Amicus Curiae Brief — Oklahoma Tax Comm'n v. Citizen Band of Potawatomi Tribe of Okla.

FOR ARGUMENT qy)

9. Supreme Court, U.S.

No. 89-1322 YT TLE D

DiC 12 1990

In The

JOSEPH F. SPANIOL, JR.

Supreme Court of the United $tates CLERK |

October Term, 1990

>

Oklahoma Tax Commission,

Petitioner,

Vv.

The Citizen Band Potawatomi

Indian Tribe of Oklahoma,

Respondent.

>

ON WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE TENTH CIRCUIT

*

BRIEF OF AMICI CURIAE SENECA-CAYUGA

TRIBE OF OKLAHOMA, WYANDOTTE TRIBE OF

OKLAHOMA, PAWNEE INDIAN TRIBE OF OKLAHOMA,

OTOE-MISSOURIA TRIBE OF OKLAHOMA, PONCA TRIBE

OF INDIANS OF OKLAHOMA, KAW INDIAN TRIBE

OF OKLAHOMA, TONKAWA TRIBE OF INDIANS OF

OKLAHOMA, AND KIOWA, COMANCHE AND APACHE

INTERTRIBAL LAND USE COMMITTEE

IN SUPPORT OF RESPONDENT

+

GLENN M. FELDMAN

O'Connor, Cavanagh

Anderson, Westover

Killingsworth & Beshears

1 East Camelback Road, #1100

Phoenix, Arizona 85012

» (602) 263-2452

Attorneys for Amici Curiae

-

INTEREST OF AMICI CURIAE

SUMMARY OF ARGUMENT ..

I. TRIBAL TRUST LAND IN OKLAHOMA

IS A "RESERVATION" AND THEREFORE

"INDIAN COUNTRY" AS DEFINED AT 18

CE Se: teed be Sdiadidvdwsae........

A.

Indian Country Purposes Under §1151(a) . .

The State’s Argument Concerning The

Supposed Disestablishment of All

Indian Reservations in Oklahoma is

Il. THE TAX COMMISSION’S COUNTERCLAIM

WAS PROPERLY DISMISSED UNDER THE

DOCTRINE OF TRIBAL SOVEREIGN

A.

TABLE OF AUTHORITIES

Cases Page

Adams v. Murphy,

165 F.2d 304 (8th Cir 1908) ................. 16

Atkinson v. Haldane,

569 P.2d 151 (Alaska, 1977) ................. 16

Bull v. United States,

I ios scl dccccccccccs. 17

California v. Cabazon Band of Mission Indians,

DEE. scocscesstocccccccecce 2,4

Chemehuevi Indian Tribe v. California State Board of

Equalization, 492 F. Supp. 55 (N.D. Cal. 1979),

aff'd, 757 F.2d 1047, 1051 (9th Cir. 1985) rev'd

on other grounds, 474 U.S. 9 (1987)....... 15, 17, 18

Cheyenne-Arapaho Tribes v. State of Oklahoma,

18 F.2d 665 (10th Cir. 1980) ................. 6

Cogo v. Central Council of Tlingit and Haida Indians,

465 F. Supp. 1286 (D. Al. 1979) .............. 16

DeCoteau v. District County Court,

CE ccc Gedesceccccscoeccs 4, 10

Frederick v. United States,

386 F.2d 481 (Sth Cir. 1967). ................ 17

Harjo v. Andrus,

oon F208 909 (D.CCe,. 1978) .... 2. eee een 11

Harjo v. Kleppe,

420 F.Supp. 1110 (D.D.C. 1976) .............. 11

Illinois Central Railroad Co. v. Public Utilities Commission,

BE WE Sa ee 8 WSUS ee worcccvcccoes 17

Indian Country, U.S.A. v. Oklahoma Tax Commission,

829 F.2d 967 (10th Cir. 1987),

cert. denied US. ___, 108 S.Ct. 2870 (1988)6, 8, 10

Jicarilla Apache Tribe v. Andrus,

687 F.2d 1324 (10th Cir. 1982) ............... 15

Maryland Casualty Co. v. Citizens National Bank of North

Hollywood, 361 F.2d 517 (Sth Cir. 1966) ...... 16, 19

McClanahan v. Arizona Tax Commission,

GEE We ED. whee eee ER eke Sed itiee 3

Mescalero Apache Tribe v. Jones,

GER Te BES | 6b SOW es ccece cess ct 3, 7, 14

New Mexico v. Mescalero Apache Tribe,

Ge EN EES Gowadecccccccccsesecooes 2

Oklahoma Tax Commission v. United States,

ED. eo Seabee eb eccsccccces 12, 13

Puyallup Tribe Inc. v. Department of Garne,

eG UT. PPTL ETRE TTEET Tee 15, 18

Ramey Construction Company v.

