COUNTY OF YAKIMA v. CONFEDERATED TRIBES AND BANDS OF THE YAKIMA INDIAN NATION
Legal provision: 25 U.S.C. 331
Argument of Jeffrey C. Sullivan
Chief Justice Rehnquist: We'll hear argument next in No. 90-408, County of Yakima v. Confederate Tribes and Bands of the Yakima Nation, and 90-577, vice versa.
Mr. Sullivan, you may proceed.
Mr. Sullivan: Thank you, Mr. Chief Justice, and may it please the Court:
Can Yakima County impose real estate property tax on fee lands owned by tribal members and the Yakima Indian Nation and collect its real estate excise tax on the sale of those fee lands?
It is our position that this authority exists, that Congress has reaffirmed that authority on a number of occasions since its inception in 1887, that this Court has uniformly held that the tax on fee lands is appropriate, and that generally everybody agreed with that position, including the Solicitor General and its staff until 1989... we say, and believe in response to the decision of the district court in this case.
In 1887, the General Allotment Act was passed.
The General Allotment Act, for the purposes of this case, provided a number of things.
First, land was to be held in trust for a 25-year period of time.
At the end of that trust period, the individual allottees were to receive fee patents.
With those fee patents went two things: (1) citizenship, and (2) the responsibility of paying tax... along with the rights of alienation of that property, and the ability to sell and deal with it as any other citizen would.
In 1906 the Congress reaffirmed and clarified, we believe, its intent.
In 1906 the Burke Act was passed.
It was passed in... partly in response to one of this Court's opinions in In Re Heff, to reaffirm that you didn't become a citizen until the fee patent was issued.
But when it was issued, you became a citizen; and secondly, the 1906 act shortened the trust period, or at least it allowed the Secretary to shorten the trust period from 25 years into a basically an individual decision of the Secretary.
Unknown Speaker: Mr. Sullivan, on land within a reservation, where a fee title is held by an Indian member of the tribe, but it was patented and the title was issued; and if that land is later transferred, does State law govern what it takes to make a transfer and pass title?
Mr. Sullivan: Yes.
Unknown Speaker: And what about if the owner were to die without leaving a will, what law would govern the passage of that land?
Mr. Sullivan: I believe that the... if the... if it's a tribal member--
Unknown Speaker: If the owner is a tribal member.
Mr. Sullivan: --I believe that the fee lands would pass under the provisions of State law.
The balance of his estate would pass under the rights of inheritance as established in the United States Code and rules of--
Unknown Speaker: Have there been cases involving that, to your knowledge?
Mr. Sullivan: --I don't believe it ever has been raised, or any case in which it has been a problem, Your Honor.
Unknown Speaker: Thank you.
Mr. Sullivan: In 1906, this Court was called about in Goudy v. Meath to address this issue.
Do tribal members who own fee patent have to pay real estate property tax?
This Court said, it requires a technical and narrow construction to hold that involuntary alienation continues to be forbidden, while the power of voluntary alienation is granted.
And it is disregarding the act of Congress to hold that an Indian having property is not subject to taxation when he is a subject to all the laws, civil and criminal, of the State.
Subsequent to that... particularly the 1906 act and also this Court's decision in Goudy... and I think, parenthetic, it's important to understand because the Government has raised it, but what about property that doesn't follow exactly from the Allotment Act itself?
The property in Goudy came from a different act.
Do you remember the facts in Goudy?
They talked about a 10-year trust period that had already expired.
It was not patented under the General Allotment Act.
And they talked from this time forward in terms of fee patents and trust lands.
Trust lands were not subject to tax; fee lands were.
In the early twenties, as a result of this particular statute, the Secretary began to issue patents.
Many of the Indians lost their land to tax sales, the type of tax sale that generated the litigation in this case.
The Congress was called upon to address this issue.
And in 1927, the Congress did not... which they could have done... say, you don't have to pay real estate property tax any longer on your fee lands.
The Congress' choice, rather, was to say, you can't be forced to take one of these patents unless you don't... unless you want it.
You must consent.
And the Government can't force it on you.
Unknown Speaker: Mr. Sullivan, excuse me for interrupting you again.
But the statute in question, section 349, refers to at the expiration of the trust period.
Now, when did the trust period expire here?
Do we know that?
Mr. Sullivan: --We don't know that.
The record in the stipulation would be that all of these lands were patented under title... excuse me, under this amendment 6 or section 6.
Unknown Speaker: Well, were the patents issued during the trust period or after the trust period?
And does the record tell us that?
Mr. Sullivan: The record does not tell us that.
We submit that it makes no difference whether it was during the trust period or whether it was after the trust period.
Unknown Speaker: Well, it might make a difference if the statute only applies to lands patented during the trust period, or to lands patented at the expiration of the trust period.
At least there's language in that section that may make it relevant.
Mr. Sullivan: We believe... I would... I can't disagree that that could be a reading given to the proviso.
Unknown Speaker: Yeah.
Mr. Sullivan: We submit, however, that that clearly was not the intent, that the taxation of these lands were meant to apply to all lands patented in any manner.
And I think that Goudy reiterates that, and this Court's subsequent opinions would indicate that... in which this very specific issue has been addressed, i.e., should these lands... or the proceeds from these lands... be taxed.
And that distinction has never been made.
The cases are replete; the statutes are replete; the congressional record is replete, that the distinction is between trust and allotted lands... I mean, excuse me... trust and fee land.
And the method by which... the technical method by which the fee is obtained is of no consequence.
And I think in some respects, this is... our position is bolstered by the '79 opinion of the Solicitor which we cite in our reply brief, in which the Solicitor in that opinion says that, after acquired, a title appears in his opinion, at least, at that time, is also covered.
So that the distinction for the county assessor and for the... tax collectors among the counties is is it fee land or is it trust land.
And if it's fee land, it is going to be taxed because it is freely alienable.
To get involved in the very stilted, in our opinion, interpretation of the proviso puts us in a difficult position, and one that would not coincide, we believe, with this Court's ruling in Goudy.
The tribe and the Government make a big deal, in some respects, in terms of the Indian Reorganization Act.
We submit, again, the Indian Reorganization Act was adopted partially because of, again, this similar problem.
