Opinion ID: 201580
Heading Depth: 3
Heading Rank: 3

Heading: Unanswered Questions

Text: The State posits that it has raised two independently sufficient grounds on which we might affirm the district court's judgment, even if the legal incidence of the tax is found to fall on the Tribe. Since we find that the legal incidence of the tax does not fall on the Narragansett Tribe, we find it unnecessary and inappropriate to decide these questions. The grounds put forth by the State are (1) that the settlement lands are not Indian country,3 and (2) that direct taxation of the Tribe by the State is allowed pursuant to both section 1708 of the Settlement Act, 25 3 Indian country is usually the benchmark for approaching the allocation of federal, tribal, and state authority with respect to Indians and Indian lands. Narragansett Indian Tribe of R.I. v. Narragansett Elec. Co., 89 F.3d 908, 915 (1996) (quoting Indian Country, U.S.A. v. Oklahoma Tax Comm'n, 829 F.2d 967, 973 (10th Cir. 1987)). Indian country is defined by Congress as including:
reservation under the jurisdiction of the United States Government, . . . (b) all dependent Indian communities within the borders of the United States whether within the original or subsequently acquired territory thereof, and whether within or without the limits of a state, and (c) all Indian allotments . . . . 18 U.S.C. § 1151; see Narragansett Elec. Co., 89 F.3d at 915. The Supreme Court has repeatedly applied this definition to issues of both criminal and civil jurisdiction. Id. at 915; (quoting California v. Cabazon Band of Mission Indians, 480 U.S. 202, 208 (1987)). -19- U.S.C. § 1708(a), and the Tribe's consent,4 implicit in its agreement to subject the settlement lands to the full force and effect of all laws of the State of Rhode Island, in the Joint Memorandum of Understanding between the Narragansett Tribe and the State of Rhode Island, H.R. Rep. No. 95-1453, at 26, reprinted in 1978 U.S.C.C.A.N. 1948, 1964. The Narragansetts, on the other hand, want us to declare that the settlement lands are Indian country and that the State does not have authority to tax the Tribe directly because Congress did not expressly and unequivocally consent to state taxation of the Narragansett Tribe. McClanahan, 411 U.S. at 177-78 (laying to rest any doubt that taxation of Indian reservation lands or Indian income from activities carried on within the boundaries of reservation lands is not permissible absent unmistakably clear congressional consent); see also Montana v. Blackfeet Tribe, 471 U.S. 479, 765 (1985); Brian v. Itasca County, 426 U.S. 373, 376 (1976). 4 Congress has granted the consent of the United States to States wishing to assume criminal and civil jurisdiction over reservation Indians, 25 U.S.C. § 1322(a), and 25 U.S.C. § 1324 confers upon the States the right to disregard enabling acts which limit their authority over such Indians. However, the Act expressly provides that the State must act 'with the consent of the tribe occupying the particular Indian country,' 25 U.S.C. § 1322(a), and must 'appropriately (amend its) constitution or statutes.' 25 U.S.C. § 1324. McClanahan v. State Tax Comm'n of Arizona, 411 U.S. 164, 177-78 (1973). -20- We find it unnecessary and inappropriate to decide these questions today. Because we affirm the district court's holding that the legal incidence of Rhode Island's cigarette tax falls on the consumer and not the tribal distributor, it is unnecessary for us to consider whether the tax would be valid if it were a direct tax on the Tribe. D. Sovereign immunity and the State's enforcement of its laws on the Tribe's settlement lands The Narragansetts claim that the State of Rhode Island exceeded its authority in enforcing its cigarette laws against the government of the Narragansett Indian Tribe and that the State thereby violated the Tribe's sovereign immunity. The State argues, conversely, that since the State's civil and criminal laws and jurisdiction apply to the settlement lands pursuant to 25 U.S.C. § 1708, the State has concomitant ability to enforce its laws there, including those governing the sale of cigarettes. The State also argues that the Tribe's sovereign immunity was abrogated by section 1708, and therefore tribal sovereign immunity does not bar the State's enforcement of its laws on the settlement lands. The Tribe