FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BIG SANDY RANCHERIA

ENTERPRISES, a federally-chartered

corporation,

Plaintiff-Appellant,

v.

ROB BONTA,

*

 in his official capacity

as Attorney General of the State of

California; NICOLAS MADUROS, in

his official capacity as Director of

the California Department of Tax

and Fee Administration,

Defendants-Appellees.

No. 19-16777

D.C. No.

1:18-cv-00958-

DAD-EPG

OPINION

Appeal from the United States District Court

for the Eastern District of California

Dale A. Drozd, District Judge, Presiding

Argued and Submitted November 19, 2020

San Francisco, California

Filed June 16, 2021

* Rob Bonta has been substituted for his predecessor, Xavier

Becerra, as California Attorney General under Fed. R. App. P 43(c)(2).
2 BIG SANDY RANCHERIA ENTERS. V. BONTA

Before: Sidney R. Thomas, Chief Judge, and Mary M.

Schroeder and Marsha S. Berzon, Circuit Judges

Opinion by Chief Judge Thomas;

Concurrence by Judge Berzon

SUMMARY**

Indian Tribes

The panel affirmed the district court’s dismissal of an

action in which Big Sandy Rancheria Enterprises, a federally

chartered tribal corporation wholly owned and controlled by

the Big Sandy Rancheria of Western Mono Indians, sought

declaratory and injunctive relief against the Attorney General

of California and the Director of the California Department

of Tax and Fee Administration concerning taxes applied to

inter-tribal sales of cigarettes.

The district court dismissed for lack of subject matter

jurisdiction the Corporation’s challenge to California’s

cigarette excise tax as applied to the Corporation’s wholesale

cigarette distribution business, and dismissed for failure to

state a claim the Corporation’s remaining challenges to other

regulations governing cigarette distribution in California, as

applied to the Corporation’s business.

The Corporation’s fifth cause of action alleged that

federal common law and tribal sovereign immunity

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.
BIG SANDY RANCHERIA ENTERS. V. BONTA 3

preempted California’s Cigarette Tax Law as applied to the

Corporation. The panel held that the district court properly

dismissed this cause of action on jurisdictional grounds

pursuant to the Tax Injunction Act, which prohibits district

courts from enjoining, suspending, or restraining the

assessment, levy, or collection of any tax under State law

where a plain, speedy, and efficient remedymay be had in the

courts of such State. The panel held that the district court

properly declined to apply the Indian tribes exception to the

Tax Injunction Act’s jurisdictional bar. This exception, set

forth at 28 U.S.C. § 1362, confers federal jurisdiction over

claims brought by any Indian tribe or band with a governing

body duly recognized by the Secretary of the Interior. The

Corporation contended that as an “incorporated tribe” under

§ 17 of the Indian Reorganization Act, it was an “Indian tribe

or band” for jurisdictional purposes. Based on the relevant

statutory language, legislative history, and circuit precedent

narrowly construing § 1362, the panel concluded that the

Corporation was not an “Indian tribe or band” within the

meaning of § 1362, and therefore could not invoke § 1362 to

avoid the Tax Injunction Act’s jurisdictional bar.

The Corporation’s remaining causes of action challenged

California’s Tobacco Directory Law, which requires the

Attorney General to maintain and publish a directory of

tobacco product manufacturers and tobacco brand families

that have been approved for sale in California, and

California’s licensing, reporting, and recordkeeping

requirements in connection with cigarette distribution, on two

grounds: (1) applying the challenged regulations to the

Corporation’s cigarette sales to tribal retailers on other

reservations violates “principles of Indian tribal selfgovernance;” and (ii) federal regulation of “trade with Indians

within Indian country” under the Indian Trader Statutes
4 BIG SANDY RANCHERIA ENTERS. V. BONTA

preempts the challenged regulations as applied to the

Corporation’s intertribal wholesale cigarette business. 

The panel held that the district court properly dismissed

both theories for failure to state a claim. The panel concluded

that tribal sovereignty principles did not preclude California

from regulating the Corporation’s intertribal wholesale

cigarette sales under the challenged regulations. The

Corporation conceded that it left the Rancheria to sell

cigarettes to tribal retailers on other reservations. The

Corporation did not allege that the challenged regulations

were discriminatory, nor did it plausibly allege that federal

law barred the Directory Statute’s application to the

Corporation. The Corporation therefore failed to state a claim

that the challenged regulations, as applied to its offreservation conduct, infringed tribal self-governance. The

panel joined the Tenth Circuit and Oklahoma Supreme Court

in treating tribe-to-tribe sales made outside the tribal

enterprise’s reservation as “off reservation” activities subject

to non-discriminatory state laws of general application. The

panel held that the Corporation also failed to state a claim that

the Indian Trader Statutes preempted any of the challenged

regulations as applied to its intertribal wholesale cigarette

business.

Judge Berzon concurred in part and acquiesced dubitante

in part. Judge Berzon joined the majority opinion in

affirming the dismissal of the Corporation’s first four claims. 

She wrote that she differed from the majority in its certainty

that the Corporation was not an “Indian tribe or band” for

jurisdictional purposes under 28 U.S.C. § 1362, the Indian

tribes exception to the Tax Injunction Act’s jurisdictional bar. 

Because Judge Berzon had doubts about the majority’s

conclusion but was not prepared to say it was certainly
BIG SANDY RANCHERIA ENTERS. V. BONTA 5

wrong, she wrote separately, dubitante, as to Part III of the

majority’s opinion, which affirmed the dismissal of the

Corporation’s fifth cause of action for lack of jurisdiction.

COUNSEL

Tim Hennessy (argued), John M. Peebles, and Michael A.

Robinson, Peebles Kidder Bergen & Robinson LLP,

Sacramento, California, for Plaintiff-Appellant.

Michael John von Loewenfeldt (argued), Wagstaffe von

Loewenfeldt Busch & Radwick LLP, San Francisco,

California; James V. Hart (argued) and Peter F. Nascenzi,

Deputy Attorneys General; Karen Leaf, Senior Assistant

Attorney General; Attorney General’s Office, Sacramento,

California; for Defendants-Appellees.
6 BIG SANDY RANCHERIA ENTERS. V. BONTA

OPINION

THOMAS, Chief Judge:

This appeal presents the question whether California

cigarette tax regulations apply to inter-tribal sales of

cigarettes by a federally chartered tribal corporation wholly

owned by a federally recognized Indian tribe. We conclude

that they do, and we affirm the judgment of the district court. 

We have jurisdiction under 28 U.S.C. § 1291.

Specifically, this case involves Big Sandy Rancheria

Enterprises (“the Corporation”), a federally chartered tribal

corporation wholly owned and controlled by the Big Sandy

Rancheria of Western Mono Indians (“the Tribe”). The

Corporation sought declaratory and injunctive relief against

the Attorney General of California (“Attorney General”) and

the Director of the California Department of Tax and Fee

Administration (“Director”).

The district court dismissed the Corporation’s challenge

to California’s cigarette excise tax as applied to the

Corporation’s wholesale cigarette distribution business, for

lack of subject matter jurisdiction, and dismissed the

Corporation’s remaining challenges to other regulations

governing cigarette distribution in California, as applied to

the Corporation’s business, for failure to state a claim.

I

A

“Since 1959 California has imposed an excise tax on the

distribution of cigarettes.” Cal. State Bd. of Equalization v.
BIG SANDY RANCHERIA ENTERS. V. BONTA 7

Chemehuevi Indian Tribe, 474 U.S. 9, 10 (1985) (per

curiam); see also Cigarette and Tobacco Products Tax Law

(“Cigarette Tax Law”), Cal. Rev. & Tax. Code

§§ 30001–30483. “Distribution” includes, in pertinent part,

“[t]he sale of untaxed cigarettes or tobacco products in th[e]

state” or “[t]he use or consumption of untaxed cigarettes or

tobacco products in th[e] state.” Cal. Rev. & Tax. Code

§ 30008.1“Use or consumption” means “the exercise of any

right or power over cigarettes or tobacco products incident to

the ownership thereof.” Id. § 30009. However, “use or

consumption” excludes the “the keeping or retention” of such

products “by a licensed distributor for the purpose of sale.” 

Id. § 30009. The “sale of cigarettes or tobacco products by

the manufacturer to a licensed distributor” is not subject to

the excise tax. Id. § 30103.

Distributors pay the excise tax by purchasing stamps from

the state to affix to each package of cigarettes before

distribution. Id. §§ 30161, 30163(a). California’s scheme

recognizes that the state may not tax certain distributions. 

For example, “cigarettes sold . . . by a Native American tribe

to a member of that tribe on that tribe’s land” are “exempt

from state excise tax pursuant to federal law.” Cal. Health &

Safety Code § 104556(j); see also Wagnon v. Prairie Band

Potawatomi Nation, 546 U.S. 95, 101–02 (2005) (“States are

categorically barred from placing the legal incidence of an

excise tax on a tribe or on tribal members for sales made

inside Indian country without congressional authorization.”

(quotation marks omitted; emphasis removed)); Montana v.

Blackfeet Tribe, 471 U.S. 759, 764 (1985) (“Indian tribes and

1

“‘Untaxed cigarette’ means any cigarette which has not yet been

distributed in such manner as to result in a tax liability” under state law. 

Id. § 30005.
8 BIG SANDY RANCHERIA ENTERS. V. BONTA

individuals generally are exempt from state taxation within

their own territory.”). In such instances, a “user or

consumer,” who is “obligated to pay the tax,” owes the tax,

and the exempt distributor is responsible for collecting the tax

from such purchasers and remitting it to the state. Cal. Rev.

& Tax. Code §§ 30008(b), 30107, 30108(a), 30184; see also

Chemehuevi, 474 U.S. at 11 (“[Section] 30107 clearly seems

to place on consumers the obligation to pay the tax for all

previously untaxed cigarettes.” (citation omitted)).

The excise taxes “provide funding for local and state

programs, including health services, antismoking campaigns,

cancer research, and education programs.” Cal. Bus. & Prof.

Code § 22970.1. To facilitate the collection of taxes,

California requires all distributors to obtain two state-issued

licenses, one of which must be renewed annually. See Cal.

Rev. & Tax. Code § 30140; see also Cal. Bus. & Prof. Code

§ 22975(a). California enacted the annual licensing

requirement in 2003, see Cigarette and Tobacco Products

Licensing Act (“Licensing Act”), Cal. Bus. & Prof. Code

§§ 22970–22991, upon a finding that “[t]ax revenues ha[d]

declined by hundreds of millions of dollars per year due, in

part, to unlawful distributions and untaxed sales of cigarettes

and tobacco products,” id. § 22970.1(b). To “help stem the

tide of untaxed distributions and illegal sales,” California

imposed licensing obligations on manufacturers, importers,

wholesalers, distributors, and retailers. Id. § 22970.1(d). 

Under the Licensing Act, distributors and wholesalers may

not sell to unlicensed entities. See id. § 22980.1(b)(1). 

Violations of the Licensing Act are misdemeanors punishable

by a $5000 fine, one year of imprisonment, or both. See id.

