Source: https://supreme.justia.com/cases/federal/us/425/463/case.html
Timestamp: 2016-05-27 02:23:45
Document Index: 70655424

Matched Legal Cases: ['§ 1341', '§ 1253', '§ 1341', '§ 1341', '§ 1362', '§ 1341', '§ 6', 'arts 425']

U.S. Supreme CourtMoe v. Salish & Kootenai Tribes, 425 U.S. 463 (1976)Moe v. Confederated Salish & Kootenai TribesNo. 74-1656Argued January 20, 1976Decided April 27, 1976*425 U.S. 463APPEAL FROM THE UNITED STATES DISTRICT COURT
We are called upon in these appeals to resolve several questions arising out of a conflict between the asserted taxing power of the State of Montana and the immunity claimed by the Confederated Salish and Kootenai Tribes (Tribe) and its members living on the tribal reservation. Convened as a three-judge court, [Footnote 1] the District Court for the District of Montana considered separate attacks on the State's cigarette sales and personal property taxes as applied to reservation Indians. After finding that the suits were not barred by the prohibition of 28 U.S.C. Page 425 U. S. 466 § 1341, [Footnote 2] the District Court entered final judgments which, with one exception, sustained the Tribe's challenges, and from which the State has appealed (No. 74-1656). The Tribe has cross-appealed from that part of the judgments upholding tax jurisdiction over on-reservation sales of cigarettes by members of the Tribe to non-Indians. We noted probable jurisdiction under 28 U.S.C. § 1253 and consolidated the appeal and cross-appeal. [Footnote 3] 423 U.S. 819 (1975). Concluding that the District Court had the power to grant injunctive relief in favor of the Tribe, and that it was correct on the merits, we affirm in both cases.
"The Flathead Reservation is a well developed Page 425 U. S. 467 agricultural area with farms, ranches and communities scattered throughout the inhabited portions of the Reservation. While some towns have predominantly Indian sectors, generally Indians and non-Indians live together in integrated communities. Banks, businesses and professions on the Reservation provide services to Indians and non-Indians alike."
Joseph Wheeler, a member of the Tribe, leased from it two tracts of trust land within the reservation whereon he operated retail "smoke shops." Deputy sheriffs arrested Wheeler and an Indian employee for failure to possess a cigarette retailer's license and for selling nontax-stamped cigarettes, both misdemeanors under Montana law. These individuals, joined by the Tribe and the tribal chairmen, then sued [Footnote 4] in the District Court for declaratory and injunctive relief against the State's cigarette tax and vendor-licensing statutes as applied to Page 425 U. S. 468 tribal members who sold cigarettes within the reservation. [Footnote 5] That court, by a divided vote, held that our decision in McClanahan v. Arizona State Tax Comm'n, 411 U. S. 164 (1973), barred Montana's efforts to impose its cigarette tax statutes on the Tribe's retail cigarette sales with one exception: it may require a precollection of the tax imposed by law upon the non-Indian purchaser of the cigarettes. [Footnote 6]
In a later action, the Tribe and four enrolled members, all residents of the reservation, challenged [Footnote 7] Montana's Page 425 U. S. 469 statutory scheme for assessment and collection of personal property taxes, in particular the imposition of such taxes on motor vehicles owned by tribal member residing on the reservation. [Footnote 8] The District Court, again by a divided vote, found its earlier decision interpreting McClanahan controlling in the Tribe's favor. While recognizing, as did the Tribe, that a fee required for registration and issuance of state license plates for a motor vehicle could be exacted from Indians residing on the reservation, the court held that the additional personal property tax which was likewise made a condition precedent for lawful registration of the vehicle could not be imposed on reservation Indians. [Footnote 9] Page 425 U. S. 470
"'the mere illegality or unconstitutionality of a state . . . tax is not, in itself, a ground for equitable relief in the courts of the United States. If the remedy at law is plain, adequate, and complete, the aggrieved party is left to that remedy in the state courts, from which the cause may be brought to this Court for review if any federal question be involved.' Matthews v. Rodgers, [284 U.S. 521, 284 U. S. 525-526 (1932)]."
Great Lakes Co. v. Huffman, 319 U. S. 293,2 319 U. S. 98 (1943). This broad jurisdictional barrier, however, has been held by this Court to be inapplicable to suits brought by the United States "to protect itself and its instrumentalities from unconstitutional state exactions." Department of Employment v. United States, 385 U. S. 355, 385 U. S. 358 (1966). [Footnote 10] Page 425 U. S. 471
in this kind of case. Mescalero, supra, at 411 U. S. 155. While the concept of a federal instrumentality may well have greater usefulness in determining the applicability of § 1341, Department of Employment v. United States, supra, than in providing the touchstone for deciding whether or not Indian tribes may be taxed, Mescalero, supra, we do not believe that the District Court's expanded Page 425 U. S. 472 version of this doctrine, quoted above, can, by itself, avoid the bar of § 1341.
