Part II - Self-Determination Meets Paternalism

11 An Unfit Guardian Ongoing Federal Paternalism

Even after adopting a policy of tribal self-determination, the United States continues its paternalistic treatment of tribes. The Moapa Band of Paiute Indians discovered this firsthand in 1984. The Moapa Band is located in Clark County, Nevada, home of Las Vegas. Proximity to the Vegas Strip means few people are going to drive to the Moapa Band of Paiute Reservation to gamble. Thus, the Moapa Band had to look for nongaming revenue sources. It selected prostitution.

Prostitution is legal in Nevada but illegal in Clark County because Nevada law prohibits brothels in counties with populations greater than 250,000 people. The Moapa Band saw this as an opportunity for economic development and passed an ordinance legalizing brothels on the Moapa Reservation. But like many Indian Reorganization Act tribes, the Moapa Band’s Constitution required federal approval of tribal ordinances.¹

The Secretary of the Interior had the authority to deny tribal ordinances for “any cause” and exercised this authority to block the Moapa ordinance. The Secretary noted the Moapa Reservation’s location within Clark County meant prostitution violated state law. In the spirit of unabashed paternalism, the area’s BIA director admitted tribal economic development was an important federal policy goal but determined brothels were “not the kind of economic development envisioned by federal policy.”² The Secretary of the Interior also did not believe the Moapa Band would derive significant revenue from the bordello. Furthermore, the Secretary believed the brothel would attract substantial media attention and precipitate a “political reaction detrimental to the sovereignty, not only of the Moapa Band, but all of Indian tribes.”³

The Moapa Band challenged the Secretary’s decision as an abuse of discretion. A federal magistrate and the federal district court affirmed the Secretary’s decision based on Nevada law – but disregarded the Secretary’s public policy concerns. On appeal, the Ninth Circuit noted it could “uphold the Secretary’s ruling if any reason given for it is valid.”⁴ The Ninth Circuit believed the Secretary had legitimate reasons to invalidate the tribal ordinance although the court admitted that “the activity is legal in Nevada and apparently is a profitable economic enterprise for non-Indians. The Secretary’s decision denies Moapa an economic opportunity which the Moapa Business Council has determined will benefit the tribe, and which is available to non-Indians nearby albeit not in Clark County.”⁵ In a footnote, the court conceded the Secretary’s denial of the ordinance was largely driven by an impulse to protect the Moapa.⁶ Hence, the reasons provided by the Secretary were little more than patina used to validate federal paternalism.

Federal paternalism remains alive in federal Indian policy. Regardless of the federal government’s intentions, the ongoing paternalism undermines tribes’ ability to act as governments and determine their own destiny. After all, Nevada counties do not need federal permission to establish a brothel. Nevertheless, tribes – who have much longer histories of self-governing than any state – need federal approval before they can determine what activities are permissible on their land. Making federal paternalism all the worse, the federal government has proven itself to be an exceedingly unfit guardian.

11.1 The Federal Government and Peabody Coal v. Navajo Nation

The Navajo Nation has a larger landmass than West Virginia and contains significant natural resources endowments. Notwithstanding, many on the Navajo Nation live in abject poverty. Navajo homes frequently lack access to running water, electricity, and the internet. Plus, houses are often significantly overcrowded due to federal land controls. These factors made the Navajo Nation, as well as numerous other tribes, particularly susceptible to COVID-19.

Over the years, the federal government has enabled oil, uranium, and coal companies to exploit the Navajo Nation’s resources. To be sure, some Navajos benefited from employment created by reservation resource extraction. Nonetheless, Peabody Coal Company’s relationship with the Navajo Nation shows how the federal government’s mismanagement of tribal resources rises from ineptitude to outright corruption.

In 1964, Sentry Royalty Company entered a twenty-year lease for coal on the Navajo Nation at a rate of 37.5 cents per ton – “not enough to buy a can of Coke,” as former Navajo Nation Chairman Peter MacDonald put it. The Secretary of the Interior approved the lease although the United States Court of Appeals for the Federal Circuit later noted, “It is not disputed that this was well below then-prevailing royalty rates.”⁷ Peabody Coal Company eventually succeeded Sentry as the leaseholder. By 1983, Peabody Coal had generated more than $140 million from the lease while the Navajo Nation itself received only $2.7 million in royalties.⁸

The Navajo Nation sought to increase the lease rate, but Peabody was unwilling to agree to an increase. Therefore, the Navajo Nation invoked a federal law permitting the BIA to establish the lease at the fair market rate.⁹ Based upon what private owners were receiving for coal leases, the BIA Division of Energy and Mineral Resources recommended the Navajo Nation royalty rate be set at no less than 25 percent. Nevertheless, the BIA only sought to increase the lease rate to 20 percent.¹⁰ The BIA never informed the Navajo Nation of the pending increase.

When Peabody received notice of the pending increase from the Navajo area BIA director, Peabody immediately appealed the decision. Peabody hired sitting Secretary of the Interior Donald Hodel’s close friend, Stanley Hulett, to engage in private communications with Hodel. Hulett’s purpose was to prevent Hodel and Deputy Assistant Interior Secretary John Fritz from increasing the royalty rate.¹¹ Then Interior Solicitor Frank K. Richardson advised Hodel that his private communications with Hulett would constitute improper ex parte contact.¹² Fritz independently reached the same conclusion.¹³ Notwithstanding, Fritz and Hodel both engaged in private communications with Hulett.¹⁴

Exactly what happened during the ex parte meetings is unknown; however, following the private interactions with Hulett, Hodel suppressed the BIA’s decision recommending the royalty rate increase.¹⁵ Hodel also proceeded to personally oversee negotiations between the Navajo Nation and Peabody – a break from standard Department of the Interior protocol. Hodel told Peabody and the Navajo Nation that a failure to reach an agreement would likely lead to time-consuming and expensive appeals.¹⁶ As a result, negotiations amounted to the Secretary of the Interior and Peabody Coal teaming up against the Navajo Nation. Then Navajo Chairman Peterson Zah advocated for the 25 percent rate that private coal owners were getting.¹⁷ Zah never learned how close the Navajo Nation was to getting 20 percent. With the deck stacked against him, Zah ended up falling far short of his goal. Instead of the 20% the BIA had recently determined was a reasonable rate, the Navajo were forced to accept 12.5% as well as several other terms favorable to Peabody, including waiving claims to $88 million dollars in back taxes and royalties from Peabody.¹⁸

During the lease review ten years later, the Navajo Nation obtained federal documents disclosing Hodel’s illicit communications. The Navajo Nation filed suit in 1999 and lost at the federal district court despite the court admitting, “[T]he United States violated the most fundamental fiduciary duties of care, loyalty and candor.”¹⁹ The United States Court of Appeals for the Federal Circuit reversed the lower court and held that the federal government violated its trust duty because the Indian Mineral Leasing Act and its accompanying regulations grant “pervasive control by the United States of the manner in which mineral leases are sought, negotiated, conditioned, and paid, and the pervasive obligation to protect the interests of the Indian tribes.”²⁰ Contrarily, the Supreme Court resolved the matter in 2003 by stating, “However one might appraise the Secretary’s intervention in this case, we have no warrant from any relevant statute or regulation to conclude that his conduct implicated a duty enforceable in an action for damages under the Indian Tucker Act.”²¹ In other words, no statute explicitly forbade the Secretary of the Interior from intervening on behalf of Peabody and undermining the Navajo Nation’s bargaining position, so the Secretary did not breach the United States’ trust obligation to the Navajo Nation.

Justice Souter wrote a dissent, joined by Justices O’Connor and Stevens. He explained:

What is more, the Tribe has made a powerful showing that the Secretary knew perfectly well how his own intervention on behalf of Peabody had derailed the lease adjustment proceeding that would in all probability have yielded the 20 percent rate. After his ex parte meeting with Peabody’s representatives, the Secretary put his name on the memorandum, drafted by Peabody, directing Deputy Assistant Secretary Fritz to withhold his decision affirming the 20 percent rate; directing him to mislead the Tribe by telling it that no decision on the merits of the adjustment was imminent, when in fact the affirmance had been prepared for Fritz’s signature; and directing him to encourage the Tribe to shift its attention from the Area Director’s appealed award of 20 percent and return to the negotiating table, where 20 percent was never even a possibility. The purpose and predictable effect of these actions was to induce the Tribe to take a deep discount in the royalty rate in the face of what the Tribe feared would otherwise be prolonged revenue loss and uncertainty. The point of this evidence is not that the Secretary violated some rule of procedure for administrative appeals, or some statutory duty regarding royalty adjustments under the terms of the earlier lease. What these facts support is the Tribe’s claim that the Secretary defaulted on his fiduciary responsibility to withhold approval of an inadequate lease accepted by the Tribe while under a disadvantage the Secretary himself had intentionally imposed.²²

The Navajo Nation attempted to relitigate the case but was ultimately denied again by the Supreme Court in 2009. The Navajo Nation lost more than $600 million due to the Secretary of the Interior’s unscrupulous interaction with the Peabody Coal Company – money the Navajo Nation could have used to better life on the reservation. Indeed, allowing the United States to avoid financial liability appears to have factored into the Court’s decision as the Solicitor General argued a Navajo Nation victory would result in other suits for duplicitous federal behavior.²³

11.2 The Largest Class Action in United States’ History

A few years before the Navajo suit commenced in federal court, Elouise Cobell filed a class action lawsuit against the United States alleging it had breached its trust relationship with Indian allotment holders. Cobell was a citizen of the Blackfeet Nation and heir to an allotment interest. Growing up, she frequently heard tales of missing money from the family allotment.²⁴ Cobell was far from the only Indian with stories of lost or suspiciously managed money by the United States. At eighteen years old, Cobell started asking the BIA to explain where the money from her allotment was going. The BIA told her she was not “capable” of comprehending accounting.²⁵ Cobell proceeded to become an accountant and a banker; she even founded the Native American Bank, the first ever Indian-owned bank.²⁶ While serving as treasurer for the Blackfeet Nation, she questioned the BIA about its trust account management but was again dismissively told she did not know how to read the financial statements. Undeterred, she contacted other tribal financial officers. The group banded together and succeeded in having Congress enact the Indian Trust Reform Act of 1994.²⁷

Coincidentally, Cobell encountered Attorney General Janet Reno at a conference after the Indian Trust Reform Act passed, and the two discussed the federal government’s failure to properly account for Indian trust money. Reno told Cobell to request a meeting. After months of trying, Cobell finally scheduled a meeting. Representatives from many federal agencies were present, but Reno was absent.²⁸ Cobell stated her extensive research revealed the United States was stealing Indian trust money by placing it in the Treasury’s general fund to be used for the United States’ latest pet projects. Cobell also claimed much of the money owed to individual Indians disappeared into the pockets of BIA employees.²⁹ For years, the United States had dared the Indians who questioned its management of their money to sue it. Fed up, Cobell decided to call the bluff and filed suit in 1996.³⁰

The suit was one of the largest class actions in United States’ history. The class comprised more than 300,000 Indian plaintiffs, though it is possible that more than 500,000 Indians were wronged. According to Cobell’s accountants, the United States failed to pay Indian beneficiaries $176 billion for agricultural and mineral leases over the past century. The Clinton and W. Bush administrations responded by mustering the full force of the federal government to prevent resolution of the case in favor of Cobell. Both administrations spent hundreds of millions of dollars and intentionally caused bureaucratic delays.³¹ In fact, federal employees intentionally destroyed relevant documents during the course of litigation and engaged in other improprieties.³²

The presiding judge in the case was Royce Lamberth. Judge Lamberth, appointed to the federal judiciary by President Ronald Reagan, was not amused by the federal government’s antics. In Judge Lamberth’s opinion, the United States’ management of Indian assets was “a story shot through with bureaucratic blunders, flubs, goofs and foul-ups, and peppered with scandals, deception, dirty tricks and outright villainy – the end of which is nowhere in sight.”³³ Judge Lamberth asked, “If Interior is willing to deceive this Court, why would anyone think that Interior would hesitate to lie to the Indians?”³⁴ Due to the federal government’s unscrupulous behavior during the course of litigation, Judge Lamberth held two cabinet-level federal officials in contempt of a court – a first in the history of the United States.³⁵ The United States, nonetheless, persisted with dubious tactics, such as withholding royalty payments from Indians then telling the angry royalty holders to contact Cobell with complaints. Cobell personally responded to every call she received.³⁶

Outraged by the Department of Interior’s continued improprieties, Judge Lamberth authored an opinion of rare candor in 2005:

But when one strips away the convoluted statutes, the technical legal complexities, the elaborate collateral proceedings, and the layers upon layers of interrelated orders and opinions from this Court and the Court of Appeals, what remains is the raw, shocking, humiliating truth at the bottom: After all these years, our government still treats Native American Indians as if they were somehow less than deserving of the respect that should be afforded to everyone in a society where all people are supposed to be equal ….

… But regardless of the motivations of the originators of the trust, one would expect, or at least hope, that the modern Interior department and its modern administrators would manage it in a way that reflects our modern understandings of how the government should treat people. Alas, our “modern” Interior department has time and again demonstrated that it is a dinosaur – the morally and culturally oblivious hand-me-down of a disgracefully racist and imperialist government that should have been buried a century ago, the last pathetic outpost of the indifference and anglocentrism we thought we had left behind.³⁷

Prior to penning this passage, Judge Lamberth had consistently ruled in favor of the Cobell-plaintiffs. Hence, the United States had repeatedly attempted to have Judge Lamberth removed from the case.³⁸ The United States Court of Appeals for the District of Columbia finally removed Judge Lamberth after his 2005 opinion. The Court of Appeals determined Judge Lamberth was justified in describing the Department of Interior’s handling of Indian assets as “ignominious” and “incompetent.”³⁹ The Court of Appeals even concluded Judge Lamberth may have been justified in describing the Department of Interior as racist. However, the Court of Appeals believed allegations of racism were irrelevant because the case was about accounting.⁴⁰

Judge Lamberth was replaced by Judge James Robertson. Judge Robertson was appointed by President Clinton and prior to taking the bench, was actively involved in civil rights and racial justice initiatives.⁴¹ Soon after taking over the case, Judge Robertson held a ten-day bench trial in the name of bringing the case to a close.⁴² Judge Robertson’s appointment changed the dynamics of the case. While he recognized the federal government’s failures, Judge Robertson wrote, “[T]he time has come to bring this suit to a close.”⁴³ Thus, the Cobell-plaintiffs moved to settle. President Obama signed the Cobell settlement in December of 2010.