§ 22981. The Licensing Act does not apply to any person

“exempt from regulation” under federal law. Id. § 22971.4.
BIG SANDY RANCHERIA ENTERS. V. BONTA 9

Additionally, California imposes reporting and

recordkeeping requirements on cigarette distributors. They

must file monthly reports with the California Department of

Tax and Fee Administration respecting their distributions

both taxable and exempt. See Cal. Rev. & Tax. Code

§§ 30182(a), 30183(a); 18 Cal. Code Regs. § 4031. 

Distributors must also “keep . . . records, receipts, invoices,

and other pertinent papers with respect” to their cigarette

dealings, which the state may examine. Cal. Rev. & Tax.

Code §§ 30453, 30454; 18 Cal. Code Regs. §§ 4026(a), 4901. 

Similarly, under the Licensing Act, distributors must retain

copies of transaction records to assist the state’s auditing and

collection efforts. See, e.g., Cal. Bus. & Prof. Code

§§ 22978.1, 22978.5 (requiring distributors and wholesalers

to maintain sale records, including invoices and receipts,

“during the past four years” and to make such records

available upon the state’s request).

In addition to collecting taxes, California regulates

cigarette manufacturers pursuant to a 1998 settlement

agreement between four major cigarette manufacturers and

46 states, the District of Columbia, and five United States

territories. See King Mountain Tobacco Co., Inc. v.

McKenna, 768 F.3d 989, 991 (9th Cir. 2014). The Master

Settlement Agreement (“Agreement”) requires manufacturers

that are signatories to the Agreement—“participating

manufacturers”—“to make substantial annual cash payments

to the settling states and territories, in perpetuity, to offset the

increased cost to the health care system created by smoking.” 

Id.; see also Agreement § IX(c).2In return, participating

manufacturers obtained “a release of past, present, and certain

2 For the text of the Agreement, see https://oag.ca.gov/sites/

all/files/agweb/pdfs/tobacco/1msa.pdf.
10 BIG SANDY RANCHERIA ENTERS. V. BONTA

future claims against them.” Cal. Health & Safety Code

§ 104555(e); see also Agreement § XII. The parties to the

Agreement further negotiated the “Non-Participating

Manufacturers Adjustment.” See Agreement § IX(d). Under

that provision, a participatingmanufacturer may substantially

reduce its payment to a state if it has lost market share as a

result of competition from non-participating manufacturers. 

However, a state may avoid that result if it enacts and

“diligentlyenforce[s]” a “[q]ualifying [s]tatute,” under which

non-participating manufacturers must deposit money into an

escrow account based on the number of cigarettes sold in a

state the prior year. Id. § IX(d)(2)(B).

California’s qualifying statute is the California Reserve

Fund Statute (“Escrow Statute”), Cal. Health & Safety Code

§§ 104555–104558. In enacting the Escrow Statute, the

California Legislature found:

It would be contrary to the policy of the state

if non-participating manufacturers could use

a resulting cost advantage to derive large,

short-term profits in the years before liability

may arise without ensuring that the state will

have an eventual source of recovery from

them if they are proved to have acted

culpably. It is thus in the interest of the state

to require that these manufacturers establish a

reserve fund to guarantee a source of

compensation and to prevent those

manufacturers from deriving large, short-term

profits and then becoming judgment proof

before liability may arise.
BIG SANDY RANCHERIA ENTERS. V. BONTA 11

Id. § 104555(f); see also King Mountain Tobacco, 768 F.3d

at 991 (explaining that because not all tobacco manufacturers

were parties to the Agreement, “[t]he states feared that these

non-participating manufacturers . . . would become insolvent

against future liability for smoking-related health care

costs”).

The Escrow Statute requires non-participating

manufacturers to either become participating manufacturers

under the Agreement or to place funds annually into an 

escrow account at a specified rate for each “unit[] sold” in

California during the previous year. Cal. Health & Safety

Code § 104557(a). “Units sold” refers to “the number of

individual cigarettes sold to a consumer in the state by the

applicable tobacco product manufacturer, whether directly or

through a distributor, retailer, or similar intermediary . . .,

regardless of whether the state excise tax was due or

collected.” Id. § 104556(j). “Units sold” excludes “cigarettes

sold . . . by a Native American tribe to a member of that tribe

on that tribe’s land, or that are otherwise exempt from state

excise tax pursuant to federal law.” Id. The required escrow

payment roughly equals the annual per-cigarette-sold

payment required from participating manufacturers and was

around $6.95 per carton in 2018. The money in the escrow

account may be released back to an non-participating

manufacturer only: (i) to pay a judgment or settlement; (ii) as

a refund for overpayment to the account; or (iii) after the

funds have spent 25 years in the account. Id. § 104557(b).

The Escrow Statute further requires non-participating

manufacturers to “certify” annually that they have complied

with their escrow obligations. Id. § 104557(c). To ensure

such compliance, states have enacted “directory” statutes

(also known as “contraband” or “complementary” statutes). 
12 BIG SANDY RANCHERIA ENTERS. V. BONTA

California’s Tobacco Directory Law (“Directory Statute”),

Cal. Rev. & Tax. Code § 30165.1, requires the Attorney

General to maintain and publish a directory of tobacco

product manufacturers and tobacco brand families that have

been approved for sale in California. See id. § 30165.1(c). 

To be listed on this directory, a manufacturer must annually

certify to the Attorney General that it is either a participating

manufacturer that has made all payments owed under the

Agreement or is a non-participating manufacturer that has

complied with its escrow obligations as well as the Licensing

Act. See id. § 30165.1(b). The Directory Statute deems offdirectory cigarettes contraband. See id. § 30165.1(e)(1)

(prohibiting any person from affixing a tax stamp to or paying

the tax on off-directory cigarettes); see also id.

§ 30165.1(e)(2) (prohibiting any person from “sell[ing],

offer[ing], or possess[ing] for sale” in California, “ship[ping]

or otherwise distribut[ing] into or within [California], or

import[ing] for personal consumption in [California]” offdirectory cigarettes).

B

The Tribe is federally recognized, see Indian Entities

Recognized and Eligible to Receive Services from the U.S.

Bureau of Indian Affairs, 86 Fed. Reg. 7554, 7554 (Jan. 29,

2021), with offices on the Big Sandy Rancheria (the

“Rancheria”) in Auberry, California.

The Tribe has not adopted a tribal constitution according

to the procedures set forth in section 16 of the Indian
BIG SANDY RANCHERIA ENTERS. V. BONTA 13

Reorganization Act (“IRA”),3but instead has adopted

governing documents under 25 U.S.C. § 5123(h)(1)

(recognizing tribe’s “inherent sovereign power to adopt

governing documents under procedures other than those

specified” in section 16). The Tribe owns and controls the

Corporation, which was chartered and organized in 2012

under section 17 of the IRA, see id. § 5124.4 The

Corporation’s Board of Directors is comprised of the same

members as the Tribe’s governing body, the Tribal Council.

The Corporation is a “tobacco distribution enterprise”

whose purpose is to “foster economic development on the

Rancheria and to create economic opportunities for Tribal

members.” The enterprise has four subdivisions: (i) BSR

Distributing, a wholesale distributor of tobacco products “to

Indian tribes and Indian-owned entities in Indian Country”;

(ii) BSR Distribution, which was “organized to engage in the

distribution of tobacco products to non-Indian owned

entities,” but has “not made any sales” yet; (iii) Big Sandy

Manufacturing, which was “organized to engage in the

manufacture of tobacco products” on the reservation, but has

3

See 25 U.S.C. § 5123(a) (“Any Indian tribe shall have the right to

organize for its common welfare, and may adopt an appropriate

constitution and bylaws, and any amendments thereto, which shall become

effective when” both “ratified by a majority vote of the adult members of

the tribe or tribes at a special election authorized and called by the

Secretary under such rules and regulations as the Secretarymay prescribe”

and “approved by the Secretary[.]”).

4 The Secretary may “issue a charter of incorporation” to “any tribe”

that petitions for one. Id. The charter is not operative until “ratified by

the governing body ofsuch tribe” and “shall not be revoked or surrendered

except by Act of Congress.” Id. “[A]ll Indian tribes” may petition for a

section 17 charter regardless whether they have voted against the IRA’s

application. Id. §§ 5125–26.
14 BIG SANDY RANCHERIA ENTERS. V. BONTA

“not yet received” a Manufacture of Tobacco Products permit

from the United States Department of the Treasury, Alcohol

and Tobacco Tax and Trade Bureau; and (iv) Big Sandy

Importing, which was “organized to engage in the

importation of tobacco and tobacco products onto the Big

Sandy Rancheria” and obtained a Tobacco Importer permit

from the [Department of the Treasury], effective November

8, 2017, and expiring on November 7, 2022.

Through Big Sandy Importing and BSR Distributing, the

Corporation “purchases tobacco products for non-retail resale

exclusively from Indian manufacturers.”5It is unclear from

the Corporation’s allegations whether these purchases occur

on the Rancheria or the “Indian manufacturers[’]” respective

reservations.

BSR Distributing resells these cigarettes “exclusively to

Indian tribal governmental, and Indian tribal-member,

reservation-based retailers operating within their own Indian

reservations [or] Indian Country within the geographical

limits of the State of California.” According to the

Corporation, these retailers, in turn, sell to “individual

5 The Corporation has purchased cigarettes fromAzuma Corporation,

which is wholly owned by the Alturas Indian Rancheria, a federally

recognized Indian tribe inAlturas, California, and GrandRiver Enterprises

Six Nations (“GRE”), a Canadian corporation wholly owned by members

of the Six Nations of the Grand River, a First Nation of Canada. In

November 2018, after GRE entered into a settlement agreement with

California, agreeing to, among other things, comply with its escrow

obligations, the Corporation stopped importing cigarettes from GRE. See

Settlement Agreement Between the People of the State of California and

Grand River Enterprises Six Nations, Ltd. (Nov. 2018),

https://tinyurl.com/GRE-settlement; see also California Tobacco

Directory, https://oag.ca.gov/tobacco/directory(listingGRE-manufactured

cigarettes).
BIG SANDY RANCHERIA ENTERS. V. BONTA 15

customers within [the] retailers’ own Indian reservation /

Indian Country.”

In 2008, before obtaining a section 17 charter, the Tribe,

doing business as “BSR Distribution,” applied for a

distributor’s license. In response, a state representative

sought to clarify whether BSR Distribution intended to “sell

to [California] retailers and wholesalers,” in which case “a

distributor’s license [would be] required.” The Corporation

does not allege that it ever responded to this letter or

otherwise followed up on the application.

Between 2011 and 2016, the Attorney General

corresponded with the Corporation and its various business

entities, raising concerns about compliance with state and

federal laws governing cigarette sales. During that period,

the AttorneyGeneral accused the Corporation of violating the

Cigarette Tax Law, the Directory Statute, and California’s

licensing requirements by selling “off-directory”

cigarettes—“without collection of state tax”—“to non-tribal

members in California,” and without a state-issued license. 

The Corporation continues to distribute cigarettes in

California.