Lands were being lost; the tax... the land base of the tribe was being diminished.
In the Indian Reorganization Act, the Congress, again, addressed this issue and they did so by saying there will be no more allotments.
They extended the trust period indefinitely and allowed for the Secretary to return some of these lands to trust, to get them out of the tax base.
We submit that that... and again, Congress could have addressed the tax issue and chose not to, and allowed section 349 of 25 U.S.C. to remain on the books.
In 1939, this Court in Board of Commissioners v. Jackson County was dealing with the problem... okay, because by this time, the Court had decided that if you didn't consent to the patent, then the taxes needed to be returned.
But the Court, in dealing with this as it was... as it directed... or as it was... what the consequences of this were for the county said, in consequence, Jackson County in 1919 began to subject the land to its regular property taxes.
It continued to... subject... excuse me... it continued to do so as long as this fee-simple patent was left... undisturbed by the United States.
Jackson County, in all innocence, acted in reliance on a fee patent given under the hand of the President of the United States.
Here is a long, and unexcused delay, referring to trying to get the money back on behalf of the individual Indian, and the assertion of a right for which Jackson County should not be penalized.
The lands of this Indian and the lands of other Indians had become part of the economy of Jackson County, which we believe, crucial and in part of this case.
Unknown Speaker: When are you going to get to Moe?
Mr. Sullivan: I'm almost there, Your Honor.
Unknown Speaker: Yeah, yeah.
Mr. Sullivan: I think it's important, and I think Moe is important.
I think we need to have the history up to Moe, because the... again, the tribe and the Government say, well, it's sort of the eye--
Unknown Speaker: I take it at the very minimum, you want to limit Moe to its facts, I suppose.
Mr. Sullivan: --Well, we believe that Moe... sure, Moe--
Unknown Speaker: There's a difference between the clause that was relied on in Moe and the clause that you rely on here, is there?
Mr. Sullivan: --Well, no, Your Honor.
There is a difference, but we rely on both parts of... the clause that... what's been called the general laws clause of Moe, which said the general, civil, and criminal laws of the State, is exactly the same clause used in Goudy v. Meath.
We believe that we have a specific provision with respect to tax and real estate.
In Moe, I think it's significant that in looking at the district court opinion, a number of things happen.
The tribes in Moe could have asked the Court don't impose real estate property tax, but they did not.
The issue in Moe was personal property tax.
It was vendor license fees and sales taxes.
It did not deal with real property tax.
And, in fact, it's clear from the record, if you look again at a footnote, footnote 9 in the opinion of the district court says... and remember in that case the State of Montana tried to make a big deal about how much money we pay for services and all these great things we're doing for the tribe and therefore, just do away with their laws, which we feel was an overbroad approach.
But the trial court says--
Unknown Speaker: Well, how do you... in terms of the rationale and the reasoning of... in Moe, why is there a difference between personal and real property owned by Indians within a reservation?
Mr. Sullivan: --Well, in terms of... the difference is, in terms of the taxing authority of State and local government.
We have... the Court, in Moe, you don't have general authority to impose your personal property tax.
This Court has said that we are going to limit the State's ability to tax Indians unless there is a specific provision.
Unknown Speaker: You would say that the State may tax Indian-held fee land on a reservation?
Mr. Sullivan: Correct.
Unknown Speaker: But if that same Indian had personal property on that same piece of real estate, you accept Moe's decision that the State may not tax?
Mr. Sullivan: Absolutely, absolutely.
And I think it's because of the Court's requirement that the taxing authority be specific; and that that authority has been upheld by the Court since that period of time.
Unknown Speaker: You accept it, but you don't really agree with it.
Mr. Sullivan: I think that the rules that have been adopted with respect to the relations between State and county and the Indian tribes could be more clear, yes.
I would agree.
I think... example... let me give an example that I think's important to this analysis.
The Government concedes that the only way they can collect income tax, Federal income tax, is because of this provision, section 6.
This Court, in Squire v. Capoeman dealt with that issue.
It was a 1956 case.
It was before Moe.
But the Court said, you can't... the Government was trying to tax the proceeds of a timber sale of allotted land that was still held in trust.
The Court said, you can't do that.
The Government said that provision... that provision for taxes only applies to State and local government.
It doesn't apply to the Federal Government.
This Court said no, it applies to Federal income tax also.
Without that authority, I submit, if the Court were to say no, section 6 doesn't mean what it says, it doesn't authorize tax on real property, that you also eliminate the income tax ability of the Government to collect the income tax that come from that land.
Unknown Speaker: But your argument, as I understood... I was surprised to hear what you said earlier.
I thought you were just arguing that because of the proviso, the real estate can be taxed.
But you also say that for other purposes, the real estate comes within the jurisdiction of the State.
Mr. Sullivan: That's correct.
Unknown Speaker: So for purposes of inheritance, and so forth?
Mr. Sullivan: --Well, the State of Washington, at this time, does not have an inheritance tax.
But, for example--
Unknown Speaker: I'm not talking about taxes.
I'm talking about what happens to the property when the decedent of the allotted land dies.
As I understood your answer to an earlier question, that the land would pass according to State law.
Is that right?
Mr. Sullivan: --That's correct.
Unknown Speaker: Now how do you get that in the proviso?
The proviso doesn't say anything about that.
It says sale, encumbrance, and taxation.
Mr. Sullivan: Well, part of that, I believe, Your Honor, comes from Public Law 280, which does apply in the Yakima reservation.
Part of it is the problem of the tax... the real estate property records are kept at the county courthouse, which would include all the fees.
Unknown Speaker: Do we have to decide that?
I thought... I... frankly, I didn't realize this until you said it.
I thought we were just talking about the very narrow question about whether the State can tax the land.
Mr. Sullivan: I think that's all we are talking about.
Unknown Speaker: --And can I agree that the State can tax the land without agreeing that the land passes according to State law, that the State can do all sorts of other things with respect to the land?
Mr. Sullivan: Absolutely.
We are... our position is, however--
Unknown Speaker: As long as I get four of the votes.
Mr. Sullivan: --That's correct.
Our position is, with respect to the real estate excise tax.
