Updates On The Land Loss Of Crow Creek Souix
Why is that the BIA, a federally funded agency, continues to walk away with a clean slate, when they in fact perpetuated the entire incident with one of the nations poorest of Nations, the Crow Creek Sioux?
The land was already part of the original Crow Creek Res., established by the Treaty of 1868. This very land was stolen & bought back by said Crow Creek.
The entire ordeal is suspect at best & deserves a delay on the auction of the land on behalf of the Creek Sioux.
I look forward to your reply in all earnest.
PRESS RELEASE .. .. For immediate release
December 3, 2009
IRS AUCTIONS OF 20% OF TOTAL CROW CREEK SIOUX TRIBE'S LAND HOLDINGS
(Ft. Thompson, S.D.) Former Crow Creek tribal council member and secretary Crystal St. John, who was elected in 2002, gave background information on the IRS claims. She said that "back in 2001, the Tribe got an IRS letter saying Tribe was delinquent in payroll taxes. The BIA Area Contracting Office Richard Zephier, BIA Superintend Steve McLaughlin, BIA CFO Harold Condon, and Tribal Chairwoman Roxanne Sazue entered into a Memorandum of Agreement (MOA) in which all tribal finances were placed under a BIA appointed monitor. The BIA appointed Harold Condon as monitor."
"In August, 2002, the Tribal Council was informed by Mr. Condon that all the Tribe's finances were in order and everything was okay. Then, in a Council Meeting, former council member Ronnie Kirkie asked Mr. Condon if it was true that the Tribe owed the IRS any taxes. Mr. Condon replied "no."
"In September, 2002, the Tribal Council received an IRS levy notice stating that the Tribe owned the IRS delinquent taxes. The Tribe also found out that Mr. Condon had written a letter to the IRS stating that 'the Tribe is a sovereign nation and does not owe any payroll taxes so abate that.'" "This was the beginning of the Tribe's problems with the IRS, " she said
"The problem was exacerbated when the BIA said no federal funds could be used to pay off the previous tax liabilities caused by Mr. Condon. From that point on, each time the Tribe would set aside funds to pay off its current quarterly IRS taxes, every week or month the IRS would levy these funds for past taxes, which would take the tax money needed for us to keep current on the quarterly taxes. This started with the mess created by Mr. Condon, and resulted in the current situation in which prevents the Tribe from ever catching up with its IRS tax debt," she said.
The Crow Creek Reservation was created by the Act of March 2, 1889, which carved up the Great Sioux Reservation created by the 1868 Treaty. Congress has continually reduced the Tribe's land base down to its current size, including flooding out the Tribe's remaining prime agricultural land along the Missouri River by the Flood Control Act of 1944. In 1997, Congress set up a trust fund to provide additional compensation for the loss of its Missouri River lands, and the Tribe used some of these trust funds to purchase 7,100 acres of fee land called the LeMaster Ranch lands. These 7,100 acres constitute about 20% of the Tribe's current land base on the reservation. To buy back some of their land that was lost under the flood control Act of 1944. Congress approved Crow Creek Infrastructure Development Trust Fund Act of 1996 setting up Trust Fund dollars controlled by the BIA. The Le'Master land was purchased with these Federal dollars.
"Because the lands were purchased with Infrastructure Development Trust Funds, I feel that the IRS needed the approval of the BIA to auction these lands off for taxes. The Crow Creek Sioux Tribe (since the purchase of the Le'Master land) approved numerous resolutions asking the BIA to put the land into trust when there were no taxes or levies/liens on this land. Because of BIA misfeasance in failing to put the land in trust, we lost the land in question in an IRS auction today!!," said Tribal Council member Norman Thompson.
The Tribe, whose reservation sits in one of the poorest county in the United States according to the 2000 Federal Census, was planning to use the LeMaster Ranch lands for a new wind energy farm, since it sits next to the second largest federal electrical quid in the United States and is in one of the areas with the highest wind velocities according the Department of Energy's Wind Energy Map.
Brandon Sazue, Chairman of the Tribe, said that the IRS auction "was downright shameful and contrary to the Government's trust responsibility to the Tribe. The lands were purchased with Infrastructure Development Trust Funds and should have been exempt from an IRS levy. In addition, the lands should have been exempt under the 1834 Non-Intercourse Act, which requires tribal consent before any tribally owned lands can be conveyed. We regard our lands as sacred and they are and never will be for sale."
The Tribe succeeded in stopping the sale in July, 2009, by transferring them to a tribally chartered corporation called Crow Creek Sioux Tribal Farms, Inc. and having the corporation file a Chapter 11 bankruptcy case which stayed the sale. Eventually, the bankruptcy case was withdrawn in November, 2009, when it was determined that the Indian law claims should be filed in U.S. District Court.
The Tribe has been negotiating a loan from the Shakopee Mdewakanton Sioux Community in Minnesota to pay the IRS off. Shakopee had its attorneys, the Dorsey and Whitney Law Firm assisting the Tribe in negotiating the IRS loan down, but to no avail. IRS set a new date for the auction and eventually time ran out and the Tribe filed a lawsuit in U.S. District court on December 1, 2009 to stop the IRS auction.
At a telephonic hearing held on December 2, 2009, U.S. District Judge Roberto Lange made the following ruling in denying the Tribe's motion for a temporary restraining order:
1. The Tribe did not make a sufficient showing to establish irreparable harm to grant a TRO;
2. There is a 180 day redemption period for the Tribe to repurchase the land plus a 20% penalty under the IRS Code.
3. The land is currently leased to an individual (for another year) and there will be no change in the possession of the land within the next 180 days;
4. A trial will be held on March 29 and 30, 2009 on the merits of the Tribe's claims; and
5. If the Tribe prevails, the court will order the Government to pay back the purchase price and the 20% penalty.
Regardless, the Tribe still has 180 days redemption period to purchase the land back.
News of the action has generated the a lot of interest among tribes across the United States. The Chairmen of other Sioux tribes have also rallied behind the Tribe by contacting the Interior Department and IRS to stop the auction, but to no avail.