C

In July 2018, the Corporation sued the Attorney General

and the Director in their official capacities. Seeking

declaratory and injunctive relief, the complaint alleged that:

(i) federal common law and tribal sovereignty preempt the

DirectoryStatute as applied to the Corporation; (ii) the Indian

Trader Statutes, 25 U.S.C. §§ 261–64, do so as well;

(iii) federal common law and tribal sovereignty preempt

California’s licensing requirements as applied to the
16 BIG SANDY RANCHERIA ENTERS. V. BONTA

Corporation; (iv) the Indian Trader Statutes do so as well; and

(v) federal common law and tribal sovereignty preempt the

Cigarette Tax Law as applied to the Corporation. In

connection with its fifth cause of action, the Corporation

sought a declaration that it “has no liability” for taxes

imposed under the Cigarette Tax Law.

Both the Attorney General and the Director moved to

dismiss the fifth cause of action under the Tax Injunction Act,

28 U.S.C. § 1341, which prohibits district courts from

“enjoin[ing], suspend[ing] or restrain[ing] the assessment,

levy or collection of any tax under State law where a plain,

speedy and efficient remedy may be had in the courts of such

State.” They both acknowledged an exception to the Tax

Injunction Act available to Indian tribes (the “Indian tribes

exception”) under 28 U.S.C. § 1362, which confers federal

jurisdiction over claims “brought by any Indian tribe or band

with a governing body duly recognized by the Secretary of

the Interior.” See also Moe v. Confederated Salish &

Kootenai Tribes of the Flathead Rsrv., 425 U.S. 463, 470–74

(1976) (holding that the Indian tribes exception extends to

claims challenging state tax laws). But they countered that

the Corporation is not itself an “Indian tribe or band” and,

thus, cannot invoke the federal courts’ jurisdiction under

§ 1362.

The Corporation subsequently amended its complaint to

allege that the Corporation itself is a federally recognized

Indian tribe, rather than a “federally-chartered corporation

wholly owned by . . . a federally recognized Indian tribe.” 

The Director again moved to dismiss the fifth cause of action

for lack of subject matter jurisdiction. The Attorney General

likewise moved to dismiss on that ground and to dismiss the

other four causes of action for failure to state a claim.
BIG SANDY RANCHERIA ENTERS. V. BONTA 17

After a hearing on the motions, the district court

dismissed the fifth cause of action for lack of jurisdiction and

the remaining causes of action with prejudice for failure to

state a claim. See Big Sandy Rancheria Enters. v. Becerra,

395 F. Supp. 3d 1314, 1334 (E.D. Cal. 2019) (“Big Sandy”). 

The Corporation timely appealed.

II

We review dismissals for lack of subject matter

jurisdiction and for failure to state a claim de novo. See Hyatt

v. Off. of Mgmt. & Budget, 908 F.3d 1165, 1170 (9th Cir.

2018). To determine whether the Corporation “state[s] a

claim to relief that is plausible on its face,” Ashcroft v. Iqbal,

556 U.S. 662, 678 (2009) (citation omitted), and “sufficient

as a legal matter to invoke the court’s jurisdiction,” we accept

the Corporation’s factual allegations as true and draw all

reasonable inferences in its favor, Leite v. Crane Co.,

749 F.3d 1117, 1121 (9th Cir. 2014).

III

The district court properly dismissed the Corporation’s

fifth cause of action on jurisdictional grounds pursuant to the

Tax Injunction Act, 28 U.S.C. § 1341, and properly declined

to apply the Indian tribes exception to the Tax Injunction

Act’s jurisdictional bar, see id. § 1362.

A

The Tax Injunction Act prohibits district courts from

“enjoin[ing], suspend[ing] or restrain[ing] the assessment,

levy or collection of any tax under State law where a plain,

speedy and efficient remedy may be had in the courts of such
18 BIG SANDY RANCHERIA ENTERS. V. BONTA

State.” Id. § 1341. It is well-settled, and the Corporation

does not dispute, that the Tax Injunction Act’s jurisdictional

bar extends to actions for declaratory relief. See California

v. Grace Brethren Church, 457 U.S. 393, 408–09 (1982)

(“[T]he principal purpose of the Tax Injunction Act [is] to

limit drastically federal district court jurisdiction to interfere

with so important a local concern as the collection of taxes.”

(internal citation and quotation marks omitted)); see also

Lowe v. Washoe County, 627 F.3d 1151, 1155 (9th Cir. 2010)

(“The Supreme Court repeatedly has characterized the [Tax

Injunction] Act as a broad jurisdictional barrier . . . that

prohibits both declaratory and injunctive relief.” (internal

citation and quotation marks omitted)). Nor does the

Corporation dispute that California provides a “plain, speedy

and efficient remedy” within the meaning of § 1341. See

Grace Brethren, 457 U.S. at 414 n.31, 417; see also Jerron

W., Inc. v. Cal. State Bd. of Equalization, 129 F.3d 1334,

1339 (9th Cir. 1997).

The only objection that the Corporation raises to the

district court’s jurisdictional determination is based on

28 U.S.C. § 1362, which grants district courts “original

jurisdiction of all civil actions” arising under federal law and

“brought by any Indian tribe or band with a governing body

duly recognized by the Secretary of the Interior

[(“Secretary”)].” Id. Section 1362 constitutes an exception

to the Tax Injunction Act. See Moe, 425 U.S. at 470–74. The

Corporation contends that as the “incorporated tribe” under

section 17 of the Indian Reorganization Act, it is an “Indian

tribe or band” for jurisdictional purposes. We disagree.
BIG SANDY RANCHERIA ENTERS. V. BONTA 19

B

Congress enacted the Indian Reorganization Act to enable

tribes “to revitalize their self-government through the

adoption of constitutions and bylaws” under section 16 of the

IRA, see 25 U.S.C. § 5126, and “through the creation of

chartered corporations, with the power to conduct the

business and economic affairs of the tribe,” under section 17

of the IRA, see id. § 5124. Mescalero Apache Tribe v. Jones,

411 U.S. 145, 151 (1973) (“Mescalero”); see also S. Rep. No.

73-1080 (1934) (explaining that Congress enacted section 17

to “permit Indian tribes to equip themselves with the devices

ofmodern business organization, through forming themselves

into business corporations”).

By incorporating, a tribe may waive tribal sovereign

immunity for its business operations without having to waive

that immunity for nonbusiness liability. Cf. Linneen v. Gila

River Indian Cmty., 276 F.3d 489, 493 (2002) (explaining

that a waiver of immunity from suit in a tribe’s “corporate

charter in no way affects the sovereign immunity of the

[tribe] as a constitutional, or governmental, entity”). A tribal

corporation’s waiver of sovereign immunity “removes a

major market hurdle for a tribal business (because third

parties generally do not want to enter into contracts with

parties they cannot sue to enforce agreements or to seek tort

damages) and puts a tribal business on equal footing with

nontribal businesses.” Uniband, Inc. v. Comm’r, 140 T.C.

230, 261 (2013).

Under section 17, the Secretary “may, upon petition by

any tribe, issue a charter of incorporation to such tribe.” 

25 U.S.C. § 5124. To “become operative,” the charter must

be ratified “by the governing body of such tribe.” Id. 
20 BIG SANDY RANCHERIA ENTERS. V. BONTA

“Corporations chartered under section 17 must be wholly

owned by the tribe.” Felix S. Cohen’s Handbook of Federal

Indian Law (“Cohen’s Handbook”) § 4.04[3][a][ii] p. 258

(2012 ed.); see also Bureau of Indian Affairs, Example of a

Federal Charter, https://tinyurl.com/BIA-example-charter

(“[The Corporation] is a legal entity wholly owned by the

EXAMPLE TRIBE, a federally recognized Indian tribe, but

distinct and separate from the Tribe.”). The charter “may

convey to the incorporated tribe the power to purchase, take

by gift, or bequest, or otherwise, own, hold, manage, operate,

and dispose of property of every description . . ., including

the power to purchase restricted Indian lands.” 25 U.S.C.

§ 5124.

C

Based on the relevant statutory language, legislative

history, and circuit precedent narrowly construing § 1362, we

conclude that the Corporation is not an “Indian tribe or band”

within the meaning of § 1362, and that the Corporation

therefore may not invoke § 1362 to avoid the Tax Injunction

Act’s jurisdictional bar. These conclusions align with

Congress’s purpose in enactingsection 17—“giving tribes the

power to incorporate,” including “enabl[ing] tribes to waive

sovereign immunity, thereby facilitating business

transactions.” Am. Vantage Cos., Inc. v. Table Mountain

Rancheria, 292 F.3d 1091, 1098 (9th Cir. 2002). In light of

this purpose, it would be odd to allow a section 17

corporation to selectively claim the benefits of sovereignty in

order to challenge a tax.
BIG SANDY RANCHERIA ENTERS. V. BONTA 21

1

We begin by interpreting “Indian tribe or band,” bearing

in mind that “statutes passed for the benefit of Indian tribes,

such as [§] 1362, are to be liberally construed, with doubtful

expressions being resolved in the Indians’ favor.” Gila River

Indian Cmty. v. Henningson, Durham & Richardson,

626 F.2d 708, 712 (1980). “[F]ederal law ordinarily uses the

term ‘Indian tribe’ to designate a group of native people with

whom the federal government has established some kind of

political relationship or ‘recognition.’” Cohen’s Handbook

§ 3.02[2] at 132–33 (emphasis added). As stated in the

House Report accompanying the bill that became the

Federally Recognized Indian Tribe List Act of 1994, Pub. L.

No. 103-454, 108 Stat. 4791 (Nov. 2, 1994), 25 U.S.C.

§ 5131:6

[F]ederal recognition is . . . [a] formal

political act, it permanently establishes a

government-to-government relationship

between the United States and the recognized

tribe . . . . Concomitantly, it institutionalizes

the tribe’s quasi-sovereign status, along with

all the powers accompanying that status such

as the power to tax, and to establish a

separate judiciary. Finally, it imposes upon

the Secretary of the Interior specific

6 This act requires the Secretary to publish in the Federal Register a

“list of all Indian tribes which the Secretary recognizes to be eligible for

the special programs and services provided by the United States to the

Indians because of their status as Indians.” 25 U.S.C. § 5131; see also

25 C.F.R. §§ 83.5, 83.11.
22 BIG SANDY RANCHERIA ENTERS. V. BONTA

obligations to provide a panoply of benefits

and services to the tribe and its members.

H.R. Rep. No. 103-781 (1994) (emphasis added); accord

Cohen’s Handbook § 3.02[3] at 133.

Although these authorities do not construe “Indian tribe

or band” as used in § 1362, they tend to support the district

court’s construction of “Indian tribe or band” as limited to

“the Tribe in its constitutional form,” as distinct from its

corporate form. Big Sandy, 395 F. Supp. 3d at 1324. Section

1362’s legislative history provides some additional support

for that construction, explaining that the “tribe’s desire to

have a Federal forum for matters based upon Federal

questions is justified” by, inter alia, the “unique

governmental status of Indian tribes.” H.R. Rep. No. 89-

2040, at 3146 (1966) (emphasis added).

