2nd Circuit Gets Stupid With IGRA

In a horrid opinion in Mashantucket Pequot v. Town of Ledyard, the Second Circuit scrutinized IGRA's tax preemption provision, 25 U.S.C. 2710(d)(4), which provides:

nothing in this section shall be interpreted as conferring upon a State or any of its political subdivisions authority to impose any tax, fee, charge, or other assessment upon an Indian tribe or upon any other person or entity authorized by an Indian tribe to engage in a class III activity.

Astonishingly, the Second Circuit held that this provision somehow does not operate to outlaw state taxes on Class III slot machine vendors, meaning on "entit[ies] authorized by an Indian tribe to engage in a class III activity." The panel reasoned that “IGRA does not directly preempt, by its text of by plain implication. . . . IGRA addresses state taxation, without prohibiting taxes." Wow.

Indeed, in the way of judicial realism, the Second Circuit overlooked contrary interpretations of 2710(d)(4) by its sister circuits. Consider, for example, what panels in Cabazon II (9th Cir. 1994) and Rincon (9th Cir. 2010), have said about that statute over the last two decades:

Cabazon II: “IGRA preempts the State of California from taxing offtrack betting activities on tribal lands.” Rincon: “[N]othing in IGRA can reasonably be construed as conferring on states the power to impose anything [fees or taxes]; all the states are empowered to do is negotiate.” Id.: “Under 2710(d)(4), it is not only ‘taxes’ that are precluded, it is any ‘tax, fee, charge, or other assessment.’”

We've now arguably got a circuit split. Until that--heaven forbid--might ever be resolved on high, gaming tribes in the West should be protected from the state tax man under cover of Cabazon II and Rincon. Those mega-gaming tribes in the Northeast, maybe not so much.

Gabriel "Gabe" Galanda is a partner at Galanda Broadman PLLC, of Seattle, an American Indian owned law firm.  He is an enrolled member of the Round Valley Indian Tribes of Covelo, California.  Gabe assists tribal governments and businesses in all matters of tribal economic development and diversification, including entity formation and related tax strategy. He also helps tribes and tribal businesses and joint ventures withstand attack from federal, state and local government. Gabe can be reached at 206.691.3631 or gabe@galandabroadman.com.

How I Learned To Stop Worrying And Love Bracker

Mashantucket Pequot Tribe v. Town of Ledyard (2d Cir.), handed down last month, has confirmed what we all know about Bracker balancing: when applied, Tribes usually lose. In fact it seems every time courts apply the Bracker balancing test, it becomes erroneously less possible to pass.  See Ute Mountain Ute Tribe v. Rodriguez, 660 F.3d 1177 (10th Cir. 2011); Barona Band of Mission Indians v. Yee, 528 F.3d 1184 (9th Cir. 2008).  By way of background, Bracker essentially preempts taxes on non-Indians in Indian Country where the interests of the state are outweighed by the interests of the Tribe and the federal government, with the latter usually being borne out through federal regulation.  White Mountain Apache Tribe v. Bracker, 448 U.S. 136 (1980).

In Ledyard, the Mashantucket Pequot Tribe sued a neighboring town to bar Connecticut’s personal property tax upon vendors leasing slot machines to the Tribe for use at Foxwoods Casino.  In applying Bracker, the court recognized and weighed the following interests:

Federal

-       tribal economic development as expressed through IGRA

-       tribes being primary beneficiaries in gaming

Tribal

-       economic development

-       sovereignty over reservation

State/Local

-       interest in preventing litigation by other Indians related to personal property

-       the hassle of a particularized inquiry into use of leased property when applying Bracker