Rather than the more than $100 billion sought by the class, the settlement was $3.4 billion. Only $1.5 billion went to individual Indians – meaning individual Indians who had their assets mismanaged for more than a century received $500 each.⁴⁴ Sardonically, the remaining $1.9 billion went to the Department of Interior – the very agency that misappropriated from Indians for a century – to improve its land management capacity.⁴⁵

To be sure, the deck was stacked against the Cobell-plaintiffs. The class was facing the world’s largest law office – the United States Department of Justice⁴⁶ – and its virtually unlimited resources. Exacerbating the disadvantage, the Cobell class was litigating against the United States in the federal court system, which the Supreme Court itself has described as the “courts of the conqueror.”⁴⁷ Indians have a losing record in federal court. Given this reality, the settlement may be the best Indians could have hoped for. Still, $500 per Indian after a century of robbery was an unsatisfactory settlement for many claimants.⁴⁸

11.3 The Supreme Court Shields the Federal Government Again

Although the federal government has been undeniably deplorable at managing Indian assets, in 2011 the Supreme Court ruled the United States does not have the standard disclosure duties of an ordinary trustee. The Jicarilla Apache Nation filed a breach of trust suit against the United States for mismanagement of the tribe’s trust assets. To effectively pursue the action, the tribe sought disclosure of several documents relevant to the case. The United States eventually agreed to turn over some of the documents; however, the United States continued to claim 155 documents were privileged from discovery. The federal district court and the federal appellate court ruled in favor of the tribe, analogizing the trust relationship between tribes and the United States to that of a standard trust. However, the Supreme Court disagreed and held the United States’ trust relationship was sufficiently different from ordinary trust relationships to avoid common law disclosure duties. Justice Alito, writing for the majority, bluntly summarized the trust relationship between tribes and the United States, explaining, “[T]he Government has often structured the trust relationship to pursue its own policy goals.”⁴⁹

Justice Sotomayor was alone in her dissent. She noted the trust relationship’s long history, the intricate web of federal statutes detailing the United States’ trust obligations to tribes, and the United States’ exercise of “elaborate control over [trust assets] belonging to Indians.”⁵⁰ Justice Sotomayor believed this meant – on top of the Court’s historic reliance on common law trust principles – the United States should be bound by standard common law duties of disclosure to beneficiaries. Furthermore, Justice Sotomayor asserted that the United States’ undisputed ineptitude at managing Indian trust assets screamed for higher disclosure duties than ordinary trustees are bound to. Justice Sotomayor declared, “[H]ad this type of mismanagement taken place in other trust arrangements such as Social Security, there would be war.”⁵¹ Justice Sotomayor explicitly stated the Supreme Court’s decision had severe adverse effects on the Jicarilla Apache Nation’s chances of success in litigation and harmed tribes in more than ninety other pending cases.

11.4 Double Standard for Tribal Governments

The United States’ treatment of tribes as lesser governments continues beyond the trust relationship. For example, the purpose of the National Labor Relations Act (NLRA)⁵² is to preserve workers’ right to unionize and engage in collective bargaining. The NLRA covers most private sector employees;⁵³ however, the NLRA specifically excludes the federal, state, and municipal governments from the Act’s coverage.⁵⁴ Even labor organizations are exempt from the NLRA. Though not specifically mentioned in the NLRA’s text, Indian tribes are governments. Following this logic, the National Labor Relations Board (NLRB) determined Indian tribes and their wholly owned enterprises were exempt from the NLRA in 1976.⁵⁵

Although the federal government’s policy of tribal self-determination has not changed since the NLRB took this position, the NLRB decided tribes had changed in 2004. That year, the NLRB decided tribes were subject to the NLRA because, “As tribal businesses have grown and prospered, they have become significant employers of non-Indians and serious competitors with non-Indian owned businesses.”⁵⁶ Thus, the economic development brought on by tribal self-determination, most notably Indian gaming, meant Indian tribes were now too successful in business although the NLRA still excluded governments from its coverage.

As a result, tribes are the only governments in the United States subject to the NRLA. While it is true that the NLRA’s application is specifically limited to tribal commercial enterprises – like casinos – it is equally true that the NLRA does not apply to state and local government-owned commercial enterprises such as lotteries, liquor stores, hotels, and banks.⁵⁷ Furthermore, the NLRB’s ruling ignores the reality that virtually all tribal government revenue is derived from tribal commercial enterprises due to other federal policies that hinder tribal private sector development. Tribes have pursued federal legislation that would amend the NLRA to ensure tribes are treated the same as every other United States government but to no avail. States and municipalities prefer tribes to be at a competitive disadvantage, and unions want to organize on tribal lands. Tribes have less clout in Congress than those constituencies. Accordingly, tribes are treated as lesser sovereigns.

Tribes face a similar issue when it comes to issuing tax-exempt bonds. Tribes have always been governments, and in 1982, Congress enacted the Indian Tribal Governmental Tax Status Act.⁵⁸ The Act solidified tribes’ treatment as states for federal tax purposes, including issuing tax-exempt bonds.⁵⁹ However, tribes face a major hurdle when seeking to issue tax-exempt bonds: the bond financing must further an “essential governmental function.”⁶⁰ These three words have enabled the Internal Revenue Service (IRS) to prevent tribes from using bonds to finance golf courses and countless other economic development projects.⁶¹ Notably, when blocking the Las Vegas Paiute Tribe from using tax-exempt bonds to finance a golf course on its reservation in 2002, the IRS admitted, “[I]t is likely that construction and operation of golf courses are customary governmental functions.”⁶²

The IRS put it mildly. The Government Accountability Office (GAO) conducted a study in 2006 to examine how state and local governments use tax-exempt bonds.⁶³ The GAO performed this research due to the difficulties tribal governments faced when complying with the essential governmental function requirement. According to the GAO, “[a]t least 120 golf courses in twenty-nine states have been identified as financed, at least in part, with tax-exempt bonds.”⁶⁴ The GAO discovered thirty-nine hotels that had been financed with tax-exempt bonds. The GAO even identified state and local governments’ use of tax-exempt bonds to finance gaming – including to support privately owned casinos. Tribes are still treated as lesser governments when it comes to finance. Without access to the same financial tools as other United States governments, tribes face unparalleled difficulties funding basic government services.

In addition to tax and financing issues, tribes receive less in federal funds than other United States governments. Tribes sold their land in treaties in exchange for the United States’ pledge to provide numerous goods and services. Nonetheless, the United States persistently fails to honor its treaty-funding obligations to tribes. For example, tribes received $0.75 cents per every $100 needed from the Drinking Water State Revolving Fund in 2012. Louisiana was funded at the lowest level of any state, yet it collected triple the amount of money Indian country received.⁶⁵ The United States has consistently spent more money providing foreign countries with safe drinking water than it spends providing the original Americans with access to safe drinking water.⁶⁶ Lack of funding for safe water exacerbated tribes’ susceptibility to COVID-19.

Insufficient federal spending on Indian healthcare also made Indians particularly vulnerable to COVID-19. Although treaties explicitly secured tribes’ right to healthcare, the United States has long underfunded Indian healthcare. In 2017, Indian Health Services expenditures were $3,332 per person versus $9,207 federal healthcare dollars per person in the country.⁶⁷ The United States even spends twice as much money on healthcare per prisoner than it does per Indian.⁶⁸ The litany of funding disparities goes on and on. A 2018 report by the United States Commission on Civil Rights made the following recommendation in response to the federal government’s ongoing failure to fund tribal governments: “The United States expects all nations to live up to their treaty obligations; it should live up to its own.”⁶⁹

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Despite an avowed policy of tribal self-determination, the United States continues to exercise paternalism over tribes. But it is unclear what the United States is protecting tribes from. Indeed, the federal government’s history of ineptitude and corruption suggests federal paternalism causes more problems for tribes than it cures. A symptom of paternalism is bureaucracy, and Indian country is rife with it.

12 Excessive Federal Bureaucracy

President Ronald Reagan opined on the federal government’s self-determination policy in 1983, stating:

[S]ince 1975, there has been more rhetoric than action. Instead of fostering and encouraging self-government, federal policies have by and large inhibited the political and economic development of the tribes. Excessive regulation and self-perpetuating bureaucracy have stifled local decision making, thwarted Indian control of Indian resources, and promoted dependency rather than self-sufficiency.¹

The same year, President Reagan created a Presidential Commission on Indian Reservation Economies to examine impediments to tribal economic development, and unsurprisingly, the Commission concluded Indian country was encumbered by “[a] Byzantine system of overregulation [that] actually deters investment by raising costs, creating uncertainty, and undermining local initiative.”² Four decades have passed since the Commission made these remarks; nevertheless, tribes remain mired in federally imposed rules and regulations that exist exclusively in Indian country.

Companies aiming to serve Indian country populations routinely surrender to the forces of federal bureaucracy rather than wait years for federal permission to open a business.³ The dense layers of red tape help explain the dearth of privately owned businesses in Indian country. After all, businesses have an alternative to the federal bureaucracy burdening Indian country – open just across the reservation border. In fact, the Navajo Nation border town of Gallup, New Mexico doubles in size on weekends as Navajo citizens leave the reservation to purchase basic goods there.⁴ Countless other examples abound of businesses opening outside of Indian country to avoid federal bureaucracy.

12.1 Trust Land

Many commercial activities require land, and land use in Indian country is complicated. Indian country has three primary land tenure types: fee simple, restricted fee, and trust land – which can be tribal or individual. Trust lands are owned by the United States for the benefit of the tribes or individual Indians. Accordingly, the United States holds title to trust land while tribes or an individual Indian retain the right to use the land, a legacy of the Doctrine of Discovery and Johnson v. M’Intosh. Trust land is Indian country’s predominant land tenure form and can be located outside the boundaries of a reservation. For most purposes, restricted fee lands operate the same as trust land. However, title to restricted fee land is owned by the tribe or an individual Indian. Despite ownership, restricted fee lands cannot be freely alienated – hence, the name restricted fee.⁵ Indian country also contains fee simple lands. Lands held in fee simple can be freely alienated and operate similarly within the borders of Indian country as fee lands do outside of Indian country, though jurisdictional issues frequently arise. Fee simple is the United States’ predominant land tenure form.

Indian country’s bureaucratic maze is often tied to trust land. Because the United States owns trust land, it can – and does – impose conditions on its use. Moreover, the United States’ ownership of trust land means it cannot be freely alienated. Inalienability restricts access to capital; indeed, simply encumbering trust land can require the Secretary of the Interior’s approval.⁶ Trust land’s title being vested in the United States means those who wish to use it must lease it, and leasing trust land is often a complex matter. Different federal regulations exist for different types of leases, including agricultural, residential, and wind and solar projects.⁷ The federal regulations can also vary from reservation to reservation.⁸

While storefronts are becoming less significant, many businesses require office or warehouse space. Oftentimes, an individual or company wishes to purchase the land and building where the business is located because the land and building are assets; however, trust land cannot be purchased. This means a lease must be executed on trust land. Although leases are common, ownership is often preferable from a capital perspective. Trust land’s inalienability means the lender cannot acquire ownership if the borrower defaults. Thus, the lender’s risk is higher in leasehold mortgages. Lenders compensate for this risk by charging higher interest rates for leasehold mortgages. Higher interest rates mean the borrower is paying more to operate on trust land than to operate on fee simple land.⁹ Capital is vital to business operations, so trust land’s inalienability places businesses at a financial disadvantage.

Leasing property in most jurisdictions is fairly easy. The lessee locates the lessor. The parties agree to terms, and the terms can be simple – a description of the property, lease duration, and price. Of course, lease agreements can be complex, but the complexity is a consequence of the parties’ choice rather than a bureaucratic decree. Though the lease may not explicitly say so, the parties must comply with the relevant local laws. Parties may also choose to record the lease in the local registry. Federal agencies and local bureaucrats are not usually involved. The transaction is confined to the two parties. Not so on trust land.

Indian country business site leases are governed by the Code of Federal Regulations. While there is no official lease template,¹⁰ the BIA mandates lease agreements comply with a slew of requirements, including submitting environmental and archaeological reports and surveys;¹¹ completing the environmental reports alone will likely cost well over $100,000 and take at least six months.¹² The lease agreement must authorize the BIA to inspect the lease premises. Likewise, lessees are required to cooperate with BIA requests for information relating to the lease site.¹³ Lessees are also required to waive their right to sue the United States or the beneficiary of trust land in order to obtain a business site lease of trust land.¹⁴ If the business site lease is of individual Indian trust land, the BIA must approve the price of the lease¹⁵ and whether the individual Indian can receive nonmonetary compensation.¹⁶ Moreover, special circumstances must be met in order for the lessee to make payments directly to the individual Indian trust land owner rather than the BIA.¹⁷ The BIA also mandates lessees to obtain insurance to protect Indian landowner’s interests.¹⁸ While many private landlords insist their tenants purchase insurance, no state, and likely no city, has rental insurance requirements.¹⁹

These federal controls on trust land undermine tribes’ ability to govern their land. Due to federal regulations, tribes cannot exercise the same autonomy over their land as state and municipal governments do. In addition to thwarting tribal self-government, the federal government’s slow-moving land bureaucracy makes accessing capital more difficult thereby undermining tribal economic development efforts. Federal control over trust land suggests tribes are lesser governments, incapable of managing their own land.

