Opposition Brief — Kiowa Tribe of Oklahoma v. Aircraft Equipment Co.

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No. 97-216 © oct 6 997

CLEP!

In The animal

Supreme Court of the United States

October Term, 1997

*

THE KIOWA TRIBE OF OKLAHOMA

a federally recognized Indian Tribe,

Petitioner,

vs.

AIRCRAFT EQUIPMENT COMPANY

an Oklahoma Partnership, et al.,

Respondents.

¢

On Petition For Writ Of Certiorari

To The Oklahoma Supreme Court

+

BRIEF IN OPPOSITION TO PETITION

FOR WRIT OF CERTIORARI

¢

Donna N. BLAKLEY

Counsel of Record

SHARON TAYLOR THOMAS

Janis W. PRESLAR

Haut, Estitt, HARDWICK,

GaBLe, GOLDEN & NELSON, P.C.

2900 Liberty Tower,

100 North Broadway

Oklahoma City, OK 73102

Phone: (405) 553-2828

Attorneys for Respondents, Aquila

Energy Corporation, the Home-Stake

Royalty Corporation, Sun Company,

Inc. (R & M), Associated Natural

Gas, Inc., Associated Transport &

Trading Company, and Kerr-McGee

Refining Corporation

October 6, 1997

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTION PRESENTED

Whether an injunction in support of interpleader,

entered in an action to enforce against an Indian tribe a

judgment valid on its face, which was rendered on a

transaction arising outside of Indian Country, interferes

with the tribe’s right to make its own rules and be gov-

erned by them.

ii

PARENTS/SUBSIDIARIES OF

CORPORATE RESPONDENTS

The parent and/or subsidiaries of each of these

Respondents are:

Respondent, Aquila Energy Corporation:

UtiliCorp. United, Inc.

Aquila Gas Pipeline Corporation

Respondent, The Home-Stake Royalty Corporation:

The Home-Stake Royalties, Ltd.

The Home-Stake Gas Corporation

Respondent, Sun Company, Inc. (R&M):

Sun Company, Inc.

Respondent, Associated Natural Gas, Inc. (now Duke

Energy Field Services, Inc., formerly PanEnergy Field

Services, Inc.):

Duke Energy Natural Gas Corporation

(formerly PanEnergy Natural

Gas Corporation)

AIM Pipeline Company

ANGI Gas Services Company

Associated Louisiana Intrastate

Pipeline Company

Associated Storage Corporation

Centana Gathering Company

Centana Oil Gathering Company

Centana Intrastate Pipeline Company

PanEnergy Comite Company

Grand Valley Gas Canada, Ltd.

GV Power Corporation II

National Helium Corporation

ili

PARENTS/SUBSIDIARIES OF

CORPORATE RESPONDENTS - Continued

PanEnergy Dauphin Island Company

PanEnergy Financial Services, Inc.

PanEnergy Intrastate Pipeline Company

PanEnergy Louisiana Corporation

PanEnergy Louisiana Intrastate Company

PanEnergy Marketing Company

PanEnergy Mobile Bay Processing Company

PanEnergy NGL Services, Inc.

PanEnergy Texas Gathering Company

PanEnergy Texas Intrastate

Pipeline Company

Respondent, Associated Transport and Trading Company

(now Duke Energy Transport and Trading Company, for-

merly PanEnergy Transport and Trading Company):

Duke Energy Natural Gas

Corporation (formerly

PanEnergy Natural

: Gas Corporation)

Lubrication Services, Inc.

Duke Energy Pipe Line Company

iv

TABLE OF CONTENTS

Fis 8 ey i} sy | 0 RR ey eer i

PARENTS/SUBSIDIARIES OF CORPORATE

gk ea errr er ae rer re ere rrr ii

gy te Be ees py Sr rer ree iv

TABLE CP PPR oo ob 56 deeb cadetn tesa ces Vv

STATUTORY PROVISIONS INVOLVED............. 1

SEAT EMERINE OO TEU CAB oes dtc eeicineves 2

REASONS FOR DENYING CERTIORARI........... 7

I. THE DISTRICT COURT HAS THE POWER TO

ENFORCE ITS JUDGMENT AGAINST THE TRIBE

Il. AN INJUNCTION, RENDERED UNDER NON-

DISCRIMINATORY STATE LAW, WHICH WILL

REMAIN IN EFFECT ONLY UNTIL THE JURIS-

DICTIONAL ISSUE RAISED BY THE TRIBE IS

FINALLY DECIDED, IS PROPER.............. 11

II. THE TRIBE’S ATTEMPT TO COLLATERALLY

ATTACK THE UNDERLYING JUDGMENT

SOUGHT TO BE ENFORCED IN THIS ACTION

Rey See RN 91 Ou kn Couto 5 stds nce sivas 14

AAT Oe ob 4 ip tt dn aes Coa eadg Ves oNsh es Ph ees 17

Vv

TABLE OF AUTHORITIES

Page

CASES

Aircraft Equipment Co. v. Kiowa Tribe of Oklahoma,

7 we. Bt |} eee ere ee 3, 6, 16

Barnett v. Newcomer, 307 P.2d 148 (Okla. 1957)....... 16

California v. Cabazon Band of Mission Indians, 480

U.S. 202, 107 S. Ct. 1083, 94 L. Ed. 2d 244 (1987) ..... 9

Consolidation Co. v. Bailey, 330 F. Supp. 474 (W.D.

Pa. 1971), affirmed, 467 F.2d 1124 (3rd Cir. 1972),

cert. denied, 410 U.S. 930, 93 S. Ct. 1372, 35 L. Ed.

Die DOE RRS E Is oi enc 8 esd aie bg VAs Vee ER ee 13

Cook v. Cook, 342 U.S. 126, 72 S. Ct. 157, 96 L. Ed.

146 CASS1) 5 oe sss MO Pepe mie PoC eee Pe 15

Cramer v. Phoenix Mut. Life Ins. Co., 91 F.2d 141

(8th Cir. 1937), cert. denied, 302 U.S. 739, 58S. Ct.

MA, BR Ee SER CES oi sees ies eesteuee 12

Durfee v. Duke, 375 U.S. 106, 84 S. Ct. 242, 11 L. Ed.

en Te CEPR ov bk ci eas cee RECS ee 16

Evans v. Wright, 13 W. R. 468 (C. P. 1865)........... 12

Hadnot v. Shaw, 826 P.2d 978 (Okla. 1992) ............ 2

Holcomb v. Aetna Life Insurance Co., 228 F.2d 75

(10th Cir. 1955), cert. denied, 350 U.S. 986, 76 S.

Ct. 073, 30D: Gd GES CIID as on isn sea sins c 12

Kennerly v. District Court of Montana, 400 U.S. 423,

91 S. Ct. 400, 27 L. Bd. 20 SO7 (8971)... ....2.2220. 9

Little Horn State Bank v. Stops, 170 Mont. 510, 555

P.2d 211 (1976), cert. denied, 431 U.S. 924, 97 S.

Ct. 2398, 33 1. Bd. 2a 2a (IGE) oes s eeieees 7, 8, 10

vi

TABLE OF AUTHORITIES — Continued

Page

Merrion v. Jicarilla Apache Tribe, 455 U.S. 130, 102 S.

Ct. OO6, 7h La Be. 2b Ze See okie Cenc Salieseemn cnn 9

Mescalero Apache Tribe v. Jones, 411 U.S. 145, 93 S.

Ct. 1267, 36 ©. Bd. 2d TSG CERT EP os sod veieneas 9, 10

Oklahoma Tax Commission v. Citizens Band Pot-

tawatomie Indian Tribe, 498 U.S. 505, 111 S. Ct.

905, 112-4. Bet. Be 158s CHG ia reece cae dees 15

Organized Village of Kake v. Egan, 369 U.S. 60, 82 S.

Ce. S62, 7 Gy Ge. Be Bra eee occceadyetisanas aes 11

Pam-To-Pee v. U.S., 187 U.S. 371, 23 S. Ct. 142, 47 L.

Bak, 221 ESOC okies cee eee eae 9, 10

Pettit v. American Nat. Bank of Austin, 649 P.2d 525

(Cede. SOBRE si cic's Ses vise doy vo cae ae en eta 15

Trustees of Somerset Academy v. Picher, 90 F.2d 741

(Ist Cir. 1937), cert. denied, 302 U.S. 737, 58 S. Ct.

199, 2 1. Bd. BI CAR i Soke cheek ho ntwGlcecane 15

UNC Resources, Inc. v. Benally, 518 F. Supp. 1046

(D.C. Avia. WOR i ikke s cence aves wear cere 14 |

U.S. ex rel Riggs v. Board of Supervisors of Johnson |

County, lowa, 73 U.S. 166, 6 Wall. 166, 18 L. Ed.

re hs Pe erie | rmeiny b yee ey 7,9

U.S. ex rel. Robinson Rancheria v. Borneo, Inc., 971

B2ck DOG COGN CA Rs 6 ican ioc toc elesaeenerenny 16

U.S. v. Major Oil Corp., 583 F.2d 1152 (10th Cir. |

LOPE) o o'o.0.064' Keg SAV RCS OR SN We PRR TAW ERS IER IER ROE mec 13 |

United States v. Hosteen Tse-Kesi, 191 F.2d 518 (10th

Che BSB) ince eva Chie ck aos toe el eee 14

EE eVOX7EE

Vil

TABLE OF AUTHORITIES - Continued

United States v. State of Oregon, 657 F.2d 1009 (9th

Ce SEED ick coaee eg ones din wade vend Hwee vei 13

Washington v. Confederated Tribes of Colville Indian

Reservation, 447 U.S. 134, 100 S. Ct. 2069, 65 L.

Sas SO Ns ahi oa sg NS Seah S abe hoe beteomaae 9

Williams v. Lee, 358 U.S. 217, 79 S. Ct. 269, 3 L. Ed.

ee REAR De Tog gee aber Pom Magny leabyt Mee Ye 8, 9

STATUTES AND RULES

Okla. Stat. tit. 12, § 2022 (1991)................ ay Ma

Rene Mee SEONe hy hs io enh pe cus Seer hee cdcdaeucviwes 12

MISCELLANEOUS

C. Wright, A. Miller & M. Kane, Federal Practice

pen Preceisive ] TFUE COGS) 5 5.66 nvs on cdaeckecntes 12

RESPONDENTS’ BRIEF IN OPPOSITION

TO PETITION FOR WRIT OF CERTIORARI

Respondents, Aquila Energy Corporation, The

Home-Stake Royalty Corporation, Sun Company, Inc.

