Court Opinion

ID: 8409150
Source: CourtListenerOpinion
Date Created: 2022-11-02 16:53:06.456489+00
Date Added: 2024-06-11T16:47:39.238009
License: Public Domain

KLEINFELD, Circuit Judge,
dissenting:
I respectfully dissent.
In my view', the Hayden-Cartwright Act expressly authorizes the tax at issue because it permits the state to impose the tax regardless of its incidence. The Act renders unnecessary the majority’s highly indeterminate analysis of where the incidence of the tax falls.
That Act generally enables states to tax sales of fuel by or through “filling stations [and] licensed traders ... located on United States military or other reservations.”1 If “military or other reservations” includes Indian reservations, the Act authorizes the tax. The Supreme Court identified the precise issue of whether “reservations” includes Indian reservations, and expressly avoided resolving it.2 I would now answer that question in the affirmative.
There are two reasons that Indian reservations are “reservations” for purposes of the statute. First, it says so. It explicitly covers “reservations” and does not limit its coverage to military reservations. Black’s Law Dictionary defines “reservation” as “[a] tract of public land set aside for a special purpose; esp., a tract of land set aside for use by an American Indian tribe.”3 The Supreme Court says that “[t]he word is used in the land law to describe any body of land, large or small, which Congress has reserved from sale for any purpose,” such as “a military reservation, or an Indian reservation.”4 Except for lawyers, few people even know that what they call military “bases” are called military “reservations” in federal land law parlanee. The word “reservation” ordinarily means and is most often used to mean Indian reservations. If the statute meant to make an exception to its “reservations” coverage for Indian reservations, it would have said “except for *697Indian reservations.” The Justice Department since 1936, and the Interior Department since 1940, have understood the Hayden-Cartwright Act to apply to Indian reservations.5 This settled administrative interpretation ought to be given some deference.
Second, if anyone were to have any question whether Congress was speaking about, and considered, Indian reservations, the question would be answered by its express coverage of “licensed traders.” Ordinarily one can operate a grocery store or a hardware store, or engage in other trades, without a license. The term “licensed trader” in federal statutes means one and only one thing: a person with a federal license to trade on an Indian reservation. Thus, it is “unmistakably clear”6 that the Hayden-Cartwright Act expressly allows states to levy taxes on fuel sold on Indian reservations.
That is not to say that sales of gasoline to Indian tribes can be taxed under the statute. That may be a different question, one not raised by the parties in this case. Sales on reservations are not necessarily the same thing as sales to Indians or Indian tribes. Sales on reservations, but not to Indians, may be sales to non-Indians who drive to the reservation to get a bargain on untaxed gasoline. Whether Congress ought to provide for revenue and jobs to Indians on reservations by enabling them to sell untaxed gasoline, or whether it should provide for protection of state revenue from gasoline taxes by preventing Indian tribes from operating untaxed islands within states, are policy questions that may be answered either way. Congress has answered them and can change its answer. We have no say. The only question for us is whether the policy question was resolved by the Hayden-Cartwright Act. The words of the Act clearly do resolve it, in favor of the states.
A little reflection on why Indian reservations are called “reservations” would help to avoid confusion. From the 1780s, when the Articles of Confederation government enacted the Northwest Ordinance and its predecessors,7 to 1986, when the Homestead Act repeal became effective in Alaska,8 national policy on federally owned lands was to sell them cheap or give them away, rather than to hold on to them or charter them to great companies as England and Spain had. Once the southern states seceded, thereby losing control over the Senate (the South had traditionally opposed free land for ordinary farmers in the territories, because the small parcels would be incompatible with the economics of slavery), Republicans were able to enact the Homestead Act of 1862, turning squatters into landowners.9 Though free land doubtless contributed to democracy, it was democracy that caused the government to adopt a policy of free land.
About all one had to do to get title to 160 acres of land under the Homestead *698Act was to occupy the land and improve it.10 With so liberal a policy of giving away the public domain, the government needed a means to mark out some portions that would not be turned into farms, mines, homesites, trade sites, and all the other categories of private ownership. Under the Northwest Ordinance and its Jeffersonian predecessor, land was to be reserved from sale (giving away land for free was Lincoln’s subsequent innovation under the Homestead Act 11) for such purposes as schools and transfer to Revolutionary War veterans.12 Likewise, under the Morrill Land-Grant Act of 1862, lands were reserved from entry for various public purposes, such as schools.13 Beginning in 1872 with Yellowstone, reservations from entry were made for parks.14
