upon moving manufactured tobacco products into the market the incident of the taxes on the transfer of the product movement out of bond or importation it's not an income tax does not involve income or capital gains the excise tax scheme allow seizure and forfeiture of the akamai allotted lands even if the landowner is not responsible for the tax addition applying the general this court and the supreme court has done in capone and makes clear that this tax which allow seizure of a lot of lands by the government from third party non taxpayers cannot be applied on yakima allotted the internal revenue code provides for the cigarette excise tax in subchapter each chapter fifty two twenty six u s c section fifty seven zero one it say twenty six u s c subtitle g provides for of cigarette papers and tubes b personal property of those acting with intent to defraud seanie real and personal property of illicit operators it's subchapter subsection d and title general the issue here that subsection says all property intended for use and by laying the provisions of this chapter the tobacco tax code or regulations there under or which has been so used shell shall be forfeited to the united states provided in section seventy three zero two intent is not an issue ownership is not an issue shall be forfeited is the statutory requirement the for occurs as provided in says you have twenty six u s c section seventy three zero two that section also says it shall be unlawful to have or possess property intended for use or which has here on behalf of the argument yes your honor so what is the source of a sovereign interest in preventing taxation of an individual member in other words the try vs the individual member and i'm asking nation having injunction act however wouldn't apply to the aca nation both because it's not a person under the act and because of the supreme court's ruling in south carolina versus reagan saying if they have no other option which hear the acma nation would not and this treaty the eight hundred fifty five specifically section article six which talks about the allotment the possible allotment of lands with reference to the omagh treaty which just like in the general allot is that no incumbrance can be placed on these lands but what isn't it seemed to me that the remedy here is the tax payers refunds isn't that a remedy are so extra completely intertwined here i mean you have the individual taxpayers who if assessed they have the right to bring the individual refunds correct yes or to oppose a suit brought by the united states which is in fact the case here but isn't isn't really the tribes status completely derivative of those individuals in trying to avoid the tax on this particular  call it endeavor i don't want to judge one where the other but you know that the cigarette selling not at all you're out of the type of tribes interest is in making sure that a lot of the lands that belong to its members are held in trust for its member indians do president for other allotment holders are they going to lose their lands under the forfeiture provisions of the tobacco excise tax that's exactly the problem here if they don't pay the tax the land can get forfeited that's that's exactly right your honor if they don't pay the tax can have a choice to pay their tax and have a refinance correct and then if they had the money i mean it's we're talking sixty million twenty three million dollars plus penalty and interest you're right but this is not a mom and pop shop operation you're talking it is a mom and pop shop operation your honor it's amazing ever to get the tax of that magnitude up the mom and pop operation because that's i mean the taxes that the what it takes to produce a package of cigarettes is that its members holdings of the lands of the treaty lands that they retained in the goetia of the treaty that those lands are not taken from them so they have an extra they have a huge interest in this case that they can't they have no other avenue to protect except this lawsuit until we get through and be certain to sovereign i mean a question is is or the i'm sorry the subject matter jurisdiction question but here the acclimation interest is distinct from the taxpayers it's an interest in the land bargained for in the treaty of eight hundred fifty five land that subsequently some of that land was subsequently allotted individual members but it's still reservation lands application of the reservation that their sovereign interests over these lan address the tribe issue in terms of trying their person tribe the person does not include the sovereign your honor and that's the situation here this is a sovereign indian nation it has a treaty with the federal government approved by congress signed by the president it's recognized by the federal government as a sovereign nation and there's no person there is no definition of person in an injunction act which would encompass  bishop tribe argue that it was a person it argued that it was a person and they and an action against inyo county it went all the way to the supreme court and in that case the supreme court held that no tribes are not persons so there's there is precedent consistent precedent holding that tribes are not persons in other contexts and that's applicable here as well it's a sovereign nation here today to protect sovereign none of that is present here this is a tobacco excise tax case that requires that the land shall be forfeited and there's nothing the tribe can do about that if not even with any intent if if king mountain doesn't recognized by the government itself in page twenty one of its response brief when it's talking about the proceedings below which were big complicated because the taxpayer and the owner of the taxpayer and the the trib plaintiffs and judge peterson dismissed the taxpayer and the owner of the taxpayer out of the case because the any injunction in and then the act of a nation move for partial summary judgment and as the u s describes in its respon indian trust property and income directly derived from there from we agree with that the parties are in agreement here the very act issue says that the land shall be forfeited even if it's an innocent owner  operations of king mountain necessarily but on the interest in protecting these a lot of lands the processing that takes place there doesn't matter judge peterson there