Kerr-McGee v. Navajo Tribe

In 1978, the Navajo Tribal Council (the council), the governing body of the Navajo Tribe of Indians (the tribe) (defendant), enacted ordinances that imposed taxes on leasehold interests and sales of services by tribe and non-tribe businesses on the Navajo reservation (the reservation). The tribe sought approval of the ordinances from the Bureau of Indian Affairs of the Department of the Interior (the bureau), which informed the tribe that no approval was necessary. A mineral lessee (the lessee) (plaintiff) on the reservation filed suit in the United States District Court for the District of Arizona, arguing that the taxes were invalid without approval of the Secretary of the Interior (the secretary), pursuant to the Indian Reorganization Act (IRA). The lessee argued that, because the IRA authorizes a tribe to adopt a constitution subject to the secretary’s approval and because some tribal constitutions call for the secretary’s approval of tax ordinances, such approval was required for a tribe to assess taxes on non-Indians. The lessee argued, in the alternative, that the Indian Mineral Leasing Act (IMLA) required the secretary to approve taxes on mineral leases because the IMLA stated that all mineral-lease operations were subject to the rules promulgated by the secretary. The district court held in the lessee’s favor and issued a permanent injunction against the tribe’s enforcement of the taxes. The tribe appealed, and the United States Court of Appeals for the Ninth Circuit reversed, holding that no law or principle required the secretary’s approval for the tribe to enforce the taxes. The United States Supreme Court granted certiorari.