Amicus Curiae Brief — Atkinson Trading Co. v. Shirley

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JAN i| 60 | FILED

No. 00-454

| OFFICE OF THE CLERK

IN THE

Supreme Court of the Anited States

ATKINSON TRADING COMPANY, INC.,

Petitioner,

Vv.

JOE SHIRLEY, JR., VICTOR JOE, DERRICK B. WATCHMAN, AND

ELROY DRAKE, MEMBERS OF THE NAVAJO TAX COMMISSION;

AND STEVEN C, BEGAY, EXECUTIVE DIRECTOR OF THE

NAVAJO TAX COMMISSION,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the Tenth Circuit

BRIEF OF AMICUS CURIAE

ASSOCIATION OF AMERICAN

RAILROADS IN SUPPORT OF PETITIONER

LOUIS P. WARCHOT LYNN H. SLADE

JANET L. BARTELMAY Counsel of Record

ASSOCIATION OF AMERICAN WALTER E. STERN

RAILROADS WILLIAM C, SCOTT

50 F Street, NW MODRALL, SPERLING, ROEHL,

Washington, DC 20001-1564 HARRIS & SISK, P.A.

(202) 639-2500 500 Fourth Street, NW

Bank of America Centre

Ste. 1000

P.O. Box 2168

Albuquerque, NM 87103

(505) 848-1800

Counsel for Amicus Curiae

WILSON-EPES PRINTING Co., INC. — (202) 789-0096 -— WASHINGTON, D.C. 20001

49 PT

QUESTION PRESENTED

Amicus Curiae, Association of American Railroads,

addresses the following question:

Whether an Indian tribe lacks jurisdiction to impose a

tax on nonmember activities and transactions on

nonmember fee lands (or their equivalent) within an

Indian reservation?

(i)

TABLE OF CONTENTS

TO AFFORD PREDICTABILITY, LAND

STATUS SHOULD REMAIN A CRITICAL

FACTOR IN DEFINING TRIBAL JURIS-

DICTION OVER NONMEMBER PROP-

ee PRR PUR BEE MI esc shsdisnerscesovvansesisonss

This Court’s Decisions Make Plain that

Land Status is the Predominant Factor in

Evaluating Tribal Jurisdiction Over Non-

Fistorical Understandings and Contemp-

oraneous Interpretations Demonstrate that

Tribal Jurisdiction is Significantly Re-

duced on Nonmember Fee Lands or Their

NU dithisdistibiisssdidithatidicchstiacheacsiainsances |

1. Absent powers conferred by treaty or

Congress, historically, Indian tribes

lacked jurisdiction over nonmembers

SAREE ESE aNe See

(iii)

SOPOT OCHS USOT EO TE SETH SES EEE ESOS OSES EE ESES

SOPHO SEE ESEH HOES EEE SESE SEEE HOSE EEE EES

SCH H RSH ESSE EesE Eee DEF eeeeeE

SHOTS ESTHET ESHEETS SEES ESEEEES

COO O OOOO OOOO EOE O OOOO TOSS OOOOH OOO DEOO DOC ES ODODE SEO EEeeeeeere

Il.

lil.

TABLE OF CONTENTS—Continued

2. Buster v. Wright and other historical

tribal tax precedent do not support the

exercise of tribal taxation here...............

3. Recent Congressional action—defining

federal and state criminal jurisdictional

boundaries—cannot change widely

held historical understandings concern-

ing tribal civil jurisdiction over non-

MEMDBETS ......-ccccccreccroscrseececsessssnsevscscoccses

THE COURT OF APPEALS’ APPLICATION

OF THE MONTANA EXCEPTIONS CAN-

NOT BE RECONCILED WITH THIS

COURT’S DECISIONS IN MONTANA AND

STRATE ......ccssvecosssorcsescccencsosensovenecosencssoncssescsoses

THE COURT OF APPEALS’ “SLIDING

SCALE” ANALYSIS WOULD DEPRIVE

INDIAN TRIBES AND OTHERS PRESENT

ON INDIAN RESERVATIONS OF PRE-

DICTABLE JURISDICTIONAL GUIDE-

LINES, AND WOULD ENGENDER

TRIBAL TAXES UNRELATED TO NON-

MEMBERS’ CONSENT .........ccssceseseeesereessseeeees

CONCLUSION ............cscccscsssssccssereeseseesscsneessnersoeeeneeeenes

PRAT ARM es se ARERR eer Ney ae eo

TABLE OF AUTHORITIES

Cases Page

Alaska v. Native Village of Venetie Tribal

Government, 522 U.S. 520 (1998) ....ccccccscsese 4, 8,9, 18

Ash Sheep Co. v. United States, 252 U.S. 159

CEFR ivcetscsisseninsishneieseliasecidsiagunaaaieies 10

Atkinson Trading Co. v. Shirley, 210 F.3d 1247

CRI its Be ccdacidncpacctnccnstibasina ee passim

Backcountry Against Dumps v. EPA. 100 F.3d

RE CA AR, SID scien cnskcnipiadbinseeasdcduace 19

Bates v. Clark, 95 U.S. 204 (1877)....... 2, 3, 10-12, 14-16

Big Horn County Electric Cooperative, Inc. v.

Adams, 219 F.3d 944 (9th Cir. 2000)...........000.. 8, 23

Brendale v. Confederated Tribes and Bands of

Yakima Indian Nation, 492 U.S. 408

(CS PUP nissihociienissdlialtitacdeaipeatncictietdika hasadaiike cota 4, 7,9, 18

Burlington Northern R.R. Co. v. Red Wolf, 522

Soy GPE LESTE libntincackicaiiamtisassdbucrsuke.. 8, 21

Buster v. Wright, 135 F. 947 (8th Cir. 1905)....... 3, 13, 14

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

BORE | OI settles citi itialadasieateaceedis cig eae 24

DeCoteau v. District County Court, 420 U.S. 425

CAO TD picncvcntsiecachistalianatiobinse cdi neue 18

Dick v. United States, 208 U.S. 340 2): | FEES 12

Donnelly v. United States, 228 U.S. 243 (1913)... 17

Hagen v. Utah, 510 U.S. 399 (1994) .o.cccccccccccsseeees 18

M’Culloch v. Maryland, 17 U.S. (4 Wheat.) 316

CE EPP ntisripessncigiminendlitiaienmbitaniipiacaac ee 23

Maxey v. Wright, 3 Ind. T. 243, 54 S.W. 807,

aff d, 105 F. 1003 (8th Cir. 1900) .........ccecccseee. 15, 16

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

CP URAT siencicdbnninsieistbedadaicesaisititeetiniia ie oct 6, 13

Montana v. United States, 450 U.S. 544 (1981)... passim

- Morris v. Hitchcock, 194 U.S. 384 CESOB) . cccrececsce 15

TABLE OF AUTHORITIES—Continued

Cases Page

P ~ Oliphant vy. Suquamish Indian Tribe, 435 U.S.