Apache Tribe of the Mescalero Reservation,

673 F.2d 315 (10th Cir. 1982) ................ 15

Santa Clara Pueblo v. Martinez,

Ge ES wee ecedecccccs cessvve 15, 20

Seneca-Cayuga Tribe v. State ex rel. Thompson,

874 F.2d 709 (10th Cir. 1989) ............... 8, 15

v

Solem v. Bartlett,

EF PTTL LTT TTT Tee 10

Thebo v. Choctaw Tribe of Indians,

Ge re PIED o'b'c SSS c ie cccccccces 16

Three Affiliated Tribes v. Wold Engineering,

ET EE. 6 con 60 oN SS bb Wise cod 6% 16, 19

Turner v. United States,

EY a td's Gie'd's OOO aneeee oda 15

U. S. v. Shaw,

EE Aad d's s 0b bic bide 6640 weed 17

United States v. Agnew,

oe Bl A eae 17

United States v. Drunkwater,

434 F. Supp. 457 (E.D. Va 1977) ............. 17

United States v. Edena,

ora @. Same. E517 (DBC. 19746)... ccc ccees 17

United States v. John,

ED 2406 ch 006%.6 006008 5, 12, 13

United States v. Longo, -

464 F.2d 913 (8th Cir. 1972) ................ 17

United States v. McGowan,

i bs aw 6s 6 de 68 ed. e660 ceed Fes 5

United States v. Oregon,

657 F.2d 1009 (9th Cir. 1981). ine 0s a8 oe ee s- 15

United States v. Pelican,

Ns th ee die O46 oa dd 008 Om 5, 6

vi

United States v. Sherwood,

oe PTT err ree 14

United States v. Testan,

GD TA FIG eb vec cc ctecsccesccccs. 14

United States v. United States Fidelity and Guaranty Co.,

309 U.S. 506 (1940) ......... 2c eee eee 15, 17, 19

United States v. Wilson,

523 F. Supp. 874 (N.D. Iowa, W. D. 1981)....... 17

Washington v. Confederated Tribes of the Colville Indian

Reservation, 447 U.S. 134 (1980) .............. 20

Statutes:

EN CW she Sdiwsin ceeccredececccnees 2-14

ep EE 6 no ces oe dé obwes che cee eesetts 16

EE Ee ee 7

Oklahoma Indian Welfare Act,

BP es EE MEE, cccccccncdbeesevbess 8-10

Indian Self Determination Act, °

25 U.S.C. $450 et seq.. Pere eee eee 16

Miscellaneous:

Felix Cohen, Handbook of Federal Indian Law (1982 ed.)5, 11

6 C. Wright and A. Miller,

Federal Practice and Procedure $1427 (1971). ..... 17

S. Rep. No. 1232, 74th Cong. Ist Sess. (1935). ......... 9

vii

H. R. Rep. No. 2408, 74th Cong. 2d. Sess. (1936). ...... 9

Rule 13(a), Federal Rules of Civil Procedure ......... 17

No. 89-1322

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1990

OKLAHOMA TAX COMMISSION, Petitioner,

v.

THE CITIZEN BAND POTAWATOMI

INDIAN TRIBE OF OKLAHOMA, Respondent.

BRIEF OF AMICI CURIAE TRIBES

IN SUPPORT OF RESPONDENT

CONSENT TO FILING

Both parties have consented to the filing of this brief.

Letters of consent have been lodged with the Clerk of the

Court.

INTEREST OF AMICI CURIAE

The amici are all federally recognized Indian tribes (and

one intertribal organization) which occupy federally-owned tribal

trust lands within the State of Oklahoma. The tribes exercise

a broad range of self-governing powers within these lands and —

are engaged in various forms of economic development activities

that generate revenues used to provide tribal programs and

services for their members. These efforts are fully consistent

2

with current federal Indian policies, which seek to promote and

foster tribal self-government through economic self-sufficiency.

See California v. Cabazon Band of Mission Indians, 480 U.S.

202, 216-18 and ns. 19 and 20 (1987); New Mexico v. Mescalero

Apache Tribe, 462 U.S. 324, 334-35 (1983).

Certain positions advanced by the Oklahoma Tax

Commission in this case would seriously threaten the attainment

of these important national goals. In particular, the Tax

Commissioa contends that federally-owned tribal trust land in

Oklahoma is “off-reservation" land and should be subject to

complete state jurisdiction. In addition, the Commission urges

this Court to abandon the long-recognized doctrine of tribal

sovereign immunity from unconsented suit.

These results would be contrary to the established

precedents of this Court and to the policies and expectations of

Congress. As a result, the amici tribes have a substantial

interest in opposing the State’s wide-ranging attack on tribal

self-government in Oklahoma by means of this amicus brief.

SUMMARY OF ARGUMENT

The Tenth Circuit was correct in holding that the tribal

trust land of the Potawatomi Tribe is “Indian Country" within

the meaning of 18 U.S.C. §1151(a). That statute defines

"Indian Country” as including “ali land within the limits of any

Indian reservation under the jurisdiction of the United States

Government. . . .". Under well ‘established precedents of this

- Court and an unbroken line of authority from the Tenth Circuit,

which has extensive experience in dealing with Oklahoma Indian

land issues, federally-owned tribal trust land in Oklahoma is a

reservation for purposes of Indian Country status. The

argument of the Oklahoma Tax Commission that the trust land

of the Potawatomi Tribe is “off-reservation" land, and therefore

subject to complete state jurisdiction, is based upon faulty legal

and historical analysis and should be rejected by this Court.

of such congressional determination, this Court should affirm

the judgment of the court below dismissing the Tax

Commission’s counterclaim against the Potawatomi Tribe.

