State of Alaska ex rel. Yukon Flats School Dist. v. Native Village of Venetie Tribal Government

Citation101 F.3d 1286
Decision Date20 November 1996
Docket NumberNo. 96-35042,96-35042
Parties96 Cal. Daily Op. Serv. 8373, 96 Daily Journal D.A.R. 13,963 STATE OF ALASKA ex rel. YUKON FLATS SCHOOL DISTRICT, Unalakleet/Neeser Construction JV, Unalakleet Native Corporation, Neeser Construction Company, and Gerald Neeser, Plaintiffs-Appellees, v. NATIVE VILLAGE OF VENETIE TRIBAL GOVERNMENT, a/k/a the Native Village of Venetie, the Venetie Tax Court, the Venetie Tax Commission, Gideon James, Lawrence Roberts, Larry Williams, Ernest Erick, Lincoln Tritt, John Titus, and David Case, Defendants-Appellants.
CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)

Appeal from the United States District Court for the District of Alaska, H. Russel Holland, District Judge, Presiding. D.C. No. CV-87-00051-HRH.

Before: BROWNING, D. W. NELSON, and FERNANDEZ, Circuit Judges.

OPINION

D. W. NELSON, Circuit Judge:

The Native Village of Venetie Tribal Government appeals the district court's determination that the Alaska Native Claims Settlement Act extinguished Indian country in Alaska, and that the tribal government therefore lacks the authority to impose its Business Activities Tax upon a state contractor. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we reverse the district court's judgment. We conclude that the Alaska Native Claims Settlement Act did not extinguish Indian country in Alaska as a general matter, and that the land Venetie occupies is Indian country.

FACTUAL AND PROCEDURAL BACKGROUND

This case arises from Venetie's attempt to impose its Business Activities Tax upon the Neeser Construction Company, which had been hired by the State of Alaska to build a new school in the village.

The Neets'aii Gwich'in--from whom nearly all of the inhabitants of Venetie descend--are a group of Alaska Natives that has historically inhabited an area consisting of the East Fork of the Chandalar River. In 1940, the Neets'aii Gwich'in adopted a constitution under the Indian Reorganization Act, 25 U.S.C. § 476. This constitution established the Native Village of Venetie as the governing authority of the Neets'aii Gwich'in. In 1943, the Secretary of the Interior created a reservation for the Neets'aii Gwich'in out of approximately 1.8 million acres surrounding Venetie. The Native Village of Venetie has governed this reserve since its creation. In 1976, the Native Village of Venetie restructured its council to include formal representation from Arctic Village (another community comprised of Neets'aii Gwich'in) and changed its name to the Native Village of Venetie Tribal Government ("Venetie").

In 1971, Congress passed the Alaska Native Claims Settlement Act ("ANCSA"), 43 U.S.C. § 1601 et seq. ANCSA revoked "the various reserves set aside" for Alaska Natives by legislative or executive action, including the Venetie Reservation. 43 U.S.C. § 1618(a). In exchange, Congress authorized the transfer of $962.5 million and approximately 44 million acres of land to Native village and regional corporations created by the Act. 43 U.S.C. §§ 1606, 1607, 1611. These corporations were to be owned by Native shareholders residing in the corporations' respective geographical areas.

Announcing the goals of the Act, Congress declared that

the settlement should be accomplished rapidly, with certainty, in conformity with the real economic and social needs of Natives, without litigation, with maximum participation by Natives in decisions affecting their rights and property, without establishing any permanent racially defined institutions, rights, privileges, or obligations, [and] without creating a reservation system or lengthy wardship or trusteeship....

43 U.S.C. § 1601(b). Congress clarified that ANCSA did not "relieve, replace, or diminish any obligation of the United States or of the State or [sic] Alaska to protect and promote the rights or welfare of Natives...." 43 U.S.C. § 1601(c).

Congress enabled Native village corporations to opt out of ANCSA and to receive title in fee simple to their former reservation lands. 43 U.S.C. § 1618(b). Under this option, "any Village Corporation or Corporations may elect within two years [after the enactment of ANCSA] to acquire title to ... any reserve set aside for the use or benefit of its stockholders or members prior to December 18, 1971." Id. Village corporations that exercised this option were not eligible to receive land or monetary distributions from the regional corporation.