"the means whereby the tribes are assured of the same judicial determination whether the action is brought in their behalf by the Government or by their own attorneys. [Footnote 12] "Page 425 U. S. 473
Here, the United States could have made the same attack on the State's assertion of taxing power as was in Page 425 U. S. 474 fact made by the Tribe. Heckman v. United States, supra. [Footnote 13] We think that the legislative history of § 1362, though by no means dispositive, suggests that, in certain respects, tribes suing under this section were to be accorded treatment similar to that of the United States had it sued on their behalf. Since the United States is not barred by § 1341 from seeking to enjoin the enforcement of a state tax law, Department of Employment v. Page 425 U. S. 475 United States, supra, we hold that the Tribe is not barred from doing so here. [Footnote 14]
"[I]n the special area of state taxation, absent cession of jurisdiction or other federal statutes permitting Page 425 U. S. 476 it, there has been no satisfactory authority for taxing Indian reservation lands or Indian income from activities carried on within the boundaries of the reservation, and McClanahan v. Arizona State Tax Comm'n, supra, lays to rest any doubt in this respect by holding that such taxation is not permissible absent congressional consent."
392 F.Supp. at 1315. In view of the District Court's findings, we agree that there is no basis for distinguishing McClanahan on this ground. Page 425 U. S. 477
The State relies on Goudy v. Meath, 203 U. S. 146 (1906), where the Court, applying the above section, rejected the claim of an Indian patentee thereunder that state taxing jurisdiction was not among the "laws" to which he and his land had been made subject. Building on Goudy and the fact that the General Allotment Act has never been explicitly "repealed," the State claims that Congress has never intended to withdraw Montana's taxing jurisdiction, and that such power continues to the present. Page 425 U. S. 478
"Its policy was to continue the reservation system and the trust status of Indian lands, but to allot tracts to individual Indians for agriculture and grazing. When all the lands had been allotted and the trust expired, the reservation could be abolished. Unallotted lands were made available to non-Indians Page 425 U. S. 479 with the purpose, in part, of promoting interaction between the races and of encouraging Indians to adopt white ways. See § 6 of the General Allotment Act, 24 Stat. 390. . . ."
We need not dwell at length on this constitutional argument, for, assuming that the State has standing to raise it on behalf of its non-Indian citizens and taxpayers, Page 425 U. S. 480 we think it is foreclosed by our recent decision in Morton v. Mancari, 417 U. S. 535 (1974). In reviewing the variety of statutes and decisions according special treatment to Indian tribes and reservations, we stated, id. at 417 U. S. 552-555:
"* * * *" "On numerous occasions, this Court specifically has upheld legislation that singles out Indians for particular and special treatment."
For these reasons, the personal property tax on personal property located within the reservation; the vendor license fee sought to be applied to a reservation Indian conducting a cigarette business for the Tribe on reservation land; and the cigarette sales tax, as applied to on-reservation sales by Indians to Indians, [Footnote 16] conflict with Page 425 U. S. 481 the congressional statutes which provide the basis for decision with respect to such impositions. McClanahan, supra; Mescalero Apache Tribe v. Jones, 411 U. S. 145 (1973). [Footnote 17]
The Tribe would carry these cases significantly further than we have done, however, and urges that the State cannot impose its cigarette tax on sales by Indians to non-Indians because, "[i]n simple terms, [the Indian retailer] has been taxed, and . . . has suffered a measurable out-of-pocket loss." But this claim ignores the District Court's finding that "it is the non-Indian consumer or user who saves the tax and reaps the benefit of the tax Page 425 U. S. 482 exemption." 392 F.Supp. at 1308. That finding necessarily follows from the Montana statute, which provides that the cigarette tax "shall be conclusively presumed to be [a] direct [tax] on the retail consumer precollected for the purpose of convenience and facility only." [Footnote 18] Since nonpayment of the tax is a misdemeanor as to the retail purchaser, [Footnote 19] the competitive advantage which the Indian seller doing business on tribal land enjoys over all other cigarette retailers, within and without the reservation, is dependent on the extent to which the non-Indian purchaser is willing to flout his legal obligation to pay the tax. Without the simple expedient of having the retailer collect the sales tax from non-Indian purchasers, it is clear that wholesale violations of the law by the latter class will go virtually unchecked.
id. at 380 U. S. 691, does not apply to the instant case. Page 425 U. S. 483
Named as defendants were various county officials, the State's Department of Revenue and its director, and the State itself. In contrast to the cigarette tax case, however, the plaintiffs, suing as representatives of all other members of the Tribe residing on the reservation, demanded a refund of personal property taxes paid to the date of the District Court's final judgment. In the opinion accompanying the District Court's judgment entering the requested declaratory and injunctive relief in favor of the Tribe and the individual Indians, it stated that "any further questions" were reserved pending this Court's final determination of the constitutionality of the personal property tax statutes. Our conclusions in Parts 425 U. S. S. 475|>III, infra that the District Court, with subject matter jurisdiction over the Tribe's claims, properly entered injunctive relief in its favor implicitly embrace a finding that the Tribe, qua Tribe, has a discrete claim of injury with respect to these forms of state taxation so as to confer standing upon it apart from the monetary injury asserted by the individual Indian plaintiffs. Since the substantive interest which Congress has sought to protect is tribal self-government, such a conclusion is quite consistent with other doctrines of standing. See, e.g., Warth v. Seldin, 422 U. S. 490, 422 U. S. 498-499 (1975). Whether, in like fashion, standing rests in the Tribe to litigate the pending individual refund claims is a question properly left for the District Court as and when these claims are pursued, and we express no opinion thereon. We note, however, that, if only the individual Indians have standing to sue for refunds, their claims must be properly grounded jurisdictionally. See, e.g., Zahn v. International Paper Co., 414 U. S. 291, 414 U. S. 294 (1973).