The Tribe contemplates asking Senator Dorgan and the S.D. Congressional Delegation to hold congressional hearing on the IRS's auction of its tribal treaty lands. In the meantime, the Tribe will pursue its federal court action and continue negotiating its loan with Shokopee.
crow-creek-sioux-tribe-motion-..for-tro.pdf has been uploaded to the home site under "Files" section on the left.
Contributed by Sister Jodie Whiteljwhite@restel.net/
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH DAKOTA
CROW CREEK SIOUX TRIBAL FARMS,
INC., AND CROW CREEK SIOUX TRIBE,
v. Civil No. 09-3031
UNITED STATES INTERNAL REVENUE
SERVICE AND JAMES DAUGHERTY, E.
HANNIFIN, AND STEVE HOPKINS,
EMPLOYEES OF THE INTERNAL
REVENUE SERVICE, IN THEIR OFFICIAL
AND INDIVIDUAL CAPACITY,
MEMORANDUM OF LAW IN SUPPORT OF MOTION FOR
TEMPORARY RESTRAINING ORDER
Plaintiffs Crow Creek Tribal Farms, Inc. (“CCTF”) and Crow Creek Sioux Tribe
(“the Tribe”), by and through undersigned counsel, hereby submit this memorandum of
law in support of their Motion for Temporary Restraining Order.
STATEMENT OF FACTS
Plaintiff Crow Creek Sioux Tribe is a federally recognized Indian Tribe, with a
governing body recognized by the Secretary of the Interior that exercises sovereign
power and authority over the Crow Creek Indian Reservation in Brule and Hyde County,
South Dakota. The Crow Creek Indian Reservation was created by the 1868 Treaty, Act
of April 29, 1868, 15 Stat. 635, and by Section 6, Act of March 2, 1889, 25 Stat. 888.
The Tribe has a government-to-government relationship with the United States of
Case 3:09-cv-03031-RAL Document 6 Filed 12/02/2009 Page 1 of 23
Crow Creek Tribal Farms, Inc. (CCTF), is a corporation that was formed and
organized under Crow Creek Sioux Tribal Laws as a legal entity separate and distinct
from the Crow Creek Sioux Tribe. CCTF currently holds ownership and title to certain
real estate located in Hyde County, South Dakota, commonly known as the LeMaster
Ranch. CCTF is not delinquent on any taxes owed to the Internal Revenue Service.
The Defendant Internal Revenue Service (IRS), an agency of the United States of
America, has been delegated the power and authority to impose and collect employment
taxes from employers in the United States. The agency has levied on property and
money owned by the Crow Creek Sioux Tribe for failure to pay delinquent employment
taxes amounting to approximately $3,123,789.73. The IRS proposes to sell at auction,
the auction to be held on Thursday, December 3, 2009, that real estate held by Crow
Creek Sioux Tribal Farms known as the LeMaster Ranch.
A. The Delinquent Taxes
Because of erroneous tax advice received from the Bureau of Indian Affairs, the
Crow Creek Sioux Tribe became delinquent in the payment of employment taxes
collected by the IRS beginning in 2003. The BIA had informed the Tribe that, because it
was a federally recognized Tribe, it was not necessary to pay federal employment taxes.
The delinquency relates to the filing of and payments due under Forms 940 and 941 from
September 20, 2003 until the present time.
The Tribe has attempted to pay the arrearages and subsequent amounts as they
come due, but has been unable to bring the employment taxes current. Meanwhile, the
IRS has levied and garnished various accounts of the Tribe making it impossible for the
Case 3:09-cv-03031-RAL Document 6 Filed 12/02/2009 Page 2 of 23
Tribe to bring the taxes current. As of August 17, 2009, the total amount outstanding and
due the Internal Revenue Service, including all related penalty and interest, was
B. The LeMaster Ranch Property
In 1998 the Tribe, as part of a land consolidation effort on its reservation,
purchased the LeMaster Ranch, consisting of approximately 7,100 fee patent acres in
Hyde County, South Dakota, from the LeMasters, private owners. This land is located on
the Crow Creek Indian Reservation and was previously held in trust by the United States
government for the Tribe or its members. The land subsequently came out of trust and
was acquired in fee status by the LeMasters, from whom the Tribe subsequently acquired
the land in 1998. The Tribe also owned 10 acres of fee patent land in Hughes County,
which land forms a part of the LeMaster Ranch property.
The LeMaster Ranch lands are located within and were a part of the original Crow
Creek Indian Reservation as established by the Treaty of 1868, Act of April 29, 1868, 15
Stat. 635, and Act of March 2, 1889, 25 Stat. 888, and once were held in trust by the
United States for the Crow Creek Sioux Tribe. The lands were subsequently allotted and
came out of trust when sold to non-Indians, and they were ultimately sold to the
These lands were allotted and conveyed to individual Indian landowners pursuant
to Sections 8 through 12 of the Act of March 2, 1889, 25 Stat. 888. However, these
allotments and conveyances were unlawful in that the following proviso to Section 9 of
the Act was never complied with: “Provided, That these sections as to the allotments
shall not be compulsory without the consent of the majority of the adult members of the
Case 3:09-cv-03031-RAL Document 6 Filed 12/02/2009 Page 3 of 23
tribe, except that the allotments shall be made as provided for the orphans.” No
referendum was ever held by which a majority of the adult members of the Crow Creek
Sioux Tribe consented to the allotments.
The appraised value of the LeMaster Ranch lands has been estimated to be
$4,634,000 by Wendell Appraisal Services. (See Exhibit I attached to the Complaint.)
C. The Imminent IRS Sale By Public Auction of the LeMaster Ranch Lands
The IRS, through its employees, James Daugherty, E. Hannifin, and Steve Hopkins,
is proposing to sell, by public auction, the LeMaster Ranch lands, including the Hughes
County real estate, on December 3, 2009 at the hour of 10:00 o’clock A.M. at Hyde
County Courthouse in Highmore, South Dakota, to satisfy the IRS tax lien in the amount
of $3,123,789.73. (See Exhibit II attached to the Complaint.)
