Gabe Galanda to Address Tribal Business Leader Ethics at NCAIED's Tulalip Conference

On Tuesday, September 5, 2017 from 2:45pm-4pm, Gabe Galanda will speak on "Management and Leadership: Ethical Decision Making in Business."  The program description:

Tribal elected and business leaders are faced with a host of challenges when engaging in modern economic development, not the least of which are issues of ethics, morality, legality and tradition.  This panel will explore how tribal leaders may navigate the myriad of ethical, moral and legal issues associated with many of Indian Country's hottest areas of commerce: payday lending; tobacco, liquor and firework sales; marijuana cultivation and sales; gaming; land development; and taxation.

Information about NCAIED's Northwest Enterprise Development Conference, being held September 4 - 7, 2017 at the Tulalip Resort Casino in Tulalip, Washington, is here.

Disenrollment As Cottage Industry

In the New York Times Magazine story that broke earlier this year, "Who Decides Who Counts as Native American?," Professor Rob Williams described disenrollment as a cottage industry:

Robert Williams, chairman of the Indigenous Peoples Law and Policy Program at the University of Arizona, told me that some tribes have recently begun to hire membership consultants to help trim their rolls. “It’s almost become an industry in some parts of Indian Country,” he said.

In a recent interview about their new groundbreaking book, Dismembered, Dr. David Wilkins and Shelly Wilkins expose the players in that industry:

What was the most interesting thing you learned from writing the book?

DEW & SHW: Perhaps the most shocking thing we learned was the amount of money outsiders were making from fomenting discord within Tribal Nations. Non-native attorneys who keep the conflicts going in order to bill more hours, outside consultants—self-professed enrollment experts—who organize seminars or directly advise Tribal leaders on ways to “clean-up their rolls,” financial advisors who calculated how much further per-capita payments would go if membership were to be reduced.

It is not merely "Non-native attorneys" who churn billable hours in times of intra-tribal strife; Native lawyers do, too.  But at least as to disenrollment, there do now appear to be fewer reputable Indian law firms who will advocate for tribal politicians who seek to jettison their kin.

As Robin Ladue observed in the most recent edition of Tribal Business Journal, in an article titled, "Disenrollment Sparks Litigation, Economic Issues":

Some attorneys, including Robert A. Rosette, founding partner of Rosette LLP, say disenrollment procedures are a part of tribal sovereignty, but attorneys who assist or work for tribal councils must follow their own laws and not violate due process.

The National Native American Bar Association (NNABA) issued a resolution in 2015 that it is immoral and unethical for lawyers to encourage or take part in disenrollment processes that lack adequate due process, equal protection or a remedy for the violation of the civil rights of tribe members.

The Indian legal profession does seem to be increasingly turning away disenrollment business, finding it illegal, unethical or immoral---or simply distasteful.

But those "outside consultants" still appear undeterred from engaging in disenrollment commerce, perhaps as they are not subject to ethical or regulatory restraint; or without a moral compass.  Disenrollment auditors, in particular, continue to help tribes "'clean up their rolls.'"

That for-profit auditors, CPAs and financial advisors now help dictate who belongs, should repulse us all.  Beyond that, the disenrollment industry should be disinvited from Indian Country.

Gabriel S. Galanda is the managing lawyer of Galanda Broadman, PLLC, in Seattle. Gabe is a descendant of the Nomlaki and Concow Tribes, belonging to the Round Valley Indian Tribes of Northern California. 

"The American Indian Middle Class," by Gabe Galanda

As recently published in the book, An Economic Encyclopedia of Progress and Poverty, Gabe Galanda's article, "The American Indian Middle Class," is here.  

The piece discusses, from a predominately legal perspective, how various happenings over the last 125 years shaped today's tribal middle class:

• The Indian assimilation era that began in the 1880s
• The Urban Indian Relocation Program of the 1950s
• The Fish Wars of the 1960s and 1970s
• Reagan Era Indian policy of the 1980s
• Indian gaming and per capita income since the 1990s
• Disenrollment since the 2000s

Gabriel S. Galanda is the managing lawyer of Galanda Broadman, PLLC, in Seattle. Gabe is a descendant of the Nomlaki and Concow Tribes, belonging to the Round Valley Indian Tribes of Northern California. 

Negative Ninth Circuit Indian Property Tax Precedent in the Making

Last Thursday a Southern California federal court handed down an Indian property tax ruling that is of potentially significant negative implication for tribes in the Ninth Circuit.