-       generalized off reservation infrastructure

-       uniform application of tax code

Given the nebulous context of balancing tests, it’s very rarely possible to say a Bracker case was fundamentally incorrect.  But it’s possible in Ledyard.  The profound federal and tribal interests receive a gloss, but the court gives weight to incredible state and local issues that don’t make sense internally.  First, the court reasoned that states have an appreciable interest in preventing litigation by those who have been illegally taxed.  How can a state have a legitimate interest in preventing litigation to enforce valid legal rights?  Wow, we have a major problem.  Second, the court reasoned that states have an interest in avoiding complicated, particularized inquiries into who and what is being taxed.  But Bracker itself requires a "particularized inquiry" into taxed value to determine whether state taxes are preempted—we have an even more major problem.  Third, if generalized off-reservation services can be taken into account, we have a major, major problem.  Add to the legally incorrect analysis the flip voice of this panel—“ nothing in Connecticut’s tax makes it likely that Michael Corleone will arrive to take over the Tribe’s operations” —and, in sum, we have a major, major, major problem.

When Bracker fails even in the clearly preemptive IGRA context, caution must be used in using it at all.  While Bracker may still be viable in the administrative context, and in securing clear rulings from non-tribal taxing agencies, in courts, its demise may not have been exaggerated—until a court reads the 1980-decision correctly.

Anthony Broadman is a partner with Galanda Broadman PLLC.  He can be reached at anthony@galandabroadman.com.  His practice focuses on company-critical litigation and representing tribal governments in public affairs, taxation, and economic development matters.  He provides businesses and tribal governments advice regarding taxation, risk management, and legislative strategy.  Anthony was named a Rising Star by Washington Law & Politics magazine for 2013 and is immediate past Chair of the WSBA Administrative Law Section and Editor of the Indian Law Newsletter, published by the WSBA Indian Law Section.

IRS Targeting Is Nothing New—For Indian Country

Lost in the IRS-Tea-Party scandal is the fact that federal tax collectors have been targeting certain groups—Indian tribal governments—for years.

As Rep. Darrell Issa, R-Calif., Chairman of the House Oversight Committee, wastes Congress’s time on what really looks like a manufactured scandal, Indian Country should focus its attention on the IRS’s special wing—the ITG—focused on “provid[ing] Indian tribal government customers top quality service by helping them understand and comply with applicable tax laws, and to protect the public interest by applying the tax law with integrity and fairness to all.”  Which is code for auditing them.

The irony hasn’t been lost on those paying attention.

If the IRS had a division focused on providing anti-tax group “customers top quality service by helping them understand and comply with applicable tax laws,” Representative Issa might have a real scandal on his hands.

For what it’s worth, it would be more rational for the IRS to have a division focused on anti-tax groups as opposed to tribes.  Anti-tax groups are—surprise—less likely to pay taxes.  But ironically it is tribes and tribal members—supposed “Indians not taxed” according to the Constitution—who have been targeted and forcibly taxed by Uncle Sam since long before Representative Issa’s crusade.

Anthony Broadman is a partner with Galanda Broadman PLLC.  Anthony’s practice focuses on company-critical litigation and representing tribal governments in public affairs, taxation, and economic development matters.  He provides businesses and tribal governments advice regarding taxation, risk management, and legislative strategy.  Anthony was named a Rising Star by Washington Law & Politics magazine for 2013 and is immediate past Chair of the WSBA Administrative Law Section and Editor of the Indian Law Newsletter, published by the WSBA Indian Law Section.

Round Valley Lawyer Gabe Galanda Quoted By McLatchy Re Interior's Buy Back Scheme

Gabe Galanda is quoted at length in a nationally syndicated article by McLatchy Newspapers regarding Interior's nascent land buy back program.

“There’s no love for California Indian Country,” said Gabriel Galanda, a Seattle lawyer and a member of the Round Valley Indian Tribes of Mendocino County, Calif. He called the program “a disaster” in the making. . . Galanda, the Seattle lawyer, questioned why the same government agency that mismanaged Indian trust land should now be trusted to provide a fix. “Funding the agency to correct the problem they caused is not a prudent use of taxpayer dollars,” he said.