The real estate excise tax that the Ninth Circuit struck down says it's an excise tax.
It's covered by Moe.
Our position is the excise tax follows the sale of the land.
It's a 1 percent tax that every citizen of the State pays when a piece of real property is sold.
Unknown Speaker: Yes, but don't we have to follow the Washington Supreme Court's interpretation of this, of its own law in that regard?
I mean, didn't State... didn't they just rely on what the State supreme... how the State supreme court described the excise tax?
Mr. Sullivan: Well, correct.
They called it an excise tax, Your Honor, but just because it's an excise tax, I don't believe it's covered by Moe, because it's more analogous to income tax and inheritance tax, which this Court has upheld as proper taxes.
In the Oklahoma Tax Commission case, this Court said it's okay for the State of Oklahoma to collect inheritance tax that is tied to fee lands.
Unknown Speaker: Yeah, but the Washington Supreme Court says that tax upon the sales of property is not a tax upon the subject matter in that sale.
So how can you say it's a real estate tax?
I mean, if it's a matter of State law, I don't understand your--
Mr. Sullivan: Well, it would be... the analysis is is that the income tax, the capital gains tax is a tax on the increase in your wealth.
And therefore it, it seems to me is more analogous to the income tax... it's a source from which the money flows.
In this case, it flows from the State.
Well, I think you're right.
The Washington Supreme Court might well have said that, but they didn't.
Aren't we bound by what the Washington Supreme Court... how the Washington Supreme Court characterized it in that phase of the case?
We... I agree, this Court has... is agreed that it's bound in terms of... by the Washington State court... the supreme court's ruling in interpretation of its own--
Unknown Speaker: --What about a sales tax on the sale of personal property that, itself, can't be taxed?
Mr. Sullivan: --We submit that Moe has answered that question.
Unknown Speaker: What, that no... the State could not--
Mr. Sullivan: The State could not tax that; that the statute--
Unknown Speaker: --What about a timber severance tax on fee land?
Mr. Sullivan: --If the fee land is owned by tribal members, our position would be that that could be taxed... just like the income tax, just like the inheritance tax.
If it comes from fee land.
The distinction in the law, the distinction that was made by the Allotment Act, by the Congress in subsequent actions with respect to it, have continually reiterated that point: that there will be this basic distinction between trust land and fee land.
The fact is, that if you are a member of the tribe, or the tribe itself, and you don't want to be taxed, all you have to do is put your land in trust.
You know, we believe... it's that simple.
The Court has said that alienability, if--
Unknown Speaker: Well, it's not quite that... so you don't have to do that to have the advantage of Moe.
Mr. Sullivan: --I agree, but Moe did not deal with real property.
The tribe could have raised that issue.
They chose not to, as I say.
In fact, the district court relied on the fact that those taxes were being paid, and pointed it out, that the real estate taxes were be paid... were being paid.
And we get to this very narrow construction, I suppose.
In Yakima County, as the other counties, for 100 and... up until the injunction was issued in this case, almost 100 years or a little over 100 years, collected these taxes.
And they did it based upon the statute.
Congres enacted the statute.
The Government... excuse me--
Unknown Speaker: Mr. Sullivan, what does the last proviso of this statute mean, where it says: and provided further, that the provisions of this act shall not extend to any Indians in the former Indian territory.
Mr. Sullivan: --We... I believe, Your Honor, that that was to make specific reference to the area essentially in the State of Oklahoma that was the... the land owned by the five civilized tribes, so-called, that was... had been treated differently by the various statutes.
And that that was the reason for that proviso, to clarify that the General Allotment Act would not apply to that group of American Indians.
Unknown Speaker: Mr. Sullivan, as I understand your response to Justice Stevens' question, do I understand it correctly that you say it doesn't matter whether it's a tax on the land or not, that any tax that is what... that is related to the land?
I suppose you would say that the State could impose a sales tax on the land, too; impose a tax upon real estate sales with respect to this land?
Mr. Sullivan: That's, in essence, what the 1 percent real estate excise tax is, Your Honor.
And yes... all I'm relating to is that this Court, in Squire v. Capoeman, said that if it's owned in fee, and there's free alienability, that the tribal member, who may not otherwise have to pay income tax, is going to have to pay it.
In the Oklahoma Tax Commission case, when Oklahoma wanted to collect a million-and-some dollars worth of inheritance tax said no, you can't collect all of it, because some of it is not related to fee lands.
That part, the part that's related to trust lands, you can't collect.
The part that's related, the income you've earned from the fee lands can be taxed by the State of Oklahoma... not by the Federal Government... by the State of Oklahoma.
We are just relating that it seems to us, that these cases require that, in fact, the tax be collected, if it's owned in fee.
And that the Congress has said--
Unknown Speaker: You're trying to distinguish this situation from Moe.
And the device you're using is the proviso, as I understand it.
Without the proviso there's no basis for distinguishing this from Moe.
The proviso, however, doesn't say taxes relating to such land, but it says taxation of said land.
It says taxation of said land.
So you have to be taxing the land to come within the proviso, don't you?
Mr. Sullivan: --Well, Squire v. Capoeman specifically analyzed the proviso and said that if it's trust, it's not going to be taxed; if it's fee, it will be taxed.
So that, it seems to me, that to the extent that both provisions... and I say both provisions, because the general laws clause was upheld in Goudy, and I think you can distinguish Moe on the basis of personalty, as opposed to real property.
And I think it's a valid distinction.
It's one that the Congress made early on.
Unknown Speaker: I mean, you can distinguish it on that ground.
But there's no basis in the law for distinguishing it on that ground, that the basis in the law that you give us, that you entice is with, is the proviso.
And the proviso says, taxation of said land.
But you rely on both provisos I take it.
Mr. Sullivan: That's correct.
Unknown Speaker: Including the one that was at issue in Moe.
Mr. Sullivan: That's correct... as interpreted by Goudy.
Unknown Speaker: And you think you should win even if the last proviso... if the tax proviso wasn't even there?
Mr. Sullivan: That's correct.
And again, the opinion of the Solicitor is... written in 1979, was of the same, indicating that the intent of Congress was that if lands are held in fee, they would be taxed.
If they weren't held in fee, if they were held in trust, that they would not.