ARGUMENT

1. TRIBAL TRUST LAND IN OKLAHOMA IS A

"RESERVATION" AND THEREFORE "INDIAN

COUNTRY" AS DEFINED AT 18 U.S.C. $1151(a)

Central to much of the State’s argument in this case is the

contention that the activities of the Potawatomi Tribe at issue

here occurred “off the reservation." The State’s repeated

references to and discussion of Mescalero Apache Tribe v. Jones,

411 U.S. 145 (1973), and its efforts to distinguish McClanahan

v. Arizona Tax Commission, 411 U.S. 164 (1973), are all

predicated on the assumption that the Potawatomi tribal land

held in trust by the United States in this case does not

constitute a "reservation" for jurisdictional purposes.’

" In those companion cases, the Court set forth two broad

principles of federal Indian law: that state laws generally are

not applicable to tribal activities on an Indian reservation except

to the extent that Congress has expressly authorized the applica-

tion of state law, McClanahan; but that a tribal enterprise

conducted off the reservation may be subject to non-discrimina-

tory state taxation. Mescalero.

Although the Tax Commission never says so directly, the

importance of the “on-reservation" versus “off-reservation"

distinction is to determine whether the Potawatomi tribal lands

are “Indian Country." That term, as defined at 18 U.S.C.

$1151(a), includes “all land within the limits of any Indian

reservation under the jurisdiction of the United States

Government. . ." and applies to questions of both criminal and

civil jurisdiction. California v. Cabazon Band, 480 U.S. at 207,

federal and tribal jurisdiction are paramount, and state authority

is extremely limited or non-existent. See generally DeCoteau v.

District County Court, 420 U.S. 425, 427 and n.2 (1975).

Therefore, in determining the extent of the State’s regulatory

authority in this case, the threshold question is whether or not

the tribal trust land on which the Potawatomi Tribe is

conducting its activities is an Indian reservation within the

meaning of §1151(a), and, hence, Indian Country.

A. An Unbroken Line of Authority From This Court

and the Tenth Circuit Has Held That Land Set

Apart by the United States and Held in Trust for

an Indian Tribe is a Reservation for Indian Country

Indian

$115i(a). The reason for this glaring omission is obvious,

however. The most cursory review of the case law from this

Court and from the Tenth Circuit Court of Appeals quickly

reveals that land held in trust the United States for the

benefit of a federally recognized Indian tribe, however it may

otherwise be designated, constitutes a “reservation” for purposes

of $1151(a).

This is not to suggest that the term “Indian reservation"

has had une fixed or immutable meaning through time or for all

purposes. In fact, the leading treatise on federal Indian law

devotes four pages to discussing the origin, development and

5

different usages of the term over time and in different contexts.

Felix Cohen’s Handbook of Federal Indian Law, 34-38 (1982

ed.) (hereafter “"Cohen"). Whatever its historical roots, however,

there is now general agreement that the term “Indian

reservation” as used in §1151(a) simply land validly set

apart for the use of Indians under the authority of the federal

government, regardless of how the land achieved that status.

See United States v. John, 437 U.S. 634, 648-49 (1978) (quoting

United States v. Pelican, 232 U.S. 442, 449 [1914]); Cohen at 34

and n.66.

It is immaterial that the word "reservation" may not have

been used when the land at issue here was set apart for tribal

use by the United States. This Court so concluded more than

fifty years ago in United States v. McGowan, 302 U.S. 535, 538-

39 (1938). In that case, the Court determined the status of a

small tract of land purchased by the federal government and

held in trust for homeless Nevada Indians. The land had never

been formally designated as a “reservation” by Congress, but

instead was characterized as the “Reno Indian Colony.” The

Supreme Court rejected the argument that the land was not

Indian Country because it had never been expressly set aside as

a “reservation.” Instead, the Court held:

Indians in this colony have been afforded the same

protection by the government as that given Indians in

other settlements known as ‘reservations’ . . . and it

is immaterial whether Congress designates a

settlement as a ‘reservation’ or ‘colony.’

Id. As a result, the Court concluded that “it is not reasonably

possible to draw any distinction between this Indian ‘colony’

and "Indian Country.” Id. at 539.

Forty years later, the Court reached a similar conciusion

in United States v. John, 437 U.S. 634 (1978). In that case, this

Court reversed a judgment of the Mississippi Supreme Court

and ruled that certain land held in trust by the federal

gcvernment for the Mississippi Band of Choctaw Indians was a

6

"reservation" within the meaning of §1151(a), despite the lack

of a formal designation as such by Congress. The Court relied

on McGowan and United States v. Pelican, 232 U.S. 442 (1914),

in which reservation status had been based on a finding that the

subject lands “had been validly set apart for the use of the

therefore “Indian Country” under §1151(a).

In addition to these cases, the Tenth Circuit Court of

Appeals has repeatedly held that tribal trust lands in Oklahoma

are Indian reservations for purpose of §1151(a). The court of

appeals did so first in Cheyenne-Arapaho Tribes v. State of

Oklahoma, 618 F.2d 665, 666-68 (10th Cir. 1980), primarily on

the strength of United States v. John. In that case, the court

held that lands set apart and held in trust for the tribe under

a variety of different federal statutes all constituted Indian

Country under $1151(a). More recently, the Tenth Circuit has

subjected the question to even more rigorous analysis, and

reached the same conclusion in a case involving the petitioner

here. Indian Country, U.S.A. v. Oklahoma Tax Commission,

829 F.2d 967 (10th Cir. 1987), cert. denied US. ___, 108

S.Ct. 2870 (1988).