12.2 Land Fractionation

Using individual Indian trust land can be further complicated by fractionation. Due to allotment, individual Indians acquired ownership of reservation lands. The Indian Reorganization Act locked these lands in trust status. This preserved Indian landholdings; however, title ownership passed down to heirs in undivided property interests. That is, rather than two heirs each receiving half of the 160-acre allotment – 80 acres each – the heirs each instead received 50 percent interest in the entire 160-acre allotment. As trust land is inalienable, fractionation worsens over time.²⁰ Today, a thousand individuals can possess an undivided interest in a single tract of land.²¹ Over a quarter million individuals possess an interest in fractionated trust land on more than 150 reservations.²²

The federal government is responsible for managing fractionated trust lands on behalf of individual Indian owners. The federal government’s management of fractionated trust land is infamously poor; indeed, those who possess an interest in fractionated land are commonly unable to obtain rudimentary information about their land interest or activities occurring on it.²³ Inadequate recordkeeping has enabled the United States to “lose” billions of dollars owed to individual Indian allotment holders, à la the Cobell litigation.²⁴ The low-quality records of fractionated land are largely a function of cost – the federal government spends more money on recordkeeping than the land is actually worth. The Supreme Court spelled this out in a 1987 opinion:

Tract 1305 is 40 acres and produces $1,080 in income annually. It is valued at $8,000. It has 439 owners, one-third of whom receive less than $.05 in annual rent and two-thirds of whom receive less than $1. The largest interest holder receives $82.85 annually. The common denominator used to compute fractional interests in the property is 3,394,923,840,000. The smallest heir receives $.01 every 177 years. If the tract were sold (assuming the 439 owners could agree) for its estimated $8,000 value, he would be entitled to $.000418. The administrative costs of handling this tract are estimated by the Bureau of Indian Affairs at $17,560 annually.²⁵

Congress has attempted to solve the fractionation puzzle multiple times but has not succeeded yet. Thus, fractionation continues.

Fractionated land issues go beyond recordkeeping. Using fractionated land requires the consent of greater than 50 percent of the interest if a tract of land has more than twenty interest holders.²⁶ Some allotted parcels have more than 1,000 interest holders, meaning an individual who desires to use the land may have to track down more than 500 people then convince them to consent to the desired use. Doing this is time-consuming and may very well be impossible due to faulty federal records. However, using allotted land requires the consent of 80% of the interest to use it if six to ten owners are involved, and 90% of the interest if five or fewer owners are involved. This enables a single interest holder to hold out for a higher price and impede development.²⁷

Fractionation was not created by tribal law; rather, fractionation is a direct result of two federal policies – the General Allotment Act and the IRA. The inefficiencies of fractionated land often render it functionally worthless and an impediment to tribal economic development.

12.3 The HEARTH Act

In 2012, Congress passed the Helping Expedite and Advance Responsible Tribal Homeownership Act (HEARTH) to “provide federally recognized Tribes with a way to exercise greater control over their lands and to use judgment, through their own regulations and governmental processes, to benefit their people.”²⁸ Tribes have proven themselves to be much more efficient at processing leases than the BIA. For example, prior to implementing the HEARTH Act, obtaining a lease on Ho-Chunk Nation land took up to a year and half due to slow-moving federal bureaucracy. Since Ho-Chunk Nation implemented the HEARTH Act, the tribe’s land can typically be leased in four to six weeks.²⁹ Experiences like this have made the HEARTH Act popular with tribes as a means to enhance control over their land.³⁰

More than seventy tribes have taken advantage of the HEARTH Act so far;³¹ nonetheless, the HEARTH Act is not true tribal sovereignty as the federal government retains control of tribal land leases. The Act merely lets tribes take over the federal leasing process; it does not empower tribes to create their own leasing guidelines.³² Tribes implementing the HEARTH Act are also required to continue reporting leases, including collection of lease payments, to the BIA.³³ Furthermore, the Secretary of the Interior has the authority to determine whether tribal leasing rules were violated.³⁴

12.4 Rights-of-Way

Even developers who are not building directly on trust land may need to cross it.³⁵ For example, a fiber optics company may be required to traverse trust lands to access fee lands.³⁶ A right-of-way crossing trust land requires federal approval, including the Secretary of the Interior’s blessing for the amount of compensation received by the tribe or Indian owner.³⁷ Moreover, the precise procedure to obtain a right-of-way varies between BIA offices, and the process often proceeds at a torpid pace.³⁸ Indeed, the BIA took more than eight years to review rights-of-way for oil and gas infrastructure on the Southern Ute Indian Tribe’s reservation. The price of gas reached record heights while the BIA’s decision was pending. Due to the BIA’s delayed right-of-way approval, the Southern Ute Indian Tribe was unable to capitalize on the price increase and lost approximately $95 million in revenue. Despite the BIA being directly responsible for the loss, Southern Ute had no recourse for the lost funds.³⁹ The BIA revised its right-of-way regulations years later; however, a federal court commented, “[T]he Final Rule will likely create far more confusion, chaos, and litigation than what the Department of the Interior ever contemplated.”⁴⁰ Consequently, a land matter as simple as obtaining a right-of-way can become a complex, time-consuming matter in Indian country.

12.5 Indian Trader Regulations

Another bureaucratic impediment peculiar to Indian country is the Indian trader rules. These laws were promulgated by the first United States Congress in the Trade and Intercourse Act of 1790. The Indian trader laws forbade non-Indians from engaging in business with Indians in Indian country without first obtaining federal permission.⁴¹ According to the Supreme Court, Congress enacted Indian trader laws for the following reason:

The purpose of the section clearly is to protect the inexperienced, dependent and improvident Indians from the avarice and cunning of unscrupulous men in official position and at the same time to prevent officials from being tempted, as they otherwise might be, to speculate on that inexperience or upon the necessities and weaknesses of these “Wards of the Nation.”⁴²

Though Congress would not describe Indians as “inexperienced, dependent and improvident” today, Indian trader laws remain part of the United States Code.

Indian trader laws require non-Indians wishing to partake in business with reservation Indians to obtain a federal license to do so. In order to acquire the license, traders must jump through a heap of hoops, including proving the licensees and their employees are of good moral character.⁴³ If the would-be licensee is also seeking a business site lease, the Indian trader license will not be issued until the business site lease is approved,⁴⁴ which can take over a year. The license also only covers one establishment.⁴⁵ This means a business must obtain a separate license to expand on the same reservation. Furthermore, the Indian trader license cannot be transferred without federal permission. Licensed Indian traders cannot even lease space in their office without federal approval.⁴⁶

Even after successfully procuring an Indian trader license, businesses remain under the federal microscope. The federal government prohibits Indian traders from selling or purchasing any item the United States provides to Indians. In fact, licensed traders are not even allowed to have such items in their possession.⁴⁷ Businesses operated by a licensed Indian trader “must be managed by the bonded principal, who must habitually reside upon the reservation, and not by an unbonded subordinate.”⁴⁸ Licensed Indian traders can only pay Indians in cash and face federal restraints on their ability to offer credit to Indians.⁴⁹ Most remarkably, the federal government has the authority to set the price of goods offered by Indian traders as the Code of Federal Regulation mandates:

It is the duty of the superintendent to see that the prices charged by licensed traders are fair and reasonable. To this end the traders shall on request submit to the superintendent or inspecting officials the original invoice, showing cost, together with a statement of transportation charges, retail price of articles sold by them, the amount of Indian accounts carried on their books, the total annual sales, the value of buildings, livestock owned on reservation, the number of employees, and any other business information such officials may desire. The quality of all articles kept on sale must be good and merchantable.⁵⁰

No business wants to deal with this level of federal micromanagement.

To be sure, Indian trader laws seem to be seldom enforced – one reservation superintendent could not figure out how to acquire the licenses from the BIA, so he considered “employing local high school art students to make [Indian Trader] licenses.”⁵¹ The licenses are possible to procure though, and failure to comply carries serious penalties. Individuals caught selling goods to Indians on a reservation sans license will have their inventory forfeited and face the very precise fine of $1,617.⁵² Indian trader laws also empower the president of the United States to deny individuals the license and shut down trade on reservations altogether.⁵³

Indian trader laws’ continued existence is irrational because they have no logical purpose in the twenty-first-century United States. The laws were designed to protect Indians from unscrupulous whites, and there was a logical reason for this in 1790 – many Indians did not speak English and were unfamiliar with Anglo-American mores. Neither reason exists today. On top of this, federal courts have noted Indian trader laws harm tribal economic development efforts by casting a cloud of uncertainty over reservation business transactions. Furthermore, a federal appellate court stated Indian trader laws provide licensees with a monopoly over reservation Indians and this power can be used to exploit Indians.⁵⁴ Indian trader laws also only apply in Indian country, which makes little sense given their purpose is to protect Indians from deceitful non-Indian businesses, and Indians are much more likely to encounter non-Indian businesses outside of Indian country.

Another issue with Indian trader laws is that they employ flagrantly racial classifications. Indian trader laws overtly distinguish between “an Indian of the full blood” and everyone else. “Indian,” as used in the United States Code, usually refers to Indians in the political sense; that is, Indians are distinguished by their citizenship in a tribal government rather than their race. “Indian of the full blood” is racial. Consequently, the distinction is likely unconstitutional because Indian trader laws single out Indians based upon their Indian blood rather than their tribal citizenship.

Additionally, Indian trader laws expressly declare:

That no white person shall be employed as a clerk by any Indian trader, except such as trade with said Five Civilized Tribes, unless first licensed so to do by the Commissioner of Indian Affairs, under and in conformity to regulations to be established by the Secretary of the Interior.⁵⁵

“White person” is a racial classification. Indeed, the Supreme Court held persons of African ancestry could not be prosecuted for violating the Indian trader statutes in 1879 because “[t]he term ‘white person,’ in the Revised Statutes, must be given the same meaning it had in the original act of 1834.”⁵⁶ And when Congress said “white person” in 1834, it meant white person. The Court admitted “[t]here may be no good reason for restricting any longer this liability to acts of whites,”⁵⁷ but said Congress was responsible for changing the law. Over a century has passed, and Congress has yet to act.

Indian trader laws do not just apply to non-Indian businesses; rather, Indian trader laws directly limit tribal economic freedom. Tribes can, and routinely do, purchase land on the private real estate market. Tribes purchase land for a variety of reasons, but a nearly two-centuries-old Indian trader law expressly forbidding tribes from selling their land without federal approval remains part of the United States Code.⁵⁸ Persons who attempt to purchase lands directly from an Indian tribe without federal approval are subject to monetary penalties. The text of the statute does not distinguish between fee and trust lands. Accordingly, there is uncertainty over whether tribes can freely sell their fee simple land on the private real estate market. No federal court has declared a tribal sale of privately purchased land invalid under the Trade and Intercourse Act in the last century,⁵⁹ but, in 2000, a member of Congress said the law prevents tribes from selling their privately acquired land.⁶⁰ Existing federal regulations also support the position that tribes cannot sell their privately purchased land without federal approval.⁶¹ Uncertainty over whether tribes need federal approval to sell their privately owned land makes purchasing tribal land risky, thereby decreasing the land’s market value.

To remedy this uncertainty and facilitate market transactions, some tribes have successfully lobbied Congress to enact legislation enabling them to freely alienate their privately owned lands.⁶² That is, it takes an act of Congress for tribes to profit from the private real estate market. No state government requires an act of Congress to sell land. Hence, Indian trader laws continue to operate on the premise that tribes are lesser governments incapable of governing their land.

12.6 Natural Resource Development

Not only are tribes unable to freely alienate their land but tribes face significant, federally imposed barriers to utilizing the natural resources on their land. Simply cutting down a tree on trust land can result in bureaucratic hurdles as the Supreme Court explained in 1980: “[T]he Secretary [of the Interior] has promulgated a detailed set of regulations to govern the harvesting and sale of timber.”⁶³ The Secretary of the Interior remains intimately involved in timber management on tribal lands.⁶⁴ Federal regulations now permit tribal law to govern tribal timber management; nevertheless, tribal law does not automatically govern tribal land.⁶⁵ Rather, tribal law only governs tribal timber to the extent the Secretary of the Interior thinks the tribe is competent to manage its own timber. For example, the federal regulations explicitly authorize tribal enterprises to engage in the timber management business, yet the Secretary of the Interior must approve most every action of the tribal enterprise.⁶⁶ Tribes are barred from selling their timber on the open market sans the Secretary of the Interior’s consent.⁶⁷ The Secretary of the Interior also gets to decide how the tribe’s timber payment is structured.⁶⁸

Timber is but one of the tribal resources the federal government controls; indeed, the federal government has been involved in oil production on tribal lands since 1891.⁶⁹ Over the years, Congress has enacted various laws to encourage energy production on tribal lands. Nonetheless, federal bureaucracy remains a major impediment to tribal energy production. If an oil company wants to engage in energy production in most state jurisdictions, the company must complete four regulatory steps and can commence production in about three months.⁷⁰ On tribal trust land, oil companies must navigate forty-nine regulatory steps and doing so can take more than three years – including more than a year simply to obtain a land lease.⁷¹ The drilling permits are more expensive in Indian country too, approximately $100 in some states versus more than $10,000 in Indian country.⁷²

On top of this, oil leases of trust land often involve the BIA soliciting bids. The winning bidder is required to place one-quarter of the bid in a noninterest-bearing account until the Secretary of the Interior approves the lease. The money can remain in the account for over a year; accordingly, Indian country oil producers have significant funds tied up for a year while receiving no benefit.⁷³ And due to inflation, winning bidders stand to lose significant sums of money while waiting for Secretarial approval. The federal regulatory process is so burdensome that the United States’ Office of Inspector General reported in 2012 “the oil and gas industry generally considers Indian leases to be their lowest priority, preferring to lease private, state, and federally owned lands first.”⁷⁴

Congress sought to improve tribes’ ability to develop their oil reserves by passing the Indian Tribal Energy Development and Self-Determination Act.⁷⁵ The Act allows tribes to enter a Tribal Energy Resource Agreement (TERA).⁷⁶ TERA enable a tribe to engage in oil production with minimal federal oversight; however, tribes must first satisfy several requirements. The Government Accountability Office noted the TERA process is regularly described as “complex, confusing, and time-consuming.”⁷⁷ Even the BIA described TERA’s regulations as “hefty.”⁷⁸ The regulatory gauntlet is so dense that experts believed it is impossible for a tribe to achieve TERA approval; in fact, no tribe has even applied for a TERA.⁷⁹