are two issues here and there are two issues the directly derived issue i didn't plan to argue is covered in the briefs but the fact is this product is derived from tobacco some of it is done no more than processed dried and placed in a bank that judge pearson ruled that any manufacturing without specifying what it would be destr the purpose here is to protect the land income or the income we're not talking about the income necessarily at this point just protecting the land so processing doesn't matter the fact that it was a corporation it's not owned or any way control the dividing line is between a product that many originate on the land but is not the product that is ultimately sold that it that's a very good factual question and we unfortunately didn't get to that what is it in the process is it the is growing and cutting it can't be that because you create they cut the lumber is it the drying is it the threshing is it the blending and at what point does it benefit are in the treaty yakima treaty as is free access the ramsey case the court in ramsey and judge mckeon was on the panel looked at in common with language not the free access why manufacturing process that convert this this product into a manufactured product it might at some point but the problem is at what point certainly congress never intended for indians only to grow and be agriculturally based and have others benefit from all processing and increase the lodgment cut down there was some physical labor there that was not sufficient so the matter of fashion presses could do it but it's it shouldn't be an absolute bar and i'd like to reserve the rest of my time for about thank you thank good morning and may it please the court patrick heard of for the united states your honour's the anti injunction act and tax exception to the declaratory judgment act do apply in this case and even if they didn't the general allotment out nor the treaty neither the general ottoman act nor the tree from the acma provide an exemption from the generally applicable tax here i'd like to start with the anti injunction out it appears from my opposing counsel both in brief and in argument that they can see that the relief being sought by the uk in one nation is the type of relief that would normally come within the scope of the anti injunction act and the tax exception to the judgement act so the question is whether south carolina versus regan applies and as according quired whether the sovereign here can be treated as a person as to south carolina this case is on all fours with the six circuits recent decision in r y o in which there were three separate litigants but they all had interests that were in extremely intertwined and although opposing counsel asserts that the aca more nation's interest is different it actually is no different from the litigants here because they are all raising the same issues the issue is whether the treaty of eight hundred fifty five in the general apply because there are really one set of issues here this does not present the same case as in south carolina where south carolina had constitutional issues that another bond holder who would be litigant at issue would have no one centive to bring up here you have someone mr wheeler and mr wheeler's company who is the which is the actual taxpayer that would raise these issues so you don't have the south carolina problem instead this would create a new problem which is it would be an end run around the anti injunction act because it would allow yeah come on nation to fully litigate this case before the assessment and collection of the tax which is of course what the anti injunction act is supposed to stop and the taxpayer as you can mountain would have no incentive to actually bring the refund suit which  think there's any difference judge because again what the taxpayer argued and remember i think you made the point that this that their interest was derivative that's correct if you look at the complaint in that's the are two eighty two forty eight to eighty nine and one ninety three to two forty seven the only interest asserted by the yakima is that it's injured by its members being tax and the associated threat to tribal self government and economic wellbeing it is a derivative claim and you can also see that because the claims being brought and the complaint was very detailed on this had to do with the treaty of eight hundred fifty five in the general allotment act so again the south carolina exception which this court has said must be narrowly construed and that's consistent with all of its sister circuits the south carolina exception is for a very specific circumstance where south carolina had a tenth amendment interest in raising money and no one no other litigant that could bring a suit to challenge the action would have an incentive to challenge that portion of it that was only south carolina's and they had no avenue that's not what's happening here yeah come on nation's arguments and interests line up and are derivative of king mountains now turning to the question of whether whether the atom or nation is a person  for for anti injunction at purposes i think it's helpful first of all to start off by wondering what the the anti injunction act is it's a part of the internal revenue code so mr barnes house wasn't quite  t in saying that there is no definition that the internal revenue code supplies a definition as we have in our brief it's under seventy seven zero one a one and use uses inclusive language as the tenth circuit pointed out in chickasaw and that makes person came in more specifically and nine hundred sixty seven because language had been added to allow actions for wrongful levies so in order to line that up in order to line up the anti always has been which is to stop the restraint on assessments and collections of course the supreme court has repeatedly said that sovereign such as states in indian tribes can be persons and some's contacts and are not in other contexts for purposes of the internal revenue laws so to hear with the octomom nation its sovereign but given the broad and inclusive meaning of persons under the internal revenue code and here in the context of the anti injunction act and case called not vermont that case came out in two thousand two thousand and one chickasaw nation made its way to the supreme court itself the supreme court certainly didn't