(R&M), Associated Natural Gas, Inc., Associated Trans-

port and Trading Company and Kerr-McGee Refining

Corporation (referred to herein collectively as “the Pur-

chasers”), respectfully request that this Court deny the

petition for writ of certiorari, seeking review of the Okla-

homa Supreme Court’s opinion in this case.

¢

STATUTORY PROVISIONS INVOLVED

Okla. Stat. tit. 12, § 2022 (1991), is the Oklahoma

statute upon which the Purchasers, as disinterested stake-

holders, were permitted to deliver the funds in question

to the court by way of interpleader. That statute provides

in pertinent part:

A. Persons having claims against the plaintiff

may be joined as defendants and required to

interplead when their claims are such that the

plaintiff is or may be exposed to double or mul-

tiple liability... . A defendant exposed to simi-

lar liability may obtain such interpleader by

way of cross-claim or counterclaim. .. .

* + +

C. The court may make an order for the safe-

keeping of the subject of the action or for its

payment or delivery into the court. .. . Where

the party seeking relief by way of interpleader

claims no interest in the subject of the action

and the subject of the action has been deposited

with the court... , the court should discharge

him from the action and from liability as to the

claims of the other parties to the action with

costs and, in the discretion of the court, a rea-

sonable attorney fee.

STATEMENT OF THE CASE

Introduction. Petitioner, Kiowa Tribe of Oklahoma

(the “Tribe”), makes several statements in its Petition for

Writ of Certiorari that are not supported by the record in

this case. The Tribe asserts these facts to support its claim

that the collection remedies provided to Respondent Air-

craft Equipment Company (“Aircraft”), and the inter-

pleader remedy provided to the Purchasers in this case

interfere with the Tribe’s right to self government and

self-determination.

However, these facts were neither presented to nor

considered by the Oklahoma Supreme Court in reaching

its decision in this case. The record in this case is limited

and very few facts were presented to the Oklahoma

Supreme Court. See Kiowa’s Brief in Chief, Appendix

5-8.! The focus of the Tribe’s briefs before the Oklahoma

Supreme Court was its argument that Aircraft’s action to

enforce the prior judgment violated the Tribe’s sovereign

' In accordance with its normal practice, the Oklahoma

Supreme Court decided the appeal based on the briefs

submitted by the parties. Any issues not addressed in an

appellant’s brief are deemed waived. Hadnot v. Shaw, 826 P.2d

978, 981 (Okla. 1992). 55

immunity for the same reason that the entry of the under-

lying judgment in the prior lawsuit violated the Tribe’s

right to sovereign immunity. The Tribe did not assert any

additional authorities to support its argument that the

enforcement remedies interfered with its right of taxation

or self-government, as pointed out by the Oklahoma

Supreme-Court in its opinion. (Opinion, {J 9, 10, Peti-

tioner’s Appendix 10-11).

Trial court proceedings. Aircraft filed this case seeking

equitable relief in the nature of a creditor’s bill to satisfy

a money judgment against the Tribe that was entered in a

prior lawsuit. The underlying money judgment was a

result of a breach of a contract between the Tribe and a

non-Indian, executed outside of Indian Country. That

contract was not attached to any pleading, nor was it

introduced into evidence or otherwise made a part of the

record in this case.

The judgment in the prior lawsuit was affirmed while

the appeal in this case was pending before the Oklahoma

Supreme Court. Aircraft Equipment Company v. Kiowa Tribe

of Oklahoma, 921 P.2d 359 (Okla. 1996) (“Aircraft I’). The

Tribe did not challenge the Oklahoma Supreme Court's

opinion in Aircraft I by way of certiorari, and the underly-

ing money judgment is now a final judgment.

Aircraft brought this lawsuit against the Tribe, Wat-

son Management Group, Inc. (“Watson”), and certain oil

and gas entities that purchased oil and gas produced

from Kiowa lands and remitted severance taxes on such

production to the Tribe, including the Purchasers. (Peti-

tion and Amended Petition, R. 1, 21). Watson collected

severance taxes under a contract with the Tribe, under

which Watson was paid 50% of the amount of the taxes

collected. (Petition, 44, R. 1; Answer 44, R. 125). Aircraft

alleged that it was entitled to enforce its judgment by

collecting severance taxes directly from the Purchasers, in

priority over the claim of either Watson or the Tribe.

The Tribe asserted sovereign immunity and chal-

lenged the trial court’s power to entertain Aircraft’s suit.

Because of the conflicting claims, the Purchasers, as disin-

terested stakeholders, sought to interplead the disputed

severance taxes into court on a continuing monthly basis

until final resolution of the dispute between Aircraft and

the Tribe, pursuant to Okla. Stat. tit. 12, § 2022. (R.

158-163, 164-167, 177-179, 210-215, 216-219, 281-285,

286-288, 355-359, 360-364).

There is no support in the record for the Tribe's

statement that this action involves “all of the oil and gas

severance taxes imposed by Kiowa upon those who pro-

duce oil and gas from Kiowa Indian Country.” (Petition

for a Writ of Certiorari at 4). In Aircraft’s Petition, cited

by the Tribe, and in its Amended Petition, Aircraft sought

relief only with respect to the severance taxes remitted by

the named oil and gas entities. (R. 1, 21). Nor is there any

support in the record for the Tribe’s statement that its

tribal functions were “reduced or eliminated.” (Petition

for a Writ of Certiorari at 12). With respect to the Tribe’s

statement that its severance taxes comprise about one-

third of the Tribe’s tax revenues, there is no evidence in

this case of how much of that one-third is comprised of

the severance taxes remitted by the oil and gas entities

named in this case. Moreover, there is no evidence show-

ing how much of the Tribe’s total revenues are comprised

of the Tribe’s tax revenues.

Contrary to the Tribe’s statement at page 5 of its

Petition, the oil and gas entities that were sued are not

production companies who owed the severance taxes.?

Nor did the Tribe assert that payment of the severance

taxes to the court or Aircraft constituted a failure to pay

the tax or seek foreclosure of a resulting tax lien.*

By order filed July 5, 1995, the trial court granted the

Purchasers’ request to interplead the severance taxes into

court, restrained the Tribe and Aircraft from taking any

action against the Purchasers relating to the severance

taxes paid into court, and dismissed the Purchasers from

the action. (Order, R. 409-421.) On October 13, 1995, the

court entered judgment finding that Aircraft was entitled

2 Under the Tribe’s laws, producers of the oil and gas were

liable for the severance taxes and the Tribe had the right to

impose a tax lien upon the producers’ oil and gas leasehold

esate if the severance taxes were not paid. However, purchasers

of the production were authorized to remit the taxes to the Tribe

on behalf of the producers. (Tribe’s Answer at 2, J 2, R. 125).

3 The Tribe alleged in its answer to the petition that the

producers were necessary parties because their interests in the

oil and gas leasehold estates were subject to a tax lien and

foreclosure. Id. at 4, J 5, R. 125. The Tribe did not pursue its

claim that the producers should be joined. The Tribe’s laws,

however, provide that monetary and other penalties can be

imposed upon purchasers for late payments of the severance

tax, and provided a mechanism by which the Tribe could perfect

a lien against the producer’s share of oil and gas produced and

the proceeds thereof, including the production ard proceeds in

the hands of purchasers. (See Tribe’s laws attached to Amended

Answer, R. 188). The Tribe did not seek to perfect or foreclose

any such lien in this case.

to recover the disputed severance taxes to satisfy Air-

craft’s judgment in Aircraft I. However, the court pro-

vided that the severance taxes due from the Purchasers

should be paid into court, rather than to Aircraft, until

further order of the court. The court further ordered that

the Tribe should be restrained from enforcing any lien

against the Purchasers with respect to the severance taxes

which were paid into court. (Journal Entry of Judgment,

R. I1-129-III 152).

The appeals from the judgment and order. Aircraft filed

an appeal, challenging the portion of the judgment grant-

ing interpleader.* The Tribe also filed an appeal from the

judgment, asserting that the trial court did not have the

authority to enforce the underlying judgment for the

same reasons that it did not have the authority to enter

the underlying judgment. The Tribe did not challenge the

Purchasers’ right to file an interpleader action or the

court’s jurisdiction to preside over such interpleader

action. A review of the Tribe’s Brief in Chief reveals that

the only challenge to the court’s jurisdiction was the

court’s “power over damage suits or a suit to enforce

damage judgments.” (Appendix 8). In fact, in responding

to Aircraft’s brief, challenging the interpleader, the Tribe

stated:

The oil company defendants found themselves,

on the one hand, subject to a possible court

4 Aircraft’s appeal was docketed in Case No. 85,975, and

characterized by the Oklahoma Supreme Court as a cross-

appeal. (Opinion, { 12, Petitioner’s Appendix 12). The issue was

resolved on appeal in favor of the Purchasers. Id.

order directing them to pay Kiowa’s tax reve-

nues to Aircraft, and, on the other hand, facing

Kiowa’s assertion that such an order was juris-

dictionally void, and Kiowa would foreclose its

tax liens upon the oil companies’ oil and gas

leases. Understandably, the oil companies interplead

the tax revenues and asked to be relieved from fur-

ther proceedings.

(Appendix 29, emphasis added).

The Oklahoma Supreme Court affirmed the order

granting interpleader and the judgment.

—~ 4

REASONS FOR DENYING CERTIORARI

I. THE DISTRICT COURT HAS THE POWER TO

ENFORCE ITS JUDGMENT AGAINST THE TRIBE.

It has long been held that a court’s power to render a

judgment includes the power to enforce its judgment.

U.S. ex rel Riggs v. Board of Supervisors of Johnson County,

lowa, 73 U.S. 166, 6 Wall. 166, 18 L. Ed. 768 (1867); Little

Horn State Bank v. Stops, 170 Mont. 510, 555 P.2d 211

(1976), cert. denied, 431 U.S. 924, 97 S. Ct. 2198, 53 L. Ed.

2d 238 (1977). The case of Little Horn State Bank involved

facts similar to the instant case. In that case, a bank

obtained a judgment against the Indian defendants. The

state district court found that the plaintiff bank could not

execute on the Indian defendants’ property, located on

the reservation, in order to satisfy its judgment. The bank

appealed. On appeal, the Montana Supreme Court

framed the issue based on this Court’s pronouncement in

Williams v. Lee, 358 U.S. 217, 220, 79 S. Ct. 269, 271, 3 L.

Ed. 2d 251, 254 (1959), wherein the Court stated:

Essentially, absent governing acts of Congress,

the question has always been whether the state

action infringed on the right of reservation

Indians to make their own laws and be ruled by

them.

