Oklahoma Tax Commission v. Sac and Fox Nation

PETITIONER:Oklahoma Tax Commission
RESPONDENT:Sac and Fox Nation
LOCATION:Austin’s Auto Body Shop and mobile home

DOCKET NO.: 92-259
DECIDED BY: Rehnquist Court (1991-1993)
LOWER COURT: United States Court of Appeals for the Tenth Circuit

CITATION: 508 US 114 (1993)
ARGUED: Mar 23, 1993
DECIDED: May 17, 1993

ADVOCATES:
David Allen Miley – on behalf of the Petitioner
Edwin S. Kneedler – on behalf of the United States, as amicus curiae
G. William Rice – on behalf of the Respondent

Facts of the case

Question

Audio Transcription for Oral Argument – March 23, 1993 in Oklahoma Tax Commission v. Sac and Fox Nation

William H. Rehnquist:

We’ll hear argument now in No. 92-259, the Oklahoma Tax Commission v. the Sac and Fox Nation.

Mr. Miley.

David Allen Miley:

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

This case involves whether the State of Oklahoma may tax the income of a tribal member who is employed by the tribe, the Sac and Fox Nation, and whether Oklahoma may impose motor vehicle taxes on automobiles owned by tribal members of the Sac and Fox Nation.

The Sac and Fox Nation imposes its own income and motor vehicle taxes, as the State does.

The lower courts have enjoined the… Oklahoma from collecting these taxes, and the State feels that this injunction is improper for two reasons.

There is no Federal law which preempts State law in this area, and the State law–

Byron R. White:

But this involves State taxation of tribal members.

David Allen Miley:

–This involves State taxation of tribal members, yes.

Byron R. White:

Who are living where?

David Allen Miley:

Who… some of the tribal members live on Indian country and some do not live on Indian country.

Byron R. White:

And the… but it involves both… all of those members.

David Allen Miley:

All tribal members.

We were enjoined from taxing all tribal members who worked for the tribe or any tribal members who properly license their car with the tribe.

And those tribal members, some live off the Indian country and some live on Indian country.

Of course, we have a situation where Indian country is scattered among several… is scattered among small plots in an area that is otherwise under State jurisdiction.

Sandra Day O’Connor:

What are you including in the term Indian country when you refer to it?

David Allen Miley:

That would be trust land, that is, land that is held in trust by the United States of America for the benefit of the tribe itself or for the benefit of an Indian tribal–

Sandra Day O’Connor:

An individual.

David Allen Miley:

–An individual person.

Sandra Day O’Connor:

Are all of the so-called allotted lands here lands that are held in trust by the Government for tribal members?

David Allen Miley:

Yes, they would be or they’d be held under an allotment deed, but the allotment deeds are quite old.

But mainly we’re talking about trust land, but we are talking about allotted land also in this area.

Sandra Day O’Connor:

If it’s allotted, deeded, and not held in trust, do you count that as Indian country as well?

David Allen Miley:

Yes.

Under the Federal definition under the Federal statute, 18 U.S.C., section 1151(c), that land… an Indian allotment is included in the term.

Byron R. White:

That’s as long as the–

–The Government holds title.

That is as long as the–

David Allen Miley:

The Government.

Byron R. White:

–Until they… if it has been transferred to a non-Indian.

David Allen Miley:

Now, that’s true.

It could be… an original allottee may have transferred that or it may have been devised to a non-Indian–

Byron R. White:

So, that’s not–

David Allen Miley:

–and BIA–

Byron R. White:

–That’s not Indian country there.

David Allen Miley:

–Correct.

If the BIA–

Byron R. White:

So, it still has to be in the hands of a member.

David Allen Miley:

–Correct.

And it has to be… most land we’re talking about is held in trust by the United States Government.

Byron R. White:

What if the Government has conveyed the patent to the allottee, but the allottee is an Indian?

Is that land still Indian country?

David Allen Miley:

Well, if the Indian tribal member owns deed land, just the fee title to the land, and there is no trust or restricted status to the land, then that would not be Indian country just because the Indian would own it.

Byron R. White:

So, when you refer to Indian country, you are not referring to fee lands owned outright by individual Indians.

David Allen Miley:

Correct.

And even fee lands that are owned by the tribe itself would not be Indian country.

That land would have to be accepted into trust by the Bureau of Indian Affairs.

Many times… and tribes do in Oklahoma acquire parcels of land and hold it in fee.

BIA has complete discretion whether to accept that land in the trust if the tribe requests it.

Sometimes the BIA accepts it into trust, and sometimes the BIA does not.

So, it must be held in trust to be Indian country.

David H. Souter:

Go ahead.

If you should lose with respect to Indians who are living on trust lands, should you also lose with respect to those who are not living on trust lands?

And if the answer is no, why is the distinction important?

David Allen Miley:

Well, I don’t think the distinction… we can make a distinction.

But if I lose with respect to the Indians on the trust lands, that would have to be because they are within some sort of tribal jurisdiction that is exclusive of State jurisdiction so that outside of that territory on non-Indian country lands, then the State of Oklahoma would have complete jurisdiction over that individual.

And we’re talking about the taxation of an individual person, not the tribe.

David H. Souter:

So, you’re saying the criterion strictly is a territorial jurisdiction criterion, and therefore you would not have to lose with respect to those nontrust lands.

David Allen Miley:

Correct, but–

David H. Souter:

Is there any other competing theory of jurisdiction?

David Allen Miley:

–Well, here the tribe does not have exclusive jurisdiction because I think we’ve got to look at the Federal statute, the relevant Federal statute, so that in this case even on Indian country within Oklahoma, individuals living on Indian country are taxable by the State in Oklahoma.

Now, that is because the allotment agreement, if we… which is the McClanahan case, set up the idea that… that case dealt with the Navajo reservation in Arizona.

And that Navajo reservation was set up exclusively for the tribe, and the tribe was allowed to exclude non-Indians or impose conditions on those that were allowed to enter.

Here the Sac and Fox Nation did have a reservation which was established about the same time, in the… 1867, about the same time the Navajo reservation was established.

However, in 1891, the Federal Government… Congress passed the allotment agreement or enacted the allotment agreement which allotted all the lands of the reservation to the tribal members at that time.

Byron R. White:

Or the tribe.

David Allen Miley:

The tribe got about 800 acres.

Byron R. White:

Yes, all right.

Go ahead.

David Allen Miley:

This is a fairly… this was a fairly large reservation in central Oklahoma.

But even giving acreage to the tribe, even giving a quarter section to each tribal member, they had huge amounts of land left over, and they opened that up.

President Harrison opened that up to the legendary land runs and all people of all kinds came in and took the land.

