In a recent 2-1 opinion, the Tenth Circuit Court of Appeals over-ruled a trial court ruling in Ute Mountain Ute Tribe v. Rodriguez that preempted several New Mexico state taxes on oil and gas extracted from tribal lands. Despite robust federal and tribal regulation of those natural resources, including the tribe's exclusion of state agents from any on-reservation regulatory behavior, the appeals court ruled that state roads traversed by non-Indian extraction companies while taking oil and gas to market represented a "substantial" state interest. That interest ultimately tipped the Bracker balancing away from tax preemption, in favor of the state. In so ruling, the Tenth Circuit disregarded SCOTUS' instruction in Bracker and Ramah to disregard alleged off-reservation state impacts, as Judge Lucero rightfully observes in dissent.
While in a footnote the court took care to not "purport to hold that off-reservation infrastructure or services may be considered in every instance where they provide a benefit of any magnitude to the on-reservation activity" (emphasis in original), after Ute Mountain it is hard to fathom how tribes in the Tenth Circuit will not encounter state tax collectors with their fingers firmly holding down the state side of the Bracker scale.
Thankfully for tribes in the Ninth Circuit Hoopa Valley Tribe v. Nevins still disallows federal trial and appeals courts from considering alleged off-reservation state burdens.
Gabriel "Gabe" Galanda is a partner at Galanda Broadman PLLC, of Seattle, an American Indian majority-owned law firm. He is an enrolled member of the Round Valley Indian Tribes of Covelo, California. He can be reached at 206.691.3631 or firstname.lastname@example.org, or via galandabroadman.com.