The article observes: "critics are skeptical, saying that federal law will still allow tribes to ultimately force unwilling minority landowners to sell once they’ve acquired 51 percent ownership of any individual parcel." Galanda is among those critics, having published several commentaries about the buy back program:

When Bureau of Indian Affairs Director Mike Black was pressed, he was forced to admit that the buy back program is specifically designed to bring tribes into at least a controlling 51 percent interest in fractionated allotted or restricted lands—at which time a tribe could then, on its own volition and with its own funding, force the sale of the remaining 49 percent or other minority interest. Make no mistake about it: while Interior’s plan now disclaims that it will facilitate forced sales under 25 U.S.C. 2204, the buy back program will catalyze controversial intra-tribal forced sales.

Consider Gabe's exchange with Director Black at a recent consultation session hosted by Interior in Seattle:

MR. GALANDA: What if one single undivided 18 interest holder objects to the sale? Does it then become an 19 involuntary sale that's ineligible for acquisition? 20 MR. BLACK: No. Every individual interest is 21 based on a willing seller. 22 MR. GALANDA: Okay. 23 MR. BLACK: So if -- you know, if there's five -- 24 well, let's just say there's ten interest holders within a 25 parcel or an allotment, nine of them want to sell and the one doesn't, he doesn't have to sell or she doesn't have to 2 sell. It does not preclude from going out and purchasing 3 the other nine interests. 4 MR. GALANDA: So the tribe would then have the 5 controlling 90 percent interest and the dissident would 6 still have their 10 percent? 7 MR. BLACK: Yes. 8 MR. GALANDA: But could the tribe then force the 9 sale on that 10 percent interest once it's acquired 10 90 percent interest? 11 MR. BLACK: It wouldn't be necessarily under this 12 program. But there is some language within AIPRA that I 13 don't know the specifics of, that there is some ability for 14 tribes to do some purchase under AIPRA. 15 MR. GALANDA: So the idea is let's bring the 16 tribes into a controlling level of interest voluntarily, but 17 then the tribe could cause an involuntary sale of the 18 minority interest, in terms; is that correct? 19 MR. BLACK: I would rather turn that over to our 20 solicitors for a specific question, but there are 21 opportunities to do that, yes. I don't believe any tribes 22 really exercise that today, that I'm aware of, but this -- 23 there are options out there available. 24 MR. GALANDA: Well, I think you understand, 25 though, there's two pending forced sales within this region right now. So I just think it's something that we should be 2 aware of. I don't think it's a healthy presumption to 3 suggest that this will be done 100 percent voluntarily.

Interior should get honest and admit that the current buy back program is not "entirely voluntary"--it will catalyze the forced sale of tribal member-owned lands, by their own tribes. Heeding the so-called "lessons of Cobell," Interior must be more forthright and proactive about such obvious forthcoming legal entanglements. Oh what a tangled web we weave.

Gabriel "Gabe" Galanda is a partner at Galanda Broadman PLLC, of Seattle, an American Indian owned law firm.  He is an enrolled member of the Round Valley Indian Tribes of Covelo, California.  Gabe assists tribal governments and businesses in all matters of tribal economic development and diversification, including entity formation and related tax strategy. He also helps tribes and tribal businesses and joint ventures withstand attack from federal, state and local government. Gabe can be reached at 206.691.3631 or gabe@galandabroadman.com.

Rising Indian Legal Star Ryan Dreveskracht Honored By Hometown Newspaper

Longview, Washington's The Daily News has honored Ryan Dreveskracht by publishing the news of his honoring as a Rising Star. Ryan received that accolade last month from SuperLawyers, a rating service of outstanding lawyers from more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement.

Ryan is a Galanda Broadman associate. Prior to joining the firm he was a law clerk to the Honorable Kathleen Kay, in the U.S. District Court for the Western District of Louisiana. Ryan has published ten journal and law review articles in 2011-12 alone, on issues like tribal renewable energy, and has served as the Managing Editor for the National Lawyer’s Guild Review since 2010.

Ryan Dreveskracht is an Associate at Galanda Broadman, PLLC.  His practice focuses on representing businesses and tribal governments in public affairs, energy, gaming, taxation, and general economic development.  He can be reached at 206.909.3842 or ryan @galandabroadman.com.

