MADISON, Wis. (CN) --- A federal judge in Madison ruled on Friday that reservation lands held by four Chippewa tribes in northern Wisconsin cannot be taxed by the state if they have been under Indian ownership since being allotted by the federal government.
In November 2018, the plaintiff tribes sued former Wisconsin Governor Scott Walker, then-Wisconsin Secretary of Revenue Richard Chandler and 11 northern Wisconsin towns and their assessors in federal court over the state's attempts to assess and tax property within the boundaries of their respective reservations.
The tribes include the Lac Courtes Oreilles, Lac du Flambeau, Red Cliff and Bad River bands of Lake Superior Chippewa. They are represented by Colette Routel, director of the Indian Law Litigation Clinic at the Mitchell Hamline School of Law at Hamline University in St. Paul, Minnesota, attorneys with the St. Paul-based firm Hogen Adams and tribal lawyers.
Since the complaint was filed, current Governor Tony Evers and Peter Barca, the Evers administration's revenue secretary, have taken over as defendants in place of Walker and Chandler.
The tribes claimed the state's plans to impose property taxes on their reservation lands violates the Supremacy Clause of the U.S. Constitution and an 1854 treaty known as the Treaty with the Chippewa. The 1854 treaty became central to the dispute, as the four tribes bringing the lawsuit said they are signed on as successors to the bands of Wisconsin Ojibwe that acted as signatories for the treaty.
As the U.S. government and white settlement expanded westward, the government moved in the 1850s toward the creation of Indian reservations within territories tribes had inhabited for hundreds of years before Europeans arrived.
In the Badger State, negotiations yielded the 1854 treaty on Sept. 30 of that year, resulting in Lake Superior Ojibwe bands in Wisconsin, Minnesota and Michigan ceding more than 7 million acres of their land in return for a promise from the government of permanent, tax-exempt reservations.
Confusing matters in the tribes' lawsuit is the General Allotment Act of 1887, which states that tribal members would be given a patent in fee simple to their land after a period of time during which allotments of property were held in U.S. trusts.
While a 1992 U.S. Supreme Court decision held that the General Allotment Act gave states "unmistakably clear authorization" to tax these fee simple lands, the tribes held that their lands were allotted under the 1854 treaty, not the General Allotment Act, so the latter is non-binding.
The tribes' lawsuit ground through discovery and procedural hoops until the tribes and the state government ultimately filed cross motions for summary judgment in late 2019. Chief U.S. District Judge James Peterson struck a planned trial date and concluded the matter could be resolved at summary judgment one year to the day before Friday's decision.
Peterson ultimately granted partial summary judgment to both the tribes and the government, finding that the tribes' reservation property cannot be taxed unless it passed into non-Indian ownership at some point after allotment, in which case it can be taxed even if it subsequently changed hands back into Indian ownership.
The upshot is that "the court concludes that, generally, Indian-owned property on the plaintiff tribes' land is not taxable," Peterson wrote. The judge partially granted the tribes a permanent injunction against taxing their reservation property, unless that property had previously been under non-Indian ownership.
Peterson also concurred with the tribes that, on the whole, the 1854 treaty is the controlling factor over taxation of the tribes' property, not the General Allotment Act of 1887. The tribes and the government agreed that any lands allotted before 1887 are not taxable.
"The historical record shows that land in the tribes' reservations was allotted pursuant to the 1854 treaty, and the General Allotment Act does not express Congress's intent to usurp rights granted to the tribes under the 1854 treaty, and certainly not in unmistakably clear terms," as required by law, the Barack Obama appointee said.
But under a 1998 U.S. Supreme Court decision, "Indian tax immunity does not lie dormant during periods of non-Indian ownership only to be revived when the property returns to Indian ownership," leaving portions of the land once owned by non-Indians eligible for taxation, Peterson said.
The judge ordered the case closed, but stayed enforcement of his judgment for 30 days to allow the parties an opportunity to appeal.
Attorneys and representatives for the tribes and the state government could not be immediately reached for comment on the court's decision on Friday.
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