191 (1978) ...c.cscescssesssseseersnssssnsnssesensnnsnensensenensnnes 5, 10

Pittsburg & Midway Coal Mining Co. v. Watch-

man, 52 F.3d 1531 (1Oth Cir. 1995).....-esesesee 18

Rosebud Sioux Tribe v. Kneip, 430 U.S. 584

(1977) .ressccosscesssssssssserensnsscesssncnenesenserossseversnensoee® 11

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

(1978) ...ssecececcssssssssececsssseseessnscnensnsnsnsnssanensnsoseasens 24

Seymour v. Superintendent of Washington State

Penitentiary, 368 U.S. 351 (1962) .....-sesseseeeserees 17, 18

Solem v. Bartlett, 465 U.S. 463 (1984)... 10, 11, 17

South Dakota v. Bourland, 508 U.S. 679 (1993)... 4,7

Strate v. A-] Contractors, 520 U.S. 438 (1997) .... passim

United States v. Baker, 894 F.2d 1144 (10th Cir.

1990) .s.cccceccscsscsscsssecsscsssereerencscssnssesnsenensssssassrenses 17

United States v. McGowan, 302 US: 332

(1938) \..scscccscosssssssrseesenersessnsnesserersssensncsencnensnenenes 17

United States v. Pelican, 232 U.S. 442 (1914)...... 17

United States v. Pollmann, 364 F. Supp. 995

(S.D. Mont. 1973) ....scsssssssssssseesssnsnsncnsssssnenenensnes 19

United States v. Sandoval, 231 U.S. 28 (1913)...... 17

United States v. Von Murdock, 132 F.3d 534

(1OtH Cir. 1997)......ecccecssseererenenenenensesssessenennenenes 19

United States v. Wheeler, 435 U.S. 313 (1978) ..... 2

Washington v. Confederated Tribes of the Col-

ville Indian Reservation, 447 U.S. 134 (1980)... 6,7

White Earth Band of Chippewa Indians v.

Alexander, 518 F. Supp. 527, 534-35 (D.Minn.

1981), aff d, 683 F.2d 1129 (8th Cir. 7 4 Sane 19

Statutes and Regulations

18 U.S.C. § 1151 (2000) .......-ceeseeereeresnnsensensenneenens 16-20

18 U.S.C. § 1165 (2000) .......-eeeerreereeenssenseseennenes 19

Vii

TABLE OF AUTHORITIES—Continued

Page

Arizona Boundary Act of 1934, 48 Stat. 960......... 12, 16

Io BAS § ISTE CGO oii ccrccrerscincten os 19

42 U.S.C. §§ 6901-6992 (1994) ooo cccccccccscsecoeeee. 19

Act of June 28, 1898, 30 Stat. 495 .o...cccccccsesseseeee. 15

Other Authorities

23 Op. Atty. Gen. 214 (1900) .o.c..cccecccccccsssccescecesees 15

Felix S. Cohen, Handbook of Federal Indian

TO TM crinitacesctirilicusansiteas Bomee as 1z, 15

S. Rep. No. 1686, 86th Cong. 2d Sess. ( 1960) ...... 19

INTEREST OF AMICUS CURIAE!

The Association of American Railroads (“AAR”), a non-

profit national trade association representing the Nation’s

major railroads, appears in this case as an amicus curiae

because its members have a vital interest in ensuring that their

Property interests and activities within Indian reservations

and across Indian lands are subject to clear jurisdictional rules

that will not hinder the railroads’ ability to provide interstate

rail service. All parties have consented to AAR’s amicus

participation. AAR’s members include intercity passenger,

commuter and freight railroads. The freight railroad

members operate 76 percent of the line-haul mileage, employ

approximately 90 percent of the workers, and account for

approximately 93 percent of the freight revenues of all

railroads in the United States. In addition, AAR member

railroads operate on longstanding rights-of-way granted by

the federal government that cross dozens of different Indian

reservations in the United States, and some of their railroads

also run through areas located adjacent to Indian reservations,

but within areas over which Indian tribes or groups assert

civil jurisdiction. :

AAR represents its member railroads before courts,

agencies, and the United States Congress on matters of

common concern to its members. It has filed briefs amicus

curiae before this Court.? The decision below may have a

' This brief was not authored in-whole or in part by counsel for either

party. No person or entity, other than the amicus curiae or its members,

made a monetary contribution to the preparation or submission of this

brief.

” See, e.g. Cooper Industries, Inc. v. Leatherman Tool Group, Inc.,

U.S. Supreme Court Cause No. 99-2035 (filed December 4, 2000);

Burlington Northern R.R. v. Blackfeet Tribe, U.S. Supreme Court Cause

No. 91-545 (filed November 1, 1991); Southern Pacific Transportation

Co. v. Hernandez, U.S. Supreme Court Cause No. 91-293 (filed

serious adverse effect on the railroad industry, since it

exposes the industry to extensive and potentially burdensome

tribal taxation and regulation of railroad properties and

activities. Railroads have little or no voice in tribal

governments and, like other nonmember businesses, are

targets for taxing and other revenue raising efforts tribes may

seek to impose without adversely affecting their own

members. Tribal taxation of railroad properties and

associated rail transportation activities could have dramatic

and negative impacts on the railroad industry and the free

flow of interstate commerce.

America’s railroads cross the lands or reservations of a

large number of tribes that may seek to impose a variety of

taxes and regulatory schemes on railroad property or

activities. It is critical to railroads and others doing business

on Indian reservations for there to be reliable and objectively

discernable guideposts for determining whether a particular

tribe has jurisdiction—including the power to tax—over

railroads and other businesses. The decision below

significantly blurs the applicable standards and impairs the

railroads’ abilities to reliably predict tribal taxing powers.

SUMMARY OF ARGUMENT

As governments whose sovereignty is narrowly confined,

see generally United States v. Wheeler, 435 U.S. 313, 326

(1978), Indian tribes generally lack civil jurisdictional

authority over the property and activities of nonmembers on

nonmember fee lands. As to nonmember fee lands, this rule

derives from Bates v. Clark, 95 U.S. 204 (1877). In the last

20 years, this Court has reaffirmed and clarified the general

rule that tribes lack jurisdiction over nonmember lands and

associated activities except in very specific and narrow

September 18, 1991); Burlington Northern RR. v. Oklahoma Tax

Comm'n, 481 U.S. 454 (1987).

circumstances. See, e.g., Montana v. United States, 450 U.S.

544 (1981); Strate v. A-] Contractors, 520 U.S. 438 (1997).

The court below misconstrued _ this Court’s recent

pronouncements and has misunderstood the historical

underpinnings of those decisions.

