Montana v. Blackfeet Tribe of Indians

PETITIONER:Montana
RESPONDENT:Blackfeet Tribe of Indians
LOCATION:United States Courthouse

DOCKET NO.: 83-2161
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 471 US 759 (1985)
ARGUED: Jan 15, 1985
REARGUED: Apr 23, 1985
DECIDED: Jun 03, 1985

ADVOCATES:
Deirdre Boggs – on behalf of the Petitioners
Edwin S. Kneedler – as amicus curiae supporting the Respondent
Jeanne S. Whiteing – on behalf of the Respondent

Facts of the case

Question

  • Oral Reargument – April 23, 1985
  • Audio Transcription for Oral Argument – January 15, 1985 in Montana v. Blackfeet Tribe of Indians

    Warren E. Burger:

    We’ll hear arguments next in National Railroad… no, Montana, Montana against Blackfeet Tribe of Indians.

    And we’ll save National Railroad for a little later.

    Deirdre Boggs:

    Thank you, Your Honor, and if it please the Court:

    The issue in this case is whether the express tax authorization provision in the 1924 Indian Mineral Leasing Act which would allow Montana to tax the Blackfeet Tribe’s mineral royalties has been eradicated.

    The 1924 Indian Mineral Leasing Act allowed the Secretary of the Interior to enter into long-term leases for oil and gas on unallotted lands on treaty reservations with the consent of the affected tribe.

    That Act also allowed for the taxation of all minerals, not just oil and gas, produced on these same allotted lands.

    No regulations were ever drafted to implement the taxation provision of this Act.

    The State of Montana has taxed oil and gas production on the Blackfeet Indian Reservation since 1936 when this Court held in British-American Oil Producing Company that the 1924 Act applied to the Blackfeet oil and gas leases.

    In 1977 the Solicitor held that the 1938 Indian Mineral Leasing Act replaced completely the 1924 Indian Mineral Leasing Act, so that the tax authorization that was specifically included in the ’24 Act was limited to pre-1938 Act leases.

    This case was filed by the Blackfeet Tribe shortly afterwards.

    The Blackfeet Tribe alleged and insisted that some of the state’s taxes fell under royalties.

    They alleged that the 1938 Act completely replaced the ’24 Act, and that that replacement did away with the taxing provisions in the ’24 Act.

    And they alleged that the language in the 1924 Act which refers to such lands that can be taxed is limited to lands that are leased in fact under the 1924 Act.

    In Montana the oil and gas producers file all the tax returns with the state, and they are solely responsible for all tax payments.

    The producers are not parties to this case, and the tribe doesn’t challenge the taxes on the producers’ share.

    The predecessor taxes to the Montana taxes challenged here were challenged in 1935 within months of a written opinion that was issued by the Department of Interior stating that Montana’s taxes could not be imposed on the production of oil and gas on the Blackfeet Reservation.

    The taxes on both the producers’ share and the royalty owner’s share in that case were specifically challenged in British-North American Oil Producing Company.

    The only difference in the operation of the taxes in that case and this case is that the net proceeds tax in that case had a mandatory pass-on provision where although the producers paid the taxes and filled out the forms, there was a mandatory requirement that a pro rata share of the taxes that would fall on the tribal royalties would be collected from the royalty owners.

    The taxation authority of the state was upheld on all taxes in that case.

    Montana has collected all of the taxes since the British-American decision, notwithstanding the passage of the 1938 Indian Mineral Leasing Act.

    The purposes of the 1938 Indian Mineral Leasing Act were set forth in the reports that accompanied that legislation.

    The purposes were to cure specific defects that Congress had observed in the Indian mineral leasing statutes.

    It did not change the taxation authority that was granted in the ’24 Act.

    None of the contemporary commentators of the… or around the ’38 Act suspected that the taxation authority had been eliminated by the passage of the ’38 Act.

    Felix Cohen in his 1942 edition of 328 talks about the intent of the 1938 Act.

    He refers to the letter from the Department of Interior that we’ve included in the Petitioners’ appendix where the defects in the Indian mineral leasing scheme are itemized in detail.

    And he says that

    “A reading of that letter throws considerable light on the problems intended to be met by the Act. “

    And again, the letter that’s in the report… this is Senate Report 985… goes into the most specific details about the defects that Congress sought to cure.

    Harry A. Blackmun:

    Ms. Boggs, what does Professor Cohen say in his current edition?

    Deirdre Boggs:

    We’ve referred to that… of course, that’s no longer Professor Cohen.

    There are three references to the 1977 Solicitor’s opinion acknowledging that opinion and accepting it; that is, that the ’38 Act wiped out the tax authority.

    That was not the position in any of the previous editions… either of the two previous editions of the book.

    Sandra Day O’Connor:

    Well, Ms. Boggs, didn’t the 1924 Act by its own terms, isn’t it limited to leases issued under the 1891 Act?

    I mean the taxation authority, along with everything else in the 1924 Act, appears at least to be limited by its own terms to leases issued under the 1891 Act.

    Deirdre Boggs:

    You’re referring to the language “such lands”…

    “provided that such lands shall be taxed? “

    And it’s your position, then, that “such lands” refers to the lands that are leased–

    Sandra Day O’Connor:

    I’m referring to the entire 1924 Act and asking you if it doesn’t just apply to leases issued pursuant to the 1891 Act?

    Deirdre Boggs:

    –Justice O’Connor, it can’t.

    The taxation provision can’t, I think, because the taxation provision allows for taxation of oil and gas and other minerals on the unallotted treaty reservation lands.

    The leasing part of that Act only permits the Secretary to enter into long-term leases for oil and gas on those lands.

    I think the only grammatical and logical way to read that taxation provision is that it applies for all mineral productions on those unallotted treaty reservation lands.