asks us to consider six distinct questions regarding the enforcement of Rhode Island's cigarette laws on the settlement lands, including (1) whether the State may invoke its jurisdiction over the settlement lands to enforce its cigarette tax on the government of the Narragansett Indian Tribe (a Land/Tribe -21- distinction); (2) whether the State may issue and serve a search warrant for property of the tribal government; (3) whether the State may enter tribal lands to serve a warrant; (4) whether the State may confiscate Tribal government property while on the settlement lands; (5) whether the State can require the Tribe to purchase a license; and (6) whether the State was bound to use less intrusive means in order to enforce the cigarette tax. We have determined that, since the legal incidence of Rhode Island's cigarette tax falls on the consumer, rather than the tribal distributor, the Narragansetts are obligated to comply with the State's cigarette tax laws as they pertain to cigarettes sold to non-Indian consumers. Therefore, by selling unstamped cigarettes to non-Indian consumers, the Smoke Shop operators violated Rhode Island tax law, which is a criminal offense. This brings us to the questions regarding what measures the State may take to enforce its cigarette tax laws. Drawing the line between the sovereign rights of the Narragansett Tribe and the State of Rhode Island is complicated by the Rhode Island Indian Claims Settlement Act, which provides for the continued applicability of Rhode Island's civil and criminal laws and jurisdiction over the settlement lands. See 25 U.S.C. § 1708(a). This is an ongoing and overarching question which has vexed the State and Tribe over the years as various issues have arisen. As we have stated before, all of the relevant questions -22- cannot be answered by an all-encompassing solution. State of Rhode Island v. Narragansett Indian Tribe, 19 F.3d 685, 695 (1994). 1. Whether 25 U.S.C. § 1708(a) abrogates the Tribe's Sovereign Immunity on the Settlement Lands Indian tribes have long been recognized as possessing the common-law immunity from suit traditionally enjoyed by sovereign powers. Santa Clara Pueblo v. Martínez, 436 U.S. 49, 58 (1978) (citations omitted); see also Oklahoma Tax Comm'n v. Citizen Band Potawatomi Indian Tribe of Oklahoma, 498 U.S. 505, 508 (1991); Bottomly v. Passamaquoddy Tribe, 599 F.2d 1061, 1066 (1st Cir. 1979). This aspect of tribal sovereignty is subject to the superior and plenary control of Congress. Santa Clara Pueblo, 436 U.S. at 58. Absent a clear, express waiver of sovereign immunity by Congress or the Tribe, suits against Indian tribes are generally barred. Kiowa, 523 U.S. at 755. The Narragansett Tribe argues that its sovereign immunity is a complete defense to the State's enforcement of its cigarette laws against the Tribe. The State responds that Congress, by granting jurisdiction to the state in 25 U.S.C. § 1708, abrogated the Tribe's sovereign immunity on the settlement lands. In Narragansett Indian Tribe, 19 F.3d at 701, we stated that the grant of jurisdictional power to the state in the Settlement Act is valid and rather broad . . . . We agree with the State that this grant of jurisdictional power, in addition to the applicability of -23- the State's civil and criminal laws, provides the State with the right, and to some extent the means, to enforce these laws on the settlement lands. However, this does not mean that we agree with the State that Section 1708(a) abrogates the Tribe's sovereign immunity altogether. On the contrary, we have recognized and enforced the Tribe's sovereign immunity in the past. See Maynard v. Narragansett Indian Tribe, 984 F.2d 14, 15-16 (1st Cir. 1993). The State suggests that Maynard stands only for the proposition that Congress did not abrogate sovereign immunity for tribal conduct outside the settlement lands. We disagree. There is nothing in our analysis of the Settlement Act in that case which suggests that we have drawn a distinction based on where tribal activities occur. The fact of the matter is that Section 1708 does not expressly address the issue of sovereign immunity, and it would be inappropriate for us to infer that the congressional grant of jurisdiction to the State acts as a wholesale abrogation of the Tribe's sovereign immunity. It is well settled that statutes are to be