The historical record of judicial decisions, administrative

interpretations, and learned commentators demonstrates that

Indian tribes were understood to lack jurisdictional authority

over nonmember activities on nonmember lands, unless a

treaty or federal statute conferred such power on the specific

tribe involved. See Bates v. Clark, 95 U.S. 204 (1877). The

modern application of this rule is reflected, as to fee lands, in

Montana, and as to rights-of-way, in Strate. This Court’s

decisions establish that land status is a critical determinant of

the scope of tribal powers.

Recent Congressional action defining “Indian country” for

Purposes of state or federal criminal jurisdiction and

authorizing specific delegations of power through statutes

like the Clean Water Act do not qualify as federal statutes

that authorize the exercise by Indian tribes of general civil

jurisdiction over nonmembers. Here, unlike the situation in

Buster v. Wright, 135 F. 947 (8th Cir. 1905), no treaty or

federal statute confers any Civil jurisdiction upon the Navajo

Nation that would support the asserted tribal tax.

The Court of Appeals for the Tenth Circuit has devised an

interpretation of Montana’s “consensual _ relationship”

exception that would enable tribes to exercise civil

jurisdiction over even the most casual visitor who traverses a

reservation. To reach that result, the court below

misinterprets this Court’s clear and unequivocal decisions.

Amicus submits that this Court’s decisions require that for a

“consensual relationship” to support the exercise of tribal

jurisdiction, the relationship must be between the tribe and

the entity or person to be regulated, must be clear and

contractual, reflecting consent to jurisdiction, and must

directly concern the subject matter of the asserted tribal

jurisdiction, That definition will provide predictability to

those doing business on Indian reservations. The Court

should reverse the decision below and clarify standards

defining a consensual relationship “of the qualifying kind.”

Strate, 520 U.S. at 457.

ARGUMENT

I. TO AFFORD PREDICTABILITY, LAND

STATUS SHOULD REMAIN A CRITICAL

FACTOR IN DEFINING TRIBAL JURIS-

DICTION OVER NONMEMBER PROPERTY

AND ACTIVITIES.

A. This Court’s Decisions Make Plain that Land

Status is the Predominant Factor in Evaluating

Tribal Jurisdiction over Nonmembers.

This Court’s decisions concerning the scope of tribal civil

jurisdiction have consistently focused on land status as a

central factor in concluding that Indian tribes generally lack

the power to tax and regulate nonmember activities and

property on nonmember lands located within reservation

boundaries. See, e.g., Strate v. A-1 Contractors, 520 U.S. 438

(1997); South Dakota v. Bourland, 508 U.S. 679 (1993);

Brendale v. Confederated Tribes and Bands of Yakima Indian

Nation, 492 U.S. 408 (1989); Montana v. United States, 450

U.S. 544 (1981). These cases reflect that land status is a

critical, if not determinative, factor in defining the geographic

scope of tribal jurisdiction. See also Alaska v. Native Village

of Venetie Tribal Government, 522 U.S. 520 (1998). The

conclusion of the court below that “fee status is simply one

factor a court should consider in applying the Montana

framework and weighing the interests of the nonmembers

against those of the tribe but not the determining factor,”

cannot be reconciled with this Court’s opinions. Atkinson

Trading Co. v. Shirley, 210 F.3d 1247, 1256 (10th Cir. 2000)

(emphasis in original).

The “path-marking case concerning tribal civil jurisdiction

over nonmembers” is Montana v. United States, 450 U.S. 544

(1981). Strate, 520 U.S. at 445,

Montana . . . described a general rule that, absent a

different congressional direction, Indian tribes lack. civil

authority over the conduct of nonmembers on non-

Indian land within a reservation, subject to two

exceptions: * The first exception relates to nonmembers

who enter consensual relationships with the tribe or its

members; the second concerns activity that directly

affects the tribe’s political integrity, economic security,

health, or welfare.

Id. at 446.* In Montana, the Court’s discussion of the scope

of tribal sovereignty referred repeatedly to the concept that

*In Montana, the Court confirmed that, if an exception applies, the

tribe may have the authority to “regulate, through taxation, licensing, or

other means the activities of nonmembers....” 450 U.S. at 565 (emphasis

added). This statement draws a clear parallel between the scope of a

tribe’s regulatory and taxing jurisdiction. As discussed below, in Strate,

the Court confirmed that the scope of regulatory authority equates to a

tribe's adjudicatory authority. This straightforward parallelism hews to

historical precedent.

‘In Strate, the Court compared a tribe’s limited civil authority over

nonmembers with the absence of any tribal criminal jurisdictional

authority over nonmembers. /d. at 445, citing Oliphant v. Suquamish

Indian Tribe, 435 U.S. 191 (1978). Justice Ginsberg in Strate, and the

Court in Montana, noted that “Oliphant rested on principles that support a

more ‘general proposition’.” Strate, 520 U.S. at 445, quoting Montana,

450 U.S. at 565. That “general proposition” in essence is that Indian

tribes, as limited sovereigns, historically lacked jurisdiction over

nonmembers and their lands and activities. Historical understandings

would support a simple rule that Indian tribes lack civil jurisdiction over

nonmembers’ fee lands (and their equivalent, including federally-granted

rights-of-way) and activities on those lands. See Point I.B, infra.

6 ;

general principles of tribal sovereignty do not support the

exercise of tribal jurisdiction over nonmember property and

activity on nonmember fee lands. See 450 U.S. at 564-65

(“hunting and fishing by nonmembers of a tribe on lands no

longer owned by the tribe bears no clear relationship to tribal

self-government or internal relations”). Then, after describ-

ing the two limited exceptions that “may” support tribal

jurisdiction over activities on nonmember fee lands, the Court

concluded that neither exception applied to “[njJon-Indian

hunters and fishermen on nonmember fee land,” and

distinguished these lands from “lands still owned by or held

in trust for the Tribe or its members.” 450 U.S. at 566-67.

The Court’s analysis and result in Montana, particularly when

contrasted with the decision in Merrion v. Jicarilla Apache

Tribe, 455 U.S. 130 (1982), a case arising on tribal trust

‘lands, demonstrate the critical impact of land status and of a

tribe’s loss of the power to exclude.

The Court’s decision in Merrion v. Jicarilla Apache Tribe,

455 U.S. 130 (1982), is consistent with Montana. There,

while upholding the Tribe's authority to tax oil and gas

lessees’ activities on tribal trust lands on the reservation, the

Court stated: “[A] tribe has the power to tax nonmembers

only to the extent the nonmember enjoys the privilege of

trade or other activity on the reservation to which the tribe

can attach a tax.... A tribe has no authority over a

nonmember until the nonmember enters tribal lands or

conducts business with the Tribe.” 455 U.S. at 141-42.

There, the nonmembers were operating pursuant to a contract

with the Tribe on on-reservation tribal trust lands.”