Two Native villages were recognized by ANCSA within the boundaries of the former Venetie Reservation and two Native village corporations were thus established for the Neets'aii Gwich'in: one in Venetie (the Venetie Indian Corporation), and one in Arctic Village (the Neets'aii Corporation). In 1973, the shareholders of both corporations elected to opt out of ANCSA and to take title to their former reservation lands. The United States conveyed title to the former Venetie Reservation to the Venetie Indian Corporation and the Neets'aii Corporation as tenants in common.

In 1979, the tribal membership, acting through the Venetie Indian Corporation and the Neets'aii Corporation, transferred title to the former Venetie Reservation to Venetie. The shareholders then voted to dissolve the two Native village corporations. In 1981, the State of Alaska dissolved the corporations for non-payment of fees.

In 1986, Venetie enacted a Business Activities Tax, which imposed a five percent tax on "source gains" derived from commercial activities within the village. That same year, the State of Alaska, through the Yukon Flats School District, entered into a contract with the Neeser Construction Company for the construction of a school within the Native Village of Venetie.

In 1987, Venetie filed suit in the tribal tax court to collect taxes assessed against the Neeser Construction Company in the amount of $161,203.15. The State of Alaska, as the party responsible for paying the tax, refused to defend in tribal court and brought a federal action in the District of Alaska for declaratory and injunctive relief against the Tribe. The state claimed that the Tribe lacked jurisdiction to impose the tax. The district court issued a preliminary injunction enjoining the Tribe from further enforcement proceedings. The Ninth Circuit upheld this ruling. State of Alaska v. Native Village of Venetie, 856 F.2d 1384 (9th Cir.1988) (Venetie I). The Venetie I court held that the Tribe's authority to impose the tax upon non-members turned on whether Venetie is a federally recognized tribe and, if so, whether it inhabits Indian country. The court articulated a six-part test to guide the district court in its determination of the Indian country question.

On remand, the district court held that although Venetie is a tribe, it does not occupy Indian country as that term is defined by 18 U.S.C. § 1151. Applying its own four-part inquiry, the court determined that while Venetie was a dependent Indian community before 1971, Congress extinguished that status when it passed ANCSA.

Venetie's argument on appeal is in three parts. First, Venetie contends that the district court applied an unduly restrictive standard to determine whether the land at issue is Indian country. Second, Venetie argues that ANCSA did not extinguish Indian country in Alaska. Finally, Venetie asserts that it continues to occupy Indian country and therefore retains its inherent authority to tax activities occurring within its territory.

STANDARD OF REVIEW

The interpretation of a statute is a question of law reviewed de novo. Hopi Tribe v. Navajo Tribe, 46 F.3d 908, 921 (9th Cir.), cert. denied, --- U.S. ----, 116 S.Ct. 337, 133 L.Ed.2d 236 (1995). The district court's factual findings are reviewed for clear error. Fed.R.Civ.P. 52(a); United States v. American Prod. Indus., Inc., 58 F.3d 404, 407 (9th Cir.1995). Accordingly, the district court's determination that Venetie does not occupy Indian country as defined by 18 U.S.C. § 1151(b) is reviewed de novo, but the facts marshalled by the district court to support this determination are reviewed for clear error.

THE LEGAL STANDARD FOR DETERMINING WHETHER A TRIBE OCCUPIES
INDIAN COUNTRY

The ultimate question presented by this case--whether Venetie has the authority to tax activities occurring within its territory--turns on whether Venetie occupies Indian country. Venetie I, 856 F.2d at 1390. To resolve this question, we must first establish the proper standard for determining whether Indian country exists in a given case.

Congress has defined Indian country as follows:

"Indian country," as used in this chapter, means (a) all land within the limits of any Indian reservation under the jurisdiction of the United States Government, notwithstanding the issuance of any patent, and, including rights-of-way running through the reservation, (b) all dependent Indian communities within the borders of the United States whether within the original or subsequently acquired territory thereof, and whether within or without the limits of a state, and (c) all Indian allotments, the Indian titles to which have not been extinguished, including rights-of-way running through the same.

18 U.S.C. § 1151 (emphasis added). This definition applies to both criminal and civil jurisdiction. California v. Cabazon Band of Mission Indians, 480 U.S. 202, 207 n. 5, 107 S.Ct. 1083, 1087 n. 5, 94 L.Ed.2d 244 (1987). Venetie occupies neither a reservation nor an allotment. Thus, we must establish the test for determining whether a tribe...

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