Introduction:
Frank Bibeau is a tribal lawyer with the Chippewa, or Ojibwe, band of the Anishinaabe people in northern Minnesota. For some years, he has been lead counsel in litigation in both tribal [i] and state courts [ii] to stop Line 3 of the Enbridge tar sands oil pipeline, arguing that the project interferes with rights reserved to the Ojibwe under the 1837 Treaty of St. Peters. [iii]
Under that treaty, the Ojibwe ceded a very large amount of territory stretching from east central Minnesota through much of northern Wisconsin, in exchange for specified payments and “[t]he privilege of hunting, fishing, and gathering the wild rice, upon the lands, the rivers and the lakes included in the territory ceded[.] [iv]” The wild rice, called manoomin, was itself among the named plaintiffs in the tribal court litigation.
Those efforts were ultimately unsuccessful, but the arguments he developed in the course of that litigation, construing the language of the 1837 treaty, appear to have inspired Bibeau to rethink his relationship with the federal taxing authority, that is, the Internal Revenue Service.
Arguing by Analogy
For tax years 2016 and 2017, Bibeau had net operating loss carryforwards in amounts more than sufficient to offset the modest income from his law practice. But that income would still have been subject to self-employment tax, which he did not pay.
In 2019, the IRS sent him a request for payment. He requested a Collection Due Process Hearing, at which he asserted that the 1837 treaty exempted him from self-employment tax. The IRS, of course, disagreed, determined a deficiency, and indicated its intent to levy on his assets in order to collect the assessed deficiency.
Bibeau petitioned the U.S. Tax Court, where he advanced the same arguments. In brief, he reasoned that the language of the 1837 treaty quoted above should be broadly construed to mean that members of the Ojibwe nation should be permitted “to make a modest living.”
The quoted phrase is from the 2015 opinion of the United States Court of Appeals for the 8th Circuit in United States v. Brown, [v] which construed the treaty language reserving the privilege of “fishing” as encompassing a privilege also to sell part or all of the catch: in other words, to exploit the protected resource in order to participate in the money economy.
Bibeau cited a series of precedents reaching back more than 100 years to the effect that treaties with what were then called the “Indian” nations are to be construed in the sense in which the “Indians” would have understood them, [vi] and that ambiguities are to be resolved in favor of the “Indians.” [vii]
The specific language of the treaty, he argued, should be understood more generally to reserve to the Ojibwe people a right to “food, clothing[,] and shelter,” and also “travel, whereby the new canoe is the automobile,” applying the express terms of the treaty to modern contexts. His law practice, he argued, was in this sense analogous to “hunting, fishing, and gathering the wild rice.”
No Exceptions
But Judge Mark Holmes (in a memorandum opinion [viii]) was not buying it.
First, he rejected the proffered analogy, noting that the 8th Circuit in Brown [ix] had expressly reserved the question whether the defendants there might have been permitted to use modern technologies to catch the fish at issue. They had used nets, a technology that would have been available to their 19th-century forbears.
More to the point, Judge Holmes said, the privilege to make a modest living was not a privilege to make a modest living without paying tax. And while it is true that the treaty should be construed “favorably to Indians,” this did not mean that it should be read to “create favorable rules.” [x]
In particular, he said, any exemption from taxation should be “clearly expressed.” [xi] Here, Bibeau was asking the court to create an exemption from taxation on an activity that was itself not mentioned in the treaty. This Judge Holmes declined to do.
Taking With One Hand
But Bibeau had a fallback argument. Quoting a 1905 opinion [xii] of the U.S. Supreme Court addressing fishing rights reserved under an earlier, similar treaty to the Yakima people on the Columbia River in what is now the state of Washington, he argued the 1837 treaty “was not a grant of rights to the Indians, but a grant of rights from them [and] a reservation of those not granted[,]” [xiii] and that among the rights not expressly granted was “any right to tax members of the tribe or their income from any activity” (emphasis original).