Silver Linings to Wash. Supreme Court's Playbook in State v. Clark

Today the Washington State Supreme Court ruled against a Colville tribal member and pro-tribal friends of the court in State v. Clark. But, in the case --which Gabe Galanda co-argued, on behalf of the ACLU--there are stark silver linings that affirm tribal sovereignty, especially in Washington Indian Country and Treaty territory. The case concerned whether a county search warrant, obtained and executed by city police without any attempt to involve the tribal police or court, lacked authority of law, since it authorized the search of a tribal member defendant’s home situated on reservation trust land. The Supreme Court affirmed the defendant's "conviction for theft because the trial court properly denied his motion to suppress evidence gathered on tribal trust land without a tribal warrant."

But the silver linings lie in the Court's reasoning:

Clark asks us to recognize the Colville Tribes' interest by adopting the test used by the Supreme Court of Idaho in Matthews, which measures the infringement of tribal sovereignty by looking to whether the State ignored governing tribal procedures while serving criminal process. Ifthe State did so, then under Matthews the State undermined tribal self-government. The material facts of Matthews are quite similar to those of Hicks: state police searched tribal property for an off-reservation crime. Hicks' holding has superseded Matthews for this particular factual scenario. However, we agree that Matthews serves as the starting point for searches of reservation lands where Hicks is distinguishable, such as where the crime occurs on reservation land over which the State has jurisdiction. Consequently, we hold that the State does not infringe tribal sovereignty by searching reservation lands unless it disregards tribal procedures governing the execution of state criminal process.

What this means is that state law enforcement must follow tribal procedures governing the execution of state criminal process, before searching reservation lands. In Clark, the Court found the Colville tribe's procedure wanting because it "does not govern the way the State executes its own process. Indeed, the tribal warrant provision does not guarantee that the State could execute its warrant as the tribal court could refuse to issue a tribal warrant."

Still, if tribes promulgate clear codified procedures for the execution of state process on reservation lands (18 U.S.C. 1151), states and state police must honor those procedures. And crucially, that is notwithstanding Nevada v. Hicks. This is the starkest silver lining from Clark.

The other silver lining lies in footnote 9 to the last page of the opinion: "Clark does not argue that any treaty provision creates governing procedures for executing a state search warrant . . . We do not foreclose the possibility that the State would infringe tribal sovereignty by disregarding governing procedures created by such provisions with our opinion today. See State ex rel. Merrill v. Turtle, 413 F.2d 683, 686 (9th Cir. 1969)."  In other words, Treaty tribes, such as all Stevens Treaty signatories, have an even stronger basis to force state police to honor codified tribal procedures that govern state process on reservation lands, especially through inherent territorial exclusion rights. That, too, is notwithstanding Hicks, which did not involve Treaty rights.

So although the decision was a tribal defeat, there are silver linings to the Washington Supreme Court's playbook in Clark.

Gabriel "Gabe" Galanda is a partner at Galanda Broadman PLLC, of Seattle, an American Indian owned law firm.  He is an enrolled member of the Round Valley Indian Tribes of Covelo, California. Gabe assists tribal governments and businesses in all matters of tribal sovereignty and self-governance, especially in legal opposition to federal, state and local government encroachment.  Gabe can be reached at 206.691.3631 or gabe@galandabroadman.com.  His argument in Clark can be watched on TVW (at 35:49).

Carolina Supreme Court Goes Rogue: Immediately Orders Baby Veronica Removed

Little has changed since the Indian Child Welfare Act (“ICWA”) was enacted more than thirty years ago to address what Congressional testimony in 1974 revealed to be “the most tragic aspect of Indian life” — that is, the “wholesale removal of Indian children from their homes . . .” and their placement with non-Indian adoptive parents and foster homes.  Mississippi Band of Choctaw Indians v. Holyfield, 490 U. S. 30, 32 (1989). Last month the U.S. Supreme Court issued a decision diminishing the applicability of the ICWA, twisting the meaning of “continued custody” to find the statute inapplicable to prevent the removal of an Indian child from her biological father’s custody and home.  This was the tragic culmination of a long-running child-custody battle, widely reported in the press as the “Baby Veronica case.”