In Indian Country U.S.A., the Creek Nation of Oklahoma

and an affiliated company sought declaratory and injunctive

relief against the Oklahoma Tax Commission. The Commission

alleged that it had complete jurisdiction over a Creek tribal

bingo enterprise being conducted on Creek lands, including the

right to tax and regulate the tribal games. The State argued

Country, or, alternatively, that even if they were, the State had

The appellate court rejected both arguments. In so doing,

it carefully analyzed the scope, history and purpose of §1151(a),

and the cases of this Court that have interpreted it. 829 F.2d

7

at 973-76. After doing so, the court of appeals had no difficulty

in finding that the tribal lands at issue in that case were Indian

Country under §1151(a), as having been set apart by the federal

government for the use and benefit of the Creek Nation.

As a result, the State’s argument that the present case is

controlled by Mescalero Apache Tribe v. Jones, 411 U.S. 145

(1973) is without merit. That case generally held that tribal

activities occurring off the reservation may be subject to state

taxation. However, as just discussed, that is not the case here.

In Mescalero, the land on which the tribe had constructed its ski

resort was outside of the tribe’s reservation boundaries, and was

simply leased from the U. S. Forest Service under a 30 year

lease. Id. at 146 (land was “adjacent to the reservation"). In

addition, there is no i that the tribe exercised

governmental authority leased land. Although not

acquired in trust for the tribe, the Court summarily concluded

that this lease arrangement was sufficient to bring the tribe's

interest in that land within the immunity afforded by 25 U.S.C.

$465. The Court then held that §465, which has no relevance

to the case at bar, did not exempt the tribe’s income, derived

from that off-reservation leased land, from state taxation.

Beyond this cursory analysis, however, the Court made no effort

to define the status of the leased land. In particular, the Court

did n~!t determine whether the land was “Indian Country”

because §465 does not use that term or require that finding.

By way of contrast, the land at issue in this case is actually

set and held by the United States in trust for the

Pot i Tribe, and lies within the tribe's historical

reservation boundaries.

As these cases amply demonstrate, then, the Stat: is simply

ignoring. well-established precedent when it argues that the

Potawatomi tribal activities at issue in this case should be

regarded as “off-reservation" activities for jurisdictional purposes.

In fact, these tribal trust lands plainly constitute a reservation

and Indian Country under 18 U.S.C. $1151(a), and the court

below was correct in so holding.

B. Teo See) Aaa a ee

Disestablishment of All Indian Reservations in

Oklahoma is Unpersuasive and Incorrect. __

To buttress its argument for state jurisdiction over all

Indian lands in Oklahoma, the Tax Commission devotes a

substantial portion of its brief to the contention that all Indian

reservations in Oklahoma had been disestablished and all tribal

lands brought under state jurisdiction by the time of Oklahoma’s

admission to the Union. Tax Commission’s Brief at 9-21.

This very argument has been rejected by the Tenth Circuit,

after careful analysis, in two recent cases. Indian Country,

U.S.A., 829 F.2d at 976-81; Seneca-Cayuga Tribe v. State ex rel.

Thompson, 874 F.2d 709, 712 and n.2 (10th Cir. 1989). The

State’s disestablishment argument is unpersuasive for several

other reasons, as well. First, and perhaps most simply, it is

contrary to Congress’ clearly expressed intent. The State’s

assertion that “Congress has since recognized that no

reservations survived past statehood,” Tax Commission's Brief at

17-18, is best mepudiated through Congress’ own words. In

1936, Congress enacted the Oklahoma Indian Welfare Act

(OIWA) 25 U.S.C. §501 et seq., to specifically address the status

of Oklahoma tribes. That statute, passed approximately 30

years after the State alleges that all reservations in Oklahoma

had been terminated, authorized the Secretary of the Interior:

. . . tO acquire by purchase, relinquishment, gift,

exchange, or assignment, any interest in lands, water

rights, or surface rights to lands within or without

existing Indian reservations, including trust or

otherwise restricted lands now in Indian ownership .

25 U.S.C. §501 (emphasis added). It seems difficult to

understand why Congress would have referred to “existing

Indian reservations” in 1936 if all reservations had been

eliminated before 1906. The reason, of course, is that all

= £7

The Tax Commission has cited legislative history of the

OIWA to support a contrary conclusion. Like much of the

State’s authority, however, it is fatally flawed. The State cites

and quien See. Bap, Me. tS18, 06h Cang, tet Sam. (1955),

legislation that was rejected by Congress. It was in the next

\ the OIWA was enacted, and in H.

2d

Sess. (1936), which deals with the

ion and

that it did. oe Sop ese many re

of

last Congress the Committee

on Indian Affairs had before it H. R. 6234, a bill

considerable time to a study of the legislation

satisfactory to the Indians, to the Department, and to

the Congress itself. This bill, in its revised form, has

the endorsement of the Department; it has been

advocated by representatives of numerous Indian

groups; it is unanimously favored by the Oklahoma

delegation in the House, and was unanimously

reported by your committee.

Report continued:

5

Sections 3, 4, and 5 extend to the Oklahoma Indians

the right to organize; to adopt constitutions; to

receive charters; and to participate in loan funds and

10

otherwise to enjoy the benefits of organization for

general welfare purposes. In other words, these

sections will permit the Indians of Oklahoma to

exercise substantially the same rights and privileges as

those granted to Indians outside of Oklahoma by the

Indian Reorganization Act of June 18, 1934.

