463 U.S. 713 (1983), 82-401, Rice v. Rehner

Docket Nº:No. 82-401.
Citation:463 U.S. 713, 103 S.Ct. 3291, 77 L.Ed.2d 961
Party Name:Baxter RICE, Individually and as Director of the Department of Alcoholic Beverage Control of California, Petitioner v. Eva REHNER.
Case Date:July 01, 1983
Court:United States Supreme Court
 
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Page 713

463 U.S. 713 (1983)

103 S.Ct. 3291, 77 L.Ed.2d 961

Baxter RICE, Individually and as Director of the Department of Alcoholic Beverage Control of California, Petitioner

v.

Eva REHNER.

No. 82-401.

United States Supreme Court.

July 1, 1983

Argued March 21, 1983.

[103 S.Ct. 3292] Syllabus[*]

SYLLABUS

Respondent is a federally licensed Indian trader who operates a general store on an Indian reservation in California. When she was refused an exemption from California's law requiring a state license in order to sell liquor for off-premises consumption, respondent filed suit in Federal District Court seeking a declaratory judgment that she did not need a state license. The District Court dismissed the suit, holding that respondent was required to have a state license under 18 U.S.C. § 1161, which provides that liquor transactions in Indian country are not subject to prohibition under [103 S.Ct. 3293] federal law if such transactions are "in conformity both with the laws of the State in which [they] occu[r] and with an ordinance duly adopted by the tribe having jurisdiction over such area of Indian country." The Court of Appeals reversed, holding that § 1161 pre-empts state licensing and distribution jurisdiction over tribal liquor sales in Indian country.

Held: California may properly require respondent to obtain a state license in order to sell liquor for off-premises consumption. Pp. 3294-3303.

(a) There is no tradition of tribal sovereign immunity or inherent self-government in favor of liquor regulation by Indians. Although in Indian matters, Congress usually acts "upon the assumption that the States have no power to regulate the affairs of Indians on a reservation," Williams v. Lee, 358 U.S. 217, 220, 79 S.Ct. 269, 271, 3 L.Ed.2d 251, that assumption is unwarranted in the narrow context of liquor regulation. In addition to the congressional divestment of tribal self-government in this area, the States have also been permitted, and even required, to impose liquor regulations. The 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. Here, respondent's distribution of liquor has a significant impact beyond the limits of the reservation, and the State, independent of the Twenty-first Amendment, has an interest in the liquor traffic within its borders. Pp. 3296-3298.

(b) Title 18 U.S.C. § 1161 authorized, rather than pre-empted, state regulation of Indian liquor transactions. It is clear from the face of the statute and its legislative history both that Congress intended to remove federal prohibition on the sale and use of liquor imposed on Indians and

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that Congress intended state laws would apply of their own force to govern tribal liquor transactions as long as the tribe itself approved these transactions by enacting an ordinance. 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. Because of the lack of tradition of tribal self-government in the area of liquor regulation, it is not necessary that Congress indicate expressly that the State has jurisdiction to license and distribute liquor. This Court will not apply the canon of construction that state laws generally are not applicable to Indians on a reservation except where Congress has expressly provided that state laws shall apply, when application would be tantamount to a formalistic disregard of congressional intent. Thus, application of the state licensing scheme here does not impair a right granted or reserved by federal law, but, on the contrary, is specifically authorized by Congress and does not interfere with federal policies concerning the reservation. Pp. 3298-3303.

678 F.2d 1340 (9th Cir.1982), reversed and remanded.

COUNSEL

Alan S. Meth, Deputy Attorney General of California, argued the cause for petitioner. With him on the briefs were John K. Van De Kamp, Attorney General, and George Deukmejian, former Attorney General.

Stephen V. Quesenberry argued the cause for respondent. With him on the brief were David J. Rapport and Charles Scott.

Joshua I. Schwartz argued the cause for the United States as amicus curiae urging affirmance. With him on the brief were Solicitor General Lee, Assistant Attorney General Dinkins, Robert L. Klarquist, and Anne S. Almy.*

* Briefs of amici curiae urging reversal were filed by Warren Spannaus, Attorney General of Minnesota, and James M. Schoessler, Special Assistant Attorney General, David Albert Mustone, Tom D. Tobin, Mark V. Meierhenry, Attorney General of South Dakota, Robert L. Timm, Chief Deputy Attorney General, and Harold F.X. Purnell for the State of Minnesota et al.; by Michael T. Greely, Attorney General of Montana, and Helena S. Maclay and Deirdre Boggs, Special Assistant Attorneys General, for the State of Montana; and by James M. Goldberg for the National Alcoholic Beverage Control Association.

