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Tribal tax appeal heard in Denver; has implications on border issue
Northern Arapaho litigation against Fremont County and the State of Wyoming is using a taxation issue to determine the Wind River Indian Reservation's boundaries and tribal jurisdiction, lawyers told a Denver appeals court panel Monday.

Tribal tax appeal heard in Denver; has implications on border issue

May 8, 2012 - By Martin Reed, Staff Writer

DENVER -- Northern Arapaho litigation against Fremont County and the State of Wyoming is using a taxation issue to determine the Wind River Indian Reservation's boundaries and tribal jurisdiction, lawyers told a Denver appeals court panel on Monday.

"This isn't just a case about tax relief; it's about the reservation boundary," Eastern Shoshone Attorney General Kimberly Varilek said during the 35-minute hearing in the U.S. 10th Circuit Court of Appeals.

Martin Hardsocg with the Wyoming Attorney General's Office echoed Varilek's statement: "This is a boundary question."

More than taxes

Northern Arapaho attorneys are seeking a ruling that certain areas north of the Wind River that opened to non-tribal settlement through an act of Congress in 1905 did not diminish the reservation's boundaries.

The lawsuit claims the state's revenue department and the county treasurer are illegally taxing Arapaho tribal members residing on parcels called fee lands in the wide region known as the 1905 area that includes Riverton.

"This case is about tax immunity for the Northern Arapaho Tribe," attorney Kelly Rudd of Lander told the appeals panel during his opening remarks.

At the hearing's start, during questions about tax transactions, David M. Ebel, a senior judge with the appeals court, commented that "people agree that Riverton never got put back into the reservation."

"I don't agree with that," Rudd responded. "Riverton is within the reservation."

Wide implications

Some observers have noted the 2008 lawsuit could result in significant changes in regard to taxation, law enforcement and jurisdiction in areas north of the Wind River, including Riverton if the tribe succeeds.

"This will be a case we're ruling whether the state of Wyoming can or can't tax Arapaho members," Ebel said.

"You can't reach the tax question, Your Honor, without determining the reservation boundary," Varilek said.

An earlier decision reached in 2009 by Wyoming U.S. District Judge Clarence A. Brimmer resulted in the lawsuit's dismissal because the Eastern Shoshone Tribe and federal government could not forcibly become parties.

Rudd argued litigation over water rights involving the reservation's tribes and the state during the 1980s resolved the boundary issue.

"What we're talking about is whether the Wyoming Supreme Court ruled on the issue," Judge Jerome A Holmes said. "Isn't the ultimate question what did this court decide and what did it mean to decide?"

Tribes at odds

The judges also questioned the attorneys on the issue of forcing the Eastern Shoshone Tribe and the federal government as parties in the case.

Brimmer ruled previously that the two parties were indispensable to the case.

"The sovereignty of each nation demands equal respect, yet two of the affected sovereigns resist joinder. It is for this reason the Court joined the EST and the United States as third-party defendants," Brimmer wrote in his decision in 2009.

"Every opportunity was given to flesh out the availability for this suit to go forward. However, neither the EST nor the United States is willing to waive immunity, and the Court finds that this case cannot proceed without them," the judge stated.

The appeals judges asked what effect the Arapaho tribe's litigation would have on the other parties if it proceeds.

"We're talking about one reservation and one boundary, and that would be the prejudice" to the Eastern Shoshone Tribe, Varilek said.

Regardless of what happens to the Arapaho tribal members regarding taxation in the case, another decision might be necessary "to do it for the Shoshone," Ebel said.

"It seems to be both the Shoshone and the United States are not truly prejudiced," he said.

Hardsocg said a decision in the case would impact both of the additional parties.

"We cannot resolve the question of whether this area is Indian Country just for the Northern Arapaho," he said.

Taxes vs. boundaries

Ebel continued to question how the case would change the reservation boundaries. If a ruling means Wyoming does not tax the Arapaho tribal members, "that doesn't decide what the boundaries are," he said.

The judge compared the boundary arguments to drunken driving cases involving questions of jurisdiction. In such a case there is debate "whether it is or not on the reservation and you don't require the United States government coming in" as a party, he said.

If the litigation carried significance for Eastern Shoshone members, the tribe would have joined, Ebel said.

"It's a huge problem for the Northern Arapaho. ... It must not be a big problem or you would join," he said.

Hardsocg pointed to the Eastern Shoshone and Northern Arapaho efforts to regulate air quality through the U.S. Environmental Protection Agency. A reservation boundary determination is a necessary part of the application process.

"I do think there are other avenues for the Northern Arapaho," he said.

Katherine Barton, an attorney with the U.S. Department of Justice's Environment and Natural Resources Division in Washington, D.C., said a ruling in the case at hand would have other consequence.

"It could be very well a declaratory action for the determination of the reservation boundaries," Barton told the appeals panel. "A traffic case doesn't do that."

Rudd disagreed with the importance of a decision in the Environmental Protection Agency application.

"The EPA can't provide any relief to help the tribe with its tax immunity," he said.

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Wind River Indian Reservation