As the Corporation acknowledges, the Tribe, not the

Corporation, appears on the Federally Recognized Indian

Tribes List, see 86 Fed. Reg. 7554, 7554, as a tribe entitled to

receive benefits and services from the Department of the

Interior. Cf. Price v. Hawaii, 764 F.2d 623, 627–28 (9th Cir.

1985) (concluding that “the same factors which govern

[tribal] eligibility for federal benefits” under federal

regulations “provide some guidance for the jurisdictional

inquiry” under § 1362). Even more significantly, the

Corporation does not allege that the federal government, in

issuing the Tribe a section 17 charter, recognized the

Corporation as a distinct political entity or a government. 

Nor does the Corporation allege that it may exercise

governmental functions, such as imposing taxes or

establishing a judiciary—powers that Congress has expressly

associated with tribal status. See H.R. Rep. No. 103-781; see
BIG SANDY RANCHERIA ENTERS. V. BONTA 23

also Washington v. Confederated Tribes of Colville Indian

Rsrv., 447 U.S. 134, 152 (1980) (“Colville”) (“The power to

tax transactions occurring on trust lands and significantly

involving a tribe or its members is a fundamental attribute of

sovereignty which the tribes retain unless divested of it by

federal law or necessary implication of their dependent

status.”).

Section 17 simply does not provide for such recognition. 

See 25 U.S.C. § 5124. By permitting “any tribe” to petition

for a charter of incorporation, which—once ratified “by the

governing body of such tribe”—may convey certain powers

to the “incorporated tribe,” the statute plainly distinguishes

between the tribe and the incorporated tribe. Id. (emphasis

added); see also Memphis Biofuels, LLC v. Chickasaw Nation

Indus., Inc., 585 F.3d 917, 921 (6th Cir. 2009) (“[T]he

language of Section 17 itself—by calling the entity an

‘incorporated tribe’—suggests that the entity is an arm of the

tribe.” (emphasis added)).

Because Congress enacted § 1362 (in 1966) a few decades

after enacting section 17 (in 1934), Congress could have used

the phrase “incorporated tribe” or cross-referenced section 17

in § 1362. Cf. Big Sandy, 395 F. Supp. 3d at 1325 (“Congress

was aware when it passed § 1362 that Indian tribes could act

in both sovereign and proprietary capacities.”). It did not do

so, reinforcing the conclusion that “Indian tribe or band”

under § 1362 and the “incorporated tribe” created under

section 17 are not synonymous.

2

In addition to being a poor fit with the relevant statutory

language, the Corporation’s position is difficult to square
24 BIG SANDY RANCHERIA ENTERS. V. BONTA

with our mandate to “narrowly construe[]” the § 1362

“exception to the Tax Injunction Act for Indian tribes.” 

Ashton v. Cory, 780 F.2d 816, 820–21 (9th Cir. 1986). For

instance, in Navajo Tribal Utility Auth. v. Ariz. Dep’t of

Revenue, 608 F.2d 1228 (9th Cir. 1979), the Navajo Tribal

Utility Authority (“Utility Authority”), a “subordinate

economic enterprise of the Navajo Indian Tribe,” sued

Arizona in federal court to challenge state taxes passed

through to it by a company from which it purchased electrical

power. 608 F.2d at 1229–30. We concluded that the Utility

Authority could “not ground jurisdiction on [§] 1362.” Id.

at 1231. We reasoned that § 1362, by its plain terms, “makes

no provision for wholly controlled or owned subordinate

economic tribal entities.” Id. We further rejected the

argument (made by both the Utility Authority and the United

States, as amicus curiae) that because the “[Utility Authority]

is ultimately controlled by and closely related to the Tribe

itself, it should be treated as a tribe for jurisdictional

purposes.” Id. at 1232. We reasoned that “[i]f the leadership

of a tribe or band decides that litigation is necessary to protect

the rights of the tribe or band, then [§]1362 will provide

federal court access to the tribe or band when the other

jurisdictional requirements of the section are also met.” Id.

The Corporation maintains that Navajo “is not controlling

here” because Navajo “did not involve a section 17

corporation,” and the Corporation’s Board of Directors is

identical to the membership of the Tribal Council, whereas

the Utility Authority’s leadership was “not synonymous with

the Tribal Council.” Id. at 1232. The Corporation

accordingly reasons that its decision to challenge California’s

tax enforcement scheme is the functional equivalent of the

tribal leadership’s decision to do so. These arguments are

unavailing. Navajo’s observation that § 1362 “makes no
BIG SANDY RANCHERIA ENTERS. V. BONTA 25

provision for wholly controlled or owned subordinate

economic tribal entities,” id. at 1231, easily extends to the

Corporation, regardless of its section 17 status, because the

Corporation is an economic entity wholly owned and

controlled by the Tribe. See Cohen’s Handbook

§ 4.04[3][a][ii] at 258 (“Corporations chartered under

section 17 must be wholly owned by the tribe.”).

Additionally, we agree with the district court that

Navajo’s holding “did not hinge on the overlap of interests

between the political and corporate entities.” Big Sandy,

395 F. Supp. 3d at 1325. Indeed, we acknowledged that there

may be circumstances in which a tribal corporation’s interests

are “identi[cal]” to the tribe’s, but concluded that, even then,

“the Tribe itself will be able to protect those interests” if it

decides to do so. Navajo, 608 F.2d at 1233; cf. also Agua

Caliente Band of Cahuilla Indians v. Hardin, 223 F.3d 1041,

1043, 1046 n.5 (9th Cir. 2000) (noting that the Indian tribes

exception to the Tax Injunction Act was satisfied where a 

section 17 corporation and the governing tribe were coplaintiffs).

Navajo also requires us to reject the Corporation’s

reliance on Mescalero. There, the Mescalero Apache Tribe

appealed from unfavorable state rulings regarding its liability

for state taxes imposed on an off-reservation ski resort that

the tribe owned and operated. Mescalero, 411 U.S.

at 146–47. Reversing in part and affirming in part, the Court

observed that it was “unclear from the record whether the

Tribe has actually incorporated itself as an Indian chartered

corporation” under section 17, but remarked that “the

question of tax immunity cannot be made to turn on the

particular form in which the Tribe chooses to conduct its

business.” Id. at 157 n.13. Based on this, the Corporation
26 BIG SANDY RANCHERIA ENTERS. V. BONTA

argues that “[t]he fact that an Indian tribe has the same

federal immunity from state taxes whether acting” as a

section 16 or 17 entity is “compelling evidence that” § 1362

was intended to permit both entities to “litigate such

immunity” in federal court.

But Navajo declined to adopt that same reasoning. It

explained that Mescalero “does not assist” with the

jurisdictional question that arises when a tribal corporation

invokes § 1362 because the tribe initiated the litigation in

Mescalero and did so “in state court.” Navajo, 608 F.2d

at 1232–33 (emphasis added). Then, assuming arguendo that

Mescalero stands for the proposition that “a tax against a

tribal enterprise is a tax against the tribe itself,”we

nonetheless concluded that “[s]uch a view speaks only to the

question of tax immunity, not to the question of federal

jurisdiction.” Id. at 1233.7

3

The Corporation’s reliance on Price is likewise

misplaced. There, after assuming arguendo that a native

Hawaiian tribal group was an “Indian tribe or band,” we

focused our analysis on whether the tribe had a “governing

body duly recognized by the Secretary.” Price, 764 F.2d

7 The Corporation cites various federal tax authorities reflecting that

a section 17 tribal corporation shares the tribe’s immunity from federal

income tax. See Rev. Rul. 81-295 (1981); Rev. Rul. 94-16 (1994);

26 C.F.R. § 301.7701-1(a)(3) (“[T]ribes incorporated under section 17 of

the [IRA] . . . are not recognized as separate entities for federal tax

purposes.”); Uniband, 140 T.C. at 262 (“[T]he tribe exists, at least in part,

through its section 17 corporation.”). Like Mescalero, those authorities

“speak[] only to the question of tax immunity, not to the question of

federal jurisdiction.” Navajo, 608 F.2d at 1233.
BIG SANDY RANCHERIA ENTERS. V. BONTA 27

at 626 (quoting § 1362). We concluded that the group could

not claim federal recognition of its governing body under

either provision of the IRA because, as Native Hawaiian

groups are excluded from the IRA “by its terms,”

Kahawaiolaa v. Norton, 386 F.3d 1271, 1280 (9th Cir. 2004),

it had not adopted a constitution and bylaws under section 16

or received a section 17 charter. Price, 764 F.2d at 626. 

Because Native Hawaiian groups are not eligible for charters

under section 17, we had no occasion to decide whether

section 17 incorporation actually satisfies § 1362’s

requirement that a tribe have a federally recognized

governing body. Thus, Price is inapposite.8

IV

The Corporation’s remaining causes of action challenge

the Directory Statute and California’s licensing, reporting,

and recordkeeping requirements in connection with cigarette

distribution on two grounds: (i) applying the challenged

regulations to the Corporation’s cigarette sales to tribal

retailers on other reservations violates “principles of Indian

tribal self-governance”; and (ii) federal regulation of “trade

with Indians within Indian country” under the Indian Trader

Statutes, see 25 U.S.C. §§ 261–64, preempts the challenged

regulations as applied to the Corporation’s intertribal

wholesale cigarette business. The district court properly

dismissed both theories for failure to state a claim.

8 Given our determination that the Corporation has failed to meet the

threshold requirement of being an “Indian tribe or band,” we need not

reach the distinct question whether the Corporation has a duly recognized

governing body. In addition, because we affirm the dismissal of the fifth

cause of action for lack of jurisdiction, we express no opinion as to

whether the Corporation has stated a claim that California may not impose

any excise taxes on the Corporation’s intertribal transactions.
28 BIG SANDY RANCHERIA ENTERS. V. BONTA

A

“Long ago the [Supreme] Court departed from Mr. Chief

Justice Marshall’s view that ‘the laws of [a state] can have no

force’ within reservation boundaries.” White Mountain

Apache Tribe v. Bracker, 448 U.S. 136, 141 (1980) (quoting

Worcester v. Georgia, 31 U.S. 515, 520 (1832)). “[T]here is

no rigid rule” that resolves “whether a particular state law

may be applied to an Indian reservation or to tribal

members.” Id. at 142. Rather, there are “two independent

but related barriers to the assertion of state regulatory

authority over tribal reservations and members.” Id.

The first barrier is that state action may not burden “the

right of reservation Indians to make their own laws and be

ruled by them.”9Id. (citation and quotation marks omitted). 

“Indian tribes retain attributes of sovereignty over both their

members and their territory.” Id. (citation and quotation

marks omitted). But tribal sovereignty does not extend

“beyond what is necessary to protect tribal self-government

or to control internal relations.” Montana v. United States,

450 U.S. 544, 564 (1981).

The second barrier is preemption by federal law, as

“Congress has broad power to regulate tribal affairs.” 

