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TUESDAY, MARCH 18, 2003

A federal appeals court on Monday gave two Montana tribes one last chance to justify their authority over one of the largest railroad companies in the nation.

In a unanimous decision, the 9th Circuit Court of Appeals refused to endorse the Fort Peck Tribes' utility tax. But they left open the possibility of doing so, provided the tribes demonstrate how the railroad operation "threatens" their political integrity, economic security, health or welfare.

"We conclude in the context of this litigation that a more complete record is necessary to the resolution of the dispute at issue," wrote Judge Marsha S. Berzon for the majority.

With millions in revenues at stake, the Assiniboine and Sioux tribes have been fighting to preserve the 4 percent tax. The tax, imposed on all utility companies that operate on the 2.2 million-acre reservation, has brought in as much as $2.5 million a year.

That is, until Burlington Northern and Santa Fe Railroad (BNSF), and other non-Indian companies, stopped paying. Citing Supreme Court precedents, BNSF obtained a summary judgment in federal district court in Montana that prevented the tribes from collecting the tax.

Yesterday's action vacated that ruling in order to allow the tribes to build their case. Noting that more than 619,000 rail cars passed through the reservation in 2000 alone, the court said health and safety could be at risk.

"If the trains crossing a tribe's reservation carry toxic or dangerous chemicals, nuclear waste, biological dangers, or other threats to the reservation, then the tribe has a right to know what company it keeps, and then to assess whether any taxing strat-egy could fairly cover the tribe's protective costs," wrote Judge Ronald M. Gould in a concurring opinion.

BNSF operates on a Congressionally-granted right-of-way running through the reservation. The Supreme Court considers a right-of-way equivalent to fee land over which tribes lack jurisdiction over non-Indians.

But tribal authority over non-Indians is allowed under the Montana exceptions, named after a 1981 case which the Crow Tribe lost. The exceptions are invoked when: 1) non-Indians have entered into consensual relationships with the tribe; or 2) non-Indian action directly threatens the political integrity, economic security, health, or welfare of the tribe.

In the Fort Peck case, the appeals court said the tribes failed to meet the first exception.

Tribal jurisdiction over non-Indians is also allowed if authorized by Congress. The court said the tribes didn't satisfy this condition either.

Get the Decision:
BURLINGTON N. SANTA FE R.R. CO. v. ASSINIBOINE & SIOUX TRIBES OF THE FORT PECK RESERVATION, No. 01-35681 (9th Cir. March 17, 2003)

Relevant Links:
Fort Peck Tribes - http://www.fortpecktribes.org
Burlington Northern - http://www.bnsf.com

Related Stories:
Supreme Court strikes down Navajo tax (5/30)
Supreme Court to take on taxation (11/28)
Crow fate may rest in decision (11/28)
Court rules against Crow tax (Tribal Law 07/18)