And the tribe was not allowed to exclude those or impose any conditions on them.

And so, implicit in the terms of that allotment agreement, the relevant statute in this case, we find that the tribe has lost the autonomy that the Navajo Nation has.

Byron R. White:

So, you say this case only concerns Indians that are living on trust lands?

David Allen Miley:

Well, it concerns–

Byron R. White:

In terms of what the State is… you think that if they’re living off the trust lands, the State may–

David Allen Miley:

–Well–

Byron R. White:

–impose taxes?

David Allen Miley:

–Correct.

These are tribal members who work for the tribe.

Now, I think many tribal members don’t work for the tribe.

Byron R. White:

Right.

David Allen Miley:

They work for–

Byron R. White:

Right.

David Allen Miley:

–various places, and they… there is no argument that they are taxable, but here we have tribal members–

Byron R. White:

Who are not living on trust lands who are working for the tribe.

David Allen Miley:

–Who are working for the tribe, and some–

Byron R. White:

And they are at issue here.

David Allen Miley:

–They are at issue because the lower courts held that if you… if the Indian or the tribal member works for the tribe, they do not owe taxes.

Period.

Byron R. White:

Now, what about tribal members who do not live on trust land, but who are working for the tribe But does the same… you run into the same problem about the automobile tax?

David Allen Miley:

Right.

That’s correct.

Byron R. White:

You do.

David Allen Miley:

That’s correct.

The way the tribal scheme is set up… well, you don’t even have to be a tribal member to get a tribal tag necessarily.

Byron R. White:

Well, I know.

I know.

David Allen Miley:

But the–

Byron R. White:

Unless you’re a tribal member, the State has no barrier to insisting on their paying the excise tax.

David Allen Miley:

–Right.

Yes, in terms of our own taxes, we feel that even though you pay tribal taxes in either instance, you owe the State taxes also.

Now, so we’re talking about the tribal members on Indian country and off that are tagging their cars with the tribe.

Antonin Scalia:

What is the significance of… as to the first tax, income tax, why is it significant that the Indian who is living on the trust land works for the tribe?

What if the Indian doesn’t work for the tribe, works for somebody else on the trust land?

Is there any contention that that Indian does not owe income tax?

David Allen Miley:

Well.

I think this case started out much broader, and the tribe would argue that would be the case.

Antonin Scalia:

Yes, I thought they would.

David Allen Miley:

I would argue that… well, and the Tenth Circuit did not see it so broadly.

They felt that in order… in this circumstance, where we do not have this exclusive type statute, that the fact that they were working for the tribe was the deciding factor as to whether they were taxable or not because our tax somehow infringed on tribal self-government.

Antonin Scalia:

It seems to me that the theory of getting off is either a tribal self-government theory, in which case you ought to get off whether you’re on or off trust land so long as you’re working for the tribe, or else the theory is a territorial theory, in which case you ought to get off so long as you’re living on trust land whether or not you’re working for the tribe.

David Allen Miley:

Okay, but this case does not fall very neatly into the on/off dichotomy because people are constantly going on and off the Indian country because you cannot conduct your daily affairs of life in Oklahoma on strictly Indian country.

You have got to proceed outside of Indian country to do that because you’ve got 160 acres of Indian country here and 160 acres down the road.

And so, if you’re living on Indian country, you’re necessarily going to have to go off to take care of any business.

So, you have… what we have here is a situation where Indians are going off Indian country to work and to shop.

And what the tribe is saying in this instance is, well, if they work for us, they don’t owe any taxes, and if they happen to buy something that they’re going to take back to Indian country like a car, then they don’t owe taxes either.

Well, that–

Byron R. White:

What does the tribe say about people who don’t work for the tribe, but who live on Indian country and go off and buy an automobile?

David Allen Miley:

–Well, they would say that just because they live on Indian country, they’re within the tribal jurisdiction, you see, and that they would not be responsible for–

Byron R. White:

Well, how about on income tax?

David Allen Miley:

–On income tax–

Byron R. White:

Do they claim that Indians who live on trust lands, but who don’t work for the tribe, and… but live off of trust lands, away from trust lands… do they claim that the State may not tax those Indians… income tax those Indians?

David Allen Miley:

–Okay, now, income for a person who… a tribal member who lives off of Indian country?

Byron R. White:

Who lives on the trust lands–

David Allen Miley:

Who lives on.

Byron R. White:

–but works off of trust lands.

David Allen Miley:

Works off of trust lands.

Byron R. White:

And not for the tribe.

David Allen Miley:

Not for the tribe.

Okay.

They would argue that because the person lives on Indian country, that that would be exempt from State taxation.

Byron R. White:

Is that issue in… is that at issue in this case–

David Allen Miley:

Well, no.

The Tenth Circuit–

Byron R. White:

–among other things?

David Allen Miley:

–The Tenth Circuit did not… the Tenth Circuit ruled that only those tribal members who work for the tribe were eligible for this exemption in this case because I believe they were having a little trouble with the fact that we can’t find an existing reservation here.

For instance, in the McClanahan case, the tribal member did not work for the tribe in that case.

She lived on the reservation.

She worked on the reservation.

She earned all her income on the reservation, and because the Federal Government, in their statute that created the Navajo reservation, granted the tribe the exclusive jurisdiction over that land–

Byron R. White:

Sure.

David Allen Miley:

–the State was not allowed to come in and tax her.

Well, the Tenth Circuit couldn’t quite get there with that case because we have the situation of the allotment agreement.

Byron R. White:

Well, under McClanahan, what if that person who lived on the reservation, the Navajo reservation, earned his or her income off the reservation?

David Allen Miley:

Off the reservation, they… I believe it’s… in Arizona they would pay the State income taxes.

Byron R. White:

Well, is there… did McClanahan rule that or another case?

David Allen Miley:

McClanahan did not–

Byron R. White:

Yes.

David Allen Miley:

–did not hold that.

Byron R. White:

Did some other case?

If some other case did, I would think it would control–

David Allen Miley:

No, I–

Byron R. White:

–control the issue in this case of Indians who lived on trust land, but who were earned their income off trust land.

David Allen Miley:

–Well, I can’t think of a case right offhand that–

Byron R. White:

Yes, all right.

David Allen Miley:

–does that.

Byron R. White:

Go ahead.

David Allen Miley:

But in terms of the income tax here, I believe this Court has already ruled… well, the Supreme Court has ruled in the 1930’s that… in the case of Leahy v. State Treasurer, which relied on Choteau v. Burnet, where you had the situation of an Indian, an Osage Indian, who lived on Indian country and earned income from the tribal mineral resources, and he was taxable on the income that he earned on those tribal mineral resources in that case because there was not this type of reservation that you have in the Navajo cases.

