Duncan Energy Co. v. Three Affiliated Tribes of Ft. Berthold Reservation
| Citation | 27 F.3d 1294 |
| Decision Date | 19 July 1994 |
| Docket Number | No. 93-3622,93-3622 |
| Parties | DUNCAN ENERGY COMPANY; NBB Oil & Gas Partners (U.S.A.); Amerada Hess Corporation; Tyrex Oil Company; Turtle Mountain Gas & Oil, Inc., Appellees, v. THREE AFFILIATED TRIBES OF the FORT BERTHOLD RESERVATION; Three Affiliated Tribes Tribal Business Council; Three Affiliated Tribes Tax Commission; Wilbur D. Wilkinson Chairman, Tribal Business Council; Joseph J. Walker, Tax Commissioner, Marcus Wells, Jr., Director, Tribal Employment Rights Office, Appellants. |
| Court | United States Courts of Appeals. United States Court of Appeals (8th Circuit) |
Charles Allen Hobbs, of Washington, DC, argued, for appellant.
Brian Raymond Bjella, Bismarck, ND, argued, for appellee.
Before BEAM, LOKEN and HANSEN, Circuit Judges.
Wilbur D. Wilkinson, Joseph J. Walker, and Marcus Wells, Jr., officers of the Three Affiliated Tribes of the Fort Berthold Reservation ("the Tribe"), 1 appeal the district court's grant of summary judgment to various oil companies (hereinafter "Duncan Energy") challenging the Tribe's taxation and employment authority. The district court concluded that the Tribe lacked sovereign power to enforce the challenged tax statutes in the Northeast Quadrant of the Fort Berthold Reservation and enjoined the Tribe from enforcing the statutes against Duncan Energy. Duncan Energy Co. v. The Three Affiliated Tribes, 812 F.Supp. 1008, 1009-10 (D.N.D.1993). We reverse and remand to the district court with directions to either dismiss the case without prejudice for lack of exhaustion of tribal remedies, or to stay any proceedings pending an exhaustion of those remedies.
The Fort Berthold Reservation ("the Reservation") was created on March 3, 1891. 26 Stat. 1032. On June 1, 1910, after negotiations with the Tribe, Congress authorized homesteading in the Northeast Quadrant of the Reservation. 36 Stat. 455. Most of the land in the Northeast Quadrant is now owned in fee by non-Tribe members. Tribe members comprise slightly more than one-third of the overall population in the Northeast Quadrant, and almost half of the Tribe members living on the Reservation live in the Northeast Quadrant. Tribe members comprise slightly more than half of the population of New Town, the principal town in the disputed region. The Tribal Government is located primarily in New Town, as is the Bureau of Indian Affairs Office.
Tribal law imposes a one-percent tax on all interests in real and personal property within the Reservation used for business or profit. Tribal Tax Code, Chapter 7. The tax is assessed on forty-five percent of the fair market value of the property. Tribal Tax Code Sec. 706(3). Tribal law also imposes a gross production tax of one-percent on all oil and gas produced within the Reservation. Tribal Tax Code, Chapter 8. Furthermore, the Tribal Employment Rights Office Ordinance ("TERO") requires all employers within the Reservation to hire qualified Indian workers preferentially. The TERO prevents mineral developers from hiring non-Indian contractors unless no qualified, reasonably-priced Indian contractors are available.
Pursuant to leases from non-Indian landowners, Duncan Energy operates oil and gas wells in the Northeast Quadrant of the Reservation. Under Tribal law, Duncan Energy would therefore be subject to the oil and gas tax, the property tax, and the employment ordinance described above. Duncan Energy filed suit in the district court seeking to enjoin the Tribe from assessing or collecting taxes and from enforcing the TERO against their activities within the Reservation. The Tribe moved to dismiss or to remand the case to the Tribal adjudicative system. The district court concluded that Duncan Energy need not exhaust Tribal remedies before proceeding in federal court and granted Duncan Energy's motion for summary judgment on the merits. The Tribe appeals.
As its primary ground for affirmance, Duncan Energy contends that the 1910 Act, which opened the Reservation for homesteading, diminished the Reservation. If we were to adopt this contention, it would end our inquiry in this case; the Northeast Quadrant would no longer be part of the Fort Berthold Reservation, and the Tribes would not have jurisdiction to regulate activities there. However, this court has previously ruled that the 1910 Act did not diminish the Reservation. New Town v. United States, 454 F.2d 121 (8th Cir.1972). Duncan Energy suggests that Solem v. Bartlett, 465 U.S. 463, 104 S.Ct. 1161, 79 L.Ed.2d 443 (1984), an intervening Supreme Court decision, nullifies our prior disposition of this issue. We disagree.
