Kerr-McGee Corp. v. Navajo Tribe
| Industry | Energy, Mining |
|---|---|
| Products | Mineral rights, Uranium mining |
Kerr-McGee v. Navajo Tribe, 471 U.S. 195 (1985), was a Supreme Court decision establishing that an Indian tribe does not require authorization from the Secretary of the Interior to levy taxes on non-tribal businesses operating within reservation boundaries.
Historical Context
The Navajo Tribe is a Native American sovereign entity with a reservation covering areas in Arizona, Utah, and New Mexico. In 1978, the tribal council passed two tax ordinances: a 3% tax on leaseholds, including those involving mineral rights, and a 5% tax on commercial activities. These tax laws were submitted to the Bureau of Indian Affairs (BIA) under the Department of the Interior for review. The BIA responded by stating that no statute required federal consent for tribal taxation.[1][2]
Judicial Proceedings
Kerr-McGee, which held extensive mineral rights within the reservation, initiated a lawsuit in federal district court seeking to prevent the tribe from collecting these taxes. The company argued that taxing non-Indians necessitated approval from the Secretary of the Interior; the district court sided with Kerr-McGee and issued an injunction against tax enforcement. However, on appeal, the Ninth Circuit overturned this decision, finding no federal law or regulation demanding such approval. Kerr-McGee subsequently petitioned the Supreme Court, which agreed to hear the case.[1][2]
Legal Arguments
Alvin H. Shrago represented Kerr-McGee, while Elizabeth Bernstein and attorneys for the United States advocated for the Navajo Tribe. Amicus curiae briefs supporting Kerr-McGee were submitted by Arizona Public Service Co., Peabody Coal Co., Phillips Petroleum Co., Salt River Project Agricultural Improvement and Power District, and Texaco, Inc. Conversely, backing for the tribe came from the Association on American Indian Affairs and the Shoshone Indian Tribe Reservation.
Kerr-McGee argued that under the Indian Reorganization Act (IRA), tribal taxation of non-Indians required approval from the Secretary of the Interior, and that the Indian Mineral Leasing Act (IMLA) mandated consent from the Bureau of Indian Affairs for such taxes.
Court’s Opinion
Chief Justice Warren Burger authored a unanimous opinion. He explained that the IRA’s approval requirement applies solely to tribal constitutions and bylaws, not taxation powers, noting that the Navajo Tribe had not adopted IRA provisions. Furthermore, tribal authority to impose taxes existed prior to the IRA’s enactment. The IMLA governs oil and gas leasing but does not impose a requirement for approval of tribal taxes.
Burger highlighted federal policies encouraging tribal self-governance by recognizing taxation as an inherent aspect of sovereignty. While leasing mineral rights constitutes commercial activity, it does not restrict a tribe’s sovereign right to tax non-Indians. In absence of explicit federal prohibition, tribal taxing authority remains valid. The Court upheld the Ninth Circuit’s ruling.
Later Impact
The Kerr-McGee decision is part of a series of Supreme Court cases affirming tribes’ sovereign power to tax non-Indians. These rulings have empowered tribes to renegotiate mineral leases, create natural resource regulatory bodies, and expand tribal business ventures. For the Navajo Nation—historically affected by uranium mining and associated contamination involving companies like Kerr-McGee—the ruling supported their prohibition on uranium mining.
This case strengthened tribal jurisdiction over natural resources and civil matters involving non-Indians. Recognizing its importance, the Navajo tribal council commemorates the decision date as "Navajo National Sovereignty Day."