Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-88-01664/USCOURTS-ca10-88-01664-0/pdf.json

Parties Involved:
The Oklahoma Tax Commission
Appellee
Wyandotte Tribe of Oklahoma
Appellant

Document Text:

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

FILED 

United States Court of Appeals '!'<>nth (;irm,it 

WYANDOTTE TRIBE OF OKLAHOMA, an 

organized tribe of Indians, as 

recognized under & by the laws 

of the United States, 

v. 

Plaintiff-counter-defendant 

Appellant, 

THE STATE OF OKLAHOMA, by 

and through THE OKLAHOMA TAX 

COMMISSION, 

Defendant-counter-plaintiff, 

Appellee. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

ORDER AND JUDGMENT* 

APR O 5 989 

ROBERT L. HOECKER 

Clerk 

Nos. 88-1664 

and 

88-1674 

(D.C. No. 87-C-9-E) 

Before McKAY, BARRETT and SEYMOUR, Circuit Judges. 

The Wyandotte Tribe (Tribe) of Oklahoma and the State of 

Oklahoma Tax Commission (State) each appeal from the judgment 

entered by the district court in consolidated cases. An 

understanding of the procedural background of this case will aid 

our disposition. 

On December 30, 1986, the State filed a petition in state 

district court (State's lawsuit) seeking a temporary and permanent 

injunction prohibiting the Tribe from operating a convenience 

* This Order and Judgment has no precedential value and shall not 

be cited, or used by any court within the Tenth Circuit, except 

for purposes of establishing the doctrines of the law of the case, 

res judicata, or collateral estoppel. 10th Cir. R. 36.3. 

Appellate Case: 88-1664 Document: 010110035025 Date Filed: 04/05/1989 Page: 1 
store on tribal trust land in violation of state sales tax laws. 

The state court issued a temporary restraining order that same 

day, restraining the Tribe from selling products in violation of 

state laws. The court set a hearing on the preliminary injunction 

for January 8, 1987. 

On January 7, 1987, the Tribe filed a complaint against the 

State in federal district court seeking a temporary restraining 

order prohibiting the State from "shutting down'' the tribal 

convenience store, and also prohibiting the State from prosecuting 

its state court claim, thereby depriving the Tribe of its 

federally guaranteed rights and privileges. The district court 

conducted a hearing on the Tribe's temporary restraining order on 

that same day, and, as a result of agreements reached by the 

parties and the court, the court ordered that the Tribe be allowed 

to continue store sales, providing that it place the disputed 

taxes in escrow and that the State agree to indefinitely postpone 

the preliminary injunction hearing scheduled for the following day 

in state court. 

On January 28, 1987, the Tribe petitioned to remove the 

State's lawsuit to federal district court pursuant to 28 U.S.C. § 

1446(e). The State's lawsuit was removed, the State's subsequent 

motion to remand was denied, and the court ordered that the 

State's lawsuit and the Tribe's lawsuit be consolidated. 

Thereafter, on 

dismissal of 

May 19, 1987, the Tribe moved for voluntary 

its lawsuit pursuant to Fed. R. Civ. P. 4l(a)(2). 

The motion stated that, since the State's lawsuit had been removed 

and was then pending, the Tribe's lawsuit was duplicitous. The 

State did not oppose the motion. Some eight months later the 

-2-

Appellate Case: 88-1664 Document: 010110035025 Date Filed: 04/05/1989 Page: 2 
district court denied the Tribe's motion to voluntarily dismiss 

its own lawsuit. 

The parties proceeded to brief, and the court decided the 

merits of the case. The court found that the land on which the 

Tribe operated its convenience store was ''Indian Country" and, 

therefore, that the State could not require the Tribe to collect 

state taxes from sales made to Wyandotte tribal members. The 

court also held, however, that the State could collect state 

taxes from sales to persons who are not members of the Wyandotte 

Tribe, and that the Tribe must comply with state tax reporting and 

recordkeeping requirements with regard to such sales. 

Subsequently, the Tribe filed a motion for reconsideration on 

the question of tax immunity of members of local tribes other than 

the Wyandotte Tribe who, it argued, shared in benefits and 

disbursements made by the tribe which were constituted in part by 

convenience store sales. The court denied the motion and these 

appeals followed. 

I. 

Because our decision on the Tribe's claim that the trial 

court erred in denying its 4l(a)(2) motion for voluntary dismissal 

is dispositive, we shall not review the merits of the district 

court's findings regarding the application of state taxes. The 

relevant portion of Fed. R. Civ. P. 4l(a)(2) reads as follows: 

(2) Except as provided in paragraph (1) 

subdivision of this rule, an action shall 

dismissed at the plaintiff's instance save upon 

the court and upon such terms and conditions 

court deems proper. 

