Opinion ID: 2621995
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Heading: The Tradition of Tribal Sovereign Immunity in Rice v. Rehner

Text: ถ 15 We begin with an overview of the notion of Indian tribal sovereignty and the doctrine of tribal sovereign immunity. Tribal sovereignty and tribal sovereign immunity are rooted in the founding of our nation when the government of the United States assumed a protectorate relationship with the Indians and the dependent Indian tribe or nation retained its original natural right of self-government over members of the tribe within Indian country by consent of the dominant sovereign nation of the United States. Worcester v. Georgia, 31 U.S. (6 Pet.) 515, 542, 8 L.Ed. 483 (1832). Early on, Congress set aside reservations for the dependent Indian tribes. [6] The reservation tribes were viewed as distinct political communities with the inherent right to self-governance as a quasi-sovereign independent of the several sovereign states and in need of protection from state interference. Worcester, 31 U.S. at 551. By the late 19th Century, Congress changed to an allotment policy to assimilate the Indians as citizens of the United States, County of Yakima v. Confederated Tribes and Bands of the Yakima Indian Nation, 502 U.S. 251, 254, 112 S.Ct. 683, 686, 116 L.Ed.2d 687 (1992), and then abandoned allotments, returning to a policy of tribal self-governance and retaining a policy of assimilation. Indian Reorganization Act, 25 U.S.C. งง 461-476; Mescalero Apache Tribe v. Jones, 411 U.S. 145, 148, 93 S.Ct. 1267, 1270, 36 L.Ed.2d 114 (1973). The 1934 Indian Reorganization Act authorized Indian tribes to organize. It was designed to encourage tribal enterprises to enter the commercial world on equal footing with other businesses. 411 U.S. at 157, 93 S.Ct. at 1275. Congress excluded Oklahoma Indians from the chartering provisions of the Indian Reorganization Act but granted them the rights and privileges allowed other recognized Indian tribes under the Act. [7] ถ 16 In view of the obligation of this Nation to protect the interests of the dependent Indian people, ambiguities in applicable treaties, agreements, or statutes are construed in favor of the Indian people. Choctaw Nation of Indians v. United States, 318 U.S. 423, 432, 63 S.Ct. 672, 678, 87 L.Ed. 877 (1943). In settling the tension between the right of the quasi-sovereign Indian tribes to govern their members in Indian country and the right of the sovereign states to govern all residents within their borders where Congress has not expressly authorized the state action, the tradition of tribal sovereignty is a backdrop for preemption analysis but not the determinative factor, McClanahan v. State Tax Comm'n of Arizona, 411 U.S. 164, 93 S.Ct. 1257, 36 L.Ed.2d 129 (1973), and the doctrine of tribal sovereign immunity tests the state action for interference with the right of the self-governance but is not an absolute rule. Williams v. Lee, 358 U.S. 217, 79 S.Ct. 269, 3 L.Ed.2d 251 (1959). In preemption analysis, the federal/tribal interests and the state interests are balanced within the specific context of the controversy to determine if federal law operates to preempt state law. White Mountain Apache Tribe v. Bracker, 448 U.S. 136, 100 S.Ct. 2578, 65 L.Ed.2d 665 (1980). The tribal interests are confined to the Indian tribe's internal affairs and tribal self-government consistent with the tribe's dependent status because an Indian tribe's retained inherent sovereign power is no greater than the tribe's dependent status and does not extend to activities involving non-members absent express congressional delegation of power. Montana v. United States, 450 U.S. 544, 101 S.Ct. 1245, 67 L.Ed.2d 493 (1981). ถ 17 With this historical perspective of the doctrine of tribal sovereign immunity, we turn to Rice v. Rehner, 463 U.S. 713, 103 S.Ct. 3291, 77 L.Ed.2d 961 (1983). Rehner was a tribal member and a federally-licensed Indian trader who operated a general store on the Pala Reservation in San Diego, California. The Pala Tribe had an ordinance permitting the sale of liquor on the reservation as authorized by 18 U.S.C. ง 1161. [8] Rehner asked California for an exemption from its license requirement to sell liquor for off-premises consumption. California denied the request and Rehner sought declaratory judgment in the federal district court. The district