We are convinced that Solem did not articulate a new framework for analyzing questions of reservation diminishment. In rendering its decision, the Solem Court specifically noted that "our precedents in the area have established a fairly clean analytical structure." Id. at 470, 104 S.Ct. at 1166. Solem merely restates and applies this same analytical structure, albeit more concisely. Just this term, the Supreme Court revisited the issue of how to determine whether a Surplus Land Act diminished a reservation or merely offered non-Indians the opportunity to purchase land within established reservation boundaries. Hagen v. Utah, --- U.S. ----, 114 S.Ct. 958, 127 L.Ed.2d 252 (1994). The Court reiterated the same longstanding legal framework employed in Solem. Our reading of Hagen and Solem only confirms our previous conclusion; the 1910 Act did not diminish the Fort Berthold Reservation.
Duncan Energy also contends that New Town was incorrectly decided, and directs the court's attention to United States ex rel. Cook v. Parkinson, 525 F.2d 120 (8th Cir.1975), cert. denied, 430 U.S. 982, 97 S.Ct. 1677, 52 L.Ed.2d 376 (1977) and to Rosebud Sioux Tribe v. Kneip, 521 F.2d 87 (8th Cir.1975), aff'd, 430 U.S. 584, 97 S.Ct. 1361, 51 L.Ed.2d 660 (1977) as support for the proposition that the 1910 Act diminished the Reservation. As a panel of the Eighth Circuit, we have no authority to overrule a previous panel's decision. 2 In any event, we do not find those cases instructive. Both cases cited by Duncan Energy involved different Surplus Land Acts and it is settled law that some Surplus Land Acts diminished reservations while other acts did not. Solem, 465 U.S. at 469, 104 S.Ct. at 1165-66; compare Rosebud Sioux Tribe v. Kneip, 430 U.S. 584, 97 S.Ct. 1361, 51 L.Ed.2d 660 (1977) with Mattz v. Arnett, 412 U.S. 481, 93 S.Ct. 2245, 37 L.Ed.2d 92 (1973). To determine whether a reservation has been diminished, we examine three factors: the statutory language, the historical context, and the population that settled the land. Hagen, --- U.S. at ----, 114 S.Ct. at 965, (citing Solem, 465 U.S. at 470-72, 104 S.Ct. at 1166-67.) Of the three factors, the statutory language is the most probative. Solem, 465 U.S. at 470, 104 S.Ct. at 1166. Throughout the inquiry, ambiguities are to be resolved in favor of the Indians, and diminishment should not be found lightly. Id.; see also South Dakota v. Bourland, --- U.S. ----, ----, 113 S.Ct. 2309, 2316, 124 L.Ed.2d 606 (1993).
The language of the 1910 Act does not lend itself to the interpretation urged by Duncan. In cases where courts have found diminishment of a reservation, the Surplus Land Act itself contained phrases unambiguously expressing congressional intent to diminish the reservation. See, e.g., Hagen, --- U.S. at ---- - ----, 114 S.Ct. at 966-67 (); Rosebud, 430 U.S. at 591 n. 8, 97 S.Ct. at 1365 n. 8 (); DeCoteau v. District County Court for the Tenth Judicial Dist., 420 U.S. 425, 439 n. 22, 95 S.Ct. 1082, 1090-91 n. 22, 43 L.Ed.2d 300 (1975) (). No similar language appears in the 1910 Act which merely authorized the Secretary of the Interior to "surve[y] and to sell and dispose of ... all the surplus unallotted and unreserved lands within [a] portion of said reservation...." 36 Stat. at 455.
The 1910 Act further authorized the Secretary to reserve land in the opened territory for schools and religious institutions to be maintained for the benefit of the Tribe. Id. at 456. The Act also maintained the prohibition against the introduction of intoxicants into Indian Country in the opened territory, id. at 458; reserved all timber rights in the opened territory for the Tribe, id.; reserved all coal rights in the opened territory for the Tribe, id. at 455; and specifically stated that the United States would act merely as "trustee for said Indians to dispose of said lands and to expend and pay over the proceeds received from the sale thereof only as received...." Id. at 459. Considering similar statutory language and provisions, the Solem Court concluded that a reservation had not been diminished. Solem, 465 U.S. at 472-73, 104 S.Ct. at 1167.
We find the contrast between the provisions of the 1910 Act and the language employed in the 1891 Fort Berthold Treaty to be particularly illuminating. In the 1891 Treaty, the Tribe agreed to "cede, sell, and relinquish to the United States all their right, title, and interest in" a portion of the Reservation. 26 Stat. 1032. Thereafter, the Treaty referred to the "diminished Reservation" and provided for surveying to mark the new "outboundaries of the diminished Reservation." Id. at 1035. It would be contrary to the principle of resolving ambiguities in favor of the Indians were we to conclude that Congress intended the same meanings for the vastly different language employed in these two documents affecting the Tribe.
The district court acknowledged that it was bound to consider the land in question as part of the Reservation. Duncan Energy...
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