WASHINGTON | Attorneys made their arguments Wednesday before the U.S. Supreme Court in a case that will determine if Pender businesses that sell alcohol are subject to an Omaha Tribe of Nebraska ordinance requiring them to buy a tribal liquor license and pay taxes to the tribe.
At issue is whether Pender lies within the Omaha Indian Reservation boundaries in Thurston County.
Assistant Nebraska Solicitor General James Smith, who represented Pender, said that for more than 100 years, the non-Indian population of the disputed area has been more than 98 percent, and the tribe has never exercised jurisdiction in the area, according to the official court transcript of Wednesday's hearing. Smith said that those factors result in a de facto diminishment of the reservation.
"The story of the disputed area is that of a land that long ago lost its Indian character, if it ever had one," Smith told the justices. " ... the intent of Congress in the context of the times of the 1882 act is that the disputed area would be diminished from the reservation."
The tribe's attorney, Paul Clement, said that only Congress can diminish a reservation, and it never took such action in regards to the Omaha Reservation.
"We think multiple considerations make clear that the act of Congress did not diminish the reservation, but simply opened up a portion of the reservation for settlement within the existing boundaries," Clement told the justices, according to the transcript.
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The state of Nebraska appealed lower court rulings that said the sale of 50,000 acres of land on the western portion of the Omaha Reservation, an area in which Pender is located, to white settlers in the 1880s did not change reservation boundaries.
In 2006, the Omaha Tribe passed an alcohol ordinance requiring businesses that sell alcohol on the reservation to buy liquor licenses. The ordinance also placed a 10 percent sales tax on all alcohol purchases.
Owners of seven Pender establishments sued the tribe in U.S. District Court in Omaha, saying they were not subject to the ordinance because Pender is not on the reservation.
In a 2014 decision, a federal judge ruled that an 1882 act of Congress that opened land on the reservation for sale and settlement did not diminish the reservation. The 8th Circuit Court of Appeals later upheld that decision.
Justice Sonia Sotomayor asked Smith what Pender citizens would lose if the court rules against them.
"We've already circumscribed the powers of the tribes on their own reservations greatly, so what powers do you lose?" Sotomayor asked.
Smith said residents of the disputed territory would lose the expectation of who's governing them.
"... for over 130 years, the tribe has not exercised any sovereign authority at all," Smith said.
The Supreme Court is expected to decide the case by June.