Morongo Band of Mission Indians v. California State Bd. of Equalization

• Decision Date: 20 September 1988
• Docket Number: 87-2371 and 87-2393,Nos. 87-2320,s. 87-2320
• Citation: 858 F.2d 1376
• Parties: MORONGO BAND OF MISSION INDIANS, Plaintiff/Counterclaim-Defendant/Appellant, v. CALIFORNIA STATE BOARD OF EQUALIZATION; Richard Nevins, in his official capacity as Chairman of the State Board of Equalization; Conway H. Collis, in his official capacity as a member of the State Board of Equalization; Ernest J. Dronenburg, Jr., in his official capacity as a member of the State Board of Equalization; William M. Bennett, in his official capacity as a member of the State Board of Equalization, Defendants/Appellees, Clive Miller, Defendant/Counterclaimant/Appellee. MORONGO BAND OF MISSION INDIANS, Plaintiff/Counterclaim-Defendant/Appellee, v. CALIFORNIA STATE BOARD OF EQUALIZATION, et al., Defendants, and Clive Miller, Defendant/Counterclaimant/Appellant. MORONGO BAND OF MISSION INDIANS, Plaintiff/Appellee, v. CALIFORNIA STATE BOARD OF EQUALIZATION, Defendant/Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1376

858 F.2d 1376

13 Fed.R.Serv.3d 159

MORONGO BAND OF MISSION INDIANS, Plaintiff/Counterclaim-Defendant/Appellant, v. CALIFORNIA STATE BOARD OF EQUALIZATION; Richard Nevins, in

his official capacity as Chairman of the State Board of

Equalization; Conway H. Collis, in his official capacity as

a member of the State Board of Equalization; Ernest J.

Dronenburg, Jr., in his official capacity as a member of the

State Board of Equalization; William M. Bennett, in his

official capacity as a member of the State Board of

Equalization, Defendants/Appellees,

Clive Miller, Defendant/Counterclaimant/Appellee.

MORONGO BAND OF MISSION INDIANS, Plaintiff/Counterclaim-Defendant/Appellee, v. CALIFORNIA STATE BOARD OF EQUALIZATION, et al., Defendants, and Clive Miller, Defendant/Counterclaimant/Appellant.

MORONGO BAND OF MISSION INDIANS, Plaintiff/Appellee, v. CALIFORNIA STATE BOARD OF EQUALIZATION, Defendant/Appellant.

Nos. 87-2320, 87-2371 and 87-2393.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted May 10, 1988.

Decided June 14, 1988.

As Amended Sept. 20, 1988.

George Forman, Alexander & Karshmer, Berkeley, Cal., for plaintiff/counterclaim-defendant/appellant/appellee Morongo Band of Mission Indians.

Julian O. Standen, Asst. Atty. Gen., San Francisco, Cal., for defendants/appellant/appellees California State Bd. of Equalization.

Robert C. Moest, Fisher & Moest, Los Angeles, Cal., for defendant/counterclaimant/appellant/appellee Clive Miller.

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

Before BROWNING, ALARCON and NORRIS, Circuit Judges.

ALARCON, Circuit Judge:

I. INTRODUCTION

The question presented in this case is whether the district court properly exercised subject matter jurisdiction over an Indian tribe's action in the nature of interpleader against a member of the tribe and a state tax authority. We hold that it did not. Accordingly, we vacate the district court's judgment in all respects and remand with instructions that the case be dismissed.

II. BACKGROUND

Plaintiff/Counterclaim-Defendant/Appellant/Cross-Appellee Morongo Band of Mission Indians (the Band) leased Indian trust land beneficially owned by Defendant/Counterclaimant/Appellee/Cross-Appellant Clive Miller (Miller), a member of the Band. The lease was never approved by the Secretary of the Interior (the Secretary).

On August 16, 1983, Defendant/Appellee/Cross-Appellant California State Board of Equalization (the Board) levied on funds held by the Band and allegedly owed to Miller as rent under the lease. On December 28, 1983, the Band deposited the disputed funds into the registry of the district court and instituted an action in the nature of interpleader. The Band asserted no claim to the deposited funds.

On September 26, 1986, the district court granted the Band leave to amend its complaint to assert its own claim to the funds under the theory that the lease with Miller was invalid for lack of approval by the Secretary. ¹ Miller thereupon filed a Counterclaim alleging claims for unpaid rent under the lease, for the reasonable value of the Band's use of his property, for bad faith, and for violations of the Indian Civil Rights Act, 25 U.S.C. Sec. 1302.

The district court granted summary judgment for the Band on its claim that the lease was invalid. The court also granted summary judgment for Miller on his claim for the reasonable value of the Band's use of his property. All parties appealed.

The briefs initially filed in this court did not discuss the question of federal subject matter jurisdiction over interpleader actions. We called for supplemental briefing on the question. Each of the parties contends that the district court properly exercised jurisdiction pursuant to the general federal question statute, 28 U.S.C. Sec. 1331 (1982).

III. ANALYSIS

The fact that none of the parties contests the district court's jurisdiction does not, of course, relieve us of our responsibility to determine whether the court's exercise of jurisdiction was proper. The parties have no power to confer jurisdiction on the district court by agreement or consent. Sullivan v. First Affiliated Securities, Inc., 813 F.2d 1368, 1374 (9th Cir.), cert. denied, --- U.S. ----, 108 S.Ct. 150, 98 L.Ed.2d 106 (1987); Janakes v. United States Postal Service, 768 F.2d 1091, 1095 (9th Cir.1985). If the district court had no jurisdiction over the subject matter, the action should have been dismissed, regardless of the parties' preference for an adjudication in federal court.