construed liberally in favor of the Indians with ambiguous provisions interpreted to their benefit. Chickasaw Nation v. United States, 534 U.S. 84, 93-94 (2001). In fact, the language of Section 1708 does not purport to waive any of the Tribe's rights. [T]he mere fact that the Settlement Act cedes power to the state does not necessarily mean . . . that the Tribe lacks similar power and, -24- thus, lacks 'jurisdiction' over the settlement lands. Although the grant of jurisdictional power to the state in the Settlement Act is valid and rather broad, . . . we do not believe that it is exclusive. To the contrary, we rule that the Tribe retains concurrent jurisdiction over the settlement lands . . . . Narragansett Indian Tribe, 19 F.3d at 701. The Tribe, therefore, retains its sovereign immunity despite the grant of jurisdiction to the State in Section 1708(a). The Tribe's immunity does not, however, provide a complete defense to the enforcement of State laws. There remains a question of the extent to which the State may encroach upon the Tribe's settlement lands to enforce its criminal laws. Neither this Court, nor the Supreme Court, has issued definitive guidance on this question. 2. Whether the State may invoke its jurisdiction over the settlement lands to enforce its cigarette tax The district court considered the holdings of Nevada v. Hicks, 533 U.S. 353 (2001), and Colville in conjunction with the conferral of criminal and civil (which includes regulatory) jurisdiction contained in section 1708, and found it to be beyond doubt that criminal law enforcement, including the seizure of contraband, on the Settlement Lands is permissible. Narragansett Indian Tribe, 296 F. Supp. 2d at 171. In Hicks and Colville, the Supreme Court discusses some allowable enforcement by a state -25- concerning activities by an Indian tribe which has sovereignty and does not necessarily share jurisdiction over its tribal lands with the State. The Hicks Court recognized that the principle that Indians have the right to make their own laws and be governed by them requires 'an accommodation between the interests of the Tribes and the Federal Government, on the one hand, and those of the State, on the other.' Hicks, 533 U.S. at 362 (citing Colville, 447 U.S. at 156). The Court offered the following guidance: When 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. When, however, state interests outside the reservation are implicated, States may regulate the activities even of tribe members on tribal land, as exemplified by our decision in [Colville]. . . . It is also well established in our precedent that States have criminal jurisdiction over reservation Indians for crimes committed . . . off the reservation. While it is not entirely clear from our precedent whether the last mentioned authority entails the corollary right to enter a reservation (including Indian-fee lands) for enforcement purposes, several of our opinions point in that direction. In [Colville], we explicitly reserved the question whether state officials could seize cigarettes held for sale to nonmembers in order to recover the taxes due. Hicks, 533 U.S. at 362-63 (2001) (citations omitted). Taking the Supreme Court's discussion of the enforcement issue in Hicks and Colville, together with Congress' grant of State jurisdiction over -26- the settlement lands, the district court concluded that Rhode Island may enforce its criminal laws on the settlement lands, including the seizure of contraband. The Narragansett Tribe argues that the district court came to the wrong conclusion for several reasons. First, the Tribe asserts that its sovereign immunity is a complete defense to enforcement of the State's laws on the settlement lands. The Tribe relies heavily on a Ninth Circuit decision, Bishop Paiute Tribe v. County of Inyo, for the argument that even where Congress has expressly authorized a state to enforce its criminal laws, a tribe's sovereign immunity bars service of a search warrant against the tribe itself. 