New Paper Focuses on Double Taxation in Indian Country

Link to article here.

Citation and abstract:

Croman, K. S., & Taylor, J. B. (2016). Why beggar thy Indian neighbor? The case for tribal primacy in taxation in Indian country. Joint Occasional Papers on Native Affairs (JOPNA 2016-1). Tucson, AZ and Cambridge, MA: Native Nations Institute and Harvard Project on American Indian Economic Development.

The law governing taxation in Indian country is a mess. The accretion of common law precedents and the general tendency of states to assert primacy over the taxation of non-Indians create absurd outcomes. This article makes the case three ways. The argument based on the law shows that particularized, fact-specific precedents create a thicket of rulings that impede business development. The argument based on facts shows that these impediments to economic development harm not only tribal economies, but state and local economies, too. And the argument based on just claims testifies to the fact that the current arrangement could hardly have emerged from the actions of willing and informed governments operating in good faith. To borrow from Adam Smith, states beggar their Indian neighbors, seeking fiscal gain to the tribes’ detriment and, ultimately, their own. We conclude by recommending actions to bring fairness and certainty to the law governing taxation in Indian country.

Dreveskracht on “Keeping Tribal Business Partners Close – and Their Lawyers Closer”

Ryan Dreveskracht has written a short paper for publication on Turtle Talk titled “Keeping Tribal Business Partners Close – and Their Lawyers Closer”: Keeping Tribal Business Partners Close – and Their Lawyers Closer.

The paper is intended for tribal attorneys, and details some of the lessons tribal lawyers can learn from two recent cases involving the Seminole Tribe of Florida (Everglades Ecolodge and Contour Spa). In both cases, argues Dreveskracht, attorneys for the non-Indian business interests didn’t do their Indian law due diligence, and in the adversarial proceedings that followed in court, the Tribe pounced:

Of course, waiving tribal sovereign immunity where appropriate is always one option, but this is not always feasible. In Contour Spa and Everglades, for example, the Tribe had in fact waived its sovereign immunity via its contract with the non-Indian parties. In those cases, ultimately, the fault rested with those parties tasked with overseeing the negotiation and maintenance of those business transactions.

Dreveskracht believes that tribal lawyers may have some sort of obligation (practical, if not ethical) to make sure that the other side doesn’t fall into any Indian law traps:

Another solution is that tribes, in appropriate instances, ensure that their non-Indian business partners have engaged attorneys that are familiar with the fundamental principles of Indian law. Although this strategy may seem counterintuitive, a tribal party  should pause during the deal to consider the old adage that “bad facts make for bad law,” while also accepting that commercial disputes are inevitable, especially in modern economic times. The tribal party should also pause to consider that it is increasingly appropriate to litigate these disputes on the merits, rather than bank on seeking a quick dismissal on Indian jurisdictional grounds – a dismissal that will very likely result in appeal. There is great potential that the appellate courts will force an exception to a sovereignty-based affirmative defense – and that the exception could swallow the rule. This proverb is particularly true for commercially successful tribes, where the perception of big-business/small-entrepreneur inequality is even more likely to drive bad results in the courts, and in the court of public opinion. Accordingly, the parties and their lawyers should ensure clarity and understanding regarding the various issues of tribal jurisdiction and federal Indian law that are implicated in Indian Country commercial transactions.

I’m largely in agreement with Dreveskracht. When I started practicing in the 1990s, senior attorneys counseled me to draft contract language that would facilitate these kinds of traps. One example involved a private vendor that refused to adjudicate disputes in tribal court, insisting on state court jurisdiction and governing law. We negotiated for federal court review as a “compromise.” Of course, there is no federal subject matter jurisdiction over contract claims just because one of the parties is an Indian tribe. In California especially, cases started coming out in the 2000s where federal court judges were forced to dismiss contract claims, but the federal judges openly criticized tribal lawyers for negotiating those provisions. They frankly are borderline unethical, and may implicate professional responsibility canons.

Business partners are partners before they are adversaries, and tribal businesses depend on goodwill of their own businesses and those of other tribes to create a groundwork for doing business with non-Indian entities. It seems reasonable to rethink the arms-length negotiations strategies in at least some contracts. It may be a difficult pill to swallow for tribal lawyers. Well, face it, most just won’t do it. Lawyers are trained in an adversarial process, and always lean toward strictly assessing risk. Maybe that’s why lawyers are such lousy business people.

ILPC Cross Deputization Occasional Paper

We’ve posted a new Occasional Paper on our Occasional Paper website.  The paper, Criminal Jurisdiction in Indian Country: The Solution of Cross Deputization, was primarily written by second and third year law students in our Indigenous Law and Policy Center class.  They researched and analyzed both issues of criminal jurisdiction and cross deputization agreements with a focus on Michigan and Michigan tribes.

Empirical Research on Tribal Courts and Customary Law Posted on SSRN

My working paper, “Tribal Courts, the Indian Civil Rights Act, and Customary Law: Preliminary Data,” has been posted on SSRN. Chi-miigwetch to Alicia Ivory for all her hard work in helping with the research (you can see her contributions in the lengthy appendices at the end of the paper).

Here’s the abstract:

This study is an attempt to assess the validity of my theory that tribal courts do not apply “unusually difficult” laws in cases involving nonmembers. I theorized that in most cases (if not the vast, overwhelming majority), tribal courts apply a kind of “intertribal common law,” which consists of the application of tribal statutes that mirror federal and state statutes and the federal and state cases that interpret them.

Of the 120 cases involving an ICRA issue, tribal court judges applied federal and state case law as persuasive (and often controlling law) in 114 cases (95 percent). And, of the six cases in which the tribal court explicitly refused to apply federal or state case law, either the parties involved tribal members in a domestic dispute or else the tribal court held that its interpretation of the substantive provisions of ICRA were stronger or more protective of individual rights than would otherwise be available in parallel federal or state cases.

“Prop. 2 and Michigan American Indian Students” — Michigan Journal of Race & Law Symposium

I will be giving a short talk at the Michigan Journal of Race and Law‘s symposium on affirmative action in Michigan post-Prop. 2 this Saturday. Here are materials for my talk:

Michigan Civil Rights Commission Report — “One Michigan” at the Crossroads: An Assessment of the Impact of Proposal 06-02

MCRC Report Attachment #4 — The Michigan Indian Tuition Waiver is Based on a Political Relationship, not a Racial Classification

Michigan AG Declination to Issue Opinion re: Michigan Indian Tuition Waiver

MSU Indigenous Law & Policy Center Letter to the Michigan Law Review Commission

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Occasional Paper on Economic Development

In conjunction with the upcoming 2nd Annual Great Lakes Economic Development Symposium, which Matthew posted about here, I’ve written an introduction to eight articles we’ve submitted for the conference materials. The piece, From Economic Development to Nation Building: Observations on Eight Articles about Tribes, Sovereignty and Economic Development, will also be available on the Center’s Occasional Papers website.

Section 8(a) Business Development Program Consultation Meeting in AK reports that the SBA has published a notice in the Federal Register on a tribal consultation meeting. Here’s the summary:

The U.S. Small Business Administration (SBA) announces that it is holding a tribal consultation meeting in Fairbanks, Alaska on the topic of the 8(a) Business Development (BD) program regulations. Testimony presented at this tribal consultation meeting will become part of the administrative record for SBA’s consideration when the Agency deliberates on approaches to changes in the regulations pertaining to the 8(a) BD program.

The Indigenous Law & Policy Center recently published a white paper on the importance and linkage of the Section 8(a) BD program to the federal trust responsibility. The paper can be downloaded here as well.