court decided that ง 1161 required Rehner to have the state license and dismissed Rehner's petition. ถ 18 In deciding whether sales of liquor inside the reservation were subject to California regulation under ง 1161, Rice v. Rehner recognized that federal statutes have been consistently construed to reserve the Indian tribe's right to self-government and also recognized the recent trend toward a preemption analysis to determine whether a state could regulate activity within an Indian reservation. With obedience to the Indian law jurisprudence from Worcester v. Georgia in 1832 to Montana v. United States in 1981, Rice v. Rehner approached the preemption analysis upon the following precepts: 1) the goal of preemption analysis is to determine the congressional plan; 2) in preemption analysis, the tradition of tribal sovereignty is a backdrop against which the federal statute must be read; 3) tribal sovereignty, as a backdrop, informs the preemption analysis but does not determine preemption; 4) in preemption analysis, the role of tribal sovereignty varies with the traditions that accommodate the interests of the tribe and the federal government on the one hand and the state on the other; 5) if tradition has recognized a tribal sovereign immunity in favor of the Indians, then state law will be preempted unless Congress expressly provides otherwise; and 6) if there is no tradition of tribal sovereign immunity in favor of the Indians, preemption analysis may accord less weight to the backdrop of tribal sovereignty. ถ 19 Rice v. Rehner found that tradition had not recognized an inherent sovereign right of Indians or Indian tribes to regulate liquor. Rather, the tradition, since early colonial times, had been a complete prohibition against liquor in Indian country which is still in place subject to suspension conditioned on compliance with state law and tribal ordinance. Rice v. Rehner recognized the state and federal concurrent jurisdiction over alcoholic beverages in Indian country and no tradition of tribal sovereignty with respect to alcoholic beverages: This historical tradition of concurrent state and federal jurisdiction over the use and distribution of alcoholic beverages in Indian country is justified by the relevant state interests involved .... The State has an unquestionable interest in the liquor traffic that occurs within its borders.... A state's regulatory interest will be particularly substantial if the State can point to off-reservation effects that necessitate State intervention. There can be no doubt that Congress has divested the Indians of any inherent power to regulate in this area. In the area of liquor regulation, we find no congressional enactments demonstrating a firm federal policy of promoting tribal self-sufficiency and economic development. With respect to the regulation of liquor transactions, as opposed to the state income taxation involved in McClanahan, Indians cannot be said to possess the usual accouterments of tribal self-government. The court below erred in thinking that there was some single notion of tribal sovereignty that served to direct any preemption analysis involving Indians. Because we find that there is no tradition of sovereign immunity that favors the Indians in this respect, and because we must consider that the activity in which Rehner seeks to engage potentially has a substantial impact beyond the reservation, we may accord little if any weight to any asserted interest in tribal sovereignty in this case. Rice v. Rehner, 463 U.S. at 723-725, 103 S.Ct. at 3298-3299(citations and footnotes omitted and bold added). ถ 20 Turning to the federal statute, 18 U.S.C. ง 1161, Rice v. Rehner reviewed the legislative history and found congressional intent 1) to remove the discriminatory federal prohibition against intoxicating liquor in Indian country, 2) to have state laws of their own force govern tribal liquor transactions, and 3) to require Indians to comply with state liquor laws in every regard. 