Court Opinion

ID: 9722995
Source: CourtListenerOpinion
Date Created: 2023-08-26 09:59:40.113509+00
Date Added: 2024-06-11T18:24:43.647713
License: Public Domain

KILKENNY, Circuit Judge,
concurring and dissenting:
I commend Judge East on his excellent analysis of the problems before us and only regret that I am unable to concur fully. I dissent only in his conclusions that the tribal cigarette ordinances preempted the field and that the state of Washington had no authority to collect its cigarette tax, and the accompanying sales tax on cigarette sales, even as to non-Indian purchasers.
While Judge East is convinced that the cases of Fisher v. District Court, 424 U.S. 382, 96 S.Ct. 943, 47 L.Ed.2d 106 (1976), and Williams v. Lee, 358 U.S. 217, 79 S.Ct. 269, 3 L.Ed.2d 251 (1959), are controlling and dis-positive of this issue, I am just as convinced that these cases are distinguishable and that Moe v. Confederated Salish & Kootenai Tribes of Flathead Reservation, 425 U.S. 463, 96 S.Ct. 1634, 48 L.Ed.2d 96 (1976), and Fort Mojave Tribe v. San Bernardino County, 543 F.2d 1253 (CA 9 1976), cert. denied 430 U.S. 983, 97 S.Ct. 1678, 52 L.Ed.2d 377 (1977), are controlling and that the cigarette and sales taxes on purchases by non-Indians should be upheld.
Fisher involved a dispute between two Indians on whether the state of Montana or the Indian Tribal Court had exclusive jurisdiction of an adoption proceeding. There, the Court emphasized that the dispute arose on a reservation, entirely among Indians, and went on to say that to allow any court other than an Indian court jurisdiction would cause a corresponding decline “. . . in the authority of the Tribal Court.” Here, the issue arises on Indian land, but non-Indians, as well as Indians are involved. The tax here will not be levied against Indians. In Fisher, the Court relied heavily on an agreement between the Indian tribe and the United States and the adoption by the tribe of a Constitution and By-Laws pursuant to the Indian Reorganization Act, 48 Stat. 987, a statute specifically intended to encourage Indian tribes to revitalize their self-government. Acting pursuant to this Constitution and By-Laws, the Northern Cheyenne Tribal Council established a Tribal Court and granted it jurisdiction over adoptions “among members of the Northern Cheyenne Tribe.” There the Court held that the state court jurisdiction plainly would interfere with the powers of the self-government conferred upon the Northern Cheyenne Tribe and encouraged by federal legislation. Moreover, it would subject a dispute arising on the reservation among reservation Indians to a forum other than their own. The Court went on to say that no federal statute sanctioned this type of interference with tribal self-government. From there the Court concluded that since the adoption proceeding was appropriately characterized as litigation arising on the Indian reservation, the jurisdiction in the Tribal Court was exclusive. There is no similarity between the facts in Fisher and those on the record before us and nothing that is said by the Fisher Court is in any way relevant to our record.
In Williams, the respondent Lee, a non-Indian, operated a general store on the Navajo Reservation in Arizona under a license required by federal statute. He instituted an action in the superior court of Arizona against Williams, a Navajo Indian and his wife, who lived on the reservation, to collect for goods sold to them on credit. The Arizona trial court granted judgment in favor of Lee. The Arizona Supreme Court affirmed and the Supreme Court accepted certiorari. The Supreme Court placed considerable emphasis on Arizona’s refusal to accept jurisdiction over Indians pursuant to a congressional enabling act. Obviously, the Court felt that because Arizona had chosen not to accept that responsibility it would be anomalous to allow it to assert jurisdiction over a subject matter on which the Tribal Courts would have full power to act. Here, the state of Washington has completely assumed the congressionally authorized jurisdiction over Indians.
*1375Furthermore, the Williams Court, like Fisher, based its preemption analysis on the strong federal policy of the Indian Reorganization Act to encourage revitalization of tribal self-government. Since the majority has rejected any claim that the tax is prohibited by the Indian Reorganization Act, its reliance on Williams and Fisher is further weakened. Additionally, the Fort Mojave opinion lends support to the concept that matters of Tribal Court jurisdiction merit special preemption consideration. In distinguishing the Williams decision on this jurisdictional rationale, this court wrote:
“The interference with Indian self-government in the instant case is much less serious. No Indian or Indian land is being subjected to direct state court process.” Id. at 1258. [Emphasis supplied].
Clearly, both Fisher and Williams go to jurisdictional issues of state v. Indian courts. Here, there is no such dispute. Rather, the only issue here is the validity of the cigarette and sales taxes as applied to non-Indian purchasers. ' Consequently, Fisher and Williams cannot be deemed controlling.