The question- presented in Little Horn State Bank was

virtually identical to that presented in this case:

[W]hether state action, in the form of a writ of

execution to enforce a judgment rendered on a

transaction arising outside the reservation,

interferes with the tribe’s right to make its own

rules and be governed by them.

Little Horn State Bank, 555 P.2d at 213. The court held the

enforcement of the bank’s judgment did not interfere

with the tribe’s right of self-government.

The court said that the tribe provided no means of

enforcing the state court judgment and was not subject to

the full faith and credit clause, as are sister states. Conse-

quently:

Until the Crow Tribe has provided a means of

such enforcement or acted in some manner

within this area, we fail to see how tribal self-

government is interfered with by assuming that

reservation Indians pay for their debts incurred

off the reservation.

Little Horn State Bank, 555 P.2d at 214. The court pointed

out that the defendant tribal members elected to leave the

reservation and conduct their affairs within the jurisdic-

tion of the state courts. By doing so, they submitted

themselves to the laws of the state. They could not violate

those laws and then retreat to the sanctuary of the reser-

vation for protection. The court rejected the authorities

cited by the Indian defendants because this was not a

case of a non-member choosing to transact his business

within the boundaries of the Indian reservation, as in

Williams v. Lee, supra, or Kennerly v. District Court of

Montana, 400 U.S. 423, 91 S. Ct. 480, 27 L. Ed. 2d 507

(1971).5

The court relied on this Court’s holding in Mescalero

Apache Tribe v. Jones, 411 U.S. 145, 148, 93 S. Ct. 1267, 1270,

36 L. Ed. 2d 114, 119 (1973), wherein the Court said:

Absent express federal law to the contrary,

Indians going beyond reservation boundaries

have generally been held subject to non-discrim-

inatory state law otherwise applicable to all citi-

zens of the state.

The court found the Indian defendants went beyond the

boundaries of the Crow Indian Reservation and that the

execution statutes were nondiscriminatory and otherwise

applicable to all citizens of the state. The court said the

appeal essentially boiled down to whether the jurisdic-

tion granted in Mescalero is the same as that defined by

the United States Supreme Court in Riggs, 73 U.S. at 166

and Pam-To-Pee v. U.S., 187 U.S. 371, 23 S. Ct. 142, 47 L.

5 In its Petition, the Tribe has also erroneously relied upon

cases not involving a tribal member’s transaction of business

outside of Indian country. See, e.g., Washington v. Confederated

Tribes of Colville Indian Reservation, 447 U.S. 134, 100 S. Ct. 2069,

65 L. Ed. 2d 10 (1980); Merrion v. Jicarilla Apache Tribe, 455 U.S.

130, 102 S. Ct. 894, 71 L. Ed. 2d 21 (1982); California v. Cabazon

Band of Mission Indians, 480 U.S. 202, 107 S. Ct. 1083, 94 L. Ed. 2d

244 (1987).

10

Ed. 221 (1902), or whether it was merely the opportunity

to render a judgment incapable of enforcement. The court

said the latter would be absurd and quoted from this

Court’s decision in Pam-to-Pee, wherein the Court stated:

The award of execution is a part, and an essen-

tial part of every judgment passed on by a court

exercising judicial power. It is no judgment, in

the legal sense of the term, without it. Without

such an award the judgment would be inopera-

tive and nugatory, leaving the aggrieved party

without a remedy. It would be merely an opin-

ion, which would remain a dead letter, and

without any operation upon the rights of the

parties.

Pam-To-Pee, 187 U.S. at 383. To avoid such an illogical

situation, the court held that a writ of execution from the

state court was valid within the Indian reservation when

such was a means of enforcing a valid judgment of that

court. The court pointed out that individual rights, due

process, impartial and effective maintenance of justice,

and the public confidence in and respect for the courts is

paramount in the resolution of these kinds of matters.

The citizens of the state would be grossly deprived if,

under the guise of individual due process, they not only

had no speedy, adequate, remedy, but no remedy at all.

As stated by the Montana Supreme Court in Little

Horn State Bank, its decision in that case is supported by

the holdings of this Court. This Court has held that,

absent express federal law to the contrary, Indians going

beyond reservation boundaries are subject to non-

discriminatory state law otherwise applicable to all citi-

zens of the state. Mescalero Apache Tribe v. Jones, 411 U.S.

11

at 148-49, 36 L. Ed. 2d at 119; Organized Village of Kake v.

Egan, 369 U.S. 60, 72, 82 S. Ct. 562, 7 L. Ed. 2d 573, 582

(1962). The Court has declared that state laws may be

applied to Indians going beyond reservation boundaries,

unless such application would interfere with the reserva-

tion’s self-government or impair a right granted or

reserved by federal law. Organized Village of Kake, 369 U.S.

at 75.

II. AN INJUNCTION, RENDERED UNDER NON-

DISCRIMINATORY STATE LAW, WHICH WILL

REMAIN IN EFFECT ONLY UNTIL THE JURIS-

DICTIONAL ISSUE RAISED BY THE TRIBE IS

FINALLY DECIDED, IS PROPER.

The Tribe relied ia this case on a stipulation entered

into in a prior lawsuit by Aircraft that severance taxes

collected by the Tribe make up about one-third of the

Tribe’s total tax revenue and these tax revenues are used

for various enumerated governmental functions. The

Purchasers were not parties to this stipulation. Neverthe-

less, the record does not reflect what percentage of the

Tribe’s tax revenues make up the Tribe’s total revenues -

.000001%, 1%, 10%? Moreover, there is no support in the

record that governmental functions of the Tribe were

reduced or eliminated as a result of the severance taxes

owed by the Purchasers beirig paid into court.

6 Contrary to the Tribe’s assertion, the stipulation does not

provide that the severance taxes collected from the Respondent oil

and gas entities make up one-third of the Tribe’s total tax

revenues. There is no support in the record for the Tribe’s

statement that the targeted tax revenue is all of the oil and gas

severance taxes imposed by the Tribe.

12

The court’s injunction in this case was part and par-

cel of the Purchasers’ request to interplead the severance

taxes into court. Oklahoma’s interpleader statute, Okla.

Stat. tit. 12, § 2022, upon which the court relied to grant

interpleader in this case, is based on Fed. R. Civ. P. 22,7

which is based on the following principle:

The principle of interpleader is that, where two

persons are engaged in a dispute, and that

which is to be the fruit of the dispute is in the

hands of a third party, who is willing to give up

according to the result of the dispute,

then, . . . that third person . . . is not to be

obliged to be at the expense and risk of defend-

ing an action, but, on giving up the thing... , he

is to be relieved, and the Court directs that the

persons between whom the dispute really exists

shall fight it out at their own expense. The mere

statement of the principle shows its justice.

C. Wright, A. Miller & M. Kane, Federal Practice and

Procedure § 1702 at 493 (1986), citing Evans v. Wright, 13 W.

R. 468 (C. P. 1865). Essentially, interpleader forces the

claimants to contest what essentially is a controversy

between them without embroiling the disinterested stake-

holder in the litigation over the merits of their respective

claims. Cramer v. Phoenix Mut. Life Ins. Co., 91 F.2d 141

(8th Cir. 1937), cert. denied, 302 U.S. 739, 58 S. Ct. 141, 82

L. Ed. 571 (1937).

Injunctive relief may be entered in an interpleader

action and is recognized as being especially proper in

interpleader. Holcomb v. Aetna Life Insurance Co., 228 F.2d

7 Oklahoma Committee Comment to § 2022.

13

75, 82-83 (10th Cir. 1955), cert. denied, 350 U.S. 986, 76 S.

Ct. 473, 100 L. Ed. 853 (1956); U.S. v. Major Oil Corp., 583

F.2d 1152 (10th Cir. 1978). In Consolidation Co. v. Bailey,

330 F. Supp. 474, 478 (W.D. Pa. 1971), affirmed, 467 F.2d

1124 (3rd Cir. 1972), cert. denied, 410 U.S. 930, 93 S. Ct.

1372, 35 L. Ed. 2d 592 (1973), the court held that affirma-

tive injunctive relief is part and parcel of an interpleader

action, stating that “any injunctions issued against suits

with respect to the fund are simply ancillary or incidental

to the disposition of the fund and merely have the pur-

pose of enforcing the distribution made by the court.”

Thus, affirmative, injunctive relief is expected, proper

and fully within the power of the court in an interpleader

action, part and parcel of actions brought for the preser-

vation of a fund for the benefit of others. The very

purpose of an interpleader action is the preservation of

the fund and it would be illogical and self-defeating for a

court not to grant injunctive relief. Id.

The injunction issued in this case is to remain in

effect until the jurisdictional issue raised by the Tribe is

finally determined. Interpleader and the accompanying

injunction was issued pursuant to nondiscriminatory

Oklahoma state law to protect all parties in the action,

including the Tribe. By allowing the Purchasers to inter-

plead the disputed funds until the jurisdictional issue is

finally determined, the funds are not paid over to Aircraft

(per the court’s judgment) and there is no risk of the Tribe

not being able to recover the funds if it should finally

prevail on the jurisdictional issue.

Injunctions have previously been granted against

Indians in cases in order to prevent irreparable injury.

See, e.g., United States v. State of Oregon, 657 F.2d 1009 (9th

14

Cir. 1981) (preliminary injunction restricting on-reserva-

tion fishing by Indian tribe); United States v. Hosteen Tse-

Kesi, 191 F.2d 518 (10th Cir. 1951) (Navajo Indians

enjoined from repeated and continuing trespasses on

lands of the United States; UNC Resources, Inc. v. Benally,

518 F. Supp. 1046 (D.C. Ariz. 1981), (preliminary injunc-

tion barring the Navajo Tribal Court from exercising

jurisdiction until the district court determined whether it

or the tribal court had jurisdiction over an Indian plain-

tiff’s civil suit against a non-Indian defendant which

arose out of allegedly tortious conduct occurring off the

reservation).

In this case, interpleader and the accompanying

injunction were granted pursuant to nondiscriminatory

Oklahoma state law. The injunction will remain in effect

only until the jurisdictional issue raised by the Tribe is

finally decided. The court’s order directing the Pur-

chasers to pay severance taxes owed to the Tribe into

court, and enjoining the parties from taking any action

against the Purchasers to collect the severance taxes being

paid into court, does not interfere with the Tribe’s right to

self-government.

Ill. THE TRIBE’S ATTEMPT TO COLLATERALLY

ATTACK THE UNDERLYING JUDGMENT

SOUGHT TO BE ENFORCED IN THIS ACTION

IS IMPERMISSIBLE.