    I think that if nothing else, the inclusion of other minerals in that taxation provision… that is, minerals other than the ones that the leasing provision allowed for… would make it so that we have to read the tax provision to apply to more than just lands leased under the Act.

    The administrative practice, in addition to the Solicitor’s opinions up till 1977, was to allow Montana to levy and assess the taxes on the leases on the Blackfeet Reservation.

    We and the tribe both refer to the variety of Solicitor’s opinions and the opinions from the Department of Interior which reaffirm the power of the state to exercise its tax, and in one case in 1954 talk about a procedure that would be allowed that Montana statutes implement; that is, the procedure where the producers themselves pay the taxes, fill out the tax forms, and then subtract the tax payments from the royalty payments to the tribes.

    Then in the Montana situation, the USGS then credited those tax payments to the royalty payments.

    In 1978, shortly after the Solicitor issued its opinion, the U.S. Geological Survey issued a letter to the producers in Montana warning them that no longer would the tax payments that they were making and deducting from the tribal royalties be credited to their royalty payments.

    The en banc opinion of the Ninth Circuit held that if you impose the policy of Congress in the Indian Reorganization Act and other acts on a reading of these two acts together that the taxation provision in the 1924 Act has disappeared.

    Congress has not acted since 1938 in relation to this issue.

    The state urges in this case that rather than overlay a policy or a perceived policy of Congress or a changed policy of Congress on the interpretation of the taxation provision or whether it still exists, that the Court look at the statutes using more ordinary analysis for statutory construction.

    We would urge that the Court look at the Section 7 repealer in the 1938 Act which repeals acts or parts of acts inconsistent with the ’38 Act, and read that the way this Court has always read that, which means that those provisions of previous acts, especially specific ones specifying certain things that are not inconsistent with a later act, remain.

    William H. Rehnquist:

    Of course, the court of appeals said that the 1924 provision wasn’t repealed, didn’t it?

    I mean it didn’t take the position that it had been repealed.

    Deirdre Boggs:

    No, Your Honor.

    They said it had been replaced.

    They had it disappear without repeal.

    They didn’t apply any of those standards of construction to analyzing the statutes.

    William H. Rehnquist:

    You feel that the 1924 Act standing by its terms does apply to the leases which are sought to be taxed here?

    Deirdre Boggs:

    I feel that the part of the 1924 Act that provides specifically for state taxation remains; that it’s never been eliminated and that it therefore remains.

    Deirdre Boggs:

    I think that an analysis of whether or not there has been a repeal has to be made when you have a specific provision in an earlier statute, and there’s a later statute that’s a general statute dealing with the same subject.

    William H. Rehnquist:

    But I don’t think anyone opposes you on that point is what I’m trying to get at.

    I mean the Ninth Circuit didn’t say it was repealed.

    You obviously don’t feel it’s been repealed.

    Deirdre Boggs:

    They… they–

    William H. Rehnquist:

    They left it in limbo.

    Deirdre Boggs:

    –They did not deal with… as I recall, the en banc panel didn’t deal at all with the Section 7 provision and what it might mean.

    William H. Rehnquist:

    Well, you think that the proviso in the 1924 Act that the production of oil and gas and other minerals on such lands may be taxed by the state in which such lands are located includes lands that are leased pursuant to the 1938 Act.

    Deirdre Boggs:

    It… yes, Your Honor.

    I believe that the only reading of that provision as far as the meaning of “such lands” goes is that those are lands that are unallotted lands on treaty reservations; that is, lands that are bought and paid for by Indian tribes on the reservations.

    William H. Rehnquist:

    Referring back to the first sentence of the Act, that unallotted land on Indian reservations other than the five civilized tribes.

    Deirdre Boggs:

    As described in the Act of 1891.

    William H. Rehnquist:

    In your view, the lands on which taxation is… the leases on which taxation is now sought to be imposed are unallotted lands.

    As described in the 1891 Act.

    Yes.

    Deirdre Boggs:

    Yes, Your Honor.

    In British-American Oil Producing this Court had to struggle with what “such lands” meant, and one of the challenges in that case was whether or not these were unallotted lands, because in fact… it’s rather peculiar situation… in fact, the surface lands that we’re talking about here were allotted.

    The minerals were reserved.

    And the position taken by the producer in British-American Oil was that Section 10 of the 1919 Mineral Leasing Act had to apply to those lands, because you’re not dealing really with unallotted lands.

    This Court held that the reserved mineral rights beneath the surface lands were on allotted lands.

    That was a specific… one of the specific holdings of this Court in British-American.

    Most, if not all, of the surface lands in dispute here were allotted lands with the minerals specifically reserved under Section 10 of the 1919 Act, which this Court held did not limit the application of the ’24 Act to the leases.

    John Paul Stevens:

    Ms. Boggs, I may have misunderstood you, but I want to be sure what you just… did you… I think you used the word “allotted” when you meant “unallotted”.

    Deirdre Boggs:

    Unallotted.

    John Paul Stevens:

    The lands on which the ’38 leases are located are lands which could have been leased in 1892 pursuant to the 1891 Act, is that… is that true?

    Deirdre Boggs:

    I’m sorry.

    John Paul Stevens:

    The surface land on which the leases in dispute, the 1938 leases, are located are lands which could have given rise to leases pursuant to the 1891 Act.

    Deirdre Boggs:

    That’s right, Your Honor.

    If… if–

    John Paul Stevens:

    So you say “such lands”, which is read literally under that provision, govern these leases, covers these leases, covers the lands on which these leases are located.

    Deirdre Boggs:

    –It covers the lands under which–

    John Paul Stevens:

    I understand the problem about British-American, but forgetting that for the moment.

    Deirdre Boggs:

    –Okay.

    Not even referring to that case, though, 1891 Act.

    These are lands bought and paid for.