In support of this approach, Bibeau observed that legislation enacted in 1924 to grant citizenship to Native Americans [xiv] included an express proviso that it “shall not in any manner impair or otherwise affect the right of any Indian to tribal or other property.” [xv] This language, he argued, reinforced his view “that Congress intended to preserve not only the rights that were explicitly granted by treaties, but also those that were implicitly reserved[,] including the right to be free of taxation.” [xvi]
Unfortunately, as Judge Holmes noted, there is existing 8th Circuit precedent to the contrary, which he said “constrained” him from adopting Bibeau’s reasoning. The use of the word “constrained” here is interesting.
A Fragile Precedent
In Fond du Lac Band of Lake Superior Chippewa v. Frans, [xvii] a divided panel of the appeals court had ruled that although an 1854 treaty had established a prior right in members of the band to reside on lands reserved to them within what later became the state of Minnesota, the 1924 legislation had “altered the landscape,” so that they were nonetheless also citizens of the state and subject to its laws.
In particular, the state could properly tax pension income paid to a member of the band, based on employment outside the state.
The late Judge Diana Murphy had dissented, arguing that the 1924 legislation was designed specifically to “decouple” the question of citizenship from that of taxation, and that the legislation could not in any event supersede a treaty. [xviii]
Judge Murphy cited a number of decisions [xix] supporting her view that to allow the state to impose an income tax on residents of a reservation within the state would intrude on tribal sovereignty. The interested reader is referred to the cases cited in the footnote. Space does not permit us to go down these rabbit holes.
A motion for rehearing en banc, supported by an amicus brief from several other tribes with lands within Minnesota, was denied. No petition for certiorari was filed.
Conclusion
In checking on the latest activity in this case, it turns out that Bibeau filed a Notice of Appeal, which would lie to the 8th Circuit, on August 21, 2023. We will advise readers of any future developments of consequence.
[i] See tribal trial and appellate court filings posted to https://whiteearth.com/divisions/judicial/home.
[ii] See appeals consolidated under docket number A20-1071, filings posted to
https://macsnc.courts.state.mn.us/ctrack/cases/caseMaintenance.do?csNameID=96578.
[iii] 7 Stat. 536 (1837).
[iv] The quoted language is from Article 5 of the 1837 treaty.
[v] United States v. Brown, 777 F.3d 1025, 1031 (8th Cir. 2015). The defendants had been charged under the so-called Lacey Act, 16 U.S.C. § 3372(a)(1), with selling fish caught within the Leech Lake reservation in violation of tribal law. The appeals court affirmed the trial court in its determination that the federal criminal statute conflicted with the usufructary rights reserved to the Chippewa under the 1837 treaty.
[vi] Choctaw Nation of Indians v. United States, 318 U.S. 423, 432 (1943), probably not the best case to cite for the principle, as this was a dispute between two tribes.
[vii] Choate v. Trapp, 224 U.S. 665, 675 (1912).
[viii] Bibeau v. Commissioner, T.C. Memo. 2023-66 (May 24, 2013).
[ix] Brown, supra note 5.
[x] Quoting from Jourdain v. Commissioner, 71 T.C. 980, 990 (1979), which is pretty much directly on point.
[xi] Citing Squire v. Capoeman, 351 U.S. 1, 6, 76 S. Ct. 611 (1956).
[xii] United States v. Winans, 198 U.S.371 (1905).
[xiii] Id. at 381.
[xiv] Indian Citizenship Act of 1924, ch. 233, 43 Stat. 253, codified at 8 U.S.C. § 1401(b).
[xv] Bibeau, supra note 8, at 6.
[xvi] Id.
[xvii] 649 F.3d 849 (8th Cir. 2011).
[xviii] Id. at 854.
[xix] McClanahan v. State Tax Commissioner of Arizona, 411 U.S. 164, 173 n. 12 (1973) (holding legislation cannot supersede treaty); Goodluck v. Apache County, 417 F.Supp. 13 (D. Ariz. 1975), aff’d, 429 U.S. 876 (1976) (holding citizenship “decoupled” from taxation); and distinguishing Shakopee Mdewakanton Sioux Community v. City of Prior Lake, 771 F.2d 1153 (8th Cir. 1985).