12.7 Gaming

Although non-Indians often assume tribes can simply open a casino, federal bureaucrats are extensively involved in Indian gaming. Immediately after the Supreme Court affirmed tribes’ inherent sovereign right to permit gaming on their land,⁸⁰ states lobbied Congress to curtail tribal sovereignty in the gaming sphere, and Congress obliged with the Indian Gaming Regulatory Act (IGRA).⁸¹ IGRA created the National Indian Gaming Commission (NIGC), which is housed within the Department of Interior.⁸² The NIGC has the power to prevent tribal gaming and to shut down existing casino operations.⁸³ Tribes cannot enter into casino management contracts without approval of the NIGC chair.⁸⁴ The NIGC chair’s approval of a casino management contract may constitute a “major federal action[] significantly affecting the quality of the human environment.”⁸⁵ As a result, the chair usually waits until a National Environmental Policy Act (NEPA)⁸⁶ environmental assessment is complete prior to authorizing a contract. A NEPA review adds substantial costs in time and expense to the approval process. IGRA also mandates that tribes conduct background checks of key casino employees and report the result of these investigations to the NIGC.⁸⁷ While tribes generally have an amicable relationship with NIGC, the purpose is purely paternalistic. States pushed for IGRA and greater regulation of tribal gaming to prevent organized crime from infiltrating tribal operations. However, states admitted there was no evidence of organized crime being involved in tribal gaming.⁸⁸

IGRA greatly curtails tribal sovereignty over gaming. It grants states authority over all Indian gaming that is disconnected from traditional Indigenous activities, known as Class I gaming.⁸⁹ In fact, states can outright prohibit tribes from gaming by outlawing gaming within the state; thus, there are no tribal gaming enterprises in Utah because the state bans gaming. If states permit some form of gaming, tribes are permitted to partake in Class II gaming, defined as bingo, pull-tabs, and unbanked card games, most notably poker. However, the unbanked card games must be played in compliance with the laws of the surrounding state, including the hours of operation and pot limits.⁹⁰ Class III gaming is defined as “all forms of gaming that are not Class I gaming or Class II gaming,”⁹¹ such as blackjack, roulette, and slot machines that use a random number generator.⁹² Tribes can only engage in Class III gaming by entering a compact with the surrounding state. States hold all the power during compact negotiations because they can unilaterally bar tribes from gaming. To counter this reality, IGRA imposes a good faith requirement on states during compact negotiations.⁹³ The Supreme Court invalidated this requirement in 1996;⁹⁴ thus, tribes are largely at the mercy of states during compact negotiations.

IGRA provides tribes some protection during negotiations because the Secretary of the Interior must approve the tribal–state compact before it becomes valid.⁹⁵ Kevin Washburn, former Assistant Secretary for Indian Affairs, has written, “The Department’s role in reviewing tribal-state gaming compacts under IGRA is surprisingly broad.”⁹⁶ The Secretary of the Interior has denied approximately two dozen gaming compacts. The specter of disapproval creates economic troubles as it triggers renegotiation between the tribe and the state. This takes time and money that may lead casino investors to abandon the project.⁹⁷ In response to Class III compacting issues, tribes have adapted to Class II video gaming devices to mimic many of the features of Class III slot machines, so-called Class 2.9 games.⁹⁸ For example, Class III slot machines historically used coins. Tribes developed slot machine analogues that were entirely cashless to evade the Class III regulatory hurdles.⁹⁹ Tribal gaming operations have faced more regulatory obstacles than any other form of gaming in the United States;¹⁰⁰ nevertheless, tribal innovations have enabled tribal gaming to become a $40 billion a year industry.

✦✦✦

Federal bureaucracy hinders tribes’ ability to operate as governments. Tribal lands are governed by an intricate federal regulatory regime, so tribes are not free to implement their own rules. Moreover, most of the federal rules governing tribes provide few practical benefits. If the federal regulations did, other governments would be seeking them. Until tribes are liberated from the extensive federal regulatory web, tribes will remain lesser governments, and the federally imposed restraints on tribal jurisdiction epitomize tribes’ status as lesser governments.

13 Criminal Justice Crisis

Indians are victims of violent crimes at twice the rate of any other racial group in the United States.¹ Violence against Indian women has reached particularly severe levels; indeed, Congress has described violence against Indian women as an “epidemic.”² In 2010, Congress reported 34% of Indian women will be raped, and 39% will be the victim of domestic violence during their lifetimes.³ The prevalence of sexual violence in some parts of Indian country causes mothers to discuss with their daughters what to do when – not if – raped. On some reservations, Indian women are murdered at rates ten times the national average.⁴ The prevalence of violence against Indians has led to the missing and murdered Indigenous women and girls crisis. As macabre as these statistics are, they likely underrepresent the actual level of violence Indians experience. Historic law enforcement neglect leads many Indians to believe contacting the police is futile. And if the police are not contacted, the crime is unlikely to appear in criminal data.

In addition to its frequency, violence against Indians is unique because of its racial dynamics. Crime is an overwhelmingly intraracial affair in the United States. Consequently, black perpetrators commit the majority of crimes against black victims, and white perpetrators usually target white victims. However, more than 90 percent of Indian victims identify their perpetrator as a non-Indian.⁵ The high rate of interracial crimes involving Indians can partially be explained by Indians composing roughly 1 percent of the United States population and non-Indians making up the majority population on many reservations. Notwithstanding, the rate of non-Indian violence against Indians is particularly jarring when Indian country’s legal regime is considered.

13.1 Indian Country’s Peculiar Jurisdictional Regime

Unlike other jurisdictions in the United States, local law enforcement agents are not the primary police force in Indian country. Rather, tribes depend on the federal government and surrounding state for policing. This is a consequence of the federal government’s long-running intervention in tribal affairs. Among the first laws passed by the United States was a provision authorizing the United States to prosecute non-Indians who committed crimes against Indians in the tribal territory, and Congress made this provision permanent in 1817.⁶ In 1881, the Supreme Court held states have exclusive jurisdiction over Indian country crimes involving only non-Indians.⁷ The Supreme Court reaffirmed this principle in 1896⁸ and 1946.⁹ In 1885, Congress granted the federal government jurisdiction over “major” crimes involving only Indians.¹⁰ Most recently, Congress granted some states criminal jurisdiction over Indian country crimes within their borders in 1953.¹¹

Despite the federal interventions, inherent tribal criminal jurisdiction was left untouched. To be sure, the aforementioned laws were substantial intrusions upon tribal sovereignty, and the federal government abolished tribal courts on some reservations during the late 1800s. Nonetheless, the Supreme Court and other federal courts upheld tribal assertions of jurisdiction over non-Indians in the early 1900s.¹² Tribal courts were officially sanctioned by the United States in 1934 and no limits were placed on them; however, resource constraints limited the de facto capacity of tribal courts. Not until the Indian Civil Rights Act of 1968 (ICRA)¹³ were external limits imposed on tribal authority: a maximum penalty of six months in jail with a $500 fine and only after providing defendants with procedural safeguards aligned with the United States Bill of Rights.¹⁴ Even after ICRA, tribes presumptively possessed jurisdiction over all persons on their land because the foundational principle of federal Indian law is tribes retain all sovereign powers they have not explicitly relinquished. This presumption was challenged by Mark David Oliphant.

13.2 Oliphant v. Suquamish Indian Tribe: Facts and Consequences Don’t Matter

Oliphant was a non-Indian resident of the Port Madison Indian Reservation, a thirty-minute ferry ride west of Seattle. Oliphant attended the Suquamish Indian Tribe’s Chief Seattle Days celebration on the reservation in August of 1973. At the celebration, Oliphant got drunk and became disorderly. Tribal police were the only law enforcement agency available because neither the BIA nor Kitsap County would provide police for the duration of the event despite thousands of non-Indians attending. Thus, tribal police responded to the call about Oliphant’s drunken antics. Oliphant refused to cooperate with tribal police and proceeded to assault the officer. He was arrested but was soon out of jail on pretrial release. Oliphant obtained counsel not to argue his innocence; rather, Oliphant claimed he should be immune from tribal authority because he was a non-Indian.

Oliphant’s contesting tribal jurisdiction was part of a larger social movement. Thanks to the tribal self-determination policies ushered in by President Nixon, tribes began asserting their sovereignty. The exercise of tribal rights resulted in resource competition with states. For example, tribes in Washington boldly asserted their treaty fishing rights, which clashed with state fishing law. Every fish Indians caught meant one less fish for non-Indians. Similarly, tribes claimed their inherent sovereignty barred states from imposing taxes within reservations, and this imperiled state coffers. Against this backdrop, the recognition of tribal criminal jurisdiction over non-Indians would validate tribal sovereignty in other realms.¹⁵

Therefore, Oliphant’s attorney filed a habeas corpus petition under the ICRA to suppress the tribal charges. The federal district court ruled against Oliphant as did the Ninth Circuit Court of Appeals. In response to Oliphant’s contention that tribes can only prosecute non-Indians with congressional approval, the Ninth Circuit explained Oliphant had it backwards. The Ninth Circuit noted the bedrock principle of federal Indian law was tribes retain all inherent sovereign powers they have not been expressly divested of. Like every other nation, tribes historically claimed the right to punish all persons who committed crimes on their land. Accordingly, the question was not whether Congress had conferred prosecutorial power to tribes but whether Congress had unequivocally stripped tribes of this inherent sovereign power.

As it began its analysis of the treaties and acts of Congress, the Ninth Circuit stated it would follow the long-standing rule that legislation and treaties are to be construed in favor of tribes. The Ninth Circuit first looked to the 1855 Treaty of Point Elliott, of which the Suquamish was a party. No language in the treaty denied tribes criminal authority over non-Indians. The agreement between the Suquamish and the United States ceded tribal land but no sovereign powers. The Ninth Circuit then examined federal statutes authorizing federal and state jurisdiction over Indian country crimes. Though these laws infringed upon tribal sovereignty, Congress did not declare these laws divested tribes of criminal jurisdiction over non-Indians. Not only had tribes never lost this power but the Ninth Circuit believed the federal government’s current policy of tribal self-governance required tribes to have jurisdiction over non-Indian criminals. Furthermore, the Ninth Circuit thought denying tribes criminal jurisdiction over non-Indians would leave Indians vulnerable to non-Indian criminals. Although states and the federal government had jurisdiction over Indian country crimes, they often failed to exercise it. Hence, preventing tribes from prosecuting non-Indians who the states and federal government refused to prosecute would give non-Indians carte blanche to terrorize reservations. For these reasons, the Ninth Circuit held tribes can prosecute non-Indian criminals.

The Supreme Court sided with Oliphant, in Oliphant v. Suquamish Indian Tribe. The Court’s opinion is infamous for its factual errors and questionable legal reasoning. The Court asserted, “The effort by Indian tribal courts to exercise criminal jurisdiction over non-Indians, however, is a relatively new phenomenon.”¹⁶ In support of this claim, the Court quoted an 1834 report from the Commissioner of Indian Affairs stating, “[T]he Indian tribes are without laws, and the chiefs without much authority to exercise any restraint.”¹⁷ Instead of “formal judicial process,” the Court asserted tribes relied on religious and social pressure to solve disputes through restitution rather than punishment. The Court’s statement is both factually incorrect and ethnocentric.

Tribes had their own laws prior to European contact. Each tribe was different and had its own unique rules. Notwithstanding, it is safe to assume all tribes forbade people from assaulting their citizens. Tribes resisted European invasion and would have punished Europeans who perpetrated crimes upon their citizens; in fact, early treaties between the United States and Indian tribes explicitly affirmed tribes’ sovereign right to prosecute non-Indians.¹⁸ Furthermore, the United States knew tribes were prosecuting non-Indians well into the mid 1800s. The United States even turned over white fugitives to tribes for criminal prosecution.¹⁹ In the same 1834 report that claimed “Indian tribes are without laws,” the report declared tribes have criminal jurisdiction over all persons who freely choose to reside on tribal land because “they must be considered as voluntarily submitting themselves to the laws of the tribes.”²⁰ Accordingly, the Court’s historical research was incorrect or the truth was intentionally omitted.

Next, the Court examined the 1830 Treaty of Dancing Rabbit Creek²¹ between the United States and the Choctaw. The Court relied on language at the end of the treaty where the Choctaw “express a wish that Congress may grant to the Choctaws the right of punishing by their own laws any white man who shall come into their nation, and infringe any of their national regulations.”²² Whether this provision is sufficient to deny the Choctaw criminal jurisdiction over non-Indians is debatable. What is not debatable is that particular Choctaw treaty is the only treaty of the nearly 400 between tribes and the United States containing this language.²³

Aside from the Court’s emphasis on a single clause in one particular treaty, the Court nowhere mentions how or why the Treaty of Dancing Rabbit Creek is relevant to the Suquamish. The Suquamish had their own treaty with the United States. Moreover, the treaties were signed a generation apart in entirely different historical contexts. Given the issue before the Court, the circumstances surrounding the Suquamish seem germane. The United States originally presented a treaty to the Suquamish that contained language explicitly divesting the Suquamish of criminal authority over non-Indians. This document was rejected by the Suquamish, and the clause preventing the tribe from prosecuting non-Indians was removed in the subsequent treaty, the treaty ultimately signed by the Suquamish. The Suquamish claimed this clause was removed because the tribe wanted to retain criminal power over non-Indians. Justice Rehnquist rejected the notion, asserting there must have been a different reason – though he did not provide one.²⁴ This reasoning flies in the face of foundational principles of treaty construction, which requires ambiguities to be liberally construed in favor of tribes.

The Court then turned to the only case it could find supporting the proposition tribal courts lack criminal authority over non-Indians. The case was decided in an 1878 territorial court.²⁵ Tribal jurisdiction over non-Indians was also beyond the scope of the case; hence, the territorial court’s commentary should have carried little weight.²⁶ The century-old musings of a territorial court are usually not given much credence in contemporary courts, but the Court noted the author of the opinion was Judge Isaac Parker. The Supreme Court believed Judge Parker’s frequent exposure to cases from the Indian Territory made him an expert on the matter. However, the Supreme Court’s footnote renders this a dubious proposition.