    They’re unallotted lands that are bought and paid for on the Indian reservation.

    In addition to urging an analysis of these statutes under standard canons of statutory construction, and specifically referring to the case of Hess v. Reynolds as it applies to an interpretation of the repealer language that we have here, it’s our position that even if the Court were to overlay Indian Reorganization Act policies on its interpretation of what the 1938 Act does and doesn’t do in relation to these taxes that the conclusion does not have to be that these taxes were wiped out.

    The IRA policies that the Ninth Circuit looked at were the policies to undo the Allottment Act policies.

    They were concerned there with the land losses that had taken place under those policies, and that was what they wanted to reverse.

    And in doing that, they made a specific provision exempting from taxation lands that were purchased under the IRA.

    That is the only tax exemption provision in the Indian Reorganization Act.

    And this Court has held in the Kescalero v. Jones case that even when you’re dealing with the specific lands referred to that were to be tax exempt that that reference doesn’t mean that any income received from those lands are to be tax-exempt.

    There’s absolutely no mention in any of the materials relating to the Indian Reorganization Act in any of the reports or voluminous hearings related to that Act where Congress gave any suggestion at all that they wanted to undo the previously authorized tax provisions in any of these mineral leasing acts.

    The result and the conclusion that the Ninth Circuit reached here, the way they reached it I think is quite extraordinary; that is, they read the various congressional policies as they say them to eradicate something that Congress had never eradicated.

    In Hess v. Reynolds this Court said that when there’s a repealer such as the one in the 1938 Act that repeals acts or parts of acts inconsistent with the Act, that that in itself means that there remains… there remains the specific provisions in previous acts so long as they’re not contrary to the later general act.

    And it’s that sort of analysis that I think this issue presents to the Court.

    I think that if that sort of analysis is given to these statutes, even if the Court were to look at the Indian reorganization policy, that the tax provision that was written specifically in the 1924 Act would be found to stand.

    Warren E. Burger:

    Ms. Whiteing.

    Jeanne S. Whiteing:

    Mr. Chief Justice, and may it please the Court:

    This case turns on a question of statutory construction: the meaning of the 1938 Mineral Leasing Act.

    It is our position that the ’38 Act is a prospective replacement for prior leasing laws, and that it is a comprehensive statute which governs all terms and conditions for the leasing of tribal lands for mineral purposes.

    References to other statutes are therefore unnecessary and are neither… and are not required.

    Nothing in the–

    William J. Brennan, Jr.:

    Well, are you saying that the ’38 Act completely replaced the ’24 Act?

    Jeanne S. Whiteing:

    –I think… yes, we are saying that.

    And in fact, the Sections 1 and 2 of the 1938 Act essentially track the language in the 1924 Act.

    In effect, they incorporate and carry forward that language; but significantly, they do not… or Sections 1 and 2 do not, and nothing else in the 1938 Act carries forward or incorporates the tax.

    William J. Brennan, Jr.:

    So nothing at all was left of the ’24 Act provisions.

    Jeanne S. Whiteing:

    After 1938.

    William J. Brennan, Jr.:

    That’s what I mean.

    Jeanne S. Whiteing:

    We do recognize that that Act continues to exist to govern leases which were made before the 1938 Act… before the 1938 Act, and that is our position in this case here.

    Byron R. White:

    Well, doesn’t the Act say on its face that this repeals acts that are inconsistent with the ’38 Act?

    Jeanne S. Whiteing:

    Our position–

    Byron R. White:

    Well, doesn’t it?

    Isn’t that what it says?

    Jeanne S. Whiteing:

    –It does say that it repeals–

    Byron R. White:

    And yet you say it repeals every act whether it’s inconsistent with it or not?

    Jeanne S. Whiteing:

    –I’ve said that it… I didn’t say that it repealed the ’24 Act.

    I said it–

    Byron R. White:

    It replaced it.

    Jeanne S. Whiteing:

    –replaced it for future leasing purposes.

    And even under the–

    Byron R. White:

    Well, may I see if I fully understand it.

    What you’re saying, I gather, is the 1924 Act to the extent necessary still applies to leases before 1938; is that it?

    Jeanne S. Whiteing:

    –That’s correct.

    William J. Brennan, Jr.:

    But the 1938 Act applies to leases after 1938, is that–

    Jeanne S. Whiteing:

    That’s… that is our position.

    William J. Brennan, Jr.:

    –And the 1938 Act has no authority to the state tax.

    Jeanne S. Whiteing:

    That’s… that is our position here.

    William H. Rehnquist:

    Well, you don’t contend, do you, that the 1938 Act repealed the 1924 Act?

    Jeanne S. Whiteing:

    No.

    We don’t contend that it repealed it.

    William H. Rehnquist:

    So the 1924 Act is then still on the books.

    Jeanne S. Whiteing:

    It is still on the books.

    It was not wiped off the books by the 1938 Act.

    William H. Rehnquist:

    Okay.

    Now, here’s… I want to read you some language from the 1924 Act, and you tell me what it means.

    “Unallotted land on Indian Reservations” is the very first five or six words of that.

    It’s quoted at page 37 of the appendix of the Petitioners.

    It’s the Ninth Circuit’s rendition.

    William H. Rehnquist:

    It starts out saying, “Unallotted land on Indian Reservations”, with an exception.

    Then you go to the proviso:

    “that the production of oil and gas and other minerals on such lands. “

    –parenthetically, I take that to mean unallotted lands…

    “may be taxed by the state in which said lands are located. “

    Now, don’t you think that literally applies to the leases in this case?

    Jeanne S. Whiteing:

    ’38 Act leases you mean, Your Honor.

    William H. Rehnquist:

    Yes.

    Jeanne S. Whiteing:

    I don’t think so.

