Judges: Posner
Filed: Oct. 18, 2013
Latest Update: Mar. 02, 2020
Summary: In the United States Court of Appeals For the Seventh Circuit _ No. 12-3419 ONEIDA TRIBE OF INDIANS OF WISCONSIN, Plaintiff-Appellee, v. VILLAGE OF HOBART, WISCONSIN, Defendant-Third-Party Plaintiff-Appellant, v. UNITED STATES OF AMERICA, et al., Third-Party Defendants-Appellees. _ Appeal from the United States District Court for the Eastern District of Wisconsin. No. 10-C-137 — William C. Griesbach, Chief Judge. _ ARGUED SEPTEMBER 18, 2013 — DECIDED OCTOBER 18, 2013 _ Before BAUER, POSNER, and
Summary: In the United States Court of Appeals For the Seventh Circuit _ No. 12-3419 ONEIDA TRIBE OF INDIANS OF WISCONSIN, Plaintiff-Appellee, v. VILLAGE OF HOBART, WISCONSIN, Defendant-Third-Party Plaintiff-Appellant, v. UNITED STATES OF AMERICA, et al., Third-Party Defendants-Appellees. _ Appeal from the United States District Court for the Eastern District of Wisconsin. No. 10-C-137 — William C. Griesbach, Chief Judge. _ ARGUED SEPTEMBER 18, 2013 — DECIDED OCTOBER 18, 2013 _ Before BAUER, POSNER, and T..
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In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 12‐3419
ONEIDA TRIBE OF INDIANS OF WISCONSIN,
Plaintiff‐Appellee,
v.
VILLAGE OF HOBART, WISCONSIN,
Defendant‐Third‐Party Plaintiff‐Appellant,
v.
UNITED STATES OF AMERICA, et al.,
Third‐Party Defendants‐Appellees.
____________________
Appeal from the United States District Court for the
Eastern District of Wisconsin.
No. 10‐C‐137 — William C. Griesbach, Chief Judge.
____________________
ARGUED SEPTEMBER 18, 2013 — DECIDED OCTOBER 18, 2013
____________________
Before BAUER, POSNER, and TINDER, Circuit Judges.
POSNER, Circuit Judge. In 2007 the Village of Hobart, Wis‐
consin passed an ordinance assessing stormwater manage‐
ment fees on all parcels of land in the village, including
those owned by the Oneida Nation of Wisconsin, an Indian
2 No. 12‐3419
tribe. The purpose of the assessment was to finance the con‐
struction and operation of a stormwater management sys‐
tem. The tribe sought a declaratory judgment that the as‐
sessment could not lawfully be imposed on it. Hobart con‐
tended that if the tribe was right on that score (Hobart
thought it was wrong), the United States must pay the fees;
and so it filed a third‐party complaint against the United
States. The district judge rendered summary judgment for
the tribe and granted the motion of the United States to dis‐
miss the third‐party claim. The Village appeals both rulings.
Hobart is a small town in rural Wisconsin, near Green
Bay. Its population is less than 7000, of whom about 17 per‐
cent are Indians of the Oneida tribe. The Indians’ homes are
not confined to one neighborhood. They are scattered
throughout the village and as a result the Indian and non‐
Indian properties form an irregular checkerboard pattern.
The village itself is an enclave in the tribe’s reservation.
The significance of the checkerboard pattern is that title
to 148 parcels of land in Hobart—comprising about 1400
acres, amounting to 6.6 percent of the village’s total land—is
held by the United States in trust for the Oneida tribe. Con‐
gress has authorized the federal government to buy land and
hold it in trust for Indian tribes. 25 U.S.C. § 465; Carcieri v.
Salazar, 555 U.S. 379, 381–82 (2009). Normally the land is, as
in this case, within the boundaries of an Indian reservation.
The non‐Indian parcels in Hobart are technically part of the
surrounding Oneida reservation as well, but they are subject
to state rather than tribal sovereignty, and thus are subject to
state taxation and regulation. Tribal trust land, in contrast,
may not be taxed by either state or local governments. 25
U.S.C. § 465.