And then coming a few years later in Oklahoma Tax Commission v. U.S., the Supreme Court also ruled that members of the five civilized tribes would owe Oklahoma estate taxes on their estates which included Indian country, where they lived, their homestead allotments.

Anthony M. Kennedy:

Just one more question on this preliminary part of your argument.

If we rule for you… pardon me.

If we rule against you on your point, does the case still have to go back to determine whether or not you have jurisdiction to tax people that are in Indian country, or do we have to… we can remand for that, can’t we?

David Allen Miley:

Well, I don’t–

Anthony M. Kennedy:

I mean, because if you don’t have civil or criminal jurisdiction over Indian country–

David Allen Miley:

–Yes.

Anthony M. Kennedy:

–which I take it you don’t, and McClanahan says that’s that the key for taxation, and if the Tenth Circuit didn’t reach that, we don’t necessarily have to reach that issue in this case, do we?

We can remand.

David Allen Miley:

Well, I don’t think I agree with your reasoning that you’ve got to have civil and criminal jurisdiction.

I think the whole basis of the McClanahan case was that the Navajo treaty preempted State law.

And so, in this case, we have an allotment agreement that did away with that exclusive treaty and implies that State law now applies, and we have cases, Supreme Court cases, that suggest… that I believe are applicable to this situation, that conclude that State law, State tax law, does apply for an individual’s income.

Anthony M. Kennedy:

All right.

So, we think we should resolve that issue here in this case.

David Allen Miley:

Yes, I do.

Anthony M. Kennedy:

All right.

David Allen Miley:

So, I think, though, that one of the things that the lower courts did not… declined to do was resolve the reservation issue of whether what… to what extent the reservation exists, and I believe that is a necessary part of a finding in this case.

I believe that in order to reach the conclusion, if in fact State law infringes on tribal self-government, you’ve got to find the reservation where it is acting on, and I think you’d have to have an exclusive reservation in order to… if in fact the State law will be an infringement on the tribal government in this case.

And I don’t think that was what Congress intended when they passed the allotment agreement.

David Allen Miley:

I think we’ve got to give the allotment agreement as broad a sweep as the Congress intended that passed the act, and in that case, they were terminating the reservations in the State of Oklahoma to, in fact, create the State.

And I think it… in reading in the accounts in the case of the case that I cited, Woodward v. DeGraffenried–

Byron R. White:

–Mescalero case?

Mescalero held that if a tribe sets up a business off the reservation, it’s subject to the State gross receipts tax.

David Allen Miley:

–Correct.

In that case–

Byron R. White:

Do you suppose that would cover… that would control a case of an individual Indian working off the reservation earning income?

David Allen Miley:

–Well, that’s correct.

It would.

And I think that case did rely on the earlier Oklahoma cases to some extent.

I… the Mescalero case, however, dealt with a tribe off of a reservation–

Byron R. White:

Yes, well, I’m talking about–

David Allen Miley:

–and an individual–

Byron R. White:

–an individual Indian, and certainly the tribe is located on the reservation.

David Allen Miley:

–On the reservation.

Byron R. White:

An individual Indian living on the reservation goes off the reservation that’s his… and his regular work place, where he earns income, is not on the reservation.

David Allen Miley:

Correct.

So, in that case, that case, as well as earlier cases, like Ward v. Racehorse, hold that when Indians leave Indian country, they’re subject to State law as all other persons are.

Byron R. White:

What does it mean if working for the tribe is a… was a big factor in the decision below, which you think it was–

David Allen Miley:

Yes.

Byron R. White:

–What does it mean working for the tribe in terms of residence?

To work for the tribe, do you… does it… do they have to work on Indian country?

David Allen Miley:

Well, in this case, the headquarters building is on Indian country.

Byron R. White:

Well, I know that, but are those the only people who can be said to be working for the tribe?

David Allen Miley:

I believe some employees would probably perform some duties off of Indian country in this case.

So, I… yes, there could a situation where you would have an employee that would be working off of Indian country for the tribe.

Most definitely.

William H. Rehnquist:

What do you understand the Leahy case to stand for?

David Allen Miley:

Well, in that case, I believe it stands for the fact that when Indians within Oklahoma… the tribes do not have the autonomy that reservation tribes in other States do.

I think the Court in that case was recognizing the fact that Indian governments do exist in Oklahoma.

David Allen Miley:

Indian country does exist in Oklahoma, but that’s not the determining factor.

That’s not what we’re trying to determine here.

We’re trying to determine what… how Congress treated these tribes.

They did not give these tribes the exclusive autonomous situation that they gave the Navajos.

William H. Rehnquist:

Did you cite Leahy to the Tenth Circuit?

David Allen Miley:

Yes, I did.

William H. Rehnquist:

And did they deal with it at all in their opinion?

David Allen Miley:

They did not deal with it in their opinion.

I believe it is fairly much squarely opposed to their opinion in my view.

So, they instead relied on the later case of McClanahan to support their position.

But I think the problem with, you know, relying on the McClanahan case is that they quoted the language in McClanahan that said the Federal statute requires that the State law be excluded in this area, and the Tenth Circuit did not point to any Federal statute that excludes law for Oklahoma in regards to the Sac and Fox Nation.

I think that relevant statute is the allotment agreement and it does… nothing in that allotment agreement would presume to exclude State law.

I think it was the intent of that agreement to terminate the reservations and to include State law.

Byron R. White:

Well, don’t you think the tribe on the 800 acres that it was allotted… and it’s held in trust by the United States?

David Allen Miley:

Yes.

Byron R. White:

Don’t you think the tribe can control who is permitted to enter that piece of trust land?

David Allen Miley:

As much as any private landowner would, yes.

Byron R. White:

Well, that’s pretty big, isn’t it?

David Allen Miley:

Uh-huh.

Byron R. White:

You could… they can put of a fence around the whole thing, can’t they?

David Allen Miley:

Right.

Byron R. White:

And so, isn’t it dedicated to their exclusive use?

David Allen Miley:

Yes, it is, but–

Byron R. White:

So, how does that differ from the notion that some person who lives and works and earns money on the Navajo reservation is not subject to State income tax?

David Allen Miley:

–Well, the Federal statute that allotted the land to the tribe in this case did not provide that there would be any type of exclusive jurisdiction for this tribe.

Byron R. White:

Well, it may not, but you just said that it… you just said that the tribe has complete control of this land and can keep people off of it.

David Allen Miley:

Well–

Byron R. White:

So, where did that come from?

David Allen Miley:

–Well–

Byron R. White:

It doesn’t come from State law apparently.

David Allen Miley:

–No.

It came from–

Byron R. White:

It comes from Federal law.