The Tribe attempts to support its Petition by includ-

ing facts not supported by the record and by going

behind the state district court’s judgment, rendered on

Aircraft’s petition for equitable garnishment, to attack the

15

underlying judgment sought to be enforced. The Tribe

did not seek review by this Court of the Oklahoma

Supreme Court’s decision on the underlying judgment,

and the underlying judgment is final. See Aircraft I. The

Tribe’s collateral attack on the underlying judgment is

impermissible. A collateral attack is an attempt to avoid,

defeat, or evade a judgment, or to deny its force and

effect, in an incidental proceeding not provided by law

for the express purpose of attacking it. Trustees of Somerset

Academy v. Picher, 90 F.2d 741, 744 (Ist Cir. 1937), cert.

denied, 302 U.S. 737, 58 S. Ct. 139, 82 L. Ed. 570 (1937). In

the case of a collateral attack on a domestic judgment of a

court of general jurisdiction, every reasonable presump-

tion shall be indulged in support of the regularity and

validity of the judgment, and, unless the contrary affir-

matively appears from the face of the record, it generally

will be presumed that the court had jurisdiction of the

subject matter and of the parties, and that facts existed

which were necessary to give the court jurisdiction or

power to render the particular judgment. Cook v. Cook,

342 U.S. 126, 128-29, 72 S. Ct. 157, 159-60, 96 L. Ed. 146

(1951); Pettit v. American Nat. Bank of Austin, 649 P.2d 525,

529 (Okla. 1982).

The record in this matter does not include the

assumption agreement which was the basis for imposing

liability on the Tribe in the underlying action. If the Tribe

waived sovereign immunity in the agreement, such

waiver will be effective here to bar the Tribe’s assertion of

sovereign immunity. See, e.g., Oklahoma Tax Commission v.

Citizens Band Pottawatomie Indian Tribe, 498 U.S. 505, 509,

111 S. Ct. 905, 909, 112 L. Ed. 2d 1112, 1119 (1991)

(acknowledging the tribe’s ability to waive sovereign

16

immunity). Moreover, the face of the Oklahoma Supreme

Court’s opinion in Aircraft I, does not affirmatively show

that the court did not have jurisdiction over the Tribe in

the underlying action. Absent some affirmative evidence

of the assumption agreement, which was the basis for

finding liability against the Tribe in the underlying

action, or some other evidence, it must be presumed that

the district court had jurisdiction over the Tribe in the

underlying action. Collateral attack of the now final judg-

ment is therefore impermissible.

In an analogous case decided under Oklahoma law,

the court held that land owned by a full-blooded Indian

was subject to a levy on execution as unrestricted land

where the state district court had previously determined

the land was free of restrictions, and no appeal was taken

from the court’s adjudication. Barnett v. Newcomer, 307

P.2d 148 (Okla. 1957). Moreover, in this case, the court's

determination of its jurisdiction in the underlying action

is res judicata. See U.S. ex rel. Robinson Rancheria v. Borneo,

Inc., 971 F.2d 244, 250-51 (9th Cir. 1992), citing Durfee v.

Duke, 375 U.S. 106, 111-12, 84 S. Ct. 242, 245, 11 L. Ed. 2d

186 (1963) (in an action to enforce a judgment, the under-

lying court’s determination of its jurisdiction over the

matter is res judicata where a party appeared, contested

jurisdiction and lost).

17

CONCLUSION

In view of the foregoing, further review of this action

is unwarranted, and the Petition for a Writ of Certiorari

should be denied.

Respectfully submitted,

Donna N. BLAKLEY

Counsel of Record

Janis W. PRESLAR

SHARON TayYLoR THOMAS

Ha tt, Estitt, HArpwickx, GABLE,

Go.tpen & Netson, P.C.

2900 Liberty Tower,

100 North Broadway

Oklahoma City, OK 73102

Phone: (405) 553-2828

Attorneys for Respondents, Aquila

Energy Corporation, the Home-

Stake Royalty Corporation, Sun

Company, Inc. (R & M),

Associated Natural Gas, Inc.,

Associated Transport & Trading

Company, and Kerr-McGee Refining

Corporation

—

.

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—

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oe. vers

¢ rags se iva

App. 1

IN THE SUPREME COURT OF THE

STATE OF OKLAHOMA

AIRCRAFT EQUIPMENT

COMPANY, No. 86.184

(CJ-94-2522)

(Filed Jan. 5, 1996)

Appellee,

THE KIOWA TRIBE OF

OKLAHOMA, et al.,

)

)

)

)

vs. )

)

)

)

Appellants. )

BRIEF IN CHIEF OF THE KIOWA

TRIBE OF OKLAHOMA

R. BROWN WALLACE, OBA #9310

SHELIA D. TIMS, OBA #13360

of

ANDREWS DAVIS LEGG BIXLER

MILSTEN & PRICE

500 West Main

Oklahoma City, Oklahoma 73102

Telephone: (405) 272-9241

ATTORNEYS FOR APPELLANT,

THE KIOWA TRIBE OF OKLAHOMA

January 5, 1996

App. 2

TABLE OF CONTENTS AND AUTHORITIES

ABSTRACT OF THE REOOWREE once cisce ve suvsiveves

ARGUMENTS AND AUTHORITIES................

I. OKLAHOMA HAS NO JUDICIAL POWER OVER

DAMAGE SUITS OR A SUIT TO ENFORCE

DAMAGE JUDGMENTS AGAINST FEDERALLY

RECOGNIZED INDIAN TRIBES ................

1. OKLAHOMA LAW RELATIVE to “INDIAN

INTERESTS” AND TRIBAL IMMUNITY.....

Hoover v. Kiowa Tribe of Oklahoma, No. 78,185,

Oklahema Supreme Court (December 12, 1995) .....

Lewis v. Sac and Fox Tribe, 896 P.2d 503 (Okla.

1994), cert. denied, 116 S.Ct. 476 (1995) ........... 4,5

Seneca-Cayuga Trive [sic] v. Oklahoma, 874 F2d 709

SUE GM SI ae oh ik Oks TERS AUTUMN ASR OEE Raa aeR*s

State ex rel, May v. Seneca-Cayuga Tribe, 711 P.2d 77

CR. BOO a os eas haa wer cae waada et etavineeadestaa

2. FEDERAL LAW RELATIVE TO STATE

AUTHORITY OVER INDIAN TRIBES.......

Cotton Petroleum Corp. v. New Mexico, 490 U.S. 163,

109 S.Ct. 1698, 104 L.Ed.2d 209 (1989) .............

In Re Greene, 980 F.2d 590 (9th Cir. 1992) ............

oe PETE Pe re T Seer ere oT rT ere ert ere

Iowa Mutual Insurance Company v. LaPlante, 480

U.S. 9, 107 S.Ct. 971, 94 L.Ed.2d 10 (1987) .........

Fc gg PELTON EERE UE ER ET Tee ETT CTL TTC ET POOLE

Mescalero Apache Tribe v. Jones, 411 U.S. 145, 93

SAN. Tae; De See SEG CUNT oss icc se vcssces

App. 3

Oklahoma Tax Comm'n v. Citizen Band Potawatomi

Indian Tribe, 498 U.S. 505, 111 S.Ct. 905, 912, 112

ae sk RE ees kek ks wowace Atk oh ean anime ces 7

Oneida County, N.Y. v. Oneida Indian Nation of N.Y.

State, 470 U.S. 226, 105 S.Ct. 1245, 84 L.Ed.2d

SO PE ore coh ba Ra bNs bao ole ewe ena eecccas 6

Indian Commerce Clause, United States Constitu-

ek Meee ee Oa oe cay dw ewad een icedes caewn 6

3. THE LEWIS DESCRIPTION OF OKLAHOMA

JURISDICTION IS EITHER OVERY [sic]

BROAD OR INCONSISTENT WITH FED-

ERAL LAW; HOOVER IS INCONSISTENT

ith, @ 2 . SSG |. Greens eae. 8

CE I ai a os bs SoS ie oe Hp STEARNS ss 10, 11

DeFeo v. Ski Apache Resort, 904 P.2d 1065 (N.M. Ct.

DO FEE Sek Geeta Vue kd eine eV nd dy oha 19, 11, 12

SS UNS cS uh oti nba 53 ern th aN lees aed sen 9, 10, 12

SA MINN 9 pends ray chadccuneessdexnbuneee es 8, 9, 10

te Peery Peer ee Tre rT eerie 8, 9, 10

Padilla v. Pueblo of Acoma, 107 N.M. 174, 754 P.2d

845 (1988), cert. denied, 490 U.S. 1029 (1989)

PR Sg SS GSA? CRASS SR RED EF hog ITS 9, 10, 11, 12

Sac & Fox Nation v. Hanson, 47 F.3d 1061 (10th Cir.

1995), cert. denied, __ U.S. ___, 116 S.Ct. 57, 133

SRR AE: CE 650 ic to hae enh #4 Roo Cho ee vane: 8, 11

Santa Clara Pueblo v. Martinez, 436 U.S. 49, 98 S.Ct.

Te PE Rs Be. | eres oy ee ae 9

State of Minnesota v. United States, 305 U.S. 382, 59

Sk See Oe Ends SOP GED O) 066 eons racbnednn case 10

App. 4 -

United States v. Testan, 424 U.S. 392, 96 S.Ct. 948, 47

L.Ed.20 124 (1976). 0036 isSs ae puis cases ey eens 9, 10

Yellow Freight Systems, Inc. v. Donnelly, 494 U.S.