No. 12‐3419 3
The federal government holds little more than “bare” le‐
gal title to the trust land; with immaterial exceptions the
tribe governs trust lands just as it does lands to which it
holds title. See, e.g., 25 U.S.C. § 415(a); Montana v. United
States, 450 U.S. 544, 557 (1981). And so trust lands are part of
“Indian country,” 18 U.S.C. § 1151; Oklahoma Tax Commission
v. Sac & Fox Nation, 508 U.S. 114, 123 (1993)—in fact the larg‐
est part. Cohen’s Handbook of Federal Indian Law § 15.03, p. 997
and n. 1 (Nell Jessup Newton ed., 2012).
One may wonder why the government holds legal title to
any Indian land—why it doesn’t just buy land and give it to
an Indian tribe or, simpler still, give the tribe the money to
buy the land. The reason is to increase the likelihood that In‐
dian territory will remain Indian territory; for unlike land
held in fee simple by an Indian tribe, trust land is inalienable
without federal authorization. See 25 U.S.C. §§ 81, 177; 25
C.F.R. § 152.22. So one may wonder how it is that non‐
Indians own land in Hobart even though the village is en‐
tirely within the boundaries of the Oneida reservation. The
answer is that over time and through a variety of statutory
provisions a great deal of Indian land has been acquired by
non‐Indians. See Cohen’s Handbook, supra, § 1.04, pp. 73–74;
§16.03[2][b], pp. 1073–74.
Federal trusteeship underscores the fact that land ac‐
quired by the federal government in trust for Indians is, like
original tribal land, for the most part not subject to state ju‐
risdiction. Although the Supreme Court no longer believes
that “the treaties and laws of the United States contemplate
the Indian territory as completely separated from that of the
states,” Worcester v. Georgia, 31 U.S. 515, 557 (1832) (Marshall,
C.J.); see Nevada v. Hicks, 533 U.S. 353, 361 (2001), it remains
4 No. 12‐3419
true that “Indian treaties, executive orders, and statutes
preempt state laws that would otherwise apply by virtue of
the states’ residual jurisdiction over persons and property
within their borders. Federal preemption of state law in the
field of Indian affairs has persisted as a major doctrine in the
Supreme Court’s modern Indian law jurisprudence.” Cohen’s
Handbook, supra, § 2.01[2], p. 112. So when the federal gov‐
ernment acquires land in trust for Indians, the consequence
is to “reestablish [the Indians’] sovereign authority” over
that land. City of Sherrill v. Oneida Indian Nation, 544 U.S. 197,
221 (2005).
It is awkward for parcels of land subject to one sovereign
to be scattered throughout a territory subject to another. But
actually it’s a familiar feature of American government. Fed‐
eral facilities of all sorts, ranging from post offices to military
bases, are scattered throughout the United States, and are
subject to only as much regulation by states and local gov‐
ernments as the federal government permits. A similar scat‐
ter is common in Indian country, primarily as a result of al‐
lotment acts (later repealed) in the late 1800s and early 1900s,
notably the Dawes (General Allotment) Act of 1887, 25
U.S.C. § 331—acts allotting reservation land to individual
families to liberate them from tribal ownership that Con‐
gress in that era considered socialistic, to encourage their as‐
similation into mainstream American life, and not inci‐
dentally to facilitate the transfer of Indian land to non‐
Indians. See Cohen’s Handbook, supra, § 1.04, pp. 72–75.
The question in this case is whether the federal govern‐
ment has authorized the Village of Hobart to assess fees on
Indian lands in the village (or taxes—whether the assess‐
ments are fees or taxes is a separate issue, discussed at the
No. 12‐3419 5
end of this opinion) to pay for its stormwater management
program.
Although the authority of a state or local government
over Indian territory is limited, it is not negligible, especially
when Indians and non‐Indians live in close proximity. No
one doubts that Village of Hobart firefighters can enter Indi‐
an land in the village in the same circumstances in which
they can enter land owned by non‐Indians. But the only
premise that the Village advances for a right to impose on
the Indian lands charges for pollution control is section
313(a) of the Clean Water Act, 33 U.S.C. § 1323(a), which
provides, so far as relates to this case, that
each department, agency, or instrumentality of the execu‐
tive, legislative, and judicial branches of the Federal Gov‐
ernment (1) having jurisdiction over any property or facili‐
ty, or (2) engaged in any activity resulting, or which may
result, in the discharge or runoff of pollutants, and each of‐
ficer, agent, or employee thereof in the performance of his
official duties, shall be subject to, and comply with, all
Federal, State, interstate, and local requirements, adminis‐
trative authority, and process and sanctions respecting the
control and abatement of water pollution in the same
manner, and to the same extent as any nongovernmental
entity including the payment of reasonable service charg‐
es.