The cases are--
Unknown Speaker: When did... you said the Congress has made the distinction between personalty and realty?
When did it do that?
Mr. Sullivan: --I think that it made that distinction when it said that the fee lands would be taxed; and has never passed a specific statute authorizing the tax on personalty.
I mean, because that's... at least from a State and local government perspective, that's how we've addressed these--
Unknown Speaker: So there you are... there you really are relying on your tax proviso?
Mr. Sullivan: --Correct.
We can't... we can't--
Unknown Speaker: Otherwise, you wouldn't win under just the other proviso, on that basis.
Mr. Sullivan: --Not based on this Court's having ruled in Moe, that's correct.
Unknown Speaker: So you must get to the other proviso.
Mr. Sullivan: Well, yes, if you don't limit Moe to its facts, and say that you don't... that that applies to all taxes... I think that, again, there are a number of people who would say that the general, criminal, and civil laws of this State would include taxes.
But, as I say, the Court has taken that away from us.
Unknown Speaker: Can I ask you one question on another subject before you sit down?
Your first question in your cert petition referred to Brendale and the problem with deciding whether something's in the closed area or the open area.
I didn't understand that issue to be raised by the court of appeals' opinion.
Could you help me out?
To what extent is there a Brendale issue in this case?
Mr. Sullivan: Well, we believe there should not be, and that if the court of appeals missed--
Unknown Speaker: Do you think the court of appeals did inject the Brendale issue?
Mr. Sullivan: --Yes, but we believe so by its opinion saying it will return this back to the trial court, and the trial court will weigh these things and decide whether a tax should be imposed.
Our position is, is the Court here has established a per se rule for taxes.
It's the only workable kind of rule for taxes.
Unknown Speaker: Well, I understand your position, but I didn't... couldn't... you... I'm just not sure I understood the disposition of the court of appeals, which was, in your view, they in effect said if it's in the closed area, it cannot be taxed, but if it's in the open area it can be, or what--
Mr. Sullivan: No, we interpreted the circuit court's opinion to say that we're going to send it back, and we're going to do an analysis of the entire reservation, and maybe parcel by parcel to decide whether the taxes should be imposed.
And I think that's why both the Government and the tribe and ourselves are saying we need a per se rule, either--
Unknown Speaker: --xxx wants that.
I didn't really understand them to have xxx that.
But that's what... I see.
Mr. Sullivan: --That's how we understood it.
Unknown Speaker: Thank you, Mr. Sullivan.
Mr. Bjur, we'll hear from you.
Argument of Robert Wayne Bjur
Mr. Bjur: Thank you, Mr. Chief Justice, and may it please the Court:
The first thing that I would like to do is address an argument made by Mr. Sullivan in response to questioning from this Court.
Mr. Sullivan asserts that fee land owned by a Yakima member on the reservation would be subject to State law in the event that tribal member was to pass away.
That's not the case on the Yakima Reservation.
And on behalf of the Yakima Nation, I strongly disagree with that assertion.
It was less than 2 short years passed, when Mr. Sullivan stood before this Court and conceded, in oral argument, that Yakima County had no authority to zone land owned by fee members on the Yakima Indian Reservation.
Now how Mr. Sullivan can jump to the conclusion that Yakima County now has authority to provide for the descent and distribution of that land just simply doesn't make sense.
Unknown Speaker: I think he said that we really don't have to decide that in order to decide this case.
Mr. Bjur: That's true, but it's--
Unknown Speaker: And relieved at but.
What about the sale or to transfer title?
Whose law would apply?
Mr. Bjur: --Well, on the Yakima Reservation, tribal law and State law is concurrent.
I'm not aware of a conflict between tribal law and State law on the laws on... effecting a sale.
The only provision that... of State law that would not apply would be the real estate excise tax.
Unknown Speaker: Has the tribe restricted the transferability of lands owned in fee by tribal members?
Mr. Bjur: No, that's not part of the tribal law and order code.
The tribe doesn't restrict those sales.
However, the tribe does restrict its own sales of fee land.
That is done in accordance with policies and procedures agreed upon with the United States Government, the Bureau of Indian Affairs.
Unknown Speaker: In Washington, are stamps required on a deed when it's recorded?
Mr. Bjur: They used to be but they're not now.
All you have to do is show that the excise tax has been accounted for, one way or another.
Unknown Speaker: Are the deeds routinely recorded in the office of the Yakima County Recorder?
Mr. Bjur: Yes, deeds are recorded.
Unknown Speaker: And I take it that the State recording statutes apply?
There's not a parallel set of tribal rules on recording, are there?
Mr. Bjur: No, there's no conflict between tribal law and State law with regard to recording requirements.
Unknown Speaker: Well, it's one thing to say no conflict.
It's another thing to say that Washington would have the right to regulate the terms of sale of fee lands in certain respects... to the exclusion of the tribe, with respect to documentation, the signatures that's required on a deed, recording requirements, et cetera.
Mr. Bjur: Well, that question hasn't come up.
I would disagree.
If the tribe did take a position and passed laws regulating the transfer of fee property by a tribal member within the boundaries of the Yakima Indian Reservation, the tribal law would control, for the fee... for the tribal members.
One thing that needs to be remembered in this proceeding is what... what's at stake here.
This action was instituted by the Yakima Nation in response to the foreclosure and the pending tax sales of the lands and homes of 31 members of the tribe.
The court of appeals acknowledged that these taxes were... demonstrably serious, impacting upon the tribe's political integrity, the economic security, and health and welfare.
Also, this issue is very, very important to the Yakima Nation because of its conflict and its threat to the treaty with the Yakimas.
The treaty with the Yakimas, which we've addressed in our brief, provides that the lands of the Yakima Indian Reservation are for the exclusive use and benefit of the Yakima Nation and its members.
This is a treaty provision that remains intact.
It has not been abrogated.
These taxes, the efforts by Yakima County to impose real estate property taxes on the fee lands of Yakima members conflicts directly with the treaty.
It... they cannot be permitted.
They're invalid in my--
Unknown Speaker: Well, if... if the... if the act of Congress... if we were to find an act of Congress that authorized the imposition of these real property taxes, and it was after the treaty, then if your... your construction of the treaty would be abrogated to that effect, would it not?
