White Mountain Apache Tribe v. Bracker

The decision thwarted the state's attempt to extend its authority over economic transactions on the reservation. It also upheld the Supreme Court's long-standing tradition of limiting state jurisdiction over Indian tribes, as well as its more recent pattern of protecting tribal self-government and economic development.

Throughout most of the history of federal Native American policy, the United States government has consistently restricted the states' jurisdiction over Native American tribes and reservations located within their borders. Though state governments have repeatedly attempted to regulate tribal activities, the federal government generally has preferred to leave the management of reservations and their resources largely in the hands of Congress.

This situation has frequently created tension between the 27 states containing reservations within their borders and the nearly 300 federally recognized tribes that reside there. As Stephen Pevar wrote in The Rights of Indians and Tribes, "states resent the fact that reservation Indians are not normally subject to state taxation and regulation, and Indians resent the states' constant attempts to tax and regulate them." The economic implications of this power struggle have become even more prominent over the past several decades. As noted in the 1988 publication, Indian Tribes as Sovereign Governments, "the steady increase of economic activity in Indian Country has given states added incentive to enforce their tax laws there." The federal courts, therefore, frequently have played a decisive role in regulating the jurisdictional balance among tribal, state, and federal governments.

The Supreme Court's position on the tribal-state relationship has moved over time from a strict exclusion of any state regulation to a more modified--though still restrictive--stance. In 1832, Worcester v. Georgia held that the Cherokee tribe had complete sovereignty on its reservation, subject only to federal regulation and exempt from any state jurisdiction. This position gradually softened, as the Court handed down a series of decisions that granted states limited authority on reservations, in areas such as criminal cases involving only non-Indians .............................................

.(New York ex rel. Ray v. Martin, 1945) and taxation of non-Indians at reservation stores (Moe v. Salish & Kootenai Tribes, 1976, and Washington v. Confederated Tribes of the Colville Indian Reservation, 1980). Generally speaking, the only state laws applicable on reservations are those with express federal authorization. States continue, however, to try to regulate tribes in areas not already approved by Congress. In order to be valid, these state laws must pass two tests--the federal preemption test and the infringement test--a hurdle which few such laws have cleared.

The 1980 Supreme Court case of White Mountain Apache Tribe v. Bracker involved the state of Arizona's attempt to extend its jurisdiction over a Native American reservation through taxation. Arizona had imposed taxes on Pinetop Logging Company, a combination of two non-Indian enterprises that had contracted with the tribally-organized Fort Apache Timber Company to conduct logging operations on the Fort Apache Reservation. The taxes included both a fuel tax and a motor carrier license tax intended to compensate the state for use of its roads.

With the Apache tribe intervening as the plaintiff, Pinetop challenged the taxes in state court, declaring them preempted by federal law. When that decision, and that of the Arizona Court of Appeals in 1978, went against the plaintiff, the case went to the Supreme Court. The Court ruled in a 6-3 decision that the taxes were indeed preempted by federal law and therefore were invalid. Justice Marshall wrote the majority opinion, joined by Chief Justice Burger and Justices Brennan, Blackmun, Powell, and White. The dissenting opinion, written by Justice Stevens, included Justices Rehnquist and Stewart.

Broadly speaking, the federal preemption test used by the Court asked if the state law in question regulates an area already sufficiently covered by federal law; if so, the federal law would preempt it. The test also asked if the state law threatened tribal sovereignty and economic viability. An extensive interpretation of the preemption test comes from the 1965 Supreme Court decision in Warren Trading Post v. Arizona Tax Commission. The Apache Court relied heavily on this case in rendering its decision.

In the Apache decision, the Court emphasized several factors. It found first of all that the timber operation and the revenues it generated on the Fort Apache reservation already came under extensive federal regulation. Therefore, no room remained for additional state regulation. The Court also found that as the state had no purpose for the tax other than raising general revenue, it would provide no services with the money generated that justified the tax on tribal activities. The fact that the case involved tribal natural resources which the federal government had placed under a sustained yield harvestation program also dissuaded the Court from allowing the state to interfere in any way. Finally, the decision found that the taxes' burden ultimately would fall on the tribe, and that the timber industry proved crucial to the economic viability of many of the tribe's governmental programs. The state taxes thus hindered tribal sovereignty and economic development on the reservation.

The Apache ruling, along with a similar decision in Central Machinery v. Arizona Tax Commission in the same year, thus prevented state taxation of an economic transaction occurring on a Native American reservation, even when a non-Indian business was involved. It therefore upheld the Supreme Court's long-standing history of restricting state jurisdiction over tribal governments and resources. The decision also specifically protected tribal sovereignty and economic growth, a goal that has characterized federal Indian policy since the late 1960s. By limiting state regulation and taxation, such rulings may also encourage other non-Indian companies to do business with tribes on reservations.

In the decade following the Apache decision, it became unclear whether the Court's pattern of supporting tribal rather than state interests would hold. In 1983, Rice v. Rehner validated state liquor laws imposed on a non-Indian business on the reservation, while in Cotton Petroleum Corporation v. New Mexico in 1989, the Court allowed a state tax on oil and gas produced on tribal land by a non-Indian company. The latter decision, according to Stephen Pevar, "represents a retreat from the broad principles of the preemption doctrine," principles which the earlier Apache ruling firmly upheld.