The LeMaster Ranch, however, is currently owned and in the name of the Crow
Creek Tribal Farms, Inc., as shown by the Deed attached as Exhibit 3. CCTF has no
delinquent tax liabilities owing to the IRS.
I. Plaintiffs Will Be Irreparably Harmed Absent Issuance Of A
The purpose of preliminary equitable relief, such as a TRO, is to preserve the status
quo until the court rules on the merits. Devose v. Herrington, 42 F.3d 470, 471 (8th Cir.
1994) (en banc). To obtain a preliminary injunction, the moving party must show (1) that
he is likely to succeed on the merits, (2) that he is likely to suffer irreparable harm in the
absence of preliminary relief, (3) that the balance of equities tips in his favor, and (4) that
an injunction is in the public interest. Winter v. Natural Resources Defense Council, 129
Case 3:09-cv-03031-RAL Document 6 Filed 12/02/2009 Page 4 of 23
S. Ct. 365, 374 (2008). These four factors are identical to those that apply in evaluating
requests for temporary restraining orders. See Oglala Sioux Tribe v. C&W Enterprises,
Inc., 2009 U.S. Dist. LEXIS 25881, *3 (D.S.D. March 25, 2009) (No. CIV. 07-5024-
KES), stating that “[w]hen ruling on a motion for a TRO, the court must consider (1) the
threat of irreparable harm to the moving party; (2) balancing this harm with any injury an
injunction would inflict on other parties; (3) the likelihood of success on the merits; and
(4) the public interest,” citing Dataphase Systems, Inc. v. C.L. Systems, Inc., 640 F.2d
109, 113 (8th Cir. 1981).
As the Eighth Circuit has emphasized, care must be exercised in balancing the
equities, especially since a preliminary injunction motion is too early a stage of the
proceedings to woodenly assess a movant's probability of success on the merits with
mathematical precision. General Mills, Inc. v. Kellogg Co., 824 F.2d 622, 624 (8th Cir.
1987); Dataphase, 640 F.2d at 113. The essential inquiry in weighing the propriety of
issuing a preliminary injunction is whether the balance of other factors tips decidedly
toward the movant and the movant has also raised questions so serious and difficult as to
call for more deliberate investigation. General Mills, Inc. v. Kellogg Co., 824 F.2d at
624-625; Dataphase, 640 F.2d at 113.
When seeking a preliminary injunction or TRO, the movant has the burden to show
that under the factors set forth in Dataphase it is entitled to preliminary injunctive relief.
General Mills, Inc. v. Kellogg Co., 824 F.2d at 628. The district court has broad
discretion when ruling on requests for preliminary injunctive relief. Id. at 625.
A threat of irreparable harm must exist for a preliminary injunction or TRO to
issue. United Healthcare Insurance Co., 316 F.3d 737, 740 (8th Cir. 2002). An
Case 3:09-cv-03031-RAL Document 6 Filed 12/02/2009 Page 5 of 23
irreparable harm is an imminent injury that is both great and certain to occur, and for
which legal remedies are inadequate. Wisconsin Gas Co. v. F.E.R.C., 758 F.2d 669, 674
(D.C. Cir. 1985). In other words, irreparable harm is injury that is beyond remediation
by monetary damages. Chaplaincy of Full Gospel Churches v. England, 454 F.3d 290,
297 (D.C. Cir. 2006).
In this case, Plaintiffs will suffer several kinds of serious irreparable harm absent
the issuance of a TRO. First, the Tribe realizes revenue from leases issued on the
LeMaster Ranch, which revenue is used by the Tribe to provide services necessary to
further the health, education and welfare of the Tribe's members. The imminent sale of
the LeMaster Ranch by the IRS would interrupt the Tribe's receipt of this revenue and
curtail or terminate the provision of necessary services to tribal members, thereby
causing irreparable harm to the health, education and welfare of the Tribe's members,
injuries for which legal remedies are wholly inadequate. For example, in Winnebago
Tribe of Nebraska v. Stovall, 216 F. Supp. 2d 1226 (D. Kan. 2002), aff'd, 341 F.3d 1202
(10th Cir. 2003), the defendant Kansas state officials seized the trucks and fuel of the
plaintiff tribes and of a tribal corporation (HCI Distribution) in an attempt to enforce the
Kansas Motor Vehicle Fuel Tax Act. The Winnebago Tribe argued that it had thereby
suffered irreparable harm, pointing out that the seizure of their property had resulted in
the loss of revenues and profits, which were used for services for the Winnebago tribal
members including police service, fire service, health care service and educational
services. Other plaintiff tribes (the Kansas Tribes) similarly asserted that the defendant's
actions had caused lost sales and profits, and that, without such revenues, they would be
unable to fund tribal government programs and government services for tribal members.
Case 3:09-cv-03031-RAL Document 6 Filed 12/02/2009 Page 6 of 23
The district court, in issuing a preliminary injunction, found that “plaintiffs have
demonstrated that they will suffer irreparable injury in that monetary damages will not be
sufficient to undo the damage with which plaintiffs are currently faced.” 216 F. Supp. 2d
Secondly, the LeMaster Ranch is a significant part of the land consolidation plan of
the Tribe, and its retention by the Tribe will insure the continued existence of the Crow
Creek Indian Reservation into the future. The imminent sale by the IRS of the LeMaster
Ranch for back taxes will seriously undermine the Tribe's land consolidation plan,
thereby causing the Tribe an injury that cannot be measured in monetary damages.
Third, the IRS's seizure and sale of tribal assets, specifically the LeMaster Ranch
lands together with the rental income stream from those lands, “significantly interferes
with the Tribe's self-government,” an interference that constitutes irreparable harm. See
Kiowa Indian Tribe of Oklahoma v. Hoover, 150 F.3d 1163, 1171-1172 (10th Cir. 1998);
Seneca-Cayuga Tribe v. Oklahoma, 874 F.2d 709, 716 (10th Cir. 1989) (finding
irreparable injury where threatened loss of revenues and jobs created "prospect of
significant interference with [tribal] self-government"). “[H]arm to tribal selfgovernment
is not easily subject to valuation[.]” Prairie Band of Potawatomi Indians v.
