597 F.3d 1117 (10th Cir. 2010), 09-5050, Osage Nation v. Irby

Docket Nº:09-5050.
Citation:597 F.3d 1117
Opinion Judge:PAUL KELLY, JR., Circuit Judge.
Party Name:OSAGE NATION, Plaintiff-Appellant, v. Constance IRBY Secretary-Member of the Oklahoma Tax Commission; Thomas E. Kemp, Jr., Chairman of the Oklahoma Tax Commission; Jerry Johnson, Warden, Vice-Chairman of the Oklahoma Tax Commission, Defendants-Appellees. Oklahoma Farm Bureau; Oklahoma Cattlemen's Association; Osage County Farm Bureau; Osage County
Attorney:Thomas P. Schlosser of Morisset, Schlosser & Jozwiak, Seattle, WA (and Gary S. Pitchlynn, O. Joseph Williams and Stephanie Moser Goins of Pitchlynn & Williams, P.L.L.C., Norman, OK, with him on the briefs), for Plaintiff-Appellant. Lynn H. Slade, (William C. Scott and Joan D. Marsan of Modrall, S...
Judge Panel:Before TACHA, EBEL, and KELLY, Circuit Judges.
Case Date:March 05, 2010
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
 
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597 F.3d 1117 (10th Cir. 2010)

OSAGE NATION, Plaintiff-Appellant,

v.

Constance IRBY Secretary-Member of the Oklahoma Tax Commission; Thomas E. Kemp, Jr., Chairman of the Oklahoma Tax Commission; Jerry Johnson, Warden, Vice-Chairman of the Oklahoma Tax Commission, Defendants-Appellees.

Oklahoma Farm Bureau; Oklahoma Cattlemen's Association; Osage County Farm Bureau; Osage County Cattlemen's Association; Oklahoma Association of Electric Cooperatives; Oklahoma Independent Petroleum Association; Oklahoma Municipal League; Oklahoma Rural Water Association; Oklahoma Wildlife Management Association; Environmental Federation of Oklahoma; Public Service Company of Oklahoma; Oklahoma State Chamber of Commerce and Industry, Amici Curiae.

No. 09-5050.

United States Court of Appeals, Tenth Circuit.

March 5, 2010

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[Copyrighted Material Omitted]

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Thomas P. Schlosser of Morisset, Schlosser & Jozwiak, Seattle, WA (and Gary S. Pitchlynn, O. Joseph Williams and Stephanie Moser Goins of Pitchlynn & Williams, P.L.L.C., Norman, OK, with him on the briefs), for Plaintiff-Appellant.

Lynn H. Slade, (William C. Scott and Joan D. Marsan of Modrall, Sperling, Roehl, Harris & Sisk, P.A., Albuquerque, NM; Kathryn L. Bass, Chief Deputy General Counsel, Oklahoma Tax Commission, Oklahoma City, OK, on the brief), for Defendants-Appellees.

Steven W. Bugg and Jeff L. Todd of McAfee & Taft A Professional Corporation, Oklahoma City, OK, for Amici Curiae.

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Before TACHA, EBEL, and KELLY, Circuit Judges.

PAUL KELLY, JR., Circuit Judge.

Plaintiff-Appellant the Osage Nation (" the Nation" ) appeals from the grant of summary judgment for Defendants-Appellees. The Nation sought (1) a declaratory judgment that the Nation's reservation, which comprises all of Osage County, Oklahoma, has not been disestablished and remains Indian country within the meaning of 18 U.S.C. § 1151; (2) a declaratory judgment that Nation members who are employed and reside within the reservation's geographical boundaries are exempt from paying state income tax; and (3) injunctive relief prohibiting Defendants from collecting income tax from such tribal members. 1 Aplt.App. at 24.

The pivotal issue in this case is whether the Nation's reservation has been disestablished, not Oklahoma's tax policies. The district court held that the Osage reservation had been disestablished; that tribal members who work and live on non-trust/non-restricted land in Osage County are not exempt from state income tax; and that " [t]he Osage have not sought to reestablish their claimed reservation or to challenge [Oklahoma's] taxation until recently," and Oklahoma's longstanding reliance counsels against now establishing Osage County as a reservation. 2 Aplt.App. at 389-407. The district court also denied the Nation's Rule 59 motion. 2 Aplt.App. at 416. On appeal, the Nation argues that its reservation has never been disestablished and is coterminous with Osage County; that tribal members who work and live in Osage County are exempt from state income tax; and that the district court should not have applied equitable considerations to this case. Our jurisdiction arises under 28 U.S.C. § 1291, and because we agree that the Osage reservation has been disestablished, we affirm.