Briefs of amici curiae urging affirmance were filed by Art Bunce for the Agua Caliente Band of Cahuilla Indians; by George E. Fettinger and Kathleen A. Miller for the Mescalero Apache Tribe; by Kim Jerome Gottschalk for the Pala Band of Mission Indians; by Harry R. Sachse for the Shoshone Tribe of the Wind River Indian Reservation et al.; and by Douglas L. Bell, Allen H. Sanders, andJeffrey Schuster for the Tulalip and Muckleshoot Indian Tribes.

Alan S. Meth, San Diego, Cal., for petitioner.

Stephen V. Quesenberry, Escondido, Cal., for respondent.

Joshua I. Schwartz, Washington, D.C., for the U.S. as amicus curiae, by special leave of Court.

OPINION

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Justice O'CONNOR delivered the opinion of the Court.

The question presented by this case is whether the State of California may require a federally licensed Indian trader, who operates a general store on an Indian reservation, to obtain a state liquor license in order to sell liquor for off-premises consumption. Because we find that Congress has delegated authority to the States as well as to the Indian tribes to regulate the use and distribution of alcoholic beverages [103 S.Ct. 3294] in Indian country,1 we reverse the judgment of the Court of Appeals for the Ninth Circuit.

I

The respondent Rehner is a federally licensed Indian trader2 who operates a general store on the Pala Reservation in San Diego, California. The Pala Tribe had adopted a tribal ordinance

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permitting the sale of liquor on the reservation providing that the sales conformed to state law, and this ordinance was approved by the Secretary of the Interior. See 25 Fed.Reg. 3343 (1960). Rehner then sought from the State an exemption from its law requiring a state license for retail sale of distilled spirits for off-premises consumption. 3 When she was refused an exemption, Rehner filed suit seeking a declaratory judgment that she did not need a license from the State, and an order directing that liquor wholesalers could sell to her. The District Court granted the State's motion to dismiss, ruling that Rehner was required to have a state license under 18 U.S.C. § 1161, which provides that liquor transactions in Indian country are not subject to prohibition under federal law provided those transactions are "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 having jurisdiction over such area of Indian country...."4

The Court of Appeals reversed the District Court, holding that § 1161 did not confer jurisdiction on the States to require liquor licenses. The court held that "18 U.S.C. § 1161 preempts state licensing and distribution jurisdiction over tribal liquor sales in Indian country." Rehner v. Rice, 678 F.2d 1340, 1351 (CA9). 5

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In deciding the pre-emption issue, the court focused on two aspects of § 1161. First, it held that "there is insufficient evidence to show that Congress intended section 1161 to confer on the states regulatory jurisdiction over on-reservation liquor traffic." Id., at 1343. The court reasoned that the liquor transactions at issue were governed exclusively by federal law, and that if Congress wished to remove "its veil of pre-emption," it needed to do so by an express statement that the State had [103 S.Ct. 3295] jurisdiction to impose its licensing requirement. Ibid. Second, the court held that "section 1161 has pre-emptive effect" because Congress provided for tribal ordinances that were to be certified by the Secretary of the Interior and published in the Federal Register. Id., at 1348-1349, 1349, n. 18. In this way, "the regulatory authority of the tribes ... was safeguarded by federal supervision." Id., at 1349. 6

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II

The decisions of this Court concerning the principles to be applied in determining whether state regulation of activities in Indian country is pre-empted have not been static. In Worcester v. Georgia, 31 U.S. (6 Pet.) 515, 561, 8 L.Ed. 483 (1832), Chief Justice Marshall wrote that an Indian reservation "is a distinct community, occupying its own territory, with boundaries accurately described, in which ... [state laws] can have no force ...." Despite this early statement emphasizing the importance of tribal self-government, "Congress has to a substantial degree opened the doors of reservations to state laws, in marked contrast to what prevailed in the time of Chief Justice Marshall," Organized Village of Kake v. Egan, 369 U.S. 60, 74, 82 S.Ct. 562, 570, 7 L.Ed.2d 573 (1962). "[E]ven on reservations, state laws may be applied unless such application would interfere with reservation self-government or would impair a right granted or reserved by federal law." Mescalero Apache Tribe v. Jones, 411 U.S. 145, 148, 93 S.Ct. 1267, 1270, 36 L.Ed.2d...

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