Bracker, 448 U.S. at 142–43; see also U.S. Const. Art. 1, § 8,

cl. 3 (empowering Congress to “regulate Commerce . . . with

the Indian Tribes”). “Ambiguities in federal law have been

construed generously in order to comport with . . . traditional

notions of sovereignty and with the federal policy of

9 This right is also known as the “right of tribal self-government.” Id.

at 143. The first amended complaint refers to this right as “tribal

sovereignty.”
BIG SANDY RANCHERIA ENTERS. V. BONTA 29

encouraging tribal independence.” Bracker, 448 U.S.

at 143–44. Thus, “in order to find a particular state law to

have been preempted by operation of federal law,” we need

not identify “an express congressional statement to that

effect.” Id. at 144. Rather, where a state seeks to regulate

tribal activity that is already governed by a “comprehensive,”

“detailed,” and “pervasive” federal regulatory scheme, this

preemption barrier applies. Id. at 145–46, 148. “At the same

time any applicable regulatory interest of the State must be

given weight.” Id. at 144.

1

Whether state regulation infringes tribal sovereignty

depends on who is being regulated—Indians or

non-Indians—and where the activity to be regulated takes

place—on or off a tribe’s reservation. Wagnon, 546 U.S.

at 101. Based on the “who” and “where,” one of three

analytical frameworks applies.

First, “[w]hen on-reservation conduct involving only

Indians is at issue, state law is generally inapplicable, for the

State’s regulatory interest is likely to be minimal and the

federal interest in encouraging tribal self-government is at its

strongest.” Bracker, 448 U.S. at 144. Applying this rule in

Moe, 425 U.S. 463, the Supreme Court invalidated Montana’s

“vendor license fee” as “applied to a reservation Indian

conducting a cigarette business for the Tribe on reservation

land; and [the state’s] cigarette sales tax, as applied to onreservation sales by Indians to Indians.” Id. at 480–81; see

also, e.g., Okla. Tax Comm’n v. Chickasaw Nation, 515 U.S.

450, 454–55 (1995) (invalidating motor fuels tax as applied

to tribal retail stores on tribal trust land); McClanahan v. Ariz.

Tax Comm’n, 411 U.S. 164, 165–66 (1973) (invalidating a tax
30 BIG SANDY RANCHERIA ENTERS. V. BONTA

on income earned from reservation sources by tribal members

residing on the reservation).

Second, when a state “asserts authority over the conduct

of non-Indians engaging in activity on the reservation,”

courts must conduct “a particularized inquiry into” and

balance the “state, federal, and tribal interests at stake.” 

Bracker, 448 U.S. at 145 (emphasis added). Under Bracker’s

balancing test, “State jurisdiction is preempted by the

operation of federal law if it interferes or is incompatible with

federal and tribal interests reflected in federal law, unless the

state interests at stake are sufficient to justify the assertion of

state authority.” New Mexico v. Mescalero Apache Tribe,

462 U.S. 324, 334 (1983). When “a tribe plays an active role

in generating activities of value on its reservation” with the

aid of non-Indian entities, it has a “strong interest in

maintaining those activities free from state interference,” in

contrast to when tribes “simply allow the sale of items such

as cigarettes to take place on their reservations.” Gila River

Indian Cmty. v. Waddell, 967 F.2d 1404, 1410 (9th Cir.

1992).

The Court has “balanced federal, state, and tribal interests

in diverse contexts,” including where—as here—the

challenged regulations are not themselves taxes. Chickasaw

Nation, 515 U.S. at 458. The Court has upheld such

regulations where they are “minimal burden[s] designed to

avoid the likelihood that in [their] absence non-Indians

purchasing from the tribal seller will avoid payment of a

concededly lawful tax.” Moe, 425 U.S. at 483. These

permissible burdens have included requiring on-reservation

tribal retailers to collect and remit cigarette taxes from nonIndian purchasers, id., and requiring such retailers to maintain

records regarding tax-exempt sales, see Colville, 447 U.S. at
BIG SANDY RANCHERIA ENTERS. V. BONTA 31

160 (“[T]he Tribes have failed to demonstrate that

[Washington’s] recordkeeping requirements for exempt sales

are not reasonably necessary as a means of preventing

fraudulent transactions.”).

Third, because “state power over Indian affairs is

considerably more expansive” “outside the reservation . . .

than it is within reservation boundaries,” id. at 162, when a

tribe or tribal members act outside their reservation, they are

subject to “non-discriminatory state law otherwise applicable

to all citizens of the State,” “[a]bsent express federal law to

the contrary.” Mescalero, 411 U.S. at 148–49; see also

Bracker, 448 U.S. at 144 n.11 (reaffirming principle). 

Applying this rule, the Supreme Court has upheld a state’s

taxation of income derived from a tribe’s off-reservation ski

resort, Mescalero, 411 U.S. at 148–49, and a state cigarette

tax on Indian purchasers who were “not members of the

Tribe” on whose reservation the sales took place, Colville,

447 U.S. at 161. As to the latter, the Court has explained that

taxing such purchasers typically does not “contravene the

principle of tribal self-government” because “[f]or most

practical purposes those Indians stand on the same footing as

non-Indians resident on the reservation.” Id. Absent

evidence that such nonmembers “have a say in tribal affairs

or significantly share in tribal disbursements,” “the State’s

interest in taxing these purchasers outweighs any tribal

interest that may exist in preventing the State from imposing

its taxes.” Id. The Court has warned that balancing interests

under Bracker when the regulated activity is off-reservation

is “inconsistent with the special geographic sovereignty

concerns that gave rise to that test.” Wagnon, 546 U.S.

at 112–13.
32 BIG SANDY RANCHERIA ENTERS. V. BONTA

2

We next turn to the specific federal law that the

Corporation identifies as preempting all the challenged state

regulations: the Indian Trader Statutes (the “Statutes”),

25 U.S.C. §§ 261–64. Since 1790, the federal government

has sought to regulate persons trading with Indians to

“prevent fraud and imposition upon” the latter. Cent. Mach.

Co. v. Ariz. Tax Comm’n, 448 U.S. 160, 162 (1980)

(quotation marks omitted); see also Dep’t of Tax’n & Fin. of

New York v. Milhelm Attea & Bros., Inc., 512 U.S. 61, 70

(1994). Under the present regulatory scheme, the

“Commissioner of Indian Affairs [(“Commissioner”)] shall

have the sole power . . . to appoint traders to the Indian

tribes” and to issue regulations “specifying the kind and

quantity of goods and the prices at which such goods should

be sold to the Indians.” 25 U.S.C. § 261. “Any person

desiring to trade with the Indians on any Indian reservation”

must follow regulations that the Commissioner “may

prescribe for the protection of said Indians.” Id. § 262. The

Statutes further authorize the President “to prohibit the

introduction of goods, or any particular article, into the

country belonging to any Indian tribe,” id. § 263, and set forth

sanctions for “any person other than an Indian of the full

blood” who attempts to trade “on any Indian reservation”

“without [a] license,” id. § 264.

Under the Statutes, “the Commissioner has promulgated

detailed regulations” regarding “who may qualify to be a

trader and how he shall be licensed; penalties for acting as a

trader without a license; conditions under which government

employees may trade with Indians; articles that cannot be

sold to Indians; and conduct forbidden on a licensed trader’s

premises.” Warren Trading Post Co. v. Ariz. State Tax
BIG SANDY RANCHERIA ENTERS. V. BONTA 33

Comm’n, 380 U.S. 685, 689 (1965); see also 25 C.F.R.

§§ 140.1–.26. Only one implementing regulation, however,

addresses traders’ on-reservation cigarette sales, and it

prohibits such sales to “any Indian under 18 years of age.” 

25 C.F.R. § 140.17.

On two occasions, the Supreme Court has deemed the

Statutes preemptive with respect to state taxation of traders

to Indian tribes. In Warren Trading Post, the Court

concluded that the Statutes barred Arizona from imposing a

gross sales tax on a non-Indian retail trading business

“federally licensed” as an “Indian trader with respect to sales

made to reservation Indians on the reservation.” 380 U.S. at

691–92. The Court explained that the tax could “disturb and

disarrange the statutory plan Congress set up in order to

protect Indians against prices deemed unfair or unreasonable

by the Indian Commissioner.” Id. at 691. Later, the Court

held that Arizona could not tax the gross receipts of a nontribal corporation’s on-reservation tractor sales to a tribal

entity, even though the corporation was not a federally

licensed Indian trader. See Cent. Mach., 448 U.S. at 164–65. 

The Court noted, however, that the Bureau of Indian Affairs

had expressly approved the contract for sale and the tribe’s

budgetary allocation for the tractor purchases. Id. at 161, 165

n.4. In the Court’s view, it was “irrelevant that [the

corporation] was not a licensed Indian trader” because it is

“the existence of the Indian trader statutes . . ., and not their

administration, that preempts the field of transactions with

Indians occurring on reservations.” Id. at 165.

Subsequent Supreme Court cases have taken a narrower

view of the Statutes’ preemptive effect. For instance, in

upholding Washington’s taxation of non-Indians that

purchase cigarettes from on-reservation tribal retailers, the
34 BIG SANDY RANCHERIA ENTERS. V. BONTA

Court clarified that the Statutes “incorporate a congressional

desire comprehensively to regulate businesses selling goods

to reservation Indians . . . , but no similar intent is evident

with respect to sales by Indians to nonmembers of the Tribe.” 

Colville, 447 U.S. at 155–56. The Court rejected the notion

that the Statutes “go[] so far as to grant tribal enterprises

selling goods to nonmembers an artificial competitive

advantage over all other businesses in a State.” Id. at 155.

And most recently, as the Corporation acknowledges, the

Court retreated from Warren Trading Post’s suggestion that

“no state regulation of Indian traders can be valid,” Milhelm,

512 U.S. at 71; see also id. at 74 (rejecting the proposition

that the Indian Trader Statutes “bar[] any and all stateimposed burdens on Indian traders”). In Milhelm, non-Indian

“wholesalers licensed by the Bureau of Indian Affairs . . . to

sell cigarettes to reservation Indians” contended that the

Statutes preempted various state regulations, including a limit

on the number of tax-free cigarettes that they could sell to

tribes and reservation retailers as well as requirements that

they “hold state licenses,” “keep records reflecting the

identity of the buyer in each tax-exempt sale[,] and make

monthly reports to [New York] on all such sales.” Id. at

66–67. The Court clarified that the Statutes preempt state

regulatory authority only insofar as the state seeks to “dictate

‘the kind and quantity of goods and the prices at which such

goods shall be sold to the Indians.’” Id. at 75 (quoting

25 U.S.C. § 261). New York’s quantity limitation on tax-free

cigarettes did not have this impermissible purpose because

“Indian traders remain[ed] free to sell Indian tribes and

retailers as many cigarettes as they wish[ed], of any kind and

at whatever price.” Id.
BIG SANDY RANCHERIA ENTERS. V. BONTA 35

Applying the reasoning of Moe and Colville, even though

those cases “dealt most directly with claims of interference

with tribal sovereignty,” id. at 74, the Court upheld the other

challenged regulations as “minimal burdens reasonably

tailored to the collection of valid taxes from non-Indians,” id.

at 73–74, 76. It explained that “[i]t would be anomalous” to

permit states, under Moe and Colville, to “impose tax

collection and bookkeeping burdens on reservation retailers

who are themselves enrolled tribal members,” but to hold that

the Statutes bar “similar burdens . . . on wholesalers who

often (as in this case) are [non-Indian].” Id. at 74. The Court

reasoned that “[j]ust as tribal sovereignty does not completely

preclude States from enlisting tribal retailers to assist

enforcement of valid state taxes, the Indian Trader Statutes do

not bar the States from imposing reasonable regulatory

burdens upon Indian traders for the same purpose.” Id.