Footnote 10 in Oliphant may be the most bewildering citation in Supreme Court history. The citation begins by noting the character of Judge Parker’s docket then adding, “Judge Parker’s views of the law were not always upheld by this Court.”²⁷ In other words, the Supreme Court was admitting Judge Parker was not considered among the finest legal minds of his day. Indeed, two-thirds of his decisions were overturned by higher courts,²⁸ an astounding figure considering approximately 90 percent of lower court decisions are affirmed on appeal.²⁹ Relying on Judge Parker is the legal equivalent of cheating off an “F” student.

Nonetheless, Justice Rehnquist, author of the majority opinion, attempted to justify his reliance on Judge Parker by claiming Judge Parker was held in “the universal esteem in which the Indian tribes which were subject to the jurisdiction ….”³⁰ To reach this conclusion, Justice Rehnquist quoted a passage from the book He Hanged Them High: An Authentic Account of the Fanatical Judge Who Hanged Eighty-Eight Men,³¹ a subtitle he curiously omitted from his citation. Quoting from the book, Justice Rehnquist stated, “[T]he principal chief of the Choctaws, Pleasant Porter, came forward and placed a wreath of wild flowers on the grave [of Judge Parker].”³² One Indian placing flowers on a grave is a thin reed to glean the views of every Indian under Judge Parker’s jurisdiction. Plus, placing flowers on the grave could have meant any number of things – it could have been genuine sorrow; it could have been a political gesture; it could have meant good riddance. Placing weight upon this gesture also begs the question: If two Indians defiled the grave of Judge Parker, would his views on Indians carry less weight? After all, the defilers outnumber flower bearers. And making reliance on this book and the alleged gesture all the more flummoxing is the glaring error in the passage – Pleasant Porter was not Choctaw: He was Chief of the Creek Nation. Tribal citizenship matters, and the failure to properly affiliate Chief Porter raises questions about whether Indians actually held Judge Parker in high regard.

Footnote 10 contains another red flag. Justice Rehnquist stated, “It may be that Judge Parker’s views as to the ultimate destiny of the Indian people are not in accord with current thinking on the subject ….”³³ In plain speak, people in the contemporary United States would consider Judge Parker’s beliefs ethnocentric. Indeed, Judge Parker hoped to “civilize” Indians, meaning he was not for outright genocide;³⁴ rather, he hoped to obliterate Indian culture, eradicate tribal governments, and transform Indians into white people. A person who desires the destruction of tribal governments and culture is unlikely to support tribal sovereignty. Notwithstanding, Justice Rehnquist considered Judge Isaac Parker the greatest source to gauge metes and bounds of inherent tribal sovereignty.

The Supreme Court’s opinion relied on other questionable legal authorities to support its holding that tribal courts lack criminal jurisdiction over non-Indians. Justice Rehnquist cited a 1960 Senate Report and a 1970 Solicitor of the Department of the Interior opinion that concluded tribes lack criminal jurisdiction over non-Indians.³⁵ Standing on their own, these sources are reasonable. However, a footnote follows both authorities. The footnote following the Senate Report states the 1977 congressional Policy Review Commission determined “[t]here is an established legal basis for tribes to exercise jurisdiction over non-Indians.”³⁶ Likewise, the footnote following the Solicitor opinion notes, “The 1970 opinion of the Solicitor was withdrawn in 1974 but has not been replaced. No reason was given for the withdrawal.”³⁷ A possible reason for the differing assessments of tribal sovereignty could be the United States’ executive and legislative branches had begun moving from policies of tribal termination toward tribal self-determination. Hence, the Court’s authorities conflicted with current federal policy.

Unsurprisingly, the Supreme Court cited many of the canonical federal Indian law cases. While these cases depict Indians and tribes in an unfavorable light,³⁸ none of these cases denied tribes authority over non-Indians. In addition to the canons, the Court referenced the 1891 case of In re Mayfield,³⁹ about whether the federal government can put Indians in jail for adultery, and quoted a passage stating tribal self-government powers extend only so far “as was thought to be consistent with the safety of the white population with which they may have come in contact.”⁴⁰ The Supreme Court also quoted the infamous passage from Ex parte Crow Dog – noting prosecuting Indians in federal court would be judging them “by superiors of a different race” – to demonstrate it would be unfair to try non-Indians in tribal courts.

But the comparison between the circumstances in Oliphant and Crow Dog was specious. The Court in Crow Dog believed Indians – who had never experienced United States law – could not fairly be tried and sentenced to death by it. Though Oliphant may not have known Suquamish law jot for jot, it is hard to imagine that he would have been surprised to discover punching tribal cops violated tribal law. Plus, the maximum penalty Oliphant could have suffered under tribal law was capped at six months in jail and a $500 fine – likely the most lenient penalty for this crime of any jurisdiction in the United States. And curiously, the Supreme Court omitted “superiors” from its Crow Dog quotation, sanitizing the racial undertones of Crow Dog. Likening the prosecution of Crow Dog to Oliphant seems disingenuous.

The Supreme Court acknowledged there was no clear evidence tribes had ever been divested of jurisdiction over non-Indians. Following the canons of federal Indian law, this should have meant tribes retained the ability to prosecute non-Indians. But the Supreme Court decided to rewrite federal Indian law by declaring:

“Indian law” draws principally upon the treaties drawn and executed by the Executive Branch and legislation passed by Congress. These instruments, which beyond their actual text form the backdrop for the intricate web of judicially made Indian law, cannot be interpreted in isolation but must be read in light of the common notions of the day and the assumptions of those who drafted them.⁴¹

During his time on the Supreme Court, Justice Rehnquist was opposed to tribal interests. For example, in United States v. Sioux Nation,⁴² eight Supreme Court Justices held the United States had unlawfully taken the Black Hills from the Sioux in the ignominious sell or starve “agreement” of 1876. The majority quoted the lower court’s assessment of the United States’ treatment of the Sioux: “A more ripe and rank case of dishonorable dealings will never, all probability, be found in our history, which is not, taken as a whole, the disgrace it now pleases some persons to believe.”⁴³ Contrarily, Justice Rehnquist believed no injustice was foisted upon the Sioux. In his lone dissent, Justice Rehnquist quoted a source asserting, “[The Sioux and other Plains Indians] lived only for the day, recognized no rights of property, robbed or killed anyone if they thought they could get away with it, inflicted cruelty without a qualm, and endured torture without flinching.”⁴⁴ Thus, Justice Rehnquist claimed the Sioux “did not lack their share of villainy either.”⁴⁵

Even for Justice Rehnquist, commanding present-day lawyers to incorporate the anti-Indian bias of the 1700s and 1800s into contemporary federal Indian law is jarring. Anti-Indian sentiments were rampant in eighteenth- and nineteenth-century United States; indeed, even the historic “Friends of the Indian” were ethnocentric by present standards. Using this guideline, tribal sovereignty will forever remain shackled by the unjust past. The Supreme Court’s reliance on antiquated views of Indians to discern the power of contemporary tribal governments is all the more troublesome because the legislative and executive branches have categorically rejected those outmoded views and embraced a policy of tribal self-determination.

The final paragraph of Oliphant admitted there was little real danger of non-Indian rights being violated in tribal courts. The Supreme Court noted tribal courts “resemble in many respects their state counterparts”; plus, tribal courts are bound by the ICRA. Hence, parties in tribal courts receive procedural safeguards analogous to those in other United States courts. The Supreme Court also recognized that non-Indian crime is a severe problem on Indian reservations but brushed this concern aside, stating Congress can solve the problem if it wishes.

Oliphant prevents tribes from performing the most essential of government functions – protecting the people within their borders from all violent criminals. By denying tribes the ability to prosecute non-Indians, Oliphant leaves tribes largely powerless to protect their citizens from most of the United States’ population. Consequently, Oliphant does not treat tribes as sovereign governments. Instead, Oliphant acts as though tribes are an inferior social organization that cannot administer justice in an impartial manner.

13.3 Duro v. Reina: Stretching Oliphant Further

The Supreme Court extended Oliphant’s reasoning in 1990 in Duro v. Reina.⁴⁶ Albert Duro, a citizen of the Torrez-Martinez Band of Cahuilla Mission Indians, lived on the Salt River Indian Reservation and worked for the Salt River Pima-Maricopa Indian’s (Salt River) construction company. Duro allegedly shot and killed a fourteen-year-old boy on the Salt River Indian Reservation. The boy was enrolled in the culturally related and nearby Gila River Indian Tribe. Duro was arrested by federal agents following the murder; however, the United States Attorney refused to prosecute the case. Not wanting the crime to go unpunished, Salt River brought criminal charges against Duro. Duro responded by playing the Oliphant card, arguing tribes lack criminal jurisdiction over nonmember Indians.

The federal district court agreed with Duro; the Ninth Circuit Court of Appeals reversed, upholding tribal jurisdiction; and the Supreme Court sided with Duro. As in Oliphant, the Supreme Court admitted there was no clear evidence tribes had ever been divested of criminal jurisdiction over nonmember Indians. This was irrelevant. The Supreme Court emphasized tribes’ extraconstitutional status as well as the fact Duro was ineligible for citizenship in Salt River. The Court explained: “Petitioner is not a member of the Pima-Maricopa Tribe, and is not now eligible to become one. Neither he nor other members of his Tribe may vote, hold office, or serve on a jury under Pima-Maricopa authority.”⁴⁷ Consequently, the Court held Duro was functionally a non-Indian for tribal jurisdiction purposes. Although political participation is not a requirement for prosecution by other United States governments,⁴⁸ the Supreme Court chose to foist this prerequisite upon tribes.

Tribes universally denounced Duro for the practical law enforcement problems caused by the decision. Under Duro, a Navajo could not be prosecuted by the Hopi Tribe for committing a crime on the Hopi Reservation – which is problematic because the Navajo Reservation surrounds the Hopi Reservation. Indeed, the Duro Court seemed to view tribes as racial groups who exist isolated from one another, but this view was as wrongheaded as it is impractical. For example, the Mississippi Band of Choctaw Indians hosts a powwow on its reservation. Indians from twenty tribes attend the event. Every one of those individuals would be able to commit all the petty crimes they desired with no fear of legal recourse thanks to Duro. States realized the magnitude of this problem and joined the effort to lobby for a legislative Duro reversal, and within six months of the decision, Congress enacted a temporary Duro-fix. The Duro-fix became permanent in 1991.⁴⁹ The constitutionality of the Duro-fix was challenged, and the Supreme Court affirmed the law in 2004.⁵⁰ Hence, tribes now have the ability to prosecute all Indians who commit crimes on their land.

13.4 Minor Public Safety Improvements

Congress’ next significant effort to address Indian country crime was the Tribal Law and Order Act of 2010 (TLOA).⁵¹ TLOA requires United States Attorneys with Indian country in their district to appoint a tribal liaison in hopes of fostering cooperative efforts between tribes and federal prosecutors. Likewise, United States Attorneys are “authorized and encouraged to appoint Special Assistant United States Attorneys”⁵² to help with Indian country prosecutorial efforts, particularly of minor crimes.⁵³ Due to United States Attorneys’ high declination rates for Indian country cases, TLOA mandates United States Attorneys collect and report data relating to Indian country crime. TLOA grants tribes greater access to criminal databases and increased funding for tribal law enforcement. Most significantly, TLOA increased tribal sentencing authority from one year to three years per offense, with the ability to stack sentences for a maximum of nine years in jail. The maximum fine tribes can issue increased from $5,000 to $15,000 thanks to TLOA. Strings are attached though.

In order to issue an enhanced sentence, tribes must comport with congressionally imposed requirements. TLOA requires tribes to provide defendants with the right to counsel as well as pay for attorneys for indigent defendants. The public defender must be licensed by a jurisdiction that “applies appropriate professional licensing standards and effectively ensures the competence and professional responsibility of its licensed attorneys.”⁵⁴ Enhanced sentencing also requires the presiding tribal court judge to be licensed and have “sufficient legal training to preside over criminal proceedings.”⁵⁵ Tribes must also publish all criminal laws and record the trial if they are to issue enhanced sentences.

While a step in the right direction, TLOA is essentially virtue signaling. It enabled the president and Congress to say they took action to improve public safety in Indian country. This is certainly true; nevertheless, TLOA misses the mark. Non-Indians commit a large portion of crimes in Indian country, and TLOA does not allow tribes to prosecute non-Indians. Also worth noting, Congress was well aware of tribes’ financial constraints. Congress knew most tribes could not afford to implement TLOA. Additionally, some tribes refuse to implement TLOA because they view its procedural mandates as a further attempt to colonize tribal justice systems. Thus, TLOA does little to solve Indian country’s crime problem.

Congress went a bit further in passing the Violence Against Women Act of 2013 (VAWA).⁵⁶ VAWA allows tribes to prosecute non-Indians who commit dating violence, domestic violence, or violate a protective order. Defendants in VAWA prosecutions must be in some sort of intimate relationship with the victim, reside in the Indian country of the prosecuting tribe, or be employed in the Indian country of the prosecuting tribe. Tribes cannot prosecute non-Indians without satisfying TLOA’s requirements. VAWA also requires tribal jury systems to incorporate non-Indians. Significantly, VAWA includes a broad catchall provision declaring tribes shall provide defendants with all rights needed to make VAWA comply with the Constitution. This is progress, but unfortunately, VAWA barely scratches the surface of non-Indian victimizations of Indians.

Although VAWA’s jurisdictional grant is narrow, this provision of VAWA faced enormous opposition. Much of it was based on the belief that tribal governments are inherently biased against non-Indians. In fact, Senator Chuck Grassley declared, “Under the laws of our land, you’ve got to have a jury that is a reflection of society as a whole, and on an Indian reservation, it’s going to be made up of Indians, right? So the non-Indian doesn’t get a fair trial.”⁵⁷ Notably, Indian defendants seldom have an Indian on the jury when they are tried in state and federal court. Neither Senator Grassley nor other VAWA opponents expressed any problem with this scenario.