    William H. Rehnquist:

    You say that those leases are not on unallotted lands?

    Jeanne S. Whiteing:

    We are saying that they are unallotted lands, but they are not subject to lease under the 1891 Act, and that is the full–

    William H. Rehnquist:

    Well, but where does the 1938 Act say anything about lands subject to lease under the 1891 Act?

    Jeanne S. Whiteing:

    –The 1938 Act does not say anything–

    William H. Rehnquist:

    It’s totally silent on the subject, isn’t it?

    Jeanne S. Whiteing:

    –It is silent on the issue of taxation.

    It does say unallotted lands on Indian reservations are subject to lease for mining purposes under the ’38 Act.

    William H. Rehnquist:

    But this proviso for taxation in the 1924 Act doesn’t say that leases executed under the 1891 Act shall be subject to taxation.

    It says that leases on unallotted land shall be subject to taxation.

    Jeanne S. Whiteing:

    It says leases on unallotted lands or unallotted lands subject to lease under the 1891 Act.

    And our position is that after 1938–

    William H. Rehnquist:

    Well, where does it say subject to the 1891 Act in the 1924 provision?

    Jeanne S. Whiteing:

    –The first part of the 1924 Act, Your Honor, says

    “unallotted land on Indian reservations, with some exceptions, subject to lease for mining purposes for a period of ten years under the proviso to Section 3 of the Act of February 28, 1891. “

    William H. Rehnquist:

    And you say that makes… makes it applicable only to lands under those… leased under that particular section?

    Jeanne S. Whiteing:

    Only to lands leased under the 1891 Act.

    And after 1938 our position is that unallotted lands are not subject to lease under the 1891 Act because the 1938 Act completely replaced prior leasing laws for prospective leases.

    William H. Rehnquist:

    But, no, the Ninth Circuit held that some of these leases are taxable, didn’t it?

    Jeanne S. Whiteing:

    They… they held that the leases that were executed prior to 1938 under the 1891 Act were taxable.

    William H. Rehnquist:

    And you don’t dispute that holding.

    Jeanne S. Whiteing:

    We don’t dispute that here.

    William H. Rehnquist:

    Well, do you dispute it anywhere?

    Jeanne S. Whiteing:

    We did certainly argue differently before the Ninth Circuit.

    They did not agree with us.

    John Paul Stevens:

    May I follow up with one question?

    Again focusing on the language, ’24 Act…

    “subject to lease under the 1891 Act. “

    Apart from the fact that the leases may not have been granted, would you agree that the lands on which the 1938 and thereafter leases are located would have given… could have given rise to leases under the 1891 Act if they had been… people had acted promptly in 1892 or ’93 as a matter of geography?

    Jeanne S. Whiteing:

    I’m not sure I understand your question.

    John Paul Stevens:

    Well, the… the leases subject to the 1938 Act which are in dispute here are on unallotted lands.

    Jeanne S. Whiteing:

    That’s correct.

    John Paul Stevens:

    That everybody agrees on.

    Is it also true that they are located on such lands… that is, unallotted lands… that could have been leased in 1892?

    Jeanne S. Whiteing:

    They could have been leased in 1892 under the Act of 1891, that’s correct.

    John Paul Stevens:

    Or in 1925.

    But in fact they were not.

    Jeanne S. Whiteing:

    Or in 1925.

    But after 1938 we’re saying that they are not subject to lease under the 1891 Act.

    John Paul Stevens:

    Although they had at one time been subject to lease under the 1891 Act.

    Jeanne S. Whiteing:

    That’s correct.

    Now, Montana makes the point that the oil… the taxing consent in the 1924 Act cannot just apply to 1891 Act leases because it authorizes taxation of not just oil and gas but other minerals as well.

    But the 1891 Act as a whole certainly authorized leases for mining purposes and not just oil and gas mining.

    And after all, the 1924 Act is an amendment to the 1891 Act, so the tax consent is consistent with those lands that were subject or those purposes for which the 1891 Act was a leasing authorization.

    Basically, it is our position that the terms of the 1924 Act in themselves make clear that the tax consent applies only to lands leased under the 1891 Act, and that these lands at issue here or the leases at issue were not subject to lease under the 1891 Act after 1938.

    Sandra Day O’Connor:

    Ms. Whiteing, if… if the Ninth Circuit is correct in this case, what are the implications for state taxation of the producers of the oil and gas leases, the non-Indians?

    Jeanne S. Whiteing:

    Well, of course the Ninth Circuit did not address that question, and it’s not in issue here.

    States still can argue and do argue that they can tax producers’ interests and the–

    Sandra Day O’Connor:

    Well, I’m asking what you think the implications are for that in the event the Ninth Circuit is correct.

    Jeanne S. Whiteing:

    –Well, the implication, I think, is that certainly there would be no specific statute to which a state could point that authorizes such taxation, but they still could argue that nevertheless taxation would be possible, and whether that taxation would be upheld depends on application of the principles and tasks set out in cases… in opinions of this Court such as White Mountain Apache v.–

    Sandra Day O’Connor:

    Yes.

    I’m asking what you think the implications are, not what somebody else might argue.

    Jeanne S. Whiteing:

    –Well, if those… if those tests were applied, I think that it certainly is possible to find that state taxation of producers is invalid.

    After all, this is a tax on an important resource of the tribe that’s tied to the land and is intimately related to their ability to become self-sufficient.

    And under the test in White Mountain Apache, even things like gasoline taxes and other more minor taxes were found not to be applicable.

    So I think it’s very possible for a court to find that these taxes are not applicable either under that test.

    Harry A. Blackmun:

    But in any event, you haven’t taken a position on that formally.

    Jeanne S. Whiteing:

    No, we have not.

    That is not an issue in our case.

    Harry A. Blackmun:

    Maybe that’s for tomorrow when you can think it through.

