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In Montana v. United States,
Held: The Navajo Nation's imposition of a hotel occupancy tax upon nonmembers on non-Indian fee land within its reservation is invalid. Pp. 8-14.
(a) Montana's general rule applies to tribal attempts to tax nonmember activity occurring on non-Indian fee land. Tribal jurisdiction is limited: For powers not expressly conferred them by federal statute or treaty, tribes must rely upon their retained or inherent sovereignty. Their power over nonmembers on non-Indian fee land is sharply circumscribed. Montana noted only two exceptions: (1) a tribe may regulate the activities of nonmembers who enter consensual relationships with the tribe or its members; and (2) a tribe may exercise civil authority over the conduct of non-Indians on fee lands within its reservation when that conduct threatens or has some direct effect on the tribe's political integrity, economic security, or health or welfare.
(b) Montana's exceptions do not obtain here. Neither petitioner nor its hotel guests have entered into a consensual relationship with the Navajo Nation justifying the tax's imposition. Such a relationship must stem from commercial dealing, contracts, leases, or other arrangements, Montana, supra, at 565, and a nonmember's actual or potential receipt of tribal police, fire, and medical services does not create the requisite connection. Nor is petitioner's status as an "Indian trader" licensed by the Indian Affairs Commissioner sufficient by itself to support the tax's imposition. As to Montana's second exception, petitioner's operation of a hotel on non-Indian fee land does not threaten or have a direct effect on the tribe's political integrity, economic security, or health or welfare. Contrary to respondents' argument, the judgment in Brendale v. Confederated Tribes and Bands of Yakima Nation,
210 F. 3d 1247, reversed.
Rehnquist, C. J., delivered the opinion for a unanimous Court. Souter, J., filed a concurring opinion, in which Kennedy and Thomas, JJ., joined.
ATKINSON TRADING COMPANY, INC., PETITIONER
v. JOE SHIRLEY, Jr., et al.
on writ of certiorari to the united states court of
appeals for the tenth circuit
[May 29, 2001]
Chief Justice Rehnquist delivered the opinion of the Court.
In Montana v. United States,
In 1916, Hubert Richardson, lured by the possibility of trading with wealthy Gray Mountain Navajo cattlemen, built the Cameron Trading Post just south of the Little Colorado River near Cameron, Arizona. G. Richardson, Navajo Trader, pp. 136-137 (1986). Richardson purchased the land directly from the United States, but the Navajo Nation Reservation, which had been established in 1868, see 15 Stat. 667, was later extended eight miles south so that the Cameron Trading Post fell within its exterior boundaries. See Act of June 14, 1934, ch. 521, 48 Stat. 960-962. This 1934 enlargement of the Navajo Reservation--which today stretches across northeast Arizona, northwest New Mexico, and southeast Utah--did not alter the status of the property: It is, like millions of acres throughout the United States, non-Indian fee land within a tribal reservation.
Richardson's "drafty, wooden store building and four small, one-room-shack cabins overlooking the bare river canyon," Richardson, supra, at 135, have since evolved into a business complex consisting of a hotel, restaurant, cafeteria, gallery, curio shop, retail store, and recreational vehicle facility. The current owner, petitioner Atkinson Trading Company, Inc., benefits from the Cameron Trading Post's location near the intersection of Arizona Highway 64 (which leads west to the Grand Canyon) and United States Highway 89 (which connects Flagstaff on the south with Glen Canyon Dam to the north). A significant portion of petitioner's hotel business stems from tourists on their way to or from the Grand Canyon National Park.
In 1992, the Navajo Nation enacted a hotel occupancy tax, which imposes an 8 percent tax upon any hotel room located within the exterior boundaries of the Navajo Nation Reservation. See 24 Navajo Nation Code §§101-142 (1995), App. to Pet. for Cert. 102a-124a. Although the legal incidence of the tax falls directly upon the guests, the owner or operator of the hotel must collect and remit it to respondents, members of the Navajo Tax Commission. §§104, 107. The nonmember guests at the Cameron Trading Post pay approximately $84,000 in taxes to respondents annually.
Petitioner's challenge under Montana to the Navajo Nation's authority to impose the hotel occupancy tax was rejected by both the Navajo Tax Commission and the Navajo Supreme Court. Petitioner then sought relief in the United States District Court for the District of New Mexico, which also upheld the tax. A divided panel of the Court of Appeals for the Tenth Circuit affirmed. See 210 F. 3d 1247 (2000).
