty.

5In reliance on the Tenth Circuit Court’s opinion in this case,

the Shoshone and Arapahoe tribes in Wyoming have reasserted

their severance tax ordinance on oil and gas production,

chalkenged in Conoco Inc., et al. v. Shoshone and Arapahoe

Tribes, et al., No. C-80-0181 (D. Wyo.).

i Salt River Project Agricultural Improvement and Power Dis-

trict vy. Navajo Tribe of Indians, 9th Cir. No. CA78-3492.

7 Arizona Public Service Company, et al., vy. Cecil Andrus, et al.,

No. CV 78-238-C (D.N.M.); Southland Royalty Company, v.

Navajo Tribe of Indians, C-79-0140 (D.Utah); Amoco Pro- >

duction Company vy. Peter MacDonald, et al., CV-79-155-B

(D.N.M.); Kerr-MeGee Corp. v. Navajo Tribe of Indians,

rs

7)

to the amicus brief filed below by the National Congress of

Indians, in 1978 at least 55 tribes were imposing various

forms of tribal taxes on non-Indians:

1. Do Indian Tribes Have the Power to Tax Non-

Members as a Condition For Remaining on the Reser-

vation Under Pre-Existing Contracts?

The majority opinion of the Court of Appeals framed

the question of tribal jurisdiction over the non-Indian

Petitioners as “the bald issue of an Indian tribe’s taxing

power without benefit of reservations of authority in a

treaty.” (Appendix, p. 13). The Court of Appeals held that

“the tribe has the inherent power to levy a privilege tax

on the occupation of severing oil and gas from reservation

land even though the tax falls on nonmembers.” (Appen-

dix, p. 15).

Petitioners submit the Court of Appeals below confused

the sovereignty of the United States government with the

proprietary rights of Indian tribes by referring to the power

to exclude or condition entry retained by any property

owner as a “sovereign power.” In attempting to excavate

the legal foundation for the tribal power to tax non-

Indians, the Court of Appeals majority said:

“But two different sovereign powers have been re-

lied upon — the power to tax, e.g., Cherokee Indians —

Export Tax on Hay, 23 Op. Att’y Gen. 528 (1901), or

the power to exclude non-members from the reserva-

tion and set the terms upon which such persons could

et al,, CV-79-383-M (D.N.M.); Blackfeet Tribe of Indians v.

State of Montana, et al., CV-78-61 GF (D. Mont.) ; Conoco Inc.

et al. v. Shoshone and Arapahoe Tribes, et al,, supra; Kerr-

McGee Corp. v. Navajo Tribe of Indians, et al. CIV 80-247-

PHX-wpe (D. Ariz.) ; Union Oil Co. of Calif. v. Peter Mac-

Donald, et al., CIV 79-738 (D.N.M.).

10

enter and do business therein. 2.g., Buster v. Wright,

135 F. at 950.” (emphasis supplied) (Appendix A,

p. 13).

In discussing the origins of tribal sovereignty the Court

of Appeals purported to find a “commonly shared presump-

tion of Congress, the Executive Branch, and the lower

federal courts... that the tribes retain the power to levy

a tax that falls upon non-members doing business on the

reservation.” (Appendix A, p. 12). As the earliest pro-

nouncement of the Executive Branch cited by the Court

of Appeals indicates, such tribal power was generally traced

to proprietary rights. In 18 Op. Att’y Gen. 36 (1884), Attor-

ney General Phillips compared the tribes to proprietary

innkeepers and made it clear their taxation powers did not

apply to persons rightfully on the reservation:

“In the absence of treaty or statutory provision to

the contrary, the Choctaw and Chickasaw nations have

power to regulate their own rights of occupancy, and

to say who shall participate, and upon what conditions,

and hence may require permits to reside in the nations

from citizens of the United States, and levy a pecuniary

exaction therefor... I submit that, whatever this may

mean, it does not limit the right of these tribes to pass

upon the question, who... shall share their occupancy,

and upon what terms....The serious words ‘jurisdic-

tion’ and ‘self-government’ are scarcely appropriate

to the right of a hotel keeper to prescribe rules and

charges for persons who became his fellow occupants.”