Mr. Bjur: --Well--
Unknown Speaker: A treaty doesn't govern over a later statute.
Mr. Bjur: --In order to abrogate the treaty, it is my understanding of this Court's decisions on that, the abrogation has to be clear and specific.
Section 34... 25 U.S.C. 349, section 6 of the Allotment Act does not provide clear and unambiguous intent by Congress to abrogate these treaty rights.
Unknown Speaker: Do you agree that if it did provide unambiguously for State taxation, the treaty would be abrogated?
It doesn't have to mention the treaty, sir.
Mr. Bjur: No, I agree that that's the status of the law.
If it was clear and unambiguous that abrogation was intended, this Court has issued opinions that would permit it.
Unknown Speaker: Well, how much clearer can you be than to say that... that under certain circumstances the... any restrictions on the taxation of land shall expire?
Mr. Bjur: Well, I believe that that's not clear.
What the proviso says--
Unknown Speaker: Well, how would you make it clearer?
Mr. Bjur: --Well, I would make it clearer by saying, and--
Unknown Speaker: I would just say it again, and I really mean it?
Mr. Bjur: --No, when the fee patent is issued, this land shall be subject to State taxation.
That's not what's said.
Unknown Speaker: Well, shall be removed.
It says, all restrictions to sale encumbrance or taxation of said land shall be removed.
Mr. Bjur: But that statute was passed... or the proviso was passed in 1906 at the height of the assimilation and allotment era.
This Court in Moe has--
Unknown Speaker: Well, I know, but now you're getting into something else.
What would you say if Moe had never been decided?
How clear would that be in--
Mr. Bjur: --If Moe... to me, Moe is the logical extension of McClanahan, Mescalero, the Kansas Indians, Bryan v. Itasca County... all those cases that I've mentioned would support the position that we bring to this Court today.
Moe is very helpful, no doubt.
Moe is the basis--
Unknown Speaker: --Well, you think the... you think the... the later statutes really repeal the General Allotment Act, and for all intents and purposes... or this part of... at least this part of section 349?
Mr. Bjur: --Well--
Unknown Speaker: Did it or didn't it?
Mr. Bjur: --I don't use the word repeal.
I prefer to use the words repudiated, as the Court used in Moe.
Unknown Speaker: Well, you can't have two statutes existing... regulating the same subject in a contradictory way.
Isn't one of them going to cover it, and the other one, if it doesn't cover it, it's been repealed.
Mr. Bjur: Well, what the Court... what this Court has done, particularly in Moe, is looked to the policies behind the allotment and assimilation legislation.
Those policies no longer exist.
They've been completely replaced and totally repudiated.
Unknown Speaker: But ordinarily... ordinarily, simply a change of direction on the part of Congress, so that Congress is doing things differently in the are of Indian relations now than it did earlier doesn't repeal an express statute.
Mr. Bjur: Well, this is the enactment of the Indian Reorganization Act and legislation thereafter wasn't a change in direction.
It was a 180-degree opposite situation.
Instead of assimilating and ending--
Unknown Speaker: Well, what about the rule against implied repeals?
Can you point to something in the Indian Reorganization Act that... that is squarely inconsistent with the proviso?
Mr. Bjur: --No, I can't.
Unknown Speaker: Well, doesn't the rule against implied repeals govern?
Mr. Bjur: No, ah--
Unknown Speaker: Why not?
Mr. Bjur: --Because I can't point to anything in the Indian Reorganization Act that says directly repeals or contradicts the main provision of 25 U.S.C. 349 which provides that on the issuance of a patent in fee, the allottee shall be subject to the general criminal and civil jurisdiction in the State in which that allottee resides.
And yet Moe teaches us that that has been... that's inconsistent.
That is no longer appropriate.
So the same logic applies to this issue.
Unknown Speaker: Is it necessarily inconsistent to say that both the Indian tribe could tax the land as well as the State and county?
I mean, we often have parallel systems of taxation out there.
Is there anything necessarily consistent with that?
Mr. Bjur: No, the tribe would have authority to impose its taxes on fee lands.
But the tribe has chosen not to tax any of the lands owned by tribal members.
Unknown Speaker: Well, and even if the tribe did choose to tax, it wouldn't be... it wouldn't mean that there couldn't be another taxing jurisdiction that also had that power.
Mr. Bjur: Except this Court has said, to give States taxing jurisdiction over Indian tribes and their people require... requires a clear and unambiguous intent on Congress' part to effect... effectfully--
Unknown Speaker: Well, I guess this Court in that early Goudy case thought it was clear enough.
Mr. Bjur: --Well, what Goudy held--
Unknown Speaker: Section 349.
Mr. Bjur: --That's true.
In 1906 at the height of the allotment and assimilation period, this Court held that taxing jurisdiction was one of the general civil jurisdictions that the allottee became subject to when he received his patent.
Unknown Speaker: It said that by virtue of the language to that effect in section 349.
Mr. Bjur: That's right.
The Goudy decision was made before the adoption of the Burke Act proviso.
So the Court in Goudy did not have the benefit of that other language.
It relied on the general jurisdictional grant contained in the main text of the statute.
Unknown Speaker: Moe never explicitly distinguished between fee lands and other lands, did it?
Mr. Bjur: Yes, it did, in my opinion.
Unknown Speaker: Well, correct me if I'm wrong.
It does make that explicit distinction?
Mr. Bjur: The--
Unknown Speaker: The issue was... in Moe was the general policy... general powers to tax.
Mr. Bjur: --But the opinion in Moe provides that even on fee lands, the general taxing authority for personal property taxes in the State of Montana does not exist.
Unknown Speaker: Well, as to personal property tax.
But it never addressed a tax that was specifically directed to fee lands only, on those lands.
Mr. Bjur: No, it did not address that in Moe.
But the logic of Moe applies.
If the ability to tax a car that an Indian person owns on fee lands reduces the size of the Flathead Reservation, surely the ability to impose the property tax takes away the size of the reservation to the Yakima people.
The Yakima Indian Reservation is the homeland of the Yakima people.
