Stacy Leeds

Dylan Hedden-Nicely and Stacy Leeds on McGirt and the Future of Federal Indian Law

Matthew L.M. Fletcher

Dylan Hedden-Nicely and Stacy Leeds have posted “A Familiar Crossroads: McGirt v. Oklahoma and the Future of the Federal Indian Law Canon” on SSRN. The paper is forthcoming in the New Mexico Law Review.

The abstract:

Federal Indian law forms part of the bedrock of American jurisprudence. Indeed, critical parts of the pre-civil war constitutional canon were defined in federal Indian law cases that simultaneously provided legal justification for American westward expansion onto unceded Indian lands. As a result, federal Indian law makes up an inextricable part of American rule of law. Despite its importance, federal Indian law follows a long and circuitous road that requires “wander[ing] the maze of Indian statutes and case law tracing back [over] 100 years.” That road has long oscillated between two poles, with the Supreme Court sometimes applying foundational principles that view tribes as sovereigns “retaining all their original natural rights,” and at other times treating tribes as mere “wards subject to a [self-imposed] guardian.”

Supreme Court respect for tribal sovereignty and self-determination reached its zenith in the so-called “modern era” of federal Indian law, spanning from 1959 through the late 1970s. During this era, the Court tended to adhere to federal Indian jurisprudence and solidified a relatively coherent doctrine based upon the foundational principles developed in the 1830s. The late Dean David Getches described the modern era as a time that “encouraged a reinvigoration of tribal governments throughout the country. During this period, tribes gained political influence and economic security as [the federal government] generally promoted a policy of tribal self-determination.”

The Court turned away from its foundational Indian law principles with the onset of the 1980s and the departure intensified as Chief Justice William Rehnquist was appointed chief justice in 1986. Since then, the touchstone of the Supreme Court’s federal Indian jurisprudence has been to employ a “subjectivist” approach whereby it “gauges tribal sovereignty as a function of changing conditions”—demographic, social, political, and economic—and the expectations of non-Indians that may be potentially by the exercise of tribal power. As a result, the Supreme Court became a strikingly hostile place for American Indian tribes as the Court became increasingly willing to divest tribes of governmental powers, not by upholding the enactments of Congress, but through its own interpretation of what tribal inherent governmental rights ought to be.

The appointment of Justice Sonia Sotomayor and, more recently, Justice Neil Gorsuch seems to have brought change to the Court’s direction in Indian law cases. Since then, cases have been consistently decided in favor of tribal litigants by reaffirming treaty rights through the application of foundational principles that focus on the plain language of treaties and the application of the Indian canons of construction. However, to be sure, even the Rehnquist Court did “recite[] and sometimes act[] upon foundation principles,” but those cases were limited to situations where “non-Indian interests [were] not seriously threatened.” All of Indian Country waited for, or perhaps dreaded, a true litmus test.

That test came to the Supreme Court in the form of two Indian law cases—Sharp v. Murphy and McGirt v. Oklahoma—both of which were framed by non-Indian parties to affect the interests of an estimated 1.8 million people in eastern half Oklahoma. Ready or not, Indian Country found its test case, which squarely placed the Court’s competing jurisprudential philosophies— its foundation principles versus its “subjectivist” approach—on a collision course.

In a powerful and uncharacteristically passionate decision, Justice Gorsuch wrote for a 5-4 majority, upholding treaty-based rights to re-recognize the historic reservation boundaries of the Muscogee (Creek) Nation, the fourth largest Indigenous nation in the United States. The decision was the fourth consecutive treaty-rights victory and seemed to solidify a shift toward a consistent approach rooted in foundational principles.

The victory was short-lived. Just weeks after the Court’s decision in McGirt, Justice Ruth Bader Ginsburg passed away, once again shifting the make-up of the United States Supreme Court. As a result, Federal Indian law once again finds itself at a crossroads. The Murphy and McGirt decisions are landmark decisions that bring change to the legal landscape of much of Oklahoma. It remains to be seen whether the perceived new Supreme Court era in Indian law is here to stay.

Highly recommended!!!

Stacy Leeds and Lonnie Beard on the Tax Implications of McGirt v. Oklahoma

Matthew L.M. Fletcher

Stacy Leeds and Lonnie Beard have posted “A Wealth of Sovereign Choices: Tax Implications of McGirt v. Oklahoma and the Promise of Tribal Economic Development,” forthcoming in the Tulsa Law Review, on SSRN. Here is the abstract:

Justice Neil Gorsuch’s now famous opening line in McGirt v. Oklahoma will long be remembered by Indigenous nations as one of the most powerful judicial statements in the history of federal Indian law. “On the far end of the Trail of Tears was a promise.”

For that promise to be fully realized, the McGirt decision must lead to more than just increased criminal justice system responsibilities for the federal government and the impacted Indigenous nations, collectively known as the “Five Tribes.” The promise at the end of the wholesale removal and relocation of Five Tribes was not simply an empty promise of geographic boundaries, it also included a permanent homeland with fully functioning tribal governments, including powers of taxation. With the re-affirmation of reservation boundaries and the re-assumption of many governmental responsibilities, the Five Tribes necessarily have the power to raise meaningful revenue to govern.

The promise must also include diverse economic development strategies conceived of and implemented by the Five Tribes in order to take advantage of and fully realize McGirt’s newly reaffirmed reservation status. If this challenge is accepted, the Five Tribes have an opportunity to reconfirm and expand government powers that have been denied them for over a century, including the power to make the same sovereign tax choices afforded other sovereigns worldwide.

This article explores the tax implications of the McGirt decision with detailed analysis of what has changed, and what remains the same, for purposes of federal, tribal and state taxing authority. The article suggests several law and policy choices available to the Five Tribes, including how to maximize tax incentives to grow the reservation population base and support a diverse economy through small business and enterprise scale development. The article includes a call to action for tribal governments to formulate a long-term economic strategy that will take advantage of tax attributes that attach to the various reservations. In conclusion, the article suggests possible compact arrangements with other Indigenous nations and with Oklahoma’s state and local governments.

McGirt has been heralded as ushering in substantial changes for the eastern half of Oklahoma. If tribes and Oklahoma play their collective economic cards right, big change could come in the form of positive economic outcomes. Economists predict, or at least hope for, a post-COVID economic revival for rural communities in America’s heartland. To assist in this economic revival, the Five Tribes’ reservations could serve as laboratories for the formulation of economic development strategies that could serve as blueprints for other parts of rural America. For that to happen in eastern Oklahoma, McGirt will need to live up to its full potential, becoming much more than an overturned criminal conviction from inside Indian country.