Pierce, 253 F.3d 1234, 1251 (10th Cir. 2001).
Fourth, the jurisdiction of the Crow Creek Sioux Tribe will be decreased by over
7,100 acres if the IRS is allowed to sell the LeMaster Ranch for the back taxes owned by
the Tribe. Again, the resulting loss and impairment of tribal jurisdiction and sovereignty
cannot be measured in or remedied by monetary damages. “[A]n invasion of tribal
sovereignty can constitute irreparable injury.” Wyandotte Nation v. Sebelius, 443 F.3d
Case 3:09-cv-03031-RAL Document 6 Filed 12/02/2009 Page 7 of 23
1247, 1255 (10th Cir. 2006); see also Winnebago Tribe of Nebraska v. Stovall, 216 F.
Supp. 2d at 1233 (finding irreparable injury where “scope of tribal sovereignty” is
threatened because such “can not be measured in dollars”).
In sum, Plaintiffs have made a strong showing of irreparable harm that is certain to
occur if a TRO restraining the IRS from selling the LeMaster Ranch property is not
II. Plaintiffs Have Demonstrated A Sufficient Likelihood of Success on the
The moving party for a preliminary injunction or TRO need not demonstrate a
mathematical probability of success, such as greater than 50 percent. Heartland
Academy Comm. Church v. Waddle, 335 F.3d 684, 690 (8th Cir. 2003); Oglala Sioux
Tribe v. C&W Enterprises, Inc., 2009 U.S. Dist. LEXIS 25881, *6. Instead, the movant
need only demonstrate that it has a “fair chance of prevailing” after discovery, formal
procedures, complete evidence, and a full trial on the merits. Id.
A. The IRS Lacks Authority To Seize And Sell The 7,100 Acres, As
Such Seizure And Sale Of Tribal Land Acquired Through Purchase In
Fee Violates The Indian Nonintercourse Act, 25 U.S.C. § 177.
The Indian Nonintercourse Act (INA) provides in relevant part that
No purchase, grant, lease, or other conveyance of lands, or of any title or
claim thereto, from any Indian nation or tribe of Indians, shall be of any
validity in law or equity, unless the same be made by treaty or convention
entered into pursuant to the Constitution.
25 U.S.C. § 177. “In other words, land owned by an Indian nation is inalienable (except
with the approval of Congress, a circumstance not present here).” Oneida Indian Nation
of New York v. Madison County, 401 F. Supp. 2d 219, 227 (N.D.N.Y. 2005).
Case 3:09-cv-03031-RAL Document 6 Filed 12/02/2009 Page 8 of 23
The INA “broadly protects Indian tribes' rights to and interests in land.” Tonkowa
Tribe of Oklahoma v. Richards, 75 F.3d 1039, 1045 (5th Cir. 1996). As “perhaps the
most significant congressional enactment regarding Indian lands,” the INA's “overriding
purpose is the protection of Indian lands.” United States on behalf of Santa Ana Indian
Pueblo v. University of New Mexico, 731 F.2d 703, 706 (10th Cir.), cert. denied, 469 U.S.
853 (1984) (citations omitted).
The INA “applies to 'any title or claim' to real property, including nonpossessory
interests.” Tonkowa Tribe of Oklahoma v. Richards, 75 F.3d at 1045. Thus, it has long
been recognized that “[t]his statutory provision [§ 177] is very general and
comprehensive. Its operation does not depend upon the nature or extent of the title to the
land which the tribe or nation may hold.” Id., quoting Lease of Indian Lands for Grazing
Purposes, 18 Op. Att'y Gen. No. 583 (July 21, 1885).
More specifically, “[t]he Nonintercourse Act protects a tribe's interest in land
whether that interest is based on aboriginal right, purchase or transfer from a state.”
Tonkowa Tribe of Oklahoma v. Richards, 75 F.3d at 1045 (emphasis added); see Alonzo
v. United States, 249 F.2d 189, 196 (10th Cir. 1957) (lands acquired through grants made
by governments of Spain and Mexico and by purchase), cert. denied, 355 U.S. 940
(1958); Joint Tribal Council of Passamaquoddy Tribe v. Morton, 528 F.2d 370 (1st Cir.
1975) (grants by state); United States v. 7405.3 Acres of Land, 97 F.2d 417, 422 (4th Cir.
1938) (“It makes no difference that title to the land in controversy was originally
obtained by grant from the state of North Carolina."). Thus, the Tenth Circuit in Alonzo,
after pointing out that “the word 'lands' is in nowise limited by any express or implied
language in the Act,” 249 F.2d at 196, reasoned in pertinent part as follows:
Case 3:09-cv-03031-RAL Document 6 Filed 12/02/2009 Page 9 of 23
The reason for the imposition of the restrictions [set forth in § 177] is in
nowise related to the manner in which the Indians acquired their lands.
The purpose of the restrictions is to protect the Indians . . . against the loss
of their lands by improvident disposition or through overreaching by
members of other races. There is as great a need for such protection of
the Pueblos in New Mexico, with respect to their lands acquired by
purchase, as there is to lands otherwise acquired.
Id. (emphasis added and footnote omitted).
Furthermore, the INA reaches not only voluntary conveyances by a tribe but also
“any action” by a state or by the Federal government “which purports to divest a tribe of
an interest in land.” Tonkowa Tribe of Oklahoma v. Richards, 75 F.3d at 1045; see
Tuscarora Indian Nation v. Federal Power Commission, 265 F.2d 338 (D.C. Cir. 1958)
(applying INA to condemnation proceeding), rev'd on other grounds, 362 U.S. 99 (1960);
Tuscarora Nation of Indians v. Power Authority of New York, 257 F.2d 885, 893 (2d Cir.
