With a critical taxation case already on the horizon, the state of Kansas is looking to add another Indian law case to the U.S. Supreme Court docket.

This past March, the justices agreed to determine whether the state can impose a distribution tax on gasoline sold by the Prairie Band Potawatomi Nation. Oral arguments -- without Justice Sandra Day O'Connor, who just announced her resignation -- will take place during the October 2005-2006 term.

If officials in Kansas have their way, the court will take on another dispute. This one involves the state's refusal to recognize motor vehicle registration and titles issued by the Prairie Band Potawatomi Nation.

In both cases, the state lost before the 10th Circuit Court of Appeals. In separate rulings, judges of the court said the state overstepped its boundaries by interfering with the tribe's rights.

The rulings were victories for the tribe, which operates a successful casino and gas station. The car tag program, in fact, was instituted in 1995 in response to increased traffic on the reservation.

But the state has balked at acknowledging the tribe's right to self-governance. In the tax case, the 10th Circuit held that "strong federal and tribal interests" pre-empted taxation on the reservation.

"The nation's interests are particularly strong," Judge Monroe G. McKay wrote on August 11. "Tribes have a recognized 'interest in raising revenues for essential governmental programs, [and] that interest is strongest when the revenues are derived from value generated on the reservation by activities involving the tribes and when the taxpayer is the recipient of tribal services."

Several months later, McKay arrived at a similar conclusion in the car tag dispute. "Motor vehicle titling and registration is a traditional government function," he observed. "Because vehicle registration involves a traditional government function, tribal issues are heightened."

Kansas officials believe otherwise. Claiming that its own sovereignty and public safety are at risk, the state argued that it didn't have to recognize the car tags off the reservation.

On March 25, the 10th Circuit dismissed the state's justification. "Kansas' sovereignty and public safety interests do not automatically trump the tribe's interest in self-governance," McKay wrote for the majority.

Another judge, Michael W. McConnell, noted that the state recognizes car tags from other states and even car tags from tribes in Oklahoma. He wrote separately to say that he agreed with the outcome of the decision but utilized a different standard to get there.

"By invoking a safety rationale for refusing to recognize Prairie Band vehicles, Kansas treats similarly situated parties differently," McConnell wrote. "This is a discriminatory application of state law that violates the Mescalero standard."

The Mescalero standard, named for a 1983 Supreme Court case, is at issue in both the car tag and taxation cases. It balances tribal, state and federal interests for activities that occur on reservations.

But the state favors the Mescalero Apache test, named for a 1980 case. The standard favors state interests for activities that occur off reservations.

As tribes develop and grow their economies in ways that impact non-Indians and interests off the reservation, the distinction is become more and more significant. In one prominent example, the National Labor Relations Board recently asserted jurisdiction over on-reservation enterprises that employ and affect non-Indians.

The issue is being closely watched throughout Indian Country. In the labor case, tribes are lobbying Congress to reverse the decision.

In the gas tax case, the Native American Rights Fund and the National Congress of American Indians plan to coordinate the submission of briefs to the Supreme Court to ensure that tribal interests are protected.

For the car tag case, Kansas attorney general's office filed the petition for writ of certiorari on June 23. A response from the Prairie Band Potawatomi Nation is due July 27 [Supreme Court Docket Sheet].

Car Tag Decision:
Prairie Band Potawatomi Nation v. Kansas (March 25, 2005)

Gas Tax Decision:
Prairie Band Potawatomi Nation v. Richards (August 11, 2004)

Relevant Links:
Prairie Band Potawatomi Nation - http://www.pbpindiantribe.com
NARF-NCAI Tribal Supreme Court Project - http://www.narf.org/sct/index.html