Article I, Section 8, Clause 3 — Indian Tribes

ArtI.S8.C3.9.1 Scope of Commerce Clause Authority and Indian Tribes

Jurisdiction over matters in “Indian Country”¹ “is governed by a complex patchwork of federal, state, and tribal law.”² Since Worcester v. Georgia in 1832,³ the Supreme Court has recognized that Native American “tribes are unique aggregations possessing attributes of sovereignty over both their members and their territories.”⁴ They are no longer “possessed of the full attributes of sovereignty,”⁵ however, having relinquished some part of it by “[t]heir incorporation within the territory of the United States and their acceptance of its protection.”⁶ Accordingly, “[t]he sovereignty that the Indian tribes retain is of a unique and limited character. It exists only at the sufferance of Congress and is subject to complete defeasance.”⁷

While previously “the subject of some confusion,” the source of federal authority over tribal matters is generally recognized to “derive[ ] from federal responsibility for regulating commerce with Indian tribes and for treaty making.”⁸ The Constitution’s so-called “Indian Commerce Clause” explicitly authorizes Congress to regulate commerce with the tribes.⁹ Congress’s authority to regulate commercial activity in “Indian Country” is plenary,¹⁰ exclusive,¹¹ and broad,¹² and persists even though such activity may occur within a state’s territorial boundaries.¹³

Using its Indian Commerce Clause authority, Congress may determine with whom and in what manner the tribes engage in commercial activity.¹⁴ Major areas where Congress has exercised its power to regulate include: tribal land; tribal gaming; hunting, fishing, and wildlife; and natural resources, such as minerals, oil and gas, and timber. Congress has also attempted to promote tribal political and economic development¹⁵ through legislation such as the Indian Reorganization Act of 1934¹⁶ and the Native American Business Development, Trade Promotion, and Tourism Act.¹⁷

The Supreme Court has increasingly recognized Congress’s power under the Indian Commerce Clause as a source of authority to regulate tribal rights and obligations beyond matters of mere commerce.¹⁸ Although the power of Congress over tribal affairs is broad, it is not limitless.¹⁹ While “the United States has power to control and manage the affairs of its Indian wards in good faith for their welfare, that power is subject to constitutional limitations.”²⁰ The Court has articulated a standard of review that defers to legislative judgment “[a]s long as the special treatment can be tied rationally to the fulfillment of Congress’s unique obligation toward the Indians.”²¹ A more searching review is warranted when it is alleged that the Federal Government’s behavior toward a tribe contravenes its obligations, or when the government has taken property which it guaranteed to the tribe without compensating the tribe for the land’s full value.²²

ArtI.S8.C3.9.2 Restrictions on State Powers, Indian Tribes, and Commerce Clause

Although in 1871, Congress forbade making further treaties with the tribes,¹ cases disputing the application of old treaties, and especially their effects upon attempted state regulation of on-reservation activities, continue to appear on the Supreme Court’s docket.² Given the broad federal power to legislate on tribal affairs, the Court has generally used a preemption-like doctrine as the analytical framework with which to judge the permissibility of assertions of state jurisdiction over tribes:

[T]he traditional notions of tribal sovereignty, and the recognition and encouragement

of this sovereignty in congressional Acts promoting tribal independence and economic

development, inform the pre-emption analysis that governs this inquiry. As a result,

ambiguities in federal law should be construed generously, and federal pre-emption is

not limited to those situations where Congress has explicitly announced an intention

to pre-empt state activity.³

Accordingly, state regulation of tribal activities is preempted by federal law if the state scheme is incompatible with federal and tribal interests, unless the state’s interests are substantial enough to justify the assertion of its authority.⁴ If a detailed, federal regulatory framework exists and would be compromised by incompatible state regulation, the state action may be preempted by federal law.⁵ Tribal gaming, for instance, is subject to a detailed federal regulatory scheme that preempts state law for certain types of gaming on tribal land, but preserves state regulation of tribal gaming on non-tribal land.⁶ Notably, just as federal statutes are generally construed to the benefit of Native Americans, the preemption doctrine will not be applied strictly to prevent states from aiding tribes.⁷

The Supreme Court has also clarified that “States have no authority to reduce federal reservations lying within their borders.”⁸ In a leading case involving settlement of Native land claims, the Court ruled in County of Oneida v. Oneida Indian Nation⁹ that a tribe could obtain damages for wrongful possession of land conveyed in 1795 without federal approval, as required by the Nonintercourse Act.¹⁰ The Act reflected the accepted principle that extinguishment of title to Native American land requires the United States’ consent. The Court reiterated the rule that enactments are construed liberally in favor of Native Americans; Congress may abrogate Native treaty rights or extinguish aboriginal land title only if it does so clearly and unambiguously. Consequently, federal approval of land-conveyance treaties containing references to earlier conveyances that violated the Nonintercourse Act do not constitute ratification of the invalid conveyances.¹¹