David Allen Miley:

–Federal law.

Yes.

Byron R. White:

Well, then maybe the allotment act didn’t expressly provide for it, but somewhere under the atmosphere, you say Federal law gives the tribe complete control of that land, that 800 acres.

David Allen Miley:

Yes, that 800 acres, subject to the… you know, BIA’s oversight.

William H. Rehnquist:

Well, I thought you said it had… the tribe had the same rights as a private property owner would have–

David Allen Miley:

Correct.

William H. Rehnquist:

–to exclude.

Well that would suggest State law, wouldn’t it?

David Allen Miley:

No.

Well, this… under… with this Indian country, they would be subject to the BIA’s oversight as far as what they want to do with the land.

Certainly they would have to get approval for those types of things.

So, it is kind of… in that sense that it would be under more Federal jurisdiction I believe.

Byron R. White:

Well, the only difference between the Navajo reservation example I just gave you and this is that it’s very likely that most of the Indians, or is it… very likely that most of the Indians who work for the tribe on their 800 acres do not live on the 800 acres?

David Allen Miley:

Most likely they do not.

Byron R. White:

They do not.

David Allen Miley:

Thank you.

William H. Rehnquist:

Thank you, Mr. Miley.

We’ll hear now from you, Mr. Kneedler.

Edwin S. Kneedler:

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

There are two possible theories of immunity from State taxation at issue in this case, and they were the ones identified–

Byron R. White:

Well, could I ask you just at the outset–

Edwin S. Kneedler:

–Yes.

Byron R. White:

–do you support and defend the decision of the Tenth Circuit?

Edwin S. Kneedler:

Not in its entirety, Justice White.

Byron R. White:

I didn’t think so.

Edwin S. Kneedler:

No.

Byron R. White:

So, go ahead.

Edwin S. Kneedler:

Yes.

We… there are two possible theories.

Under one of them, the territorial theory, essentially the principles synthesized by this Court in McClanahan, we think the court was mistaken.

The court of appeals seemed to believe that it was sufficient if the Indian earns his income within Indian country irrespective of where he resides.

In McClanahan itself, however, the Indian both lived and worked on the Indian reservation.

It’s common for States… and Oklahoma is one of these States… to tax income on the basis of either where the individual resides or works, and as long as that statute is applied in an evenhanded manner, the territorial principles, McClanahan would not bar the tax if the individual either resided or worked off the reservation.

We do think it’s significant, however, that Oklahoma affords a credit to a resident who works in another State, but does not afford a comparable credit to a resident who works for the Indian tribe.

So, in the example of someone who… an Indian who lives off the reservation, but works on the reservation, we would think a parallel to Oklahoma’s own State taxing scheme would suggest that a credit might be given.

And that’s… that is we think something that could be decided on remand.

But because the court of appeals–

Harry A. Blackmun:

Is that… Mr. Kneedler, is that something that has been ruled upon or is that just practice that you’re referring to?

Edwin S. Kneedler:

–It’s… Oklahoma’s own tax code provides that, and the amicus brief filed in this case by a number of States identifies that as a common practice.

Byron R. White:

But it’s never… you don’t know of any case that says that Oklahoma automatically does that for the person who is taxed by an Indian tribe.

Edwin S. Kneedler:

Oklahoma does not do that for an Indian tribe.

And we think this case should be remanded because the… a necessary aspect of the McClanahan analysis is where the individual resides and works.

We think the case should be remanded insofar as the McClanahan analysis is concerned to determine exactly where the tribal employees do live and work.

We assume that most of the tribal employees work in Indian country, but it’s–

Byron R. White:

What’s your view if they don’t?

Edwin S. Kneedler:

–If they–

Byron R. White:

If they don’t live on the… they work for the tribe on Indian country, but they live off of it.

What’s your view?

Edwin S. Kneedler:

–In that event, we believe the State could tax them, although we think on remand, the court could examine this question of whether a credit should be given for the income tax paid–

Byron R. White:

Exactly.

Edwin S. Kneedler:

–to the tribe.

Antonin Scalia:

On what basis?

Equal protection?

Is that it or what?

Edwin S. Kneedler:

I would… I think general Indian law principles in the Indian commerce clause.

I think there’s a relative balancing of the State tribal interests in a situation like this, and in a situation like this where… particularly where the individuals are employed by the tribe itself.

John Paul Stevens:

It seems to me, Mr. Kneedler, in that case the tribe could tax them 100 percent, and then get a 100 percent deduction from their… because they all work for the tribe.

John Paul Stevens:

So, the income is paid by the tribe to them.

Then take some of it back in the form of taxes.

Could they just tax 100 percent and then say that we want a credit from the State income for that amount?

Edwin S. Kneedler:

Well, I think the… I think there may be some resistance on the part of the Indian–

John Paul Stevens:

Well, maybe 50–

Edwin S. Kneedler:

–The political process within the tribe I think would limit the amount of tax on that.

Byron R. White:

–But you wouldn’t say the State had to give that kind of a credit under Federal law.

It just so happens they–

Edwin S. Kneedler:

I think there’s a substantial argument that it should, given its tax structure with respect to off reservation, but I think one of the things the Court should examine is the extent to which the failure to give that credit would interfere with the… with tribal self-government.

William H. Rehnquist:

–In any of our recent cases, have we said there was kind of a dormant Indian commerce clause?

No.

Edwin S. Kneedler:

The Court has not relied on the Indian commerce clause.

William H. Rehnquist:

Well, why should we here?

Edwin S. Kneedler:

It’s not really necessary to because we think it’s sufficient to look both to the Indian country status of the land at issue… and it is Indian country status, not reservation status that we think is the starting point of analysis in this case… and look at the question of whether the tribe is… whether there’s tribal self-government actually working in the area, whether there is a government-to-government relationship between the United States and the Indian tribe.

Byron R. White:

Mr. Kneedler, you said there were two theories.

You’ve given… you’ve gone over the–

Edwin S. Kneedler:

Right.

Byron R. White:

–property theory.

Edwin S. Kneedler:

Right, the territorial based one.

Byron R. White:

Yes, territorial, and what’s–

Edwin S. Kneedler:

And the second one–

Antonin Scalia:

–Except your last remarks didn’t sound like territorial based.

Your last remarks sounded like–

–Well, he was getting to it.

Was he getting to the next one?

He was getting to it.

I thought he was mixing the two up.

Edwin S. Kneedler:

–The… on the credit point, I was simply saying that that’s a common accommodation of States, both of who have some territorial jurisdiction.

I’m… that’s what I was suggesting on the credit.

On the interference with tribe self-government point, because the individuals here are actually employed by the tribe itself–

Byron R. White:

This is your second theory?