From this commentary it is apparent that Congress

intended the Indian tribes of Oklahoma to enjoy the same

general status as tribes elsewhere in the United States; a status

that, by definition, requires a secure land base over which the

tribe can exercise governmental authority. It would have been

a hollow gesture, at best, for Congress to have extended powers

of tribal organization and self-government to Oklahoma tribes

under the OIWA, but for them to be denied that authority and

be fully subject to state jurisdiction because their trust lands

failed to constitute "Indian Country." By specifically designating

them as “reservations” in the statute, it is clear that Congress

fully intended to avoid the result proposed by the Tax

“mmission in this case.

Second, the State’s argument is irrelevant. As this Court

has noted, disestablishment of reservation boundaries primarily

affects the jurisdictional status of non-Indian owned lands within

the reservation; tribal lands and trust lands within the original

boundaries retain their “Indian Country" character despite

disestablishment. Solem v. Bartlett, 465 U.S. 463, 467, n8

(1984); DeCoteau v. District County Court, 420 U.S. at 428.

This Court has never held that lands currently held in trust by

the United States for an Indian tribe within the boundaries of

a disestablished or diminished reservation are subject to state

jurisdiction.

The Tenth Circuit, with substantial experience in dealing

with Oklahoma Indian law issues, has followed the same line of

reasoning. Indian Country, U.S.A., 829 F.2d at 975, n.3. So,

too, in Cheyenne-Arapaho Tribes v. State of Oklahoma, the court

of appeals presumed that the original reservation may have

been disestablished by congressional action. 618 F.2d at 667.

Tribe (which they are) those lands retain their Indian Country

status under §1151(a), and are not subject to general state

The State’s reliance upon, and the conclusion it draws

from, the Dawes Commission Reports are also unwarranted.

These were reports to Congress, not reports by Congress.

Therefore, they are of very limited value in attempting to

ascertain what Congress actually did insofar as any particular

ion is

In addition, the reports were simply wrong to the extent

that they advised Congress that one result of the Dawes

Commission's activities had been the abolition of all tribal

governments within the Indian Territory. Such a view has been

specifically rejected both by contemporary federal courts, Harjo

v. Kleppe, 420 F.Supp. 1110 (D.D.C. 1976) aff'd sub nom. Harjo

v. Andrus, 581 F.2d 949 (D.C.Cir. 1978), and by authoritative

Indian law commentators. Cohen at 779-80, 781-84.

As a result, the State’s position here that "the allotment of

the land and the effacement of the tribal governments were

successfully obtained," and that “the [Dawes] Commission had

accomplished the reconstruction of the Territory in order to

replace the several tribal governments with a constitutional state

government,” Tax Commission’s Brief at 15, must be viewed

merely as wishful thinking rather than legal reality. In fact, the

“evidence” relied upon here by the Tax Commission fails to

12

establish that all Oklahoma reservations and tribal governments,

including those of the Potawatomi Tribe, have ever been

terminated.

To support its unprecedented position here, the Tax

Commission also suggests that Oklahoma Indian tribes are

entitled to less federal protection than other tribes because

Oklahoma Indians have ostensibly been assimilated into the

non-Indian population. Tax Commission’s Brief at 18-21.

The Court has already rejected this very argument in

United States v. John, 437 U.S. 634 (1978). In that case, as

here, the state argued that because “the Choctaws residing in

Mississippi have become fully assimilated into the political and

social life of the State," id. at 652, they were not entitled to

federal protection and were fully subject to state law. The

Court disagreed, and held that continued federal recognition of

the tribe as a tribe, rather than the degree to which individual

members may or may not be assimilated into the non-Indian

community, determines the extent to which federal and tribal,

rather than state, jurisdiction applies on tribal trust land. Jd. In

addition, as was the case in John, the record before this Court

is absolutely devoid of any persuasive evidence whatsoever to

establish the “fact” that the Potawatomi Tribe, or any other

Oklahoma tribe, has been fully assimilated into the non-Indian

community, or that Oklahoma Indian tribes are any more or

less assimilated than tribes of any other state. Rather than

provide empirical evidence, expert testimony or the like, the

Tax Commission would have the Court make this far-reaching

determination on the basis of several sentences of dicta from

Oklahoma Tax Commission v. United States, 319 U.S. 598

(1943).?

? Cohen discusses Oklahoma Tax Commission in the

broader judicial context in which it arose, Cohen at 421-24, and

concludes that while “the result was not an abrupt change of

doctrine . . . the plurality opinion relied on broad reasoning

going well beyond the immediate issue." Jd. at 422. The

13

Oklahoma Tax Commission, when fairly analyzed, does not

support the unprecedented position for which the State cites it

here. First, the language quoted by the Tax Commission in its

brief did not even command the support of a majority of the

Court. Justice Black wrote the plurality opinion, from which

the State quoted, for four members of the Court, while an

equal number joined the dissent. Justice Douglas concurred in

the result and disposition, but without any indication that he

adopted the patronizing language upon which the State focuses

here.

Equally as important, this language, when read in context,

does not support the State’s argument in any event. Even

given the broadest possible reading, it cannot be said that a

majority of the Supreme Court was saying in 1943 that all

Indian tribal governments within the State of Oklahoma had

ceased to exist as a legal matter. Rather, the Court seemed to

be commenting on what it viewed as the dormant and largely

inactive state of those governments at that time and for some

unspecified period in the past. However, both the plurality and

dissenting opinions expressly recognized that the Oklahoma

Indian Welfare Act of 1936 was intended and had begun to

revitalize Oklahoma tribes. 319 U.S. at 603, n.5 (“under [the

OIWA] some progress has been made in the restoration of

tribal government"); id. at 613, n.1 ("They still exist . . . and

have recently been authorized to resume some of their former

powers” [citing the OIWA)).