1958) (Nonintercourse Act applied to condemnation proceeding by state), vacated as
moot, 362 U.S. 608 (1960); United States v. First Nat'l Bank, 56 F.2d 634, 635 (D. Neb.
1931) ("The Omaha tribe owned its lands before Nebraska became a state . . . . It is not
competent for either the Congress by legislation or the states by court decisions to impair
those rights."), aff'd, 59 F.2d 367 (8th Cir. 1932). Thus, action by a state or by the
Federal government to foreclose on or to seize and sell tribal real property for unpaid
back taxes is barred by the INA, absent congressional approval. See, e.g., Oneida Indian
Nation of New York v. Madison County, 401 F. Supp. 2d at 227 (“Proceeding with the
state court foreclosure would result in the transfer of title to land owned by the Nation to
the County--alienation of Indian land. This is precisely what is prohibited by the
Case 3:09-cv-03031-RAL Document 6 Filed 12/02/2009 Page 10 of 23
Nonintercourse Act.”); accord, Oneida Indian Nation v. Oneida County, 432 F. Supp. 2d
285, 289 (N.D.N.Y. 2006).
To establish a prima facie case for a violation of the INA, the Debtor must prove
four elements: “(1) that it is or represents an Indian tribe within the meaning of the
Nonintercourse Act; (2) that the land in issue is covered by the Nonintercourse Act as
tribal land; (3) that the United States has never approved or consented to the alienation of
the tribal land; and (4) that the trust relationship between the United States and the tribe,
established by coverage of the Nonintercourse Act, has never been terminated or
abandoned.” Catawba Indian Tribe of South Carolina v. State of South Carolina, 718
F.2d 1291, 1295 (4th Cir. 1983), aff'd, 740 F.2d 305 (4th Cir. 1984) (en banc), rev'd on
other grounds, 476 U.S. 498 (1986); accord, Delaware Nation v. Commonwealth of
Pennsylvania, 446 F.3d 410, 418 (3d Cir.), cert. denied, 549 U.S. 1071 (2006); Golden
Hill Paugussett Tribe of Indians v. Weicker, 39 F.3d 51, 56 (2d Cir. 1994); Epps v.
Andrus, 611 F.2d 915, 917 (1st Cir. 1979).
Plaintiffs have established all four elements. With regard to the first element, the
Crow Creek Sioux Tribe is an Indian Tribe within the meaning of the INA, and CCTF is
a corporation chartered by the Tribe and thereby constitutes an agency and representative
of the Crow Creek Sioux Tribe. See Black's Law Dictionary 84 (4th ed. 1968) (defined
“agency” as “[i]nclud[ing] every relation in which one person acts for or represents
another by latter's authority”); id. at 1465 (“To represent a person is to stand in his
place.”); id. at 1466 (defining “representative” as meaning “[o]ne who represents or
stands in the place of another”). The Supreme Court has defined a "tribe" as "a body of
Indians of the same or a similar race, united in a community under one leadership or
Case 3:09-cv-03031-RAL Document 6 Filed 12/02/2009 Page 11 of 23
government, and inhabiting a particular though sometimes ill-defined territory . . . ."
Montoya v. United States, 180 U.S. 261, 266 (1901). The Supreme Court has applied this
definition to bring within the scope of the INA a tribe of Indians that did not have a
federally recognized form of government. United States v. Cadelaria, 271 U.S. 432,
441-442 (1926); see also Catawba Indian Tribe of South Carolina v. State of South
Carolina, 718 F.2d at 1298. The Crow Creek Sioux Tribe is a body of Indians of the
same or similar race, see Constitution of the Crow Creek Sioux Tribe [“CCST Const.],
Art. II (1948) (defining membership in Tribe); united in a community under a single
tribal government that is federally recognized, see CCST Const., Art. III, Section 1 (“The
governing body of the Crow Creek Sioux Tribe shall be the Tribal Council.”); Indian
Entities Recognized and Eligible to Receive Services from the United States Bureau of
Indian Affairs, 74 Fed. Reg. 40218, 40219 (Aug. 11, 2009) (listing as one of the “Indian
Tribal Entities Within The Contiguous 48 States Recognized And Eligible To Receive
Services From the United States Bureau of Indian Affairs,” the “Crow Creek Sioux Tribe
of the Crow Creek Reservation, South Dakota”); and inhabiting a particular reservation
territory. See CCST Const., Art. I (“The jurisdiction of the Crow Creek Sioux Tribe shall
extend to the territory within the original confines of the diminished reservation
boundaries, which are described by the Act of March 2, 1889 (25 Stat. L. 888), and
including trust allotments without the herein mentioned boundaries and such other lands
as may be hereafter added thereto under any law of the United States, except as otherwise
provided by law.”). Plaintiff Crow Creek Sioux Tribe thus clearly qualifies as an Indian
tribe for purposes of the INA, and Plaintiff CCTF represents the Tribe.
Case 3:09-cv-03031-RAL Document 6 Filed 12/02/2009 Page 12 of 23
As for the fourth element, the trust relationship between the United States and the
Crow Creek Sioux Tribe has never been terminated or abandoned. See 74 Fed. Reg. at
Turning to the second element of an INA claim, the land in question was acquired
by purchase by the Tribe, and title to the land was held in fee by the Tribe until it was
recently transferred to Crow Creek Tribal Farms, Inc. CCTF is a tribal corporation
created and chartered by the Tribe for tribal purposes. Such a corporation has been
treated by the federal courts as an arm or agency of the Tribe itself. See Weeks
Construction, Inc. v. Oglala Sioux Housing Authority, 797 F.2d 668, 670-671 (8th Cir.