Baby Veronica’s father is a citizen of the Cherokee Nation and U.S. veteran who mistakenly signed away his parental rights on the eve of his deployment to war.  But when he discovered that an adoption of his child was at stake, he quickly moved to assert his inherent rights as a father so that he could raise his own daughter.  The Supreme Court’s holding quickly resulted in the summary eradication of an Indian father’s parental rights.

Beyond that tragedy, the Supreme Court’s decision threatens the efficacy of the statute enacted to address what the Court recalcitrantly acknowledged were “abusive child welfare practices that resulted in the separation of large numbers of Indian children from their families and tribes through adoption or foster care placement, usually in non-Indian homes.”

In a move showing that little if any real progress for Indian children and Indian Country as a whole has been made since the ICWA’s enactment, the South Carolina Supreme Court went a large and destructive step beyond the High Court’s mandate in the Baby Veronica case.  Because the  Court’s order was limited to a finding that the ICWA was inapplicable in this case, the lower courts should still be able to consider other laws potentially protecting the biological father’s rights, or at least ensuring that any further order is in Baby Veronica’s best interests.  In an order  handed down on July 17, however, the South Carolina Supreme Court demanded “prompt entry of an order approving and finalizing Adoptive Couple’s adoption of Baby Girl.”

As two of the five South Carolina Supreme Court Justices declared in their dissent, the South Carolina Supreme Court goes far beyond the U.S. Supreme Court’s opinion in immediately terminating the Indian father’s parental rights without regard to any other applicable laws — or what is in Baby Veronica’s best interests:

[n]othing in the [U.S. Supreme Court’s] majority opinion suggests, much less mandates, that this Court is authorized to reject the jurisdiction of other courts based upon a 1989 case deciding jurisdiction under the Uniform Child Custody Jurisdiction Act (UCCJA), nor obligated to order that the adoption of this child by Adoptive Parents be immediately approved and finalized.  Further, the majority orders the immediate transfer of the child, no longer an infant or toddler, upon the filing of the family court’s adoption order, without regard to whether such an abrupt transfer would be in the child’s best interest.

This heart-wrenching case highlights not only the fact that little has changed for the better since the ICWA’s enactment; it also serves as a call to action for Indian Country.  Those who care about the welfare of Indian children in America must raise their voices and demand Congress and the President act to strengthen the ICWA.  Because as we see with Baby Veronica and her father’s case, this statute has clearly failed to stop the assaults on Indian families as it was intended to do in 1978.

Only time will tell if Adoptive Couple v. Baby Girl will make matters worse for Indian families and children.  I suspect it will.

Joe Sexton is Of Counsel with Galanda Broadman, PLLC.  Joe’s practice focuses on tribal sovereignty issues, including complex land and environmental issues, and economic development matters.  He can be reached at (509) 910-8842 and joe@galandbroadman.com.  

Northwest Tribal Lawyers Litigate To Protect Indian Chief's Grave

As featured on Turtle Talk, Galanda Broadman recently defeated summary judgment in a San Juan Superior Court case in which we are representing tribal member plaintiffs who directly descend from a Lummi/Clallam Chief. The Chief's grave and headstone sits on waterfront fee land on San Juan Island in Washington State, where that ancestor has lied in rest since the year 1900. In December 2012, the tribal plaintiffs allege that the Chief's headstone was disturbed, in violation of the state Indian Graves and Records Act and a covenant running with the land.

The case asks the question: who holds what sticks in the bundle of property rights, regarding an American Indian ancestors grave?

Galanda Broadman, an Indian Country Law Firm, is dedicated to advancing tribal legal rights and Indian business interests.  The firm, with offices in Seattle, Washington and Bend, Oregon, represents tribal governments, businesses and members in critical litigation, business and regulatory matters, especially in matters of Indian Treaty rights, tribal sovereignty and taxation.