291 F.3d 549, 567 n.6 (9th Cir. 2002) ([T]he search warrant was executed against the tribes in order to obtain information as part of a criminal investigation against individual Indians . . . . [T]he officers had authority to enforce criminal law against individual Indians under Public Law 280, but did not have authority to enforce those criminal laws against tribes as sovereign entities.). However, this decision is not valid precedent, as the Supreme Court vacated and remanded the decision, stating: The Tribe has not explained, and the trial and appellate courts have not clearly decided, what prescription of federal common law, if any, enables the Tribe to maintain an action for declaratory relief establishing its sovereign right to be free from state criminal processes. This case is therefore remanded -27- for focused consideration and resolution of that jurisdictional question. Inyo County v. Paiute-Shoshone Indians, 538 U.S. 701, 702 (2003). Second, the Narragansetts argue that we should not rest our decision on Colville, because the Supreme Court did not decide the question of state encroachment onto tribal lands to seize cigarettes in that case. The Court refused to express an opinion on the question of whether the state may enter onto a reservation and seize stocks of cigarettes which are intended for sale to nonIndian purchasers. Colville, 447 U.S. at 162. The Court did, however, determine that the State of Washington's interest in enforcing its valid taxes was sufficient to justify seizures of shipments of unstamped cigarettes as contraband while they were in transit, traveling to the reservations. Id. at 161. By seizing cigarettes en route to the reservation, the State polices against wholesale evasion of its own valid taxes without unnecessarily intruding on core tribal interests. Id. at 162. Unlike the State of Washington in Colville, Congress provided Rhode Island with civil and criminal jurisdiction on the Narragansetts' settlement lands. 25 U.S.C. § 1708(a). In light of this authority and the precedent set in Colville, we find that the State of Rhode Island may have the power to enter onto the settlement lands and seize unstamped cigarettes as contraband, from -28- the Indian distributor, provided that the action does not violate the Tribe's sovereign immunity. 3. The Land/Tribe Distinction The Tribe contends that a distinction should be made between the jurisdiction the State was given over the settlement lands and any power the State might have over the Tribe itself. The Tribe argues that the grant of jurisdiction that Congress gave to the State of Rhode Island merely subjected the settlement lands . . . to the civil and criminal laws and jurisdiction of the State, 25 U.S.C. § 1708(a), not the Narragansett Tribal government. The Tribe asserts that Congress intentionally limited this jurisdiction to the settlement lands, and that it knew how to write the Act to cover the Tribe as well if it had so intended. See, e.g., Maine Settlement Act, 25 U.S.C. § 1725 (expressly providing the State with jurisdiction over all Indians, Indian nations, or tribes or bands of Indians in the State of Maine . . . and any lands or other natural resources owned by any such Indian, Indian Nation, tribe or band of Indians, and any lands held in trust by the United States for any such Indian). In ascertaining the intent of Congress in statutes regulating Indian tribes, we must read the statutes against a backdrop of Indian sovereignty. Colville, 447 U.S. at 178 (citing McClanahan, 411 U.S. at 172). [T]he [Supreme] Court has held that retained sovereignty includes the power of Indians to make and -29- enforce their own substantive law in internal matters, including matters such as membership rules, inheritance rules, and the regulation of domestic relations. Narragansett Indian Tribe, 19 F.3d at 701 (citing Santa Clara Pueblo, 436 U.S. at 56). Congress did not expressly give the State jurisdiction over the Narragansett Tribe in Section 1708. While we have said that the grant of jurisdictional power to the State is broad, we have also found that the Tribe retains concurrent jurisdiction over the settlement lands, Narragansett Indian Tribe, 19 F.3d at 701, and that any effort by the state to exercise [its] authority is hedged in by . . . the Tribe's retained rights of sovereignty . . . Id. at 705. Therefore, as the district court stated, when the Tribe acts 'qua Tribe,' that is, as the political entity responsible for governing the Narragansetts, it is not subject to the State's civil and criminal laws and jurisdiction. The Tribe asserts that the opening and operation of the Smoke Shop was a tribal government activity. The Narragansetts' Smoke Shop