18 Op. Att’y Gen. at 36-7 (1884),

The proprietary foundation of tribal authority to tax

is important in the instant case because the Jicarilla Tribe

clearly did not have the right to impose a license fee as

a condition on Petitioners’ right to enter tribal lands or

engage in business thereon. Petitioners had executed leases

with the Jicarillas long before any Jicarilla tribal taxes

11

were conceived or imposed. These leases set specific bonus,

rental and royalty payments to be made by the Petitioners

to the Tribe and such provisions were expressly approved

by the United States Secretary of the Interior.

Tracing the source of tribal authority to tax to the power

to exclude is particularly appropriate in the case of a tribe

such as the Jicarilla Apaches. Unlike many Indian tribes,

the Jicarillas were not an organized and existing sovereign

government at the time the Constitution was signed. As

Chief Judge Seth pointed out in his dissent below, the

Jicarillas totally lacked any central authority and merely

banded together for purposes of military defense or ag-

gression. (Appendix 4 p. 32). When the United States

acquired the New Mexico territory from Mexico in the

1848 Treaty of Guadalupe Hidalgo, there was no existing

Jicarilla governmental authority. (Appendix A p. 30-33).

Any governmental sovereignty possessed by Jicarillas

must, therefore, have been expressly granted by the United

States subsequent to acquisition of this territory.

These historical limitations on Jicarilla sovereignty, ar-

ticulated so cogently in Judge Seth’s dissent, are completely

consistent with the construction by this Court in Late Cor-

poration of the Church of Jesus Christ of Latter-Day Saints

v. United States, 136 U.S. 1 (1890) of the effect of the Treaty

of Guadalupe Hidalgo upon the territory annexed. In

Latter-Day Saints, this Court found that from the moment

the United States acquired lands from Mexico by virtue

of the Treaty of Guadalupe Hidalgo, the United States

was the only sovereign in the territory and all governmen-

tal power derived from that source:

“Having rightfully acquired said territories, the

United States Government was the only one which

could impose laws upon them, and its sovereignty over

them was complete. No state of the Union had any

12

such right of sovereignty over them; no other country

or government had any such right. These propositions

are so elementary, and so necessarily follow from the

conditions of things arising upon the acquisition of

new territory, that they need no argument to support

them. They are self-evident.” 136 U.S. at 42-3. (empha-

sis supplied).

It is clear that this Court intended the same rule to apply

to tribal governments since only four years prior to the

rule as enuciated in Latter-Day Saints, this Court had de-

cided United States v, Kagama, 118 U.S. 375 (1886). In-

deed, this Court recognized the difficulties of integrating

tribal sovereignty into the dual Federal-State system cre-

ated by the Constitution in White Mountain Apache Tribe

v. Bracton, —U.S.—, (No. 78-1177, June 27, 1980). In

recognizing the continuing validity of Kagama, Justice

Marshall, speaking for the Court opined:

“The status of the tribes has been deseribed as ‘an

anomalous one and of complex character,’ for despite

their partial assimilation into American culture, the

tribes have retained ‘a semi-independent position . . .

not as States, not as nations, not as possessed of the

full attributes of sovereignty, but as a separate people,

with the power of regulating their internal and social

relations, and thus far not brought under the laws of

the Union or of the State within whose limits they

resided.’ McClanahan v. Arizona State Tax Comwm’n,

411 U.S. 164, 173, (1973), quoting United States v.

Kagama, 118 U.S. 375, 381-382 (1886).”

Petitioners respectfully submit that this Court discussed

Indian taxation authority in State of Washington y. Con-

federated Tribes of the Colville Indian Reservation, — U.S.

—, 48 U.S.L.W. 4668 (1980) fairly raised only the ques-

tion of the applicability of state cigarette and motor

vehicle taxes on Indian reservations. Colville involved

state sales taxes by the State of Washington against non-

members making purchases of cigarettes and tobacco on

13

the reservation, and motor vehicle taxes on tribal mem-

bers residing on the reservation. In Colville, the lower

court ruled against the applicability of the state taxes

to non-members on the reservation. This Court reversed

in this respect, upholding the authority of the state

not only to impose the taxes on non-members on

the reservation but also to require the tribes to keep

records for and collect the state taxes and to assert state

civil and criminal jurisdiction over the Indian tribes to

enforce the state taxes. This Court affirmed the lower court

in Colville only with respect to denying applicability of the

state motor vehicle tax on tribal members, quite a different

question than those presented here with regard to Indian

taxation of non-members,

Mr. Justice Rehnquist in Colville, supra, recognized the

lack of a coherent doctrine on the question of Indian taxa-

tion and turned again to the principle of federal preemp-

tion as the basis for analysis of the issue. He pointed out

that McClanahan vy. Arizona State Tax Commission, 411

U.S. 164 (1973), did not resolve to what extent residual

Indian sovereignty in the total absence of federal treaty

obligation or legislation would still be recognized. 48

U.S.L.W. 4680, and note 2.