820, 110 S.Ct. 1566, 108 L.Ed.2d 834 (1990)......... 9

4. STATE COGNIZANCE OVER DAMAGE SUITS

OR SUITS TO ENFORCE DAMAGE JUDG-

MENTS AGAINST AN INDIAN TRIBE ....... 12

Citizen Band, supra .......ccccccsececcccecceesececes 13

Howlett v. Rose, 496 U.S. 356, 110 S.Ct. 2430, 110

L.Ed.20 332 (199). Vcc cc cece sivvesdevcteeeners 13, 14

LaPlante, SUPTa . 2.6... cccsscceccesecctersessseses 32.35

Larson v. Domestic & Foreign Commerce Corp., 337

U.S. 682, 69 S.Ct. 1457, 93 L.Ed. 1628 (1949) ...... 14

Lewis, SUDTA . oc sscnceactedehsctavestascneassanens 12, 33

Merrion v. Jicarilla Apache Tribe, 455 U.S. 130, 102

S.Ct. 894, 71 L.BG.2e ZB CERBE his os owes ive viesne ds 12

Santa Clara, SUPTA 2... 0c cccccereneccessnccssceeseens 13

Tenneco Oil v. Sac & Fox Tribe of Indians of Okla-

homa, 725 F.2d 572 (10th Cir. 1984)................ 14

Testam, SUPTA 2.2... ccvesccecccvesecctescctesereseecs 12

ll. THE TAXING LAWS AND TAX REVENUE OF A

FEDERALLY RECOGNIZED INDIAN TRIBE

ARE NOT SUBJECT TO STATE COURT JURIS-

DICTION; COMITY REQUIRES OKLAHOMA

TO PROTECT KIOWA’S TAX REVENUES...... 15

DeFeo, Gupea. . 05. cvvcsnsctcuyesuvweequtsusssvuceres 15

Merriog, SUPT. «0. sccscnstsbeubamsctssseuh was se eee os 15

Padilla, GUIEG «0:00 sive dqss a PxWes Nee ene eeea Sade 15

CONCLUSION 0 cn S85 se Rees - Keg aioe eaness a cenees 16

App. 5

IN THE SUPREME COURT OF THE STATE

OF OKLAHOMA

AIRCRAFT EQUIPMENT

COMPANY,

WU. 86,184

Appelice, (CJ-94-2522)

THE KIOWA TRIBE OF

OKLAHOMA, et al.,

)

)

)

)

V. )

)

)

)

Appellant. )

BRIEF IN CHIEF OF

THE KIOWA TRIBE OF OKLAHOMA

Appellant, The Kiowa Tribe of Oklahoma (“Kiowa”),

submits the following brief in support of its appeal from

a state court judgment which entered a creditor’s bill

against Kiowa and enjoined Kiowa from enforcing its

tribal laws.

ABSTRACT OF THE RECORD

This appeal challenges Oklahoma’s authority over a

suit to seize the tax revenues of a federally recognized

Indian tribe and to restrain the tribe from enforcing its

tribal taxation laws.

The facts involved in this appeal are undisputed.

Kiowa is a federally recognized Indian tribe. In a separate

case, the District Court of Oklahoma County entered a

damage judgment against Kiowa and in favor of Aircraft

App. 6

Equipment Company (“Aircraft”). (R. 125-31)! That judg-

ment arose from Kiowa’s default upon an assumption of a

promissory note. Assumption of the promissory note was

consideration for the purchase of shares in an Oklahoma

corporation. In the assumption agreement, Kiowa speci-

fically reserved its sovereign rights. Kiowa did not waive

its sovereign immunity or consent to suit in Oklahoma

courts. (R. 244)

The damage judgment, and orders which enforced

the judgment by garnishing Kiowa’s tax revenues, are on

appeal in this Court, Aircraft Equipment Company v. The

Kiowa Tribe of Oklahoma, No. 82,505, and Aircraft Equip-

ment Company v. The Kiowa Tribe of Oklahoma, No. 85,272.

This appeal arises from Aircraft’s separate suit to

obtain, as a post-judgment remedy, a creditor’s bill. Air-

craft sought a creditor’s bill to order oil and gas pro-

ducers, which remove oil and gas from Kiowa land and

are subject to Kiowa’s oil and gas severance tax, to pay

the Kiowa severance tax to Aircraft rather than to Kiowa.

(R.1)

The defendant oil companies filed pleadings which,

essentially, interplead the severance tax revenues. (R. 158,

212, 236, 310, 313-14, 343, 409-21) The defendant oil com-

panies also sought orders enjoining Kiowa from enforcing

its tribal tax laws. (R. 160, 213, 236, 409-21) Kiowa’s tribal!

tax laws provide a lien and lien foreclosure mechanism

1 Citations to “R.” refer to the Record, previously bound in

Record No. 85,975, as stated in the Court clerk’s Index in this

appeal.

App. 7

where severance taxes are not paid upon leases subject to

the tribal tax. (R. 258)

Kiowa asserted that the District Court of Okiahoma

County had no authority over it because, as a federally

recognized Indian tribe, it has sovereign immunity from a

damage action and sovereign immunity from an action to

enforce a damage judgment. (R. 240-80) Kiowa also

asserted that if the District Court of Oklahoma County

had any authority over it, then the use of that authority to

seize its tax revenues and enjoin it from enforcing its tax

law was an impermissible infringement upon its federally

protected sovereign rights. (R. 240-80)

The District Court of Oklahoma County concluded

that if it had jurisdiction to enter a damage judgment,

then there must be jurisdiction to enforce that judgment.

(R.IIL? 156 at pp. 19-20) Hence, the district court granted

creditor’s bill with respect to Kiowa’s tax revenues. (R.IIL,

129-30) Recognizing, however, that the underlying judg-

ment was on appeal and its jurisdiction was questionable,

the District Court ordered the Oklahoma County Court

Clerk to hold the tax revenues pending outcome of the

appeal of the underlying judgment. (R.III, 156 pp. 19-22)

The district court also recognized that Kiowa would

attempt to foreclose its tribal law tax lien on the oil

companies’ mineral leasehold interests and thus the court

enjoined Kiowa from enforcing that lien, pending out-

come of the appeal. (R.III, 129-30, 156 at pp. 19-20) Hence,

Kiowa’s tax revenues are currently being paid to the

2 Citations to “R. III” refer to those documents indexed

within this Record and referred to in this manner in the Court

Clerk’s Index.

App. 8

Oklahoma County Court Clerk and Kiowa is enjoined

from enforcing its tribal tax laws.

ARGUMENTS AND AUTHORITIES

I,

OKLAHOMA HAS NO JUDICIAL POWER OVER

DAMAGE SUITS OR A SUIT TO ENFORCE DAMAGE

JUDGMENTS AGAINST FEDERALLY RECOGNIZED

INDIAN TRIBES

In order to define Oklahoma's judicial authority over

damage suits and the enforcement of damage judgments

against a federally recognized Indian tribe, one must

define the boundary between two sovereigns - the state

and the tribe - with reference to standards set by a third

sovereign — the federal government. Each of these areas is

addressed below.

1. OKLAHOMA LAW RELATIVE TO “INDIAN

INTERESTS” AND TRIBAL IMMUNITY

Oklahoma defined its jurisdiction with respect to

“Indian interests” in Lewis v. Sac and Fox Tribe, 896 P.2d

503 (Okla. 1994), cert. denied, 116 S.Ct. 476 (1995).5 Lewis

involved a claim for specific performance by Sac and Fox

Housing Authority of an agreement to convey real prop-

erty and for an accounting for mineral revenues. As an

3 This discussion ornits reference to State ex rel. May v.

Seneca-Cayuga Tribe, 711 P.2d 77 (Okla. 1985). This Court does

not appear to have relied upon Seneca-Cayuga after the decision

in Seneca-Cayuga Tribe v. Thompson, 874 F.2d 709 (10th Cir. 1989).

App. 9

accounting is retrospective in nature and relates to reve-

nues received, presumably, a money judgment was

involved. Lewis defined Oklahoma’s jurisdiction over

“Indian interests” as all matters except: (1) those explic-

itly withdrawn by Congress and (2) those that infringe

upon tribal self-government. Lewis, 896 P.2d at 508.4

It is significant that Lewis spoke of “Indian interests”

as opposed to dealing directly with the sovereign immu-

nity of a Indian tribe.

Oklahoma addressed the issue of tribal immunity in

Hoover v. Kiowa Tribe of Oklahoma, No. 78,185, Oklahoma

Supreme Court (December 12, 1995). In Hoover, Oklahoma

drew upon Lewis to confirm that it had inherent power

over “Indian interests” and then concluded that sover-

eign immunity was no bar to its judicial power over a

damage suit against a tribe, when the tribe was engaged

in commercial activity off Indian country.

2. FEDERAL LAW RELATIVE TO STATE AUTHORITY

OVER INDIAN TRIBES

The federal law concerning jurisdiction over a feder-

ally recognized Indian tribe is considerably more com-

plex, and a state’s inherent power is considerably less

than suggested by Lewis and Hoover. Federal law begins

with the recognition of tribal sovereignty and involves

4 Justice Summers, dissenting, suggests that the issue of

state court cognizance is determined by reference to whether

the real property in question was “Indian country.” In the

absence of evidence that it was “Indian country,” the dissent

found state court jurisdiction. Lewis, 896 P.2d at 517, 522.

= Pore yen

App. 10

the result of the Indian Commerce Clause® assigning to

the federal government the control of commerce with

Indian tribes.

Federal law recognizes that the inherent sovereignty of

Indian tribes is intact, except to the extent that it has been

withdrawn by federal statute or treaty. Jowa Mutual Insur-

ance Company v. LaPlante, 480 U.S. 9, 107 S.Ct. 971, 94

L.Ed.2d 10 (1987).

Because tribal sovereignty is presumed intact, it

includes an extensive array of rights, which then are

limited and defined based only upon federal actions. The

jurisprudence that has sprung from the analysis of tribal

sovereignty is so extensive that a generalized description

of the nature of tribal sovereignty is impossible. Nonethe-

less, as Lewis recognizes, many cases arising from con-

flicts between tribal immunity and state power (generally

over taxation and regulation), proceed by analyzing fed-

eral pre-emption® and infringement upon tribal self-gov-

ernment, see Cotton Petroleum Corp. v. New Mexico, 490

U.S. 163, 109 S.Ct. 1698, 104 L.Ed.2d 209 (1989), and often

emphasize the location and nature of the disputed activ-

ities. Mescalero Apache Tribe v. Jones, 411 U.S. 145, 93 S.Ct.

1267, 36 L.Ed.2d 114 (1973) (tribally owned ski lift off

Indian country subject to state gross receipts tax, but not

5 United States Constitution, Article I, Sec. 8, Cl. 3; Oneida

County, N.Y. v. Oneida Indian Nation of N.Y. State, 470 U.S. 226,

105 S.Ct. 1245, 84 L.Ed.2d 169 (1985).

6 In Re Green, 980 F.2d 595 (9th Cir. 1992) recognizes that

“(a)lmost by definition, application of the pre-emption analysis

is limited to situations where the state itself is seeking to tax or

regulate conduct on the reservation.” Id. at 595.

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Pepi Khel canta hin ite

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App. 11

subject to state use tax). The preemption/infringement

formula, however, is nct an exhaustive definition of tribal

sovereignty or state power. It is not exhaustive because it

fails to account for the fact that federal law recognizes

absolute tribal immunity to damage suits. In Oklahoma

Tax Comm'n v. Citizen Band Potawatomi Indian Tribe, 498

U.S. 505, 111 S.Ct. 905, 112 L.Ed.2d 1112 (1991), Oklahoma

sought orders forcing a tribe to collect state cigarette

taxes on certain Indian country cigarette sales and asked

for a $2.7 million damage judgment for back taxes on

cigarettes already sold. While the Supreme Court found

that the tribe should collect Oklahoma cigarette taxes on

certain sales, it refused to enter a money judgment

because tribes are immune from damage judgments. Citi-

zen Band, 111 S.Ct. at 912.

