Oneida Tribe of Indians of Wis. v. Vill. of Hobart

• Decision Date: 18 October 2013
• Docket Number: No. 12–3419.,12–3419.
• Citation: 732 F.3d 837
• Parties: ONEIDA TRIBE OF INDIANS OF WISCONSIN, Plaintiff–Appellee, v. VILLAGE OF HOBART, WISCONSIN, Defendant–Third–Party Plaintiff–Appellant, v. United States of America, et al., Third–Party Defendants–Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

732 F.3d 837

ONEIDA TRIBE OF INDIANS OF WISCONSIN, Plaintiff–Appellee,

v.VILLAGE OF HOBART, WISCONSIN, Defendant–Third–Party Plaintiff–Appellant,

v.United States of America, et al., Third–Party Defendants–Appellees.

No. 12–3419.

United States Court of Appeals,Seventh Circuit.

Argued Sept. 18, 2013.

Decided Oct. 18, 2013.

Arlinda F. Locklear, Attorney, Washington, DC, for Plaintiff–Appellee.

Frank W. Kowalkowski, Attorney, Davis & Kuelthau, Green Bay, WI, for Defendant–Appellant.

Joshua M. Levin, Attorney, Department of Justice, Office of the Attorney General, Peter McVeigh, Attorney, Department of Justice, Washington, DC, for Defendants–Appellees.

Before BAUER, POSNER, and TINDER, Circuit Judges.

POSNER, Circuit Judge.

In 2007 the Village of Hobart, Wisconsin passed an ordinance assessing stormwater management fees on all parcels of land in the village, including those owned by the Oneida Nation of Wisconsin, an Indian tribe. The purpose of the assessment was to finance the construction and operation of a stormwater management system. The tribe sought a declaratory judgment that the assessment could not lawfully be imposed on it. Hobart contended that if the tribe was right on that score (Hobart thought it was wrong), the United States must pay the fees; and so it filed a third-party complaint against the United States. The district judge rendered summary judgment for the tribe and granted the motion of the United States to dismiss the third-party claim. The Village appeals both rulings.

Hobart is a small town in rural Wisconsin, near Green Bay. Its population is less than 7000, of whom about 17 percent are Indians of the Oneida tribe. The Indians' homes are not confined to one neighborhood. They are scattered throughout the village and as a result the Indian and non-Indian properties form an irregular checkerboard pattern. The village itself is an enclave in the tribe's reservation.

The significance of the checkerboard pattern is that title to 148 parcels of land in Hobart—comprising about 1400 acres, amounting to 6.6 percent of the village's total land—is held by the United States in trust for the Oneida tribe. Congress has authorized the federal government to buy land and hold it in trust for Indian tribes. 25 U.S.C. § 465; Carcieri v. Salazar, 555 U.S. 379, 381–82, 129 S.Ct. 1058, 172 L.Ed.2d 791 (2009). Normally the land is, as in this case, within the boundaries of an Indian reservation. The non-Indian parcels in Hobart are technically part of the surrounding Oneida reservation as well, but they are subject to state rather than tribal sovereignty, and thus are subject to state taxation and regulation. Tribal trust land, in contrast, may not be taxed by either state or local governments. 25 U.S.C. § 465.

The federal government holds little more than “bare” legal title to the trust land; with immaterial exceptions the tribe governs trust lands just as it does lands to which it holds title. See, e.g., 25 U.S.C. § 415(a); Montana v. United States, 450 U.S. 544, 557, 101 S.Ct. 1245, 67 L.Ed.2d 493 (1981). And so trust lands are part of “Indian country,” 18 U.S.C. § 1151; Oklahoma Tax Commission v. Sac & Fox Nation, 508 U.S. 114, 123, 113 S.Ct. 1985, 124 L.Ed.2d 30 (1993)—in fact the largest part. Cohen's Handbook of Federal Indian Law§ 15.03, p. 997 and n.1 (Nell Jessup Newton ed., 2012).

One may wonder why the government holds legal title to any Indian land—why it doesn't just buy land and give it to an Indian tribe or, simpler still, give the tribe the money to buy the land. The reason is to increase the likelihood that Indian territory will remain Indian territory; for unlike land held in fee simple by an Indian tribe, trust land is inalienable without federal authorization. See 25 U.S.C. §§ 81, 177; 25 C.F.R. § 152.22. So one may wonder how it is that non-Indians own land in Hobart even though the village is entirely within the boundaries of the Oneida reservation. The answer is that over time and through a variety of statutory provisions a great deal of Indian land has been acquired by non-Indians. See Cohen's Handbook, supra, § 1.04, pp. 73–74; § 16.03[2][b], pp. 1073–74.

