Opinion ID: 2109887
Heading Depth: 4
Heading Rank: 2

Heading: Threat to Political Integrity

Text: The second Montana exception is that [a] tribe may also retain inherent power to exercise civil authority over the conduct of non-Indians on fee lands within its reservation when that conduct threatens or has some direct effect on the political integrity, the economic security, or the health or welfare of the tribe. Montana, supra, 450 U.S. at 566, 101 S.Ct. at 1258. The Tribe has the burden of proof on this issue. See Brendale, supra, 109 S.Ct. at 3008; Montana, supra . As we have already noted, the Tribe made no appearance in these proceedings to explain how its political integrity, economic security, or health and welfare would be threatened by the PSC's exercise of jurisdiction. The PSC found that the Tribe has never attempted any type of electric utility regulation in the past. The PSC has traditionally exercised jurisdiction over electric suppliers on the reservation. These circumstances negate the claim that the Tribe's resolution directing that Otter Tail serve DTI was necessary to tribal self-government. See Montana, supra, 450 U.S. at 564 n. 13, 101 S.Ct. at 1258 n. 13. We reject Otter Tail's argument that regulation of an electric service is a quintessential act of the Tribe's right of self-government. Otter Tail also asserted that the Tribe's economic security is jeopardized because DTI's competitive position in the marketplace will be undercut by being forced to pay Baker's higher electric rates. However, the difference in electric costs to DTI was not fully developed in this record because the rate structure for permanent electric service to DTI had not yet been established by Baker. As Justice White pointed out for the plurality in Brendale, the Tribe's interest under federal law, defined in terms of the impact of the challenged regulations on the political integrity, economic security, or the health or welfare of the tribe, does not entitle the Tribe to preclude everything that has an adverse effect on the Tribe. Rather, the impact must be demonstrably serious. Brendale, supra, 109 S.Ct. at 3008. Otter Tail's theoretical arguments fall short of demonstrating any serious effect on the Tribe's economic security. We conclude that the Tribe does not derive the power to regulate an electric service on the reservation under either of the Montana exceptions.