Montana v. Crow Tribe, 523 U.S. 696 (1998)

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696

OCTOBER TERM, 1997

Syllabus

MONTANA et al. v. CROW TRIBE OF INDIANS et al.

certiorari to the united states court of appeals for the ninth circuit

No. 96-1829. Argued February 24, 1998—Decided May 18, 1998

In 1904, the Crow Tribe ceded part of its Montana Reservation to the

United States for settlement by non-Indians. The United States holds rights to minerals underlying the ceded strip in trust for the Tribe. In 1972, with the approval of the Department of the Interior and pursuant to the Indian Mineral Leasing Act of 1938 (IMLA), Westmoreland Resources, Inc., a non-Indian company, entered into a mining lease with the Tribe for coal underlying the ceded strip. After executing the lease, Westmoreland signed contracts with its customers, four utility companies, allowing it to pass on to the utilities the cost of valid taxes. West-moreland and the Tribe renegotiated the lease in 1974. The amended lease had an extendable ten-year term, and set some of the highest royalties in the United States. In 1975, Montana imposed a severance tax and a gross proceeds tax on all coal produced in the State, including coal underlying the reservation proper and the ceded strip. Westmore-land paid these taxes without timely pursuit of the procedures Montana law provides for protests and refunds. Some six months after the State imposed its taxes, the Crow Tribal Council adopted its own severance tax. The Department of the Interior approved the Tribe's tax as applied to coal underlying the reservation proper but, because of a limitation in the Tribe's constitution, did not approve as to coal beneath the ceded strip. The Tribe again enacted a tax for coal mined on the ceded strip in 1982, and again the Department rejected the tax.

In 1978, the Tribe brought a federal action for injunctive and declaratory relief against Montana and its counties, alleging that the State's severance and gross proceeds taxes were preempted by the IMLA and infringed on the Tribe's right to govern itself. The District Court dismissed the complaint. The Ninth Circuit reversed, holding that the Tribe's allegations, if proved, would establish that the IMLA preempted the State's taxes. The Court of Appeals noted, however, that the Tribe had paid none of Westmoreland's taxes and apparently would not be entitled to any refund in the event that the taxes were declared invalid. Crow Tribe v. Montana, 650 F. 2d 1104, 1113, n. 13 (Crow I). In 1982, the Tribe and Westmoreland entered into an agreement, with Interior Department approval, under which Westmoreland agreed to pay the Tribe a tax equal to the State's then-existing taxes, less any tax pay-

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