Edwin S. Kneedler:

–This is the second theory.

Because the individuals here are actually employed by the tribe, there is a substantial argument we think that the income tax would be preempted irrespective of where the individuals live because any taxes paid by the tribal officers and employees to the State necessarily has an impact on the amount of money–

Byron R. White:

Well, I thought you just said a while ago if the tribal member is living off of… is not living on the trust land, the State could tax him.

Edwin S. Kneedler:

–Under the McClanahan territorial theory.

Byron R. White:

Right.

Edwin S. Kneedler:

What I was suggesting is there may be a separate theory that we think should also be examined on remand in… because here the individuals are actually employees of the tribe itself.

John Paul Stevens:

Mr. Kneedler, would that theory apply equally to a nonmember employed by the tribe?

Edwin S. Kneedler:

It might, but we think that the interference with… that question is not before because the Tenth Circuit rejected that, but the interference with tribal self-government we think would be much more pronounced–

William H. Rehnquist:

Well, how does it interfere with tribal self-government to have them pay an income tax?

To the State.

Edwin S. Kneedler:

–Well, because just as a matter of economics, we think that in order to compete in the labor market, if the individuals whom the tribe employs have to pay both a State tax and on top of that a tribal tax, the tribe’s ability to operate a government in the same way that a local government or a State government would be operated outside the reservation, they would be competitively disadvantaged.

William H. Rehnquist:

So, ruling for the tribe here would enable them to keep a kind of a cheap labor source.

Edwin S. Kneedler:

Well, no.

They would be… it’s simply a question of when the tribe employs its own members, which we think is at the core of tribal self-government.

Byron R. White:

This business of interference with tribal self-government is sort of common law, isn’t it?

Edwin S. Kneedler:

Yes, it is.

Byron R. White:

The courts have been making it up, including–

Edwin S. Kneedler:

No.

It’s a common law against the backdrop of 200 years of this Nation’s history.

Byron R. White:

–Well, I know, but the courts have been… I don’t… do you read it in some statute?

Edwin S. Kneedler:

No, but the–

Byron R. White:

Well, then it’s common law and the courts have been making it up.

Edwin S. Kneedler:

–Well, but it goes all the way back to Worcester v. Georgia.

Byron R. White:

Well, it may be, but that was a court decision.

Edwin S. Kneedler:

Yes, but again, when the Indian activity takes place in Indian country, that is the historic touchstone, not reservation.

Indian country is the historic touchstone all the way back to the nonintercourse acts of 1790 and 1834 where Federal and State law applies and where… excuse me… the Federal and tribal law applies and State law does not.

And in Worcester v. Georgia, the Court said as long as there’s a distinct community occupying its own territory… and that here would include the allotments or dependent Indian communities, as well as the trust–

Byron R. White:

Do you think this second theory would touch upon the automobile excise tax?

Edwin S. Kneedler:

–No.

Edwin S. Kneedler:

The automobile excise tax is just the first territorial theory.

Byron R. White:

So, it would just be territorial, but you would say that the State may not put the excise tax on Indians who are living in what kind of a community did you say?

Edwin S. Kneedler:

A dependent Indian community.

It’s one of–

Byron R. White:

What is that?

Edwin S. Kneedler:

–It’s one of the three definitions of Indian country under 1151.

It covers situations, for example, where there’s a housing authority or something set aside by the Federal Government or by the tribe under Federal auspices where Indians reside, but it may not actually be trust land.

It may not be on a true reservation.

It’s a definition that’s developed from this Court’s decision in McGowan and Sandoval.

Antonin Scalia:

Mr. Kneedler, why wouldn’t your first theory, your territorial theory… why wouldn’t that apply to someone who’s not employed by the tribe?

Edwin S. Kneedler:

It would.

The territorial… in McClanahan, the individual does not–

Antonin Scalia:

Okay.

So, you–

Edwin S. Kneedler:

–No, that does not–

Antonin Scalia:

–So, you’re free from income tax whether you’re employed by the tribe or not.

Edwin S. Kneedler:

–Under McClanahan.

We think it’s significant that in DeCoteau, for example, where this Court held the reservation was disestablished, the Court was at some pains we think to show that that would not adversely affect the Indians themselves on Indian country outside the reservation.

It said even within Indian country, which the Court pointed out specifically included allotments, a State may have jurisdiction over some persons or types of conduct, but this jurisdiction is quite limited.

And the Court specifically cited McClanahan after that recitation, indicating that the immunity from State taxation should apply even though the reservation was disestablished wherever you have Indian country and, thus, we think wherever the individual is residing and working within Indian country, as long a there is a functioning tribal government with jurisdiction over that particular land.

Here we think that the compact of tribal self-government entered into between the Sac and Fox Nation and the United States demonstrates the tribal self-government, contrary to the view of the State of Oklahoma, is alive and well in the State.

William H. Rehnquist:

Thank you, Mr. Kneedler.

Mr. Rice, we’ll hear now from you.

G. William Rice:

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

We believe that this case can be resolved by straightforward application of this Court’s per se rule and the rules of stare decisis.

The Court has ruled previously in several cases, in which the Court did not recognize that there was an existing Indian reservation, that State taxes, at least as to tribal members within Indian country were not applicable.

Those cases include Rickert, the Kansas Indians, the New York Indians, several other cases cited in the brief.

Now, the State would have you believe that the tribe here is totally subject to State law, that the Indian reservation of the Sac and Fox Nation was abolished back in 1891, and that the tribe is not a tribe in the normal sense of the word.

I don’t believe that any of those are true.

Now, the per se rule that this Court has developed has been applied in the early cases I just mentioned.

G. William Rice:

In Montana v. Blackfeet, the State… the Court said that the States may tax Indians only when Congress has manifested clearly its consent.

That is clearly a different analysis, a different type of rule, than the State would bring forward here where they say the question is not has Congress said they… Oklahoma can tax the tribe.

They’re trying to advance the theory that the State may tax unless Congress has said they cannot, and as that court has simply said… as the Court has simply said that’s–

Byron R. White:

Are there some other… are there prior cases covering the situation about a State trying to tax a member of a tribe who does not live in Indian country, but works in Indian country?

G. William Rice:

–Your Honor, I don’t believe there’s anything exactly on point.

Byron R. White:

What is your position on that?

G. William Rice:

My position on that is that the line, if you will, or the bright line rule that should be applicable here, is the Indian country line.

What we have is–

Byron R. White:

Well, Indian country.

You mean if he’s working in Indian country–

G. William Rice:

–Yes, sir.

Byron R. White:

–or if he’s living in Indian country?

G. William Rice:

If he’s working in Indian country.

