Court Opinion

ID: 4362512
Source: CourtListenerOpinion
Date Created: 2019-01-28 21:00:31.454224+00
Date Added: 2024-06-11T14:48:36.639896
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                             JAN 28 2019
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS

                           FOR THE NINTH CIRCUIT

AGUA CALIENTE BAND OF                            No. 17-56003
CAHUILLA INDIANS, a federally
recognized Indian tribe, on its own behalf       D.C. No.
and as parens patriae for its members,           5:14-cv-00007-DMG-DTB

              Plaintiff-Appellant,
                                                 MEMORANDUM*
 v.

RIVERSIDE COUNTY; et al.,

              Defendants-Appellees,

DESERT WATER AGENCY,

              Intervenor-Defendant-
              Appellee.

                    Appeal from the United States District Court
                       for the Central District of California
                      Dolly M. Gee, District Judge, Presiding

                       Argued and Submitted January 8, 2019
                               Pasadena, California

      *
        This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Before: GRABER and WATFORD, Circuit Judges, and ZOUHARY,*** District
Judge.

      Plaintiff Agua Caliente Band of Cahuilla Indians appeals the summary

judgment entered in favor of Defendant Riverside County and Intervenor-

Defendant Desert Water Agency, upholding the right of the County to assess and

collect a possessory interest tax ("PIT") from non-Indian lessees of Indian trust

lands on the Agua Caliente Reservation. On de novo review, Los Coyotes Band of

Cahuilla & Cupeno Indians v. Jewell, 729 F.3d 1025, 1035 (9th Cir. 2013), we

affirm.

      In Agua Caliente Band of Mission Indians v. County of Riverside, 442 F.2d
1184 (9th Cir. 1971), we held that this very tax is permissible. Plaintiff argues that

our cursory preemption analysis there is clearly irreconcilable with White

Mountain Apache Tribe v. Bracker, 448 U.S. 136 (1980), and therefore not

controlling. See Miller v. Gammie, 335 F.3d 889, 893 (9th Cir. 2003) (en banc)

(permitting a three-judge panel to depart from circuit precedent if, but only if, that

precedent is clearly irreconcilable with a later Supreme Court or en banc decision).

We disagree.

      ***
        The Honorable Jack Zouhary, United States District Judge for the
Northern District of Ohio, sitting by designation.
                                           2
       In Bracker, the Supreme Court recognized that "[m]ore difficult" preemption

questions arise in cases like this, in which "a State asserts authority over the

conduct of non-Indians engaging in activity on the reservation." 448 U.S. at 144.

In such cases, Bracker instructs that a court’s inquiry should not be "dependent on

mechanical or absolute conceptions of state or tribal sovereignty." Id. at 145.

Instead, courts should engage in "a particularized inquiry into the nature of the

state, federal, and tribal interests at stake." Id.

       In Agua Caliente, decided nine years before Bracker, we did not expressly

engage in that particularized, interest-balancing inquiry. But we did consider the

congressional purpose behind "the legislation dealing with Indians and Indian

lands," the PIT’s legal incidence, and the indirect economic effect of the PIT on the

tribe and tribal members. See Agua Caliente, 442 F.2d at 1186–87. A few years

later, in Fort Mojave Tribe v. County of San Bernardino, 543 F.2d 1253 (9th Cir.

1976), we again upheld the assessment and imposition of a PIT on non-Indian

lessees of land held in trust by the federal government for an Indian tribe.1 In Fort

Mojave, we engaged in a more extensive analysis of the PIT’s effect on federal and

       1
         We reject the district court’s characterization of our holding as dictum. See
Barapind v. Enomoto, 400 F.3d 744, 750–51 (9th Cir. 2005) (en banc) (per curiam)
(holding that a panel majority’s decision concerning an issue presented for review
is circuit law even if that decision was not necessary to the disposition of the case).
                                             3
tribal interests, foreshadowing the later requirements of Bracker. Indeed, in

Confederated Tribes of Chehalis Reservation v. Thurston County Board of

Equalization, 724 F.3d 1153, 1158 (9th Cir. 2013), we observed that our PIT cases,

including Fort Mojave, "applied a similar mode of analysis" to Bracker.

      We conclude that our PIT precedents are not clearly irreconcilable with

Bracker. We note that

      "[t]he clearly irreconcilable requirement is a high standard." United
      States v. Robertson, 875 F.3d 1281, 1291 (9th Cir. 2017) (quotation
      marks omitted). Accordingly, "[i]t is not enough for there to be some
      tension between the intervening higher authority and prior circuit
      precedent, or for the intervening higher authority to cast doubt on the
      prior circuit precedent." Id. "So long as the court can apply our prior
      circuit precedent without running afoul of the intervening authority it
      must do so." Id. (quotation marks omitted).