The district court, believing that it had jurisdiction based on the original interpleader claim, granted the Band leave to file an amended complaint realleging the interpleader claim and adding three claims for declaratory relief. In determining federal court jurisdiction, we look to the original, rather than to the amended, complaint. Subject matter jurisdiction must exist as of the time the action is commenced. See Mollan v. Torrance, 22 U.S. (9 Wheat.) 536, 538, 6 L.Ed. 154 (1824) (jurisdiction "depends upon the state of things at the time of the action brought"); Nuclear Eng'g Co. v. Scott, 660 F.2d 241, 248 (7th Cir.1981) ("Jurisdictional questions are answered by reference to the time of the filing of an action...."), cert. denied, 455 U.S. 993, 102 S.Ct. 1622, 71 L.Ed.2d 855 (1982); Mobil Oil Corp. v. Kelley, 493 F.2d 784, 786 (5th Cir.) (jurisdiction "is determined at the outset of the suit"), cert. denied, 419 U.S. 1022, 95 S.Ct. 498, 42 L.Ed.2d 296 (1974). ² If jurisdiction is lacking at the outset, the district court has "no power to do anything with the case except dismiss." 15 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure Sec. 3844, at 332 (1986) (footnote omitted); accord United States v. Boe, 543 F.2d 151, 159 (C.C.P.A.1976) (when subject matter jurisdiction is lacking, the district court "ha[s] no power to do anything, other than to dismiss the action," and any order other than to dismiss is a nullity). ³ Accordingly we must examine the Band's original complaint to determine whether the claim alleged therein was one over which the district court had jurisdiction. If jurisdiction was lacking, then the court's various orders, including that granting leave to amend the complaint, were nullities.

The complaint originally filed by the Band alleged one claim--interpleader. The facts alleged to support the claim were as follows: The Band is a federally-recognized Indian tribe. It is the beneficial owner of unallotted trust lands within the Morongo Indian Reservation, which is located in Riverside County, California. Miller is a member of the Band and resides on its reservation. He is the beneficial owner of allotted parcels of trust land located within the reservation. On April 26, 1983, the Band and Miller executed a written lease giving the Band the right to use a specified portion of Miller's land to conduct bingo games. The lease provided that the Band would pay rent to Miller from the proceeds of the games. On or about August 16, 1983, in an effort to collect state cigarette taxes owed by Miller, the Board served the Band with a Notice of Levy on all property in the Band's possession belonging to Miller, including funds being held by the Band as rent. Miller subsequently demanded that the Band pay him the rent in question, contending that the rent was exempt from the Board's levy under 25 U.S.C. Sec. 410 ⁴ and the doctrine of federal preemption of the field of leases of Indian trust land. Faced with conflicting claims to the rent, the Band deposited $292,000 into the registry of the district court and instituted the present action.

In its complaint, the Band did not assert any right to the deposited funds. Rather, it characterized the funds as "rents due to MILLER for the months of September through December, 1983." By way of relief on its claim for interpleader, the Band prayed that the district court "[o]rder the defendants to interplead and settle between themselves their rights to the rents due under the said lease; ... [o]rder that plaintiffs are discharged from all liability with respect to the rent payments deposited with the Court ...; [and] [o]rder that the rents deposited with the Court be paid to the party whom the Court shall adjudge entitled to them...."

The complaint alleged subject matter jurisdiction under 25 U.S.C. Sec. 345 and 28 U.S.C. Secs. 1331, 1335, 1353, 1362, 2201, and 2202. Contrary to the Band's assertion, jurisdiction is unavailable under the Federal Interpleader Act, 28 U.S.C. Sec. 1335 (1982). That section requires that two or more of the adverse claimants to the interpleaded funds be "of diverse citizenship as defined in section 1332 of this title." 28 U.S.C. Sec. 1335(a)(1) (1982); see State Farm Fire & Cas. Co. v. Tashire, 386 U.S. 523, 530, 87 S.Ct. 1199, 1203, 18 L.Ed.2d 270 (1967) (section 1335 "has been uniformly construed to require ... diversity of citizenship between two or more claimants"). According to the Band's complaint, the Board "is an agency of the State of California charged by law with the assessment and collection of state taxes." As an agency of the State of California, the Board has no "citizenship" for the purposes of section 1332. See Moor v. County of Alameda, 411 U.S. 693, 717, 93 S.Ct. 1785, 1799, 36 L.Ed.2d 596 (1973) ("There is no question that a State is not a 'citizen' for purposes of the diversity jurisdiction."); Postal Tel Cable Co. v. Alabama, 155 U.S. 482, 487, 15 S.Ct. 192, 194, 39 L.Ed. 231 (1894) ("A State is not a citizen. And, under the Judiciary Acts of the United States, it is well settled that a suit between a State and a citizen or a corporation of another State is not between citizens of different States...."). Hence, the adverse claimants--Miller and the Board--are not of diverse citizenship. ⁵

In addition to section 1335, Fed.R.Civ.P. 22 provides for interpleader actions in the federal courts. Rule 22, however, is...