The action of the Indian inside the Indian country should be the determining question.

It’s basically the opposite of Mescalero Apache Tribe v. Jones.

Byron R. White:

Well, does that cover the automobiles too?

G. William Rice:

It covers the individual, for instance, who would go to a automobile dealership and have a car delivered to him and title transferred within the Indian country.

That’s Central Machinery v. Arizona Tax Commission.

That exact thing happened in that case, only it was a tractor dealership who was being taxed on a gross receipts tax, which is kind of an income tax.

William H. Rehnquist:

What if the Indian in this particular case lived on nontribal land, went to an automobile dealer that was on nontribal land, not Indian country, bought an automobile, and said I’ll take delivery of it at the 800-acre reservation?

G. William Rice:

I think the answer to that is when he brings that automobile from the reservation or from his allotment back out, let’s say, to Norman outside the Indian reservation, outside the Indian country, at that point, since he’s a resident there, he becomes obligated to pay the State tax there.

If he bought that piece of property to leave it in the Indian country and, you know, to operate it there… and the good example, the classic example, is the individual who spends the summers in Colorado and works back home during the school year as an educator, for instance.

If he leaves all his furniture, his car, et cetera on his allotment within the Sac and Fox Indian country during the school year, that’s between him and the tribe.

That’s what is set aside by the whole Indian country concept to the tribe and the Federal Government.

On the other hand, when it comes May and he gets out of school and he flies up to Colorado and picks up that car, now he owes State taxes on that car.

Byron R. White:

But he could drive his own car up there without being taxed by a State.

G. William Rice:

He could, sir.

Byron R. White:

Yes.

But the key in your view is where the person works, not where the person lives?

G. William Rice:

The key… excuse me… the key is the conduct of the Indian in the Indian country.

G. William Rice:

The Indian country has always been defined by Congress by court decision as that area that’s set aside for tribal self-government for Indian occupancy and Indian use.

That has been the theory behind the concept of Indian country from the beginning days–

Byron R. White:

But we have no… but you’ve got no… we haven’t got any square cases on that, living off the reservation, but working on.

A while ago you said–

G. William Rice:

–Not to my knowledge.

Byron R. White:

–Yes.

The cases you mentioned, the Kansas case–

G. William Rice:

It’s the converse of Mescalero v. Jones.

Byron R. White:

Who did you mention?

The Kansas case and the–

G. William Rice:

The Kansas Indians and the New York Indians.

Now, if you say the Indian–

Byron R. White:

–They were living on and working on.

G. William Rice:

–What we had there was a situation where the tribe’s reservations had been abolished.

Byron R. White:

Right.

G. William Rice:

And the claim made there was basically the same claim that’s being made here.

These Indians are assimilated into the State community and you can’t tell the difference and so forth.

The Court came back and said no.

As long as the political branches of the government, as long as the Congress and the executive recognize these as a people with the tribal government, having the right to make and enforce their own laws and maintaining a governmental relationship with the United States, they’re outside the authority of the State to levy taxes even though their reservation had been abolished–

Byron R. White:

But they were living in Indian country.

G. William Rice:

–I believe that they were.

Byron R. White:

Yes.

G. William Rice:

I mean, that’s the outgrowth of those cases.

And that’s why I said I don’t know… excuse me… offhand of a clear case where an Indian was outside the Indian country and came in and went to work in the Indian country.

Byron R. White:

And stayed and continued to live off of it.

G. William Rice:

That’s correct.

Byron R. White:

But your position is that the same rule ought to apply.

G. William Rice:

My position is the same rule of McClanahan should apply because what McClanahan, when you get back to page 179 and 180 of the opinion down at the bottom, basically says that this person was an Indian and the income they earned came from the Indian reservation.

And I think those are really the two penultimate issues in McClanahan, is the person an Indian, and did they earn it in the Indian country.

Byron R. White:

Yes.

Byron R. White:

And the territorial rationale doesn’t exactly work out, but I suppose you would argue with the Federal Government that perhaps it’s an interference with tribal self-government.

G. William Rice:

Insofar as–

Byron R. White:

Taxing–

G. William Rice:

–the use of a tax could be used to regulate conduct, I believe yes, it is.

Antonin Scalia:

–Are you… you’re claiming this exemption not just for income received from the tribe, but any income?

G. William Rice:

I believe that any income that an Indian earns in the Indian country is exempt from State taxation.

Antonin Scalia:

And with respect to the car, I’m not sure whether you said the car… the Indian has to reside on… in Indian country and also the car has to be garaged there, both?

G. William Rice:

The position is that the property has to be garaged, located in the Indian country.

Antonin Scalia:

Okay.

So, what if the Indian lives off of the Indian country, but he garages his car in the Indian country.

Is that car exempt from the taxes here?

G. William Rice:

I believe it would be… could be.

Byron R. White:

Could you give us a citation of the Kansas and New York Indians?

G. William Rice:

The Kansas Indians, Your Honor, is 72 U.S. 667, and the New York Indians follows that immediately.

Byron R. White:

It was 72, 767?

G. William Rice:

72 United States 667.

As previously indicated, the Court has adopted a per se rule against the taxation of Indians in the Indian country.

I think simple straightforward application of that rule resolves this case.

The per se rule, as it was stated last term in County of Yakima v. Yakima… and this has been stated in California v. Cabazon and Montana v. Blackfeet… is really a penultimate outgrowth of the preemption rule of Federal preemption.

The problem here is that we’re trying to apply the allotment agreement in a vacuum.

It’s as if the first time there’s a relationship between the Sac and Fox Nation and the United States came about in the allotment agreement.

That’s simply not the case.

There has been a treaty relationship between the United States and the Sac and Fox Nation since 1789.

The early treaties between the Sac and Fox Nation and the United States are exactly the same type of treaties that Worcester v. Georgia held to preempt all State action by the State of Georgia.

Now, the Court has gone then from a per se rule to a preemption analysis and has come back, at least in the tax situations, to the per se rule.

The thing… one thing that is happening here that I think is important in this context is the redevelopment or the reaffirmation by Congress, if you will, of the rights to tribal self-government, and I refer specifically to the Sac and Fox Nation’s self-governance grant and compact that they have entered into now with the United States Department of the Interior.

Antonin Scalia:

Mr. Rice, I don’t… how is this possibly administrable in a State, especially like Oklahoma, where there are just a lot of isolated pockets of Indian territory?

Your position is if the money is earned by an Indian in Indian country, it’s exempt from State tax.

So, what do you do with somebody that, you know, drives to work… let’s assume he’s a carpenter.

He does part of his work on the Indian country, part of his work off of the Indian country.

Antonin Scalia:

How can you possibly administer a scheme like that?