U.S. District Court Judge Dolly Gee issued a summary judgment decision in favor of Riverside County and against the Agua Caliente Band of Cahuilla Indians, affirming state possessory interest taxes (“PIT”) assessed by the County and imposed on non-Indian lessees who use and occupy Indian trust land within the Agua Caliente Indian Reservation.  

A couple things of note:

First, the Court ruled that Section 465's preemption applied only to "lands or rights that were placed in the United States’ name in trust for the Indian’s benefit under the IRA or the Act of July 28, 1955—neither of which are at issue." This is a significant clarification, given that the best, if not only, way to win Indian tax preemption cases these days is under a federal statute or regulation.

Second, the United States, as amicus curiae in the case, contended "that the comprehensiveness of the federal and regulatory scheme governing the leasing of Indian land, coupled with the federal interest in tribal sovereignty, 'weigh heavily against state and local taxation.'” But although finding those federal interests "strong" under Bracker, the Court found that they "must nonetheless yield to . . . state interests." United States intervention--whether as a party or friend of the court--had previously been seen as tipping Bracker balancing in favor of tribes.

Expect that if the decision stands on appeal to the Ninth Circuit Court of Appeals, state revenue agents will have a field day enhancing use taxes like PIT, to circumvent property tax preemption. 

Gabriel S. Galanda is the managing lawyer of Galanda Broadman, PLLC, in Seattle. Gabe is a descendant of the Nomlaki and Concow Tribes, belonging to the Round Valley Indian Tribes of Northern California. 

One To Watch: State Court Class Action Over Wapato Point Excise Taxation & BIA Leasing Regulations

A Wapato Point sublessee has filed a class action lawsuit in Grant County, Washington, against the Chelan County Treasurer to obtain a refund of Washington State real estate excise taxes on "transactions involving the assignment of subleases of real property and improvements thereon situated on Indian land."

Wapato Point is a famed Colville Indian allotment along the shores of Lake Chelan, Washington, a major tourist destination.

Plaintiff sued on behalf of all persons "who have been subjected to the imposition of Washington real estate excise tax on transactions involving transfers or assignments of leasehold interests on Indian property situated in the state of Washington."  Presumably at least the Plaintiff, if not the entire putative class of persons, is non-Indian. The size of that class and scope of any tax refunds from those transfers or assignments---use privileges---remains to be seen.

Plaintiff was allowed to sue the Chelan County Treasurer in Grant County Superior Court under a Washington state statute that allows county defendants to be sued in an adjoining county, in order to eliminate any home-court advantage for county government.  The Grant County Superior Court likely has minimal experience with Indian legal or jurisdictional issues. 

The lynchpin to the Plaintiff's lawsuit are the BIA's following leasing regulations, which took effect in January 2013 and which are rooted in federal statute, specifically 25 U.S.C. 465:

Plaintiff's case finds support in the Eleventh Circuit Court of Appeals' decision last year in Seminole Tribe of Florida v. Stranburg, most notably this passage

§ 465 precludes state taxation of that “bundle of privileges that make up property or ownership of property.” See id. at 158, 93 S.Ct. at 1275. The ability to lease property is a fundamental privilege of property ownership. By taxing the “privilege” of “engag[ing] in the business of renting, leasing, letting, or granting a license for the use of any real property,” the State of Florida is taxing a privilege of ownership just as New Mexico's tax in Mescalero taxed the privilege of use. . . . In conclusion, we hold that Florida's Rental Tax is expressly precluded by 25 U.S.C. § 465, and, in the alternative, is preempted by the comprehensive federal regulation of Indian land leasing. 

The real estate excise taxes at issue certainly seem to implicate the privilege of "leasing, letting, or granting a license for the use" of the Wapato Point lands at issue in the Grant County suit.

Presumably, in addition to arguing federal statutory exemption, Plaintiff will also argue Bracker preemption.  Bracker, the Supreme Court test that generally governs the taxation of non-Indians in Indian Country, is among the "federal law" referenced in the quoted BIA leasing regulations.  

As with all Indian tax cases, the Grant County suit will prove to be a fierce battle against state taxing forces, especially given the venue in deeply red (GOP) rural America; the financial implications of the proposed class action for both Chelan County and the state; and Washington State Department of Revenue (DOR)'s general aversion to the BIA's leasing regulations.  DOR can be expected to somehow back the Chelan County Treasurer in defense of the suit.

Complicating things further, the balancing of tribal (Colville) and federal interests may occur without a tribal party to the suit. Historically speaking, both of those interests needed to be aggressively developed by Indian parties for Bracker interest-balancing to be meaningful. Today, however, federal laws like § 465 coupled with the BIA leasing regulations may suffice to balance those two interests.

In all, the case is one to watch, closely.