In United States vy. Wheeler, 435 U.S. 313 (1978), this

Court found that Indian tribes do not possess sovereignty to

the same extent or from the same source as that of the

United States Government. The Court pointed out that

“the sovereignty that the Indian tribes retain is of a uniaue

and limited character.” 435 U.S. 323. Justice Stewart, in the

Court’s unanimous opinion, described the area of sover-

eignty necessarily withdrawn as a result of dependent tribal

status:

“The areas in which such implicit divestiture of sov-

ereignty has been held to have occurred are those

14

involving the relations between an Indian tribe and

nonmembers of the tribe ... . These limitations rest

on the fact that the dependent status of Indian tribes

within our territorial jurisdiction is necessarily in-

consistent with their freedom independently to deter-

mine their external relations.” 435 U.S. at 326.

While this Court stated there was no implicit divestiture

of the tribe’s inherent powers in Colville,’ that statement was

grounded on the lack of an overriding federal interest that

would be frustrated by tribal taxation in that case. 48

U.S.L.W. at 4673. To the contrary, in the present case

there is such an overriding interest. It is an issue of vital

significance to the Western states whether Indian tribes will

be allowed to tax the same mineral production already taxed

by the States under congressional authority, since multiple

taxation here could well overburden mineral production

to the point of abandonment or confiscation by the tribes,

sans tax. This presents an issue of considerable federal

significance.

The Court of Appeals below, erroneously attempted to

predicate Indian sovereignty on the Commerce Clause of

the United States Constitution. The majority of the Court

of Appeals implicitly, and Judge McKay’s concurrence ex-

plicitly, assume that by mentioning “Indian tribes” in the

Commerce Clause of the Constitution, the founding fathers

intended such tribes to assume general governmental au-

thority within the territorial boundaries of their reserva-

tion. (Appendix, p. 10, 15, 25). This Court rejected any such

8 Colville, relying on Washington v. Yakima Indian Nation, 439

U.S. 463 (1979) expressly upheld the state’s assumption of both

civil and criminal jurisdiction over the tribes —a result in-

congruous with the notion of tribal sovereignty urged by the

Apaches and supported by the Court of Appeals here.

15

interpretation of the Commerce Clause in United States v.

Kagama, 118 U.S. 375 (1886), where it concluded that there

is no legitimate sovereignty contemplated for Indian tribes

within the Constitutional framework. In a passage quoted

with approval in Oliphant v. Suquamish Tribe, 435 U.S.

191 (1978), the Court said:

“Indians are within the geographical limits of the

United States, The soil and the people within these

limits are under the political control of the government

of the United States or of the States of the Union.

There exists within the broad domain of sovereignty

but these two.” 118 U.S. at 379.

The Supreme Court’s recognition of the fact the Constitu-

tion fails to reflect any general governmental power for

Indian tribes is also supported by historical documents

indicating its draftsmen did not contemplate a general

governmental role for Indian tribes. For discussion, see

Martone, American Indian Tribal Self-Government in the

Federal System: Inherent Right or Constitutional License?

51 Notre Dame Lawyer, 600 (1976).

To grant Indian tribes the general governmental author-

ity bestowed by the Court of Appeals would directly con-

travene the entire dual system of federal-state government

established by the Constitution’. Dissenting from the ma-

jority below, Chief Judge Seth noted that the United

States and the states are the only two governmental entities

contemplated by the Constitution. To allow Indian tribes

sovereignty within the territorial boundaries of a state,

but not subject to state control, is inconsistent with the

federal concept of our Constitutional system:

® Article I; Section 1; Article II, Section 1; Article III, Section 1;

Article IV; Article V; Article VI; Article VII; and the Tenth

Amendment (Appendix E).