Hobart argues that this provision subjects tribal trust
lands to local authority over stormwater runoff—a cause of
water pollution acknowledged by Congress in enacting
stormwater amendments to the Clean Water Act. See 33
U.S.C. § 1342(p). Unmanaged stormwater runoff absorbs
pollutants in its path and often deposits them in nearby bod‐
ies of water that are classified as waters of the United States
6 No. 12‐3419
and therefore subject to federal regulation. See National Pol‐
lutant Discharge Elimination System—Regulations for Revi‐
sion of the Water Pollution Control Program Addressing
Storm Water Discharges, 64 Fed. Reg. 68,722, 68,724 (Dec. 8,
1999). Hobart’s stormwater management program (adopted
though not yet fully implemented) is intended to reduce, so
far as the Clean Water Act requires, pollution caused by
stormwater runoff.
Although section 313(a) does waive federal immunity
from local regulation of stormwater runoff, it does not ad‐
dress the underlying authority of local governments to regu‐
late that runoff on Indian lands. The federal Environmental
Protection Agency has the whip hand. Congress has author‐
ized it to establish and enforce nationwide standards for
regulating pollution, including stormwater pollution, of wa‐
ters of the United States. 33 U.S.C. §§ 1251(a), (d); 1361(a).
The agency’s “National Pollutant Discharge Elimination Sys‐
tem,” cited above, requires that the discharge of stormwater
into waters of the United States comply with permits that
“shall require controls to reduce the discharge of pollutants
to the maximum extent practicable, including management
practices, control techniques and system, design and engi‐
neering methods, and such other provisions as the Adminis‐
trator or the State determines appropriate for the control of
such pollutants.” 33 U.S.C. § 1342(p)(3)(B)(iii); see also 40
C.F.R. § 122.34(a).
But notice the phrase “or the State determines.” Congress
has authorized the EPA to delegate to states the authority to
issue stormwater management permits within their bounda‐
ries, 33 U.S.C. § 1342(b), and Wisconsin is one of the states to
which the authority has been delegated. But the uniform
No. 12‐3419 7
understanding has been that states and their subdivisions
are not authorized to regulate stormwater or other pollution
on Indian lands, including Indian trust lands. Cohen’s Hand‐
book, supra, § 10.02[1], at 789–90. Those lands are not exempt
from the Clean Water Act. But it is the Indian governments
of those lands, in this case the government of the Oneida
tribe, rather than states, that can be delegated regulatory au‐
thority under the Act. See 33 U.S.C. § 1377(e)(2); 40 C.F.R.
§ 122.31(b). So far as federal regulation of water pollution is
concerned, tribes equal states—they are not subservient to
them.
The eleven federally recognized tribes in Wisconsin oc‐
cupy about a thousand square miles. Wisconsin Department
of Administration, Division of Intergovernmental Relations,
Tribes of Wisconsin 3, Appendices A through K (July 2013),
ftp://doaftp1380.wi.gov/Doadocs/2011_Tribes_of_WI_v_7‐
2013.pdf (visited Oct. 15, 2013). They are self‐governing enti‐
ties, and there is no indication that in section 313(a) of the
Clean Water Act (a section that contains no mention of Indi‐
ans) Congress decided to place the regulation of pollution in
their territory under state control. Other federal properties in
a state—post offices, for example—are subject to delegated
state administration of the Clean Water Act, but not Indian
reservations, which for purposes of the Act are equated to
states. 33 U.S.C. § 1377(e); 40 C.F.R. § 131.3(j).