I mean, I can see if you’re limiting it to income received from the tribe, you can identify it.

But how is Oklahoma going to identify what income is earned on Indian country and what is earned off Indian country?

There’s a whole… I can see whole volumes of law being written about this when Indian income is earned.

G. William Rice:

I don’t think it’s that difficult to identify what the Indian country is.

Antonin Scalia:

Well, that’s true.

G. William Rice:

That’s a fairly a simple analysis based on 18 U.S.C. 1151.

Antonin Scalia:

Right.

G. William Rice:

You can identify a reservation, a dependent Indian community, or an Indian allotment, and you immediately know where that is.

Antonin Scalia:

Okay.

But let’s assume I’m a delivery… my business is delivering newspapers and I deliver newspapers to somebody in Indian country.

Okay?

G. William Rice:

Okay.

Antonin Scalia:

Part of my delivery is in Indian country and part of my route is outside of Indian country.

What do I do?

Divide my salary by 2 and–

G. William Rice:

Well, no more than you would if you were selling things inside the State and outside the State, for instance.

You would… or the same type of situation occurs when you have taxable income and nontaxable income.

You simply report that part that’s taxable to the State of Oklahoma, and you report that part that’s taxable to the Sac and Fox Nation.

Antonin Scalia:

–Yes.

I think the situation is a lot rarer in the interstate situation than it is with people living in the State of Oklahoma and driving in and out of Indian country all the time.

G. William Rice:

Well, it’s not really a case I think of driving in and out of the Indian country all the time.

The more rational situation is going to be where you have a fellow who works all day, for instance, at the tribal office, drives back to a area outside of the Indian country and goes to a second job in the evening as a checker at the grocery store or, you know, some other type of employment.

I don’t think that would be any trouble at all to decide what part of that income goes to the State authority and which one doesn’t.

And that’s the straw man really is the McClanahan… Roselyn McClanahan who works for the Navajo legal services during the daytime, is not taxable on that income, and yet if she drives over to Gallup off of the reservation and works an evening job, then under the McClanahan rule, I presume she’s taxable on the income that she earned at Gallup.

And that’s the case that’s going to come up.

Byron R. White:

Mr. Rice, did I gather you said that the State may not only not tax Indians who live off Indian country and work on Indian country, but they also may not tax non-Indians who live off the Indian country and work on Indian country?

G. William Rice:

I’m not sure I quite understand the question.

Byron R. White:

Well, let’s assume there’s a non-Indian who lives off the reservation or lives off Indian country, but works on Indian country.

Maybe that’s just a figment of… maybe that’s just… because it may be that nobody who’s a non-Indian ever gets to work on–

G. William Rice:

No.

There are some that work there.

Byron R. White:

–All right.

So, what’s the answer?

G. William Rice:

Well–

Byron R. White:

A non-Indian living off but working on?

G. William Rice:

–I think there’s two answers to that.

One is–

Byron R. White:

Well, I know, but you can either say the State may tax him or may not.

G. William Rice:

–Well, I think the State may not tax him for two reasons.

One is that as long as he is working for the tribe or engaged in conduct which is subject to regulation and if the State interferes by taxing him with tribal self-government to the point that they are trying to use their tax to regulate conduct–

Byron R. White:

Did the Tenth Circuit decide against you on that?

G. William Rice:

–No, they did not.

They decided that adversely to us.

Byron R. White:

That’s what I said.

Against you.

They decided against you.

G. William Rice:

Yes.

Byron R. White:

And we denied cert on that.

G. William Rice:

You denied cert on that.

Byron R. White:

Yes.

So, that isn’t at issue here.

We know what your position is.

G. William Rice:

That’s the position that we had because of the treaties and the other.

Now, in addition to the per se rule and the preemption, we also have the stare decisis questions.

McClanahan squarely holds that Indians, I think, in the Indian country are not subject to State income tax.

Moe v. Confederated Salish & Kootenai and Washington v. the Colville tribes provide the same type of background for automobile taxes.

The taxes here are property taxes, pure and simple.

They’re based on the value of the car.

The Oklahoma courts, as shown in exhibits 18 and 27 through 32 in the Tenth Circuit exhibits, have ruled against the Tax Commission on exactly this issue.

G. William Rice:

It was interesting in the Solicitor General’s letter lodged with the court that the Oklahoma Court of Appeals has now ruled against the Tax Commission on the issue of the income tax in Core v. Oklahoma Tax Commission.

The stare decisis situation here is such that the Court all… really just needs to simply apply those cases to this situation.

Those cases apply in the Indian country, and since they are applicable in the Indian country in my view, the Court need go no further.

Now, if the Court chooses to take the next step, then the question becomes whether the original boundaries of the Sac and Fox Indian reservation have been extinguished, and that’s an issue that neither the district court nor the Tenth Circuit chose to address.

It would be our position in that case that you could either remand for that decision or you could go ahead and decide it on the record that’s here.

Byron R. White:

Who brought this suit?

G. William Rice:

Excuse me?

Byron R. White:

Who brought this suit?

G. William Rice:

The Nation brought this suit, the Sac and Fox Nation.

Byron R. White:

Well, did you… and was part of your claim that the reservation had never been–

G. William Rice:

Yes, sir, it was.

Byron R. White:

–destroyed?

And none of the lower courts decided it?

G. William Rice:

They did not decide that issue at all.

The reference is continuously to the abolished reservation or the old reservation or the reservation that’s not there anymore.

The fact of the matter is no court has ever ruled that way.

That was part of the complaint.

That was part of the argument all the way up.

That was never ruled on.

The courts below simply did what we said is the only thing that this Court really needs to do, and that was to apply the per se rule and the rules of stare decisis and say that these cases, McClanahan, Moe, Colville, and Central Machinery, apply, pure and simple, within the Indian country.

Because of that, we have Indian country where the tribal trust land is because all our reservation has ever really been is land that has been set aside under the superintendence of the Government for Indians.

That’s what our reservation turns out to be.

We have dependent Indian communities.

We have allotments that are still in trust.

Now, because we have that situation, we don’t have to decide the reservation boundary issue.

We’ve got the tribe on trust land.

We’ve got most of the people that work there on trust land, and we can let the reservation boundary issue go–

Byron R. White:

But you lost half your… you lost some of your case in the Tenth Circuit, and we denied cert.–

G. William Rice:

–Yes, sir.

Byron R. White:

–And it might have come out differently if they had decided that the reservation had not been abolished.

G. William Rice:

No, I don’t think under their analysis that it would have come out any differently–

Byron R. White:

Oh, I see.

G. William Rice:

–because what they simply said is they drew a distinction between tribal members and nontribal members, and that was the basis of the distinction there.

