Cotton Petroleum Corporation v. New Mexico

PETITIONER: Cotton Petroleum Corporation
RESPONDENT: New Mexico
LOCATION: State University of New York Albany

DOCKET NO.: 87-1327
DECIDED BY: Rehnquist Court (1988-1990)
LOWER COURT: State appellate court

CITATION: 490 US 163 (1989)
ARGUED: Nov 30, 1988
DECIDED: Apr 25, 1989

ADVOCATES:
Daniel H. Israel - on behalf of the Appellants
Harold D. Stratton - on behalf of the Appellees

Facts of the case

Question

Media for Cotton Petroleum Corporation v. New Mexico

Audio Transcription for Oral Argument - November 30, 1988 in Cotton Petroleum Corporation v. New Mexico

Audio Transcription for Opinion Announcement - April 25, 1989 in Cotton Petroleum Corporation v. New Mexico

William H. Rehnquist:

The opinion of the Court in number 87-1327 Cotton Petroleum Company against New Mexico will be announced by Justice Stevens.

John Paul Stevens:

Seven years ago in Mary Anne against the Hickorel Apache Tribe, we held that the tribe has the power to impose a severance tax on the production of oil and gas by Non-Indian lessees of oils located on the tribe's reservation.

Today, in an appeal form the New Mexico Court of Appeals, we hold that the State of New Mexico may also impose a severance tax on the same production of oil and gas.

In an opinion filed with the clerk of the court, we conclude that the Indian Mineral Leasing Act of 1938, which grants the tribe authority to execute mineral leases does not include an express or implied prohibition on state taxation of the Non-Indian lessees.

Nor are we able to find such a prohibition in any other congressional enactment or in the now repudiated doctrine of intergovernmental tax immunity.

We also reject Cotton's contention that the state severance tax is inconsistent with the commerce clause because the aggregation of state and Indian taxes imposes a higher burden of on-reservation production than on other production in the state.

Most significantly, there is simply no basis for concluding that Indian tribes which are separately mentioned in the commerce clause should be treated as states engaged in Interstate Commerce.

The judgment of the New Mexico Court of Appeals is therefore, affirmed.

Justice Blackmun has filed a dissenting opinion in which Justices Brennan and Marshall have joined.