Wisconsin itself, in applying for permitting authority
under the Act in 1979, disclaimed authority to regulate
stormwater runoff on Indian lands. And Hobart acknowl‐
edged this by applying for a runoff permit not from the state
but from the EPA. It couldn’t obtain a permit from the state
because it wanted the permit to cover the 148 Indian parcels,
8 No. 12‐3419
and the state had disclaimed regulatory authority over those
parcels. For the same reason, the Oneida tribe couldn’t ob‐
tain a permit from the State of Wisconsin either, and so it too
applied to the EPA for a permit. (The EPA has granted tenta‐
tive, but not yet final, permits to both Hobart and the tribe.)
It does seem odd (to pick up on an earlier point) that
there should be two separate stormwater management pro‐
grams in tiny Hobart, administered by different sovereigns.
Indeed, given the checkerboard pattern of Indian and non‐
Indian land ownership in the village, it’s difficult to see how
there can be separate programs. We are told that both the
tribe and the Village have at least some stormwater runoff
facilities in the village, serving their respective constituen‐
cies. It’s difficult to visualize that; the Village presumably
owns all the streets, and storm sewers run under streets. But
storm sewers are not the only devices for regulating storm‐
water runoff; alternatives include retention ponds, and ap‐
parently there is one or more of them on Indian land in Ho‐
bart.
Nevertheless we can imagine an argument, built on our
earlier example of the Village’s authority to deploy its fire‐
fighters on Indian parcels, for an exception of necessity—a
common law graft onto the Clean Water Act—to the Oneida
tribe’s exclusive authority over Indian land. But the Village
doesn’t argue for such an exception; it doesn’t deny the fea‐
sibility of cooperative arrangements between it and the tribe,
which has signed cooperative service agreements with other
government bodies in the area.
So Hobart loses its case against the tribe. And there is an‐
other reason it must lose. Because federal law forbids states
and local authorities to tax Indian lands, the tribe can’t be
No. 12‐3419 9
forced to pay the assessment decreed by the challenged or‐
dinance if the assessment is a tax.
In Empress Casino Joliet Corp. v. Balmoral Racing Club, Inc.,
651 F.3d 722, 728 (7th Cir. 2011) (en banc), we rejected the
cumbersome multifactor tests that some courts had used to
try to distinguish between taxes and fees. We said that
the only material distinction [between taxes and fees] is be‐
tween exactions designed to generate revenue—taxes,
whatever the state calls them … —and exactions designed
either to punish (fines, in a broad sense) rather than to
generate revenue (the hope being that the punishment will
deter, though deterrence is never perfect and therefore
fines generate some state revenues), or to compensate for a
service that the state provides to the persons or firms on
whom or on which the exaction falls (or, what is similar, to
compensate the state for costs imposed on it by those per‐
sons or firms, other than costs of providing a service to
them): in other words, a fee.
Judged by this standard—which Hobart accepts—the
stormwater runoff assessment is a tax rather than a fee. It is
designed to generate revenue to pay for a governmental pro‐
ject. It is not a fee for a service provided to a particular land‐
owner. The landowners in the village are unlikely to be
harmed by stormwater runoff, and therefore helped by the
Village’s stormwater management program. Pollution
caused by the runoff would affect the streams and other
bodies of water, none of them in the village so far as ap‐
pears, into which the stormwater carries pollutants. Neither
is the fee a penalty for the landowner’s imposition of a cost
on the Village; the causal relation between a particular land‐
owner’s activities and the amount of stormwater runoff pol‐
lution resulting from rainstorms in Hobart is obscure, and
10 No. 12‐3419
the assessment scheme does not assign causal responsibility
for particular pollution to particular landowners. Further‐
more, unpaid stormwater runoff assessments become liens
on the property subject to the assessments, and are enforcea‐
ble in the same manner as real property taxes—though the
imposition, let alone the foreclosure, of liens on land to
which the federal government holds legal title is out of the
question.
In its third‐party complaint against the United States, the
Village argues that if the Oneida tribe isn’t liable to pay the
assessment, the federal government is, by virtue of the waiv‐
er in section 313(a) of the Clean Air Act of its immunity from
“reasonable service charges.” But a tax is not a reasonable
service charge; section 313(a) makes no reference to tribal
lands; and the federal government is merely the holder of
legal title to the 148 parcels in question, not the occupant.
The government’s status as trustee rather than merely donor
of tribal lands is designed to preserve tribal sovereignty, not
to make the federal government pay tribal debts. Anyway
there are no tribal debts to Hobart.
AFFIRMED.