Whether Arizona courts may hear a non-Indian trader's civil suit against Navajo Indians for a debt arising from a transaction on the Navajo Reservation when Congress has not affirmatively granted Arizona that jurisdiction.
Holding
No. Arizona's exercise of jurisdiction would unlawfully infringe the Navajo Tribe's right to govern its own reservation affairs, and Congress had not authorized the State to displace tribal-court jurisdiction.
Reasoning
The Court began with the enduring principle of Worcester v. Georgia: Indian tribes retain authority over their internal reservation affairs unless Congress provides otherwise. Although later decisions allowed state jurisdiction in limited settings—such as suits brought by Indians against outsiders or crimes committed by one non-Indian against another—those exceptions did not extend to matters that would impair tribal self-government or jeopardize Indian interests.
The controlling inquiry was not simply whether Congress had expressly prohibited Arizona from acting. Rather, absent a governing Act of Congress, the question is whether the state's action would infringe the right of reservation Indians to make their own laws and be governed by them. A state court's assertion of authority over this reservation-based dispute would directly undermine the authority of the Navajo tribal courts over reservation affairs.
The 1868 Navajo treaty reserved a permanent homeland for the Tribe and reflected the understanding that its internal affairs would remain within tribal authority. Congress and the Bureau of Indian Affairs had subsequently supported the development of Navajo government and courts, which exercised broad civil jurisdiction, including over suits by outsiders against Indian defendants. Thus, tribal court was not merely a theoretical alternative; it was the functioning forum for this kind of dispute.
Congress had repeatedly shown that when it wanted States to assume civil or criminal jurisdiction over reservation Indians, it did so expressly. Although federal law permitted Arizona to assume such jurisdiction through affirmative state action, Arizona had not accepted that responsibility. Neither the trader's non-Indian status nor his federally required license altered the result, because he entered the Reservation and made the credit transaction there with reservation Indians. Any withdrawal of Navajo tribal authority was therefore a decision for Congress, not Arizona courts.