And I believe that Congress has dictated that all of the reservation lands should be home to these people... including the fee lands, which brings into play Congress adopting the Indian country definition at 18 U.S.C. 1151.
The Yakima Nation believes that this statute is significant because it clarified that Indian country was to include fee lands.
This was in doubt on many reservations before Congress did this.
I believe that this particular statute was important to the Court's decision in Moe.
Unknown Speaker: But in Moe, if we had found the personal property... a personal property tax could... should... could be imposed, we would have had to find that the entirety of the State... of the State's law would also apply.
There was no basis for distinguishing personal property taxes from the remainder of State jurisdiction.
And in that situation, the checkerboard problem we were concerned about in Moe is a serious problem, as the Federal Assimilative Crime Act demonstrates.
The Federal Government, which owns real estate all around, doesn't try to, you know, have separate laws, in a checkerboard fashion within the various States.
So that was a real concern in Moe.
But gee, running a checkerboard system of real estate is not very difficult.
Don't we have that same situation with respect to Federal lands owned within the States?
The States can tax other lands, but they can't tax the Federal lands.
So what's the big deal about checkerboarding as far as real estate taxation is concerned?
Mr. Bjur: Well, it's significant because why should one Yakima member have to pay taxes to a jurisdiction that he pays no other taxes to, on one parcel of land, while the other Yakima member not have to pay taxes?
Unknown Speaker: Well, cause the statute says so.
But I mean, there's no serious implementation problem, as there is when you have... when you have people in one relatively small area all subject to different criminal and civil laws on the basis of which parcel of land they happen to be on.
And that would be very strange.
But I don't see anything so strange about allowing a State to tax some parcels and not to tax others.
Mr. Bjur: Well, that's true, but that same distinction could have been made in Moe.
Unknown Speaker: No, I don't think so.
I mean, they didn't have the proviso.
I mean, if you said personal property taxes could be imposed on as a checkerboard-pattern basis, I think you'd have to say all laws, quote, "both civil and criminal" would be applicable on the same checkerboard basis.
And that would have been a real... a real problem, I think.
Mr. Bjur: Well, I would argue that the proviso wasn't intended to be that dramatic.
The proviso was something that Congress passed, and still fell within the limits of the general jurisdictional grant contained at the beginning of 349.
I would like to point out... I'm running out of time... but point out to this Court to consider the argument that we've made on the State disclaimer statute.
The court of appeals found that the disclaimer language had been waived by Congress, or Congress had consented to it by 349.
Again, Congress did not contemplate, when it adopted 349 that Indian tribes would be flourishing, and that the reservation system would continue to exist at the end of the 25-year trust period.
And I would also like this Court to affirm the decision in the court of appeals on the excise tax.
There's no reason to distinguish that excise tax from the taxes that this Court has struck down in the other cases that have come before this Court.
Unknown Speaker: Can I ask you one question before you sit down?
Mr. Bjur: Sure.
Unknown Speaker: At the beginning you said you were relying on the provisions of the treaty with the Yakima Nation.
Are the provisions you've relied on set forth in your brief?
I didn't find them.
Mr. Bjur: Well, the... my brief--
Unknown Speaker: Quotes from the--
Mr. Bjur: --quotes those provisions.
The treaty is 12 Stat. 951, where it describes the 10.8 million acres that the tribe gave up and provided basically the tax base for the rest of central Washington.
The next section goes on to provide that... describe the lands that would be in the reservation, and it says these lands shall be for the exclusive use and benefit of the Yakima Nation.
Unknown Speaker: --That's what I thought you said.
But that would mean they couldn't have even conveyed them to non-Indians.
And they did.
And there's a big question about that.
Mr. Bjur: Well, the General Allotment Act was the beginning of an effort to abrogate that.
But the General Allotment Act did not go to fruition.
Congress saw the error of that in... and halted allotment and assimilation before it became finalized.
The treaty provision was not abrogated.
It still remains in force.
Unknown Speaker: Thank you, Mr. Bjur.
Mr. Kneedler, we'll hear from you.
Argument of Edwin S. Kneedler
Mr. Kneedler: Thank you, Mr. Chief Justice, and may it please the Court:
There's no disagreement between the parties as to the general principles of preemption in Indian law that govern this case.
Those principles, which are rooted in both ancient treaties and current Federal statutes, provide that State taxation of Indian activities and property on a reservation is preempted, unless Congress carves out an exception to that rule in unmistakably clear terms.
We submit that on the question in which the parties are in a disagreement... whether section 6 of the General Allotment Act permits the taxation here... this Court's unanimous decision in Moe controls.
In Moe, the Court found untenable the argument that section 6 of the General Allotment Act allowed the State of Montana to tax activities with respect to Indians who had received fee allotments as contemplated in section 6... including personal property--
Unknown Speaker: But not real property.
Mr. Kneedler: --but not real property.
In our view, Mr. Chief Justice, though, it follows a fortiori for several reasons from that conclusion, and that construction of section 6.
Unknown Speaker: Well, when did the Solicitor General or the Justice Department adopt that view of Moe?
Mr. Kneedler: Insofar as the Solicitor General's Office is concerned, the first time I'm aware that we looked at it is the first time that we were asked to look at it, which was in connection with filing the court of... an amicus brief in the court of appeals in this case.
Unknown Speaker: So the Government is... the Government has maintained the same position since it first addressed--
Mr. Kneedler: There was... there was a... an opinion by the Solicitor of the Interior Department which has since been repudiated... I think it's the use of the word solicitor, that it wasn't clear... it was an opinion of the Solicitor of the Interior Department in 1979 that did not give that construction to Moe with respect to real property taxes.
But the Interior Department has now over-ruled that decision.
There are several reasons why we believe that... ah... Moe controls in this case.
But first let me... let me explain the two... there are two separate theories, or bases for an immunity from taxation that are at issue here, and it's important to keep them distinct.
Under section 5 of the General Allotment Act, allotments made to individual Indians were held in trust.
Although section 5 did not expressly say so, this Court's decision in Rickert held that a State could not tax the allotment while it was held in trust.
The principle was, that the trust allotment was an instrumentality of the United States Government, in furtherance of the policy of carrying-out the allotment of lands under the Allotment Act.