Gabriel S. Galanda is the managing lawyer of Galanda Broadman, PLLC, in Seattle. Gabe is a descendant of the Nomlaki and Concow Tribes, belonging to the Round Valley Indian Tribes of Northern California. He thanks Leslie Cushman for brainstorming the implications of this new lawsuit with him.

Five Galanda Broadman Tribal Lawyers Receive Professional Accolades

Super Lawyers magazine has named Gabe Galanda (Round Valley) a Super Lawyer, and honored Anthony Broadman, Ryan Dreveskracht, Joe Sexton and Amber Penn-Roco (Chehalis) as Rising Stars, all in the field of Native American Law.  Each lawyer was evaluated on twelve indicators of peer recognition and professional achievement. 

Chambers USA 2017 also recently named Gabe as one of the best lawyers in the country in the field of Native American Law.  Chambers, headquartered in London, identifies and ranks the world's best lawyers and law firms based on in-depth, objective research.

Galanda Broadman, “An Indian Country Law Firm,” is dedicated to advancing tribal legal rights and Indian business interests.  With offices in Seattle and Yakima, Washington and Bend, Oregon, the firm represents tribal governments, businesses and citizens in critical litigation, business and regulatory matters, especially in matters of Indian Treaty rights, tribal sovereignty, and civil rights.

IHS Issues Guidance Re: Nooksack Disenrollment, Health Care, Drinking Water

On Friday, the federal Indian Health Service (IHS) issued a set of Frequently Asked Questions (FAQs) regarding the disenrollment-fueled annihilation at Nooksack, after holding two listening sessions in Bellingham last month.  

The federal guidance is unprecedented, especially as to disenrollment, a subject that the federal government typically does not touch. A few excerpts:

Q: Is IHS taking our funding because of the Nooksack 306 members?

A: No; the IHS cannot engage in an ISDEAA contract with the Nooksack Indian Tribe until the Department of Interior determines the Tribe is acting in accordance with the Tribe's Constitution and Bylaws. The holdover council does not have standing to represent the Nooksack Indian Tribe in a government-to-government relationship with the Indian Health Service, as well as other federal agencies.

Q: Is the IHS determining who represents the Nooksack Indian Tribe?
A: No, the Department of the Interior is the lead for the federal government in issues involving tribal governance.

Q: Is our tribal clinic closing?

A: The IHS cannot say whether the tribal clinic will remain open; that is a decision only the Tribe can make. However, after June 13, 2017, the IHS will not have any relationship with the tribal clinic and the tribal clinic will no longer have access to the cost-savings and tort coverage it receives as an ISDEAA contractor.

Q: What actions are being taken by the Environmental Protection Agency (EPA) to ensure safe drinking water for the Nooksack Tribal Community?

A: According to the March 27, 2017, letter from the EPA the Tribe failed to meet drinking water regulations. The EPA has issued Unilateral Administrative Orders that took effect on April 10, 2017.

Q: What has IHS done to help the Nooksack Tribal community have safe drinking water?

A: IHS engineers and utility consultants have provided the Tribe with technical assistance to help meet the EPA regulatory requirements.

Q: Can IHS do more to provide additional support to ensure Nooksack Tribal community has safe drinking water?

A: IHS utility consultants maintain communication with members from the tribal water utility and will continue technical assistance. However, IHS cannot assist with constructing improvements to the community water systems until the Tribal Council governance issues are resolved.

Galanda Broadman, PLLC, represents over 330 Nooksack Tribal members, including but not limited to at least 50 members who are not proposed for disenrollment but simply want a Tribal Council election to be conducted.

Casino ATM Provider Claiming Federal Indian Tax Preemption, Dissed by Wash. State Superior Court

By Anthony Broadman

An appeal of a Washington state trial court order will test the reach of IGRA and Bracker preemption of taxes on non-Indians providing services to Tribal casinos in the state. 

Everi Payments provides ATM services to Tribal casinos in Washington.  The Washington Department of Revenue (DOR) has assessed Everi over $1.4 million in “B&O taxes,” our state’s gross receipts tax.

Everi sued DOR in Thurston County Superior Court, which granted summary judgment to DOR, holding that federal law does not preempt B&O taxes on ATM services provided to Tribal casinos.

Everi Payments has appealed that decision to Division Two of the Washington State Court of Appeals.  Given the likelihood the case will eventually ascend to the Washington State Supreme Court, remains one to watch.

Anthony Broadman is a partner at Galanda Broadman PLLC. He can be reached at 206.321.2672, anthony@galandabroadman.com, or via www.galandabroadman.com.

