Supreme Court turns down Indian Country taxation case as high-profile session continues

By Acee Agoyo

Indianz.Com

WASHINGTON, D.C. — With about a month left in an already unusual session, the nation’s highest court has passed up a chance to address a long-standing issue affecting economic sovereignty in Indian Country.

In an order on Monday, the U.S. Supreme Court denied the petition in Albrecht v. Albrecht. The action, which came without explanation, lets stand a ruling from California that allows state and local governments to impose taxes on non-Indians who do business on Indian trust lands.

The dispute affects about 500 individuals, organizations and business entities in Riverside County, home to more than a dozen tribes in the southern part of the state. The non-Indian interests had challenged taxes imposed on trust lands they lease, primarily from citizens of the Agua Caliente Band of Cahuilla Indians.

In a decision issued last fall, the Court of Appeal of California, Fourth Appellate District, Division Two, upheld the taxes as legitimate. The ruling concluded that Riverside County’s efforts are not pre-empted by the federal government, in its role as trustee on Indian trust lands, and do not infringe on tribal sovereignty even though the tribe does not benefit economically.

“The Agua Caliente tribe receives no portion of the revenues collected from the county’s possessory interest tax or the lease payments made pursuant to the leasing of allotted land,” the appellate ruling from September 9, 2021, stated.

The Agua Caliente Band was not a part of the litigation at the state level and did not take part in the petition to the Supreme Court. The tribal citizens whose allotted lands are being taxed in Riverside County were not involved either.

But a group of tribes and tribal business interests submitted a brief in hopes of getting the nation’s highest court to resolve an issue that they say hinders economic development across Indian Country. Sovereignty is at stake, they asserted.

“Here, the County of Riverside and other local government entities have sought to pad their public fisc by significantly interfering with federal and tribal leasing laws and the tribal governments’ sovereign jurisdiction,” the brief signed by the Twenty-Nine Palms Band of Mission Indians, the Fort Independence Tribe of Paiute Indians, the Alturas Indian Rancheria, the Soboba Band of Luiseño Indians and the Inter-Tribal Trade Consortium read.

“These state political subdivisions have forced their own possessory interest tax and other local taxes onto Tribal Lands over which these state political subdivisions have no taxing or jurisdictional authority,” the tribal interests continued.

The tribal brief highlighted the efforts that the U.S. government, in its role as trustee, has taken to promote economic development in Indian Country. Included is the Helping Expedite and Advance Responsible Tribal Home Ownership Act, a federal law that encourages tribes to exercise greater control over leasing activities on their reservations.

The law, also known as the HEARTH Act, has become popular since enacted by Congress and signed into law in 2012. As of April 2022, nearly 80 Indian nations have taken advantage of the law in order to expedite housing, agricultural and other economic opportunities on their lands.

“The Helping Expedite and Advance Responsible Tribal Home Ownership Act has opened doors of economic opportunity for tribal nations with approved land leasing regulations,” Assistant Secretary for Indian Affairs Bryan Newland, a political appointee in the Biden administration, said last month upon approving HEARTH Act regulations for five tribes in California.

“With these approvals, these tribal communities have had their authority to control leasing of their lands under the act restored,” said Newland, a citizen of the Bay Mills Indian Community. “We will continue to welcome tribes to submit HEARTH Act leasing ordinances and reclaim the authority to manage the development of their homelands.”

In 2021 alone, the Bureau of Indian Affairs approved HEARTH Act regulations for 19 tribes, a record for the federal agency.

Every HEARTH Act approval comes with a notice in the Federal Register that addresses taxation of Indian trust lands. According to the Department of the Interior, states and local governments do not have the authority to impose taxes in Indian Country.

“The strong federal and tribal interests against state and local taxation of improvements, leaseholds, and activities on land leased under the Department’s leasing regulations apply equally to improvements, leaseholds, and activities on land leased pursuant to Tribal leasing regulations approved under the HEARTH Act,” the April 20 notice for the Morongo Band of Mission Indians, whose homelands are located in Riverside County in California, reads.

Despite Riverside County being home to a significant number of tribes, local officials have long clashed with Indian nations. In one high-profile case, the Agua Caliente Band is suing the county and a local water agency to quantify its water rights and to secure greater control of the water supply on its homelands in and around Palm Springs.

The county agencies tried to get the Supreme Court to stop the litigation after the tribe won a significant decision in its favor. The case is ongoing, with the federal government in full support of the tribe’s water rights.

The judicial system itself in Riverside County has slowly undergone change. Sunshine Suzanne Sykes, a citizen of the Navajo Nation, was the first Native person to serve on the Superior Court of Riverside County. She is now on the cusp of securing U.S. Senate confirmation as the first Native federal judge in all of California.

“Judge Sykes is devoted to pursuing justice for those who have too often been left behind by our legal system,” Sen. Alex Padilla (D-California) said at her nomination hearing in February. The Senate is moving forward with final consideration of Sykes this week, according to the Democratic majority.

The Albrecht taxation case involved the County of Riverside, the Desert Water Agency and the Coachella Valley Water District. All three entities waived their right to respond to the petition presented to the Supreme Court, according to the docket sheet for No. 21-2198, which typically happens when a party feels there is little chance the justices will agree to hear a case. It takes at least four justices — out of nine — for the court to grant a particular petition.

The order list from the nation’s highest court on Monday marked the first since the leak of a forthcoming decision in a reproductive rights case. Chief Justice John G. Roberts, Jr. has ordered an investigation into the unprecedented release of the draft opinion, as protests continue in defense of a woman’s right to choose.

In addition to the orders on Monday, the high court issued two decisions — though none from the three Indian law cases that were argued during the current term. Rulings are expected in Oklahoma v. Castro-Huerta, Denezpi v. United States and Ysleta del Sur Pueblo v. Texas before the end of June.

At stake in Castro-Huerta is whether the state of Oklahoma can prosecute non-Indians for crimes committed against Indian victims in Indian Country. Oral arguments took place on April 27.

Denezpi impacts the ability of tribes to protect women and children from violence, while Ysleta del Sur Pueblo affects the livelihoods of thousands of people who depend on employment in Indian Country. The cases were argued on February 21.

The decisions will be the last in which Justice Stephen G. Breyer will participate before he retires at the end of the court’s current session, which began last October.

Albrecht also included a number of business interests that lease land from citizens of the Colorado River Indian Tribes. Turtle Talk has posted documents from the case.