S Washington v. Confederated Tribes of the Colville Indian

Reservation, 447 U.S. 134 (1980), fundamentally a state tax case, is also

consistent with Montana. There, the Court rejected the state’s argument

that the Tribes lacked the power to tax transactions on trust lands, stating:

“Executive branch officials have consistently recognized that Indian tribes

possess a broad measure of civil jurisdiction over the activities of non-

’

————— ae ae

(Uae rc mie

In Brendale v. Confederated Tribes and Bands of Yakima

Indian Nation, 492 U.S. 408 (1989), the Court considered

once again the scope of a tribe’s power to regulate

nonmember lands and activities. There, Justice White stated

that, as to all nonmember lands, “the Yakima Nation no

longer has the power to exclude fee owners from its land

within the boundaries of the reservation.” Jd. at 424.

“Therefore, that power can no longer serve as the basis for

tribal exercise of the lesser included power [to regulate].” /d.

Inasmuch as there is no evidence in the record that the Navajo

Nation has engaged in any “historic and consistent” effort to

limit access, maintain control Over, Or preserve the character

of the area in which the Cameron Trading Post and related

facilities are located, the Court’s analysis applicable to the

\ “closed” portion of the Yakima Reservation is inapposite

because there is no evidence the Navajo Nation ever sought to

exercise a power to exclude with respect to the Atkinson

lands. See 492 U.S. at 438-40 (Stevens, J.).

The Court next emphasized the critical significance of the

loss of power to exclude in South Dakota v. Bourland, 508

U.S. 679 (1993). There, the Court Stated:

Montana and Brendale establish that when an Indian

tribe conveys Ownership of its tribal lands to non-

Indians, it loses any former right of absolute and

exclusive use and Occupation of the conveyed lands.

The abrogation of this greater right, at least in the

context of the type of area at issue in this case [broadly

opened to the public], implies the loss of regulatory

jurisdiction over the use of the land by others.

Id. at 689. The Bourland Court observed: “regulatory

authority goes hand in hand with the power to exclude.” /d.

at 691 n.11, citing Brendale, 492 U.S. at 423-24 (White, J.).

Indians on Indian reservation lands in which the tribes have a significant

interest.” 447 U.S. at 152 (emphasis added).

Consequently, where a_ tribe has no right to exclude

nonmembers from particular lands within a reservation, the

tribe will ordinarily lack the power to regulate or tax those

lands or their use.

The unanimous Court in Strate laid to rest any doubt

regarding the significance of land status and the power to

exclude. There, the Court determined that federally-granted

rights-of-way crossing Indian reservations were the

equivalent of fee lands, and thus were governed by the

jurisdictional analysis prescribed in Montana. 520 U.S. at

456. In reaching this conclusion, the Court rejected the tribal

court plaintiffs’ contention that tribal courts possess general

jurisdiction within reservation boundaries without regard to

land status. Having concluded that the highway right-of-way

was the equivalent of fee land,® the Court held that tribal

court jurisdiction could not be sustained unless the tribal

court plaintiffs could establish that either of Montana’s

exceptions applied. If not, the main rule—driven by land

status and the concomitant loss of the power to exclude—

controlled. Id. at 456.

where the Court issued a writ of certiorari, vacated a decision of the

Ninth Circuit, and remanded for further consideration in light of Strate,

the Court signaled that other federally-granted «ights-of-way also are

subject to the analysis in Strate. The Ninth Circuit then properly applied

Strate to federally-granted railroad rights-of-way. See Burlington

Northern R.R. Co. v. Red Wolf, 196 F.3d 1059 (9th Cir. 1999), cert.

denied, 120 S. Ct. 1964 (2000). More recently, the Ninth Circuit

recognized that Strate required the overruling of its earlier decision in

Burlington Northern R. R. Co. v. Blackfeet Tribe, 924 F.2d 899 (9th Cir.

1991), because Blackfeet Tribe failed to recognize that the railroad right-

of-way at issue there was the equivalent of fee lands. Hence, the court

held that the tribal taxes levied on utility properties could not stand in

light of Strate. Big Horn County Electric Cooperative, Inc. v. Adams, 219

F.3d 944, 953 (9th Cir. 2000).

Finally, in Venetie, this Court unanimously rejected the

Ninth Circuit’s multi-factor test, similar in the

unpredictability of its application to the sliding scale

proposed by the Court below. See Atkinson, 210 F.3d at

1255. Instead, this Court’s decision in Venetie focused on the

land status and federal superintendence of specific lands in

reaching its conclusion that the Native Village lacked the

power to tax. See 522 U.S. at 525-27. Even though the

business activities subject to the asserted tribal tax occurred

on lands owned in fee by the Native Village, the Court stated

that the Village could not tax the activities since the lands

were not reservation lands, were not trust allotments, were

not lands set aside by the federal government for the use of

the Indians, and were not subject to the superintendence of

the federal government. Jd. at 526-32. Venetie and this

Court’s other decisions lead to the conclusion that the court

below erred when it stated that “the Supreme Court did not

intend that fee status should become the determining factor in

cases involving the assertions of tribal sovereign power over

nonmembers on the reservation.” See 210 F.3d at 1254.

Montana’s “main rule” is that tribes generally lack civil

jurisdiction over nonmembers on nonmember fee lands and

on federally-granted rights-of-way.

The Court has worked hard to clarify and define the powers

of Indian tribes over nonmembers on nonmember fee lands or

their equivalent. However, the decision below ignores this

Court’s writings, expands beyond recognition the narrow

exceptions potentially available that might support assertions

of tribal jurisdiction, and cannot be harmonized with this

Court’s decisions in Montana, Brendale, and Strate. This

case presents the Cuurt with an important Opportunity to

clarify its jurisprudence concerning the scope of tribal

jurisdiction over nonmember property and activities on

nonmember-owned fee lands.

B. Historical Understandings and Contemp-

oraneous Interpretations Demonstrate that

Tribal Jurisdiction is Significantly Reduced on

Nonmember Fee Lands or Their Equivalent.

1. Absent powers conferred by treaty or

Congress, historically, Indian tribes lacked

jurisdiction over nonmembers on_ fee

lands.

The decision below runs counter to pertinent historical

federal decisions and policies and contemporaneous under-

standings concerning tribal jurisdiction. The “common

notions” held by all branches of the federal government

during the nineteenth and early twentieth centuries, Oliphant

v. Suguamish Indian Tribe, 435 U.S. 191, 206 (1978), reflect

clearly that Indian tribes generally lacked civil jurisdiction

over nonmembers. As this Court stated in Solem v. Bartlett,

465 U.S. 463, 468 (1984), a reservation disestablishment

case: 7

The notion that reservation status of Indian lands might

not be coextensive with tribal ownership was unfamiliar

at the turn of the century. Indian lands were judicially

defined to include only those lands in which the Indians

held some form of property interest: trust lands,

individual allotments, and, to a more limited degree,

opened lands that had not yet been-claimed by non-

Indians.