was opened pursuant to a resolution passed by the Narragansett Tribal Council with the stated purpose of providing economic development for the Tribal Nation. The Tribe, therefore, asserts that sovereign immunity precludes the State of Rhode Island from entering the settlement lands, serving a warrant on the tribal activity, and confiscating tribal government property as contraband. -30- While retained tribal sovereignty has never been precisely defined, the Supreme Court has offered the following description: Indian tribes are distinct, independent political communities, retaining their original natural rights in matters of local self-government. Worcester v. Georgia, 6 Pet. 515, 559, 8 L.Ed. 483 (1832) . . . Although no longer possessed of the full attributes of sovereignty, they remain a separate people, with the power of regulating their internal and social relations. United States v. Kagama, 118 U.S. 375, 381-382, 6 S.Ct. 1109, 1112-1113, 30 L.Ed. 228 (1886). See United States v. Wheeler, 435 U.S. 313, 98 S.Ct. 1079, 55 L.Ed.2d 303 (1978). They have power to make their own substantive law in internal matters, see Roff v. Burney, 168 U.S. 218, 18 S.Ct. 60, 42 L.Ed. 442 (1897) (membership); Jones v. Meehan, 175 U.S. 1, 29, 20 S.Ct. 1, 12, 44 L.Ed. 49 (1899) (inheritance rules); United States v. Quiver, 241 U.S. 602, 36 S.Ct. 699, 60 L.Ed. 1176 (1916) (domestic relations), and to enforce that law in their own forums, see, e.g., Williams v. Lee, 358 U.S. 217, 79 S.Ct. 269, 3 L.Ed.2d 251 (1959). Santa Clara Pueblo, 436 U.S. at 55-56. Precedent dictates that the determination of whether the Tribe's retained rights of sovereignty or the State's residual authority takes precedence should involve an interest balancing test that [t]est[s] the sturdiness of the barriers each presents and makes a particularized inquiry into the nature of the state, federal, and tribal interests at stake. Narragansett Indian Tribe, 19 F.3d at 705 (quoting White Mountain Apache Tribe v. -31- Bracker, 448 U.S. 136, 145 (1980)).5 In this case, we must balance the State's interest in enforcing its cigarette laws with the Tribe's sovereignty interests and related interests in tribal economic development and self-governance. As we stated previously, the precedent set in Moe and other cigarette tax cases involving Indian tribes is that Indian retailers on an Indian reservation may be required to collect the state cigarette taxes applicable to sales to non-Indians because the minimal burden imposed by this requirement is justified by the State's interest in assuring the payment of these lawful taxes. The district court applied the test this Court used in Akins v. Penobscot Nation, 130 F.3d 482 (1st Cir. 1997), to determine whether the Tribe's operation of the Smoke Shop should be included in the Tribe's retained right of sovereignty. In so doing, the district court tightly confined the meaning of sovereign immunity to apply only when the Tribe acts in matters of local governance. Narragansett Indian Tribe, 296 F. Supp. 2d at 175-77. We find it inappropriate to apply the Akins test in this instance. 5 We recognize that the Supreme Court has recently granted certiorari for a question regarding whether the Court should abandon the White Mountain Apache interest-balancing test in favor of a preemption analysis based on the principle that Indian immunities are dependent upon congressional intent. Prairie Band Potawatomi Nation v. Richards, 379 F.3d 979 (10th Cir. 2004), cert. granted, 73 U.S.L.W. 3513 (U.S. Feb. 28, 2005) (No. 04-631). -32- In Akins, we established a multi-factor test for determining whether a policy or activity is, or is not, an internal tribal matter, as that term was used in the Maine state legislation implementing the federal Maine Indian Claims Settlement Act of 1980, 25 U.S.C. §§ 1725-1735 (Maine Settlement Act). The Maine Implementing Act makes the Penobscot Nation subject to all the duties, obligations, liabilities and limitations of a municipality . . . provided, however, that internal tribal matters . . . shall not be subject to regulation by the State. Me. Rev. Stat. Ann. tit. 30, § 6206(1) (emphasis added). While Rhode Island and Maine are similar to the extent that each state has reached a settlement with its Indian tribes which has been enacted by Congress, the provisions of the Maine Settlement Act and