    Jeanne S. Whiteing:

    It’s possible that that would be an issue in a future–

    Sandra Day O’Connor:

    Is it an issue in the case when it goes back to the court below in this case?

    Jeanne S. Whiteing:

    –There is an issue yet to be resolved, and that is the case of tax incidence; whether the burden of the… whether the incidence of the tax is actually on the tribe or on the producer.

    Sandra Day O’Connor:

    Wasn’t that… yes, wasn’t the remand specifically for that determination?

    Jeanne S. Whiteing:

    That’s correct.

    So our argument that the 1938 Act is a prospective replacement for prior leasing laws rests on several premises: first, the wording of the statute, which we’ve talked about; second, its legislative history and purposes; historic Indian policies and administrative treatment in practice.

    One other point about the wording of this 1938 Act is that Sections 1 and 2 do essentially incorporate and refer to the words of the 1924 Act.

    Congress was obviously looking at that act when it enacted the 1938 Act, and it chose to incorporate the most important provisions of that Act governing leasing, but significantly, it did not carry forward and incorporate the tax provision of the ’24 Act.

    Montana insists that the tax consent is ambulatory and that it attaches to other provisions, but… unless it is specifically repealed.

    But our argument does not raise any specific issue of repeal, although we do recognize that the ’24 Act may still continue to exist to govern prior leases.

    The second premise of our argument is that the legislative history and purposes make clear that the ’38 Act is a replacement statute.

    The legislative history is clear that prior laws were considered inadequate; that the ’38 Act was proposed as a more satisfactory law for leasing of Indian lands for mining purposes; and it was proposed as an act to regulate mining on Indian land and not to amend prior laws.

    There were three major purposes of the 1938 Act: to bring uniformity to the area of Indian law or Indian mining; to bring mining leases into harmony with the Indian Reorganization Act; and to ensure that the Indians received the greatest economic return from their land.

    Each of these purposes would be thwarted–

    John Paul Stevens:

    On that last point, if everybody in 1939 had understood what the Solicitor in 1977 understood the statute to mean, would that not have required a holding that even the… there could be no tax, even on the non-Indian interest in the lease, because it would have affected the bargaining between the parties?

    Jeanne S. Whiteing:

    –I think it’s a question of when tax… how much the tax may impact, and it may be that under that policy some tax… some taxation would be possible but not–

    John Paul Stevens:

    Well, wouldn’t… I mean if the oil companies knew they had to bear the whole burden of the tax, wouldn’t they have adjusted the Indians’ royalty rate accordingly?

    Jeanne S. Whiteing:

    –I think that’s right, and actually that is our point in referring to the policy of both the IRA and the ’38 Act, to ensure that the tribes were economically revitalized.

    But the 1934 policy, IRA policy, and the 1938 Act obviously were not in effect in 1891 or 1924.

    They represent a significant change in Indian policy, and the 1938 Act was specifically than to comport with that significant change in policy.

    Byron R. White:

    Well, Ms. Whiteing, I would think that if you put that much in the ’34 Act, I would think state taxation any time after 1934 would have been bad, and if you say the ’34 Act has that much force, that it would have implicitly repealed any consent to taxation before that.

    Jeanne S. Whiteing:

    Well, I… I don’t want to indicate that the IRA had so much force in the overall scheme of things.

    Jeanne S. Whiteing:

    It’s one–

    Byron R. White:

    Well, if it didn’t by itself… if it wouldn’t have prevented taxes in 1935, I don’t know why if would have in 1938.

    Jeanne S. Whiteing:

    –I’m saying that it is one indication that Congress was looking to–

    Byron R. White:

    Well, not much of a one if it wouldn’t have affected the state’s tax power in 1935.

    Jeanne S. Whiteing:

    –I think that it… I think that it would have.

    Byron R. White:

    So you change your mind.

    Jeanne S. Whiteing:

    No, I’m not changing my mind.

    I’m just saying that it’s only one indication that–

    William H. Rehnquist:

    Well, how would it have affected state tax power in 1935, as you just said it would?

    Jeanne S. Whiteing:

    –Well, a specific policy of the IRA was state tax exemption.

    William H. Rehnquist:

    Do you think that if Congress had never passed the 1938 Leasing Act that the ’24 proviso authorizing taxation would have been rendered nugatory by the 1934 Act alone?

    Jeanne S. Whiteing:

    Not in itself.

    William H. Rehnquist:

    Well, then how… but you said that Act would affect taxation in 1935.

    How would it?

    Jeanne S. Whiteing:

    I don’t think it would have affected it specifically.

    It would certainly be–

    William H. Rehnquist:

    Oh, how would it have affected–

    Jeanne S. Whiteing:

    –something to look to.

    William H. Rehnquist:

    –How would it have affected it generally?

    Jeanne S. Whiteing:

    It was a… in terms of trying to interpret a particular act that may have purported to authorize taxation, it is a policy which could be looked to to determine what the meaning of that act is; and that is essentially the way we’re looking at it here.

    William H. Rehnquist:

    Well, then, you have to have another act in addition to the ’34 Act before your–

    Jeanne S. Whiteing:

    I don’t think the IRA in itself changes any tax authority that may have existed in any–

    William H. Rehnquist:

    –Well, I thought a moment ago you said it did.

    Jeanne S. Whiteing:

    –I did… I didn’t mean to indicate that.

    I only meant that it is certainly a policy to look to to determine whether taxation is authorized in any particular–

    Byron R. White:

    Well, if the ’24 Act didn’t to the trick and you must rely on the ’38 Act, and up until ’38 there was an express policy of permitting state taxation, I would think that there would have… you would expect to find some mention of that in the legislative history if Congress intended to dispense with taxation.

