Winnebago Tribe of Nebraska v. Kline, Kansas Supreme Court, No. 94, 781:

Plaintiffs brought the question of whether the Kansas motor-fuel tax law imposes a fuel tax collection or payment responsibility upon nonresident tribal corporation, Ho-Chunk Inc., a corporation established by the Winnebago Tribe, that imports fuel from outside Kansas and delivers the fuel to gas stations on Indian reservations within the state of Kansas without any physical place of business or physical storage in Kansas. 

The court held that the tribe was not a distributor but an importer and did not have to pay the tax as the importer – instead the retail gas stations, the distributors of the gas, are responsible for paying the tax.

The Kansas motor-fuel tax law, K.S.A. 79-3401 et seq., imposes a tax per gallon on the use, sale or delivery of all motor vehicle fuels or special fuels which are used, sold or delivered in this state for any purpose whatsoever." K.S.A. 2005 Supp. 79-3408(a). "Unless otherwise specified in the Statute, the incidence of this tax is imposed on the distributor of the first receipt of the motor fuel and such taxes shall be paid but once."

The defendant, Kansas Department of Revenue,  previously ruled that the state fuel tax at issue is imposed on a distributor when such fuel is first received in the State of Kansas at its business and in this case when the Winnebago trucks crossed into Kansas and they “received” the gas into the state.

The Court, using both legislative history and plain language interpretation of the statute, reasoned that the Winnebago Tribe cannot fall under the statue because the fuel never comes to rest or storage in Kansas, at the point of crossing the state line there is no transfer of possession of the fuel, the statue specifically and plainly excludes persons who import motor fuel into the state by truck, and even KDR acknowledged in its licensing process that HCI was an importer and not a distributor. 

Wagnon (formerly Richards) v. PBP (Prairie Band Potawatomi Nation) Nation (04-631)

On December 6, 2005, the United States Supreme Court issued a negative decision in Wagnon v. Prairie Band Potawatomi Nation.  In the underlying case the Tenth Circuit had held that state taxation of motor fuel is not allowed where the Tribe charges a tax equal to the state tax and builds and maintains the roads on its reservation.  The Tenth Circuit found that the Prairie Band is not “marketing a tax exemption” but instead the tax revenues from the gas station are “reservation generated value.”

In the majority opinion (7-2) written by Justice Thomas, the Supreme Court reversed the Tenth Circuit ruling and held that because the Kansas tax is a non-discriminatory tax imposed on the motor fuel received by a non-Indian fuel distributor off the reservation, the tax does not implicate tribal sovereignty and is a valid tax.  Justice Thomas began his analysis by noting that “under our Indian tax immunity cases, the ‘who’ and the ‘where’ of the challenged tax have significant consequences.”  The decision upheld the Kansas tax because the state law places the duty to pay the tax on the fuel distributor, a non-Indian located off-reservation, and because the tax was imposed on the distributor’s receipt of fuel off the reservation.

The Court rejected the argument that it should apply the White Mountain v. Bracker balancing test, because it found that the tax was a purely off-reservation tax that does not implicate tribal sovereignty.   The Court also rejected the argument that the tax was discriminatory because fuel delivered to other sovereigns (including States and foreign countries) was exempt from taxation, concluding that Kansas provides roads services to the Nation that it does not provide to those other sovereigns.

The impact of this decision is likely to be limited to motor fuel and tobacco taxes because they are generally taxed early in the distribution chain, rather than at the point of sale.  Many tribes and states have entered into tax agreements or other arrangements on these taxes, so the effects may not be widely felt outside Kansas.  However, there is the possibility that some states will read the decision as new authority to impose taxes on reservations. 

Dark-Eyes v. Conn. Commissioner of Revenue Services (05-1464)   On October 2, 2006, the Supreme Court denied review of a case involving taxation on private settlement lands owned by a tribe. Dark Eyes is an enrolled member of the Mashantucket Pequot Indian Tribal Nation, and earned her income from the Tribe as a tribal council member.   Dark Eyes did not pay her state income taxes from 1996-1998 and claimed an exemption because she lived in Indian Country.   She argued that the Pequot Indian Tribal Nation was authorized to acquire land under the Private Settlement Lands Act of 1983 within a designated 800 acres with settlement funds.  This Act allowed the tribe to purchase the land that Dark Eyes lived on from willing land owners and then file for lands to be held in trust.  However, the land that Dark Eyes lived on was not purchased by settlement funds but was purchased by the tribe with non-settlement funds.   The lower court held that she could not claim an exemption from state taxation for certain years because the settlement lands were not Indian Country until the trust application was completed in Aug, 1998.