B

Applying these principles, we affirm the dismissal of the

Corporation’s preemption challenges to the Directory Statute

and California’s licensing, recordkeeping, and reporting

requirements.

1

Tribal sovereignty principles do not preclude California

from regulating the Corporation’s intertribal wholesale

cigarette sales under the challenged regulations.

The Corporation concedes that it leaves the Rancheria to

sell cigarettes to tribal retailers on other reservations. The

Corporation does not allege that the challenged regulations

are discriminatory nor, for the reasons stated below, does the
36 BIG SANDY RANCHERIA ENTERS. V. BONTA

Corporation plausibly allege that federal law bars the

Directory Statute’s application to the Corporation. See

Mescalero, 411 U.S. at 148–49. The Corporation therefore

fails to state a claim that the challenged regulations, as

applied to its off-reservation conduct, infringe tribal selfgovernance. See id. at 148, 153 (explaining that “offreservation activities are within the reach of state law” so

long as the state law is not discriminatory and “[a]bsent

express federal law to the contrary”); see also King Mountain

Tobacco, 768 F.3d at 993 (“Mescalero requires that we

determine whether Washington’s escrow statute is

discriminatory and whether King Mountain’s activities go

beyond the boundaries of the reservation.”).

The Corporation does not remain “on reservation” for

purposes of the tribal-sovereignty analysis by selling

cigarettes on other tribes’ reservations. The Corporation’s

contention that it undertakes its sales activities entirely in

“Indian country” disregards that “[t]here is a significant

geographical component to tribal sovereignty,” Bracker, 448

U.S. at 151, and that “Indian tribes are unique aggregations

possessing attributes of sovereignty over both their members

and their territory.” United States v. Mazurie, 419 U.S. 544,

557 (1975) (emphasis added). The Corporation fails to

plausibly allege that California hinders the Tribe’s ability to

govern its territory and members by prohibiting the

Corporation, an unlicensed distributor, from selling offdirectory cigarettes outside the Rancheria. See Mescalero,

411 U.S. at 157 (explaining that a tribe does not have

“expansive immunity from ordinary” regulation that applies

to “businesses throughout the State” when that tribe travels

“beyond its reservation borders for the purpose of carrying on

a business enterprise” (emphasis added)).
BIG SANDY RANCHERIA ENTERS. V. BONTA 37

We therefore join the Tenth Circuit and Oklahoma

Supreme Court in treating tribe-to-tribe sales made outside

the tribal enterprise’s reservation as “off reservation” activity

subject to non-discriminatory state laws of general

application. See Muscogee (Creek)Nation v. Pruitt, 669 F.3d

1159, 1172 (10th Cir. 2012) (“[W]hen Indians . . . act outside

of their own Indian country . . ., including within the Indian

country of another tribe, they are subject to nondiscriminatory state laws otherwise applicable to all citizens

of the state.” (emphasis added));10 Edmondson v. Native

Wholesale Supply, 237 P.3d 199, 215–16 (Okla. 2010)

(concluding that “tribal to tribal transactions” that

“extend[ed] beyond the boundaries of any single

‘reservation’” constituted “off-reservation conduct”), cert.

denied, 563 U.S. 960 (2011), abrogated on other grounds by

Bristol-Meyers Squibb Co. v. Super. Ct., 137 S. Ct. 1773

(2017).

In these circumstances, the district court properly

declined to balance federal, state, and tribal interests under

Bracker. See Big Sandy, 395 F. Supp. 3d at 1328–30. 

Bracker balancing is appropriate when a tribe or tribal entity

challenges a state’s regulation of transactions between the

tribe and nonmembers on the tribe’s reservation. See, e.g.,

Bracker, 448 U.S. at 141 (balancing interests where a tribe

10 Like the tribe in Muscogee, where the Tenth Circuit rejected a

preemption challenge to Oklahoma’s directory statute, see 669 F.3d

at 1179–80, the Corporation does not allege that California has enforced

or threatened to enforce the Directory Statute on the Rancheria—for

example, by seizing contraband cigarettes there. Cf. Muscogee, 669 F.3d

at 1180 & n.9 (declining to perform Bracker balancing where the tribe

alleged enforcement and threatened enforcement of the directory statute

outside of its reservation, e.g., the seizure of cigarettes “in transit to the

Indian country of the Nation”).
38 BIG SANDY RANCHERIA ENTERS. V. BONTA

intervened as a plaintiff to challenge Arizona’s taxation of a

non-Indian company that provided the tribe logging services

on the tribe’s reservation); California v. Cabazon Band of

Mission Indians, 480 U.S. 202, 216 (1987) (balancing

interests where tribes challenged California’s attempt to

prohibit them from offering non-Indians high stakes bingo

games on their reservations); Gila River Indian Cmty.,

967 F.2d at 1407, 1410–11 (balancing interests where a tribe

challenged Arizona’s taxation of non-Indian entity that

operated performing arts center on the tribe’s reservation).

Here, the Corporation does not allege that California

seeks to regulate its transactions with non-Indians or

nonmembers on the Rancheria in a way that infringes on the

Tribe’s self-governance. Rather, the Corporation claims that

the Directory Statute, as applied to the Corporation’s sales

activities off the Rancheria, infringes the Tribe’s selfgovernance. For the reasons already stated, this claim is not

cognizable under Mescalero, 411 U.S. at 148–49.

2

The Corporation has likewise failed to state a claim that

the Indian Trader Statutes preempt any of the challenged

regulations as applied to its intertribal wholesale cigarette

business.

a

As a preliminary matter, the complaint is devoid of any

allegations that the federal government has exercised any

shred of oversight—still less “comprehensive,” “detailed,” or

“pervasive” oversight—with respect to the Corporation’s

alleged Indian trading. Bracker, 448 U.S. at 145–46, 148. 
BIG SANDY RANCHERIA ENTERS. V. BONTA 39

Accordingly, the transactions that the Corporation seeks to

immunize from state regulation are fundamentally different

from the transactions that have led the Court to deem the

Statutes preemptive of state regulation as applied to Indian

traders. Specifically, the Corporation does not allege that the

federal government has licensed it as an Indian trader or

otherwise approved its cigarette sales to tribal retailers on

other reservations. See Warren Trading Post, 380 U.S.

at 691; Cent. Mach., 448 U.S. at 165 n.4. Moreover, it strains

credulity to deem a lone federal regulation that prohibits onreservation cigarette sales to Indian minors, see 25 C.F.R.

§ 140.17, “comprehensive” and preemptive federal regulation

of cigarette trade within Indian country. Warren Trading

Post, 380 U.S. at 688–89.

b

The Supreme Court’s reasoning in Milhelm further

requires dismissal of the Corporation’s claims that the

Statutes preempt the Directory Statute and California’s

licensing, recordkeeping, and reporting requirements.

(1)

First, the Corporation’s allegation that the Directory

Statute impermissibly “specifies the kind and price of goods

that may be sold to Indians by limiting the cigarettes that the

Tribe may sell . . . to cigarettes of a tobacco product

manufacturer or brand family included in the directory” fails

under Milhelm. The Directory Statute prohibits the

Corporation from selling certain tobacco products based

solely on the product manufacturer’s violation of state law

and without regard to the type, price, or quantity of the

product itself. So long as the Corporation sources its
40 BIG SANDY RANCHERIA ENTERS. V. BONTA

cigarettes from manufacturers that comply with their escrow

obligations, it “remain[s] free to sell Indian tribes and

retailers as many cigarettes” as it wishes, “of any kind, and at

whatever price.” Milhelm, 512 U.S. at 75.

To be sure, non-participating manufacturers may have an

economic incentive to pass the cost of escrow deposits on to

their consumers, such that the Corporation’s compliance with

the Directory Statute may very well increase the cost of the

cigarettes that it sells. Notwithstanding this potential

downstream effect on pricing, the Directory Statute, unlike

the preempted taxation in Warren Trading Post and Central

Machinery, does not directly affect the price that the

Corporation charges its consumers.

In sum, the Corporation fails to plausibly allege that the

Directory Statute “disturb[s] and disarrange[s] the statutory

plan to protect Indians against prices deemed unfair or

unreasonable,” Warren Trading Post, 380 U.S. at 691; see

also 25 C.F.R. § 140.22 (describing federal government’s

“duty” to ensure that prices charged to Indians are “fair and

reasonable”), or that it impermissibly seeks to “dictate ‘the

kind and quantity of goods and the prices at which such

goods shall be sold to the Indians.’” Milhelm, 512 U.S. at 75

(quoting 25 U.S.C. § 261).

(2)

The Corporation also fails to state a claim that the

Statutes preempt California’s licensing, recordkeeping, and

reporting requirements because it does not plausibly allege

that those requirements are not “reasonable regulatory

burdens” imposed on Indian traders “to assist enforcement of

valid state taxes.” Id. at 74; see also Colville, 447 U.S. at 160
BIG SANDY RANCHERIA ENTERS. V. BONTA 41

(placing the burden on the tribe to show that the challenged

regulations are “not reasonably necessary as a means of

preventing fraudulent transactions”). Valid state taxes

include the cigarette excise taxes that California seeks to

collect from customers who purchase cigarettes on

reservations to which they do not belong. See Chemehuevi,

474 U.S. at 11–12; see also Colville, 447 U.S. at 156–59.

These minimal burdens may be imposed on Indian

businesses that, like the Corporation, purport to engage only

in tax-exempt transactions. See Colville, 447 U.S. at 159–60

(reversing the district court, which had struck down

recordkeeping requirements with respect to all on-reservation

cigarette sales by Indian retailers after finding that none of

these retailers’ sales were taxable); Milhelm, 512 U.S. at 76

(upholdingNew York law requiring that cigarette wholesalers

making on-reservation cigarette sales to tribal retailers

“maintain detailed records on tax-exempt transactions”

(emphasis added)).

The Corporation does not plausibly allege that

California’s licensing, recordkeeping, and reporting

requirements, as applied to its sales to nonmember Indian

retailers, are excessive burdens. As the district court noted,

tax enforcement schemes “with even more demanding

requirements than those of California have been repeatedly

upheld by the Supreme Court as imposing only a ‘minimal

burden.’” Big Sandy, 395 F. Supp. 3d at 1332–33; see also

Milhelm, 512 U.S. at 64–67, 76 (upholding state laws

requiring “[w]holesale distributors of tax-exempt cigarettes”

to “hold state licenses,” maintain records regarding taxexempt transactions, and adhere to quantity limitations on the

untaxed cigarettes that they could sell to reservation

retailers); Colville, 447 U.S. at 159–60 (upholding
42 BIG SANDY RANCHERIA ENTERS. V. BONTA

recordkeeping requirements, which required Indian

smokeshop operators to “keep detailed records of both

taxable and nontaxable transactions,” including, in connection

with the latter, “the names of all Indian purchasers, their

tribal affiliations, the Indian reservations within which sales

are made, and the dollar amount and dates of sales”).