Close v. Sotheby’s, Inc., 894 F.3d 1061, 1073 (9th Cir. 2018) (second alteration in

original). Although there may be some tension between the legal theory applied in

Agua Caliente and Fort Mojave and the balancing inquiry required under Bracker,

these decisions are consistent as a practical matter.

      Additionally, relying on Mescalero Apache Tribe v. Jones, 411 U.S. 145

(1973), Plaintiff argues that 25 U.S.C. § 465 bars this tax. Once again, we already

addressed this issue: "In Agua Caliente, for example, we stressed that ‘[t]he

California tax on possessory interests does not purport to tax the land as such,’

                                           4
which would be barred by § 465, ‘but rather taxes the "full cash value" of the

lessee’s interest in it,’ which is not covered by § 465." Chehalis, 724 F.3d at 1158

n.7 (alteration in original) (quoting Agua Caliente, 442 F.2d at 1186). That

conclusion is not clearly irreconcilable with Mescalero, and we therefore remain

bound by it.

      AFFIRMED.

                                          5
                                                                              FILED
Agua Caliente Band of Cahuilla Indians v. Riverside County, No. 17-56003
                                                                               JAN 28 2019
WATFORD, Circuit Judge, concurring:                                       MOLLY C. DWYER, CLERK
                                                                            U.S. COURT OF APPEALS

      I agree with my colleagues that the possessory interest tax (PIT) at issue is

not preempted by federal law. It is not categorically preempted because its

incidence falls on non-tribal-member lessees, rather than the Tribe or its members.

See Oklahoma Tax Commission v. Chickasaw Nation, 515 U.S. 450, 458–59

(1995). The preemption analysis is therefore governed by the test established in

White Mountain Apache Tribe v. Bracker, 448 U.S. 136 (1980), which requires

balancing federal, state, and tribal interests. See id. at 145.

      As the district court noted, the federal interests involved here are substantial:

The leasing of Indian trust lands is pervasively regulated by the Bureau of Indian

Affairs. See 25 C.F.R. §§ 162.001–.029 (2013). But pervasive regulation does not

always require preemption. Cotton Petroleum Corp. v. New Mexico, 490 U.S. 163,

186 (1989). The Bracker test requires that we proceed to consider the interests of

the State.

      Unlike in Bracker, the County has readily identified “service[s] performed

by the State that would justify the assessment of taxes.” 448 U.S. at 148–49. The

PIT taxes “the full cash value of the lessee’s interest in” the property leased. Agua

Caliente Band of Mission Indians v. County of Riverside, 442 F.2d 1184, 1186 (9th

Cir. 1971) (internal quotation marks omitted). That interest is valuable because of
                                                                              Page 2 of 3

a bevy of State-provided services, including water, electricity, road maintenance,

trash collection, and the protection afforded by police officers and firefighters. See

Gila River Indian Community v. Waddell, 91 F.3d 1232, 1238–39 (9th Cir. 1996).

The on-reservation provision of those substantial services gives the County the

kind of strong interest that justifies its imposition of a tax. “This is not a case in

which the State has had nothing to do with the on-reservation activity, save tax it.”

Cotton Petroleum, 490 U.S. at 186. Indeed, it appears that the County’s

connection to the taxed activity is greater than that approved by the Supreme Court

in Cotton Petroleum. See id. at 170–72 & nn. 6–7.

      Nor do tribal interests weigh in favor of preemption. Any impact the

collection of the PIT may have on the Tribe is “too indirect and too insubstantial to

support [a] claim of pre-emption.” Id. at 187. Given the strong connection

between the services provided and the activity taxed, no “special factor” requires

preemption. Id. I would therefore conclude that the PIT is not preempted under

Bracker.

      In my view, we are not bound by our earlier decisions in Agua Caliente and

Fort Mojave Tribe v. County of San Bernardino, 543 F.2d 1253 (9th Cir. 1976).

As the district court correctly determined, neither of those cases undertook the

analysis that the Supreme Court’s later decision in Bracker requires: “a

particularized inquiry into the nature of the state, federal, and tribal interests at
                                                                      Page 3 of 3

stake.” 448 U.S. at 145. For the reasons stated above, however, even under the

new balancing framework established in Bracker, the outcome here remains the

same: The PIT is not preempted.