Other tribal jurisdiction opponents couched their argument in terms of constitutional rights. Tribal sovereignty predates the formation of the United States, and tribes never consented to the Constitution. Accordingly, tribes are not bound by the Constitution. Opponents of tribal jurisdiction interpreted this to mean non-Indian rights are likely to be violated in tribal courts. This is false. Tribes are bound by ICRA. ICRA provides protections analogous to those in the Bill of Rights – even the Supreme Court in Oliphant noted ICRA largely eliminates fears of non-Indians being denied due process in tribal court. VAWA requires tribes to provide non-Indian defendants with all rights needed to satisfy due process under the United States Constitution, so VAWA protects non-Indian constitutional rights. Constitutional rights should not be taken lightly, but it is worth noting that some constitutional rights are suspended within 100 miles of the United States border.⁵⁸ This means approximately two-thirds of the United States’ population is perennially living without full constitutional rights.⁵⁹ Tribal courts bound by ICRA seem formidable compared to suspended rights.

The strongest argument in support of tribal criminal jurisdiction over non-Indians is the performance of VAWA-implementing tribes. Tribes have arrested more than 100 non-Indians for domestic violence, dating violence, and protective order violations. More than seventy of these non-Indian defendants have pled guilty in tribal court, which is comparable to plea rates in other United States jurisdictions. The high plea rate in tribal courts is particularly impressive considering their limitations. State and federal prosecutors often induce pleas by threatening elevated charges; however, tribal courts cannot use this tactic because the maximum penalty is three years per offense. Despite the obstacles to tribal prosecutions, not a single non-Indian defendant has alleged unfairness in a tribal court. In fact, some tribes urged defendants to challenge their tribal prosecutions in federal court. The non-Indian defendants declined on the grounds they received a fair shake in tribal court.

Tribal criminal jurisdiction over non-Indians was expanded in VAWA 2022.⁶⁰ Now, tribes can prosecute non-Indians who engage in stalking, sex trafficking, sexual violence, and child violence. Furthermore, VAWA 2022 permits tribes to prosecute non-Indians who assault law enforcement officers and obstruct justice. The jurisdictional expansion is accompanied by the same procedural requirements as VAWA 2013.⁶¹ Although tribal jurisdiction is expanding, tribal jurisdiction still has a long way to go before tribes can uphold their governmental duty to protect their citizens from all criminals within their borders.

13.5 The Jurisdictional Quagmire

Limited tribal jurisdiction means tribes depend on states and the federal government for law enforcement. Every crime in Indian country is punishable by a government; however, determining which government is the proper authority to prosecute a crime can be challenging.⁶² Generally, tribes only have criminal jurisdiction over Indians. The federal government has jurisdiction over major crimes in Indian country when an Indian is the perpetrator. The federal government also has jurisdiction if the crime involves an Indian victim and non-Indian perpetrator or vice versa. States have exclusive jurisdiction over crimes involving only non-Indians. The Supreme Court’s 2022 decision in Oklahoma v. Castro-Huerta grants Oklahoma, and possibly other states, criminal jurisdiction over crimes involving a non-Indian perpetrator and an Indian victim.⁶³

Since jurisdiction turns on whether a person is an Indian, courts must determine if a person is an Indian. This can be very complicated. “Indian” has more than two dozen definitions under federal law. The go-to test in criminal cases comes from United States v. Rogers,⁶⁴ and requires a person to possess both Indian blood and government recognition as an Indian. Indian blood is usually fairly easy to establish, but using a person’s blood to assess which law applies seems to be the epitome of racism – which should be unsurprising since the Rogers’ test was contrived by a notoriously racist judge, Chief Justice Roger Taney. In 2015, a federal judge critiqued the continued use of Rogers to determine “Indian” status in the twenty-first century, exclaiming, “Reliance on pre-civil war precedent laden with dubious racial undertones seems an odd course for our circuit law to have followed, especially in light of the Supreme Court’s much more recent holdings in Mancari and Antelope.”⁶⁵ Notwithstanding, Rogers’ “blood” criterion remains embedded in federal Indian law.

Determining whether an individual has government recognition as an Indian, the other factor of the Rogers test, can easily become a vexing task. As an example, the federal government acknowledges the citizens of the United Houma Nation (UHN) are Indians “without doubt or question.”⁶⁶ The federal government, nevertheless, refuses to recognize the UHN as “a tribe of Indians,”⁶⁷ but federally recognized tribes do consider the UHN a bona fide tribe. Hence, it is equally plausible that the Houma are or are not Indians for criminal jurisdiction purposes. Additionally, Indians may relinquish their tribal citizenship prior to or after committing a crime. If these factors were not amorphous enough, different courts use different tests to gauge Indian status, meaning a person may be an Indian in the Eighth Circuit but not the Ninth Circuit. Simply figuring out whether a person is an Indian can take months.

What qualifies as “Indian country” can be ambiguous too. For example, it was widely believed that all the reservations in Oklahoma had been disestablished for more than a century. The Supreme Court said otherwise in the 2020 case of McGirt v. Oklahoma.⁶⁸ As a result, nearly half of Oklahoma consists of reservation land. McGirt is an extreme example, but due to the General Allotment Act, Indian country is frequently checkerboarded, alternating and intermixed parcels of land under state or tribal authority. Which government has jurisdiction can change with each step. Law enforcement agents are often forced to rely on GPS to figure out their jurisdiction, but even this may be insufficient, as exhibited by McGirt.

Jurisdictional confusion creates a strong disincentive for state and federal agents to pursue Indian country crimes. State and federal agents can arrest and prosecute offenders without having to quibble over whether the parties are Indian outside of Indian country. Hence, law enforcement is much more efficient outside of Indian country. There are consequences of getting the jurisdictional inquiry incorrect too. If the wrong law enforcement agency prosecutes the defendant, the defendant may be released for lack of jurisdiction. This means officers who spent hundreds of hours working on the case wasted their time. Plus, some of the evidence may not be usable in another jurisdiction due to differing evidentiary rules. Liability may also arise if the wrong government prosecutes the case. As a result of liability concerns, some state law enforcement agencies openly refuse to patrol checkerboard reservations.⁶⁹

Jurisdictional issues are compounded by Indian country’s police shortage. Indian country has less than half the boots on the ground as comparable rural jurisdictions. A 2001 report by the National Institute of Justice described the average reservation police force as having one to two officers patrolling an area the size of Delaware.⁷⁰ Delaware has far more police agencies than most reservations have cops.⁷¹ Fewer police officers lead to slower response times, and response time is especially significant in Indian country because of Indian country’s jurisdictional framework. All a criminal has to do is reach the reservation border, then the pursuing officer’s ability to detain and arrest becomes a mystery. Criminals know this; hence, police claim criminals laugh as they cross reservation borders. This bizarre state of affairs prompted the Washington Supreme Court to state Indian country’s jurisdictional scheme creates an “incentive for intoxicated drivers to race for the reservation border.”⁷²

Law enforcement difficulties created by the jurisdictional maze and police shortage are exacerbated by Indian country’s abysmal infrastructure and cultural barriers. State and federal law enforcement are often located more than 100 miles from Indian country. Once state and federal agents reach Indian country, they discover Indian country’s roads are largely unpaved; indeed, the roads have been described by the United States Commission on Civil Rights as “the most ‘underdeveloped, unsafe, and poorly maintained road networks in the nation.’”⁷³ Traveling in Indian country gets more complicated because reservation homes often lack addresses. This means GPS will be largely useless. Even if the crime scene has an address, Indian country’s shoddy communication infrastructure may prevent GPS’s use as well as the officer’s ability to call for backup. Assuming the crime scene is reached, evidence collection may be difficult due to Indian country’s poor medical care, including a lack of rape kits. Even if law enforcement can reach the crime scene, they may not be welcomed by the tribal community. Indians are often distrustful of state and federal agents because of cultural barriers as well as past and ongoing abuses.

In addition to these obstacles to criminal justice, federal law enforcement officers have no reason to prioritize Indian country crime. Federal prosecutors are usually more interested in high-profile cases, like terrorism and white-collar crimes. The Indian country docket does not fit this bill. In fact, federal prosecutors have allegedly been fired for focusing on Indian country crimes. Federal judges have also stated they do not like Indian country cases, and this discourages prosecutors from pursuing reservation crimes.

Some states have jurisdiction over all reservation crimes due to federal legislation, such as Public Law 280. Indians fair even worse when states have criminal authority over reservation crimes. States are often uninterested in Indian country because Indians are usually a small, poor minority. An elected sheriff probably will not win elections by concentrating on reservation safety. Moreover, states cannot tax tribal lands, so there is an actual disincentive to police Indian country. State law enforcement usually are not members of tribal communities either. Accordingly, they have no incentive to focus on Indian country crimes when crimes are occurring in the agent’s own community. In fact, there are accounts of state police ignoring Indian victims and using their authority to harass Indians. Several studies show tribes subjected to state jurisdiction experience higher crime rates than tribes under federal jurisdiction.⁷⁴

Racism likely contributes to high rates of violence against Indians as Indians experience elevated victimization rates outside of Indian country too. When Indians are victimized, police are slow to respond, and when Indians are accused, police are more likely to kill Indians than members of any other race.⁷⁵ Likewise, police often assume Indian women were intoxicated when they were victimized and may deem Indians less worthy of protection than other United States citizens. The media is largely indifferent to crimes against Indians as missing Indian women and girls seldom make headlines.

The above factors combine to make Indian country a prime place for non-Indian criminals to target Indian victims; in fact, the United States Commission on Civil Rights has declared, “Native Americans have become easy crime targets.”⁷⁶ Some federal prosecutors are apathetic to Indian country crime, and if a non-Indian victimizes an Indian, only the federal government has jurisdiction in most states. Hence, non-Indian criminals have a logical reason to select Indian victims in Indian country. The available evidence suggests non-Indian criminals have figured this out. Indian country crime rates soar during oil booms and hunting season, times when non-Indians enter reservations in large numbers. Indian women get the worst of the non-Indian influx as reservations have become known as “rape tourism” destinations.

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Being unable to prosecute all persons on their land severely limits tribes’ ability to function as governments. Without the power to punish the non-Indian criminals who harm their citizens, tribes are largely demoted from sovereigns to social clubs. One could argue criminal power is unique because a prosecution deprives a person of their physical liberty. However, Oliphant has been extended to the civil realm too. As a result, Oliphant hampers tribes’ capacity to enforce contracts, zone their property, and uphold tribal safety standards. This diminished jurisdiction has deleterious effects on tribal economies.

14 Tribal Economic Development and Uncertain Civil Jurisdiction

Despite the rich casino, Indian stereotype, tribal economies are often nonexistent. Indeed, most reservations lack any semblance of a private sector. This means reservation residents must drive long distances to purchase basic goods as well as find private sector jobs. The absence of a private sector helps explain Indian country’s perennial 50 percent unemployment rate.¹ Low employment usually translates to high poverty, and Indian country is no exception. Reservation Indians have the highest poverty rate in the United States, 38% compared to 13% for the country as a whole.² Although Indians are approximately 1 percent of the population, eight of the ten poorest counties in the United States are majority Indian.

Tribes have enacted several reforms and initiatives aimed at creating private sectors on their land. For example, the Choctaw Nation Small Business Development program provides Choctaw Nation citizens with technical assistance relating to writing business plans, filing taxes, accessing capital, and more.³ In the same vein, tribes have created procurement preferences for their citizens as well as other Indians. Indian procurement preferences are constitutional because Indian – as used in the federal Indian law context – is a political classification deriving from tribes’ sovereignty rather than a raw, racial classification. Tribes are also creating community development financial institutions to help their citizens access business capital. And approximately a dozen Indian Chambers of Commerce currently exist to provide business trainings and networking opportunities.

Most significantly, tribes have begun promulgating commercial laws. Due to years of federal paternalism and denigrations of tribal sovereignty, some tribes do not have fully developed commercial codes. Without adequate legal infrastructure, businesses do not know which rules to follow. This creates uncertainty, and uncertainty is bad for business. Accordingly, many tribes have started implementing laws designed to make their reservations more attractive business climates. Some tribes have acted alone, and others have sought the guidance of outside institutions. But of all the tribal business law reforms, tribal secured transactions laws have received the most attention.

Secured transactions laws increase investor confidence by improving lenders’ likelihood of repayment upon default. Basically, the more likely the lender is to be repaid, the lower the borrower’s interest rate. Lower interest rates translate to more capital, which businesses need to operate and grow. Hence, secured transaction laws are hallmarks of economic development efforts in impoverished countries. For this reason, the National Conference of Commissioners on Uniform State Laws partnered with tribes to create a secured transactions law specifically for tribes. The Model Tribal Secured Transactions Act (MTSTA) was published in 2005, and dozens of tribes have implemented it or other secured transactions laws. However, secured transactions laws have not transformed tribal economies.

Although tribal law is vital to tribal economic success, federal law undermines the effectiveness of tribal law. Due to Oliphant and its progeny, tribal civil jurisdiction over non-Indians is severely limited. Jurisdictional limitations hinder the force of tribal law, but the unpredictability of when tribal law applies is an equally significant problem. That is, tribal laws like the MTSTA are largely useless if the tribe cannot predictably enforce them. The constraints on tribal civil jurisdiction create uncertainty over which law applies in Indian country and hinders tribal economic development.

14.1 Montana v. United States: A New Path

Tribes long had commercial laws;⁴ in fact, early Congresses openly acknowledged tribal regulations were more important to Indian commerce than federal laws.⁵ Once placed on reservations, tribal laws began to wither by federal design. The United States supplanted traditional, Indigenous justice systems with Courts of Indian Offenses and even expressly abolished tribal courts during the 1890s.⁶ Notwithstanding, tribal civil jurisdiction over non-Indians was consistently affirmed during the late 1800s and early 1900s.⁷ The Supreme Court in 1904 determined the Chickasaw Nation had the ability to require those within its territory to follow Chickasaw regulations.⁸ As part of Congress’ effort to promote tribal self-government, the 1934 Indian Reorganization Act encouraged the creation of tribal courts. In 1959, the Supreme Court decided suits against Indians arising from events on a reservation must take place in tribal court.⁹ Nearly twenty years later, the Supreme Court declared, “Tribal courts have repeatedly been recognized as appropriate forums for the exclusive adjudication of disputes affecting important personal and property interests of both Indians and non-Indians. Nonjudicial tribal institutions have also been recognized as competent law-applying bodies.”¹⁰ This strong statement in support of tribal courts and self-governance occurred two months after the Court’s Oliphant decision; however, the Supreme Court soon changed its tune on tribal civil authority over non-Indians.