Labor Relations

San Manuel v. NLRB (DC Circuit)

On September 30, 2005, the National Labor Relations Board (NLRB) issued a decision finalizing its earlier May 2004 ruling that held that the National Labor Relations Act (NLRA) applies to tribal businesses on tribal lands.  The NLRA generally exempts governmental employers from the provisions of the NLRA on collective bargaining. The Board departed from longstanding precedent and created a new doctrine not found in the statute -- that tribal government "commercial" activities are subject to the NLRA, while "traditional" governmental activities are not.

The San Manuel Band of Mission Indians filed a petition for review in the U.S. Court of Appeals for the D.C. Circuit on October 6, 2005.  On February 9, 2007 the Court issued their ruling upholding the NLRB decision. The Court held that the NLRB may apply the NLRA to employment at the San Manuel casino. On appeal two issues existed: 1) whether the Tribe's gaming activity was an essential government function and if NLRA regulation conflicted with tribal sovereignty, and 2) whether the term "employer" in the NLRA encompasses Indian tribal governments operating commercial enterprises.

First, the Court held that when tribes conduct commercial activities such as gaming, they do so subject to the NLRA, as long as such application would not interfere with reservation self-government or impair rights granted or reserved by federal law.  San Manuel argued that the term "employer" in the NLRA encompasses Indian tribal governments operating commercial enterprises, but that they fall under an exemption for public subdivisions.  The Court held that there is no congressional intent to indicate whether or not Congress meant to specifically include tribes in the catergorical exemption.  The Court applied "Chevron" deference to the NLRB's application of employer in the NLRA and said tribal governments are not exempt because it is reasonable to conclude that Congress intended them to be included.

On June 13, 2007, the D.C. Circuit Court of Appeals denied San Manuel's petition to reconsider the case. The Tribe has not yet announced whether or not they will take their case to the Supreme Court.

Campaign Contribution/Tribal Sovereign Immunity

Agua Caliente Band of Cahuilla Indians v. Superior Court ( S123832) -- The California Supreme Court has allowed the state's Fair Political Practices Commission to sue tribes in state court for violating state election campaign reporting laws. This decision is contrary to federal law guaranteeing tribes immunity from lawsuits without their consent, as well as language in the U.S. Constitution committing Indian affairs to the federal government, not the states.

The underlying lawsuit brought by the Fair Political Practices Commission two years ago (“FPPC”) alleged that the Agua Caliente tribe was late in disclosing more than $8 million in donations to candidates and causes between 1998 and 2002 in violation of the 1974 Political Reform Act (“PRA”). The lawsuit claimed that by filing required campaign reports late, the tribe deprived voters information to make informed decisions about candidates and propositions.  Under the PRA, the commission can impose a fine for the amount improperly reported.

The Fair Political Practices Commission brought suit against Agua Caliente for failing to comply with disclosure rules.  The Tribe maintained that as a sovereign government, it is immune from most state intervention, including lawsuits to enforce state laws.  The Tribe argued that only Congress or the tribe itself can waive tribal sovereign immunity and subject the tribe to state lawsuits or laws.

The 3rd District Court of Appeal in Sacramento disagreed, ruling 2-1 that "the constitutional right of the state to sue to preserve its republican form of government trumps the common law doctrine of tribal immunity."  Agua Caliente appealed the 3rd District Court of Appeal’s ruling to the State Supreme Court.  The tribe asserted it could not be sued to comply with disclosure rules because it was immune from suit by the FPPC. 

The Supreme Court ruled 4-3 that Indian tribes are bound by campaign-finance disclosure rules.  The justices upheld the lower court decision that said tribes were subject to campaign-finance enforcement lawsuits from the FPPC, the state agency that oversees elections.  Justice Ming Chin said the majority reached its decision based on the "significant importance of the state's ability to provide a transparent election process with rules that apply equally to all parties who enter the electoral fray."

