Court Opinion

ID: 9855529
Source: CourtListenerOpinion
Date Created: 2023-09-24 06:26:59.839285+00
Date Added: 2024-06-11T09:36:09.540887
License: Public Domain

GILBERTSON, Chief Justice
(concurring specially).
[¶ 44.] I join in the Court’s opinion. I write specially only to address remand procedures which this Court’s decision now authorizes.
[¶ 45.] One hundred years ago, the United States Supreme Court struck down the first attempt by the State of South Dakota to levy a tax on personal property owed by Indians who resided in Indian country. United States v. Rickert, 188 U.S. 432, 23 S.Ct. 478, 47 L.Ed. 532 (1903). However, the Court merely struck down the attempted taxation and the subject of refunds was never addressed.
[¶ 46.] More recent taxation cases between the State and various opponents to its taxation attempts have dealt with the refund issue. Generally, state statutes of limitation such as SDCL 10-47B-141, *408seeking to limit the time for application of refunds, have not fared well in this context. In United States ex rel. Cheyenne River Sioux Tribe v. South Dakota, 105 F.3d 1552 (8thCir.1997), cert. denied, 522 U.S. 981, 118 S.Ct. 441, 139 L.Ed.2d 378 (1997), the district court was reversed for not allowing a monetary refund of motor vehicle excise taxes paid by tribal members. The Eighth Circuit reasoned that a refund was appropriate to tribal members if paid under duress when the state’s tax was determined to be invalid “ ‘because it [is] beyond the State’s power to impose’ or ‘because the taxpayers were absolutely immune from the tax.’ ” Id. at 1560 (citing McKesson Corp. v. Division of Alcoholic Beverages and Tobacco, 496 U.S. 18, 39, 110 S.Ct. 2238, 2251-52, 110 L.Ed.2d 17 (1990)) (additional citations omitted). Thus, “ ‘the State must ‘undo’ the unlawful deprivation by refunding the tax previously paid under duress.’ ” Id.
[¶ 47.] The United States Supreme Court had previously held in McKesson that if a taxpayer was absolutely immune from a tax, it would be a violation of the Fourteenth Amendment to allow the State to retain taxes previously paid under duress without any obligation to refund such unlawfully collected taxes. McKesson, 496 U.S. 18, 39, 110 S.Ct. 2238, 2251, 110 L.Ed.2d 17 (1990). In reliance upon McKesson, the Cheyenne Court further refined its ruling by stating that:
[t]axes that are voluntarily paid because of mistake of law cannot be recovered back, but taxes paid under duress or coercion are recoverable, and state refund procedures do not limit such recovery.
Id. at 1561 (internal citations omitted).
[¶ 48.] The refund issue again arose in United States ex rel. Cheyenne River Sioux Tribe v. South Dakota, 102 F.Supp.2d 1166(DSD), which was the remand proceeding from the Cheyenne Eighth Circuit case. Therein, the district court concluded the excise taxes were paid “ ‘under duress or coercion’ ” as the “State did not provide a pre-deprivation procedure to challenge the tax and failure to pay the tax subjected tribal members to criminal penalties.” Id. at 1172. The district court cast aside the State’s argument that SDCL 10-59-19 governed the time for allowable refunds in favor of the longer 28 U.S.C. § 2415(a). Id. at 1174. However, that decision hinged on the fact the United States was the plaintiff rather than individual Indians seeking refunds. While the door was not completely closed precluding the application of state statutes of limitation, the district court held that state statutes of limitation may apply to a federal claim which is analogous to a state cause of action only if there is no applicable federal statutes of limitation and the state statutes of limitation “would not be inconsistent with underlying federal policies.” Id. (citing Oneida County v. Oneida Indian Nation, 470 U.S. 226, 240-42, 105 S.Ct. 1245, 1254-56, 84 L.Ed.2d 169 (1985)). Therein, the Court applied 28 U.S.C. § 2415(a) because it concluded the State would be unjustly enriched if it were allowed to keep the illegal collection of the excise tax from tribal members. Cheyenne River, 102 F.Supp.2d at 1174. See also United States ex rel. Standing Rock Sioux Tribe v. Janklow, 103 F.Supp.2d 1146, 1155 (D.S.D.2000).
[¶ 49.] Thus upon remand, the trial court in this case should determine whether those tribal members5 paid under coercion and duress and thus are entitled to be *409considered for a refund. That will also affect whether SDCL 10-47B-131.2 can stand as a valid statute of limitation. If those legal matters are resolved in favor of the tribal members, the trial court should proceed to resolve evidentiary matters concerning the individual claims.

. The immunity from tax does not extend to Indians who are members of a different tribe. Cheyenne River, 105 F.3d at 1559.