Opinion ID: 464880
Heading Depth: 3
Heading Rank: 3

Heading: Tribal Interests

Text: 22 The Tribes offer a number of compelling interests in favor of their position. The bingo games operated on the reservations are the Tribes' only source of income. The games are the major source of employment for the reservation Indians and the sole source of revenue for operating their tribal governments and for providing services to their members. 23 The State argues that the tribal interest is weak for two reasons: (1) they are marketing an exemption from state laws to non-Indians who go on the reservation; and (2) the tribal tradition does not encompass commercial gambling, particularly where predominantly non-Indian participants are involved. 24
25 In support of their contention that the Tribes are marketing an exemption from California law, the State cites Washington v. Confederated Tribes of the Colville Reservation, 447 U.S. 134, 100 S.Ct. 2069, 65 L.Ed.2d 10 (1980). 26 In Colville, the Indian tribes sought to bar the State of Washington from enforcing a cigarette excise tax and a general sales tax on cigarette sales by on-reservation tobacco outlets to non-Indian purchasers. The Supreme Court held that the imposition of these taxes on on-reservation purchases of cigarettes by non-Indians was valid. For the following reasons, we find that Colville does not support the State's contention. 27 First, the Supreme Court in Colville did not rule that a Tribe's marketing of a [tax] exemption enabled the state to prohibit the Tribe from engaging in the underlying activity, which is what the State is trying to accomplish in this case. Rather, the Court ruled that if all the Tribe is marketing to non-Indians is an exemption from state taxes which the state would otherwise use to provide off-reservation services to off-reservation residents, then the Tribe's legitimate interest in making those sales would not outweigh the state's legitimate interest in taxing those same transactions. In the current case, the tribal interest in providing revenue and jobs for its members outweighs the State's interest in protecting against the potential for intrusion of organized crime. 28 Second, in Colville, the Court recognized that the Tribe's interest in generating revenues for essential governmental programs is strongest when the revenues are derived from value generated on the reservation by activities involving the Tribes.... Colville, 447 U.S. at 156-57, 100 S.Ct. at 2082-83. See Mescalero Apache Tribe, 462 U.S. at 337, 103 S.Ct. at 2387-88. Even the State concedes that the revenues here are derived from value generated by on-reservation activities.... Appellant's Brief at 28, n. 11. Instead of merely importing products to resell in a manner which deprives the State of revenues which would be used to provide state services off-reservation, the Tribes in this case built and help operate gambling facilities, employ tribal members, regulate and conduct these activities wholly within their reservation, and utilize the funds to provide necessary governmental services for their members. We agree with both parties that the revenues here are derived from value generated on the reservation by activities involving the Tribes. We therefore find the Tribes' interest to be strong. 29
30 As we pointed out earlier, tribal tradition remains highly relevant in determining whether state laws apply on Indian reservations. The State contends that the Tribes involved in this case did not traditionally engage in tribally sponsored, high stakes commercial gambling operations catering primarily to non-Indian participants. Therefore, since no such tradition exists, we may accord less weight to the 'backdrop' of tribal sovereignty. Rice, 463 U.S. at 720, 103 S.Ct. at 3295. 31 We find it unnecessary to decide this issue because we believe that the State's focus is too narrow. The focus in determining whether a tribal tradition exists should instead be on whether the tribe is engaged in a traditional governmental function, not whether it historically engaged in a particular activity. The Tribes in this case are engaged in the traditional governmental function of raising revenue. They are thereby exercising their inherent sovereign governmental authority. One of our recent decisions supports this analysis. In Crow Tribe of Indians v. State of Montana, 650 F.2d 1104 (9th Cir.1981), modified at 665 F.2d 1390 (1982), we cited zoning and automobile registration as examples of activities which, though obviously not traditional tribal activities, were nonetheless among the traditional governmental functions currently exercised by Indian tribes. Id. at 1110. 32 Having determined that a tradition exists which recognizes a sovereign immunity in favor of the Indians, we are reluctant to infer that the State should exercise authority in this case. See Rice, 463 U.S. at 719, 103 S.Ct. at 3295. 33 In light of the foregoing discussion, we find that the federal and tribal interests at stake here outweigh the State's interest. Therefore, under the federal common law's particularized inquiry test, the State and County may not apply their gambling laws on the Indian reservations because application of these laws would interfere with reservation self-government. 34 We affirm the summary judgment and the permanent injunction restraining the County and the State from applying their gambling laws on the reservations. 35 AFFIRMED.