In addition to federal preemption, the impact on tribal sovereignty is a determinant of relative state and tribal regulatory authority.¹² A tribe has the power to regulate its members and, unless so provided by Congress, a state may not regulate in a manner that would infringe upon this tribal authority.¹³ In other words, the “semi-autonomous status” of tribes is an “independent but related” barrier to the exercise of state authority over commercial activity on a reservation.¹⁴ If state regulation of activities on tribal lands would interfere with the tribe’s sovereignty and self-governance, the state is generally divested of jurisdiction under federal law.¹⁵ Substantial tribal interests in on-reservation activities could outweigh the state’s interests in the off-reservation effects of on-reservation activities.¹⁶ However,a tribe may not offer on-reservation activities to avoid state off-reservation law.¹⁷

In sum, there are two independent barriers to state regulation of tribal reservations and members, either of which can independently bar the application of a state law: (1) preemption by federal law and (2) tribal sovereignty.¹⁸ Accordingly, the Court’s preemption inquiry in this context requires an examination of applicable federal law as well as the nature of state, federal, and tribal interests to determine whether the exercise of state authority is permissible.¹⁹ The preemption inquiry considers traditional notions of tribal sovereignty and the federal goal of tribal self-governance, including tribal self-sufficiency and economic development.²⁰

Generally, however, Native Americans on reservations are not subject to state law unless Congress has expressly legislated otherwise,²¹ because the federal interest in encouraging tribal self-government is strongest on the reservation, while the state’s regulatory interest is likely to be low.²² On the other hand, beyond reservation boundaries, Native Americans are subject to generally applicable state laws as long as they are not discriminatory or preempted by federal law.²³ And when state interests outside the reservation are implicated on the reservation, such as in the context of a state’s police powers, states may regulate the activities of tribe members on tribal land under certain circumstances.²⁴

With regard to regulation of on-reservation activities of non-Natives, in Montana v. United States,²⁵ the Supreme Court articulated the so-called Montana Doctrine under which a tribe may not “exercise criminal jurisdiction over non-Indians” with two notable exceptions.²⁶ First, “[a] tribe may regulate, through taxation, licensing, or other means, the activities of nonmembers who enter consensual relationships with the tribe or its members, through commercial dealing, contracts, leases, or other arrangements.”²⁷ Second, a tribe may address “the conduct of non-Indians on fee lands within its reservation when that conduct threatens or has some direct effect on the political integrity, the economic security, or the health or welfare of the tribe.”²⁸ Applying the Montana Doctrine’s second exception, in United States v. Cooley, the Court held that a “tribal officer possesses the authority . . . to detain temporarily and to search a non-Indian on a public right-of-way that runs through an Indian reservation.”²⁹

As suggested by the first exception to the Montana Doctrine, among the fundamental attributes of sovereignty a tribe possesses, unless divested by federal law, is the power to tax non-Natives entering the reservation to engage in economic activities.³⁰ Over time, the Court has recognized additional inherent tribal sovereign powers.³¹

The scope of state taxing powers—the conflict of “the plenary power of the States over residents within their borders with the semi-autonomous status of Indians living on tribal reservations”³²—has been frequently litigated. Absent cession of jurisdiction or other congressional consent, states possess no power to tax reservation lands or tribal income from activities carried on within a reservation’s boundaries.³³ Off-reservation Native activities require an express federal exemption to deny state taxing power.³⁴ State taxation of non-Natives doing business with Natives on the reservation involves a close analysis of the federal statutory framework, although the operating premise was for many years to deny state taxation power because of its burdens upon the development of tribal self-sufficiency and interference with the tribes’ ability to exercise their sovereign functions.³⁵

The Supreme Court appears to have moved away from this operating premise to some extent. For example, in Cotton Petroleum Corp. v. New Mexico,³⁶ the Court upheld a state oil and gas severance tax applied to on-reservation operations by non-Natives, which were already taxed by the Tribe,³⁷ finding the impairment of tribal sovereignty was “too indirect and too insubstantial” to warrant preemption. The Court found the fact that the state provided significant services to the oil and gas lessees justified state taxation, while distinguishing earlier cases in which the state “asserted no legitimate regulatory interest that might justify the tax.”³⁸ In a later case where the Court confronted arguments that the imposition of particular state taxes on reservation property was inconsistent with self-determination and self-governance, the Court denominated these as “policy” arguments properly presented to Congress rather than to the Court.³⁹