A few words on probably the most important recent law review article in Indian law — Richard D. Pomp’s The Unfulfilled Promise of the Indian Commerce Clause and State Taxation, 63 Tax Lawyer 897 (2010).
In The Brethren, the 1979 book that opened the door the mysteries of the interior of the Supreme Court (and served as a source of deep embarrassment to several Justices), Bob Woodward and Scott Armstrong found that the Justices of the 1970s, unusually hospitable to the claims of Indian tribes given the history of American Indian law and policy, considered being assigned to draft the majority opinion in an Indian case a sign of disrespect. No Justice wanted those assignments. H.W. Perry, Jr.’s Deciding to Decide (1991), which was the first book detailing the insides of the Court after The Brethren, confirmed that assignments to write majority opinions in Indian cases and tax cases – “the crud” – tended to go to the junior Justices. For example, Chief Justice Burger, according to Woodward and Armstrong, assigned then-Justice Rehnquist an Indian tax case (Moe v. Confederated Salish and Kootenai Tribes, 426 U.S. 463 (1976)) as punishment for a 1975 Supreme Court Christmas party joke gone wrong.
If Indian cases are bad, and tax cases are bad, then Indian tax cases must be the worst.
Or are they?
Richard Pomp’s entertaining paper, The Unfulfilled Promise of the Indian Commerce Clause and State Taxation, blows the lid off of the myth that Indian tax cases are boring.
It turns out that one of the most exciting things about the Indian Commerce Clause is the history of the Clause, which generated more debate at the Constitutional Convention than the Interstate and Foreign Commerce Clauses combined. For some reason (perhaps because Pomp’s article hadn’t yet been written), the Supreme Court has simply refused to engage at all on the “original meaning” of the Indian Commerce Clause. The Court had a chance to in Seminole Tribe v. Florida, 517 U.S. 44 (1996), but Chief Justice Rehnquist just ignored the question by concluding that the three Commerce Clauses were the same for Eleventh Amendment purposes. But maybe since the Supreme Court frequently enters into the thicket of early American history to interpret many Constitutional provisions, the history of the Indian Commerce Clause is worth a second look, as Pomp does here.
For almost two centuries now, the Supreme Court has interpreted the Clause to have two key features, both highly relevant to Pomp’s article. First, it grants “plenary power” to Congress to regulate Indian commerce (a power the Supreme Court long has expanded to plenary power to regulate all of Indian affairs). Second, it grants exclusive power to Congress, meaning the states have no independent authority to regulate Indian commerce. Pomp is the first without an ideological stake in the outcome to delve into the history of the Clause.
Surely, the Clause has been a source of unspeakable torment of Indian tribes and Indian people by Congress; its plenary power has been used to dispossess Indians of property, culture, government, and even basic dignity as Indian people throughout the United States. But the plenary power of Congress is also responsible for the various Indian self-determination acts, the Indian Child Welfare Act, and numerous other statutes supporting tribal self-governance. And the exclusive character of Congressional power in this field often has been a boon to Indian nations that have fought with (and now compete with) state governments over taxation and regulatory authority over tribal resources. In the bad old days, states would boldly foreclose on Indian trust property, forcing the United States to bring suit to recover the lands, as in United States v. Rickert, 188 U.S. 432 (1903).
And yet, as Professor Pomp details, the promise of the Indian Commerce Clause is unfulfilled. Tribal economies frequently are stunted by state interference, as in the cases of Cotton Petroleum v. New Mexico, 490 U.S. 163 (1989), and Wagnon v. Prairie Band Potawatomi Nation, 546 U.S. 95 (2005), where the Court held that states could tax on-reservation business activities of non-Indians. And so states now can generate a bit of a windfall in tax revenue without having to do much in return, because they aren’t providing services to Indian country anyway. Moreover, states often can effectively double-tax on-reservation business activities, undercutting the tribal tax base.
Pomp’s paper shows how Indian commerce and state taxation are intimately linked, and yet the Supreme Court, for the most part, has declined to engage in the relatively simple economic analysis of the import of state taxation on Indian commerce. But the best part of the paper is that Professor Pomp has read and digested every Indian taxation case in the modern era, an incredible undertaking. He links those cases to the non-Indian realm of state and local taxation. Perhaps most importantly, he details how the tribes and the United States have repeatedly argued that the Indian Commerce Clause has independent significance in Indian tax cases, only for the Court to simply ignore or refuse to engage with those arguments.
Professor Pomp’s conclusion is that the Supreme Court isn’t going to change course and reconsider its jurisprudence based on the meaning of the Indian Commerce Clause. Congress could do it, but won’t. The real action is negotiating tribal-state agreements that blur jurisdictional lines and share tax revenue between tribes and states, and avoiding the unpredictability of federal court adjudication.
Indian tax cases likely remain at the top of the heap in “crud” for the Supreme Court, and tribal interests are already fully aware that the Court is only interested in Indian tax cases when a state government loses below and vehemently demands review. But now the Court, really for the first time, has a comprehensive and ideologically balanced primer on state taxation and Indian law.