Indeed, as the Supreme Court reasoned in Milhelm,

cigarette wholesalers, like the Corporation—which must

“maintain detailed records” regarding their transactions—are

generally less burdened than Indian retailers whom the state

may require to do the same under Colville because

“wholesale trade typically involves a comparatively small

number of large-volume sales.” 512 U.S. at 74. The

Corporation does not allege otherwise.

In asserting that California’s licensing, recordkeeping,

and reporting requirements are not “designed to prevent nonIndians from evading taxes,” the Corporation disregards the

Legislature’s findings to the contrary. See Cal. Bus. & Prof.

Code §§ 22970.1(c) (“The enforcement of California’s

cigarette and tobacco products tax laws is necessary to collect

millions of dollars in lost tax revenues each year.”),

22970.1(d) (finding that licensing every person in the

distribution chain would “help stem the tide of untaxed

distributions and illegal sales”). And as the Attorney General 

explained below, “[e]ven if [the Corporation] does not owe

the tax, or [the Corporation’s] customers do not owe the tax,

the State’s licensing and reporting requirements allow [the

State] to see if someone owes the tax, and then, if they do, to

collect it.” Big Sandy, 395 F. Supp. 3d at 1332.

Just because the state-mandated “reports would not

identify [the Corporation’s] retail customers” or any
BIG SANDY RANCHERIA ENTERS. V. BONTA 43

information about those retailers’ downstream transactions,

i.e., “the information necessary to ascertain the products’

ultimate taxability,” that does not make California’s

requirements unreasonable. “[A]lthough the Corporation’s

reports would not list the identity of its customers, each of its

customers’ filings would list the Corporation as the seller,

thereby allowing the State to compare the Corporation’s

aggregate monthly outflow with the monthly inflow reported

by its customers, and to follow up in the event of

discrepancies.” Id. Morever, wholesale distributors must

“maintain and make available for examination underlying

invoices and other records supporting the required

reports”—that is, “exactly the kind of information that would

aid . . . in tracking [the Corporation’s] downstream sales.” 

Id.; see also Cal. Bus. & Prof. Code § 22978.5.

The Corporation likewise fails to state a claim that the

licensing, recordkeeping, and reporting requirements are

generally “incompatible with the federal regulation of trade

with Indians in Indian country.” The Corporation does not

allege, for instance, that the challenged requirements “could

. . . disturb and disarrange the statutory plan” by imposing an

“economic burden” on the Corporation that “would

eventually be passed on to” tribal purchasers in the form of

either pricier, fewer, or shoddier products. Bracker, 448 U.S.

at 152; see also Cent. Mach., 448 U.S. at 162 (noting that the

seller had added the amount of the challenged state tax,

nearly $3000, to the price of the tractors purchased by a tribal

entity on the reservation). Nor does the Corporation plausibly

allege that the challenged regulations, which enable the state

to monitor and police statewide cigarette distribution, usurp

or interfere with the Commissioner’s “sole power and

authority to appoint traders to the Indian tribes.” 25 U.S.C.

§ 261. The Corporation does not, for example, attribute its
44 BIG SANDY RANCHERIA ENTERS. V. BONTA

failure to apply for an Indian trader license under 25 U.S.C.

§ 262 and 25 C.F.R. § 140.9 to California’s regulatory

scheme or contend that holding the licenses required under

California law would somehow prevent it from obtaining an

Indian trader license under federal law.

V

For the foregoing reasons, we affirm the district court’s

dismissal for lack of subject matter jurisdiction and for failure

to state a claim.

AFFIRMED.

BERZON, Circuit Judge, concurring in part and acquiescing

dubitante in part:

I join the majority opinion in affirming the dismissal of

Big Sandy Rancheria Enterprises’ (“BSRE” or “the

Corporation”) first four claims. Where I differ from the

majority is in the certainty that BSRE is not an “Indian tribe

or band” for jurisdictional purposes. 28 U.S.C. § 1362. Nor

am I certain, however, that BSRE is an “Indian tribe or band.” 

Because I have doubts about the majority’s conclusion but am

not prepared to say it is certainly wrong, I concur in the

judgment but write separately, dubitante, as to Part III,

affirming the dismissal of BSRE’s fifth claim for lack of

jurisdiction. See United States v. Campbell, 937 F.3d 1254,

1259–61 (9th Cir. 2019) (Berzon, J., dubitante); United States

v. $11,500.00 in U.S. Currency, 869 F.3d 1062, 1076–77 (9th

Cir. 2017) (Hurwitz, J., concurring in part and acquiescing

dubitante in part). As the matter of the tribal status of
BIG SANDY RANCHERIA ENTERS. V. BONTA 45

corporations incorporated under § 17 of the Indian

Reorganization Act (IRA), 25 U.S.C. § 5124, is likely to be

of continuing significance and the pertinent case law is scant,

it seems worth spelling out some of my concerns even

though, in the end, they are not of sufficient weight to

convince me to reject the majority’s ultimate holding.

Under the “Indian Tribes exception,” any action that

could be brought in federal court under 28 U.S.C. § 1362 is

exempt from the Tax Injunction Act’s command that

challenges to state law be brought first in state court. See

28 U.S.C. § 1341; Moe v. Confederated Salish & Kootenai

Tribes of the Flathead Rsrv., 425 U.S. 463, 474–75 (1976);

Barona Band of Mission Indians v. Yee, 528 F.3d 1184, 1187

n.1 (9th Cir. 2008). Section 1362 confers federal jurisdiction

over “all civil actions, brought by any Indian tribe or band

with a governing body duly recognized by the Secretary of

the Interior,” arising under federal law. 28 U.S.C. § 1362. 

Whether this provision encompasses the current suit turns on

the scope of the term “any Indian tribe or band.”

As the majority points out, Maj. Op. at 22, our analysis of

this question must be guided by the canon that “statutes

passed for the benefit of Indian tribes, such as [§] 1362, are

to be liberally construed, with doubtful expressions being

resolved in the Indians’ favor.” Gila River Indian Cmty. v.

Henningson, Durham & Richardson, 626 F.2d 708, 712

(1980); see Bryan v. Itasca County, 426 U.S. 373, 392 (1976). 

In this case, construing the statute “liberally . . . in the

Indians’ favor” with regard to any “doubtful expressions”

would mean holding that the statute includes tribes

incorporated under § 17 of the IRA, like BSRE, and that the

district court therefore has jurisdiction to consider BSRE’s

claim under the Tax Injunction Act. The key question, then,
46 BIG SANDY RANCHERIA ENTERS. V. BONTA

is whether the scope of “any Indian tribe or band” in § 1362

is the type of “doubtful expression[]” to which the Indian

canon of construction applies.

Case law construing either § 1362 or § 17 is extremely

sparse, and Congress has provided little guidance on how the

statutes’ terms are to be construed. The question whether

§ 17 corporations are an “Indian tribe or band” for

jurisdictional purposes appears to have never been squarely

addressed by our circuit or by any other federal court of

appeals. Faced with an untrodden statutory and precedential

backdrop, the majority has reached a conclusion that is

plausible and perhaps correct. I write separately, however,

because the majority’s conclusion is not the only one that

could be drawn against the pertinent backdrop.

First, I view the majority’s focus on whether the

Corporation, itself and independently, is a federally

recognized tribe as misguided. See Maj. Op. at 22–25. It is

undisputed that Big Sandy Rancheria is a federally

recognized tribe. The relevant question is therefore not

whether BSRE is federally recognized for the purposes of

§ 1362, but whether BSRE, in its incorporated form, is

identical with Big Sandy Rancheria for jurisdictional

purposes.

Framed in this way, I am not certain that BSRE’s position

that § 17 corporations are “Indian tribe[s] or band[s]” for

jurisdictional purposes is, as the majority has it, a “poor fit

with the relevant statutory language.” Maj. Op. at 23. 

Section 17 of the IRA empowers the Secretary of the Interior

to “upon petition by any tribe, issue a charter of incorporation

to such tribe,” provided that “such charter shall not become

operative until ratified by the governing body of such tribe.” 
BIG SANDY RANCHERIA ENTERS. V. BONTA 47

25 U.S.C. § 5124 (emphasis added). The § 17 charter “may

convey to the incorporated tribe” the power to purchase and

alienate property, including restricted Indian lands. Id.

(emphasis added).

This statutory language does, as the majority points out,

distinguish between the Tribe’s governing body and its

corporate entity. But by issuing the corporate charter “to

such tribe” and referring to a § 17 corporation as the

“incorporated tribe,” the statute can be read to identify § 17

corporations as also “tribe[s],” whether or not distinct entities

from the tribe as organized in its governmental capacity. 

Section 1362—enacted, as the majority points out, several

decades after § 17, see Pub. L. 89-635, § 1, Oct. 10, 1966, 80

Stat. 880 (codified at 28 U.S.C. § 1362)—does not limit its

grant of jurisdiction to suits brought by the governing body of

an Indian tribe or band, nor to tribes organized under the

specific structures set out in the IRA. A plausible reading of

the statute’s silence is that § 1362 encompasses tribal entities

regardless of the organizational structure or capacity in which

they bring suit.

It is this reasoning that guided the only other Ninth

Circuit opinion to consider whether § 17 corporations qualify

for the Tax Injunction Act’s “Indian tribes exception.” In

White Mountain Apache Tribe v. Williams, 810 F.2d 844 (9th

Cir. 1985), the White Mountain Apache Tribe, in its capacity

as a § 17 corporation, brought a § 1983 claim in federal court

challenging Arizona’s power to tax a joint venture between

the incorporated tribe and a private timber operation. See id.

at 846–47; id. at 865 (B. Fletcher, J., dissenting). The

majority concluded that the Tribe had failed to state a claim

under § 1983; it did not consider whether the court had

jurisdiction to consider any such claim.
48 BIG SANDY RANCHERIA ENTERS. V. BONTA

In dissent, however, Judge Fletcher concluded that it did. 

Because she would have held that the Tribe had asserted a

viable § 1983 claim, she considered whether the incorporated

tribe was entitled to bring suit based on those claims and, if

so, whether any such action was “barred in the federal courts”

by the Tax Injunction Act. Id. at 865 (Fletcher, J.,

dissenting). Judge Fletcher reasoned that, because “[t]he

plain language of section 1362 . . . does not distinguish

between the ‘governmental’ tribe provided for in IRA section

16 and the ‘incorporated tribe’ provided for in section 17,”

the § 17 entity was an “Indian tribe or band” under § 1362. 

Id. at 868 (quoting 25 U.S.C. §§ 476–77 (now codified at

25 U.S.C. § 5123–24)). So, reviewing the same statutory

text, Judge Fletcher drew the opposite conclusion to that

drawn by the majority here.