16

“The Constitution contemplates that the states are

to create within their boundaries the counties, parishes,

cities, and villages. The states thus establish all the

local bodies and all entities having governmental pow-

ers within their boundaries. The federal government,

under its residual powers, retained no authority to

create governmental bodies within the states.” (Appen-

dix A, pp. 33-34).

To grant Indian tribes the sovereignty over non-Indians

urged by the majority of the Court of Appeals would be to

elevate such tribes to a level equal to or greater than that

of States of the Union. In his concurring opinion, Judge

McKay, equating tribes with federal municipalities, ex-

pressly recognized the implications of the majority position

in attributing “police powers, regulatory power, or fiscal

powers” to Indian tribes. (Appendix, p, 28). This approach

would require that reservation enclaves be carved out of

the existing states to accommodate 287 tribal governments".

The states would have absolutely no control over the

exercise of governmental authority within those Indian

enclaves existing within their borders. As this Court

has expressly recognized in United States v. Kagama,

118 U.S. 375, 381 (1886), the semi-independent posi-

tion of Indian tribes to regulate their internal and

social relations does not give tribes governmental power

to the same extent as that granted the states. Cf, White

Mountain, Supra, Slip. Op. pp. 5, 6 The policy pur-

poses underlying the doctrine of “tribal sovereignty,”

including inter alia the preservation and development of

tribal customs and religion, may be fully achieved without

subjecting other Americans to tribal jurisdiction. Peti-

tioners respectfully submit our federal system was not

1° Santa Clara Pueblo v. Martinez, 436 U.S. 49, at 65, n. 21 (1978).

17

designed to, and cannot, accommodate such broad govern-

mental authority by an entity not recognized by the Con-

stitution.

2. If Indian Tribes Have Taxation Authority Over Non-

Indians, Has Such Authority Been Preempted on

Executive Order Reservations by 25 U.S.C. § 398c?

The right of tribal self-government is ultimately de-

pendent on and subject to the broad power of Congress.

White Mountain Apache Tribe v. Bracker, — U.S.—, (No.

78-1177, 1980). Unquestionably one of the critical bell-

wethers in determining the interests of the states and Indian

tribes in regulating the activities of non-Indians on a

reservation is the intent of Congress. Colville, 48 U.S.L.W.

4674, 4676, 4679. Petitioners submit such Congressional

intent to preempt any tribal taxation power possessed by

the Jicarillas is expressed in 25 U.S.C. 398e."!

Although treaties were signed by representatives of the

United States Army and Jicarilla Apache leaders, none

were ever ratified by Congress. In 1871, by the provisions

of 25 U.S.C, § 71, Congress recognized the tribes were no

longer regarded as sovereign nations but were regulated

by Congressional statute. De Coteau v. District ¢ ‘ounty

125 U.S.C. § 398¢. reads in full:

Taxes may be levied and collected by the State or local

authority upon improvements, output of mines or oil and

gas wells, or other rights, property, or assets of any lessee

upon lands within Executive order Indian reservations in

the same manner as such taxes are otherwise levied and

collected, and such taxes may be levied against the share

obtained for the Indians as bonuses, rentals, and royalties,

and the Secretary of the Interior is hereby authorized and

directed to cause such taxes to be paid out of the tribal

funds in the Treasury; Provided, that such taxes shall not

become a lien or charge of any kind against the land or other

property of such Indians. Mar. 3, 1927, ¢. 299, § 3, 44 Stat.

1347.

18

Court, 420 U.S. 425, 4382 (1975) Cf. Organized Village of

Kake v. Egan, 369 U.S. .60, 72 (1962). Since no Jicarilla

treaty was ratified by Congress prior to 1871, when it ter-

minated recognition of the remaining recalcitrant Indian

bands, a series of Executive Orders relating to the Jicarillas

was promulgated and revoked. (See, Seth Dissent, Appen-

dix A, pp. 34-35 and Appendix H). Finally, a location was

chosen and a reservation created for the Jicarillas by

Executive Order.

In light of the purposes of 25 U.S.C. § 71 and the marked

change in attitude it represented, Congress adopted a

somewhat hostile attitude toward reservations created ex-

clusively by the President after 1871. It is from this histori-

cal perspective that “the broad policies that underlie”

25 U.S.C. § 398¢. must be judged. White Mountain Apache

Tribe v. Bracker, supra, slip opinion at 8. Cf. United States

v. Sioux Nation —U.S.—, slip op. at 431 June 30, 1980).