Implementing Act are very different from the Rhode Island Settlement Act, which did not limit the jurisdiction of the Narragansett Tribe, but rather provided the State with concurrent jurisdiction. In Akins, we repeatedly warned that our analysis was unique to Maine because of the Maine Settlement Act and the State's Implementing Act. 130 F.3d 482, 484 (The structure of analysis differs here from that which would be used in claims against the vast majority of other Indian tribes in the country.). We will not require the Narragansett Tribe to meet the internal tribal matter exception provided in the Maine -33- Implementing Act when Congress did not place a similar limitation on the Narragansetts. This is not to say that many of the Akins factors are not generally applicable. Nor do we disagree with the district court's conclusion that the Tribe's retained right of sovereignty will not shield the Tribe's unlawful operation of a Smoke Shop that offers non-Indian consumers a means to bypass the State's cigarette tax which would not otherwise be available to them off of the settlement lands. 4. The State's enforcement of its laws against the Narragansett Tribe The next question concerns the extent to which the State may enforce its cigarette laws directly against the Narragansett Tribal government. We find that it is worthwhile to consider the fact that the Narragansett Tribe's sovereign immunity has not been abrogated and that there exist means by which the State could have enforced its cigarette tax laws which would have been more respectful of the Tribe's sovereignty. The doctrine of tribal immunity is settled law today. The Supreme Court has refused to abandon or narrow this doctrine despite arguments that tribal businesses have become far removed from tribal self-governance and internal affairs. See Kiowa, 523 U.S. at 757. The Court stated that it retained the doctrine . . . -34- on the theory that Congress had failed to abrogate it in order to promote economic development and tribal self-sufficiency. Id. For example, in Potawatomi, the Supreme Court reaffirmed that while Oklahoma may tax cigarette sales by a Tribe's store to nonmembers, the Tribe enjoys immunity from a suit to collect unpaid taxes. Kiowa, 523 U.S. at 755 (citing Potawatomi, 498 U.S. at 510). There is a difference between the right to demand compliance with state laws and the means available to enforce them. Id. (citing Potawatomi, 498 U.S. at 514 (There is no doubt that sovereign immunity bars the State from pursuing the most efficient remedy, but we are not persuaded that it lacks any adequate alternatives.)). Some of the alternatives referenced in Potawatomi include holding individual agents or officers of the tribe liable for damages in actions brought by the State, see Ex parte Young, 209 U.S. 123 (1908), collecting the sales tax from cigarette wholesalers, either by seizing unstamped cigarettes off the reservation, Colville, 447 U.S. at 161-162, or assessing wholesalers who supplied unstamped cigarettes to the tribal stores, City Vending of Muskogee, Inc. v. Oklahoma Tax Comm'n, 898 F.2d 122 (10th Cir. 1990). Another option is that the State might enter into an agreement with the Tribe to adopt a mutually satisfactory regime for the collection of its cigarette tax. Today we have held that the State's cigarette tax laws are applicable to sales to non-Indian customers on the settlement -35- lands. The State of Rhode Island has numerous alternatives that it may use to enforce its cigarette tax on the settlement lands without violating the Tribe's sovereign immunity. The State's hands will not be completely tied while the Tribe continues to operate its Smoke Shop in violation of the State's cigarette laws. Although the operation of the Smoke Shop without complying with Rhode Island's cigarette tax laws is certainly not a sovereign right retained by the Narragansett Tribe, the Tribe does have a right of sovereign immunity that should be respected the State. For these reasons, we hold that the State violated the Tribe's sovereign rights when it enforced the criminal provisions of its cigarette tax laws by executing a search warrant against the Tribal government's Smoke Shop, forcibly entering the Shop and seizing the Tribe's stock of unstamped cigarettes, and arresting tribal officials who were acting in their official capacity.