1986) (“As an arm of tribal government, a tribal housing authority possesses attributes of
tribal sovereignty, . . . and suits against an agency like the Housing Authority normally
are barred absent a waiver of sovereign immunity.”); Dillon v. Yankton Sioux Tribe
Housing Auth., 144 F.3d 581, 583 (8th Cir. 1998) (same); Hagen v. Sisseton-Wahpeton
Community College, 205 F.3d 1040, 1043 (8th Cir. 2000) (community college served as
an arm of the tribe and not a mere business and was thus entitled to tribal sovereign
immunity); Allen v. Gold Country Casino, 464 F.3d 1044, 1046, 1047 (9th Cir. 2006)
(pointing out that a tribal casino “is not a mere revenue-producing tribal business” and
holding that, “[i]n light of the purposes for which the Tribe founded this Casino and the
Tribe’s ownership and control of its operations, there can be little doubt that the Casino
functions as an arm of the Tribe” and “accordingly enjoys the Tribe’s immunity from
suit”), cert. denied, 549 U.S. 1231 (2007). The land therefore remains tribal land within
the meaning of the INA, although title to the land is formally held by CCTF. As
discussed above, it makes no difference whether the land in question was acquired by
Case 3:09-cv-03031-RAL Document 6 Filed 12/02/2009 Page 13 of 23
purchase or whether it is land to which the Tribe holds aboriginal title. See, e.g., Alonzo,
249 F.2d at 196.
Finally, the United States has never approved or consented to the alienation of the
tribal land in question here. While the tribal land in question, namely the 7,100 acres
comprising the Le Master Ranch, was originally held by the Tribe by an aboriginal title
and was purportedly allotted under Sections 8 through 12 of the Act of March 2, 1889, 25
Stat. 888, the allotments were illegal for lack of compliance with the proviso in Section 9
of the 1889 Act, which proviso states: “That these sections as to the allotments shall not
be compulsory without the consent of the majority of the adult members of the tribe,
except that the allotments shall be made as provided for the orphans.” (Emphasis added.)
The 7,100 acres in question were allotted in violation of Section 9 of the 1889 Act in that
no referendum was ever held in which the majority of the adult members of the Tribe
approved the allotments now comprising the 7,100-acre Le Master Ranch. Given the
lack of compliance with Section 9 of the 1889 Act, Congress has never approved or
consented to the alienation of the tribal land in question, either while it was held by the
tribe by an aboriginal title or subsequently after the tribe reacquired the land through
Thus, even assuming that, ordinarily, Indian land approved for alienation by the
federal government through the adoption of allotment acts and then later reacquired by a
tribe is not subject to the protection of the INA, see Lummi Indian Tribe v. Whatcom
County, Wash., 5 F.3d 1355, 1359 (9th Cir. 1993) (“parcels of [Indian] land approved for
alienation by the federal government and then reacquired by the Tribe [do] not then
become inalienable by operation of the Nonintercourse Act”), cert. denied, 512 U.S.
Case 3:09-cv-03031-RAL Document 6 Filed 12/02/2009 Page 14 of 23
1228 (1994), this principle has no application here. The approval for alienation
embodied in allotment provisions, namely Sections 8 through 12, of the 1889 Act was
expressly conditioned by Congress on compliance with the proviso of Section 9 that the
majority of the adult members of the Tribe consent to the allotments. Because this
condition was never complied with, in that no referendum was ever held by which a
majority of the Tribe's members consented to the allotments, the allotments were in fact
unlawfully made to individual tribal members without federal government approval or
In other words, because the allotments were never “lawfully conveyed” to
individual tribal members in accordance with the requirements of Section 9 of the 1889
Act, the 7,100 acres comprising the Le Master Ranch remain subject to the protections of
the INA. Cf. Oneida Tribe of Indians of Wisconsin v. Village of Hobart, 542 F. Supp. 2d
908, 933, 934 (E.D. Wis. 2008), rejecting “contention that reservation lands lawfully
conveyed in fee upon issuance of a patent issued by the United States pursuant to the
Allotment Acts regain federal protection from taxation and alienation merely upon
reacquisition by the tribe” (emphasis added), and distinguishing Oneida Indian Nation
cases on the grounds that “Congress never consented to the removal of federal protection
of the property there at issue. The State of New York had acquired the lands unlawfully.”
To summarize, “[t]he Nonintercourse Act, in plain language, prohibits the
conveyance of lands from any Indian nation.” Oneida Indian Nation of New York v.
Madison County, 401 F. Supp. 2d at 228. The seizure and sale sought by the IRS would
be a conveyance of lands from either the Tribe, an Indian nation, or from CCTF, an
Case 3:09-cv-03031-RAL Document 6 Filed 12/02/2009 Page 15 of 23
agency and arm of the Tribe. As there has never been congressional approval for this
action, the IRS seizure and sale is prohibited by the INA.
B. The IRS Lacks Authority To Seize And Sell The 7,100 Acres, Which
Have Always Been Tribally Owned Trust Lands, Since They Were
Allotted In Violation of Section 9 of the 1889 Act.
The 7,100 acres comprising the Le Master Ranch were originally part of the Crow
Creek Sioux Tribe's 1868 treaty lands, to which the Tribe held an aboriginal title. These
lands were purportedly alloted to individual tribal members under Sections 8 through 12
of the 1889 Act.
Section 9 of the 1889 Act provided as follows:
That all allotments set apart under the provisions of this act shall
be selected by the Indians, heads of families selecting for their minor
children, and the agents shall select for each orphan child, and in such
manner as to embrace the improvements of the Indians making the
selection. Where the improvements of two or more Indians have been
made on the same legal subdivision of land, unless they shall otherwise
agree, a provisional line may be run dividing said lands between them, and
the amount to which each is entitled shall be equalized in the assignment
of the remainder of the land to which they are entitled under this act:
Provided, That if any one entitled to an allotment shall fail to make a
selection within five years after the President shall direct that allotments
may be made on a particular reservation, the Secretary of the Interior may
direct the agent of such tribe or band, if such there be, and if there be no
agent, then a special agent appointed for that purpose, to make a selection
for such Indian, which selection shall be allotted as in cases where
selections are made by the Indians, and patents shall issue in like manner:
Provided, That these sections as to the allotments shall not be compulsory
without the consent of the majority of the adult members of the tribe,
except that the allotments shall be made as provided for the orphans.