During the long debate on this Act, Senator Bratton,

who subsequently became a judge on the Tenth Cireuit

Court of Appeals, explained the legal infirmities of this

Executive Order process:

“Upon the question of this title, the Executive has

set apart these reservations by proclamation from

time to time since 1871 without any express authority

from Congress. It is a practice that has been followed,

and it has been recognized inferentially or indirectly

from time to time by Congress. However, when we

deal with the question of title to these lands, we are

confronted with this situation: We have about

22,000,000 acres of land that at one time belonged to

the United States. If the government does not own the

title now, it is by virtue of presidential proclamations

divesting the government of that title and vesting it

in the Indians.

“The Constitution provides that— ‘The Congress

shall have power to dispose of and make all needful

19

rules and regulations respecting the territory or other

property belonging to the United States.’ If the Indians

own the title to these lands so that they own the min-

erals under them, the President has vested that title in

them by presidential proclamation in the face of a

Constitutional provision vesting that authority in the

Congress.” 67 Cong. Ree., 10995 (1926). (See, also 67

Cong. Ree. 10915; 10910 (1926)).

That Congress would not have condoned tribal taxa-

tion of non-Indians is clear from the history and debate

surrounding the passage of 25 U.S.C. § 398¢. This statute

was adopted as a compromise between those who felt the

states were clearly entitled to all the royalties on oil and

gas severed from Executive Order Indian reservations and

those who felt the tribes should get a portion of such

royalties. Indeed a recent Congressional study recognized

that Indians have traditionally received royalties rather

than taxes as revenue from mineral production on their

land and implicitly acknowledged that 25 U.S.C. 398e.,

should be repealed in order to allow tribal taxation!,

Petitioners submit, therefore, that if Indian tribes have

the inherent power to tax non-Indians generally such power

has been preempted by Congress as to oil and gas taxation

on Executive Order Indian Reservations".

Even if Congress did not intend 25 U.S.C. 398(e) to grant

the states exclusive taxation authority over oil and gas

produced from Executive Order Reservations, the overall

Congressional attention to Indian leasing indicates a pre-

1266 Cong. Rec, 999, 2234, 2739, 5433-4, 67 Cong. Ree. 10912,

10915-19, 10995, 11397, 68 Cony. Ree, 4569.

18 Final Report of the American Indian Policy Review Commis-

sion at 81 344-45,

‘See Barrett, J., dissent, Appendix, p, 52, tax non-Indians

Mineral Lessees, 19 Nat. Res. J. 969 at 991 (1979),

20

eu.plive intent. Federal Regulations govern every minute

detail of Indian leasing. This federal regulatory scheme,

therefore, totally preempts any tribal tax not recognized

therein. The Secretary of the Interior is given broad su-

pervisory authority over tribal lands and assets under 25

U.S.C. § 464. Under the terms of 25 U.SC §§ 81 and 415,

the Secretary is charged with the duty to approve or dis-

approve contracts and leases with the Indian tribes. Under

20 U.S.C. § 396d, “all operations under any oil, gas or

mineral lease issued pursuant to the terms of any act af-

fecting restricted Indian lands shall be subject to the rules

and regulations promulgated by the Secretary of the In-

terior.” The Secretary has exercised these statutory man-

dates in Part 171 of Title 25 of the Code of Federal Regu-

lations. These regulations govern, among other matters,

the method of acquiring leases from the tribes ($$ 171.1a

to 171.9), the term of such leases (§ 171.10), manner of pay-

ments (§ 171.12), rates of rentals and royalties under oil

and gas leases (§ 171.13), the time for making royalty pay-

ments (§ 171.16), waste prevention (§ 171.19), restrictions

on and approval of oil and gas operating plans (§§ 171.20

and 171,21), assignment of lease interests (§ 171.26) and

cancellation of leases (§ 171.27). Most specifically the Code

of Federal Regulations prohibits any unilateral increase

in the remuneration required under the leases, 25 C.F.R.

171.28.