Federal trusteeship underscores the fact that land acquired by the federal government in trust for Indians is, like original tribal land, for the most part not subject to state jurisdiction. Although the Supreme Court no longer believes that “the treaties and laws of the United States contemplate the Indian territory as completely separated from that of the states,” Worcester v. Georgia, 31 U.S. 515, 557, 6 Pet. 515, 8 L.Ed. 483 (1832) (Marshall, C.J.); see Nevada v. Hicks, 533 U.S. 353, 361, 121 S.Ct. 2304, 150 L.Ed.2d 398 (2001), it remains true that “Indian treaties, executive orders, and statutes preempt state laws that would otherwise apply by virtue of the states' residual jurisdiction over persons and property within their borders. Federal preemption of state law in the field of Indian affairs has persisted as a major doctrine in the Supreme Court's modern Indian law jurisprudence.” Cohen's Handbook, supra, § 2.01[2], p. 112. So when the federal government acquires land in trust for Indians, the consequence is to “reestablish [the Indians'] sovereign authority” over that land. City of Sherrill v. Oneida Indian Nation, 544 U.S. 197, 221, 125 S.Ct. 1478, 161 L.Ed.2d 386 (2005).

It is awkward for parcels of land subject to one sovereign to be scattered throughout a territory subject to another. But actually it's a familiar feature of American government. Federal facilities of all sorts, ranging from post offices to military bases, are scattered throughout the United States, and are subject to only as much regulation by states and local governments as the federal government permits. A similar scatter is common in Indian country, primarily as a result of allotment acts (later repealed) in the late 1800s and early 1900s, notably the Dawes (General Allotment) Act of 1887, 25 U.S.C. § 331—acts allotting reservation land to individual families to liberate them from tribal ownership that Congress in that era considered socialistic, to encourage their assimilation into mainstream American life, and not incidentally to facilitate the transfer of Indian land to non-Indians. See Cohen's Handbook, supra, § 1.04, pp. 72–75.

The question in this case is whether the federal government has authorized the Village of Hobart to assess fees on Indian lands in the village (or taxes—whether the assessments are fees or taxes is a separate issue, discussed at the end of this opinion) to pay for its stormwater management program.

Although the authority of a state or local government over Indian territory is limited, it is not negligible, especially when Indians and non-Indians live in close proximity. No one doubts that Village of Hobart firefighters can enter Indian land in the village in the same circumstances in which they can enter land owned by non-Indians. But the only premise that the Village advances for a right to impose on the Indian lands charges for pollution control is section 313(a) of the Clean Water Act, 33 U.S.C. § 1323(a), which provides, so far as relates to this case, that

each department, agency, or instrumentality of the executive, legislative, and judicial branches of the Federal Government (1) having jurisdiction over any property or facility, or (2) engaged in any activity resulting, or which may result, in the discharge or runoff of pollutants, and each officer, agent, or employee thereof in the performance of his official duties, shall be subject to, and comply with, all Federal, State, interstate, and local requirements, administrative authority, and process and sanctions respecting the control and abatement of water pollution in the same manner, and to the same extent as any nongovernmental entity including the payment of reasonable service charges.

Hobart argues that this provision subjects tribal trust lands to local authority over stormwater runoff—a cause of water pollution acknowledged by Congress in enacting stormwater amendments to the Clean Water Act. See 33 U.S.C. § 1342(p). Unmanaged stormwater runoff absorbs pollutants in its path and often deposits them in nearby bodies of water that are classified as waters of the United States and therefore subject to federal regulation. See National Pollutant Discharge Elimination System—Regulations for Revision of the Water Pollution Control Program Addressing Storm Water Discharges, 64 Fed.Reg. 68,722, 68,724 (Dec. 8, 1999). Hobart's stormwater management program (adopted though not yet fully implemented) is intended to reduce, so far as the Clean Water Act requires, pollution caused by stormwater runoff.

Although section 313(a) does waive federal immunity from local regulation of stormwater runoff, it does not address the underlying authority of local governments to regulate that runoff on Indian lands. The federal Environmental Protection Agency has the whip hand. Congress has authorized it to establish and enforce nationwide standards for regulating pollution,...