Oklahoma tribe asks federal judge to reconsider his decision that the Osage Reservation is not all of Osage County, putting three casinos' status into doubt.
The Osage Nation has asked a federal judge to reconsider his "lousy decision" on the reservation status of Osage County that has Nation officials rushing to place tribal casino land into trust. U.S. District Judge James Payne's Jan. 23 decision said Osage Nation employees are not exempt from paying state income taxes and that Osage County is not the Osage Reservation's boundaries. His decision came by summary judgment, which prevented the Nation from going to trial. "That was a lousy decision," said Principal Chief Jim Gray in an interview. "This is the first legitimate setback we've ever had [in the nearly eight-year-old case]. We intend to fight, we intend to prevail." The Nation filed a "motion for reconsideration" on Feb. 6. If Payne's decision stands, the tribe can appeal to the 10th U.S. Circuit Court of Appeals in Denver.
Worst-Case Scenarios However, Gray acknowledged that all worst-case scenarios could be possible: The tribe's Tulsa, Skiatook and Ponca City Million Dollar Elm casinos could close because they are situated on land that is not held in trust or, under Payne's decision, deemed the Osage Reservation. "There's no reason to think that we can't get the land into trust," Gray said in the interview. The Nation is in the process of filing the trust applications, said a source in the Chief's office who asked not to be named. Approval of a trust application could take between six months to three years. The Nation didn't immediately put the land into trust when it first bought the land because the federal National Indian Gaming Commission approved the Osages' claim that Osage County was also the reservation, the source said. The state signed the compact as well, a de facto recognition that the county is also the reservation, the source said. "It wasn't necessary to put [the land] into trust," the source said. "We've been abiding by the compact, and they've been cashing our checks."
Speculation Over Big Tax Bill The source also disputed speculation that the Nation would face a big tax bill from the state if Payne's decision stands — "the issue that seems to be of the greatest concern to many discussing the issue," the source said. "What people concerned about this need to understand is that the state doesn't ‘tax' the casinos, but rather, the tribe and the state have agreed to a revenue sharing agreement with the state in exchange for a right to operate in that location," the source said. "If the Payne decision were to have an effect upon the Nation's casinos it would be this: in accepting X amount in revenues from casinos operating on fee land for the past X years, it seems it would be the state that owes the tribe, not the tribe that owes the state. "As to tribal business tax liabilities, nothing about this decision changes the law regarding [the] ability of state or local entities to levy taxes on tribes," the source said. In his 27-page decision in Osage Nation v. Oklahoma Tax Commission, Payne cited the Oklahoma Organic Act, the Oklahoma Enabling Act and the Osage Allotment Act as proof that the U.S. Congress intended to dissolve the Osage Reservation and leave only ownership of the mineral estate and small tracts of trust land to the Nation. Payne's decision said that because Congress gave the State of Oklahoma jurisdiction over tribal members not living on trust land, they are not exempt from state income taxes
Another Look at the Evidence The motion for reconsideration asks Payne to take another look at the evidence the Nation provided. "Osages have never consciously given up their boundaries, ever," said Gray told a crowd of employees and tribal members Feb. 2. "We've made significant impacts in the tribe and the community, and all of these things the judge didn't even consider." Payne's decision said that establishing Osage County as a reservation "deprives Oklahoma of the ability to fund services in Osage County through income taxes" and that "the State's provision of services would be severely threatened." The decision also pointed out that the Nation has "left unchallenged the State's taxation of the income of its members for more than seventy years." Payne also said that removing Osages from the state tax rolls "would have significant practical consequences not only for income taxation, but potentially for civil, criminal and regulatory jurisdiction in Osage County." The judge mentioned that the county is majority non-Indian and non-Osage. In its new motion to Payne, the Nation pointed out the numerous times that the Oklahoma Organic Act, the Oklahoma Enabling Act and the Osage Allotment Act use the phrases "Osage Reservation" and "[Osages shall] reside on their Indian Reservation." The Nation also argued that the acts never said the tribe will no longer be governed by federal authority.
Both County and Reservation In a Jan. 5 presentation on the Nation's reservation status, Elizabeth Homer, the Osage Nation Gaming Commission lawyer, stressed that states can have multiple layers of jurisdiction. Osage County does not cease to exist if it is also the Osage Reservation. It can be both, said Homer, who declined to be interviewed for this story. The Osage Reservation is a "formal" reservation that originated in treaty and was confirmed by Congress with certain aspects of the transaction accomplished through executive order, Homer said. The Nation bought the reservation from the Cherokee tribe, paid for it with cash and still owns the deed to the land, dated June 14, 1883. The deed provided the Nation with a reservation set apart and confirmed as its reservation, she said. The case was filed in 2001 in federal court in Tulsa, and in December 2007 the 10th U.S. Circuit Court of Appeals ruled that the Nation could proceed against individual members of the Oklahoma Tax Commission. If the Nation has to return to the 10th U.S. Circuit Court of Appeals, the Nation will at least have its voice heard, Chief Gray said. But he is hopeful that Payne will reconsider the evidence before him and rule in the Nation's favor.
'Long History of State Intrusion' "We cannot believe that the court's clear desire to avoid disturbing the long history of the State's intrusion into our reservation through a self-serving and labored interpretation of federal law will be persuasive to the Circuit Court as a lawful and valid basis for this ruling," Gray said in a prepared statement. "We will continue to pursue a full and fair consideration of our claim, no matter how long and how difficult the struggle may be." Osage Nation Congressional Speaker Archie Mason predicted that resolution of the issue could be a long way off. "We as a Congress [of the Osage Nation] recognize our claim as a reservation status, without a doubt . . . and we support all of that," Mason said. "This is of national importance to our Osage Nation. We have to stand together to support this. "The impact if [Payne] was to rule against us [in the reconsideration] would be devastating," Mason added. "However, with the federal court system as it is, we might not get a decision in eight to 10 years. I don't know. It's a lengthy process." This story was written for the Osage News, the tribal newspaper of the Osage Nation, and is used with permission.