The comprehensive character of federal reguulation over

oil and gas operations on tribal lands leaves little, if any,

room for regulation by Indian governmental entities. When

the laws of an inferior sovereign “touch upon” the area

of a comprehensive federal policy, the latter “may not be

set at naught or its benefits denied” by the laws of the

lesser or dependent sovereign. Sears, Roebuck & Co.. v. Sti f-

fel Co., 376 U.S, 225, 229 (1964). In Warren Trading Post

Co. v. Arizona Tax Commission, 3880 U.S. 685 (1965), this

21

Court addressed the question of whether Congress's delega-

tion of authority to the Commissioner of Indian Affairs over

trading on the reservations preempted state taxation of

reservation traders. The Court reviewed the Commissioner's

“detailed regulations” concerning traders and concluded:

“These apparently all-inclusive regulations and the

statutes authorizing them would seem in themselves

sufficient to show that Congress has taken the business

of Indian trading on reservations so fully in hand that

no room remains for state laws imposing additional

burdens upon traders.” 380 U.S. at 690.

The Court held:

“Indian traders trading on a reservation with res-

ervation Indians are immune from a state tax like

Arizona’s... because Congress in the exercise of its

power granted in Article 1, §8, has undertaken to

regulate reservation trading in such a comprehensive

way that there is no room for the States to legislate

on the subject.” Id. at 691 n.18.

As in Warren Trading Post, the Secretary's “apparently

all-inclusive regulations” over reservation oil and gas op-

erations, together with the statutes that authorize them,

would seem in themselves sufficient to show that Congress

has taken the matter so fully in hand that no room remains

for additional tribal taxes “imposing additional burdens”

on oil and gas lessees. “There is no room for these taxes in

the comprehensive federal regulatory scheme.” While

Mountain, — U.S. — (No. 78-1177, 1980), slip opinion pp.

11-12. “The imposition of the taxes at issue would under

mine that policy in a context in which the Federal Gov.

ernment has undertaken to regulate the most minute de-

tails of [oil and gas] production”. [bid,

3. If Indian Tribes Have Governmental Authority Over

Non-Indians, Must Non-Indians Be Accorded the Full

99

oe

Range of Constitutional Protections Against Abuses

of Tribal Authority?

A further important question of federal law which has

not been, but should be, settled by this Court is the nature

and extent of Constitutional guarantees which must be

extended non-Indians as a protection against the excesses

of any sovereignty found to exist in Indian tribes. Peti-

tioners submit that this Court’s decisions holding that

Indian tribes need not extend constitutional rights to their

own members support the proposition that Indian tribes

were not intended to have coercive governmental authority

over non-Indians. In Santa Clara Pueblo v. Martinez, 436

U.S. 49 (1978); for example, this Court recognized:

“As separate sovereigns pre-existing the Constitu-

tion, tribes have historically been regarded as un-

constrained by those constitutional provisions framed

specifically as limitations on federal or state authority.”

436 U.S. at 56.

The. facts involved and language employed in Santa

Clara emphasize the lack of Constitutional inhibitions

on tribal government apply only when the tribe is deal-

ing with its own members in areas traditionally regu-

lated by Indian custom. A careful review of the opinion

in Santa Clara leads to the conclusion that this Court

recognized that Constitutional restraints upon tribal gov-

ernment were not necessary because tribal government has

authority only on internal matters traditionally governed

by Indian practices and customs, Justice Marshall, speaking

for the Court, clearly articulated the parameters of tribal

authority as involving strictly internal tribal matters.

“Indian tribes are ‘distinct, independent political

communities, retaining their original natural rights’

in matters of local self-government. Although no longer

‘possessed of the full attributes of sovereignty,’ they

22

remain a ‘separate people, with the power of regulating

their internal and social relations.” 436 U.S. at 55.

Given this Court’s holdings that Indian tribes are not

constrained by the Constitution, two alternatives exist:

(1) either such tribes cannot have authority over non-

Indians; or (2) non-Indian citizens can be totally deprived

of their Constitutional rights by Indian tribes. Petitioners

submit that this Court’s decision in Santa Clara supports

the first alternative.

Logic dictates that since tribal customs and traditiorts

differ from the Anglo-American concept of jurisprudence,

the United States Constitution need not be injected into the

relationship between tribal members and their government.