From the beginning of our nation, no public purpose for reserving lands from sale or entry was more important than reservations for the Indians, in the early days because of their military threat to the new republic, and subsequently as a matter of national honor.15 As Felix Cohen put it, the most common Indian reservation legislation “is that which reserves a portion of the public domain from entry or sale and dedicates the reserved area to Indian use.” 16 It would be highly inconvenient for the government as well as the Indians if squatters or purchasers took lands from the Indians. In the early days, that risked embroiling the government in Indian wars. Likewise it would be inconvenient if military bases could become squatters’ homesteads. So both have been reserved from entry, and called “reservations” for that reason, since the earliest days of the Republic.
If there were any ambiguity in the Hayden-Cartwright Act reference to “reservations,” which there is not, it would be cured decisively by the Act’s reference to “licensed traders.” The only federally “licensed traders” that exist, the only persons to whom the phrase applies, are those who trade with Indians in Indian country.17 The majority suggests that the phrase could refer to “non-Indian traders licensed to conduct business on any federal reservation,” 18 but there is no instance of the phrase “licensed trader” used in federal law outside of trade with Indians. Traders on Indian reservations have always needed federal licenses. Before we were even the United States, colonial governments licensed traders dealing with the Indian tribes.19 “In the very first volume of the federal statutes is found an Act, passed in 1790 by the first Congress, ‘to regulate trade and intercourse with the Indian tribes,’ requiring that Indian traders obtain a license from a federal official, and specifying in detail the conditions on which such licenses would be granted.”20
*699Generally, it has been illegal for anyone but an Indian to live in Indian country or on an Indian reservation as a trader without a license, on pain of fíne and forfeiture of all trade goods.21 The purposes of licensing Indian traders have been obvious from the legal restrictions imposed from time to time on their trade: preventing sales to Indians in Indian country of whiskey and of means for making war, and protecting the Indians from exploitation.22 Federal law still provides, with various exceptions and limitations, that “[a]ny person other than an Indian of the full blood who shall attempt to reside in the Indian country, or to trade therein, or on any Indian reservation as a trader, or to introduce goods, or to trade therein, without such license, shall forfeit all merchandise offered for sale to the Indians, or found in his possession, and shall moreover be liable to a penalty of $50Q.”23
Without federal legislation to the contrary, such as the Act we are construing, these licensed traders cannot be taxed by the states.24 “[F]rom the very first days of our government, the Federal Government had been permitting the Indians largely to govern themselves, tree from state interference, and had exercised through statutes and treaties a sweeping and dominant control over persons who wished to trade with Indians and Indian tribes.”25 Warren Trading Post holds that assessment and collection of a state tax on gross proceeds of the Indian trader “would to a substantial extent frustrate the evident congressional purpose of ensuring that no burden shall be imposed upon Indian traders for trading with Indians on reservations except as authorized by Acts of Congress.” 26
The Hayden-Cartwright Act is just such an act of Congress, and its inclusion of “licensed traders” can mean only one thing, that Congress was acting pursuant to the “as authorized by Acts of Congress” language under Warren Trading Post. Since “licensed traders” is a phrase with only one meaning, persons licensed to trade on Indian reservations, Congress necessarily meant the unambiguous word “reservations” to apply, as it ordinarily does, to Indian reservations.
The only circuit authority the majority cites, Marty Indian School Board v. South Dakota,27 is not on point. There the tax was on fuel purchased by an Indian school, and the Eighth Circuit decided the issue on preemption grounds, primarily relying on White Mountain Apache Tribe,28 The Hayden-Cartwright Act was distinguished in an offhand remark at the end of the decision.29 Marty Indian School Board, would be relevant authority if the question before us were state tax on fuel sold to an Indian school or tribe, but it is not.
The language of the Hayden-Cartwright Act is “unmistakably clear,” to the effect that “reservations” includes Indian reser*700vations. The express application of the Act to “licensed traders,” which is to say, Indian traders on Indian reservations, eliminates any room for argument about what Congress said. About the only argument I can think for the Act not being “unmistakably clear” is that the majority today makes a mistake. That logical amusement is not a sufficient reason to set aside the plain and express decision of Congress.

