Attea, Elias H., Jr. v. Eastern Area Director, 16 IBIA 138 (1988)

Appeal from a decision of the Eastern Area Director, Bureau of Indian Affairs, revoking an Indian trader's license for the sale of cigarettes and fuel on the St. Regis Mohawk Indian Reservation.

Reversed and remanded.

1. Administrative Procedure: Administrative Procedure Act--Administrative Procedure: Licensing--Indians: Traders

   Except in cases of willfulness or where public health, interest, or safety requires otherwise, 5 U.S.C. § 558(c) (1982) dictates that, prior to institution of proceedings to revoke an Indian trader's license, the licensee must be given written notice of the facts or conduct that may warrant revocation and an opportunity to demonstrate or achieve compliance with all lawful requirements.

2. Administrative Procedure: Administrative Procedure Act--Administrative Procedure: Licensing--Indians: Traders

   For purposes of the procedural requirements concerning license revocation in 5 U.S.C. § 558(c) (1982), a finding that a licensed Indian trader acted willfully requires evidence that he acted intentionally or with careless disregard of agency requirements.

   Appellant Elias H. Attea, Jr., challenges a September 18, 1987, decision of the Area Director, Eastern Area Office, Bureau of Indian Affairs (appellee; BIA), revoking appellant's Indian trader's license. For the reasons discussed below, the Board reverses that decision and remands the case to appellee.

   IBIA 88-13-A

   Background

   Persons doing business on Indian reservations and trading with Indians are subject to regulation pursuant to the "Indian trader statutes," 25 U.S.C. §§ 261-264 (1982). 1/ 25 U.S.C. § 261 provides: "The Commissioner of Indian Affairs shall have the sole power and authority to appoint traders to the Indian tribes and to make such rules and regulations as he may deem just and proper specifying the kind and quantity of goods and the prices at which such goods shall be sold to the Indians." 25 U.S.C. § 262 provides:

   Any person desiring to trade with the Indians on any Indian reservation shall, upon establishing the fact, to the satisfaction of the Commissioner of Indian Affairs, that he is a proper person to engage in such trade, be permitted to do so under such rules and regulations as the Commissioner of Indian Affairs may prescribe for the protection of said Indians.

   The regulations promulgated pursuant to this statutory authority are found at 25 CFR Parts 140 and 141 2/ and provide for, inter alia, the issuance of licenses to trade with Indians.

   On May 1, 1986, appellant was issued an Indian trader's license by the Liaison Officer, New York Liaison Office, BIA. 3/ The license authorized appellant to sell cigarettes and fuel on the St. Regis Mohawk Indian Reservation, New York, from May 1, 1986, to April 30, 1991. The license stated:

   In consideration of the granting of this license, and by the acceptance thereof, the licensee expressly warrants that all applicable Federal, State, and Tribal laws and regulations will be fully complied with in all respects and that authorized annual license fees will be paid when due. Upon failure to do so the licensee is subject to forfeiture of this license and such further action as the law and facts may justify.

   This license is revocable at any time pursuant to the provisions of Part 251 [now Part 140] of Title 25 of the Code of Federal Regulations.

   In an action effective on November 12, 1986, the Tribal Council of the St. Regis Mohawk Tribe (tribe) revoked the tribal licenses of three _____________________________ 1/ All further references to the United States Code are to the 1982 edition.

   2/ Part 141 concerns only the Navajo, Hopi, and Zuni Reservations.

   3/ The license shows that it was issued to Elias H. Attea, Jr., JR Attea Wholesale. Appellant's license application, dated Mar. 5, 1985, identifies his residence address and proposed business address as 6175 Strickler Road, Clarence, New York, and states that he was employed by Attea Bros., 1509 Clinton St., Buffalo, New York.

   IBIA 88-13-A

   individuals who had been licensed to sell unstamped cigarettes at retail on the reservation. The tribe then wrote to Milhem Attea & Bros., Inc., concerning the revocations. 4/ The letter was addressed to the company at its business address, 1509 Clinton Street, Buffalo, New York 14206. It was dated November 12, 1986, and mailed on November 18, 1986. The letter stated:

   RE: ELI TARBELL, BEAR'S DEN WILLIAM SEARS

   GABRIEL OAKES

   This is to notify you that the St. Regis Mohawk Tribal Council has revoked the authority of the above-named individuals to sell unstamped cigarettes as of this date.