Likewise, Judge Fletcher in White Mountain Apache took

the opposite view from that of the majority here as to other

indicia of congressional intent. She noted first that “[w]hen

Congress passed section 1362 in 1966, it was fully aware that

Indian tribes could act in both sovereign and proprietary

capacities,” and then concluded that the “failure to limit

explicitly the scope of section 1362 to actions brought by

tribes in their governmental capacitysuggests that [Congress]

intended the provision to encompass actions brought by tribes

in their corporate capacity as well.” Id. The majority here

draws the exact opposite conclusion from the same legislative

history. See Maj. Op. at 22–23. That the text and legislative

history of the jurisdictional statute have been interpreted by

different members of this court as commanding directly

opposite outcomes suggests that, at the very least, § 1362’s

reference to “Indian tribe[s] or band[s]” may be the type of

doubtful expression entitled to construction favorable to the

tribe.
BIG SANDY RANCHERIA ENTERS. V. BONTA 49

Nor do I find, in my own review of the legislative history,

a persuasive answer to the question whether Congress

intended § 1362’s application to “Indian tribe[s] or band[s]”

to include § 17 corporations. As the Supreme Court pointed

out in Moe, Congress’s purpose in enacting § 1362 was “to

open the federal courts to the kind of claims that could have

been brought by the United States as trustee, but for whatever

reason were not so brought.” 425 U.S. at 472. The relevant

case law does not paint a crystal-clear picture of what actions

could be brought by the United States as trustee. But the

United States appears to have represented the interests of § 17

incorporated tribes in at least one legal action. See Md. Cas.

Co. v. Citizens Nat. Bank of W. Hollywood, 361 F.2d 517,

518–19 (5th Cir. 1966). The federal government is also

empowered to hold lands in trust for § 17 incorporated tribes. 

See Carlson v. Tulalip Tribes of Wash., 510 F.2d 1337, 1339

(9th Cir. 1975). And, as Moe held, the United States is

empowered to “seek[] to enjoin the enforcement of a state tax

law” to vindicate tribal interests. 425 U.S. at 474. Against

this limited case law, a plausible inference from the statute’s

purpose and ambiguous text is that Congress intended to open

federal courts to claims vindicating the interests of tribes in

their § 17 incorporated capacity.

Third, I believe the majority overstates our mandate to

“narrowly construe[]” the § 1362 exception to the Tax

Injunction Act. Maj. Op. at 24 (quoting Ashton v. Cory,

780 F.2d 816, 820 (9th Cir. 1986)). Ashton’s conclusion that

the § 1362 exception to the Act “has been narrowly construed

by our court” relied exclusively on cases “refus[ing] to extend

the exception to include individual members of Indian tribes”

suing in a personal capacity. Id. at 820–21 (emphasis added)

(citing Comenout v. Washington, 722 F.2d 574, 577 (9th

Cir.1983); Dillon v. Montana, 634 F.2d 463, 469 (9th
50 BIG SANDY RANCHERIA ENTERS. V. BONTA

Cir.1980)). Its holding has been applied only once since, in

a case declining to apply the exception to a private enterprise

owned by tribal members. See Amarok Corp. v. Nev. Dep’t

of Tax’n, 935 F.2d 1068, 1069–71 (1991).

I do not read these cases as sanctioning in general a

cramped construction of the jurisdictional statute. Rather, the

construction of § 1362 in the cited cases reflects a

straightforward understanding of the distinction between a

sovereign entity and its citizens. A court’s refusal to apply

the jurisdictional statute to private citizens and corporations

does not narrow the statutory definition of “Indian tribe or

band,” anymore than a refusal by the Supreme Court to assert

original jurisdiction over a suit by a private citizen of a state

would constitute a narrow construction of Art. III, § 2, cl. 2

of the U.S. Constitution, which extends the Court’s original

jurisdiction to suits in which states are a party.

Navajo Tribal Util. Auth. v. Arizona Dep’t of Revenue,

608 F.2d 1228 (9th Cir. 1979), does, however, present a

wrinkle for a more forgiving reading of the case law. As the

majority points out, Navajo rejected an expansive reading of

the jurisdictional statute in part on the ground that “[i]f the

leadership of a tribe or band decides that litigation is

necessary,” then that leadership is free to bring suit itself

under § 1362. Id. at 1232. In the present case, I remain

puzzled as to why the Big Sandy Rancheria tribal council—a

body that, by the § 17 charter, is identical in its membership

to the BSRE Board—chose not to sidestep the jurisdictional

question altogether by bringing suit qua tribal council. But

even so, that the tribal council could have initiated suit in its

governmental capacity does not necessarily mean that, as a

statutory matter, the same body is foreclosed from initiating

a federal suit in its incorporated form. Cf. Mescalero Apache
BIG SANDY RANCHERIA ENTERS. V. BONTA 51

Tribe v. Jones, 411 U.S. 145, 158 n.13 (1973) (“[T]he

question of tax immunity cannot be made to turn on the

particular form in which the Tribe chooses to conduct its

business.”).

In the end, I am not convinced that Navajo’s

interpretation of the jurisdictional statute squarely forecloses

federal jurisdiction here. Navajo held only that § 1362 “does

not cover subordinate, semi-autonomous tribal entities.” 

608 F.2d at 1231.1 That case concerned the Navajo Nation’s

public utility company, which enjoyed a “substantial”

relationship with the tribe and over which the tribal

government “exercise[d] some measure of control.” Id.

at 1232. But in declining to assert jurisdiction, the Navajo

court emphasized the utility authority’s “substantial degree of

autonomy” from the tribal government, noting that the

corporation’s Board was “not synonymous with the Tribal

Council or even a committee thereof. Rather, it [wa]s a

somewhat, although not a completely, independent entity.” 

Id.

By contrast, § 17 corporations appear by definition to lack

autonomy. Charters of incorporation are issued at the

discretion of the Secretary of the Interior; may be revoked

only by an Act of Congress; and “confer only powers that the

Secretary of the Interior is willing for the corporation to

possess.” Uniband, Inc. v. Comm’r, 140 T.C. 230, 262

(2013) (citing Md. Cas. Co., 361 F.2d at 520); see 25 U.S.C.

§ 5124. What’s more, § 17 corporations are treated as

1 Even with this holding—which may or may not encompass § 17

corporations—the NinthCircuit appears to go further in limiting the scope

of § 1362 than other circuits have. See 1 Cohen’s Handbook of Federal

Indian Law § 7.04 n. 18 (N. Jessup, Ed., 2019).
52 BIG SANDY RANCHERIA ENTERS. V. BONTA

identical to tribal governments for purposes of federal tax

immunity. See 26 C.F.R. § 301.7701-1(a)(3). And, although

this court has never addressed the question, several circuits

have held—as the majority acknowledges, Maj. Op.

at 23—that § 17 corporations are “arms of the tribe” for

purposes of sovereign immunity. See Amerind Risk Mgmt.

Corp. v. Malaterre, 633 F.3d 680, 685 (8th Cir. 2011);

Memphis Biofuels, LLC v. Chickasaw Nation Indus., Inc.,

585 F.3d 917, 921 (6th Cir. 2009); Md. Cas. Co, 361 F.2d

at 521–22 (adopted as binding precedent by the 11th Circuit,

see Bonner v. City of Prichard, 661 F.2d 1206, 1207 (11th

Cir. 1981) (en banc)). The analyses relevant to assessing

federal tax and sovereign immunity are, of course, distinct

from the jurisdictional analysis. See In re Prairie Island

Dakota Sioux, 21 F.3d 302, 304 (8th Cir. 1994). But in my

view, these features of the § 17 corporation complicate the

latter question and render the present case sufficiently distinct

from Navajo to merit closer consideration.

Finally, I address the majority’s assertion that it would be

“odd” to allow tribes to allow a § 17 entity to “selectively

claim the benefits of sovereignty.” Maj. Op. at 20. I do not

see why this is so. First, I note again that, although this

circuit has never addressed the question, every circuit to have

considered whether § 17 corporations are entitled to inherent

sovereign immunity has held that they are. See cases cited

supra; see also Breakthrough Mgmt. Grp., Inc. v. Chukchansi

Gold Casino & Resort, 629 F.3d 1173, 1184 n.8 (10th Cir.

2010); Clay Smith, Tribal Sovereign Immunity: A Primer,

50 Advocate 19, 20–21 (May 2007) (“The principal legal

difference [between § 17 corporations and other tribal

corporations] is that, while section 17 corporations retain

their tribal status—and, accordingly, sovereign immunity in

the absence of a ‘sue and be sued’ waiver—the other species
BIG SANDY RANCHERIA ENTERS. V. BONTA 53

of corporations are not imbued automatically with such

status.”). The Supreme Court reinforced this principle in

Michigan v. Bay Mills Indian Cmty., 572 U.S. 782 (2014),

when it held that tribes are entitled to sovereign immunity

when engaging in commercial activity both on- and offreservation, id. at 790.

That many § 17 corporations choose to waive their

inherent immunity has no bearing on whether they are

“tribe[s]” under § 1362. Tribes, like all sovereigns, may

waive immunity when doing so is beneficial to their interests. 

See United States v. State of Oregon, 657 F.2d 1009, 1014

(9th Cir. 1981). As we held in State of Oregon, one of the

“[c]lear policy considerations . . . militat[ing] in favor of [a]

tribe’s power to consent to suit” is the concern that “nonIndian interests might prudently avoid contracts with Tribes

that would otherwise prove beneficial to the Indians, with the

result that Tribes wishing to engage in business would be

needlessly impeded.” Id. Accordingly, tribes may consent to

suit as an act of prudent self-government. See id.

As our precedent and that of other circuits makes clear, a

waiver of sovereign immunity does not negate inherent

sovereignty. As State of Oregon pointed out, some tribal

constitutions ratified under § 16 of the IRA, like some § 17

charters, contain “sue or be sued” clauses that can be

interpreted as waiving immunity for the relevant government. 

See id. at 1013 n. 11; see also Linneen v. Gila River Indian

Cmty., 276 F.3d 489, 492 (9th Cir. 2002). But the majority

does not and cannot plausibly argue that tribes with

constitutions ratified by the Department of the Interior

pursuant to § 16 are not “Indian tribe[s] . . . duly recognized

by the Secretary of the Interior.” 28 U.S.C. § 1362. Native

nations organized under § 16, like all sovereign entities, may
54 BIG SANDY RANCHERIA ENTERS. V. BONTA

waive immunity in some contexts while invoking the benefits

of sovereignty in others. I see no reason why, as a matter of

principle, tribes incorporated under § 17 should be any

different.

This is not to conclude definitively that § 17 entities are

the “tribe” for jurisdictional purposes. But I am dubious as to

the majority’s assertion that an entity that waives sovereign

immunity may not at the same time selectively claim the

benefits of sovereignty in other contexts. The selective

enjoyment of the benefits of sovereignty is the prerogative of

all sovereign entities; tribes are no different.

I join the majority’s conclusion because, with the

exceptions noted, its reasoning is persuasive, and I cannot be

certain, faced with an ambiguous statutory text, a thin

legislative history, and sparse case law, that the majority’s

conclusion is incorrect. But I am quite certain that the

question is a closer one than the majority opinion indicates. 

And as we appear to be the first federal circuit court to

address this precise question, I believe there is some value in

expressing these doubts publicly. I therefore concur with the

majority in full as to Parts I, II, and IV, and concur, dubitante,

as to Part III.