3. THE LEWIS DESCRIPTION OF OKLAHOMA

JURISDICTION IS EITHER OVERLY BROAD

OR INCONSISTENT WITH FEDERAL LAW;

HOOVER IS INCONSISTENT WITH FEDERAL

LAW

Lewis is either overly broad or inconsistent with fed-

eral law. This is so, because federal law recognizes that

the inherent sovereignty of Indian tribes is intact, except

to the extent that it has been withdrawn by federal stat-

utes or treaty. LaPlante, 107 S.Ct. at 975. In short, federal

law assumes tribal sovereignty, absent some retraction of

that sovereignty by federal action. Lewis, on the other

hand, takes the reverse position and assumes state juris-

diction over “Indian interests” absent an explicit federal

ouster or an infringement upon tribal self-government.

These two standards are directly opposite to one another.

App. 12

Lewis describes state jurisdiction much more extensively

than federal authority permits.”

Lewis reached its conclusion based upon two novel

premises: (1) tribal immunity has been “abandoned”® and

(2) with immunity “abandoned,” inherent state court

jurisdiction over Indian interests is defined solely by

considerations which relate to the division of judicial

power between the state and federal governments.?

The first Lewis premise - tribal immunity has been

“abandoned” — is novel because federal law specifies that

tribal immunity is lost only by: (1) a clear and unequivo-

cal waiver by the tribe or (2) Congressional action. Santa

Clara Pueblo v. Martinez, 436 U.S. 49, 98 S. Ct. 1670, 56

L.Ed.2d 106 (1978). Lewis does not involve a tribal waiver

or a Congressional act. Lewis has neither of the federally

prescribed requirements to avoid immunity. Instead,

7 The Lewis dissent that would key determination of

jurisdiction based upon the geographical location of the

property is also too broad. A federally recognized Indian tribe,

wherever it may be, is still a federally recognized Indian tribe

and the state is still subject to the federal laws which define the

nature of that Indian tribe. An Indian tribe’s federally protected

sovereign immunity to damage suit has an extra-territorial

component. Sac and Fox Nation v. Hanson, 47 F.3rd 1061 (10th

Cir.1995). To allow state law to strip tribal immunity to damages

suit based upon geography is to allow state law to override

supreme federal law.

8 Lewis, 896 P.2d at 506, 511, n. 59.

9 Lewis’ linchpin authority, Yellow Freight System, Inc. v.

Donnelly, 494 U.S. 820, 110 S.Ct. 1566, 108 L.Ed.2d 834 (1990),

involves only the concepts of federal versus state authority. It

does not address interaction with a third sovereign —- an Indian

tribe.

i

App. 13

Lewis avoided immunity by using its own theory of aban-

donment.!°

The second Lewis premise — inherent state court juris-

diction over Indian interests is defined solely by consid-

erations used in dividing jurisdiction between state and

federal governments — is equally novel. This is so because

a court’s authority over a sovereign is determined from

the extent of the consent of the sovereign itself to be sued.

United States v. Testan, 424 U.S. 392, 96 S.Ct. 948, 47

L.Ed.2d 114 (1976); State of Minnesota v. United States, 305

U.S. 382, 59 S.Ct. 292, 83 L.Ed. 235 (1939) (United States

consent to suit in federal courts in condemnation of

Indian land does not create jurisdiction in state courts).!!

Lewis is devoid of reliance upon any consent, tribal or

Congressional, to create the state court’s jurisdiction.

Hoover recognized Lewis’ failure to address tribal sov-

ereign immunity and acknowledged Lewis’s reliance upon

the state’s inherent authority. Hoover, slip opinion, p. 4.

Hoover relied on Padilla v. Pueblo of Acoma, 107 N.M. 174,

10 Lewis also suggests that any abandonment may have

been somewhat less than clear and unequivocal as required by

Santa Clara, and in fact may have been an implied abandonment.

Federal law provides that a waiver cannot be implied. United

States v. Testan, 424 U.S. 392, 96 S.Ct. 948, 47 L.Ed.2d 114 (1976).

See Lewis, 896 P.2d at 511, n. 59.

11 This analysis proceeds upon the approach of a sovereign

being sued in its own courts as opposed to a sovereign declaring

its inherent power over another sovereign. This is the proper

approach because a state has no authority to declare its inherent

jurisdiction over an Indian tribe. Tribal sovereignty is defined

by federal law, not by state declaration. LaPlante, 107 S.Ct. at

976.

App. 14

754 P.2d 845 (1988), cert. denied, 490 U.S. 1029 (1989), for

the idea that a lack of federal law prohibiting one state

from exercising jurisdiction over another state, mixed

with New Mexico’s policy of allowing itself to be sued,

was a passable substitute for tribal consent to be sued.

Hence, Padilla concluded that a state court had jurisdic-

tion over a damage suit against a sovereign tribe and it

was not necessary to obtain consent by the tribe or by

Congress. Padilla, 754 P.2d at 850.

The New Mexico courts, however, have recognized

that Padilla is flawed. In DeFeo v. Ski Apache Resort, 904

P.2d 1065 (N.M. Ct. App. 1995) cert. denied, 903 P.2d 844

(N.M. 1995), the New Mexico Court of Appeais held that

Padilla conflicts with federal law:

Padilla appears to conflict with the Tenth Cir-

cuit’s more recent holding in Sac & Fox Nation,

which clearly stated that the location of the

commercial activity was not determinative and

held that an Indian tribe was immune from suit

in state courts “even if the suit results from

commercial activity occurring off the [Indian

tribe’s] reservation,” Sac & Fox Nation, 47 F.3d at

1065.

DeFeo, 904 P.2d at 1069. The New Mexico Supreme Court

denied certiorari in DeFeo. DeFeo, 904 P.2d at 1065.

The DeFeo court held that federal law bars suits

against Indian tribes absent a clear waiver by the tribe or

by congressional abrogation. DeFeo, 904 P.2d at 1067, cit-

ing Citizen Band, 111 S.Ct. at 909.

The DeFeo court adopted the reasoning of the Tenth

Circuit Sac & Fox opinion and held that a tribe’s sover-

eign immunity applies to a tribe’s commercial activity.

App. 15

DeFeo, 904 P.2d at 1068. The DeFeo court concluded that

the district court lacked jurisdiction over the tort claim

against the tribe and that the tribe had not waived its

sovereign immunity by engaging in commercial activity.

DeFeo, 904 P.2d at 1069.

The DeFeo opinion did not need to address the issue

of whether a tribe’s immunity extends to off-reservation

activity because the alleged tort occurred within the

tribe’s reservation. The court did, however, hold that in

light of recent federal decisions, New Mexico courts

should give the Padilla reasoning a “fresh look.” DeFeo,

904 P.2d at 1069.

As recognized in DeFeo, Padilla is wrong. The fact

that federal law does not prohibit states from exercising

jurisdiction over each other cannot be expanded to tribal

immunity cases for two reasons. First, tribes are not states

and second, federal law does prohibit damages suits

against tribes. As held in DeFeo, Padilla conflicts with

federal law. Hoover is premised upon Padilla and thus

Hoover is also wrong. Hoover was decided without any

reference to DeFeo or to the federal decisions that forced

the New Mexico court to criticize Padilla.

4. STATE COGNIZANCE OVER DAMAGE SUITS

OR SUITS TO ENFORCE DAMAGE JUDG-

MENTS AGAINST AN INDIAN TRIBE

Because jurisdiction over a sovereign must grow

from that sovereign’s consent, Oklahoma’s jurisdiction

must be drawn solely from federal law that relates speci-

fically to Indian tribes. Only the federal government may

define an Indian tribe’s sovereignty. LaPlante, 107 S.Ct. at

App. 16

975-75; Merrion v. Jicarilla Apache Tribe, 455 U.S. 130, 102

S.Ct. 894, 71 L.Ed.2d 21 (1982). Federal Law on the com-

merce clause or other unrelated areas simply cannot be

expanded to imply a consent by a sovereign tribe to suit.

United States v. Testan, 424 U.S. 392, 96 S.Ct. 948, 47

L.Ed.2d 114 (1976). Neither can such unrelated law be

used to find inherent state power where none exists.

Federal law clearly and plainly provides that absent fed-

eral retraction, LaPlante, 107 S.Ct. at 975, or an express

waiver by the tribe, Santa Clara, 98 S.Ct. at 1677, tribal

sovereignty is intact and it includes immunity from dam-

age suits. Citizen Band, 111 S.Ct. at 910-912.

In this case, Kiowa did not waive its immunity. It

certainly did not consent to a seizure of its tax revenue.

Kiowa specifically reserved its sovereign rights. Hence,

the state court cannot base its jurisdiction upon a Santa

Clara-type waiver.

Congress has never abrogated tribal immunity to

damage suits. It certainly has never authorized seizure of

a tribe’s tax revenue. In fact, the United States Supreme

Court has specifically recognized, and refused to aban-

don, tribal immunity to damage suits, even in a case

where it entered orders commanding the tribe to collect

certain tobacco taxes for Oklahoma. Citizen Band, 111

S.Ct. at 912. Hence, the court cannot draw its jurisdiction

from any federal abrogation.

Simpiy recognizing there is no jurisdiction over a

damage suit against an Indian tribe, however, is not to

say that there is no capacity to exercise cognizance of a

suit involving a tribe. As Lewis recognizes, the nation

App. 17

does have a dual court system. The United States “Con-

stitution, and laws passed pursuant to it, are as much

laws in the states as laws passed by the state legislature.”

Howlett v. Rose, 496 U.S. 356, 110 S.Ct. 2430, 110 L.Ed.2d

332 (1990). Under the Supremacy Clause, the federal laws

are “the Supreme Law of the Land” that states have a

coordinate responsibility to enforce “according to their

regular modes of procedure.” Howelett, 110 S.Ct. at 2438.

Also, the Larson doctrine!? permits some degree of speci-

fic relief when the activity of a sovereign goes beyond the

sovereign’s real authority. This has been termed “espe-

cially appropriate in Indian law cases.” Tenneco Oil v. Sac

& Fox Tribe of Indians of Oklahoma, 725 F.2d 572 (10th Cir.

1984). Oklahoma is not without cognizance, but it does

not have the cognizance it assumes to itself.

Oklahoma must recognize that the federal govern-

ment grants the state authority over Indian tribes through

its regulation of the sovereignty of tribes and its exercise

of federal authority under the Indian Commerce Clause.

