Chemehuevi Indian Tribe v. California State Bd. of Equalization

• Decision Date: 12 April 1985
• Docket Number: Nos. 83-2431,83-2481,s. 83-2431
• Citation: 757 F.2d 1047
• Parties: The CHEMEHUEVI INDIAN TRIBE, Plaintiff-Appellant, v. CALIFORNIA STATE BOARD OF EQUALIZATION; George R. Reilly; Iris Stankey; William M. Bennett; Richard Nevins; Kenneth Cory; individually and in their official capacities as members of the California State Board of Equalization; Bank of America; N.T. & S.A., a national banking association; and David Cordier, individually and in his capacity as employee of the California State Board of Equalization; Defendants-Appellees. The CHEMEHUEVI INDIAN TRIBE, Plaintiff-Appellee, v. CALIFORNIA STATE BOARD OF EQUALIZATION; Reilly, George R.; Stankey, Iris; Bennett, William M.; Nevins, Richard; & Cory, Kenneth; individually & in their official capacities as members of the California State Board of Equalization, Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1047

757 F.2d 1047

The CHEMEHUEVI INDIAN TRIBE, Plaintiff-Appellant, v. CALIFORNIA STATE BOARD OF EQUALIZATION; George R. Reilly;

Iris Stankey; William M. Bennett; Richard Nevins; Kenneth

Cory; individually and in their official capacities as

members of the California State Board of Equalization; Bank

of America; N.T. & S.A., a national banking association;

and David Cordier, individually and in his capacity as

employee of the California State Board of Equalization;

Defendants-Appellees.

The CHEMEHUEVI INDIAN TRIBE, Plaintiff-Appellee, v. CALIFORNIA STATE BOARD OF EQUALIZATION; Reilly, George R.;

Stankey, Iris; Bennett, William M.; Nevins, Richard; &

Cory, Kenneth; individually & in their official capacities

as members of the California State Board of Equalization,

Defendants-Appellants.

Nos. 83-2431, 83-2481.

United States Court of Appeals Ninth Circuit.

Argued and Submitted July 9, 1984.

Decided April 12, 1985.

Lester J. Marston, Ukiah, Cal., for plaintiff.

James Cuneo, San Francisco, Cal., for defendants.

Glenn M. Feldman and M. Frances Ayer, Ziontz, Pirtle, Morisset, Ernstoff & Chestnut, Washington, D.C., amici curiae, for Big Pine Band of Owens Valley Paiute-Shoshone Indians et al.

Appeal from the United States District Court for the Northern District of California.

Before PHILLIPS, ^* FLETCHER, and REINHARDT, Circuit Judges.

REINHARDT, Circuit Judge:

The Chemehuevi Indian Tribe ("Tribe") brought suit in the district court challenging the validity of California's cigarette tax as applied to cigarettes sold by the Tribe on the reservation to non-Indian purchasers, and requesting injunctive relief to prevent the California State Board of Equalization ("Board") from enforcing the California Cigarette Tax Law against it. In response, the Board filed a counterclaim for the amount of taxes allegedly due. We find that sovereign immunity bars the counterclaim and that the California statute is preempted by federal law because it imposes the state tax directly upon the Tribe.

I. FACTUAL BACKGROUND

Since time immemorial, the Chemehuevi Indian Tribe ¹ has resided in the Chemehuevi Valley desert along the Colorado River, in the area that is now part of the Chemehuevi Indian Reservation. The Reservation is adjacent to Lake Havasu in the State of California, and the Tribe operates a resort, including a marina, a restaurant, and retail stores on land within the Reservation. As part of this business activity, the Tribe sells cigarettes that it purchases from a wholesaler in Arizona. During the first two years it operated its resort, the Tribe remitted to the California State Board of Equalization the state tax imposed on the distribution of cigarettes. In 1977, in an effort to raise revenues, the Tribe lawfully enacted its own Business and Cigarette Tax Code. ² As part of this Code, the Tribe imposed a tribal cigarette tax equivalent to the state cigarette tax. The Tribe then ceased remitting to the Board the state cigarette tax.

Following these actions by the Tribe, the Board notified the Bank of America that the Tribe was delinquent in the payment of taxes due to the state. Pursuant to the Board's request, the bank notified the Tribe that it was restricting the release of monies in the Tribe's checking and savings accounts. The Board then recorded liens against Tribal property and assets and attempted to execute on the liens. In response, the Tribe filed this action to enjoin the Board from enforcing its Cigarette Tax Law against the Tribe and the Board counterclaimed for the amount of taxes it alleged was due.