Background

In 1872, Congress established a reservation for the Osage Nation in present day Oklahoma. See Act of June 5, 1872, ch. 310, 17 Stat. 228 (An Act to Confirm to the Great and Little Osage Indians a Reservation in the Indian Territory). In 1887, due to increased demand for land by white settlers and a desire to assimilate tribal nations, Congress passed the Indian General Allotment Act. See Act of February 8, 1887, ch. 119, 24 Stat. 388 (codified as amended at 25 U.S.C. §§ 331-334, 339, 341-342, 348-349, 354, 381). The Osage reservation was expressly exempted from this Act. 25 U.S.C. § 339. In 1907, Oklahoma became a state, and the Osage reservation was incorporated into the new state as Osage County as provided for in the Oklahoma Enabling Act. See Act of June 16, 1906, ch. 3335, 34 Stat. 267, §§ 2, 21; see also Okla. Const., art. XVII, § 8 (" The Osage Indian Reservation with its present boundaries is hereby constituted one county to be know as Osage County." ). Osage County, the largest county in Oklahoma, covers about 2,250 square miles (about 3% of Oklahoma's total land area).

Contemporaneous to passing the Oklahoma Enabling Act, Congress enacted the Osage Allotment Act. See Act of June 28, 1906, ch. 3572, 34 Stat. 539. The 1906 Osage Allotment Act severed the mineral estate from the surface estate of the reservation and placed it in trust for the tribe. Id. at §§ 2-3. The Act included several provisions regarding tribal government and tribal membership and granted the Osage tribal council general tribal authority. See Logan v. Andrus, 640 F.2d 269, 270 (10th Cir.1981) (noting that nothing in the Osage Allotment Act " limited the authority of the officers therein named to mineral administration or any other specific function" ). The Act also allotted most

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of the Osage surface land in severalty to tribal members. Osage Allotment Act at § 2.

In 2004, Congress passed a statute clarifying the 1906 Act and authorizing the Osage Nation to determine its membership and government structure. Pub.L. No. 108-431, 118 Stat. 2609 (2004) (An Act to Reaffirm the Inherent Sovereign Rights of the Osage Tribe to Determine Its Membership and Form of Government). This Act refers to the Osage as " based in Pawhuska, Oklahoma," id. at § 1, but does not specifically refer to an Osage reservation in the text of the statute, and does not address the reservation status of Osage land.

In 1999, a tribal member who was employed by the Tribe on trust land and lived within the boundaries of the Osage County on fee land protested the State's assessment of income tax on her. Osage Nation v. Oklahoma ex rel. Okla. Tax Comm'n, 260 Fed.Appx. 13, 15 (10th Cir.2007). The Oklahoma Tax Commission determined that she did not live in Indian country within the meaning of 18 U.S.C. § 1151, and that her income was taxable. Id. After the Commission's decision, the Osage Nation filed the instant suit seeking declaratory and injunctive relief. Id. at 15-16. Specifically, the Nation seeks a declaratory judgment: " (1) that the Nation's reservation boundaries have not been extinguished, disestablished, terminated, or diminished and is and remains the Indian country of the Nation; and (2) that the Nation's members who both earn income and reside within the geographical boundaries of the Nation's reservation are not subject to or required to pay taxes to the State ... on [ ] income." 1 Aplt.App. at 24. The Nation further seeks injunctive relief prohibiting " Defendants ... from levying or collecting Oklahoma state income taxes upon the income of the Nation's members who both earn income and reside within the geographical boundaries of the Nation's reservation." 1 Aplt.App. at 24.

The state of Oklahoma and the Oklahoma Tax Commission filed a motion to dismiss, arguing that the Nation's suit was barred by the Eleventh Amendment. Osage Nation, 260 Fed.Appx. at 16. The Nation amended the complaint to include the individual members of the Tax Commission as defendants. Id. All of the defendants again moved to dismiss based on Eleventh Amendment immunity, and the district court denied the motion. Id. On appeal, we reversed the district court's decision to allow the suit to proceed against the State of Oklahoma and the Oklahoma Tax Commission. We determined that the suit could proceed against the individual members of the Tax Commission under the Ex parte Young exception to Eleventh Amendment immunity. Id. at 22.

On remand, the remaining defendants moved to dismiss, and the district court converted their motion to one for summary...

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