The state’s authority is created by what it is given by the

federal government. The state’s authority is not an inher-

ent authority, limited only by what the federal govern-

ment takes from the state by way of “ouster.” The state

cannot rely upon comity to supply a missing consent to

jurisdiction. Federal law recognizes significant aspects of

tribal sovereignty, including an immunity from damage

suits. The state must recognize that immunity is a matter

of supreme federal law. This recognition must leave the

12 Larson v. Domestic & Foreign Commerce Corp., 337 U.S. 682,

69 S.Ct. 1457, 93 L.Ed. 1628 (1949).

App. 18

state without authority to enforce a damage judgment by

seizing tribal tax revenues.

II.

THE TAXING LAWS AND TAX REVENUE OF A FED-

ERALLY RECOGNIZED INDIAN TRIBE ARE NOT

SUBJECT TO STATE COURT JURISDICTION; COM-

ITY REQUIRES OKLAHOMA TO PROTECT KIOWA’S

TAX REVENUES

Even if this Court concludes that it does, indeed,

have jurisdiction over a damage suit or a suit to enforce a

judgment against a federally recognized Indian tribe,

then, it may not enforce a judgment by seizing tribal tax

revenues and enjoining enforcement of tribal tax laws. To

do so violates the Lewis restriction against infringing

upon tribal self-government.

“(T]he power to tax is an essential attribute of Indian

sovereignty because it is a necessary instrument of self-

government and territorial management.” Merrion v. Jic-

arilla Apache Tribe, 455 U.S. 130, 102 S.Ct. 894, 71 L.Ed.2d

21 (1982). The power to tax is, essentially, meaningless,

and certainly not useful in self-government, if the fruits

of that power are seized by the state and if the state

enjoins enforcement of the tax laws. Seizing tax revenue

and enjoining enforcement of tribal tax law is an obvious

infringements upon tribal self-government which cannot

be allowed.

If Oklahoma is allowed to pursue the approach to

Indian sovereignty followed by Padilla (but rejected by

DeFeo), then it must also recognize that Oklahoma would

not allow an Oklahoma court to seize Oklahoma’s tax

App. 19

revenues. Onder Padilla, comity principles would require

that Oklahoma not seize another sovereign’s tax reve-

nues.

CONCLUSION

Oklahoma has no judicial power over a damage suit

against a federally recognized Indian tribe. Likewise, it

has no judicial power to enforce a damage judgment

against a federally recognized Indian tribe. Oklahoma’s

power over suits and enforcement of judgments against

tribes arises from the consent of the tribe or from a grant

from the federal government. In this case, the tribe did

not consent, but, reserved its sovereign rights. The fed-

eral government has never authorized damage suits or

suits to enforce damage judgments against a tribe, but,

has clearly recognized tribal immunity from damages

suits.

The power to tax is an essential attribute of Indian

sovereignty because it is a necessary instrument of self-

government. Seizing the fruits of this power must be an

infringement upon a tribe’s federally protected right to

self-government.

The judgment and orders of the district court must be

reversed and vacated and the court ordered to dismiss

the case. The Oklahoma County Court Clerk should be

ordered to pay Kiowa’s tax revenues to Kiowa.

/s/ Shelia D. Tims

R. BROWN WALLACE,

OBA #9310

SHELIA D. TIMS,

OBA #13360

App. 20

of

ANDREWS DAVIS LEGG

BIXLER MILSTEN & PRICE

500 West Main

Okahoma City, Oklahoma

73102

Telephone (405) 272-9241

ATTORNEYS FOR THE

KIOWA TRIBE OF

OKLAHOMA

CERTIFICATE OF SERVICE

I hereby certify that on this 5th day of January, 1996,

a true and correct copy of the above and foregoing docu-

ment was placed in the United States Mail, postage pre-

paid and addressed to:

I further certify that a copy of the above and foregoing

Brief in Chief was filed in the Office of the County Clerk of

Oklahoma County on the 5th day of January, 1996.

William J. Robinson

Shirk, Work, Robinson &Work

801 Colcord Building

15 North Robinson

Oklahoma City, Oklahoma 73102

Dwight W. Birdwell

Ronald J. Pool

217 N. Harvey, Ste. 200

Oklahoma City, Oklahoma 73102

Donna N. Blakley

Janis W. Preslar

2900 Liberty Tower

100 N. Broadway

Oklahoma City, Oklahoma 73102-8827

App. 21

Myron K. Cunningham

Kerr-McGee Corporation

123 Robert S. Kerr Avenue

Oklahoma City, Oklahoma 73125

Timothy J. Bomhoff

Conner & Winters, A P.C.

950 City Place

204 North Robinson

Oklahoma City, Oklahoma 73102

John M. Peters

Jonathan E. Miller

Monnet, Hayes, Bullis,

Thompson & Edwards

1719 First National Center West

Oklahoma City, Oklahoma 73102

Jeffrey W. Wagner

Sun Company, Inc.

1801 Market Street

Philadelphia, PA 19103

Wade A. Heofling

Associated Natural Gas, Inc.

370 — 17th Street, Suite 900

Denver, Colorado 80202

Joseph L. Carnell

3535 NW 58th, Suite 430

Oklahoma City, Oklahoma 73112

John R. Morris

McAfee & Taft

10th Floor, Two Leadership Square

211 North Robinson

Oklahoma City, Oklahoma 73102

App. 22

Frederic Dorwart

J. Michael Medina

Old City Hall Building

124 E. Fourth Street

Tulsa, Oklahoma 74103-5010

Michael A. Rubenstein

McKinney, Stringer & Webster, P.C.

101 North Broadway

Oklahoma City, Oklahoma 73102

/s/ Shelia D. Tims

App. 23

IN THE SUPREME COURT

OF THE STATE OF OKLAHOMA

AIRCRAFT EQUIPMENT COMPANY,

a partnership,

Sed sieccaes No. 85975

(Filed

THE KIOWA TRIBE OF OKLAHOMA, ? Sep. 22 1995)

AQUILLA ENERGY CORPORATION,

THE HOMESTAKE ROYALTY

CORPORATION, KERR-McGEE

REFINING CORPORATION, ORYX

ENERGY CORPORATION, PLAINS

LIQUIDS TRANSPORT, INC., SUN

COMPANY, INC. (R & M),

ASSOCIATED NATURAL GAS, INC.,

ASSOCIATED TRANSPORT AND

TRADING COMPANY, SENEX PIPE

LINE COMPANY, AND HAMON

OPERATING COMPANY,

Appellees.

)

)

)

)

)

versus

Ne eee ee ee eee ee ee ee”

ANSWER BRIEF OF THE

KIOWA TRIBE OF OKLAHOMA

R. Brown Wallace, OBA #9310

Shelia D. Tims, OBA #13300

ANDREWS DAVIS LEGG BIXLER

MILSTEN & PRICE

500 West Main

Oklahoma City, Oklalttoma 73102

Telephone (405) 272-9241

App. 24

TABLE OF CONTENTS

PG a DIE 86.5 05a cre eta Want cchen stun ehh eens 1

Aircraft Equipment Company v. The Kiowa Tribe of

Oklahoma and Watson Management Group, Inc.,

COND, COD. Gare son cacetecsces seveneanes 2

Aircraft Equipment Company v. The Kiowa Tribe of

Oklahoma et al., No. 86,184..........00 cece eeees 3

Aircraft Equipment Company v. The Kiowa Tribe of

Oklahoma et al, No. CJ-94-2522 .............445. 3

Aircraft Equipment Company v. The Kiowa Tribe of

CRIMI, FED. GEG eon so en as ceed adeyeee ns 2

Aircraft Equipment v. The Kiowa Tribe of Oklahoma,

Die. CRE SGTAS eos ibidinn cd banentcachsn dee ebeeee 2

Merrion v. Jicarilla Apache Tribe, 455 U.S. 130, 102

S. Ch ORG, FE 0. eke SO ee CR he vine genes 2

PARE bos isch cle Seedede tha dewdbnas eh Raes cabs 4

KIOWA’S ANSWER TO PROPOSITION 1: INJUNC-

TION AGAINST AIRCRABT 0. .escccicscecissees 5

KIOWA’S ANSWER TO PROPOSITION II: INTER-

FUMAPMIRE + ob cde dadackuchadevnd Chbaeh awe eeexea cus 6

New Mexico v. Mescalero Apache Tribe, 462 U.S.

324, 103 S. Ct. 2378, 76 L. Ed. 2d 611 (1983)... 6

The Kiowa Indian Tribe of Oklahoma v. The Honor-

able Carolyn R. Ricks, No. 84,729 .....04....005. 2

Oklahoma Tax Commission v. Citizen Band

Potawatomi Indian Tribe, 498 U.S. 505, 111 S. Ct.

Poy RES Mae BRE COOP ED 6s caccorctaveneaces 6

App. 25

Warren Trading Post Co. v. Arizona Tax Commission,

380 U.S. 685, 85 S. Ct. 1242, 14 L. Ed. 2d 165

RSP Ph UE 6s Kise CNR EAWAN SS APE DER OREN SATO T EW AS 6

BE Ea ie ke kk eae redder eeewats ebenre des 6

KIOWA’S ANSWER TO PROPOSITION II: ATTOR-

PR No AS CRAs Means oe Rees UroesuNceeean 6

Ce Se Mc ce hve is sanateayasvavewe ea des 7

KIOWA’S ANSWER TO PROPOSITION IV: GAR-

PEPUNGE ScKiC hee ChdpehCeA RM Keaetemedaas ca kees 7

CRORE sb cod Kies PSOE cnc hokeedwayeeeme tian 7

IN THE SUPREME COURT

OF THE STATE OF OKLAHOMA

AIRCRAFT EQUIPMENT COMPANY,

a partnership,

ee No. 85975

versus

)

)

)

)

)

THE KIOWA TRIBE OF OKLAHOMA, ?

AQUILLA ENERGY CORPORATION, ?

THE HOMESTAKE ROYALTY )

CORPORATION, KERR-McGEE )

REFINING CORPORATION, ORYX ?

ENERGY CORPORATION, PLAINS ?

LIQUIDS TRANSPORT, INC., SUN?

COMPANY, INC. (R & M), )

ASSOCIATED NATURAL GAS, INC., ?

ASSOCIATED TRANSPORT AND )

TRADING COMPANY, SENEX PIPE?

LINE COMPANY, AND HAMON )

OPERATING COMPANY,

Appellees.

App. 26

ANSWER BRIEF OF THE

KIOWA TRIBE OF OKLAHOMA

INTRODUCTION

This appeal is part of an extensive sroup of legal

proceedings that are currently pending at various stages

of trial or appeal. All the proceedings center upon the

question of whether a federally recognized Indian tribe,

which has not waived its sovereign immunity, may be

sued for damages in Oklahoma courts, and, if so, may

Oklahoma courts then seize tribal tax revenues in satis-

faction of a damage judgment against the tribe.