It was designed to protect only the individual Indian, to give him a period of preparation, at the conclusion of which he would be fully assimilated into the larger society.
The rule of preemption, which is what is at issue here, is something quite different.
It turns on the statutes and treaties governing the reservation and tribal affairs.
It does not turn on the tax immunity of an individual Indian.
And the Court drew that very distinction in Moe, itself, where it said... in the jurisdictional part of the Court's holding... that the tax immunity at issue here is one of preemption, based on treaties and statutes, not based on the Federal instrumentality doctrine which has since been repudiated.
With that in mind, it becomes quite clear the way section 6 of the General Allotment Act operates.
The principal clause of section 6 that was at issue in this Court's decision in Moe, affirmatively declared that when an Indian received a fee patent, at the conclusion of the trust period, he shall have the benefit and be subject to all provisions of State law.
In Goudy v. Meath, the Court held that that included State tax law.
And that, of course, was consistent with the design of the General Allotment Act, which was that individual Indians would receive their own allotment and be assimilated into the larger society, and therefore be subject to State law.
But in Moe, this Court held that section 6 did not have the present effect of allowing the taxation of personal property on Indian reservations, that that was untenable in light of subsequent developments: the enactment of the Indian Reorganization Act which repudiated the allotment policy, and its goals of breaking up tribes and tribal relations.
It was inconsistent with the enactment of 18 U.S.C. 1151 and the definition of 1948 and was inconsistent with the regulation... the comprehensive regulation of adjudicatory jurisdiction in Public Law 280.
Unknown Speaker: --Do you think Moe really just overruled Goudy?
Mr. Kneedler: It did not... it did not, because, again, let me... because of the distinction I was drawing.
Goudy and the first clause of section 6 of the General Allotment Act had the effect of removing the instrumentality doctoring immunity, by virtue of the fact that it was the United States holding the land in trust.
It was an immunity that really derived from the United States' interest in the individual allotment.
Moe, however, discussed the preemption rationale.
And if we look at that tax... or the proviso to section 6, it becomes clear, looking at the language of it, why this does not carve out an exception to the rule of preemption.
What the proviso says is that the Secretary may accelerate the time, essentially, to grant a fee patent, if he concludes that the individual Indian is capable of managing his own affairs.
Well, the premise obviously is removing the Federal protection instrumentality rationale for the tax exemption.
Then it says all restrictions as to sale, encumbrance, or taxation of said land shall be removed.
Now, first of all, the word 5 of the General Allotment Act by virtue of the land being held in trust.
Furthermore, the use of the word "remove" indicates that what the statute was speaking to were those restrictions that were in place at the time... those that were already attached to the land.
When lifted, the Indian would become part of the Indian community... of the non-Indian community.
So in those respects, all that section 6's proviso does when a patent issues at an accelerated rate, si to subject... is to remove whatever restrictions are in the General Allotment Act, itself, to taxation.
But it does not speak to the broader question of preemption of State tax--
Unknown Speaker: But it doesn't say that.
It doesn't say... it doesn't say and thereafter, all restrictions imposed hereunder as to sale, encumbrance, or taxation shall be removed.
It says all restrictions.
Mr. Kneedler: --But a rule of preemption, under this Court's cases derived from statutes and treaties is not commonly... the word restrictions is not commonly used to describe that.
Unknown Speaker: Well, it... it seems very strange to say that the section 349 said all these restrictions would be removed and the States may tax land, but you say they can't because there's another restriction that hasn't been removed... preemption.
Mr. Kneedler: But that's exactly the rationale the Court adopted in Moe.
And that is that Moe--
Unknown Speaker: Well, I certainly... I wrote Moe, and I certainly don't agree with--
--with that interpretation of it.
Mr. Kneedler: --No... what the... not with respect to separate tax immunities as such.
But what the Court said in Moe was notwithstanding the fact that Goudy had said State tax laws are part of the laws to which the Indian... the allottee become subject, the Court said that does not apply.
It's not an applied repeal.
Section 6 remains in effect.
And if you have an off-reservation allotment, the... section 6 has the effect of subjecting that allotment to State tax law--
Unknown Speaker: Well, they certainly did--
--That's a very strange reading of Moe.
--they certainly wasted a lot of effort writing that statute.
It's just a meaningless statute.
Mr. Kneedler: --No, it's not... with all respect, Justice White, it's not.
Because at the time it was written, it was part of the allotment policy during which individual allotments were to pass into the broader society.
As this Court said in Moe, that was repudiated by the General Allotment Act... not just the allotment policy, but the... excuse me... by the IRA.
The IRA's purpose was to reestablish the tribes, and therefore to reinstate the premise of the Kansas Indian--
Unknown Speaker: So you're really saying there later arose a preemption policy--
Mr. Kneedler: --Right--
Unknown Speaker: --which intervened.
Mr. Kneedler: --Precisely, Justice White, and was not... it was the reinstatement of the prior regime, prior to the General Allotment Act.
It reinvoked the rule of the Kansas Indians, which this Court reiterated in Montana v. Blackfeet Tribe, which is once the tribe is recognized by the political departments as separate and self-governing... as this one is... and set-aside on its own land, it's a tribe, and its members are immune from taxation.
Unknown Speaker: Well, let's just assume there was a time between the General Allotment Act and preemption, where there wasn't any preemption.
Mr. Kneedler: That's correct; there was.
Unknown Speaker: All right, and... in that period of time, States were permitted to tax by virtue of the General Allotment Act.
Mr. Kneedler: Right... and even after the IRA, with respect to lands outside of reservations.
Unknown Speaker: Yes, yes, yes.
Mr. Kneedler: They may continue to do so.
That's why it's--
Unknown Speaker: So what you're saying is that this preemption policy, wherever it came from, in effect overturned the State's authority to tax pursuant to section 6.
Mr. Kneedler: --Exactly, which is what the Court held in Moe.
And it's not just a change in direction by the--
Unknown Speaker: Well that... so you don't say that repealed it.
Mr. Kneedler: --No, it did not repeal it.
Because the individual... because all the section 6 spoke to was the instrumentality doctrine tax immunity, which was individual.
But as this Court said in Moe, the tax immunity here is for the benefit of the self-governing tribe, including its members.