    Jeanne S. Whiteing:

    –I think that–

    Byron R. White:

    I mean even if you’re right on how the act should be construed, I would think there’d be some support for that construction in the legislative history; but I don’t see that you cite any to that effect.

    Jeanne S. Whiteing:

    –Well, neither is there support for the opposite–

    Byron R. White:

    Well, I know.

    Jeanne S. Whiteing:

    –side of that question.

    Byron R. White:

    I agree with… I agree with that.

    But I would expect to find something about it.

    Jeanne S. Whiteing:

    That point is precisely… the fact that there is silence of the Act I think cuts in favor of the tribe.

    Byron R. White:

    Well, it doesn’t… it doesn’t unless you win on how you construe the 1924 Act.

    Jeanne S. Whiteing:

    Well, I think it depends on the construction of the 1938 Act as a replacement act, if that in fact is the act that authorizes leasing on Indian land.

    Byron R. White:

    Suppose we don’t agree with you on your replacement theory and that all the ’38 Act is repeal any prior act that’s inconsistent with it.

    Suppose that.

    Then there will have to be some… something pretty express to repeal the ’24 permission, wouldn’t it?

    Jeanne S. Whiteing:

    Well, I think Section 7 of the ’38 Act in itself is an express repeal.

    After all, it does say that all acts or parts of acts inconsistent are repealed.

    Byron R. White:

    Well, what would be inconsistent with the ’38 Act?

    Jeanne S. Whiteing:

    There are a number of inconsistencies.

    First of all, the uniformity of purpose of the ’38 Act would be thwarted by application of the ’24 Act.

    Some lands would be… would be taxed but not others which are leased under the 1938 Act.

    John Paul Stevens:

    May I interrupt, because you made this argument before.

    I don’t understand the uniformity argument, because under your view, the ’24 leases are taxable and the ’38 leases are not.

    That’s not uniform.

    Jeanne S. Whiteing:

    We admit that there is some lack of uniformity to that particular–

    John Paul Stevens:

    But it seems to me your uniformity argument, it seems to me, would support like treatment for all the leases, and that’s the opposite of what you’re contending.

    Jeanne S. Whiteing:

    –Well, it does support like treatment, and this is our point for ’38… from 1938 forward.

    We do recognize that there is some lack of uniformity because post-’38 leases and pre-’38 leases would be treated differently; but that uniformity I think is… or lack of uniformity is less… is more acceptable than the lack of uniformity found otherwise.

    Warren E. Burger:

    Do you have anything… oh, excuse me.

    Oh, excuse me.

    I think we’ll give you some time, Mr. Kneedler.

    Edwin S. Kneedler:

    Thank you, Mr. Chief Justice, and may it please the Court:

    The state concedes in this case that there’s nothing in the language or the legislative history of the 1938 Act to authorize state taxation of leases issued under the Act, and that, in our view, is a sufficient answer to the state’s claim in this case; because it is well established that in the absence of an express authorization, states have no authority to tax on Indian reservations.

    There are a number of reasons why that principle is particularly forceful here.

    First of all, in 1937, just a year earlier, the same Congress that passed the 1938 Act revised the special Kwapaw Taxing Act that we discuss at page 19 of our brief in which Congress, in response to this very concern that states might be viewed to have power to tax absent some express authorization in the statute, put in statutory form the rule that it understood to be applied in such cases; and that is that Indian resources are held without being subject to state taxation in the absence of a waiver.

    And the Kwapaw tax statute is significant for another reason: because that tax, even though it applied in the special circumstances of Oklahoma that we describe at some length in our brief, induced Congress to authorize taxes.

    Edwin S. Kneedler:

    Congress nevertheless narrowed that particular tax to limit the type of tax, to limit the amount of the tax, to limit the minerals that it applied to.

    And in our view it seems quite unlikely that Congress, having done that for Indians that Congress had believed were appropriately subject to state taxation, would have intended to preserve by mere inference the much broader and open-ended tax authority that had been enacted in 1924.

    And this is especially so since the ’24 Act was specifically patterned after the Kwapaw taxing statute in Oklahoma.

    William H. Rehnquist:

    Well, then, you feel that even before the 1938 Act there was some limitation on the state power to tax granted by the ’24 Act?

    Edwin S. Kneedler:

    I do not, Justice Rehnquist.

    What I am suggesting is that the… is the tool of construction for construing the 1938 Act.

    I’m not suggesting that the Indian Reorganization Act or this Kwapaw statute of their own force narrowed the prior taxing authority, but for example, when Congress enacted the 1938 Act, it expressly did that to bring the ’38 leasing schemes into harmony with the policies of the Indian Reorganization Act.

    It’s that fact that makes the Indian Reorganization Act relevant, because Congress decided that the leasing program should be coordinated with the IRA, and for that reason it is appropriate–

    William H. Rehnquist:

    Where does the Kwapaw Tax Act fit into that?

    Edwin S. Kneedler:

    –Well, the Kwapaw… the Kwapaw Tax Act, which was passed in 1921, was the model for the 1924 Act.

    Congress when it enacted, the floor statement says, frankly, the only legislative history explaining the origins of the tax provision says it was patterned after the Kwapaw and Osage taxes in Oklahoma.

    But in fact, as we explain in our brief, the circumstances in Oklahoma were far different.

    The reservations had been abolished.

    The tribal governments had been abolished.

    William H. Rehnquist:

    Well, I thought you started out talking about a 1937 act.

    Edwin S. Kneedler:

    I did, but the 1921 Kwapaw statute was amended in 1937 to narrow its scope, even in Oklahoma where–

    William H. Rehnquist:

    But that affected the only Kwapaws.

    Edwin S. Kneedler:

    –It did, but it–

    William H. Rehnquist:

    The other Indians were all still in 1937 subject to the 1924 Act.