Although the Court of Appeals agreed with petitioner that our cases in this area "did make an issue of the fee status of the land in question," id., at 1256, it nonetheless concluded that the status of the land as "fee land or tribal land is simply one of the factors a court should consider" when determining whether civil jurisdiction exists, id., at 1258 (citing 18 U. S. C. §1151). Relying in part upon our decision in Merrion v. Jicarilla Apache Tribe,
We granted certiorari,
Tribal jurisdiction is limited: For powers not expressly conferred them by federal statute or treaty, Indian tribes must rely upon their retained or inherent sovereignty. In Montana, the most exhaustively reasoned of our modern cases addressing this latter authority, we observed that Indian tribe power over nonmembers on non-Indian fee land is sharply circumscribed. At issue in Montana was the Crow Tribe's attempt to regulate nonmember fishing and hunting on non-Indian fee land within the reservation. Although we "readily agree[d]" that the 1868 Fort Laramie Treaty authorized the Crow Tribe to prohibit nonmembers from hunting or fishing on tribal land,
Although we extracted from our precedents "the general proposition that the inherent sovereign powers of an Indian tribe do not extend to the activities of nonmembers of the tribe,"
The framework set forth in Montana "broadly addressed the concept of `inherent sovereignty.' " Strate v. A-1 Contractors,
Citing our decision in Merrion, respondents submit that Montana and Strate do not restrict an Indian tribe's power to impose revenue-raising taxes.3 In Merrion, just one year after our decision in Montana, we upheld a severance tax imposed by the Jicarilla Apache Tribe upon non-Indian lessees authorized to extract oil and gas from tribal land. In so doing, we noted that the power to tax derives not solely from an Indian tribe's power to exclude non-Indians from tribal land, but also from an Indian tribe's "general authority, as sovereign, to control economic activity within its jurisdiction."
Merrion, however, was careful to note that an Indian tribe's inherent power to tax only extended to " `transactions occurring on trust lands and significantly involving a tribe or its members.' "
We therefore do not read Merrion to exempt taxation from Montana's general rule that Indian tribes lack civil authority over nonmembers on non-Indian fee land. Accordingly, as in Strate, we apply Montana straight up. Because Congress has not authorized the Navajo Nation's hotel occupancy tax through treaty or statute, and because the incidence of the tax falls upon nonmembers on non-Indian fee land, it is incumbent upon the Navajo Nation to establish the existence of one of Montana's exceptions.
Respondents argue that both petitioner and its hotel guests have entered into a consensual relationship with the Navajo Nation justifying the imposition of the hotel occupancy tax.6 Echoing the reasoning of the Court of Appeals, respondents note that the Cameron Trading Post benefits from the numerous services provided by the Navajo Nation. The record reflects that the Arizona State Police and the Navajo Tribal Police patrol the portions of United States Highway 89 and Arizona Highway 64 traversing the reservation; that the Navajo Tribal Police and the Navajo Tribal Emergency Medical Services Department will respond to an emergency call from the Cameron Trading Post; and that local Arizona Fire Departments and the Navajo Tribal Fire Department provide fire protection to the area.7 Although we do not question the Navajo Nation's ability to charge an appropriate fee for a particular service actually rendered,8 we think the generalized availability of tribal services patently insufficient to sustain the Tribe's civil authority over nonmembers on non-Indian fee land.
The consensual relationship must stem from "commercial dealing, contracts, leases, or other arrangements," Montana,
Respondents and their principal amicus, the United States, also argue that petitioner consented to the tax by becoming an "Indian trader." Congress has authorized the Commissioner of Indian Affairs "to appoint traders to the Indian tribes and to make such rules and regulations as he may deem just and proper specifying the kind and quantity of goods and the prices at which such goods shall be sold to the Indians." 25 U. S. C. §261. Petitioner has acquired the requisite license to transact business with the Navajo Nation and therefore is subject to the regulatory strictures promulgated by the Indian Affairs Commissioner. See 25 CFR pt. 141 (2000).10 But whether or not the Navajo Nation could impose a tax on activities arising out of this relationship, an issue not before us, it is clear that petitioner's "Indian trader" status by itself cannot support the imposition of the hotel occupancy tax.
Montana's consensual relationship exception requires that the tax or regulation imposed by the Indian tribe have a nexus to the consensual relationship itself. In Strate, for example, even though respondent A-1 Contractors was on the reservation to perform landscaping work for the Three Affiliated Tribes at the time of the accident, we nonetheless held that the Tribes lacked adjudicatory authority because the other nonmember "was not a party to the subcontract, and the [T]ribes were strangers to the accident."
