Merrion v. Jicarilla Apache Tribe

The Jicarilla Apache Tribe (defendant) leased almost 70 percent of its reservation to non-Indian companies (plaintiffs) for mineral development; those leases were already subject to New Mexico state severance taxes on oil and gas production. In 1976, the Tribe adopted its own severance tax under its revised constitution, approved by the Secretary of the Interior. The non-Indian lessees sued to enjoin the tribal tax, arguing the Tribe's taxing power came only from its right to exclude non-Indians from its land, and that because the tax wasn't in the original leases, the Tribe couldn't add it later. The district court agreed with the lessees, but the Tenth Circuit reversed, holding the tax was within the Tribe's inherent sovereign powers.