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1985 Decision

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Lawsuit Overviews In 1978, the Crow tribe filed a lawsuit in federal court challenging the applicability of Montana’s severance and gross proceeds taxes on Crow coal. It was dismissed in 1979, but two years later, that dismissal was overturned and a retrial ordered by the 9th Circuit Court of Appeals (Crow I). The following year, Westmoreland and the Tribe agreed to a tax settlement where Westmoreland agrees to pay Crow tax if case is decided for Crow tribe. In November of 1982, the Crow tribe files new complaint and asks for reimbursement.

In 1983, the Tribe and Westmoreland filed a motion and was granted by the District Court to create an escrow account for severance tax payments while the tax authority cases were under litigation.

District Judge Battin ruled again on the case in 1985, saying that the Montana could tax Crow coal, but was overruled in 1987 by the 9th District Court of Appeals (Crow II), stating that the IMLA preempted state taxes and interfered with tribal sovereignty. The U.S. Supreme Court affirmed the 9^th District Court’s decision a year later in 1988 and Battin subsequently released almost $30 million dollars to the Tribe from the escrow account.

Four years later in 1994, Phase II of case began. Amended complaints were filed by the Tribe and the U.S. government against the State of Montana and Big Horn County, asking to recover taxes from before the 1983 escrow payment. District Judge Shanstrom ruled against the Tribe based on the Cotton Petroleum Corp. v. New Mexico (1989). Shanstrom’s decision was overturned by 9^th Circuit in 1996 and the case sent to the United States Supreme Court. In 1998, the Supreme Court issued a decision that Big Horn County and the State of Montana did not have to pay back taxes from before 1983.

This page references:

Crow Tribe of Indians v. U.S. (1985)