Citing Bates v. Clark, 95 U.S. 204 (1877) and Ash Sheep Co.

v. United States, 252 U.S. 159 (1920). Land title and whether

real property retained any trust or restricted status, and not

reservation boundaries, were then considered determinative

of jurisdictional i issues.’

? The absence of any remaining tribal or Indian interests is particularly

significant where, as here, tribal civil jurisdiction over nonmembers is

asserted, and questions of state or federal criminal jurisdiction (following

Bates v. Clark, 95 U.S. 204 ( 1877), provides historical

standards this Court has used repeatedly to determine

jurisdiction over nonmember lands. In that case, involving a

civil claim that military officials trespassed and improperly

seized a quantity of whiskey, the Court stated:

The simple criterion is, that, as to all lands thus

described, it was Indian country whenever the Indian

title had not been extinguished, and it continued to be

Indian country so long as the Indians had title to it, and

no longer. As soon as they parted with the title, it ceased

to be Indian country, without any further act of

Congress, unless by the treaty by which the Indians

parted with their title, or by some act of Congress, a

different rule was made applicable to the case.

95 U.S. at 208 (emphasis added).* As this Court noted in

Rosebud Sioux Tribe v. Kneip, 430 U.S. 584, 613 n. 47

(1977),? when “Indian title had been extinguished, . . . the

the “uncoupling of reservation status from Indian ownership” in the 1948

Major Crimes Act, see Solem, 465 U.S. at 468) are not. See Point 1.B.3,

infra. ?

“The Court’s ruling in Montana reaffirmed that congressional action

may confer tribal jurisdiction. See Montana, 450 U.S. at 564. However,

short of a treaty provision or act of Congress, when a tribe cedes the

power to exclude, tribal jurisdiction over nonmembers activities ceases

(absent the exceptions the Court described in Montana.).

” In Rosebud, tribal amici curiae advised this Court:

[A]t the time the Rosebud statutes were enacted {in 1904, 1907, and

1910}, the ‘title theory’ was dominant. A Congressman then would

have assumed. . . that each parcel ceased to be Indian country upon

the extinguishment of Indian ownership. The term “diminished”

would mean diminished in ownership, not boundaries, since

ownership was then thought to be the significant jurisdictional

factor.

Brief of Amici Curiae National Congress of American Indians, et al., 28,

Rosebud Sioux Tribe v. Kneip, 430 U.S. 584 (1977).

jurisdiction of the State . . . was full and complete.” Citing

Dick y. United States, 208 U.S. 340, 352 (1908). Thus,

resolution of questions of title also was understood to resolve

questions of federal, tribal, or state jurisdiction, absent an

express congressional statement that federal or tribal

jurisdiction should be preserved."” This understanding

persuasively supports Montana, Strate and the Court’s other

recent cases which equate the loss of tribal power to the loss

of the power to exclude.

Prior to and contemporaneous with 1934, Indian tribes

were not recognized as having the power to tax nonmembers

on nonmember lands absent a Congressional expression of

intent to that effect. In 1942, just after the 1934 Arizona

Boundary Act, 48 Stat. 960, that extended the Navajo

Reservation into the vicinity of the Atkinson Trading

Company lands, Felix S. Cohen, stated:

The power to tax nonmembers is derived in the cases

from the authority, founded on original sovereignty and

guaranteed in some instances by treaties, to remove

property of nonmembers from the territorial limits of the

tribe. Since the tribal government has the power to

exclude, it can extract a fee from nonmembers as a

condition precedent to granting permission to remain or

to operate within the tribal domain.

Felix S. Cohen, Handbook of Federal Indian Law, 266-67

(1942 Ed.) Of course, where a tribe has lost the power to

exclude, that limited power “to extract a fee” also is lost. The

historical authority relating to the taxing power of tribes

confirms that Indian tribes lacked the inherent power to tax

In Dick v. United States, 208 U.S. 340 (1908), the Court emphasized

that in Bates the Court “took care” to note that an exception to the general

rule would apply where Congress or a treaty provision preserved tribal

jurisdiction.

( 13

nonmember activities on nonmember fee lands within a

reservation.

Indian tribes were understood historically to lack

jurisdiction over nonmember activities on nonmember lands

absent an expression from Congress to-the-contrary. Because

jurisdiction was understood contemporaneously to follow

title, when the Navajo Reservation was extended in 1934 to

include lands in the vicinity of the Cameron Trading Post, the

contemporaneous understanding would have been that the

Navajo Nation lacked jurisdiction over Atkinson Trading

Company’s fee lands. That the Navajo Nation lacked any

interest in those lands would have been considered

determinative historically, and at least should be held to have

significantly reduced the power of the Navajo Nation over the

lands and activities. A tribe can exercise no civil jurisdiction

over nonmember activities on fee lands or rights-of-way,

unless the tribe can demonstrate that one of the two Montana

exceptions applies.

2. Buster v. Wright and other historical tribal

tax precedent do not support the exercise

of tribaltaxation here.

Tribal tax cases decided around the turn of the century

support the absence of tribal jurisdiction over nonmember fee

lands and associated activities.

The Tenth Circuit’s extensive reliance on Buster v. Wright,

135 F. 947 (8th Cir. 1905), to support the notion that the

Navajo Nation has the power to tax activities on Atkinson

Trading Company’s fee lands, is misplaced. See 210 F.3d at

1255-56, 1258-63.'' After discussing the scope of the powers

'' That “Buster and Merrion use similar language and similar analysis

in their consideration of tribal taxing powers on activities taking place on

fee lands and tribal lands” 210 F.3d at 1258, relates to the fact that

Merrion arose on tribal trust lands, and Buster involved a circumstance

of Indian tribes and the Creek Nation, the Eighth Circuit in

Buster specifically considered this Court's decision in Bates

v. Clark, 135 F. at 952, and the “rule” that when Indian title is

extinguished, so too is tribal jurisdiction. In clear language,

the court noted that:

the case before us falls not under the rule [in Bates], but

under the exception to the rule [i.e., where Congress or a

treaty provides otherwise], set forth in the opinion cited.

The rule applies to the extinguishment of the original

Indian title by occupancy. The case under consideration

involves the extinguishment of no such title. The rule

governs cases in which a different rule is not made

applicable by treaty or by act of Congress. ... The

Creek Nation...held its territory under a patent from the

United States and under an act of Congress which

expressly provided that it should be the country of the

Creeks “so long as they shall exist as a nation and

continue to occupy” it. They still exist as a nation, and

they still continue to occupy that country, notwith-

standing the fact that those who are noncitizens of their

tribe hold the title to and occupy isolated lots and tracts

of land therein.