National Indian Congress Issues American Indigenous Prisoners' Religious Freedoms Proclamation

In June, the National Congress of American Indians (NCAI) passed an emergency measure, Resolution #REN-13-005, observing that "the inherent rights of incarcerated Indian peoples’ freedom to believe, express, and exercise traditional indigenous religion, are too frequently violated by federal, state, and local government actors in the United States." Resolution #REN-13-005 was passed in specific reaction to the State of California's "emergency" rulemaking to outlaw various Native American sacred items from religious use in state prisons.

NCAI resolved that it “denounces and opposes any federal, state or local government restrictions placed upon incarcerated Native Peoples’ inherent rights to believe, express, and exercise their traditional religions and practices.”

NCAI further resolved to "call[] upon the United Nations Special Rapporteur on the Rights of Indigenous Peoples S. James Anaya, for an investigation into the pervasive pattern in the United States of increasing state and local restrictions on the religious freedoms of incarcerated Native peoples in the United States."

To read NCAI Resolution #REN-13-005, click here.

Galanda, Broadman & Dreveskracht Each Honored By Super Lawyers

Tribal lawyers Gabe Galanda, Anthony Broadman and Ryan Dreveskracht were each honored by Super Lawyers magazine for 2013; Gabe as a Washington "Super Lawyer" and Anthony and Ryan as "Rising Stars."

The award follows several recent honors for Galanda Broadman and its lawyers. In November 2012, Galanda Broadman received a prestigious Tier 1 ranking in the 2013 Edition of U.S. News – Best Lawyers “Best Law Firms,” in the arena of Native American Law. In addition, firm partner Gabe Galanda was then named to The Best Lawyers in America in the practice areas of both Gaming Law and Native American Law, for the seventh straight year. He was named a “Difference Maker” by the American Bar Association in November as well.

In December 2012, Lawyers of Color listed the firm in its Big Book of the Best Boutiques, an exclusive, national listing of the top minority law firms in each state. In January 2013, Seattle Business Magazine honored Gabe as one of “the Puget Sound Region’s Best Lawyers for 2013,” in both the arenas of Native American Law and Gaming Law. This past April Corporate INTL magazine named Galanda Broadman as the Boutique winner of the 2013 Corporate Intl Magazine Legal Award for "Gaming Law Firm of the Year in Washington."

Galanda Broadman, “An Indian Country Law Firm,” is dedicated to advancing tribal legal rights and Indian business interests.  The firm, with offices in Seattle, Washington and Bend, Oregon, represents tribal governments, businesses and members in critical litigation, business and regulatory matters, especially in matters of Indian Treaty rights, tribal sovereignty and taxation.

Gabe is an enrolled member of the Round Valley Indian Tribes of California. He currently sits on the National Native American Bar Association (NNABA) Board of Directors, chairing the group’s “Include Indian Law on State Bar Exams” Initiative, and co-chairing its “Increase Natives and Tribal Court Judges in the Judiciary” Initiative. Gabe is a past President of the Northwest Indian Bar Association and past Chair of the Washington State Bar Association (WSBA) Indian Law Section.

Firm partner Anthony Broadman is the immediate past Chair of the WSBA Administrative Law Section, and author of “Administrative Law in Washington Indian Country.”  In September 2012, Anthony was specially honored for his outstanding service as Chair of the Administrative Law Section.  He is a former Trustee of the WSBA Indian Law Section, and also serves as Editor-in-Chief of the Section’s Indian Law Newsletter.

Ryan Dreveskracht is a firm associate. Prior to joining Galanda Broadman he was a law clerk to the Honorable Kathleen Kay, in the U.S. District Court for the Western District of Louisiana. Ryan has published ten journal and law review articles in 2011-12 alone, on issues like tribal renewable energy, and has served as the Managing Editor for the National Lawyer’s Guild Review since 2010.