Byron R. White:

Yes, all right.

All right.

G. William Rice:

It wasn’t an Indian country decision.

John Paul Stevens:

Could you tell me just a little bit more about the nation itself?

This 800 acres, is that… that’s trust land I understand.

G. William Rice:

Yes, sir.

John Paul Stevens:

Trust for the tribe or for individual Indians?

G. William Rice:

That is… the 800 acres is land which was explicitly reserved out of the operation of the allotment agreement by the agreement itself.

John Paul Stevens:

I see.

G. William Rice:

It was to be held as the tribal land had always been held, in other words, under the 1867 treaty.

John Paul Stevens:

It’s held by the United States in trust for the tribe.

G. William Rice:

Yes, sir.

John Paul Stevens:

And roughly how many… how big is the nation?

How many Indians live on that?

G. William Rice:

About 2,500 members of the–

John Paul Stevens:

I see.

And–

G. William Rice:

–They don’t all live on the 800 acres.

John Paul Stevens:

–But some of them live on the 800.

G. William Rice:

There’s a few of them that do, yes.

Most of them reside on allotments or around the original reservation area.

John Paul Stevens:

What is the 800 acres primarily used for?

What is it?

G. William Rice:

That is where the center of the tribal government is, the tribal administrative offices.

Everything from the Chief’s office and residence down to the pow-wow grounds is on that 800 acres–

John Paul Stevens:

And–

G. William Rice:

–plus a couple hundred that has been added to it.

John Paul Stevens:

–And is there a large number of employees working for the tribal government?

G. William Rice:

Most of them work there.

There’s about 90 tribal employees that work right… you know, mostly in that area.

Now, that number does not include members of tribal boards, commissions, agencies, and–

John Paul Stevens:

If we took all of the employees of the tribe together, how many people would we be talking about roughly?

G. William Rice:

–Roughly 140 to 150 people.

John Paul Stevens:

There’s quite a group, yes.

And most of them, if not all, live on the… on Indian country.

G. William Rice:

I would say the large majority of those live on Indian country.

Now, we are I suppose back to the bright line rule.

We think that that is what Indian country is, is the place that Congress has set aside the tribe, if you will, behind the law, and they have said in 1151, which basically codified decisions of this Court and the understanding that Solicitor Cohen had in his handbook of Indian law in 1942, that the Indian country is the place for tribal self-government.

It’s a place where State law only applies when Congress says that it does.

Now, that has been the concept of Indian country.

You don’t have to decide the reservation boundary issues to decide the case if you adopt and apply the McClanahan, Moe, Colville series of cases through stare decisis or through the per se rule.

On the other hand, it seems to me that if you do not apply those cases to the Indian country generally, as it has been defined by Congress and 1151, then in order to rule against the tribe on the part of the case on which certiorari was granted, you have to overrule that line of cases because it’s kind of an either/or proposition.

If our reservation is there, then those cases ought to apply.

If those cases apply to all Indian country, regardless of reservation status, we don’t have to get to that issue, but if the reservation is there, then the only way that these cases don’t apply would be to overrule.

Byron R. White:

Well, yes, but your bright line rule I think would cover Indians who live on Indian country and work on Indian country, but it doesn’t cover Indian… tribal members who don’t live in Indian country.

G. William Rice:

It would seem to me it covers conduct of an Indian in the Indian country.

Byron R. White:

Well, I know, but–

G. William Rice:

And let me–

Byron R. White:

–none of the cases just cover… clearly cover that, and you indicated that–

G. William Rice:

–Well–

Byron R. White:

–you didn’t know of any case that covered it.

G. William Rice:

–Not in the income tax situation.

Byron R. White:

Yes, right.

G. William Rice:

There are criminal cases, for instance–

Byron R. White:

Well, I’m talking about–

G. William Rice:

–or other cases.

Byron R. White:

–We’re talking about income taxes.

Byron R. White:

But your bright line rule… I just want to be sure I understand it… would cover the operation of a commercial activity, not just working for the government.

If they ran a casino, for example, in Indian company… country, even though it’s on a reservation, but as long as it’s in Indian country, that… the bright line rule would protect the income from the casino–

G. William Rice:

That’s exactly right.

John Paul Stevens:

–or discover an oil well or something like that.

G. William Rice:

That’s exactly right.

John Paul Stevens:

Yes.

G. William Rice:

If it’s the Indian conduct in the Indian country, then that is what Congress has put behind the law.

Byron R. White:

But if the tribe is running a business off… out of Indian country, I suppose Mescalero controls.

G. William Rice:

That would be Mescalero.

If the tribe chose to take the business 100 miles away from its Indian country, and the United States does not put that in trust or does not otherwise take action that would make it Indian country, then that’s subject to State jurisdiction.

Byron R. White:

Suppose the Indian… suppose the reservation… even if the reservation wasn’t formally abolished, all of the land, other than that which has been held in trust and allotted to Indians, all of that has already been patented to non-Indians or to somebody else.

G. William Rice:

True.

Byron R. White:

So, it would be… you might say, well, here’s where the reservation used to be, but there’s–

G. William Rice:

Well, there’s still a real solid Indian presence in that area, and I think we’ve taken the position in–

Byron R. White:

–Well, I know, but you wouldn’t say that you could exclude anybody you wanted to any… within the bounds of the old reservation now.

G. William Rice:

–Well, no, I wouldn’t say that we would exclude the landowners, no.

I think that one is solved in Montana v. the United States–

Byron R. White:

Yes.

G. William Rice:

–and a couple of other cases.

Byron R. White:

Yes.

G. William Rice:

The difference, though, with the Indian conduct in those areas that have still retained reservation status is Mattz v. Arnett, and those cases say that the Indian work… the Indian activity there, their actions, are still within the Indian country.

I think I want to make it very clear that our position in the brief and here also is that there’s three fallback positions basically on the Indian country issue.

One of those is… and the first one I think is that the original boundaries are still there.

The second one is that regardless… if you read the allotment agreement and the legislative history, which is in the exhibits that were in the Tenth Circuit–

Byron R. White:

But–

G. William Rice:

–we’ve got a diminished one, not a big one.

Byron R. White:

–But if the reservation were still there and was not abolished, you wouldn’t say that every acre of ground within the bounds of the reservation would be Indian country.

G. William Rice:

Yes, sir, it is Indian country because 1151(a) says that it includes all Indian reservations notwithstanding the issuance of any patent, and Seymour v. Superintendent says a patent to anybody, whether that’s a patent to an Indian or a patent to a non-Indian.

William H. Rehnquist:

Thank you, Mr. Rice.

The case is submitted.

The honorable court is now adjourned until tomorrow at ten o’clock.