Bruner v. U.S.
| Decision Date | 16 August 2004 |
| Docket Number | No. 02-CV-504-H(C).,02-CV-504-H(C). |
| Citation | 340 F.Supp.2d 1204 |
| Parties | Richard BRUNER, Jr. and Betty K. Bruner, Plaintiffs, v. UNITED STATES of America, Defendant. |
| Court | U.S. District Court — Northern District of Oklahoma |
James Rouse Hicks, Ronald Joseph Saffa, Reece Boone Morrel, Paul R. Hodgson, Morrel West Saffa Craige & Hicks Inc., Tulsa, OK, Arthur R. Miller, Cambridge, MA, for Plaintiffs.
Robert D. Metcalfe, Teresa Dondlinger Trissell, US Department of Justice Tax Division, Washington, DC, for Defendant.
This matter comes before the Court for a determination of whether a statute duly enacted by the United States Congress is enforceable under the Constitution of the United States. That statute, Section 3 of the Act of Congress dated May 10, 1928, 45 Stat. 495, provides in applicable part as follows:
That all minerals, including oil and gas, produced on or after April 26, 1931, from restricted allotted lands of members of the Five Civilized Tribes in Oklahoma or from inherited restricted lands of full-blood Indian heirs or devisees of such lands, shall be subject to all State and Federal taxes of every kind and character the same as those produced from lands owned by other citizens of the state of Oklahoma.
Plaintiffs argue that this enactment constituted an uncompensated "taking" of property and therefore violated the due process rights granted by the Constitution. Defendant replies that the statute effects no such taking and is fully within the constitutional power of Congress to impose taxes.
At the hearing on June 6, 2003, Plaintiffs conceded that they cannot prevail in this lawsuit if Section 3 is constitutional. Therefore, after further briefing, the only question before the Court at this time is the constitutionality of this enactment. After an extensive review of the pertinent case authority, as discussed below, the Court finds the 1928 statute is constitutional.
Solely for the purpose of resolving the instant question, the parties have stipulated to the following facts:
A. Historical Background
1. The Creeks, at the time of the establishment of the United States Government, inhabited a territory in the southeastern United States.
2. During the period 1826 through 1840, the Creek Indians, some voluntarily and some forcibly, left their homes in the east and relocated in Indian Territory (in what is now the State of Oklahoma). Pursuant to a treaty dated February 14, 1833, the Creek Nation acquired a patent awarding the Nation fee simple title to a part of the Indian Territory. Over time, the white population in Indian Territory outnumbered the Indian population.
3. After the Civil War, the United States Government pursued a policy of dissolution of the Five Civilized Tribes, including the Creek Nation, and the creation of a state in what was then Indian Territory.
4. Representatives of the Dawes Commission met with the Five Civilized Tribes with the dual goals of allotment of the land to the individual Indian members and the abolishment of tribal governments. The Dawes Commission found that a majority of the Indians were hostile to the proposed allotment of their land and the abolishment of their tribal governments. From 1893 to 1897, the Dawes Commission made fruitless efforts to conclude allotment agreements. Congress threatened to enact laws for compulsory allotment if the tribes did not voluntarily ratify allotment agreements.
5. In 1897, the Dawes Commission submitted a proposed agreement to the Creeks for ratification. Both the Chief and the National Council rejected the Agreement of September 27, 1897.
6. It was under these conditions that Congress passed the Act of June 28, 1898, commonly called the Curtis Act.
7. In an election held on November 1, 1898, the Creek Nation rejected an amended version of the September 27, 1897 Agreement which had been included as Section 30 of the Curtis Act. As a result of the Tribe's failure to ratify the Agreement of September 27, 1897, the Curtis Act of June 28, 1898, became operative in the Creek Nation on December 1, 1898.
B. The Bruners' Allotment
8. Miller Bruner was a full-blood male Creek Indian enrolled at Roll No. 4893, on February 3, 1900, and was 22 years of age.
9. Miller Bruner died intestate on May 15, 1903.
10. By an Allotment Deed and a Homestead Deed both dated September 25, 1903 and approved by the Department of Interior on October 23, 1903, Miller Bruner was allotted the SW Quarter of Section Twenty-one (21), Township Eight (8) North, Range Nine (9) East, Hughes County, Oklahoma ("the Property").
11. Dick Bruner, plaintiff Richard Bruner's father and also a full-blood Creek Indian, inherited the Property subject to a life estate held by his mother. This life estate was later conveyed to Dick Bruner and the conveyance approved by the County Court of Hughes County.