    Edwin S. Kneedler:

    –They were, but… but it… but Congress put in statutory form in the act itself, in the Kwapaw statute, the rule it understood, that absent an express authorization of the taxing statute–

    Byron R. White:

    Well, I gather what you’re saying, Mr. Kneedler, is that if we want to know what Congress thought about the policy, it was that the Indians, while restricted, the income therefrom was free from state taxation, except as said immunity is expressly waived.

    Edwin S. Kneedler:

    –That’s correct.

    That’s on page 19.

    William J. Brennan, Jr.:

    And you’re saying in the ’38 Act there’s no express weight.

    Edwin S. Kneedler:

    Precisely.

    William H. Rehnquist:

    Well, Mr. Kneedler, if… if Congress had this vision in 1937 of just what an Indian taxing scheme should look like, it’s strange that it chose to put it only in the Kwapaw Act and not in the 1938 Act.

    Edwin S. Kneedler:

    Well, there was… but the rule that’s stated in the Kwapaw statute is that there has to be an express waiver in the act that it was passing, and that since the 1938 Act does not contain any reference to state taxes–

    William H. Rehnquist:

    But the Kwapaw statute is not a statute that applies beyond the Kwapaws, is it?

    Edwin S. Kneedler:

    –No, but it… but it… but it does indicate Congress’ view of the… of the… of the rule with respect to state taxes.

    And it’s reasonable to assume that the same Congress that enacted it was following that rule in the ’38 Act by not authorizing taxes.

    John Paul Stevens:

    Mr. Kneedler, may I just ask another question about the Kwapaw?

    It says

    “except as said immunity is expressly waived. “

    It doesn’t say in the particular act, just as expressly waived.

    Do you not agree that there was an express waiver in the 1924 Act?

    Edwin S. Kneedler:

    Well, there… there was in the 1924 Act.

    John Paul Stevens:

    And… and what repealed that?

    Edwin S. Kneedler:

    Again, I… I view it not as a question of repeal as such, but–

    John Paul Stevens:

    But there was at one time an express waiver covering the lands at issue in this case.

    Edwin S. Kneedler:

    –There was, but what happened in 1938… and Congress did this rather explicitly… it said it was adopting a new comprehensive leasing scheme.

    And in 1942 Professor Cohen described this in the most contemporaneous construction of it as superseding prior leasing laws.

    That’s his description at page 87 of the 1942 treatise.

    So what Congress did was supersede prior leasing laws.

    And if you look at the 1924 Act–

    John Paul Stevens:

    Then does that mean it repealed those even not inconsistent with the new law?

    Edwin S. Kneedler:

    –It… well–

    John Paul Stevens:

    I mean there was an express waiver on the books.

    Was it repealed or was it not repealed?

    Edwin S. Kneedler:

    –It was not repealed because it still applied to leases issued under the 1924 Act.

    John Paul Stevens:

    So it isn’t limited in that language, if it’s still on the books and still effective then.

    Edwin S. Kneedler:

    Well, the 1938 Act is a break with the past.

    Section 1 of the Act says,

    “Hereafter, unallotted lands on Indian reservations shall be leased pursuant to the terms of the 1938 Act. “

    That is a break with the past of the prior leasing laws, including the 1924 Act.

    And, in fact, the 1924 Act itself reinforces that because it… as has been pointed out, the taxing proviso mentioning such lands refers back to unallotted lands that were subject to leasing under the 1891 Act.

    After 1938, no such lands were subject to leasing under the 1891 Act.

    And I don’t understand Montana to dispute that proposition.

    John Paul Stevens:

    Well, they really weren’t subject to leasing under the 1891 Act after 1924 either, because they were then subject to leasing under the 1924 Act.

    Edwin S. Kneedler:

    No.

    They were subject to leasing under both.

    Edwin S. Kneedler:

    This Court’s decision in British-American viewed the 1891 and 1924 Acts as a unit and said that there.

    So they were… they were… they were actually subject to leasing under both acts.

    And there’s another reason why the taxing provision can’t be thought to be carried forward here, and that’s that it’s in the form of a proviso.

    And this Court has established a presumption that a proviso is ordinarily thought to refer simply to the substantive provision to which it’s attached.

    And here, as has been pointed out, all of the substantive provisions dealing with the leasing… the term of the lease, et cetera… has been entirely superseded by the 1938 Act.

    If that’s the case, then the proviso that was simply appended to the prior substantive leasing authority–

    Byron R. White:

    Well, you sound as though it were awfully clear, and it took about 50 years to discover it, I gather.

    Edwin S. Kneedler:

    –Well, but–

    Byron R. White:

    Or 40, 40 years to discover it, because didn’t… weren’t states permitted to tax, and didn’t they tax for 40 years after ’38?

    Edwin S. Kneedler:

    –Well, the record seems–

    Byron R. White:

    Did they or didn’t they?

    Edwin S. Kneedler:

    –The record seems quite unclear in this case exactly… exactly–

    Byron R. White:

    Well, don’t you know the fact?

    Edwin S. Kneedler:

    –I don’t know any more than is in the record in this case and–

    Byron R. White:

    Well, do you know that the Department of Interior thought that the states were allowed to do that for 40 years?

    Edwin S. Kneedler:

    –Well, they did.

    There was a–

    Byron R. White:

    Did they or didn’t they?

    Edwin S. Kneedler:

    –There was a Solicitor’s opinion in 1956 which is the… which is the… which is the earliest–

    Byron R. White:

    Well, reading the 1977 opinion, I… I would… that certainly acknowledged that the Interior Department had a different view before that.

    Edwin S. Kneedler:

    –In 1956.

    But as I mentioned, the earliest–

    Byron R. White:

    Well, continuously since 1938.

    Edwin S. Kneedler:

    –Well, but from 1938 there’s no indication that the Interior Department focused on the question at all.

