Unsettled Consequences of the McGirt Decision

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A Supreme Court decision raises new questions about tribal jurisdiction in land disputes.

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The U.S. Supreme Court issued its opinion in McGirt v. Oklahoma last July. The Court ruled that the Muscogee (Creek) Reservation was established by an 1833 treaty between the Muscogee (Creek) Nation and the United States. Although a subsequent 1866 treaty slightly modified the boundaries of the reservation, the reservation was never disestablished.

The facts of McGirt are limited to one reservation in Oklahoma, but the issues that have surfaced since the decision are not limited to Oklahoma. Questions are now arising nationwide about tribal regulatory jurisdiction over fee simple lands within the boundaries of established reservations.

McGirt, however, did not involve a question of tribal regulatory jurisdiction on fee simple land. Rather, McGirt turned on a question of criminal jurisdiction.

Jimcy McGirt is an enrolled member of the Seminole Nation who was convicted of criminal offenses in an Oklahoma state court. McGirt asserted that because he is a tribal citizen and committed his crime within the Muscogee (Creek) Reservation, the state court lacked jurisdiction. Instead, he argued, he should have been tried in federal court under the federal Major Crimes Act. The state of Oklahoma, in turn, asserted that the U.S. Congress had formally disestablished the Muscogee (Creek) Reservation many years ago.

The Court held that because the Muscogee (Creek) Reservation was never disestablished, the state of Oklahoma accordingly lacked criminal jurisdiction to prosecute McGirt. Although this was a criminal case, the Court’s decision in McGirt implicates the contours of tribal jurisdiction and highlights the need for clarification about what laws and regulations apply to land located inside reservations.

To grapple with McGirt’s implications, it is important to understand issues of land ownership patterns and tribal jurisdiction in Indian Country. Title to land located inside the boundaries of a reservation may be held in one of three ways: fee simple, trust, and restricted fee.

Under fee simple ownership, title holders retain rights to the land, and title holders may sell, lease, mortgage, or encumber their property with easements at their leisure. “Trust land” is land to which the United States holds fee title in trust for the benefit of a tribe or an individual Indian. Restricted fee land is treated similarly to trust land, except that an individual person or tribe owns fee simple title of this land, and ownership is subject to restrictions against alienation held by the United States. Generally, for trust and restricted fee lands, the United States must consent to any sale, mortgage, lease, or encumbrance of those lands.

Various federal statutes and agreements with tribes established trust and restricted fee ownership for Indian lands, including the General Allotment Act of 1887 and the Indian Reorganization Act. Furthermore, under the Nonintercourse Act, the United States must approve conveyances and encumbrances of fee simple land that is owned by tribes.

Tribes have regulatory jurisdiction over land that is held in trust or restricted fee inside the boundaries of a reservation. Under the General Allotment Act, once land is removed from trust status, the land becomes subject to state taxation, and the landowner becomes subject to the civil laws of the state where the land is located. Although the General Allotment Act is explicit as to the application of state law on former allotments, the Act does not limit the application of tribal laws to those lands. Indeed, tribal regulatory jurisdiction over people and property on fee simple land inside the reservation is much more complicated.

The Supreme Court established a two-part test for whether tribes have regulatory jurisdiction over fee simple land owned by non-Indians within the boundaries of a reservation in Montana v. United States. The Court explained that, when determining tribal jurisdiction of non-Indians on fee land within the reservation, courts must consider, first, whether the individual has a consensual (usually contractual) relationship with the tribe, or, second, whether the individual’s conduct “threatens the political integrity, economic security, or the health and welfare of the tribe.” Tribes may exercise regulatory jurisdiction only after satisfying at least one of these conditions.

In light of the complex statutory and regulatory context surrounding tribes’ ability to regulate lands within reservations, McGirt is likely to have far-reaching implications for title and land use issues, including forum for bringing and disputing claims.

Landowners rely on title insurance companies to issue policies to purchasers or their mortgage lenders. Title insurance policies provide coverage to the named insured against loss or damage as a result of claims related to the ownership of land and other rights affecting the title to or use of the land.

Underwriting title insurance policies relies heavily on an evaluation of applicable law. For example, a title insurance policy and its endorsements may provide coverage insuring compliance with laws regarding zoning, subdivision, foreclosure, tax, and other laws and regulations. To underwrite and ultimately provide this coverage, title insurers must understand what law is applicable to the property. The questions McGirt raises about jurisdiction over fee land within a reservation present additional challenges to a title insurer due to a lack of clarity over which government has proper statutory and regulatory authority associated with those lands.

For example, a tribe’s zoning law may require different processes and approvals than a state’s zoning law, and the confusion is compounded when the two conflict. In order to insure against lack of compliance with zoning authority on fee land within the reservation, the title insurer must understand which government has jurisdiction to establish zoning laws related to that property. Relevant case law is inconsistent in its answers this question, and title insurers must also consider the impact of the Montana case as well as the tribe’s position regarding jurisdiction.

Another important question impacting both title insurers and mortgage lenders is lack of clarity regarding proper venue for foreclosures on fee land within a reservation’s boundaries. When land is held in trust or restricted fee, a tribal court is assumed to be the proper venue for a foreclosure action. On fee land within the boundaries of a reservation, however, the question of venue may be unclear.

When a borrower tries to contest a foreclosure conducted pursuant to state law in tribal court, the lender is put in the position of establishing that state court is the proper venue. The lender must consider not only jurisdiction and venue related issues, but also what law governs the mortgage document. If an Indian borrower seeks to dispute a foreclosure in tribal court, the contractual test in Montana may be triggered. Under Montana, a tribal court would likely not have jurisdiction over a matter involving a non-Indian borrower, but it may have jurisdiction in a matter involving an Indian borrower.

Lenders, however, have no way of knowing whether borrowers will have the opportunity to contest a foreclosure in tribal court because, under federal fair housing laws, lenders are prohibited from making any inquiry as to a borrower’s Indian tribal citizenship when making a loan. Therefore, even if a loan document states an express preference for state courts and state law, Indian owners of fee land within the boundaries of a reservation may be able to avail themselves of protections afforded under tribal law to prevent foreclosure.

As the various issues discussed in this essay make clear, the impact of the McGirt ruling extends well beyond Oklahoma—and beyond the criminal law. The McGirt decision has been invoked in cases involving land disputes across the country, including in states such as Wisconsin, Washington, Minnesota, and Michigan.

Despite acknowledging the Muscogee (Creek) Reservation, McGirt does not provide answers to questions about regulatory jurisdiction over fee land inside the boundaries of a reservation. Until there is more certainty, lenders and title insurance companies must continue to carefully consider the laws of both the tribe and the state when underwriting transactions on these lands.

Sarah Roubidoux Lawson

Sarah Roubidoux Lawson is Of Counsel at Schwabe, Williamson & Wyatt, P.C., and is a citizen of the Iowa Tribe of Kansas and Nebraska.

Megan Powell

Megan Powell is a Commercial Underwriter at First American Title Insurance Company.

This essay is part of a series entitled Native Peoples, Tribal Sovereignty, and Regulation