Groundhog v. Keeler, 442 F.2d 674 (10th Cir. 1971). To

hold, however, that non-Indians lose their Constitutional

rights merely by entering an Indian reservation would

create 287 enclaves within the territorial boundaries of the

United States, on which non-Indian citizens can be totally

deprived of their Constitutional rights. This contravenes

the long established principle that the Constitution is bind-

ing on all within the territory of the United States and

does not contemplate such exempt enclaves. Southern R.

Co. v. Greene, 216 U.S. 400, 412 (1910) ; ef. Healy v James,

408 U.S. 169, 180 (1972).

If Indian tribes are to be given general governmental

authority over non-Indians, such tribes must be subject to

all the limits on governmental authority provided in the

Constitution’®, Without such Constitutional restraint, tribal

'® Officials of the Executive Branch charged with supervision of

Indian tribal government have long recognized Indian self-

government must operate within the limitations of the Constitu-

tion. See, e.g. Letter from Under Secretary Hatfield Chilson

quoted in Oliver, Legal Status of American Indian Tribes, 38

Ore. L.R. 193 at 243 (1959),

24

action could expropriate property worth hundreds of mil-

lions of dollars and banish non-Indian citizens rightfully on

reservations'®, As this Court recognized in Oliphant, tribal

jurisdiction over non-Indians raises enormous Constitu-

tional problems. 485 U.S. at 211-12. In Oliphant, this Court

rejected the argument that tribal regulations could be

applied to non-Indians without any regard for their Con-

stitutional rights:

“Since the formation of the Union and the adoption

of the Bill of Rights, the United States has manifested

an equally great solicitude that its citizens be protected

by the United States from unwarranted intrusions on

their personal liberty .. .” Oliphant v. Suquamish In-

dian Tribe, supra. 435 U.S. at 210.

In Colville, supra, this Court again recognized that any

“exercise of tribal sovereignty would be inconsistent with

the overriding interests of the National Government,” when

the tribes do not accord the full protections of the Bill

of Rights to non-Indians, 48 U.S.L.W. at 4673.

There is no Constitutional value more central to

our notion of political justice than that subjection to

governmental power presupposes the right to petition

and participate in that government on an equal basis.

Indeed this Court has very recently reiterated that, “In

'© When the enforcement of such tribal taxation involves the

banishment of non-Indians from the reservation, cancellation

of their leases and seizure of their property they require the

criminal jurisdiction prohibited to the tribes. Quechan Tribe

v. Rowe, 531 F.2d 408 (9th Cir. 1976); ef. Pennsylvania Coal

Co. v. Mahon, 260 U.S, 393, 1922). The Navajo Tribal Counsel

recently recognized this fact in arguing in favor of the tribes

power of banishment and expropriation of property, “The

power to tax must, by necessity, include the power to enforce

the tax or it is meaningless: a ‘voluntary’ tax is no tax at all.”

Kerr McGee Corp. v. Navajo Tribe of Indians, Ciy 80-247-PHX-

WPC Memorandum In Support of Motion for Summary Judg-

ment p. 17.

29

this nation each sovereign governs only with the consent

of the governed.” Nevada v. Hall, 440 U.S. 410, 426 (1979).

Participation in the deliberations and proceedings of an

Indian tribal council is, however, unquestionably a right

denied non-Indians. This principle can also be seen in this

Court’s recent decisions which guarantee equal franchise

to those substantially affected by governmental action See,

e€.9., Cipriano v, City of Houma, 395 U.S. 701 (1969). To

make a non-Indian subject to tribal government, when

he is completely disinfranchised by the tribe would vio-

late the Constitutional concept of equal protection. City

of Phoenix vy, Kolodziejski, 399 U.S. 204 (1970); Evans v.

Cornman, 398 U.S. 419 (1970); Terry v. Adams, 345 U.S.

461 (1953).

The Court of Appeals would subject non-Indians to tribal

governmental power without allowing them any right to

petition or participate in tribal government. Chief Judge

Seth, in dissent, clearly recognized this flaw in the majority

reasoning, saying:

“The state-created entities are the ones in which the

opportunity for participation extended to all persons

within the boundaries. These are the foundations of

governmental authority as it exists in the United

States.” (Appendix A, p. 34).