."All taxes levied by any State, Territory, or the District of Columbia upon, with respect to, or measured by, sales, purchases, storage, or use of gasoline or other motor vehicle fuels may be levied, in the same manner and to the same extent, with respect to such fuels when sold by or through post exchanges, ship stores, ship service stores, commissaries, filling stations, licensed traders, and other similar agencies, located on United States military or other reservations, when such fuels are not for the exclusive use of the United States. Such taxes, so levied, shall be paid to the proper taxing authorities of the State, Territory, or the District of Columbia, within whose borders the reservation affected may be located.” 4 U.S.C. § 104(a).

. White Mountain Apache Tribe v. Bracker, 448 U.S. 136, 151 n. 16, 100 S.Ct. 2578, 65 L.Ed.2d 665 (1980). White Mountain also points out that the special position of tribes, under current jurisprudence, is "not as nations.” Id, at 142, 100 S.Ct. 2578. The majority opinion nevertheless denotes the tribes as “Nations,” perhaps intending to accord the tribes a sovereign status less defeasible by Congress than current jurisprudence allows.

. Black's Law Dictionary 1309 (7th ed.1999).

. United States v. Celestine, 215 U.S. 278, 285, 30 S.Ct. 93, 54 L.Ed. 195 (1909),

. See Taxation by Slates of Motor-vehicle Fuels Sold in National Parks, 38 U.S. Op. Att'y Gen. 522 (1936); Application of Federal and State Sales Taxes to Activities of Menominee Indian Mills, 57 Interior Dec. 129 (1940).

. Montana v. Blackfeet Tribe of Indians, 471 U.S. 759, 765, 105 S.Ct. 2399, 85 L.Ed.2d 753 (1985).

. See Robert E. Reigel & Robert G. Athearn, America Moves West 81, 88-89 (1964).

. Federal Land Policy and Management Act of 1976, Pub.L. No. 94-579, § 702 (repealing laws related to homesteading, with the exception of those that applied to public lands in Alaska, which were to sunset ten years later).

. Ray Allen Billington, Westward Expansion: A History of the American Frontier 611-12 (1967).

. Reigel & Athearn, supra note 7, at 420-21.

. Riegel & Athearn, supra note 7, at 420.

. Billington, supra note 9, at 216.

. Id. at 702; Lawrence M. Friedman, A History of American Law 417 (1985).

. Friedman, supra note 13, at 419.

. Billington, supra note 9, at 703.

. Felix Cohen's Book of Federal Indian Law 296 (photo, reprint 1942) (1986) (emphasis in original).

. 25 U.S.C. § 261 et seq.; 25 C.F.R. 140.1-140.26 (licensed Indian traders).

. Maj. Op. at 693.

. Cohen, supra note 16, at 348.

. Warren Trading Post Co. v. Ariz. State Tax Comm'n, 380 U.S. 685, 688, 85 S.Ct. 1242, 14 L.Ed.2d 165 (1965) (quoting Act of July 22, 1790, 1 Stat. 137).

. Cohen, supra note 16, at 349.

. Id- at 349-50.

. 25 U.S.C. § 264.

. Warren Trading Post, 380 U.S. at 690, 85 S.Ct. 1242.

. Id. at 686-87, 85 S.Ct. 1242.

. Id. at 691, 85 S.Ct. 1242.

. Marty Indian Sch. Bd. v. South Dakota, 824 F.2d 684 (8th Cir.1987).

. Id. at 686-88 (citing White Mountain Apache Tribe v. Bracker, 448 U.S. 136, 100 S.Ct. 2578, 65 L.Ed.2d 665 (1979) (holding that federal regulation of timber preempted a state tax that would fall on the tribe and interfere with the congressional purpose of funding tribal government with timber sales)).

. Id. at 688, 85 S.Ct. 1242.