## Facts

- Dorothy Jefferson and a certified class of enrolled Crow Tribe members owned property within Big Horn County, Montana, located within the boundaries of the Crow Reservation.
- In 1989, the plaintiffs sued Big Horn County and the State of Montana, alleging the defendants lacked authority to assess and collect ad valorem property taxes on the class members’ property.
- The district court agreed with the plaintiffs, ordered a refund of taxes that had been paid under protest, and granted forward-looking relief declaring the property exempt from future property taxation (functioning as an injunction against future assessment and collection).
- After the district court’s judgment, the United States Supreme Court issued decisions addressing when state and local governments may impose property taxes on certain categories of Indian-owned property interests within reservation boundaries.
- In 1997, Big Horn County moved under Montana Rule of Civil Procedure 60(b) to partially vacate the earlier judgment; the district court did not rule, and the motion was deemed denied by operation of Montana procedure.
- Months later, Big Horn County filed a separate motion asking the district court to dissolve (or modify) the prospective portion of the judgment that barred future taxation, citing the intervening federal decisions.
- The district court granted the County’s motion and dissolved the prospective tax-exemption/injunctive component, leaving the refund for past taxes intact.
- The plaintiffs appealed the dissolution order to the Montana Supreme Court.

## Issues

1. May a district court dissolve or modify a permanent injunction that grants prospective relief when later controlling decisions change the law on which the injunction rested?
2. Did the deemed denial of the County’s earlier Rule 60(b) motion, or doctrines such as res judicata and collateral estoppel, bar a later motion to dissolve the injunction?
3. In light of intervening United States Supreme Court precedent, could the County and State lawfully impose ad valorem property taxes on the plaintiffs’ property going forward, making the prior prospective tax-exemption order improper?

## Decision

- The Montana Supreme Court affirmed the district court’s order dissolving the prospective injunctive relief.
- The Court held that a court sitting in equity retains continuing authority to modify or dissolve an injunction when later changes in controlling law make continued enforcement improper.
- The Court rejected the argument that the deemed denial of the County’s Rule 60(b) motion foreclosed a later request to dissolve the injunction; the denial did not eliminate the court’s power to revisit prospective equitable relief.
- The Court also rejected the plaintiffs’ finality-based defenses (including res judicata/collateral estoppel) as to the prospective injunction, reasoning that injunctions are forward-looking and may be adjusted when circumstances or controlling law materially change.
- Applying the intervening federal precedent, the Court concluded that the legal basis for the categorical future tax exemption no longer supported keeping the injunction in place.
- The dissolution affected only prospective relief; the earlier refund for taxes paid under protest was not reopened or disturbed.

## Legal Principles

- A permanent injunction remains subject to modification or dissolution when a significant change in controlling law makes continued enforcement legally wrong or inequitable.
- Finality doctrines generally do not prevent a court from revisiting prospective injunctive relief, even when the underlying judgment included other final components.
- The procedural failure of a post-judgment motion (including a deemed denial under Rule 60(b)) does not, by itself, bar a later motion directed at ending or changing an ongoing injunction.
- Courts may separate retrospective monetary relief from forward-looking equitable relief, leaving final refunds or damages intact while changing only the injunction governing future conduct.
- When federal law governing state taxation of Indian-related property interests is clarified by the United States Supreme Court, state courts must apply that controlling law in deciding whether ongoing tax-exemption injunctions can remain in effect.

## Conclusion

In *Jefferson v. Big Horn County*, the Montana Supreme Court affirmed dissolution of a district court order that had barred future property taxation of a class of Crow tribal members’ property, holding that prospective injunctions can be modified or ended when intervening controlling federal decisions change the governing law, while leaving prior tax refunds for amounts paid under protest undisturbed.


Jefferson v. Big Horn County, 300 Mont. 284 (2000)