Judge Seth also observed governmental “sovereign power”

should not be attributed to Indian tribes precisely because of

their failure to allow non-members to participate :

“The sovereignty argument advanced by the Secre-

tary must lose significance for purposes under consid-

eration because non-members of the Tribe (including

Indian non-members) are excluded from participation.

This is an express exclusion based solely on Tribal

membership. Perhaps this is how it should be for self-

determination; however, such a group of Tribal mem-

26

bers excluding all others cannot exert governmental

authority over those excluded. It is obvious that our

whole governmental structure is based on representa-

tion with an opportunity to participate. When this is

provided, authority exists to govern.” (Appendix A, p.

35).

4. Does the Tribal Tax Unduly Burden Interstate

Commerce?

The Jicarilla tax would also place a multiple burden on

interstate commerce in violation of Article I, Section 8,

Clause 3 of the Constitution of the United States. The

Court of Appeals majority opinion recognizes that New

Mexico imposes four separate severance taxes upon the

same oil and gas to which the Jicarilla Severance Tax would

apply. (Appendix, p. 19). The majority, however, dismissed

the multiple burden argument by stating:

“It is beyond question that no state, with the excep-

tion of New Mexico, has a sufficient connection with the

occupation of severing oil and natural gas within the

reservation to support a levy of a severance tax on

lessee’s occupation. There is thus no threat of a mul-

tiple burden emanating from this tax unless the possi-

bility, which we assume is fact, of New Mewico levying

an identical tax constitutes a multiple burden within

the meaning of the Commerce Clause. That New Mexico

may be able to impose an identical tax on leases does

not implicate federal interest in maintaining the flow

of interstate commerce at all, we believe.” (emphasis

added) (Appendix A, pp. 19-20).

Petitioners respectfully submit that the Court of Appeals

ignores the Constitutional proscription against multiple

burdens upon interstate commerce. The majority and con-

curring opinions give Indian tribes the powers of a local

government. If an Indian tribe is indeed analogous in gov-

ernmental power even to a local government, then it is

27

clear that such tribal taxation must be subject to dual

Commerce Clause scrutiny. Dean Milk Co. v. Madison, 340

U.S. 349 (1951). Taxation of a single event by more than

one government works to the advantage of local commerce

because such local commerce cannot be so frequently taxed.

Western Live Stock v. Bureau of Revenue, 303 U.S. 250

(1938).

If, as the Court of Appeals held, the Jiearilla tax is

levied on the incident of severance of the oil and gas

from the Jicarilla Reservation, then the Jicarilla tax con-

stitutes an impermissible burden upon interstate commerce

because New Mexico taxes the same “local” event. The

Court of Appeals dismissed this burden since only two

entities imposed such taxes on a single event. This high-

lights the pernicious effect of the majority’s holding, which

creates impermissible governmental enclaves within the

territorial boundaries of the existing states. The creation

of these “local” governments within the existing states,

but not subject to the jurisdiction thereof, will allow “local

taxes” by both tribal and state governments, The problem

may be illustrated by the fact that California alone has

66 Indian reservations within its borders. Arizona’s mere

17 reservations occupy territory larger than 13 of the

States, and cover one-third of Arizona’s 114,000 square

miles'’, Such widespread establishment of Indian taxation

would effectively destroy existing State taxation. The ma-

jority opinion below creates a unique legal situation where

several totally autonomous sovereign governments exist

within the borders of a State of the Union and all ean tax

without coordination or restriction, at least until the com-

bined level reaches confiscation.

17 Federal and State Indian Reservation and Indian Trust areas,

U.S. Department of Commerce (1974),

28

CONCLUSION

Petitioners respectfully submit certiorari should be

granted to settle the important questions of federal law

raised: herein and to bring the judgment and opinion of

the Court of Appeals below into conformity with the ap-

plicable decisions of this Court governing Indian tribal

sovereignty over non-Indians.

Dated: 1 July 1980.

Respectfully submitted,

Jason W. KEeLLAHIN

KewLuaHIN & KeLLAnIN

P. O. Box 1769

Santa Fe, New Mexico 87501

(505) 982-4285

Bruce Dovenas Biackx

CaMPBELL & Buack

P. O. Box 2208

Santa Fe, New Mexico 87501

(505) 988-4421

Tuomas H. Burton

Joun M. WiMsisH

P. O. Box 2197

Houston, Texas 77001

(713) 965-1030

Counsel for Petitioners