12. Dick Bruner died intestate on September 19, 1981. Each of his three sons — Rudolph Bruner, Randolph Bruner, and plaintiff Richard Bruner, Jr. — received a one-third (1/3) share in the Property.
13. Plaintiffs Richard Bruner, Jr. and Betty K. Bruner, husband and wife, are citizens of the United States of America and are residents of Claremore, Oklahoma.
14. Plaintiff Betty K. Bruner is Richard Bruner, Jr.'s wife, but is not a restricted Indian. Mrs. Bruner is also a plaintiff because she filed federal income tax returns for the years 1984, 1985, and 1991 through 1995 jointly with Mr. Bruner.
C. The Oil and Gas Lease and Income
15. The three brothers, Rudolph, Randolph, and plaintiff, Richard, entered into an oil and gas lease with Melzer Exploration Company on March 16, 1983, covering the Southwest Quarter of Section 21-8N-9E, Hughes County, Oklahoma. The leasing parties entered into an addendum on June 17, 1983. The lease and the addendum were both approved by the District Court of Hughes County, Oklahoma on June 17, 1983, at which the United States Probate Attorney appeared.
16. Richard Bruner, Jr. was paid in open court his share of bonus money from the oil and gas lease on the Property after approval of the lease by the state court.
17. Plaintiff Richard Bruner, Jr. received income from the production of oil and gas on this restricted Indian land and included this income in Plaintiffs' taxable income on their federal income tax returns for the years 1984, 1985, and 1991 through 1995.
D. Plaintiffs' Federal Income Tax Returns and Claims for Refund
18. Plaintiffs' tax returns were filed, their taxes paid, and their claims for refund were filed with the IRS on the following dates:
Tax Returned Latest Tax Claim
Year Filed Payment Filed
---- ----- ------- -----
1984 8/19/85 1/15/85 4/14/98
1985 5/15/87 4/15/86 4/14/98
1991 8/18/92 3/26/93 4/14/98
1992 8/17/93 4/28/95 4/14/98
1993 8/17/94 9/2/95 4/14/98
1994 4/15/95 1/30/96 4/14/98
1995 4/15/95 11/5/97 4/14/98
19. Plaintiffs paid the following amounts of federal income tax, as reported due on their returns:
Federal
Net Income Income
Year Therefrom Tax Paid
---- --------- --------
1984 $157,898 $18,987
1985 194,173 22,784
1991 20,388 1,849
1992 13,366 1,523
1993 10,582 2,229
1994 7,699 2,151
1995 6,072 1,888
-------- -------
TOTAL $410,178 $51,411
20. Plaintiffs request a refund of $44,325 of federal income taxes paid on net income attributable to oil and gas production from the SW Quarter of Section 21-8N-9E as follows:
21. By letter dated November 1, 2000, the Internal Revenue Service disallowed all of Plaintiffs' claims for federal income tax refunds and none have been refunded.
E. Additional Facts
22. No state court guardian has been appointed for Richard Bruner, Jr.
23. Richard Bruner, Jr. signs his own contracts except for contracts pertaining to restricted Indian land, which must be approved by the state district court.
24. Plaintiffs filed their own federal income tax returns for the years at issue; the Bureau of Indian Affairs did not prepare or file tax returns for Plaintiffs for those years.
25. Richard Bruner, Jr. signed his Forms 1040x, Amended U.S. Individual Income Tax Return, for the years at issue; these forms were not prepared by the Bureau of Indian Affairs.
The Court finds that a review of the relevant legal authorities in this area is instructive.
The federal-tribal relationship, premised upon broad but not unlimited federal constitutional power over Indian affairs, often is described as "plenary." This relationship also is characterized by special trust obligations, which require the United States to adhere strictly to fiduciary standards in its dealings with the Indians. The tension inherent between this broad federal authority and the special trust obligations has resulted in a unique body of law. Felix S. Cohen's Handbook of Federal Indian Law 207 (1982) (hereinafter Cohen).
This same 1982 edition of Cohen indicates that, at least up to that time, "[n]o case ha[d] been found holding a federal tax law unconstitutional as applied to Indians or tribes." Cohen at 390 n. 4. According to Chickasaw Nation v. United States, 208 F.3d 871, 880 (10th Cir.2000), aff'd, 534 U.S. 84, 122 S.Ct. 528, 151 L.Ed.2d 474 (2001), "[a]lthough Congress has often refrained from imposing taxes on Indian tribes, the Supreme Court has never held unconstitutional a federal tax applied to Indians."
This area of the law is not free from doubt. As one scholar noted, there are...
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