Id. Thereafter, the Eighth Circuit noted that a 1901

agreement with the Creek Nation guaranteed the continued

jurisdiction of the Creek Nation until 1906, when that

jurisdictional authority was to be extinguished absent some

further act of Congress. /d. at 953. Finally, the court stated:

The treaties and agreements between the United States

and the Creek Nation under which title from the United

States and jurisdiction to govern its country within the

limits of its patent were guarantied to it, the acts of

Congress, and the decisions of the courts which have

where the treaty and federat statutes involved preserved the tribal power

to tax. Montana ‘s essential distinction was not presented in either case.

respected and sustained that jurisdiction, Clearly take this

case out from under the general [Bates] rule that the

extinguishment of original Indian title by occupancy

removes land from the Indian country... .

Id. These determinations were made against a historical

backdrop that clearly and unequivocally confirmed that, as of_

1901, under prior treaties and federal statutes, the Creek

Nation had taxing power over the nonmember purchasers. Jd.

at 953-54, citing Act of June 28, 1898, 30 Stat. 495; 23 Op.

Atty. Gen. 214, 217-220 (1900).'? Therefore, as was the case

with the Cheyenne River Sioux Reservation in Solem, the

Creek Nation retained an “interest” in the lands at issue

pursuant to congressional authority so as to preserve limited

tribal powers.

This Court’s decision in Morris v. Hitchcock, 194 U.S. 384

(1904), upholding the Chickasaw Nation’s power to tax, also

was premised on the same foundation: specific treaties and

federal statutes authorized the Chickasaw Nation’s power to

tax. See also Maxey v. Wright, 3 Ind. T. 243, 54 S.W. 807,

aff d, 105 F. 1003 (8th Cir. 1900), where the court upheld the

Creek Nation’s power to impose a tax on attorneys, premised

specifically on a treaty provision preserving the power. 54

S.W. af 808-10. However, the Creek Nation itself was not

empowered under the applicable treaty to collect the tax

itself, and would only have had the power to request removal

of attorneys who failed to pay the tax. By virtue of a separate

federal statute, the Department of the Interior held the power

to collect the tax for the Nation. Jd. at 810-12. Moreover, in

? Felix S. Cohen observed that “there are important fields in which

(Oklahoma Indians have received distinctive treatment and which present

distinctive legal problems. These fields include...property laws affecting

the Five Civilized Tribes {including the Creek Nation], taxation....” Felix

S. Cohen, Handbook of Federal Indian Law, 425 (1942 Ed.) (Chapter 23,

“Special Laws Relating to Oklahoma”).

Maxey, the attorneys’ activities were on lands owned by the

Creek Nation, subject to restrictions on alienation. /d. at 811.

This Congressional intent was bolstered because the

nonmember in Buster entered the Creek Reservation to do

business with notice of the tribal power over the lands in

question. Consequently, Buster may reflect a very fact-

specific consensual relationship. See Strate, 520 U.S. at 457.

Here, the Navajo Nation can point to no treaty or

congressional act that serves to take Atkinson Trading

Company’s lands out of the general rule in Bates v. Clark.

The 1934 Arizona Boundary Act, 48 Stat. 960, that extended

the Navajo Reservation to include lands in the vicinity of

Cameron Trading Post, contains nothing that would support

the exercise of tribal jurisdiction over those nonmember

owned fee lands. And, Atkinson Trading Company clearly

had no notice of the potential assertion of tribal taxing power

when it acquired the lands well before 1934, hence, there can

be no consensual relationship, even under a Buster analysis.

Given that the Navajo Nation lacks any inherent power over

Atkinson Trading Company, the Court should reverse the

decision below.

3. Recent Congressional action—defining

federal and state criminal jurisdictional

boundaries—cannot change widely held

historical understandings concerning

tribal civil jurisdiction over nonmembers.

The decision below improperly attempts to support its

analysis by references to the definition of “Indian country”

for criminal jurisdictional purposes. See 210 F.3d at 1257. In

1948, Congress enacted a statutory definition of “Indian

country” for purposes of drawing the line between federal and

state jurisdiction over certain crimes under the Major Crimes

Act. See 18 U.S.C. § 1151 (2000). In that definition,

Congress chose, for criminal jurisdiction purposes (but as

between the federal government and states only), to uncouple

URE ome a

matters

the direct relationship between title and jurisdiction. In some

respects, the Major Crimes Act codified the results in certain

decisions of this Court regarding whether states or the federal

government enjoyed prosecutorial powers. See, e.g.,

Donnelly v. United States, 228 U.S. 243, 269 (1913) (lands

within a reservation legal title to which is held by the United

States were “Indian country”); United States v. Sandoval, 231

U.S. 28, 46 (1913) (Pueblo lands subject to restrictions on

alienation were “Indian country”); United States v. Pelican,

232 U.S. 442, 449 (1914) (allotted lands were “Indian

country”); and United States v. McGowan, 302 U.S. 535, 539

(1938) (lands validly set apart for the use of the Indians and

under the superintendence of the United States were “Indian

country”).

However, those decisions did not address whether Indian

tribes themselves might have civil or criminal jurisdiction

over nonmember fee lands or lands subject to federally-

granted rights-of-way or over activities of nonmembers on

those lands. Moreover, Section 1151(a) neither granted nor

confirmed tribal civil jurisdiction over nonmember activities

on nonmember lands or rights-of-way. See Solem v. Bartlett,

465 U.S. 463, 468 (1984) (“only in 1948 did Congress

uncouple reservation status from Indian ownership and

statutorily define Indian country to include lands held in fee

by non-Indians within reservation bounardies”); Seymour v.

Superintendent of Washington State Penitentiary, 368 U.S.

351, 358 & n.16 (1962).'? While Congress’ choice may have

made sense to allocate prosecutorial prerogatives between

state and federal governments, it does not justify employing a

Criminal statute to overturn this Court’s historic decisions

'’ United States v. Baker, 894 F.2d 1144, 1149 (10th Cir. 1990), relied

upon by the court below, see 210 F.3d at 1258, is consistent with this

conclusion. Baker, an appeal of a conviction in a criminal case, presented

the question whether a state court had jurisdiction to issue a search

Wwairaiit.

regarding the civil jurisdictional powers of tribes over non-

members.