reverse the tenth circuit on gives further credence to our argument that the tenth circuit got it right and it's fully consistent with supreme court precedent on treating sovereigns as persons for purposes of the internal revenue loss turning to the merits unless there anymore questions on is geared to the income tax well so remember indians are an indian tribe tribal corporations which is the taxpayer heater are subject to generally applicable  excise tax which isn't on tribal property or income derived therefrom so we believe that the excise taxes totally outside that the general outline act framework well that's that's a very good question judge there is no lien or levy on land held in trust for an indian tribal member so this is made clear in treasury regulation so that's twenty six  a far section three zero one point six three two one dash one solely for purposes of such and sixty two three twenty one and sixty three thirty one which are the lean lobby provisions any interest in restricted land held in trust by the united states for an individual non competent indian and not for a tribe shall not be deemed to be property or rights of property belonging to such and yet so there won't be a leaner levy in terms of the fo argument which is a new argument on appeal and which was never made in the district court we don't believe that forfeiture would apply either and the original brief the item on nation concentrated on  section c so i think that's fifty seven sixty three c which says that property real property can be forfeited if there's an illicit manufacturer but it only applies  to the tax payers or the illicit manufacturers right title and interest illicit manufacture here is a tribal corporation and it's not the a lottie so there are two different concepts there's delbert wheeler who's the a there's the taxpayer the tribal corporation so under fifty seven sixty three city it would only forfeiture would only apply to the right title and interest of the king mountain buildings and personal property one thing that they can't get is the property held in trust and there are a bend i mean obviously this wasn't really discussed and the district court at all and it and the forfeiture provision which is now heavily relied upon by the uk in one nation fifty seven sixty three d was not discussed in the opening brief except in passing now there is there's a great deal of emphasis at argument on that provision but there are no cases that indicate the fifty seven sixty three d d can be used to forfeit real property held in trust considering that they at the treasury explicitly say there are no only in our levy and i was so then if they don't pay the tax and you can't levy except upon personal or other property the two lawsuits that's still have that lawsuit out there right yes that's right individual the individual and the king mountain corporation that's right  have individuals not part of this lawsuit anymore right and they didn't appeal the decision that that the anti injunction act put a stop to their lawsuit right that's what i think so if it were determined lawsuit that's right now we're seeking to reduce the assessments to judgment it's now an appeal to this court let's just say i know that we do have jurisdiction ok and so let's say first that we have jurisdiction has nothing to do with that ok the general allotment out which really goes to protect property or income derived therefrom doesn't connect with the excise tax at all so the general allotment out is not that exemption nor does the treaty of eight hundred fifty five supply such an exemption just as a general interpretive matter treaty provisions can't be stitched together to create an exemption that's not clearly expressed in this court's case and herman is totally clear on that and none of the three provisions relied upon supply an express exemption that would apply to land and income derived directly from their front so again that doesn't that doesn't supply an exemption that would fit here ok article three in ramsey this court has said that the the the right of free access language to try to reservation roads is just that broth so it doesn't apply to the excise tax realm and then finally article six deals with the excise tax and analogized it to an income tax setting as we laid out in our brief we think this is an excise tax and totally different but even by analogy to the income tax set we think that that this is more like reinvestment income again we don't think that this is the proper framework these exemptions are geared to income taxes this is an excise tax totally different no exemption for the excise tax but even if you wanted to try thank you you have some  first off i'd like to say that we do not concede that the type of relief is the same that's being sought here as a make clear opening up to the question on is there another case that deals with indian tribes a person in reference to judge good ones there's that in your county asked about the general and that is not focused on income that's just not correct the general ottman x is focused on the title to a lot of lands and so that's that's the key here is the statute especially seventy three zero two where innocent forfeiture is permitted by the courts specifically goes to whether that shadow forfeit in seventy three zero to use no property interest provisions are just like in say that the tax could not be opposed on those lottie's both articles two and three do contain exempted language and in fact in ramsey the question was not the free access claim which which the ramsey panel s free access is exempt of language the ramsey case was the use in common with other citizens they based it on that language as the exempt of language is in the it specifically said free access is exempted here the free access isn't free although the taxes on cigarettes in the incident of the tax it does not become coate as it were until the intel it's moved actually physically moved to the public with no transportation here you have transportation the minute the the product is taken to market to public highways that's when the you can make cigarettes all day long and leave them sitting in your factory or bonded warehouse and they're never taxed the tax only kicks in when they're moved thank you very much thank you thank you both for your arguments also the extensive briefing very very interesting