The brief, unflattering description of the status of

Oklahoma tribes as of 1943 contained in Oklahoma Tax

question involved in that case concerned the application of state

inheritance taxes to the property of individual Indians. The

Court’s commentary on the status of Oklahoma tribal

governments at that time, wholly unsupported by any factual

information, was not necessary to decide the issue then before

the Court.

14

Commission is not unlike the well-documented history of the

ississippi Band of Choctaws outlined in United States v. John,

437 U.S. at 639-46. As John makes clear, however, the facts

that an Indian tribe may be only the remnant of a once larger

group, that its government may have lain dormant for years,

that its members may have been granted state citizenship and

that the Bureau of Indian Affairs may have periodically

abandoned its supervisory role and permitted a state to exercise

unauthorized jurisdiction over the tribe and its property, do not

mean that tribal existence has been terminated or that tribal

powers, if and when the tribe chooses to exercise them, have

been diminished. Id. at 652-54. Certainly nothing in the dicta

quoted by the State from Oklahoma Tax Commission suggests

a different result with respect to Oklahoma Indian tribes.

To the contrary, the facts and the legal principles

applicable in this case require the conclusion that the

Potawatomi lands at issue here are a “reservation” and ~

constitute “Indian Country” within the meaning of 18 U.S.C.

$1151(a). If this is so, then the State’s reliance on Mescalero

Apache Tribe v. Jones, 411 U.S. 145 (1973) and its bi

position that all tribal trust land in Oklahoma is ‘off-

reservation" land must also be rejected. Accordingly, tha’

portion of the decision below should be affirmed.

ll. | THE TAX COMMISSION’S COUNTERCLAIM

WAS PROPERLY DISMISSED UNDER THE

DOCTRINE OF TRIBAL SOVEREIGN

IMMUNITY FROM SUIT

The Tenth Circuit properly dismissed the Oklahoma Tax

Commission's counterclaim seeking affirmative relief against the

Potawatomi Tribe. The doctrine of tribal sovereign immunity

from unconsented suit is well established in this Court and its

validity has been expressly recognized by Congress. The State

has offered no compelling reason why this important doctrine

should suddenly be abandoned. Moreover, even if the principle

of tribal sovereign immunity should be reexamined, that task

should be left to Congress, in the exercise of its plenary

15

authority over Indian affairs.

A. The Potawatomi Tribe, Like All Federally

Recognized Tribal Governments, Enjoys Sovereign

f ity From U 1 Sui

It is a basic tenet of federal Indian law that Indian tribes

enjoy sovereign immunity from suit. Just as the United States

may not be sued without its consent, United States v. Testan,

424 U.S. 399 (1976); United States v. Sherwood, 312 U.S. 584

(1941), it is axiomatic that an Indian tribe may not be sued in

either federal or state court unless Congress or the tribe

consents to such suit, and such consent must be unequivocally

expressed. In applying this principle, the court below relied on

a long, unbroken line of authority. Santa Clara Pueblo v.

Martinez, 436 U.S. 49, 58 (1978) (“Indian tribes have long been

recognized as possessing the common-law immunity from suit

traditionally enjoyed by sovereign powers"); Puyallup Tribe, Inc.

v. Department of Game, 433 U.S. 165, 171-73 (1977); United

States v. United States Fidelity and Guaranty Co., 309 U.S. 506,

513 (1940); Turner v. United States, 248 U.S. 354, 357-58 (1919);

Seneca-Cayuga Tribe v. State ex rel. Thompson, 874 F.2d 709,

714 (10th Cir. 1989); Chemehuevi Indian Tribe v. California

State Board of Equalization, 492 F. Supp 55 (N.D. Cal. 1979),

aff'd, 757 F.2d 1047, 1051 (9h Cir. 1985) rev'd on other

grounds, 474 U.S. 9 (1987); Jicarilla Apache Tribe v. Andrus,

687 F.2d 1324, 1344 (10th Cir. 1982); Ramey Construction

Company v. Apache Tribe of the Mescalero Reservation, 673 F.2d

315, 319-20 (10th Cir. 1982).

Tribal sovereign immunity from suit is jurisdictional.

Absent an effective waiver, the assertion of. sovereign immunity

by a federally recognized Indian tribe deprives a court of

jurisdiction to adjudicate the claim, and the only proper

disposition is dismissal of the action. United States v. United

States Fidelity and Guaranty, 309 U.S. at 512 ("These Inc ‘an

Nations are exempt from suit without Congressional

authorization .... Absent that consent, the attempted exercise

of judicial power is void"); see also Puyallup Tribe Inc. v.

16

Department of Game, 433 U.S. at 172 (“Absent an effective

waiver Or consent, it is settled that a state court may ot

exercise jurisdiction over a recognized Indian tribe").

Tribal sovereign immunity is rooted in the unique historical

relationship between Indian tribes and the United States

government: tribes are immune from suit because they are

sovereigns predating the Constitution and because such

immunity is necessary to preserve their autonomous political

existence. Chemehuevi Indian Tribe, 757 F.2d at 1050-51; see

also United States v. Oregon, 657 F.2d 1009, 1013 (9th Cir.