The Kiowa Tribe of Oklahoma (Kiowa) has consis-

tently asserted that a key aspect of its federally recog-

nized sovereignty is that it is immune from damage suits

and its property, especially its tax revenues, cannot be

seized.

The issues raised in this appeal center upon various

orders entered at a May 26, 1995, motion docket. Most of

those orders were preliminary, non-dispositive and

appear to have been supplanted by a judgment entered

on August 14, 1995, after a trial on the merits of this

particular case.

The underlying case in this group of related matters

is Aircraft Equipment v. The Kiowa Tribe of Oklahoma, No.

CJ-92-10176, District Court of Oklahoma County. In that

case, Aircraft Equipment Company (“Aircraft”) recovered

a money judgment upon a guaranty executed by Kiowa.

That case was appealed by Kiowa in Aircraft Equip-

ment Company v. The Kiowa Tribe of Oklahoma, No. 82,505,

Supreme Court of Oklahoma. The Court of Appeals

re a ee

App. 27

affirmed the money judgment. The Supreme Court of

Oklahoma granted certiorari. The case awaits decision.

While the appeal was pending, Aircraft garnished the

severance tax revenue of Kiowz.! The garnishment gener-

ated a second appeal, Aircraft Equipment Company v. The

Kiowa Tribe of Oklahoma and Watson Management Group,

Inc., Garnishee, No. 85,272, Supreme Court of Oklahoma.

Apparently wishing to avoid successive garnish-

ments, or perhaps wishing to avoid jurisdictional issues

being posed by Kiowa, Aircraft sued for a creditors’ bill

in the case Aircraft Equipment Company v. the Kiowa Tribe of

Oklahoma et al, No. CJ-94-2522, District Court of Okla-

homa County, Oklahoma. (This appeal is from rulings in

the creditor’s bill case.) That suit sought an order to

direct various named oil companies to pay Kiowa’s sever-

ance tax not to Kiowa, but, directly to Aircraft in satisfac-

tion of its judgment.

This appeal arises from certain preliminary and non-

dispositive orders entered in May, prior to any hearing of

the merits of the suit for a creditors’ bill.

1 Kiowa, in exercise of its federally recognized sovereign

authority, has imposed a severance tax upon production of oil

and gas from lands subject to its jurisdiction. Merrion v. Jicarilla

Apache Tribe, 455 U.S. 130, 102 S.Ct. 894, 71 L. Ed. 2d 21 (1982):

The tribal law which creates the severance tax also provides for

a lien and foreclosure as a remedy for failure to pay the tax.

2 Kiowa also applied for a writ of prohibition in the

garnishment proceedings, The Kiowa Indian Tribe of Oklahoma v.

The Honorable Carolyn R. Ricks, No. 84,729, Supreme Court of

Oklahoma. The Supreme Court refused original jurisdiction.

App. 28

The creditors’ bill suit was heard on the merits on

August 14, 1995. The judgment and decree entered on the

merits has generated yet another appeal, Aircraft Equip-

ment Company v. The Kiowa Tribe of Oklahoma et al., No.

86,184, Supreme Court of Oklahoma, in which Kiowa has

challenged rulings of the District Court of Oklahoma

County which (1) order its tax revenues paid to the

Oklahoma County Court Clerk (2) restrain Kiowa from

enforcing its laws creating liens to enforce payment of the

tax.

The common thread of Kiowa’s position in all of

these proceedings is that, as a federally recognized Indian

tribe, it is sovereign and, by federal law, immune from

damage suits. As a result, Oklahoma courts have no

jurisdiction to hear damage suits against it. Further, the

seizure of its tax revenues is an impermissible infringe-

ment upon its federally recognized and federally pro-

tected sovereignty.

FACTS

Most of Aircraft’s points of error in this case arise

from orders entered at a May 26, 1995, motion docket.

There were no witnesses called, nor evidence taken at the

motion docket - only arguments of counsel.

At that May 26, 1995 motion docket, the trial court

was faced with a situation in which:

1. Aircraft moved for summary judgment upon its

suit for a creditors’ bill to direct the oil company defen-

dants to pay Kiowa’s severance tax directly to Aircraft.

App. 29

2. Kiowa moved for dismissal of Aircraft’s petition

for a creditors’ bill, and raised jurisdictional issues aris-

ing from its sovereign and immune status as a federally

recognized Indian tribe.

3. The oil company defendants found themselves,

on the one hand, subject to a possible court order direct-

ing them to pay“Kiowa’s tax revenues to Aircraft, and, on

the other hand, facing Kiowa’s assertion that such an

order was jurisdictionally void, and Kiowa would fore-

close its tax liens upon the oil companies’ oil and gas

leases. Understandably, the oil companies interplead the

tax revenues and asked to be relieved from further pro-

ceedings.

At the May 26, 1995, motion docket, the trial court

determined that most dispositive issues were on appeal

in the above described appeals.

With pragmatism, if not evidence, the trial court

denied the motions of Aircraft and Kiowa, ordered the oil

companies to make all-payments of Kiowa’s severance

taxes to the court clerk of Oklahoma County, restrained

Kiowa from foreclosing its tribal law lien against the oil

company leases, and restrained Aircraft from further gar-

nishment against the oil companies. The matter was set

for trial.

The essence of this appeal is Aircraft’s attempt to

escapé from the trial court’s orders entered on May 26,

1995.

As the creditors’ bill case has now been tried on the

merits, and a judgment has now supplanted most, if not

App. 30

all, of the May 26, 1995, orders, this appeal is largely

moot.

KIOQWA’S ANSWER TO PROPOSITION I:

INJUNCTION AGAINST AIRCRAFT

Proposition I appears to complain of the issuance of

injunctive relief against Aircraft at the May 26, 1995,

motion docket.

As no relief is sought against Kiowa, Kiowa makes no

response to Proposition I. Kiowa does observe, though,

that the May 26, 1995, orders were supplanted by the

judgment entered on August 14, 1995.

KIOWA’S ANSWER TO PROPOSITION II:

INTERPLEADER

Defendant oil companies responded to conflicting

claims upon the severance tax funds they hold by

requesting relief in the nature of interpleader. The relief

required including being dismissed upon paying funds

into court.

Again, as no relief is sought against Kiowa, Kiowa

makes no response to Proposition II. Kiowa does observe,

however, that the oil companies are not, at least in this

case, “garnishees.”

KIOWA’S ANSWER TO PROPOSITION III:

ATTORNEY FEES

In interpleader, the award of attorney fees is in the

discretion of the trial court under 12 O.S. § 2022.

App. 31

Kiowa responds, however, that no cause of action,

interpleader or otherwise, is proper to seize its tax reve-

nue. As the court has no power to seize tax revenues, it

also has no power to award attorney fees from such

funds.

As a federally recognized Indian tribe, Kiowa is a

sovereign, immune from any suit for damages. New Mex-

ico v. Mescalero Apache Tribe, 462 U.S. 324, 103 S.Ct. 2378,

76 L Ed 2d 611 (1983); Oklahoma Tax Commission v. Citizen

Band Potawatomi Indian Tribe; 498 U.S. 505, 111 S. Ct. 905,

112 L Ed 2d 1112 (1991) Admittedly, Indian tribes are

sued. Such cases are generally limited to actions of an

equitable or declaratory nature where the decrees are

sufficiently restricted so as not to infringe upon the

tribe’s sovereignty. Warren Trading Post Co. v. Arizona Tax

Commission, 380 U.S. 685, 85 S. Ct. 1242, 14 L ed 2d 165

(1965). Notwithstanding the fact that federal law will

allow some equitable or declaratory relief against tribes,

federal law very plainly will not allow a damage suit.

Citizen Band, supra. Seizure of tax revenue absolutely

denies the sovereign the economic capacity to act as a

sovereign. As such this seizure must be an infringement

upon a tribe’s federally protected right to self-gover-

nance.

KIOWA’S ANSWER TO PROPOSITION IV:

GARNISHMENT

In essence, Aircraft asserts that notwithstanding its

creditors’ bill suit, it should be allowed to continue to

garnish the defendant oil companies.

App. 32

The May 26, 1995, order enjoining Aircraft’s garnish-

ment is now replaced with a judgment and thus this

proposition appears to be moot. t

CONCLUSION

This appeal is largely moot. The orders entered at the

May 26, 1995, motion docket - largely preliminary and

non-dispositive — have been replaced by a judgment

entered upon trial on the merits. Beyond that, the Kiowa

Tribe of Oklahoma, by federal law, is immune from this

action. That complaint, however, is being pursued in

other pending appeals.

/s/ R. Brown Wallace

R. Brown Wallace, OBA #9310

Shelia D. Tims, OBA #13360

ANDREWS DAVIS LEGG BIXLER

MILSTEN & PRICE

500 West Main

Oklahoma City, Oklahoma 73102

Telephone (405) 272-9241

CERTIFICATE OF SERVICE

I hereby certify that on this 22 day of September,

1995, a true and correct copy of the above and foregoing

document was placed in the United States Mail, postage

prepaid and addressed to:

William J. Robinson

Shirk, Work, Robinson & Work

801 Colcord Building

15 North Robinson

Oklahoma City, Oklahoma 73102

App. 33

Dwight W. Birdwell

Ronald J. Pool

217 N. Harvey, Ste. 200

Oklahoma City, Oklahoma 73102

Donna N. Blakley

Janis W. Preslar

2900 Liberty Tower

100 N. Broadway

Oklahoma City, Oklahoma 73102-8827

Myron K. Cunningham

Kerr-McGee Corporation

123 Robert S. Kerr Avenue

Oklahoma City, Oklahoma 73125

Timothy J. Bomhoff

Conner & Winters, A P.C.

950 City Place

204 North Robinson

Oklahoma City, Oklahoma 73102

John M. Peters

Jonathan E. Miller

Monnet, Hayes, Bullis,

Thompson & Edwards

1719 First National Center West

Oklahoma City, Oklahoma 73102

Jeffrey W. Wagner

Sun Company, Inc.

1801 Market Street

Philadelphia, PA 19103

Wade A. Hoefling

Associated Natural Gas, Inc.

370 -— 17th Street, Suite 900

Denver, Colorado 80202

App. 34

John R. Morris

McAfee & Taft

10th Floor, Two Le-iership Square

211 North Robinson

Oklahoma City, Oklahoma 73102

Frederic Dorwart

J. Michael Medina

Old City Hall Building

124 E. Fourth Street

Tulsa, Oklahoma 74103-5010

/s/ R. Brown Wallace