Although the Court of Appeals did not reach Montana's second exception, both respondents and the United States argue that the hotel occupancy tax is warranted in light of the direct effects the Cameron Trading Post has upon the Navajo Nation. Again noting the Navajo Nation's provision of tribal services and petitioner's status as an "Indian trader," respondents emphasize that petitioner employs almost 100 Navajo Indians; that the Cameron Trading Post derives business from tourists visiting the reservation; and that large amounts of tribal land surround petitioner's isolated property.11 Although we have no cause to doubt respondents' assertion that the Cameron Chapter of the Navajo Nation possesses an "overwhelming Indian character," Brief for Respondents 13-14, we fail to see how petitioner's operation of a hotel on non-Indian fee land "threatens or has some direct effect on the political integrity, the economic security, or the health or welfare of the tribe." Montana,
We find unpersuasive respondents' attempt to augment this claim by reference to Brendale v. Confederated Tribes and Bands of Yakima Nation,
Indian tribes are "unique aggregations possessing attributes of sovereignty over both their members and their territory," but their dependent status generally precludes extension of tribal civil authority beyond these limits. United States v. Mazurie,
Reversed.
ATKINSON TRADING COMPANY, INC., PETITIONER
v. JOE SHIRLEY, Jr., et al.
on writ of certiorari to the united states court of
appeals for the tenth circuit
[May 29, 2001]
Justice Souter, with whom Justices Kennedy and Thomas join, concurring.
If we are to see coherence in the various manifestations of the general law of tribal jurisdiction over non-Indians, the source of doctrine must be Montana v. United States,
We also noted that nearly 90 million acres of non-Indian fee land had been acquired as part of the Indian General Allotment Act, 24 Stat. 388, as amended, 25 U. S. C. §331 et seq., which authorized the issuance of patents in fee to individual Indian allottees who, after holding the patent for 25 years, could then transfer the land to non-Indians. Although Congress repudiated the practice of allotment in the Indian Reorganization Act, 48 Stat. 984, 25 U. S. C. §461 et seq., we nonetheless found significant that Congress equated alienation "with the dissolution of tribal affairs and jurisdiction." Montana
Footnote 2
See also South Dakota v. Bourland,
Footnote 3
Respondents concede that regulatory taxes fall under the Montana framework. See
Footnote 4
Merrion v. Jicarilla Apache Tribe,
Footnote 5
We find misplaced the Court of Appeals' reliance upon 18 U. S. C. §1151, a statute conferring upon Indian tribes jurisdiction over certain criminal acts occurring in "Indian country," or "all land within the limits of any Indian reservation under the jurisdiction of the United States Government, notwithstanding the issuance of any patent, and, including rights-of-way running through the reservation." See also Duro v. Reina,
At least in the context of non-Indian fee land, we also find inapt the Court of Appeals' analogy to state taxing authority. Our reference in Merrion to a State's ability to tax activities with which it has a substantial nexus was made in the context of describing an Indian tribe's authority over tribal land. See
Footnote 6
Because the legal incidence of the tax falls directly upon the guests, not petitioner, it is unclear whether the Tribe's relationship with petitioner is at all relevant. We need not, however, decide this issue since the hotel occupancy tax exceeds the Tribe's authority even considering petitioner's contacts with the Navajo Nation.
Footnote 7
The Navajo Tribal Fire Department has responded to a fire at the Cameron Trading Post. See App. to Pet. for Cert. 57a.
Footnote 8
The Navajo Nation charges for its emergency medical services (a flat call-out fee of $300 and a mileage fee of $6.25 per mile). See App. 127-129.
Footnote 9
See Reply Brief for Petitioners 13-14 and Brief for United States as Amicus Curiae 29 in Strate v. A-1 Contractors, O. T. No. 95-1872.
Footnote 10
Although the regulations do not "preclude" the Navajo Nation from imposing upon "Indian traders" such "fees or taxes [it] may deem appropriate," the regulations do not contemplate or authorize the hotel occupancy tax at issue here. 25 CFR §141.11 (2000).
Footnote 11
The record does not reflect the amount of non-Indian fee land within the Navajo Nation. A 1995 study commissioned by the United States Department of Commerce states that 96.3 percent of the Navajo Nation's 16,224,896 acres is tribally owned, with allotted land comprising 762,749 acres, or 4.7 percent, of the reservation. See Economic Development Administration V. Tiller, American Indian Reservations and Indian Trust Areas, p. 214 (1995). The 1990 Census reports that that 96.6 percent of residents on the Navajo Nation are Indian. Joint Lodging 182. The Cameron Chapter of the Navajo Nation, in which petitioner's land lies, has a non-Indian population of 2.3 percent. See id., at 181.
Footnote 12
Although language in Merrion referred to taxation as "necessary to tribal self-government and territorial management,"
Footnote 13
Justice Stevens' opinion in Brendale sets out in some detail the restrictive nature of "closed area" surrounding the non-Indian fee land. See
Footnote 14
See Strate v. A-1 Contractors, supra, at 447, n. 6 (noting that the Yakima Nation "retained zoning authority . . . only in the closed area"); Duro v. Reina,
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Citation: 532 U.S. 645
No. 00-454
Argued: March 27, 2001
Decided: May 29, 2001
Court: United States Supreme Court
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