1981). Moreover, it has long been held that tribal sovereign

immunity is necessary to preserve and protect tribal assets from

claims and judgments that would soon deplete tribal resources.

Maryland Casualty Co. v. Citizens National Bank of North

Hollywood, 361 F.2d 517, 521-22 (Sth Cir. 1966); Adams v.

Murphy, 165 F. 304, 308-09 (8th Cir. 1908); Thebo v. Choctaw

Tribe of Indians, 66 F. 372 (8th Cir. 1895); Cogo v. Central

Council of Tlingit and Haida Indians, 465 F. Supp. 1286 (D.

Al. 1979). See generally Atkinson v. Haldane, 569 P.2d 151,

157-63 (Alaska, 1977) (discussing public policy bases for tribal

sovereign immunity).

Congress has also expressly recognized the doctrine of

tribal sovereign immunity. In enacting the Indian Self-

Determination Act of 1975, 25 U.S.C. §450 et seg., Congress

explicitly stated that nothing in that Act wasto be construed as

"affecting. modifying, diminishing or otherwise impairing the

sovereign immunity from suit enjoyed by an Indian tribe." 25

U.S.C. $450n. The fact that Congress would so clearly state its

intention to protect tribal sovereign immunity plainly indicates

its belief in the continued validity and importance of this well

established principle.

Finally, the policy concerns that underlie tribal sovereign

immunity are as relevant today as they have ever been. _ As

succinctly summarized by this Court in its most recent discussion

of the subject, "|t}he common law sovereign immunity possessed

by the Tribe is a necessary corollary to Indian sovereignty and

a

17

self-governance. Three Affiliated Tribes v. Wold Engineering, 476

U.S. 877, 890 (1986) (emphasis added). In short, tribal

immunity from suit is not an antiquated doctrine, as suggested

by the State, but rather continues to serve important federal

Indi lici

B. Tribal Sovereign Immunity Also Extends to

Counterclaims _

The Tenth Circuit correctly held that the Potawatomi

Tribe’s sovereign immunity extends not only to original actions,

but also to counterclaims seeking affirmative relief against the

tribe. This general principle of sovereign immunity is well

established. J/linois Central Railroad Co. v. Public Utilities

Commission, 245 U.S. 493, 505 (1918); accord, U. S. v. Shaw,

309 U.S. 495 (1940). The same principle applies to cross-

complaints or counterclaims brought against an Indian tribe. In

United States v. United States Fidelity and Guaranty Co., this

Court concluded that:

[possessing this immunity from direct suit, we are of

tie Opinion [that a tribe] possesses similar immunity

from cross-suits. This seems necessarily to follow if

the public policy which protects a quasi-sovereignty

from judicial attack is to be made e:..ctive.

309 USS. at 513.

Nor can the Tax Commission persuasively argue that Rule

13(a) of the Federal Rules of Civil Procedure, authorizing

compulsory counterclaims in civil actions, constitutes a

congressional waiver of sovereign immunity. That contention

has been repeatedly rejected by a host of federal courts. United

States v. Longo, 464 F.2d 913 (8th Cir. 1972); United States v.

Wilson, 523 F. Supp. 874, 900, n.22 (N.D. Iowa, W. D. 1981);

United States v. Drunkwater, 434 F. Supp. 457, 460 (E.D. Va

1977); United States v. Edena, 372 F. Supp. 1317, 1319 (D.S.C.

1974); see also 6 C. Wright and A. Miller, Federal Practice and

Procedure, Civil $1427, p. 139 (1971). As the court below also

18

noted, it has likewise been rejected in the context of tribal

sovereign immunity. Chemehuevi Indian Tribe, 757 F.2d at

1053.

Finally, the Tenth Circuit correctly held that the narrow

recoupment exception to sovereign immunity, see Bull v. United

States, 295 U.S. 247, 261 (1935), was inapplicable to this case.

The recoupment exception permits a counterclaimant to reduce

the amount of money damages sought by the government under

certain circumstances, but does not permit an award of

affirmative relief against the governmental entity. United States

v. Agnew, 423 F.2d 513 (9h Cir. 1970); see also Frederick v.

United States, 386 F.2d 481, 488 (Sth Cir. 1967). Where, as

here, the tribe's complaint sought only injunctive relief, the

recoupment exception cannot be construed to authorize a

counterclaim against the Potawatomi Tribe seeking affirmative

declaratory or monetary relief.

S The Enforcement Problems of Which The Tax

Commission Complains Are Theoretical At Best

And Do Not Warrant Abolishing Tribal Sovereign

Immunity

The Tax Commission has invited the Court to overrule the

longstanding doctrine of tribal sovereign immunity because, the

Commission says, its interest in collecting state taxes by judicial

means outweighs the principles of tribal adtonomy and self-

government that the doctrine protects. Tax Commission's Brief

at 27-39. That cortsation, however, is both speculative and

incorrect.

Federal courts, including this Court, have routinely rejected

arguments that tribal sovereign immunity should be ignored

because of practical problems caused by its enforcement. For

example, in Chemehuevi Indian Tribe v. California State Board

of Equalization, the State of California filed a counterclaim

against the tribe seeking monetary relief for unpaid cigarette

taxes. In dismissing the state’s counterclaim, the district court

noted that:

19

[t}he Tribe’s sovereign immunity might create

practical difficulties for the Board in attempting to

enforce its cigarette tax laws against the tribe, but

these potential enforcement problems cannot override

the Tribe’s claim of sovereign immunity.