It is my considered judgment that Moe v. Confederated Salish & Kootenai Tribes, supra, is controlling on our facts. To me, Moe settles the question of when and under what circumstances the cigarette tax may be collected on an Indian reservation. Moe involved a challenge by the Indian tribe and some of its members to Montana’s cigarette sales taxes and personal property taxes on motor vehicles as applied to reservation Indians and also to the state’s vendor licensing statute as applied to tribal members who sell cigarettes at smoke shops on the reservation. Relying upon McClanahan v. Arizona State Tax Comm’n., 411 U.S. 164, 93 S.Ct. 1257, 36 L.Ed.2d 129 (1973), and Mescalero Apache Tribe v. Jones, 411 U.S. 145, 93 S.Ct. 1267, 36 L.Ed.2d 114 (1973), the Supreme Court in Moe held that the vendor license fee tax on personal prpperty located within the reservation, as applied to a reservation Indian conducting a cigarette business for the tribe on reservation land and the cigarette tax as applied to on-reservation sales by Indians to Indians, would conflict with applicable federal statutes. In so holding, the Supreme Court likened the rights of the tribal members to those of the tribe itself. The Court then went on to hold that the tax immunity for reservation Indians did not constitute invidious racial discrimination against non-Indians contrary to the equal protection clause of the Fifth Amendment. However, the Court limited its decision by requiring the cigarette taxes to be levied on cigarettes sold to non-Indians by on-reservation smoke shops. Moreover, the Moe Court held that the Indian proprietor could be obligated to add the tax to the cigarette sales price and thereby aid the state’s tax collection and enforcement. In so holding, the Court emphasized the minimal burden in tax collecting, and that in its absence non-Indians purchasing from the tribal seller would escape payment of a lawful tax. Moe rejected the contention that the tax frustrated tribal self-government or conflicted with federal statutes dealing with reservation Indian affairs.
Judge East attempts to distinguish Moe from the case before us by arguing that in Moe there was no tribal management, financing, or regulation. A careful consideration of the extent of tribal involvement both here and in Moe demonstrates the cases’ overall similarity. The majority, in my opinion, has extended tribal preemption to unprecedented heights.
The district court opinion in Moe fully described the extent of tribal involvement in the regulation of cigarettes.
“The land is leased from the Tribes upon the Tribal Council’s approval of the lessee’s plan to erect a smoke shop. The Council controls the purchase of cigarettes for resale by Tribal members and charges an administrative fee in connection therewith.” Confederated Salish & Kootenai Tribes of the Flathead Reservation, Montana v. Moe, 392 F.Supp. 1297, 1313 (D.Mont.1975).
This is to be likened to the majority’s recitation of the Confederated Tribes’ regulations. It quickly becomes apparent that the only meaningful difference between the ex*1376tent of tribal involvement in the two cases is the Confederated Tribes’ decision to levy a tax on cigarettes. The mere imposition of a tribal tax does not rise to the level of a preemption of the taxing field on that article. As this court noted in Fort Mojave Tribe v. San Bernardino County, supra,
“The only effect of the tax on the Indians will be the indirect one of perhaps reducing the revenues they will receive from the leases as a result of their inability to market a tax exemption. Such an indirect economic burden cannot be said to threaten the self-governing ability of the tribe.” Id. at 1258.
Of further significance, is the fact that Moe speaks of the tribe’s rights and involvement rather than voicing similar concerns on behalf of the individual smoke shop dealers. I quote from the opinion:
“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 exemption.’ ”
******
“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.” 425 U.S. 481-482, 96 S.Ct. 1645.
The Moe court then says:
“The Tribe asserts that to make the Indian retailer an ‘involuntary agent’ for collection of taxes owed by non-Indians is a ‘gross interference with [its] freedom from state regulation . . .425 U.S. at 482, 96 S.Ct. at 1645. [Emphasis supplied].
and then concludes:
“The State’s requirement that the Indian tribal seller collect a tax validly imposed on non-Indians is a minimal burden designed to avoid the likelihood that in its absence non-Indians purchasing from the tribal seller will avoid payment of a concededly lawful tax. . . . We see nothing in this burden which frustrates tribal self-government . . 425 U.S. at 483, 96 S.Ct. at 1646.
In my opinion, this language of the Moe Court completely answers the majority’s view that the imposition of the tax in the instant case frustrates tribal self-government.
Another authority which is closely akin and of controlling importance is Fort Mojave Tribe v. County of San Bernardino, supra. There, the county levied a possessory interest tax on non-Indian lessees of land held in trust by the government for the Fort Mojave Indian Tribe. The court determined that the imposition of this type of tax on non-Indian lessees did not violate the Indian Reorganization Act and was not invalid as being an infringement upon the tribe’s right to govern itself. The court also held that the imposition of such a tax by both the Fort Mojave Indian Tribe and the California county on non-Indian lessees of Indian land did not result in improper double taxation. In Fort Mojave, the tribe itself imposed a tax on the lease. Here, the tribe itself imposed a tax on the cigarettes. In discussing this “double taxation” issue, the Fort Mojave court found no improper double taxation since the taxes were being imposed by two different and distinct taxing authorities and concluded that the uncertain economic burden there imposed on the tribe’s ability to levy a tax did not interfere with its right of self-government. We note that the Fort Mojave court made full use of the Supreme Court decision in Moe in arriving at its own conclusion.
Despite what is said by the majority, I find nothing in the record to support Judge East’s conclusions that the tribe has preempted, or even attempted to preempt, the entire field of taxation on Indian reservations. Because the state of Washington can lawfully impose its cigarette tax it follows that the state may also collect its authorized sales tax on cigarette purchases by non-Indians. The majority would find such tax*1377es preempted by tribal regulations. I dissent based on my analysis in the foregoing opinion.
I would hold that the state of Washington can validly impose the cigarette and sales tax in question and require the licensed dealers to account for the tax on all sales to non-Indians, keeping an adequate record of such sales. Because the tax, in my opinion, is legal, it follows that some type of a record must be kept.
I purposely have not spoken with regard to the majority’s conclusion that the state of Washington may not impose its personal property tax on automobiles owned by Indians living on the reservation. The record before us is totally inadequate and insufficient to consider a tax that falls precisely in between the totally on-reservation activity in McClanahan and the totally off-reservation activity in Mescalero.