Montana v. Crow Tribe of Indians

PETITIONER: Montana
RESPONDENT: Crow Tribe of Indians
LOCATION: United States Shoe Corporation

DOCKET NO.: 96-1829
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 523 US 696 (1998)
ARGUED: Feb 24, 1998
DECIDED: May 18, 1998

ADVOCATES:
Clay Riggs Smith - Argued the cause for the petitioners
Jeffrey A. Lamken - Department of Justice, argued the cause for the federal respondents
Robert S. Pelcyger - Argued the cause for the private respondent

Facts of the case

In 1904, the Crow Tribe ceded part of its Montana Reservation to the United States for settlement by non-Indians, with the U.S holding the rights to the minerals underlying the ceded strip in trust for the Tribe. In 1972, pursuant to the Indian Mineral Leasing Act of 1938 (IMLA), Westmoreland Resources, Inc., a non-Indian company, entered into a mining lease with the Tribe for coal underlying the ceded strip. In 1975, Montana imposed a severance tax and a gross proceeds tax on all coal produced in the State, including coal underlying the reservation and the ceded strip. In 1978, the Tribe brought a federal action for injunctive and declaratory relief against Montana and its counties, alleging that the State's severance and gross proceeds taxes were preempted by the IMLA and infringed on the Tribe's right to govern itself. Ultimately, the Court of Appeals concluded that both taxes were preempted by the IMLA and void for interfering with tribal governance. The U.S. Supreme Court summarily affirmed. Subsequently, the Tribe sough to recover certain taxes paid by Westmoreland. The District Court then concluded that the disgorgement remedy sought by the Tribe was not appropriate. The Court of Appeals reversed.

Question

Is the restitution sought for the Crow Tribe from the State of Montana for the illegal collection of taxes and cola mined on the Tribe's reservation warranted?

Media for Montana v. Crow Tribe of Indians

Audio Transcription for Oral Argument - February 24, 1998 in Montana v. Crow Tribe of Indians

William H. Rehnquist:

We'll hear argument now in Number 96-1829, Montana v The Crow Tribe of Indians.

Mr. Smith.

Clay Riggs Smith:

Mr. Chief Justice and may it please the Court--

The issue today is whether a Federal court may award to respondents, Crow Tribe and the United States, 58 million paid to the petitioners by a third party, Westmoreland Resources.

Reduced to its essentials, the respondents' theory is that a Federal court has this discretion and in reality the obligation to make such an award merely because the taxes have been held preempted and the actual taxpayer has no entitlement to their recovery.

Sandra Day O'Connor:

Mr. Smith, I'd like to pursue with you what you assert is the underlying cause of action here.

Is it for some kind of breach of tribal sovereignty, some Federal cause of action, or is it limited to a cause of action for money had and received based on an implied contract?

Clay Riggs Smith:

Justice O'Connor, we believe the action in this matter is limited to a cause of action for money had and received, a cause--

Sandra Day O'Connor:

Well, that's interesting, because I thought it had been determined in earlier litigation that there was a Federal cause of action here based on a... an invasion of tribal sovereignty and a preemption by Federal law of any State tax law.

Clay Riggs Smith:

--Your Honor, that is--

Sandra Day O'Connor:

And I thought we had basically summarily affirmed that notion.

Now, is that right or wrong?

Clay Riggs Smith:

--Your Honor, that is correct in the Crow II decision, the 1987 Ninth Circuit decision.

Right.

Clay Riggs Smith:

The court of--

Sandra Day O'Connor:

So are we dealing here in this suit with what remedy is appropriate based on that theory?

Clay Riggs Smith:

--Yes, Your Honor, we are, but I would add, by way of further elaboration, that in determining the appropriate remedy I think the Court is confronted with the question of whether a Federal cause of action or a Federal common law claim should be recognized under these circumstances for--

Sandra Day O'Connor:

Well, if it's been determined that there is some breach of tribal sovereignty by the State of Montana, and if what we at bottom are faced with here is what's the remedy, then I think your argument might focus on what should be the remedy, and it's entirely possible to me that it shouldn't be just a disgorgement of all the taxes but, rather, a requirement that the Court would have to look at what injury was suffered by the tribe in crafting the amount of the remedy.

Is that an argument you make, or not?

Clay Riggs Smith:

--Your Honor, that is not precisely the argument we make.

No, I didn't think so.

Clay Riggs Smith:

The argument we make, if I may go on, is that in this case we essentially dealt... played the hand we were dealt in terms of the respondent's theory and their theory of recovery, as set forth in their amended complaints and, indeed, in subsequent pleadings and in the pretrial order, was a theory which sought recovery of taxes paid by Westmoreland Resources.

Had... had the respondents attempted to recover compensatory damages, that is to say, damages directed specifically to the injury that the tribe suffered with respect to the marketability of its coal, we would have an entirely different case than we have before us today.

Anthony M. Kennedy:

And the complaint was amended, as I recall, after our affirmance in Crow II?

Clay Riggs Smith:

Yes, Your Honor, that is correct.

It was amended in 1989 by the tribe, it's fourth amended complaint, and the United States filed essentially the same complaint 6 months later in 1990.

Anthony M. Kennedy:

Is money had and received the same as restitution?

Clay Riggs Smith:

Your Honor, I would say not.

Restitution is a broader concept which covers a rather extensive range of potential remedies.

Stephen G. Breyer:

Why can't they just get restitution?