492 F. Supp 55, 61, (N.D. Cal. 1979), aff'd, 757 F.2d 1047 (9th

Cir. 1985), rev'd on other grounds, 474 U.S. 9 (1987).

This Court has taken the same position in other contexts.

For example, in Puyallup Tribe v. Department of Game, 433

U.S. 165 (1977) the Court dismissed the state’s action against

the tribe seeking to regulate tribal fishing activities on the basis

of sovereign. immunity. In so doing, the Court clearly

RP eve mcr me opera problent that its decision

to deny the state relief against the tribe would create.

Nevertheless, the Court found these considerations to be

inadequate to override the tribe's assertion of immunity in that

case. Id. at 178.

More recently, the Court upheld the doctrine of tribal

sovereign immunity against allegations that the State of North

Dakota could deny access to its courts unless tribes in that state

agreed to waive their immunity from suit. In rejecting this

contention, the Court stated:

The perceived inequity of permitting the Tribe to

recover from a non-Indian for civil wrongs in

instances where a non-Indian allegedly may not

recover against the Tribe simply must be accepted in

view of the overriding federal and tribal interests in

these circumstances, much in the same way that the

perceived inequity of permitting the United States or

North Dakota to sue in cases where they could not

be sued as defendants because of their sovereign

immunity also must be accepted.

Three Affiliated Tribes v. Wold Enginecring, 476 U.S. at 893.

Ce ee

20

Thus, enforcement problems occasioned by the assertion of

tribal sovereign immunity from suit have never been deemed to

warrant any impairment of that doctrine.

The Tax Commission further argues thai tribal sovereign

immunity should be abolished with respect to commercial

activities involving a tribe and non-Indians. That assertion also

is clearly without merit. United States v. United States Fidelity

and Guaranty Co., one of the seminal cases in this area,

involved a commercial lawsuit over coal leases between the

Choctaw and Chickasaw Tribes and a non-Indian coal company

and its surety. Likewise, Maryland Casualty Co. v. Citizens

National Bank, 361 F.2d 517, involved a dispute between the

Seminole Tribe and a contractor over a construction project.

The Eighth Circuit Court of Appeals held that a limited waiver

of tribal sovereign immunity shielded certain tribal assets from

garnishment proceedings. In reaching this conclusion, the court

noted:

The fact that the Seminole Tribe was engaged in an

enterprise private or commercial in character, rather

than governmental, is not material. It is in such

enterprises and transactions that the Indian tribes and

the Indians need protection.

-

To construe the immunity to suit as not applying to

suits on liabilities arising out of private transactions

would defeat the very purpose of Congress in not

relaxing the immunity, namely, the protection of the

interests and property of the tribes and the individual

Indians.

361 F.2d at 521-22. The fact that the present case involves a

commercial venture by the Potawatomi Tribe in no way

diminishes its sovereign immunity from unconsented suit.

Finally, even if this Court should decide that the

—<

21

~

Potawatomi Tribe must collect state taxes on its sales to non-

memberr, the Tax Commission has failed to show any

compelling reason why the principle of tribal sovereign immunity

should be abandoned. There is no evidence that the

Potawatomi Tribe, or any other Oklahoma tribe, would ignore

such a direct ruling by this Court. In addition, the State has

alternative means to enforce tribal compliance with any such

ruling. In Washington v. Confederated Tribes of the Colville

Indian Reservation, 447 U.S. 134 (1980), the Court authorized

state seizures of untaxed cigarettes off the reservation, stating

that “[b]y seizing cigarettes en route to the reservation, the

State polices against wholesale evasion of its own valid taxes

without unnecessarily intruding on core tribal interests." Jd. at

162. There is no evidence before the Court that this

enforcement mechanism has not proven adequate in the State

of Washington. As a result, the Tax Commission’s argument

that such seizures, or even the threat of such seizures, would

not prove effective in Oklahoma, is entirely speculative.

Certainly, the Court should not reverse the longstanding line of

authority upholding tribal sovereign immunity, which would have

the effect of severely intruding on "core tribal interests," on the

basis of such conjecture.

In Santa Clara Pueblo v. Martinez, 436 U.S. 49, the Court

recognized that tribal immunity from suit, like all other aspects

of tribal sovereignty, “is subject to the superior and plenary

authority of Congress." Id. at 58. To date, Congress has acted

to preserve and protect tribal sovereign immunity. 25 U.S.C.

$450n. To the extent that the question bears reexamination, it

is for Congress and not the judiciary to make that

determination. Unless and until Congress acts to diminish this

aspect of tribal sovereignty, this Court, like the court below,

should uphold the doctrine of tribal sovereign immunity as an

essential element of federal Indian law.

CONCLUSION

The Oklahoma Tax Commission is asking the Court to

adopt broad, unprecedenied positions that go well beyond what

tribal trust land was "Indian Country" under 18 U.S.C. §1151(a)

and that the State’s counterclaim against the tribe must be

dismissed on the basis of tribal sovereign immunity. Those

decisions were correct and we respectfully urge that they be

One East Camelback Road, Suite 1100

Phoenix, Arizona 85012-1656

Attorneys for Amici Curiae

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a ly