II. TRIBAL SOVEREIGN IMMUNITY

Because of its status as a sovereign entity, see, e.g., United States v. Wheeler, 435 U.S. 313, 322-23, 98 S.Ct. 1079, 1085-86, 55 L.Ed.2d 303 (1978), an Indian tribe is generally immune from unconsented suits. "The common law immunity of [Indian tribes] is coextensive with that of the United States ...." Kennerly v. United States, 721 F.2d 1252, 1258 (9th Cir.1983) (citing Santa Clara Pueblo v. Martinez, 436 U.S. 49, 58, 98 S.Ct. 1670, 1677, 56 L.Ed.2d 106 (1978)); accord Rehner v. Rice, 678 F.2d 1340, 1351 (9th Cir.1982), rev'd on other grounds, 463 U.S. 713, 103 S.Ct. 3291, 77 L.Ed.2d 961 (1983); California ex rel. California Department of Fish and Game v. Quechan Tribe of Indians, 595 F.2d 1153, 1155 (9th Cir.1979). ³ This immunity is rooted in the unique relationship between the United States government and the Indian tribes The question of tribal sovereign immunity is jurisdictional in nature. See Puyallup Tribe, Inc. v. Department of Game, 433 U.S. 165, 173, 97 S.Ct. 2616, 2621, 53 L.Ed.2d 667 (1977); United States v. United States Fidelity & Guaranty Co., 309 U.S. 506, 512, 60 S.Ct. 653, 656, 84 L.Ed. 894 (1940). Accordingly, we must address it first and resolve it irrespective of the merits of the claim. See Rehner, 678 F.2d at 1351; Quechan Tribe, 595 F.2d at 1154. In the face of voluminous precedent to the contrary, the Board contends that tribal sovereign immunity does not bar its counterclaim against the Tribe. The Board suggests both that a number of this court's recent cases present a basis for bringing suit against Indian tribes, and that counterclaims brought under Rule 13(a) of the Federal Rules of Civil Procedure are distinguishable from direct suits. We disagree.

                whose sovereignty substantially predates the Constitution.  United States v. Oregon, 657 F.2d 1009, 1013 (9th Cir.1981).  Such immunity is necessary to preserve the autonomous political existence of the tribes, id., and to preserve tribal assets, Maryland Casualty Co. v. Citizens National Bank, 361 F.2d 517, 521-22 (5th Cir.), cert. denied, 385 U.S. 918, 87 S.Ct. 227, 17 L.Ed.2d 143 (1966);  Adams v. Murphy, 165 F. 304, 308-09 (8th Cir.1908). 4   See generally Note, In Defense of Tribal Sovereign Immunity, 95 Harv.L.Rev. 1058 (1982) (demonstrating that the federal policies of tribal self-determination, economic development, and cultural autonomy require tribal immunity from suit)
                

A. Immunity From Unconsented Suit

The Board contends that recent decisions by this court in cases in which the issue of sovereign immunity of tribal officials was raised undermine the precedential value of our more general statements about the immunity of tribes. According to the Board, these cases suggest that tribal sovereign immunity may not be an absolute jurisdictional bar to all actions against Indian tribes.

The Supreme Court has recently reiterated the analytic distinction between suits against a sovereign entity and those brought against the officers or employees of the sovereign. Absent consent, a suit against a sovereign entity is barred; it is only when the plaintiff nominally sues an official that a more thorough examination of the sovereign status of the defendant must be made. See Pennhurst State School & Hospital v. Halderman, 465 U.S. 89, 104 S.Ct. 900, 908, 79 L.Ed.2d 67 (1984) (discussing sovereign immunity of states). If the official's acts exceeded the authority granted by the sovereign, as when an officer has acted unconstitutionally, the suit is deemed to be against the officer in his or her individual capacity. Because the suit is thus not against the sovereign, it is not barred. See 104 S.Ct. at 909 (citing Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908)); Larson v. Domestic & Foreign Commerce Corp., 337 U.S. 682, 689-90, 69 S.Ct. 1457, 1461-62, 93 L.Ed. 1628 (1949). ⁵

The same principles have been applied consistently when suit is brought against an Indian tribe. See, e.g., Santa Clara Pueblo, 436 U.S. at 58-59, 98 S.Ct. at 1676-1677 (citing Ex parte Young and permitting suit against tribal officer while holding that sovereign immunity bars suit against tribes); Kennerly, 721 F.2d at 1258-59. Yet, the Board suggests that some of our recent cases--Cardin v. De La Cruz, 671 F.2d 363 (9th Cir.), cert. denied, 459 U.S. 967, 103 S.Ct. 293, 74 L.Ed.2d 277 (1982) In Cardin, the district court had granted a non-Indian's request for an injunction prohibiting tribal officials from enforcing tribal health regulations against him. The Board finds support for its contention that tribes may be sued in the fact that we did not discuss the issue of tribal immunity when we reversed the district court's order. We do not see how our failure to discuss the tribe's sovereign immunity when holding that an injunction against tribal officials was invalid suggests a retreat from a consistent line of precedent holding that tribes are immune from suit.

Babbitt Ford, Inc. v. Navajo Indian Tribe, 710 F.2d 587 (9th Cir.1983), cert. denied, --- U.S. ----, 104 S.Ct. 1707, 80 L.Ed.2d 180 (1984), and Snow v. Quinault Indian Nation, 709 F.2d 1319 (9th Cir.1983), cert. denied, --- U.S. ----, 104 S.Ct. 2655, 81 L.Ed.2d 362 (1984)--have deviated from the established analytic model.

The same is true of Babbitt Ford. There, the district court reaffirmed the notion that the sovereign immunity enjoyed by Indian tribes can be limited only by explicit tribal consent or congressional authorization. Babbitt Ford, Inc. v. Navajo Indian Tribe, 519 F.Supp. 418, 424 (D.Ariz.1981) (citing Santa Clara Pueblo, 436 U.S. at 58, 98 S.Ct. at 1677); see infra p. 1053. The court said that "the sole question is whether sovereign immunity bars plaintiffs from suing the Tribe indirectly through its officers." 519 F.Supp. at 424. Thus, the court considered the circumstances under which suits could be brought against tribal officers. It did not consider the question of direct suits against Indian tribes, or suggest in any way that we were abandoning the historic rule that precludes such suits. Rather, the court held that some of the acts of particular tribal officials were within their authority while some were not, and that an injunction against the officers regarding only the latter acts was appropriate. Id. at 434. On appeal we concluded that all of the acts were within the sovereign authority of the tribe's...