Montana v. Blackfeet Tribe of Indians
85 L. Ed. 2d 753, 471 U.S. 759, 1985 U.S. LEXIS 24 (1985)
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Rule of Law:
State taxation of Indian tribal royalty interests from mineral leases on tribal lands is prohibited unless Congress has provided unmistakably clear and explicit consent to such taxation, and statutes concerning Indian affairs must be construed liberally in favor of the Indians.
Facts:
- In 1891, Congress passed the Act of Feb. 28, 1891 (1891 Act), which first authorized mineral leasing of Indian lands, specifically for terms not exceeding 10 years on lands "bought and paid for" by Indians.
- The 1891 Act was amended by the Act of May 29, 1924 (1924 Act), which allowed extended oil and gas leases and explicitly included a proviso stating that "the production of oil and gas and other minerals on such lands may be taxed by the State in which said lands are located in all respects the same as production on unrestricted lands."
- In 1938, Congress adopted comprehensive legislation (1938 Act) with the goals of achieving uniformity in tribal land mineral leasing laws and harmonizing them with the Indian Reorganization Act of 1934, but this Act did not contain any explicit provision for state taxation.
- The Blackfeet Tribe entered into oil and gas leases with non-Indian lessees for unallotted lands on its reservation, with these leases being issued in accordance with the 1938 Act.
- The State of Montana sought to apply several state taxes to the oil and gas production from these leased lands.
- The non-Indian lessees paid the Montana taxes and subsequently deducted these tax amounts from the royalty payments they made to the Blackfeet Tribe.
Procedural Posture:
- The Blackfeet Tribe filed a suit in the United States District Court for the District of Montana challenging the application of several Montana taxes to its royalty interests in oil and gas produced under leases.
- The District Court granted the State of Montana's motion for summary judgment, holding that the state taxes were authorized by the 1924 Act and that the 1938 Act did not repeal this authorization.
- A panel of the United States Court of Appeals for the Ninth Circuit affirmed the District Court’s decision.
- On rehearing en banc, the Ninth Circuit reversed in part, holding that while the tax authorization in the 1924 Act was not repealed and remained in effect for leases executed pursuant to the 1924 Act, the 1938 Act did not incorporate this tax provision, and therefore its authorization did not apply to leases executed after the enactment of the 1938 Act. The Ninth Circuit then remanded the case to the District Court.
- The Supreme Court granted Montana’s petition for certiorari.
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Issue:
Does the Indian Mineral Leasing Act of 1938, which established a comprehensive leasing scheme but did not explicitly authorize state taxation of tribal royalty interests, permit the State of Montana to tax the Blackfeet Tribe's royalty income from oil and gas leases issued to non-Indian lessees under that Act?
Opinions:
Majority - Justice Powell
No, the Indian Mineral Leasing Act of 1938 does not permit the State of Montana to tax the Blackfeet Tribe's royalty income from oil and gas leases issued under that Act. The Court emphasized that Indian tribes and individuals are generally exempt from state taxation within their own territory, and this exemption is lifted only when Congress has made its intention to do so "unmistakably clear." The 1938 Act lacks any explicit consent to state taxation, and its legislative history provides no indication of an intent to implicitly incorporate the taxing authority from the 1924 Act. Applying the special canons of construction for Indian law—which require clear consent for state taxation and liberal interpretation in favor of Indians—the general repealer clause of the 1938 Act cannot be read to incorporate consistent provisions of earlier laws or satisfy the clear consent requirement. Furthermore, the specific language of the 1924 Act's tax proviso, referring to "such lands" as those subject to lease under the 1891 Act, plainly limits its application to leases executed under the 1891 Act and its 1924 amendment, not to leases under the distinct 1938 Act.
Dissenting - Justice White
Yes, the Indian Mineral Leasing Act of 1938 permits the State of Montana to tax the Blackfeet Tribe's royalty income from oil and gas leases issued under that Act. Justice White argued that the 1938 Act's general repealer clause only nullified acts "inconsistent" with its terms, and state taxation of mineral leases is not inconsistent with any provision of the 1938 Act, which is silent on taxation. Therefore, the 1924 Act's taxing proviso was not repealed. He contended that the proviso's language, allowing taxation on "such lands" as are "unallotted land . . . subject to lease for mining purposes . . . under section 397 [the 1891 Act]," directly applies to the Blackfeet's reservation lands leased under the 1938 Act, as these lands were previously deemed "bought and paid for" in British-American Oil Producing Co. While acknowledging the canon of liberal construction in favor of Indians, he stressed that it is a canon of construction, not a license to disregard clear expressions of congressional intent. He found such clear intent in the 1924 proviso. Additionally, he noted that the Department of the Interior's interpretation until 1977 supported the application of the 1924 taxing proviso to leases under the 1938 Act, suggesting that Congress's intent was not to eliminate state taxing authority.
Analysis:
This case significantly reinforces the doctrine of tribal sovereign immunity from state taxation and the federal government's plenary power over Indian affairs. By requiring "unmistakably clear" congressional consent for state taxation of tribal resources, the Court places a high burden on states attempting to assert such jurisdiction. The ruling underscores the importance of the canons of construction in Indian law, which dictate that statutes affecting tribes must be liberally construed in their favor. This decision provides a critical protection for tribal economic development and resource management, ensuring that tribes retain greater control over their royalty income from resource extraction on their lands, absent explicit federal statutory language to the contrary.