The three-justice minority said it was up to Congress or the tribes themselves to authorize such enforcement actions against an Indian tribe. Justice Carlos Moreno noted the U.S. Supreme Court has said Oklahoma could not sue tribes in that state over the collection of cigarette taxes, and said the California Legislature should petition Congress to allow campaign disclosure enforcement actions. 

Impact of the Decision on California Tribes

 The impact of the decision is uncertain until the judgment is made final.  On January 5, 2007, the Agua Caliente Tribe filed a petition for rehearing on the 4-3 ruling.  The Court has until January 22 to act on the petition, or it will be deemed denied.  Even if the Court denies the Tribe’s petition, this step is necessary in order for the Tribe to appeal the final decision to the United States Supreme Court.  

If rehearing is granted, then the case is taken up again by the Court.  If rehearing is denied, then Agua Caliente must decide whether to appeal the decision to the United States Supreme Court or let the decision stand.

Sacred Site Protection/NEPA

Pit River Tribe; Native Coalition for Medicine Lake Highlands Defense; Mount Shasta Bioregional Ecology Center, Plaintiffs-Appellants v. United States Forest Service; Advisory Council on Historic Preservation; United States Bureau of Land Management; CalPine Corporation, Defendants-Appellees (CV-02-01314-DFL)-- The Pit River Tribe, the Native Coalition for Medicine Lake Highlands Defense and the Mount Shasa Bioregional Ecology Center (collectively “Pit River”) appealed from the district court’s summary judgment on their claims against the BLM, the United States Forest Service and the Department of Interior.  Pit River alleged that the procedures followed by the agencies in extending certain leases in the Medicine Lake Highlands and the subsequent approval of a geothermal plant to be built there, violated the National Environmental Protection Act (NEPA), the National Historic Preservation Act (NHPA), the National Forest Management Act (NFMA), and the Administrative Procedures Act (APA).  Pit River also contended that the agencies violated their fiduciary duty to the Tribe in making a final decision on the lease extension. 

The 9th Circuit Court of Appeal agreed with the Tribe in finding that the agencies did not take a “hard look” at the environmental consequences of the 1998 lease extensions and never adequately considered a “no action” alternative in light of the fact that Medicine Lake and the surrounding highlands are considered sacred sites among the Pit River people and neighboring tribes. The agencies filed a motion for rehearing by the 9th Circuit in February, but the Court denied the motion on April 18. 

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Tribal Jurisdiction

Morris v. Tanner (05-1285) – In U.S. v. Lara, the U.S. Supreme Court upheld tribal criminal jurisdiction over nonmember Indians, holding that the “Duro” amendment is an affirmation of tribal inherent authority.  However, the Lara Court expressly declined to answer the question of whether the tribal criminal prosecution of a nonmember Indian would violate the Due Process and Equal Protection clauses of the Fifth Amendment of the U.S. Constitution.

On October 1, 2006, a petition for certiorari was denied in Morris v. Tanner, which sought review of the Ninth Circuit’s unpublished memorandum opinion affirming summary judgment in favor of the Confederated Salish & Kootenai Tribes and its courts based on its published decision in Means v. Navajo Nation.   In Means, the Ninth Circuit held that under the 1990 amendments to the Indian Civil Rights Act (the “Duro” amendments), the Navajo Nation may exercise misdemeanor criminal jurisdiction over a person who is not a member of the tribe, but who is an enrolled member of another Indian tribe.  First, relying on Morton v. Mancari, the court concluded that “the weight of established law requires us to reject Means’s equal protection claim” on the basis that Indian tribal identity is political rather than racial.  Second, the court found that Means’s “ due process challenge has no force” in light of the fact that the Indian Civil Rights Act confers all the protections Means would receive under the U.S. Constitution except the right to grand jury indictment (which is not available in a misdemeanor prosecution) and the right to appointed counsel (which is provided in the Navajo Bill of Rights). 