This Court has suggested that Congress’ definition of

“Indian country,” can apply in the context of assertions of

tribal civil jurisdiction. See Alaska v. Native Village of

Venetie Tribal Government, 522 U.S. 520, 527 (1998);

DeCoteau v. District County Court, 420 U.S. 425, 427 n.2

(1975). (Venetie is not pertinent on the point presented here

because that case addressed tribal, not nonmember, lands.) In

any event, some lower courts have extended that proposition

far beyond what amicus submits is appropriate. See, e.g.,

Pittsburg & Midway Coal Mining Co. v. Watchman, 52 F.3d

1531, 1542 (10th Cir. 1995) (“We hold § 1151 represents an

express Congressional delegation of civil authority over

Indian country to the tribes.”). Such holdings cannot be

squared with this Court’s decisions in Brendale, Montana,

and Strate. The result in those cases would have been exactly

the opposite were Section 1151 to define the limits of tribal

power in the civil context. Therefore, the court below erred

when it stated that the definition éf “Indian country” reflected

in 18 U.S.C. § 1151 resolves the inquiry-presented here. See

210 F.3d.at 1257-58."

The decision below also misunderstands the Court’s

reference in Montana to Section 1151. In Montana, the

Court, in the context of the hunting and fishing regulatory

issue presented, stated: “If Congress had wished to extend

tribal jurisdiction to lands owned by non-Indians [in 18

U.S.C. § 1165, prohibiting hunting and fishing on tribal lands,

without lawful authority or permission from the tribe], it

'4The Tenth Circuit’s citation to Seymour v. Superintendent and to

Justice Blackmun’s dissent in Hagen v. Utah, 510 U.S. 399, 425-26

(1994), provide no support for the court of appeal’s decision. See 210

F.3d at 1257. Those decisions were rendered in criminal matters

involving habeas corpus petitions challenging the criminal jurisdiction of

state courts. wy

pre

oe ane

could have easily done so by incorporating in § 1165 the

definition of ‘Indian country’ in 18 U.S.C. § 1151.”

Montana, 450 U.S. at 563. The Tenth Circuit misinterpreted

the significance of this discussion. See 210 F. 3d at 1258

n.10. Rather than supporting the notion that 18 U.S.C.

§ 1151 somehow defines the geographic scope of a tribe’s

jurisdiction, the Court’s quoted comment in Montana is an

acknowledgment that Congress has the power to delegate

regulatory authority to Indian tribes, but chose to exercise it

in a limited fashion there—to apply only to trust lands, lands

subject to restrictions on alienation and other lands reserved

for Indian use. See 18 U.S.C. § 1165 (2000).'° 18 U.S.C.

§ 1151 and its definition of “Indian country” for criminal

jurisdiction purposes do not have the talismanic effect in the

civil context as suggested by the Tenth Circuit.

Congress has demonstrated an ability to delegate powers in

a variety of contexts, and has the power to define the

geographic scope of those delegated powers in a way that

may be appropriately tailored to the subject matter. See e.g.,

33 U.S.C. § 1377 (1994) (authorizing delegation to tribes of

Clean Water Act regulatory power). And, Congress has

chosen not to act in other circumstances. See, e.g.,

Backcountry Against Dumps vy. EPA, 100 F.3d 147, 150-51

(D.C. Cir. 1996) (rejecting the United States Environmental

Protection Agency’s effort to delegate regulatory authority

under the Resource Conservation Recovery Act, 42 U.S.C.

§§ 6901-6992 (1994), to an Indian tribe given the absence of

'S The legislative history of 18 U.S.C. § 1165 clearly reflects that the

reference to “lawful authority or permission” was intended to authorize

tribes to enact and apply regulations conditioning entry to tribal lands

only. See S. Rep. No. 1686, 86th Cong. 2d Sess. (1960); White Earth

Band of Chippewa Indians y. Alexander, 518 F. Supp. 527, 534-35

(D.Minn. 1981), aff'd, 683 F.2d 1129 (8th Cir.), cert. denied, 459 U.S.

1070 (1982); United States v. Pollmann, 364 F. Supp. 995, 1001 (S.D.

Mont. 1973); cf. United States v. Von Murdock, 132 F.3d 534, 535 (10th

Cir. 1997).

Congressional action). The Court should clarify that 18

— US.C. § 1151 relates solely to the determination of whether a

state or the federal government has criminal jurisdiction over

major crimes, and that Congress must act specifically to

delegate federal powers to Indian tribes.

The Court’s decisions for over a century repudiate

unequivocally the Tenth Circuit's efforts to relegate land

status to just another factor affecting tribal powers over

nonmembers. The Court should reverse the decision below to

retain the clarifying power of its land status jurisprudence. .

Il. THE COURT OF APPEALS’ APPLICATION OF

THE MONTANA EXCEPTIONS CANNOT BE

RECONCILED WITH THIS COURT’S DECI-

SIONS IN MONTANA AND STRATE.

This Court’s opinion in Strate reviewed exhaustively the

sources and proper application of the two exceptions to

“Montana’s main rule.” 520 U.S. at 459 n. 14. With respect

to the consensual relationship exception, the Court explained

that the jurisdictional assertion must be directly related to and

arise out of the consensual relationship to which the»

nonmember is a party. Although A-1 Contractors had a

consensual relationship with the Three Affiliated Tribes of

the Fort Berthold Reservation, the Court determined that the

Tribes lacked adjudicatory jurisdiction because the tribal

court plaintiff “‘was not a party to the subcontract, and the

[T]ribes were strangers to the accident.”” 520 U.S. at 457,

quoting 76 F.3d at 940. Applied to the present controversy,

these views lead ineluctably to the conclusion that the Navajo

Nation lacks jurisdiction to impose its Hotel Occupancy Tax

on casual visitors to, and guests of, Atkinson Trading

Company, which operates exclusively on nonmember fee

lands or their equivalent. Those visitors have no consensual

relationship with the Navajo Nation.

z 21

The signal from the Court in Strate, however, was

misunderstood by the court below and threatens to blur the

clarity of the Court’s jurisprudence on_ this question.

Accordingly, this Court should clarify that its decisions

prescribe a clear and unequivocal rule regarding the

consensual relationships that satisfy Montana’s first

exception: there must be a contractual relationship between

the person assertedly subject to tribal jurisdiction and the

tribe (or, in an appropriate case, tribal member) asserting

tribal jurisdiction, the relationship must reflect knowing

consent, and the assertion of tribal power must relate to the

subject matter of the consensual relationship.

Strate provides the clearest application of this rule. While

A-1 Contractors had a contractual agreement to work on a

project for a tribal entity, that consensual relationship did not

satisfy Montana’s first exception because the Three

Affiliated Tribes “were strangers to the accident.” 520 U.S.

at 457. Here, the tax is imposed on guests of Atkinson

Trading who concededly have no contractual arrangements

with the Navajo Nation: their only dealings are with

Atkinson Trading. Under Strate, Atkinson’s dealings with

individual tribal members are irrelevant. See id. Similarly,

railroads’ rights-of-way granted by the United States, even

when consented to by a tribe, are not relationships that Satisfy

Montana's first exception. See Burlington Northern R.R. v.