Act of March 2, 1889, 25 Stat. 888, Section 9 (emphasis and underlining added).
The 7,100 acres of the Le Master Ranch have always been and remain tribally
owned trust lands to which the tribe holds an aboriginal title because they were allotted to
Case 3:09-cv-03031-RAL Document 6 Filed 12/02/2009 Page 16 of 23
individual members of the tribe in violation of the proviso to Section 9 of the 1889 Act,
in that no referendum was ever held in which the majority of the adult members of the
Tribe consented to or approved the allotments.
Consequently, even assuming 25 U.S.C. § 177 does not apply to lands recently
acquired by a tribe through purchase on the open market, the 7,100 acres in question here
have always been trust lands to which the Tribe holds an aboriginal title, due to the
failure to comply with the referendum requirement of Section 9 of the 1889 Act. Thus,
because Congress never approved of or consented to the alienation of these trust lands,
the IRS is barred by 25 U.S.C. § 177 from seizing and selling such lands.
C. Because Crow Creek Tribal Farms, Inc., a Tribal Corporation, Is a
Distinct Legal Entity from the Tribe, the IRS Cannot Seize and Sell the
LeMaster Ranch Lands Currently Owned By CCTF for Back Taxes
Owed by the Tribe.
The courts have generally recognized that “tribal corporations are legal entities
distinct from the tribe.” Roberson v. Confederated Tribes of the Warm Springs
Reservation of Oregon, 1980 U.S. Dist. LEXIS 9991, *6, 103 L.R.R.M. 2749 (D. Ore.
Feb. 4, 1980), citing Parker Drilling v. Metlakatla Indian Community, 451 F. Supp. 1127
(D. Alas. 1978), and Atkinson v. Haldane, 569 P.2d 151 (Alaska 1977); see also Stock
West Corp. v. Taylor, 942 F.2d 655, 657 (9th Cir. 1991) (Bureau of Indian affairs
determined that contracts entered into between Stock West Corporation and two tribal
governmental corporations of the Confederated Tribes of the Colville Reservation, for
the construction and operation of a sawmill on the reservation, did not require BIA
approval under 25 U.S.C. § 81 “because the contracting tribal corporations were distinct
legal entities, separate from the Tribes”), aff’d in part and vacated in part on other
Case 3:09-cv-03031-RAL Document 6 Filed 12/02/2009 Page 17 of 23
grounds, 964 F.2d 912 (9th Cir. 1992) (en banc).
In this case, the LeMaster Ranch lands consisting of 7,100 acres is held in the
name and ownership of CCTF, which, as a tribal corporation, is a legal entity separate
and distinct from the Tribe. CCTF does not owe the IRS any money for delinquent
taxes, and it is not a guarantor of the tax liability or other debts of the Tribe.
Consequently, the IRS has no power, authority, or jurisdiction to sell land owned by
CCTF for the tax debts of a different legal entity, namely the Tribe.
D. NEPA Requires the Preparation of an Environmental Impact Statement
The National Environmental Policy Act (NEPA), 42 U.S.C. § 4321 et seq.,
requires the preparation of an environmental impact statement (EIS) when major federal
action undertaken by a federal agency significantly affects the human environment, 42
U.S.C. § 4332(2)[C]. The standard for determining whether a project would
significantly affect the human environment is whether the plaintiff has alleged facts
which, if true, show that the proposed project may significantly degrade some human
environmental factor. Foundation for North American Wild Sheep v. U.S. Department of
Agriculture, 681 F.2d 1172, 1178 (9th Cir. 1981). If substantial questions are raised as to
whether the proposed project may have significant effect on the human environment, an
EIS must be prepared. Id.
The NEPA requirement has been held to apply to leases of Indian lands approved
by the Bureau of Indian Affairs. Manygoats v. Kleppe, 558 F.2d 556, 557 (10th Cir.
1977); Davis v. Morton, 469 F.2d 593, 597-598 (10th Cir. 1972) (approval by BIA of 99-
year lease by Pueblo Indians of restricted Indian lands constituted “major federal action”
within meaning of 42 U.S.C. § 4332, necessitating preparation of EIS). While the Indian
Case 3:09-cv-03031-RAL Document 6 Filed 12/02/2009 Page 18 of 23
lands at issue in Manygoats and Davis v. Morton were tribal trust lands, nothing in those
cases indicated that the their holdings were limited to Indian lands held in trust by the
United States. The rationale of those cases indicates that NEPA applies with equal force
to major federal actions affecting Indian fee lands
The IRS’s threatened seizure and sale of over 7100 acres of Indian lands in this
case, namely the LeMaster Ranch lands acquired in fee by the Tribe in 1998 and
currently held by an agency of the tribe, CCTF, likewise constitutes a major federal
action within the meaning of 42 U.S.C. § 4332. The plaintiffs, moreover, have alleged
facts which, if true, show that the proposed sale of these lands may significantly degrade
several human environmental factors, necessitating the preparation of an EIS. Because
the IRS has not yet prepared such an EIS, the plaintiffs are entitled to an injunction
against the threatened seizure and sale of Indian lands pending the IRS’s conduct of an
environmental assessment and its preparation of an appropriate EIS.