Smith v. Salish Kootenai (05-10357) – On July 19, 2006, a petition for writ of certiorari was denied in Smith v. Salish Kootenai College which seeks review of a decision issued by the Ninth Circuit.  The Ninth Circuit held that under the Montana test, the tribal court has civil jurisdiction over a tort action that arose as a result of a traffic accident on a public highway within the Reservation which involved a non-member Indian who was a student at the tribal college and who was driving the vehicle as part of a vocational program at the college. 

Salinas v. Lamere (05-1189) – On May 22, 2006, the Supreme Court denied review of a decision by the California Court of Appeals which held that Public Law 280 does not grant state courts jurisdiction in civil suits that implicate an Indian tribe’s sovereignty.  Former members of the Temecula Band of Luiseno Mission Indians of the Pechanga Reservation (Pechanga Band) had been seeking an injunction in state court to prevent them from being disenrolled from the Tribe.

Doe v. Mann (05-815)– On May 1, 2006, the Supreme Court denied review of the Ninth Circuit decision granting state jurisdiction over a child custody decision involving an Indian child within the boundaries of an Indian reservation in California.  The Ninth Circuit opinion holds that under the Indian Child Welfare Act, tribes that fall under Public Law 280 do not have the “exclusive jurisdiction” provided by ICWA Section 1911(a). 

Ford Motor Co. v. Todecheene (No. 02-17048) – On January 11, 2006, the Ninth Circuit issued its decision in a case involving the scope of tribal civil jurisdiction over a products liability action arising out of an accident on the Navajo Reservation on a road wholly owned by the Nation.  The Todecheene family filed a wrongful death action in Navajo tribal court, and Ford filed a complaint in U.S. District Court challenging the Navajo court’s jurisdiction.   In an expansion of Strate v. A-1 Contractors, the 9th Circuit ruled that the Montana analysis applies even when on Indian land and ruled against tribal jurisdiction.  On February 10, 2006, the Navajo Nation filed a petition for rehearing or rehearing en banc.  On February 15, 2006, the court issued an order directing Ford Motor Company to file a response to the petition for rehearing.  The case has been fully briefed and awaits a decision from the Ninth Circuit on the petition for rehearing. 

Land Into Trust

South Dakota, et al. v. Department of the Interior, et al. (05-1428) – On October 2, 2006, a petition for certiorari was denied in an appeal of an Eighth Circuit decision that upheld the Secretary of the Interior’s authority to take land into trust on behalf of Indians and Indian tribes.  The Eighth Circuit held that 25 U.S.C. § 465 is not an unconstitutional delegation of legislative authority when viewed in the light of statutory goals and the legislative history of the Indian Reorganization Act. 

Utah v. Shivwits Band of Paiute Indians (05-1160) – On October 2, 2006, the Supreme Court denied review of another decision  that upheld the Secretary of the Interior’s authority to take land into trust on behalf of Indians and Indian tribes, pursuant to 25 U.S.C. § 465 (§ 5 of the Indian Reorganization Act).  The lower court had rejected the state’s argument that § 5 is an unconstitutional delegation of the legislative power.  At present, three Circuits have rejected this argument by various states.

Carcieri v. Norton (1st Circuit -03-2647)  -- On September 13, 2005, the U.S. Court of Appeals for the First Circuit announced its decision in response to the State of Rhode Island’s petition for rehearing.  The court had directed the parties to provide supplemental briefing on two issues: (1) whether the provisions of the Indian Reorganization Act (“IRA”) apply to the Narragansett Tribe (federally recognized in 1983); and (2) if additional land were taken into trust on behalf of the Narragansetts, whether the trust must be restricted to preserve Rhode Island's civil and criminal laws and jurisdiction. 

The First Circuit granted the petition for rehearing and issued a new panel opinion in which the court, once again, rejected the state’s argument that the IRA does not apply to any tribe that was not “now under federal jurisdiction” in 1934.  A significant number of tribes could have been hurt by the opposite ruling.  Second, the court, once again, rejected the broad arguments that Section 5 is an unconstitutional delegation of legislative authority and that taking land into trust diminishes state sovereignty in violation of the Tenth Amendment, the Enclave Clause, and the Admissions Clause, and exceeds the authority of Congress under the Indian Commerce Clause of the U.S. Constitution.