-3-

of this 

not be 

order of 

as the 

Appellate Case: 88-1664 Document: 010110035025 Date Filed: 04/05/1989 Page: 3 
This language indicates, and courts have held, that denial of a 

motion for voluntary dismissal under Fed. R. Civ. P. 4l(a)(2) is 

reviewable only for an abuse of discretion. Shaffer v. Evans, 263 

F.2d 134 (10th Cir. 1958); Moore v. C.R. Anthony Co., 198 F.2d 607 

(10th Cir. 1952); Mccants v. Ford Motor Co., Inc., 781 F.2d 855, 

appeal after remand, 789 F.2d 1539 (11th Cir. 1986). In the 

instant case, we hold that the district court did abuse its 

discretion. 

It is generally accepted that while the basic purpose of Rule 

4l(a)(2) is "to allow a plaintiff to dismiss an action without 

prejudice to future litigation, the dismissal must not unfairly 

jeopardize the defendant's interest. Accordingly, dismissal 

should in most instances be granted, unless the result would be to 

legally harm the defendant." 5 Moore's Federal Practice, 41.05(1) 

at 41-53 (1988); Lecompte v. Mr. Chip, Inc., 528 F.2d 601 (5th 

Cir. 1976); Alvardo v. Maritime Overseas Corporation, 528 F.2d 605 

(5th Cir. 1976). The legal harm suffered by the defendant if a 

voluntary motion to dismiss is granted must be some plain 

prejudice other than the mere prospect of a second lawsuit. 

Lecompte, 528 F.2d at 604. And is it not a bar to a voluntary 

dismissal that the plaintiff may gain some tactical advantage over 

the defendant. Mccants, 781 F.2d at 857; Davis v. usx 

Corporation, 819 F.2d 1270 (4th Cir. 1987). In addition, the 

court in Alvardo, supra, held that a defendant's failure to object 

to dismissal is, in itself, evidence of a lack of prejudice upon 

the defendant and that, under those circumstances, even the 

court's attachment of conditions to the dismissal was error. The 

-4-

Appellate Case: 88-1664 Document: 010110035025 Date Filed: 04/05/1989 Page: 4 
, 

court remanded the case for redetermination in light of Lecompte, 

supra. 

In this case, the State did not object to the Tribe's motion 

to voluntarily dismiss. At oral argument, counsel for the State 

agreed with counsel for the Tribe that the Tribe's Motion to 

Dismiss should have been granted. Thus, it is obvious that the 

State does not believe that it was prejudiced by virtue of the 

Tribe's voluntary dismissal of its lawsuit. And the trial court 

did not acknowledge any possible prejudice to the State in its 

order denying the Tribe's motion to dismiss. 

The district court made no finding of legal prejudice to the 

State, and the State offered no argument of prejudice to the 

court. Thus, we reverse the district court's denial of the 

Tribe's Rule 4l(a)(2) motion for voluntary dismissal of its 

complaint. 

II. 

The trial court found that the land on which the Tribe's 

convenience store is situated is ''Indian Country" within the 

meaning of 18 U.S.C. § 115l(a). We agree with that finding. 

United States v. John, 437 U.S. 634 (1978); Indian Country, U.S.A. 

v. Oklahoma Tax Commission, 829 F.2d 967 (10th Cir. 1987), cert. 

denied, U.S. (June 27, 1988); Cheyenne Arapaho Tribes v. 

State of Oklahoma, 618 F.2d 665 (10th Cir. 1980). Since it has 

been determined that the tribal trust land involved is "Indian 

Country, " there now remains only the question of sovereign 

immunity. 

The Tribe argues that if the district court had 

-5-

Appellate Case: 88-1664 Document: 010110035025 Date Filed: 04/05/1989 Page: 5 
/ 

granted its motion to dismiss the tribal lawsuit, the only case 

pending before the court would have been the State's lawsuit. 

Wyandotte Tribe's Opening Brief, p. 14. By virtue of our reversal 

of the district court's denial of the Tribe's motion to dismiss, 

that, upon remand, will be precisely the situation presented. The 

Tribe contends that the State's lawsuit, in which the State is 

seeking affirmative relief against the Tribe, is plainly barred by 

sovereign immunity and that "because sovereign immunity is not 

discretionary, but acts as a mandatory bar to the adjudication of 

the case, the district court would have had no choice but to 

dismiss the state's cause of action." Id. Wyandotte Tribe's 

Opening Brief, p. 14. 

We remand the State's lawsuit to the district court for a 

determination of whether the doctrine of sovereign immunity acts 

as a jurisdictional bar to the adjudication of that action. 

REVERSED in part and REMANDED in part. 

-6-

Entered for the Court: 

James E. Barrett, 

Senior United States 

Circuit Judge 

Appellate Case: 88-1664 Document: 010110035025 Date Filed: 04/05/1989 Page: 6