    In fact, as I mentioned, the most contemporaneous construction of the statute is Professor Cohen’s in 1942 saying that the 1938 Act superseded–

    Byron R. White:

    Well, he’s not a… he’s not charged with the administration of the statute, is he?

    Edwin S. Kneedler:

    –Well, no, but he was intimately involved… I mean not in a formal sense, but he’s generally recognized as being intimately involved in a manner in which–

    Byron R. White:

    Well, I suppose if we… I suppose we could take judicial notice as to whether… whether states were collecting taxes like this in the interim.

    I don’t suppose it’d be very hard to find out–

    Edwin S. Kneedler:

    –Well, it doesn’t–

    Byron R. White:

    –Do you know what the fact is or not?

    Edwin S. Kneedler:

    –I do not, but what I do know is from what the record shows, there were only two states that appear to have done it.

    And we have no indication that this is… that this is not–

    Byron R. White:

    Well, only two.

    Well, what about… what about the two?

    Were they collecting all these years or not?

    Edwin S. Kneedler:

    –Montana appears to have been collecting it all these years.

    Byron R. White:

    Well, that’s all I asked you really.

    Edwin S. Kneedler:

    And… well, I’m sorry.

    And New Mexico was… was… was also collecting, was also collecting.

    Byron R. White:

    Isn’t it also–

    –So you do know that there are two states–

    Edwin S. Kneedler:

    Yes.

    I’m sorry.

    I thought… I thought you meant was there a general pattern.

    No.

    The record certainly shows that Montana and New Mexico were.

    But it’s also–

    John Paul Stevens:

    –Isn’t it also true that the Secretary of the Interior approved all these leases?

    Edwin S. Kneedler:

    –Yes.

    But the leases themselves did not, to my knowledge–

    John Paul Stevens:

    They didn’t know how the money… they didn’t know how the tax burden was going to be–

    Edwin S. Kneedler:

    –The leases themselves do not reflect the taxing, to my knowledge.

    I wanted to mention one other thing about the Indian Reorganization Act, and that is that the taxing authority here was part and parcel of the allotment policy, because the tax applied here to lands, unallotted lands that were expected to find their way into the full jurisdiction and taxing authority of the states when they passed into non-Indian hands.

    And the 1934 Act abandoned the allotment policy.

    Warren E. Burger:

    –Are the views of Department of Interior binding on us, or are they merely straws in the wind?

    Edwin S. Kneedler:

    Well, they are not… they are not binding, but this Court has indicated that the… that the persuasive force of the views of an administrative department depends on the factors or various factors, including whether it was contemporaneous.

    Here it wasn’t.

    The thoroughness with which it was considered.

    Here there’s just a paragraph and a half in the 1956 opinion on the subject.

    Edwin S. Kneedler:

    So all of the factors that this Court said and identified in Skidmore and General Electric v. Gilbert point against deferring to the administrative interpretation.

    Warren E. Burger:

    Very well.

    Ms. Boggs.

    Deirdre Boggs:

    Thank you, Your Honor.

    Your Honor, we would agree with Mr. Kneedler that the 1942 edition of Cohen should be looked at here.

    And Mr. Kneedler cites us to Cohen for the proposition that the ’38 Act superseded the ’24 Act and that that supersession does away with the tax authority.

    Mr. Cohen on another page that none of us have cited in our briefs, page 257, talks about–

    257 of what?

    Deirdre Boggs:

    –Of his 1942 edition of “Federal Indian Law”… excuse me… talks about the authority of states to tax.

    This was after 1938 that he put out this edition.

    And there in that section he refers to the 1924 Act as the example of states’ authority to tax as granted by Congress.

    It’s clear that in the earlier page that Mr. Kneedler refers to that Felix Cohen is referring to the leasing provisions, not the taxation provision, in the 1924 Act.

    The tribe insists that this is a case involving statutory construction, and it is.

    And the tribe went through the fact that the ’38 Act incorporates and carries forward all parts of the ’24 Act except the taxation authority.

    The reason for this is that Congress had very specific defects in mind with the Indian mineral leasing that it set forth to cure; and it has told us what those defects are.

    One is that on some reservations no leasing was permitted.

    A major defect is that in many cases where leasing was permitted… for example, in the 1919 Act… the tribe had absolutely nothing to say about whether or not there would be leases.

    They didn’t have a thing to say about it.

    Another defect was that in many cases there could not be long-term leases, which, of course, prohibited production.

    And, in general, the defects inherent in the 1919 Act for metals where the public land laws applied to minerals… mineral leasing on Indian reservations were seen as things that needed to be cured.

    They do not see taxation as a problem that needs to be cured.

    The replacement theory I think doesn’t work, can’t work in this case where you have a repealer that repeals only things inconsistent with the act stated, especially when we have Congress telling us what they’re doing with the ’38 Act.

    And what they’re doing is taking care of specific defects which do not include taxation.

    I’d just like to quickly say one other thing.

    I wasn’t clear on whether Mr. Kneedler indicated whether or not the U.S. knew or didn’t know about the taxation in the state of Montana.

    Part of the evidence submitted to the district court by the tribe included sheets where the U.S. Geological Survey specifically credited to the tribal royalty the amount of taxes paid by the producers.

    There are sheets and sheets of this where the United States has given credit to the producers on the royalty payments.

    And the other thing that again was in the district court record… it’s not part of the printed record here; it’s attached to briefs in the district court… is a letter, 1978, from the Geological Survey, again to the producers, indicating that this past policy of crediting to the royalty payments the taxes or some of the taxes that they paid will no longer happen, indicating again that the practice had been to do that pretty consistently.

    Thank you.

    Warren E. Burger:

    Thank you, counsel.

    Warren E. Burger:

    The case is submitted.