And it's not just a... a change in policy.
There were specific statutes, later enacted, that had this effect... including the IRA, including the redefinition of 1948.
Unknown Speaker: Your time has expired, Mr. Kneedler.
Mr. Kneedler: Thank you, Mr. Chief Justice.
Unknown Speaker: Mr. Sullivan, do you have rebuttal?
You have 4 minutes remaining.
Rebuttal of Jeffrey C. Sullivan
Mr. Sullivan: Mr. Chief Justice, and may it please the Court:
Mr. Bjur indicated that he believed that section 6 was adopted after Goudy.
Our reading of that is... is different.
That section 6 was, in fact, adopted... the amendment to section 6 was adopted in May of 1906, and Goudy was decided in November.
The Court in Goudy could have relied on the second proviso but chose not to... in fact, relied on the general laws provision which we think gives it a stronger meaning.
Additionally, I think one of the questions that the Chief Justice asked points out the problem that this case addresses: when was the statute repealed?
Policy of Congress has gone from one side to another.
After the IRA, after the so-called repudiation of the assimilation policy, the Congress of the United States passed Public Law 280.
On the day that that law was passed, Public Law 280, the Congress adopted a resolution that stated, in part, the policy of Congress... this is a quotation now... as rapidly as possible to make Indians within territorial limits of the United States subject to the same laws, entitled to the same privilege and responsibilities as are applicable to other citizens of the United States, and to end their status as wards of the United States and to grant them all of the rights and prerogatives pertaining to American citizenship.
We submit that that was a policy change.
Granted, that policy has now been changed again.
Unknown Speaker: When was Public Law 280 passed?
Mr. Sullivan: It was passed in 1953.
I don't have the exact date.
But it was passed some 19 years after the Indian Reorganization Act.
That is the problem.
The policy of Congress has gone from one side to the other, and back and forth.
But as that policy has changed, this statute, providing specifically for taxing of fee lands, has never changed.
It has remained the same.
This issue should be addressed to the Congress.
The Congress should decide... all of the counties, many of the counties are like Jackson County, Kansas, which was raised in that 1939 case.
These taxes have become a part of the economy of those jurisdictions.
The Congress... if it wants to say, fee lands will no longer be taxed, then they should look at it in terms of testimony and determine that we're going to replace those taxes, much as they've done with school districts.
Pass an in lieu tax.
What kind of an impact is this going to have?
There's an... in the materials that were submitted, in one of the briefs, with respect to an individual county, one of the counties in South Dakota, these taxes make up 10 percent of the county's total taxing jurisdiction.
To end up with a situation that the tribes and the Government are asking you for is to say that an individual Indian on a reservation can own his land; he can mortgage his land; he cannot pay the mortgage and his land could be sold at a sale, at a sheriff's--
Unknown Speaker: Do you agree with the Government when it says... when they say that you do agree with the preemption submission in the sense that you can't tax unless Congress says so, specifically?
Mr. Sullivan: --Yes, we agree.
Unknown Speaker: When did that... has that always been the rule, forever and ever?
Mr. Sullivan: In terms of this Court's analysis of the--
Unknown Speaker: The Government says that after the General Allotment Act, some preemption principle suddenly arose.
Mr. Sullivan: --Well, through this Court's rulings, by saying that, in fact, the general... I think it was clear to the Congress in 1906, myself, that they were going to be subject to all taxes, and that the Court has since... since that time, an attempt to balance and interpret the way Congress has gone back and forth in what we are left with on our reservation.
If the Court has said we're not going to allow taxation on these reservations, by State and local government without specific authority... and in this case, it extended even to the--
Unknown Speaker: When was that the... when was that... when did this Court first say that?
Mr. Sullivan: --I believe in McClanahan.
I think it was in McClanahan was the first time that the Court indicated that, in looking at Arizona's income tax, that they were a State income tax that they were attempting to impose.
Chief Justice Rehnquist: Thank you, Mr. Sullivan.
The case is submitted.
Argument of Speaker
Mr. Speaker: The opinion of the Court in No. 90-408, County of Yakima versus Confederated Tribes and Bands of the Yakima Nation and a companion case will be announced by Justice Scalia.
Argument of Justice Scalia
Mr. Scalia: These cases are here on certiorari to the United States Court of Appeals for the Ninth Circuit.
Yakima County, Washington imposes an ad valorem property tax on taxable real estate within its jurisdiction, and also an excise tax on sales of real estate.
The Yakima Indian Nation instituted this action seeking a declaration that these taxes could not lawfully be imposed with respect to so-called fee-patented lands held by the Yakima Indian Nation or by individual members of that nation within the bounds of the Yakima Indian Reservation, and also seeking an injunction prohibiting those taxes.
Fee-patented lands are parcels that were once held in trust for the tribe but that had been granted by the United States to individual Indians, and often later conveyed to non-Indians under a policy to divide up the reservations that was in effect between 1887 and 1934.
The District Court held that both taxes were barred by federal law and granted the tribe the relief it sought.
The Court of Appeals affirmed in part and reversed in part.
It agreed with the District Court that federal law enjoined the sales tax but held that the ad valorem property tax would be impermissible only if it would have a demonstrably serious impact on the tribe's political integrity, economic security, or health and welfare.
In an opinion filed today, we affirm the judgment of the Court of Appeals.
We hold that the Indian General Allotment Act of 1887 as amended explicitly permits Yakima County to impose an ad valorem tax on reservation land patented in fee pursuant to that Act and owned by Reservation Indians or by the tribe itself, but that federal law does not allow the county to enforce its excise tax on sales of the land.
The contention of the tribe and its principal amicus the United States, at this explicit statutory confer of taxing power, has been repudiated by subsequent Indian legislation rests upon a misunderstanding of this Court's precedents particularly Moe versus Confederated Tribes and upon a misperception of the structure of the Indian General Allotment Act.
We modify the Court of Appeals' remand order to the District Court however, or we do not agree with the Ninth Circuit that the county's power to enforce its ad valorem property tax is qualified by any consideration of the purported effect of the tax on the tribe's political integrity, economic security, or health and welfare.
Justice Blackmun has filed a separate opinion concurring in part and dissenting in part.