The Supreme Court issued its “pathmarking”¹¹ opinion on civil jurisdiction in 1981, Montana v. United States.¹² The case was a clash between the Crow Tribe of Indians and the state of Montana over regulatory authority on the Crow Reservation. In 1973, the Crow enacted an ordinance prohibiting noncitizens from hunting or fishing on its reservation.¹³ According to the federal superintendent of the Crow Reservation, the ordinance was a necessary response to the severe depletion of game within the reservation.¹⁴ Wildlife was becoming scarce because Montana allowed non-Crow to hunt on state-owned parcels within the reservation.¹⁵ Moreover, the superintendent claimed Montana failed to regulate the non-Crow hunters on the reservation.¹⁶ As the number of non-Indian hunters on the Crow Reservation increased, so did the amount of pollution on the reservation.¹⁷ Hence, the Crow Tribe sought to restrict non-Indian hunting on the reservation.

Montana saw things differently. It claimed there was no evidence of overharvesting wildlife or environmental degradation on the Crow Reservation, but the wildlife dispute was essentially a vehicle to present Montana’s opposition to tribal authority.¹⁸ Montana’s attorneys argued Montanans, as well as other non-Indians, should have “rights to hunt and fish free from Indian interference on fee lands within the reservation.”¹⁹ Montana further contended allowing tribes to regulate non-Indians within a reservation jeopardized non-Indian property rights.²⁰ Non-Indian resistance to tribal authority was the crux of Montana’s claim. One National Park Service agent reported being told by a gun-toting, non-Indian fisherman, “Damn it, I am carrying a weapon because I don’t want any Indian to tell me what to do or where to fish.”²¹

This jurisdictional debate eventually led to the United States filing suit against Montana on behalf on the Crow Tribe. Relying on Oliphant, the district court determined tribes lack jurisdiction over non-Indians absent express delegation of authority by Congress, so Montana governed non-Indian hunting and fishing on the Crow Reservation. The Ninth Circuit sided with the Crow Tribe and held the Crow Tribe could regulate non-Indians on trust land within the tribe’s reservation. Nonetheless, the Ninth Circuit concluded Montana possessed concurrent authority over non-Indians on non-Indian-owned fee lands within the reservation.

The sovereign struggle reached the Supreme Court, which ruled against the Crow Tribe’s authority over non-Indians on fee land within the reservation. Factoring significantly against the Crow Tribe, Montana had long asserted authority over hunting and fishing on the Crow Reservation. This was true, but it ignored the federal government’s efforts to destroy the Crow government. For example, during the 1920s, the federal government actively sought to eradicate Crow culture and institutions – including slaughtering approximately 50,000 Crow horses.²² The Crow Tribe was fighting to survive until 1934. Self-government was not a plausible goal for tribes until the 1970s. Had the Court attempted to understand Crow history, it may have viewed the lack of Crow wildlife ordinances differently.

An appreciation of the Crow Tribe’s history may have also prevented the Court from making one of the most bizarre statements in the Supreme Court’s annals. As part of the Court’s justification for denying the Crow Tribe the ability to regulate fishing on its reservation, the Court claimed the Crow did not need to govern fishing because “the Crow were a nomadic tribe dependent chiefly on buffalo, and fishing was not important to their diet or way of life.”²³ This assertion by the Court is perplexing. The dissent responded by stating:

The factual premise upon which the Court bases its conclusion is open to serious question: while the District Court found that fish were not “a central part of the Crow diet,” there was evidence at trial that the Crow ate fish both as a supplement to their buffalo diet and as a substitute for meat in time of scarcity.²⁴

To say the majority’s “factual premise … is open to serious question” is an understatement.

Joe Medicine Crow, a Crow citizen and the Crow Tribe’s official historian, testified at trial of numerous instances of the Crow fishing as well as the role of fishing in Crow culture.²⁵ Medicine Crow held a master’s degree in anthropology and would have earned a doctorate had he not volunteered to defend the United States during World War II. Medicine Crow’s military service is the stuff of legend – he is likely the last person who will ever complete the four tasks to become a Crow war chief: leading a successful war party, touching an enemy without killing him, seizing an enemy’s weapon, and stealing an enemy’s horse.²⁶ Medicine Crow’s work as a historian and his World War II heroics earned him the Presidential Medal of Freedom.²⁷ Nevertheless, his testimony about Crow culture was given no weight by a majority of the Supreme Court. In case Joe Medicine Crow’s knowledge about whether the Crow ate fish remains in doubt, recent archaeological excavations of Crow land have discovered “numerous fish bones show[ing] that another staple was cutthroat trout.”²⁸

Ignoring facts that support tribal sovereignty was used to undercut tribal jurisdiction in Oliphant, and the Court relied on Oliphant to legitimize its assault on tribal sovereignty in Montana. Building upon Oliphant, the Court claimed: “[T]he Indian tribes have lost any ‘right of governing every person within their limits except themselves.’”²⁹ The Court was clear in stating Oliphant only applied to criminal jurisdiction; indeed, the legal authorities the Supreme Court relied on in Oliphant admitted tribes retained civil jurisdiction over all cases arising in Indian country.³⁰ Nonetheless, the Court believed the spirit of Oliphant applied to tribal civil authority over non-Indians too, meaning tribes presumptively lack authority over the non-Indians who enter tribal land.

The Court provided two exceptions to this general rule, known as the “Montana Exceptions.” Montana One enables tribes to assert jurisdiction over non-Indians who enter a consensual relationship with the tribe or its citizens. Montana Two permits tribes to exercise jurisdiction over non-Indians engaged in “conduct [that] threatens or has some direct effect on the political integrity, the economic security, or the health or welfare of the tribe.”³¹ Neither exception was met in Montana because the non-Indians did not enter consensual relationships with the tribe nor was tribal authority needed because the state had long asserted jurisdiction over hunting and fishing on allotted lands within the reservation.

The Montana exceptions remain the benchmark for tribal civil authority over non-Indians. Montana One seems clear, and Montana Two seems broad. Neither has proven to be the case. Plus, the Montana exceptions applicability is subject to debate. Montana was specifically about tribal authority over non-Indians on fee lands within a reservation. Subsequent decisions have seemingly stretched Montana to trust lands, but this has never been decisively determined. Accordingly, some courts do not apply Montana when disputes arise on reservation trust land.³² Then Montana and subsequent cases have distinguished between members and nonmembers of the tribe. Making the distinction, the Supreme Court has relied upon nonmembers’ lack of political status in other tribes, contending, “For most practical purposes those Indians stand on the same footing as non-Indians resident on the reservation.”³³ This reasoning makes little sense given tribes can criminally prosecute nonmember Indians. Thus, ambiguity reigns over how to apply the Montana exceptions.

Not knowing when tribal law applies creates significant uncertainty, and uncertainty is bad for economies. Additionally, not being able to consistently enforce tribal law inhibits the force of law. Placing limits on the scope of tribal law undermines tribes’ ability to function as governments.

14.2 The Path Is Not Clear: Dollar General v. Mississippi Band of Choctaw Indians

Because tribal jurisdiction over non-Indians is limited, non-Indians can contest tribal jurisdiction in federal court. Non-Indians routinely challenge tribal jurisdiction, but before the case can enter federal court, non-Indians must exhaust their tribal court remedies. Essentially, the only way to bypass the tribal court system is to establish the tribal court is acting in bad faith. This rarely happens. As a result, parties must work their way through each level of the tribal court system prior to entering federal court, which can take years. The case may then spend years in the federal court system. During this time, businesses are mired in uncertainty and spending money on legal fees, not to resolve the suit but merely to discern where to file the lawsuit. Dollar General v. Mississippi Band of Choctaw Indians³⁴ epitomizes this issue.

The facts of the case are simple enough. Dollar General opened a store on trust land within the Mississippi Band of Choctaw Indians (MBCI) Reservation. To do so, Dollar General leased land from the tribe. The lease agreement stated Dollar General agreed to “comply with all codes and requirements of all tribal and federal laws and regulations” governing leased area.³⁵ Likewise, the lease contained a clause noting the lease would be construed according to MBCI law and the lessee “is subject to the Choctaw Tribal Tort Claims Act.”³⁶ The lease also clearly stated the MBCI court had “[e]xclusive venue and jurisdiction” over actions arising from the lease.³⁷

The MBCI had a job training program for tribal youth and placed them in internships with businesses. In 2003, Dollar General accepted a thirteen-year-old Choctaw boy as an intern at its reservation store. Allegedly, the store’s manager molested the boy during the internship. The tribe lacked criminal jurisdiction under Oliphant, and federal prosecutors did not pursue the case. Seeking some measure of justice, the child’s family filed a tort suit in MBCI court against Dollar General and the store manager in 2005. The defendants contested the tribal court’s jurisdiction.

Three years later, the case reached the MBCI Supreme Court, which opined it had jurisdiction over both parties under both Montana exceptions. Regarding Montana One, the MBCI court explained, “The alleged tort in this case took place on the leased premises that are subject of the consensual agreement and the individual tortfeasor was an employee, indeed the manager of the leased premises. Thus there is a considerable nexus between the alleged tort and the commercial lease.”³⁸ The MBCI court also believed Montana Two was fulfilled because the tort at issue directly impacted the health and welfare of the tribe because the tribe is composed of its citizens, one of whom was allegedly sexually assaulted while in the employment of a business located on the Choctaw Reservation.³⁹

After the MBCI Supreme Court issued its opinion, Dollar General was able to contest tribal jurisdiction in federal court. The federal district court did not think Montana Two provided a plausible claim for tribal jurisdiction, asserting the child sexual assault in this case did not imperil tribal welfare.⁴⁰ Turning to Montana One, the court believed there was no conceivable basis for a consensual relationship between the store manager and MBCI or the child because the store manager never directly contracted with the tribe.⁴¹ Consequently, the federal district court let the store manager elude tribal jurisdiction. However, in 2011, the district court concluded Dollar General’s contractual relationship with MBCI permitted the tribal court to exercise jurisdiction over Dollar General under Montana One.

In 2014, the federal Fifth Circuit Court of Appeals issued a two-to-one opinion in favor of tribal civil jurisdiction over Dollar General.⁴² The majority explained jurisdiction existed under Montana One because the events in question arose from Dollar General’s business relationship with the tribe. Hence, “[h]aving agreed to place a minor tribe member in a position of quasi-employment on Indian land in a reservation, it would hardly be surprising for Dolgencorp to have to answer in tribal court for harm caused to the child in the course of his employment.”⁴³ On the other hand, the dissenting judge thought allowing the MBCI court to adjudicate the dispute involving Dollar General was “alarming and unprecedented.”⁴⁴ The dissenter stated, “The elements of Doe’s claims under Indian tribal law are unknown to [Dollar General] and may very well be undiscoverable by it.”⁴⁵ The majority responded to this contention by asserting, “Doe has brought two specific claims, both of which are based on the alleged sexual molestation of a child by a store manager. We suspect that Dolgencorp could have easily anticipated that such a thing would be actionable under Choctaw law.”⁴⁶

Dollar General appealed this decision to the United States Supreme Court. The Court granted certiorari in June of 2015.⁴⁷ In its brief to the Supreme Court, Dollar General was candid in its belief that tribes should be treated as lesser governments. Dollar General even quoted a passage from the 1891 case of In re Mayfield,⁴⁸ declaring, “The policy of congress has evidently been to vest in the inhabitants of the Indian country such power of self-government as was thought to be consistent with the safety of the white population with which they may have come in contact ….”⁴⁹ On the other hand, Mississippi and five other states submitted a brief in support of MBCI, alleging Dollar General’s position would undermine the rights of all sovereigns.⁵⁰ Ultimately, the case reached an unsatisfactory conclusion, with the Supreme Court split four-to-four over whether Dollar General’s lease with MBCI satisfied Montana One; consequently, the Fifth Circuit’s opinion was affirmed. The four-to-four tie occurred because Justice Antonin Scalia died while the case was pending.

Perhaps more troubling than the case’s result, over a decade was spent litigating where to litigate the case. Ordinarily, parties can avoid disputes over where to sue by placing a clause in the contract stating the parties agree to litigate disputes arising from the contract in a designated forum. However, a forum selection clause existed in Dollar General’s lease. The forum selection clause named the MBCI courts as the exclusive forum. Nonetheless, the Supreme Court was divided on whether this clause carried any weight, which is confusing given the Supreme Court enforces forum selection clauses naming foreign tribunals as the adjudicatory body. The Court’s refusal to honor the forum selection clause naming the MBCI court as the forum is a symptom of the Court viewing tribes as lesser governments.

Part of the trouble with forum selection clauses in tribal courts is a forum selection clause cannot imbue a court with the power to hear a case. For example, parties cannot agree to adjudicate their car wreck in bankruptcy court because bankruptcy courts can only hear matters relating to bankruptcy. As a result, non-Indian parties cannot consent to tribal court jurisdiction for matters outside of Montana One or Two, which is flummoxing because Montana One’s jurisdictional requirement is consent. A forum selection clause is a prime example of consent. Similarly, the parties may not be able to avoid tribal court jurisdiction if the event arises in Indian country and an Indian is a defendant because tribal courts ordinarily have exclusive jurisdiction over civil actions filed against Indian defendants that arise in Indian country. Federal courts have reached varying results in the effectiveness of forum selection clauses in Indian country.

The jurisdictional issues extend to simple matters of court procedure. Serving process across reservations borders can be tricky. Tribes probably cannot drag non-Indians from states into reservations for trials. In fact, non-Indians sometimes file suit in tribal court then hop across the reservation border and claim the tribal court lacks jurisdiction if their suit turns sour.⁵¹ States may also have issues when trying to serve process on Indians within Indian country.⁵² Then counterclaims – when the defendant chooses to file a lawsuit against the person suing the defendant – may not be possible because of Indian country’s peculiar jurisdictional rules. Likewise, the tribal court may have jurisdiction over a breach of contract claim but not discrimination or negligence claims arising from the contract. This means parties will have to file the breach of contract claim in tribal court and the other claims in state court. This is inefficient.