Red Wolf, 196 F.3d 1059, 1064 (9th Cir. 1999), cert. denied,

120 S. Ct. 1964 (2000).

The decision below represents a significant misapplication

of the two exceptions described in Montana and examined in

Strate. Despite the Court’s guidance in Strate, the court

below used the services that the Navajo Nation may provide

to the Trading Company and its guests, including police, fire,

emergency medical and tourist services, t6 construct a_

“consensual relationship” supporting Navajo Nation taxation

of the guests. In essence, the decision below sanctions a form

of jurisdictional adverse possession: if a tribe makes services

available, it can tax and regulate. See 210 F.3d at 1261-62.

The decision below opens the door wide to analyses that

would permit virtually any relationship regardless of how

remote to support tribal jurisdiction. That approach drains

any meaning from this Court’s decision in Strate and its effort

to provide predictability and a clear rule to govern when a

consensual relationship would support tribal jurisdiction.'°

In contrast, the Court of Appeals for the Ninth Circuit

understood and correctly applied Strate in reaching its

'6 The decision below similarly embraces a bread interpretation of the

second Montana exception. Neither the district court nor the court of

appeals ruled upon the merits of the second Montana exception,

concerning impacts on health and welfare or political integrity, in this

case. However, the courts below (the district court and the Navajo Nation

Supreme Court) suggested an interpretation of the second Montana

exception that would swallow the general rule that tribes lack jurisdiction.

In footnote 8, the Tenth Circuit stated: :

. . the power to tax might arise from the second “significant-

impacts” exception to the Montana rule. In fact, the Navajo

Supreme Court held as much, concluding that “[t]axation, that

indispensable element of any government, surely has everything to

do with the Navajo Nation’s political integrity.” R., Vol. I at 702.

The district court appeared to condone the Navajo Supreme Court’s

conclusion, stating that “[cJonsideration of the other half of the

Montana test, the significant impacts factor, in an appropriate case

may be sufficient to allow the tribe to impose its tax.”

210 F.3d at 1254 n.8. However, Montana requires that the nonmember

“conduct threatens or has some direct effect on the political integrity, the

economic security, or the health or welfare of the tribe.” Montana, 450

U.S. at 566 (emphasis added.) The decision below focuses not on the

nonmember conduct, but instead on the tribe’s need for revenues from

some source to run its government. The comments of the district court

and the Navajo Nation Supreme Court would appear to allow a tribe to

impose a tax on the fee lands activities of nonmembers solely because

tribal taxation is integral to a tribe’s political integrity. This circular

reasoning is wholly at odds with the Court’s instruction that the Montana

exceptions be narrowly construed and applied.

We YORRRER I) LET

decision in Big Horn County Electric Cooperative, Inc. v.

Adams, 219 F.3d 944 (9th Cir. 2000). There, following

Strate, the Ninth Circuit concluded properly that the Crow

Tribe lacked jurisdiction to impose an ad valorem tax on the

right-of-way properties of Big Horn since the consensual

relationships Big Horn had entered with tribal members for

the provision of electric services bore no relationship to the

tax on utility assets the Tribe sought to impose. /d. at 951. In

so holding, the Ninth Circuit overruled its decision in

Burlington Northern R.R. v. Blackfeet Tribe, 924 F.2d 899

(9th Cir. 1991), which had upheld tribal taxation of railroad

rights-of-way. Big Horn, 219 F.3d at 953. The Ninth

Circuit’s conclusion that there is no consensual relationship

Supporting a tax on the value of railroad rights-of-way and

attached properties is clearly correct under Strate.

The decision below turns the proper analysis of

ascertaining whether tribes have taxing jurisdiction on its

head. See M’Culloch y. Maryland, 17 U.S. (4 Wheat.) 316,

429 (1819), where Chief Justice Marshall stated: “All

subjects over which the sovereign power . . . extends, are

objects of taxation; but those over which it does not extend,

are, upon the soundest principles, exempt from taxation.”

Rather than first determining that a tribe has the power to tax,

the court below has determined that where a tribe has

governmental needs to be funded, it has the power to tax.

In Strate, Justice Ginsberg, writing for a unanimous Court,

equated the scope of a tribal court’s jurisdiction to the scope

of an Indian tribe’s legislative jurisdiction: “As to

nonmembers, we hold, a tribe’s adjudicative jurisdiction does

not exceed its legislative jurisdiction.” 520 U.S. at 453.

While the issue presented in Strate related to tribal court

jurisdiction, the rationale and statements of the Court clearly

demonstrate that its analysis is applicable equally to the

attempted exercise of tribal civil regulatory and taxing

jurisdiction over nonmembers activities and property on

nonmember fee lands and federally-granted rights-of-way

within reservations.

lll. THE COURT OF -APPEALS’ “SLIDING

SCALE” ANALYSIS WOULD DEPRIVE

PERSONS PRESENT ON INDIAN RESER-

VATIONS OF PREDICTABLE JURISDIC-

TIONAL GUIDE-LINES, AND WOULD

ENGENDER TRIBAL TAXES UNRELATED

TO NONMEMBERS’ CONSENT.

The “sliding scale” or balancing test proposed by the Court

below will undo fundamental propositions of federal Indian

law that define the scope of tribal powers over nonmember

activities on nonmember lands, and will yield a confused and

unpredictable environment for nonmembers—whether they

may be “passing through” or seeking to pursue productive

economic activity on reservation lands. Such an approach is

particularly troubling for enterprises such as interstate

railroads and pipelines, which have significant investments

that cannot easily be moved in the face of a hostile regulatory

or taxing environment.

Given that Indian tribes retain limited sovereignty, it would

indeed be ironic for tribes to have the authority to impose

burdensome and costly taxes on nonmembers whose activities

are on fee lands or their equivalent whenever the tribe

arguably could provide services or “the benefits of a civilized

society” to the nonmembers. See 210 F.3d at 1263. Given

the absence of constitutional and Commerce Clause

limitations on tribal taxation, see Cotton Petroleum Corp. v.

New Mexico, 490 U.S. 163, 191-92 (1989) (Commerce

Clause); Santa Clara Pueblo v. Martinez, 436 U.S. 49, 56

(1978) (Constitution), tribal taxation in the absence of a

meaningful consent can be particularly troubling. Many

tribal tax schemes are designed carefully in order to shift tax

burdens from tribal members to nonmembers. The Court

should reject the analysis of the courts below, confirm that

land status remains a critical factor in determining whether a

tribe has jurisdiction over nonmembers, and Clarify that

consensual relationships must, in fact, be consensual—putting

the nonmember on clear and unequivocal notice of the

prospective tribal jurisdictional assertion. Specifically, for a

consensual relationship to qualify as a basis for the assertion

of tribal jurisdiction, the relationship must be between the

tribe and the person or entity to be regulated, the consent by

the nonmember should be clear and contractual, reflecting

consent to jurisdiction, and should relate directly to the

activity that is the subject of the consensual relationship

CONCLUSION

The judgment of the court of appeals should be reversed.

Respectfully submitted,

Louis P. WARCHOT LYNN H. SLADE

JANET L. BARTELMAY Counel of Record