ArtI.S8.C3.1.3 Commerce With Indian Tribes

Article I, Section 8, Clause 3:

[The Congress shall have Power . . .] To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes; . . .

Congress’s power to regulate commerce with the Indian tribes, once almost rendered superfluous by Court decision,¹ has now been resurrected and made largely the basis for informing judicial judgment with respect to controversies concerning the rights and obligations of Native Americans. Although Congress in 1871 forbade the further making of treaties with Native American tribes,² cases disputing the application of the old treaties and especially their effects upon attempted state taxation and regulation of on-reservation activities continue to be a staple of the Court's docket.³ But this clause is one of the two bases now found sufficient to empower Federal Government authority over Native Americans. The source of federal authority over Indian matters has been the subject of some confusion, but it is now generally recognized that the power derives from federal responsibility for regulating commerce with Indian tribes and for treaty making.⁴

Forsaking reliance upon other theories and rationales, the Court has established the preemption doctrine as the analytical framework within which to judge the permissibility of assertions of state jurisdiction over the Native Americans. However, the semi-autonomous status of Native tribes erects an independent but related barrier to the exercise of state authority over commercial activity on a reservation.⁵ Thus, the question of preemption is not governed by the standards of preemption developed in other areas. Instead, the traditional notions of tribal sovereignty, and the recognition and encouragement of this sovereignty in congressional Acts promoting tribal independence and economic development, inform the pre-emption analysis that governs this inquiry. . . . As a result, ambiguities in federal law should be construed generously, and federal pre-emption is not limited to those situations where Congress has explicitly announced an intention to pre-empt state activity.⁶ A corollary is that the preemption doctrine will not be applied strictly to prevent states from aiding Native Americans.⁷ However, the protective rule is inapplicable to state regulation of liquor transactions, because there has been no tradition of tribal sovereignty with respect to that subject.⁸

The scope of state taxing powers – the conflict of the plenary power of the States over residents within their borders with the semi-autonomous status of Indians living on tribal reservations⁹ – has been often litigated. Absent cession of jurisdiction or other congressional consent, states possess no power to tax Indian reservation lands or Indian income from activities carried on within the boundaries of the reservation.¹⁰ Off-reservation Indian activities require an express federal exemption to deny state taxing power.¹¹ Subjection to taxation of non-Indians doing business with Indians on the reservation involves a close analysis of the federal statutory framework, although the operating premise was for many years to deny state power because of its burdens upon the development of tribal self-sufficiency as promoted through federal law and its interference with the tribes' ability to exercise their sovereign functions.¹²

That operating premise, however, seems to have been eroded. For example, in Cotton Petroleum Corp. v. New Mexico,¹³ the Court held that, despite of the existence of multiple taxation occasioned by a state oil and gas severance tax applied to on-reservation operations by non-Indians, which was already taxed by the tribe,¹⁴ the impairment of tribal sovereignty was too indirect and too insubstantial to warrant a finding of preemption. The fact that the state provided significant services to the oil and gas lessees justified state taxation and also distinguished earlier cases in which the state had asserted no legitimate regulatory interest that might justify the tax.¹⁵ Still further erosion, or relaxation, of the principle of construction may be found in a later case, in which the Court, confronted with arguments that the imposition of particular state taxes on Indian property on the reservation was inconsistent with self-determination and self-governance, denominated these as policy arguments properly presented to Congress rather than the Court.¹⁶

The impact on tribal sovereignty is also a prime determinant of relative state and tribal regulatory authority.¹⁷

Since Worcester v. Georgia,¹⁸ the Court has recognized that Indian tribes are unique aggregations possessing attributes of sovereignty over both their members and their territory.¹⁹ They are, of course, no longer possessed of the full attributes of sovereignty,²⁰ having relinquished some part of it by their incorporation within the territory of the United States and their acceptance of its protection. By specific treaty provision, they yielded up other sovereign powers, and Congress has removed still others. The sovereignty that the Indian tribes retain is of a unique and limited character. It exists only at the sufferance of Congress and is subject to complete defeasance.²¹

In a case of major import for the settlement of Indian land claims, the Court ruled in County of Oneida v. Oneida Indian Nation,²² that an Indian tribe may obtain damages for wrongful possession of land conveyed in 1795 without the federal approval required by the Nonintercourse Act.²³The Act reflected the accepted principle that extinguishment of the title to land by Native Americans required the consent of the United States and left intact a tribe's common-law remedies to protect possessory rights. The Court reiterated the accepted rule that enactments are construed liberally in favor of Native Americans and that Congress may abrogate Indian treaty rights or extinguish aboriginal land title only if it does so clearly and unambiguously. Consequently, federal approval of land-conveyance treaties containing references to earlier conveyances that had violated the Nonintercourse Act did not constitute ratification of the invalid conveyances.²⁴ Similarly, the Court refused to apply the general rule for borrowing a state statute of limitations for the federal common-law action, and it rejected the dissent's view that, given the extraordinary passage of time, the doctrine of laches should have been applied to bar the claim.²⁵

Although the power of Congress over Indian affairs is broad, it is not limitless.²⁶ The Court has promulgated a standard of review that defers to the legislative judgment [a]s long as the special treatment can be tied rationally to the fulfillment of Congress’s unique obligation toward the Indians . . .²⁷ A more searching review is warranted when it is alleged that the Federal Government's behavior toward Native Americans has been in contravention of its obligation and that it has in fact taken property from a tribe which it had heretofore guaranteed to the tribe, without either compensating the tribe or otherwise giving members the full value of the land.²⁸