Similarly, the ability of tribes to govern their lands free from state interference is unclear, so there is confusion over which government has authority to regulate activities on tribal lands. To discern whether states can assert jurisdiction over reservation activity, courts balance the tribal, state, and federal interests involved in the activity, known as the Bracker balancing test for its namesake case.⁵³ Chief Justice John Roberts recently opined of this query, “This test mires state efforts to regulate on reservation lands in significant uncertainty, guaranteeing that many efforts will be deemed permissible only after extensive litigation, if at all.”⁵⁴ Uncertainty prevails, but the scales have clearly tipped in favor of state authority.

14.3 Taxation or Theft?

The scales have tipped farthest in favor of states in the realm of taxation. While tribes have the inherent sovereign right to tax activities occurring within their borders, states can usually tax Indian country commerce. There are two exceptions to this rule: States cannot tax tribes nor can states tax tribal citizens within the borders of their tribes’ Indian country. Otherwise, the Bracker balancing test is used to determine whether state taxation of Indian country commerce is preempted. Courts typically hold states have the right to tax tribal commerce if the state alleges it provides a service within Indian country. Quil Ceda Village, located on the Tulalip Tribes’ reservation, is a particularly egregious example of this injustice.

The Tulalip Tribes purchased an undeveloped tract of land located within its reservation in 1949.⁵⁵ Tulalip built all of the infrastructure on the site, including roads, water, gas, and telecommunications, with financial assistance from the federal government. Tulalip planned and controlled all the development on the land. To bolster its chances of preempting state taxes, Tulalip had the tract incorporated as a federal municipality – Quil Ceda Village (QCV)⁵⁶ – making it the only federal municipality besides Washington, DC. QCV has a government that is independent of the Tulalip Tribes. According to a federal district court in 2018, Tulalip spent more than $150 million developing QCV. This was approximately 76% of the project cost. The federal government contributed 19% while Washington State and Snohomish County together contributed 5%.

QCV is now a thriving municipality and home to dozens of major businesses such as Walmart, Home Depot, Bank of America, and restaurant chains. Tens of thousands of people visit QCV each day. Despite QCV and Tulalip providing all government services at QCV, the state of Washington and Snohomish County collect more than $40 million per year from QCV in tax revenue. The state and county tax prevented QCV and Tulalip from collecting a single cent in tax revenue. After all, if the state and county are levying taxes, any additional tax imposed by QCV or the tribe would make goods more expensive at QCV than off the reservation. Thus, QCV merely collected lease payments from QCV tenets.

In 2015, Tulalip filed suit alleging Washington and Snohomish County had no right to tax the commerce occurring at QCV. Tulalip and QCV argued they were responsible for creating and operating QCV. They further argued the state and county levies prohibit QCV from assessing taxes because these taxes plus the tribal tax resulted in higher prices on than off Tulalip. The resulting higher prices would drive consumers away from QCV. The United States joined Tulalip and wrote, “In imposing taxes on Quil Ceda sales, services, and business activities, the State and County seek to raise revenues from activities that cost them nothing, and over which they exercise no control.”⁵⁷ Washington and Snohomish County countered by asserting they added value to QCV, though they could not provide a dollar value.

The federal district court held Washington and Snohomish County had the power to tax QCV. Although the court acknowledged the federal government’s policy of promoting tribal economic development and self-government, the court thought construing these policies as preempting the state and local taxes would read the federal policy too broadly. Curiously, the court interpreted federal legislation granting Tulalip greater control over tribal lands as reducing the federal interest in Tulalip and evincing a federal desire to permit the state taxes of QCV. The court also believed QCV and the federal government’s failure to micromanage the privately owned businesses at QCV as a sign both governments had little interest in the businesses. Additionally, the court pointed to QCV’s success to show the state and local taxes had not impeded the federal or tribal interest in tribal economic development – so maybe the court was crafting a tribal success tax?

The court could not identify a state interest other than collecting taxes from QCV. The court admitted Washington did not provide any direct services at QCV; indeed, it would have been disingenuous to denote any value contributed by the state or county. As Tulalip Tribal Board Chairwoman Teri Gobin said, “To date, we have never received a dollar, yet we have been 100% responsible for the costs of all the infrastructure and governmental services that allow those businesses to operate.”⁵⁸ Instead, the court pointed to services Washington and Snohomish County provide outside of QCV. This is little more than deflection because QCV provided value off reservation by directly employing more than 8,000 people. These employees pay state and local taxes when they leave QCV. Although Washington and Snohomish County prevailed at the district court, they both chose to enter a tax sharing agreement with QCV. Tulalip will ultimately end up with about half the tax revenue collected at QCV.⁵⁹ This is an improvement for QCV; nevertheless, the state and county should have no ability to collect any tax revenue from tribal lands, particularly when the state and county contribute no value.

14.4 What Is Legal?

Which government has authority to tax does not impact the legality of the underlying activity, and debates over whether an activity is lawful within Indian country arise from time to time. Without question, the most famous example is gaming. Tribes began opening bingo parlors and gaming within the borders of their reservations during the late 1960s. Disputes with the surrounding state and county often arose because gaming was usually subject to strict regulation at the state level. Tribes claimed their sovereignty enabled them to legalize gaming on tribal lands. States vigorously opposed tribes’ choice to legalize gaming on their land.

The litigation reached its climax in the 1987 Supreme Court case California v. Cabazon Band of Mission Indians.⁶⁰ California claimed it had authority to regulate gaming on tribal lands, but the Supreme Court disagreed. The Court reasoned gaming furthered federal interests by generating revenue to fund tribal governments. To support this proposition, the Court noted the Secretary of the Interior approved the tribal gaming ordinances at issue and financed Indian gaming operations. Additionally, the Secretary of the Interior approved gaming management contracts. The Court also acknowledged tribes created value on their reservations by constructing and operating casinos on their lands; that is, tribes were not passively marketing an exemption from state law. California’s only argument was state regulation was needed to prevent tribal gaming from being infiltrated by criminal syndicates. While the Court accepted this as a legitimate state interest, the Court noted California could point to no example of organized crime’s involvement in Indian gaming.

Aside from the balancing of tribal, state, and federal interests, the Court reasoned gaming did not violate California’s public policy. The state did not prohibit gaming; rather, several forms of gaming were legal in California. In fact, there were more than 400 card rooms lawfully operating within the state. The Court further pointed out that “California itself operates a state lottery, and daily encourages its citizens to participate in this state-run gambling.”⁶¹ Thus, gaming was not prohibited in California – California merely regulated gaming. Lawful gaming, even if strictly regulated, indicated California had no public policy objection to tribal gaming, essentially a difference between activities a state criminally prohibits and civilly regulates. Accordingly, the Court refused to allow California to impose its gaming ordinances on tribal lands. This resulted in tribes winning the case.

Upset by the tribal victory, states lobbied Congress to enact the Indian Gaming Regulatory Act (IGRA) in 1988.⁶² The Act grants states significant influence over tribes’ ability to engage in gaming on tribal lands; in fact, IGRA forces tribes to negotiate a compact with states for the right to engage in Vegas-style gaming on tribal lands. Although IGRA does not authorize state taxation of tribes, IGRA grants states the power to insist that tribes make a voluntary contribution to state coffers.⁶³ If the Secretary of the Interior thinks the state demands are too steep, the Secretary will not approve the compact, thereby preventing the tribe from opening a casino.⁶⁴ Tribes have no recourse if states refuse to negotiate in good faith.⁶⁵

IGRA only supersedes Cabazon with regard to gaming, so Cabazon’s criminal/prohibitory versus civil/regulatory distinction remains the law. This framework has created uncertainty. Cannabis provides a prime example. During the early 2010s, states began legalizing various cannabis products. Following the Cabazon rationale, a state’s legalization of medical marijuana paved the way for recreational marijuana in Indian country. However, this did not work because cannabis production was illegal under federal law. Tribal efforts to legalize cannabis ahead of the surrounding state uniformly failed. States pressured federal prosecutors to pursue tribal cannabis cultivation, and the feds generally obliged.

Debates over cannabis are coming to an end as states increasingly move toward legalization, but many gray areas in the law remain, including can tribes craft different gun laws than the surrounding state and can tribes legalize healthcare practices the surrounding state forbids?

14.5 Tribal Sovereignty and the Digital Frontier

Although federal Indian law is often unclear in many areas, tribal sovereignty in the digital sphere is largely uncharted territory. Part of the reason is e-commerce is a relatively new phenomenon; consequently, foundational legal issues are still being resolved outside of Indian country. However, the resolutions often ignore Indian country. For example, in 2018, the Supreme Court addressed taxation in e-commerce, holding retailers conducting substantial quantities of business in states where they lack physical presence may be required to pay taxes in those states.⁶⁶ The National Congress of American Indians submitted a brief urging the Court to address tribal e-commerce in its opinion,⁶⁷ but the Supreme Court failed to touch on the issue. Thus, the law surrounding Indian country e-commerce is a mystery.

Online lending is the current battleground for tribal sovereignty in the digital world. Tribal sovereignty enables tribes to promulgate their own financial laws; indeed, the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd–Frank)⁶⁸ is pellucid in defining federally recognized tribes as states for financial purposes.⁶⁹ Accordingly, about two dozen tribes have entered the lending industry. These tribes have crafted their own lending laws and even their own financial regulatory bodies. Tribes offer their financial products over the internet. Like most modern contracts, the tribal loan agreements contain choice of law and forum selection clauses. Tribal loan agreements select tribal law as the governing law. As the forum, the loan agreements either choose arbitration or tribal court. Customers are usually non-Indians who have never visited the tribe’s Indian country.

Tribal financial laws have proven to be extremely controversial. The major reason is the borrowers are usually subprime; that is, tribes have become lenders of last resort. Subprime borrowers present a high risk of default, so lenders charge high interest rates to account for the risk. And high interest rates are the source of the controversy as tribal lenders may charge in excess of 400% interest. Most states set a usury limit of around 30 percent. These low rates are intended to protect consumers, but many economists question this. If individuals with bad credit cannot obtain a loan through conventional means, then those with bad credit have nowhere to turn when an unfortunate event occurs. For example, a person’s car breaks down, and she lacks the cash on hand to pay for repairs. Without her car, she may not be able to travel to work. She may lose her job as a result. Preventing people from taking out high interest loans does not improve their condition – it merely limits their choices. Also worth noting, a 400% annual percentage rate is high, but in the short term, this usually amounts to $15 for every $100 borrowed.⁷⁰ Most of the controversy around tribal lending involves short-term loans, and the annual percentage rate only becomes relevant if the loan is paid over a year.⁷¹

Tribal lending has faced staunch opposition. Ironically, those who borrow from tribal lenders often claim tribal law does not apply to them although tribal law is the very thing that enabled the borrower’s loan. Courts have usually sided with borrowers. The following passage from a 2014 Seventh Circuit Court of Appeals case summarizes the sentiments of many courts:

[T]he Plaintiffs have not engaged in any activities inside the reservation. They did not enter the reservation to apply for the loans, negotiate the loans, or execute loan documents. They applied for loans in Illinois by accessing a website. They made payments on the loans and paid the financing charges from Illinois. Because the Plaintiffs’ activities do not implicate the sovereignty of the tribe over its land and its concomitant authority to regulate the activity of nonmembers on that land, the tribal courts do not have jurisdiction over the Plaintiffs’ claims.⁷²

Courts have followed this line of reasoning to conclude tribal courts lack jurisdiction over loans with non-Indians under Montana One’s consensual relationship jurisdictional hook.

This is curious. The Supreme Court has been clear that consent is a basis for tribal jurisdiction over non-Indians, and a loan is unquestionably a consensual relationship – the lender consents to transfer money to a borrower on the condition the borrower consents to repay the money at a set rate of interest. Furthermore, the borrower consents to adjudicate the loan in a particular forum in the loan contract, often arbitration or a tribal court. Forum selection clauses and arbitration agreements are almost always unblinkingly enforced by courts. While consumer advocates have raised concerns about forum selection clauses, the Supreme Court has consistently affirmed forum selection clauses and arbitration agreements in consumer cases.⁷³

Concerns over non-Indians being mistreated by tribal courts lack basis as loans usually turn on a simple question – was timely payment made? Clear written evidence can conclusively answer the question. On top of this, borrowers purposely seek out tribal law to obtain the loans. Pursuing the benefits of tribal law then asking a third party to annul the costs is disingenuous. State and federal courts have also emphasized the non-Indian borrowers do not actually visit the reservation to take out the loan and use this fact to negate the loan. However, consumers regularly purchase goods across state lines without ever leaving their home, and there is little controversy over jurisdiction in these cases. It is unclear why tribal courts should face a different jurisdictional standard. Plus, the consumers in lending cases are merely seeking cash. Cash is legal in every single state, so the end result of the transaction does not result in an illegal substance being transferred into states.

To be fair, much of the jurisprudence relating to tribal lenders developed under shady auspices. Too many cases to count involved Western Sky and other lenders owned by Martin Webb, and Webb’s enterprises created a bad first impression of tribal lending. While Martin Webb was an enrolled citizen of the Cheyenne River Sioux Tribe, Western Sky was incorporated under South Dakota law. Hence, the company was a run-of-the-mill South Dakota business for legal purposes. The loan contracts with Webb’s company named arbitration as the dispute mechanism but did not name a qualified arbitrator. The Cheyenne River Sioux Tribe had not promulgated any rules relating to lending either. Accordingly, federal courts rightfully decried Western Sky’s arbitration clause as “a sham from stem to stern.”⁷⁴ Factors like this have contributed to federal and state courts’ reluctance to recognize tribal authority over non-Indians in online lending disputes. Alas, a few bad actors should not prevent tribes from exercising their sovereign right to craft financial laws.

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Uncertain jurisdiction harms tribal economies by creating lengthy delays to determine basic issues, like which law applies: tribal or state? Uncertainty over tribal jurisdiction also undermines tribes’ ability to function as governments. The constraints on tribal jurisdiction are a consequence of viewing tribes not as sovereigns but as a minority group that happens to possess land. Expanding tribal jurisdiction is essential if tribes are to become nations again.