Washington DOR Issues Tax Guidance on Tribal Firework Sales

DOR's memo, issued on Monday, is here.  An excerpt:

Sales of fireworks delivered to the tribe’s citizens are exempt from sales tax; however, when sales are made to non-Indians from the tribal fireworks vendor, those sales are subject to sales tax.

The memo signals that the state intends to give greater attention to the taxation of fireworks sales to non-Indians this summer.

Trump’s Ineffective End to the “War on Coal”

By Amber Penn-Roco

On March 28, 2017, President Trump issued an Executive Order, “Promoting Energy Independence and Economic Growth,” designed to roll back President Obama’s climate change policies and to revive the coal industry.  Upon signing the Executive Order, President Trump remarked that he was “putting an end to the war on coal,” telling coal miners: “You’re going back to work.”  The next day, the Trump Administration formally lifted a coal-leasing moratorium on federal lands. 

Critics immediately expressed doubt as to whether President Trump’s Executive Order would be able to stop the coal industry’s decline, pointing out that the coal industry’s biggest problem is not regulation, but the rise of natural gas. 

A recent report from the Center on Global Energy Policy at Columbia University’s School of International and Public Affairs casts further doubt on effectiveness of the Executive Order, asking: “Can Coal Make a Comeback?”  The report examines the cause of coal industry’s collapse and the “prospects for a recovery of US coal production and employment by modeling the impact of President Trump’s executive order and assessing the global coal market outlook.”

The report supported critics’ assertions that natural gas, rather than regulation, was the primary reason for the decline in the coal market.  The report finds: “Increased competition from cheap natural gas is responsible for 49 percent of the decline in domestic US coal consumption. Lower-than-expected demand is responsible for 26 percent, and the growth in renewable energy is responsible for 18 percent.”  Further, the report finds that “environmental regulations have played a role in the switch from coal to natural gas and renewables in US electricity supply by accelerating coal plant retirements, but were a significantly smaller factor than recent natural gas and renewable energy cost reductions.” 

The report also indicates that international factors further contributed to the decline in coal, finding: “Changes in the global coal market have played a far greater role in the collapse of the US coal industry than is generally understood . . . More than half of the decline in US coal company revenue between 2011 and 2015 was due to international factors.”

The report scrutinizes the effectiveness of the Executive Order, finding that “[i]mplementing all the actions in President Trump’s executive order to roll back Obama-era environmental regulations could stem the recent decline in US coal consumption, but only if natural gas prices increase going forward. If natural gas prices remain at or near current levels or renewable costs fall more quickly than expected, US coal consumption will continue its decline despite Trump’s aggressive rollback of Obama-era regulations.” 

Ultimately, the report concludes, “President Trump’s efforts to roll back environmental regulations will not materially improve economic conditions in America’s coal communities.”  The report states that considering the “domestic and international market outlook, we believe it is highly unlikely US coal mining employment will return to pre-2015 levels, let alone the industry’s historical highs."

Coal is a contentious issue in Indian Country.  On one hand, many tribes own land that has large coal reserves.  Coal can provide an economically depressed tribe a source of income.  Accordingly, many tribes support the development of natural resources on their lands.  However, many tribes are also resistant to coal mining, as it can result in the destruction and desecration of the natural environment and tribal sacred places. 

In particular, many tribes, and individual tribal members, oppose the resulting environmental impact of coal burning, which increases the emission of greenhouse gases, negatively impacting climate change.  Climate change has, historically, had a disparate impact on indigenous peoples.  As recognized by the United Nations, “Indigenous peoples are among the first to face the direct consequences of climate change, owing to their dependence upon, and close relationship with the environment and its resources.”  Indeed, “Climate change exacerbates the difficulties already faced by vulnerable indigenous communities, including political and economic marginalization, loss of land and resources, human rights violations, discrimination and unemployment.”

Accordingly, President Trump’s ineffective Executive Order will have a mixed impact on tribes.  Tribes that allow coal mining may suffer economically.  Though, no more than they would’ve suffered already under the declining coal market.  However, from an environmental perspective, the decline of the coal industry is a favorable result, as it will decrease emissions.  In all, as the President’s pro-coal Executive Order demonstrates, the issue is more nuanced that it might first appear, with Tribes having interests on both sides.

Amber V. Penn-Roco is an associate attorney at Galanda Broadman, PLLC.  Amber is a member of the Confederated Tribes of the Chehalis Reservation.  Amber’s practice focuses on tribal sovereignty issues, including complex land and environmental issues, and economic development matters.  Amber can be reached at (206) 713-0040 and amber@galandabroadman.com.