463 U.S. at 726-727, 103 S.Ct. at 3299-3300. Rice v. Rehner mentioned that in official and unofficial reports to the House of Representatives, the Department of Interior stated that the federal prohibition would be lifted only if liquor `transactions are in conformity with the ordinances of the tribe concerned and are not contrary to State law.' 463 U.S. at 727, 103 S.Ct. at 3300. Congress, however, did not use the Department's language not contrary to state law, instead Congress used the language in conformity both with the laws of the State in which such act or transaction occurs and with an ordinance duly adopted by the tribe. Rice v. Rehner referred to a 1954 administrative opinion of the Solicitor of the Interior assuming that ง 1161 would result in state prosecutions and noted the Department of Interior changed its opinion in 1971. 463 U.S. at 730, n. 13, 103 S.Ct. at 3301, n. 13. The Rice v. Rehner dissent relied on the 1971 opinion that the intent of ง 1161 was merely to require the use of state liquor laws as the standard of measurement to define lawful and unlawful activity on the reservation. Rejecting the 1971 opinion, Rice v. Rehner said: It is clear then that Congress viewed ง 1161 as abolishing federal prohibition, and as legalizing Indian liquor transactions as long as those transactions conformed both with tribal ordinance and state law. It is also clear that Congress contemplated that its absolute but not exclusive power to regulate Indian liquor transactions would be delegated to the tribes themselves, and to the States, which historically shared concurrent jurisdiction with the federal government in this area. Early administrative practice and our prior decision in United States v. Mazurie, supra [419 U.S. 544, 95 S.Ct. 710, 42 L.Ed.2d 706 (1975) ], confirm this understanding of ง 1161. 463 U.S. at 727, 103 S.Ct. at 3300-3301. ถ 21 In light of the clear congressional intent, Rice v. Rehner refused to read ง 1161 in para materia with Public Law 280, 28 U.S.C. ง 1360(a). [9] Based on the language of the statute itself and its legislative history, Rice v. Rehner concluded that Congress authorized, rather than preempted, state regulation over Indian liquor transactions. We conclude that ง 1161 was intended to remove federal discrimination that resulted from the imposition of liquor prohibition on Native Americans. Congress was well aware that the Indians never enjoyed a tradition of tribal self-government insofar as liquor transactions were concerned. Congress was also aware that the states exercised concurrent authority insofar as prohibiting liquor transactions was concerned. By enacting ง 1161, Congress intended to delegate a portion of its authority to the tribes as well as to the States, so as to fill the void that would be created by the absence of the discriminatory federal prohibition. Congress did not intend to make tribal members super citizens who could trade in a traditionally regulated substance free from all but self-imposed regulations. See [ Rehner v. Rice ] 678 F.2d [1340] at 1352 [ (C.A.9 1982) ] (Goodwin, J., dissenting). Rather, we believe that in enacting ง 1161, Congress intended to recognize that Native Americans are not weak and defenseless, and are capable of making personal decisions about alcohol consumption without special assistance from the Federal Government. Application of the state licensing scheme does not impair a right granted or reserved by federal law. Kake Village, supra, 369 U.S., at 75, 82 S.Ct., at 571. On the contrary, such application of state law is specifically authorized by ... Congress ... and [does] not interfere with federal policies concerning the reservations. Warren Trading Post Co. v. Arizona Tax Commission, 380 U.S. 685, 687, n. 3, 85 S.Ct. 1242, 1243, n. 3, 14 L.Ed.2d 165 (1965). 463 U.S. at 733-734, 103 S.Ct. at 3303-3304(footnote omitted). ถ 22 We are confident that application of the doctrine of tribal sovereign immunity in this case would indeed make the Tribe a super citizen that can trade in heavily-regulated alcoholic beverages, free from all but self-imposed regulation. Although the specific concern in Rice v. Rehner was whether the reservation retail outlet had to have a state license to sell liquor, we think it is the authority to be followed in the instant matter. Rice v. Rehner very clearly ruled that Indians did not have the inherent attributes of sovereignty to regulate in the area of alcoholic beverages. It is the sovereignty that gives rise to the immunity from private suit in order to protect the dignity of the sovereign. [10] Rice v. Rehner concluded that the Indians there had no tribal immunity from state alcoholic beverage law. Accordingly, Rice v. Rehner supports the exercise of this state's adjudicatory power over this private suit.