   You are to cease delivering any unstamped cigarettes to the above-named businesses immediately.

   You are also requested to send us any invoices for deliveries made after July 29, 1986, to the present time. [Emphasis in original.]

   On December 3, 1986, the tribe wrote to appellee requesting that he revoke appellant's trader's license. 6/ The tribe's letter stated:

   On November 21, 1986, a shipment of cigarettes was confiscated by a group of people from the St. Regis Reservation. In the shipment confiscated were cigarettes which were to delivered to Bear's Den, William Sears and Gabriel Oakes, among other deliveries. * * *

   On Sunday, November 30, 1986, at about noon, another shipment was delivered to William Sears. This shipment was made in a Ryder Company truck and was witnessed by several individuals.

   On January 2, 1987, appellee wrote to Milhem Attea & Bros. Inc., concerning the tribe's request. Appellee's letter offered an opportunity to respond to the tribe's allegations and to state why appellant's license should not be revoked. ________________________ 4/ This letter was signed by two of the three St. Regis tribal chiefs. The signature line for the third chief was blank. The record shows that the third chief disagreed with the action and questioned the validity of an action taken by only two chiefs. For purposes of this decision, the Board assumes that the two chiefs had the authority to act for the tribe.

   5/ In its Dec. 3, 1986, letter discussed infra, the tribe states that the letter dated Nov. 12 was mailed on Nov. 18. The record copy of the letter dated Nov. 12 also bears a handwritten notation to the same effect.

   6/ The letter to BIA was signed by the same two St. Regis tribal chiefs as was the letter to appellant. The signature line for the third chief was, again, blank.

   IBIA 88-13-A

   On January 12, 1987, appellant, through his attorney, moved to dismiss the tribe's request to revoke his trader's license, on the grounds, inter alia, that neither the tribe's letter dated November 12, 1986, nor appellee's January 2, 1987, letter constituted effective notice to appellant because both were addressed to Milhem Attea & Bros. Inc. rather than appellant, and appellant's business was separate from that of Milhem Attea & Bros. Inc.

   In response to appellant's motion, on January 21, 1987, appellee wrote directly to appellant, repeating the offer made in the January 2 letter. Appellee stated that the tribe had requested that appellant's trader's license be revoked because "[he had] failed to comply with tribal laws and regulations as [he was] required to do by the terms of [his] license." Appellant was given 30 days to file a response. The letter also stated that the tribe would have 15 days from its receipt of appellant's response to file a reply.

   Appellant responded by letter of February 10, 1987, stating eight separate objections to the proposed revocation of his license. The tribe replied in a letter dated May 19, 1987. 7/

   In a decision dated September 18, 1987, appellee revoked appellant's trader's license. The decision identified the relevant issues as: "(A) whether the St. Regis Mohawk Tribe is recognized as exercising sovereign powers over its own reservation, (B) whether the intent of the Federal Trader Licensing Statutes has application to this matter, [and] (C) whether the 1968 Indian Civil Rights Act, 25 U.S.C. 1301-1303, has application to this matter."

   Appellee found that the tribe had the sovereign authority to regulate non-members who enter the St. Regis Mohawk Indian Reservation, even those who enter with the approval of BIA, and that the tribe had attempted to regulate the activities of appellant by directing him to cease delivering unstamped cigarettes to certain individuals.

   He further found that the intent of the Indian trader statutes was to protect Indians from non-Indians who would take unfair advantage of them and that because Indian tribes could achieve the intent of the statutes by exercise of their own authority in cases where BIA has not acted, 8/ they should not be precluded from doing so where BIA has acted. He stated that

   ______________________ 7/ The tribe's response appears to have been untimely. Neither the Jan. 2 letter nor the Jan. 21 letter, in which the time deadlines were set out, shows that a copy of the letter was sent to the tribe, although both indicate that copies were sent to the tribe's attorneys.

   8/ Appellee cites United States ex rel. Keith v. Sioux Nation Shopping Center, 634 F.2d 401 (8th Cir. 1980), in...