III. The Balance of the Equities Weighs in Favor of Issuing the
Plaintiffs respectfully submit that the balance of the equities weighs heavily in
favor of issuing the requested TRO, in that the harm faced by the IRS from the issuance
of the requested TRO is negligible compared to the harm caused to Plaintiffs if the TRO
is not issued. The IRS merely will be temporarily delayed in carrying out a seizure and
sale of the LeMaster Ranch property, and interest and penalties will continue to accrue in
favor of the Government. By contrast, Plaintiffs are faced with a loss of revenue and a
corresponding loss or curtailment of essential government functions and services,
impairment of the Plaintiff Tribe's land consolidation program, significant interference
Case 3:09-cv-03031-RAL Document 6 Filed 12/02/2009 Page 19 of 23
with the Tribe’s self-government, and impairment of the Tribe's territorial jurisdiction
and sovereignty. When faced with a similar balance of equities, the district court in
Winnebago Tribe of Nebraska v. Stovall, supra, 216 F. Supp.2d 1226 (D. Kan. 2002),
concluded that a preliminary injunction should issue:
The harm to the parties must be measured in terms of the plaintiffs' ability
to carry on essential tribal services versus the defendants' ability carry out
their responsibilities [regarding enforcement of the Kansas fuel tax law]
uninterrupted. The court finds that in this capacity, issuance of the
injunction will not affect the defendants in any appreciable way in that
they will be able to continue to carry out their responsibilities. If,
however, the injunction is not issued, the impact on the tribes could be
tremendous. The court agrees that a final order granting the relief
requested could very well adversely affect the state of Kansas'
sovereignty, but in terms of the standard for issuing a preliminary
injunction, plaintiffs are faced with more devastating losses than the state's
temporary inability to enforce its fuel tax law.
216 F. Supp. 2d at 1233.
In this case Plaintiffs are faced with multiple irreparable injuries, including a loss
of rental income affecting their ability to carry on essential tribal services for the tribe’s
members, interference with tribal self-government, and impairment of tribal sovereignty,
while the IRS, if the TRO issues, will suffer only a temporary delay in selling the
LeMaster Ranch property for the satisfaction of the Tribe's federal tax liability. Indeed,
full collection of the tax liability owed by the Tribe would play only a “very minor role”
in the federal Government’s budget. Cf. Sac & Fox Nation of Missouri v. LaFaver, 905
F. Supp. 904, 907 (D. Kan. 1995) (damage caused to State of Kansas from preliminary
injunction against collection of state fuel tax on tribal retail sales on Indian lands
negligible where tribes’ tax dollars played only a very minor role in the state’s funding
Case 3:09-cv-03031-RAL Document 6 Filed 12/02/2009 Page 20 of 23
scheme). Consequently, the balance of the equities tips heavily in favor of issuing the
IV. Issuance of the Requested TRO Would Not Be Against the Public
Issuance of the requested TRO would not be against the public interest. First, the
public has a strong interest in assuring the continued presence of social services, public
safety and educational programs that benefit tribal members. Winnebago Tribe of
Nebraska v. Stovall. 216 F. Supp. 2d at 1233; Sac & Fox Nation of Missouri v. LaFaver,
905 F. Supp. at 907-908 (“[T]he public interest will be ill-served by the potential influx
of Tribal members into the state’s social service and welfare programs.”). “The public
also has a genuine interest in helping to assure Tribal self-government, self-sufficiency
and self-determination.” Sac & Fox Nation of Missouri v. LaFaver, 905 F. Supp. at 907-
908. “[T]he injunction promotes the paramount federal policy that Indians develop
independent sources of income and strong self-government.” Seneca-Cayuga Tribe v.
Oklahoma, 874 F.2d at 716.
The public also has a strong interest in enforcing the Indian Nonintercourse Act
and NEPA and thereby protecting tribal lands and the human environment.
On the other hand, the IRS is only being required to stay the sale of the LeMaster
Ranch property until the very important issues regarding the application of the Indian
Nonintercourse Act can be finally adjudicated. Under the circumstances of this case,
issuing the requested TRO would not be contrary to the public interest.
Case 3:09-cv-03031-RAL Document 6 Filed 12/02/2009 Page 21 of 23
In sum, if the requested TRO is not issued, Plaintiffs will suffer severe irreparable
harm, including the loss or curtailment of essential services to tribal members and
significant interference with tribal self-government, while the harm that will be suffered
by the IRS from the temporary stay of the sale of the LeMaster Ranch for back taxes will
be negligible. Given that the balance of the equities, as well as the public interest, weigh
heavily in favor of the issuance of a TRO, it is enough that Plaintiffs have raised
substantial questions on the merits in order for a TRO to issue. Dataphase Systems, Inc.
v. C.L. Systems, Inc., 640 F.2d at 113 (“[W]here the movant has raised a substantial
question and the equities are otherwise strongly in his favor, the showing of success on
the merits can be less[.]”). In other words, “where[, as here,] the balance of other factors
tips decidedly toward plaintiff[s] a preliminary injunction [or TRO] may issue if
movant[s] ha[ve] raised questions so serious and difficult as to call for more deliberate
investigation.” Id.; see also Sac & Fox Nation of Missouri v. LaFaver, 905 F. Supp. at
908 (“Having established the first three prerequisites for temporary injunctive relief, the
plaintiffs need only show that the issues presented are so serious, substantial, difficult,
and doubtful as to make them a fair ground for litigation.”) As Plaintiffs have
demonstrated all four elements for the issuance of a TRO, Plaintiffs Crow Creek Sioux
Tribe and Crow Creek Tribal Farms, Inc., respectfully request that their motion for a
temporary restraining order be granted, and that the IRS be temporarily enjoined from
proceeding with the sale of the LeMaster Ranch lands for back taxes until there is a final
adjudication by this Court of the issues raised by Plaintiffs' Complaint.
Case 3:09-cv-03031-RAL Document 6 Filed 12/02/2009 Page 22 of 23
s/ Terry Pechota
Terry L. Pechota
PECHOTA LAW OFFICES
1617 Sheridan Lake Rd.
Rapid City, South Dakota 57702
/s/ Mario Gonzalez
Attorney for Crow Creek Sioux Tribe
GONZALEZ LAW FIRM
522 Seventh Street, Suite 202
Rapid City, South Dakota 57701
CERTIFICATE OF SERVICE
I hereby certify that on this 2nd day of December, 2009, a true and correct copy of
the foregoing motion for temporary restraining order was served on the following via
electronic transmission, to wit:
United States Attorney
Sioux Falls, SD 57101
Cheryl Schrempp Dupris
Assistant United States Attorney
Pierre, SD 57501
/s/ Terry L. Pechota
Terry L. Pechota
*This document was filed electronically.
Case 3:09-cv-03031-RAL Document 6 Filed 12/02/2009 Page 23 of 23