Native Business highlights three noteworthy legal victories of 2019 that uphold Tribal sovereignty and set a precedent for the future. These rulings directly impacted the Lac Vieux Desert Band, a Yakama Nation member-owned gas station, and the Mandan, Hidatsa and Arikara (MHA) Nation.
Fourth Circuit Rules in Favor of Lac Vieux Desert Band
In a highly anticipated and long-awaited ruling handed down on July 3rd, the United States Court of Appeals for the Fourth Circuit affirmed that two companies owned by the Lac Vieux Desert Band of Lake Superior Chippewa Indians are indeed legitimate arms of the Tribe, and as such, are entitled to Tribal sovereign immunity.
The ruling, which reversed an earlier order from the District Court and remanded it with instructions to grant the Tribe’s motion to dismiss for lack of subject matter jurisdiction, represented a major win for the Tribe with implications that could echo across Indian Country. Since 2017, the Tribe has been involved in the litigation, which was filed by a group of five Virginia residents alleging that Tribal sovereignty did not apply to the Tribally owned businesses.
Shortly after the decision was issued, LVD Chairman James Williams, Jr. hailed the decision as a milestone not only for his Tribe, but for Native American sovereign rights in general.
“We could not be more pleased with the Fourth Circuit’s decision upholding our Tribe’s sovereignty and our Tribal businesses’ recognition as arms of the Tribe,” Williams said. “By reversing the District Court, the Fourth Circuit’s ruling is a major victory for Native American sovereign rights across all of Indian Country.”
“The decision also provides welcome clarity to the standards used to evaluate Tribal economic instrumentalities,” Chairman Williams added.
Supreme Court Rules Yakama Gas Station Exempt From Washington State Fuel Tax, Upholds 1855 Treaty
On March 19, 2019, a six-year stand-off between a Yakama member-owned gas station and the Washington Department of Licensing came to an end. The U.S. Supreme Court ruled 5-4 to uphold a Washington State court ruling. Cougar Den is exempt from paying tax on fuel it transports on public highways in Washington State under the Yakama Treaty of 1855.
If the Supreme Court had ruled against Cougar Den, the White Swan, Washington-based gas station would have owed millions to the state in back taxes. In 2013, Washington assessed Cougar Den owed $3.6 million in taxes, penalties and licensing fees for importing wholesale gasoline from Oregon to the Tribe’s reservation in Washington.
Cougar Den argued that the Washington State tax is preempted by the “right to travel” provision in its Treaty of 1855, which allows Tribal members to travel freely on public highways and transport goods across state lines without taxation. That’s a right the Tribe fought for when it ceded 12 million acres of Tribal lands — a swath of land greater than the size of Maryland.
“We gave up the vastness of that land base for the reserved rights in order to, in this case, conduct trade and our commerce,” Yakama Tribal Chairman JoDe Goudy said.
North Dakota Governor Signs Bill Ratifying Historic Oil Tax-Sharing Compact With MHA Nation
Gov. Doug Burgum signed legislation on March 28, 2019, that ratifies the historic compact he signed in February with Mandan, Hidatsa and Arikara (MHA) Nation Chairman Mark Fox to change how the state and Tribe share tax revenue from new oil and gas activity on trust and fee lands.
Under the ratified compact, the former 50-50 tax revenue split changed, so that the Tribe now receives 80 percent of the production and extraction tax revenue from new wells on Tribal trust lands, and the state receives 20 percent of the revenue. On fee land, 80 percent of the revenue goes to the state, and 20 percent to the Tribe.
The MHA Nation’s Fort Berthold Indian Reservation sits on the oil-rich Bakken shale formation, with the Three Forks beneath it. More than 2,000 wells dot the reservation, which accounts for roughly a fifth of North Dakota’s oil production. The Tribes will gain an additional $33 million in revenue over the next two-year budget cycle under the new legislation, the state Tax Department estimates.
“This historic legislation is the result of nearly two years of good-faith dialogue and collaboration between Tribal and legislative leaders, the Governor’s Office, industry representatives and the state tax department. Finalizing this agreement sends a clear signal that North Dakota supports a stable tax and regulatory environment, which will help us compete with shale oil plays in other states and help the Tribe address infrastructure needs and other priorities,” said Burgum, whose five strategic initiatives include strengthening tribal partnerships. “We look forward to continued collaboration with all of the tribal nations in North Dakota based on mutual respect and understanding.”