Coeur D'Alene Tribe of Idaho v. Hammond
| Decision Date | 19 August 2004 |
| Docket Number | No. 02-35965.,No. 02-35998.,No. 02-36020.,02-35965.,02-35998.,02-36020. |
| Citation | 384 F.3d 674 |
| Parties | COEUR D'ALENE TRIBE OF IDAHO, Nez Perce Tribe; Shoshone-Bannock Tribes, Plaintiffs-Appellees, v. Duwayne D. HAMMOND, Jr.; Coleen Grant; Larry Watson; Severina Sam Haws, in their official capacity as Commissioners of the Idaho State Tax Commission, Defendants-Appellants. Coeur D'Alene Tribe of Idaho; Nez Perce Tribe, Plaintiffs, and Shoshone-Bannock Tribes, Plaintiff-Appellant, v. Duwayne D. Hammond, Jr.; Coleen Grant; Larry Watson; Severina Sam Haws, in their official capacity as Commissioners of the Idaho State Tax Commission, Defendants-Appellees. Coeur D'Alene Tribe of Idaho, Plaintiff-Appellant, and Shoshone-Bannock Tribes; Nez Perce Tribe, Plaintiffs, v. Duwayne D. Hammond, Jr.; Coleen Grant; Larry Watson; Severina Sam Haws, in their official capacity as Commissioners of the Idaho State Tax Commission, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Clay Smith (argued), Boise, ID, for defendants-appellants/appellees.
Brian J. Cleary (argued), Coeur D'Alene, ID, for the plaintiffs-appellees/appellants.
William Bacon, Fort Hall, ID, for the plaintiffs-appellees/appellants.
Richard K. Eichstaedt, Lapwai, ID, for the plaintiffs-appellees/appellants Nez Perce Tribe.
Douglas B.L. Endreson (argued), Washington, D.C., for the intervenor-appellant/appellee.
Appeal from the United States District Court for the District of Idaho; David O. Carter, District Judge, Presiding. D.C. No. CV-02-00185-DOC, D.C. No. CV-02-00185-BLW.
Before: KLEINFELD, GOULD, and TALLMAN, Circuit Judges.
We must decide whether Indian tribes have sovereign immunity from an Idaho state tax on motor fuel delivered by non-tribal distributors to tribally-owned gas stations for sale on Indian reservations. The Supreme Court of Idaho ruled in 2001 that the incidence of essentially the same tax fell impermissibly on the Indian tribes, and that Congress had not through the Hayden-Cartwright Act authorized states to abrogate the Indian tribes' sovereign immunity from taxation on the fuel sold on their reservations. After this state court ruling became final, the Idaho legislature attempted to modify the impact of the state court ruling by amending the tax law to provide expressly that the incidence of the Idaho state tax falls on the non-tribal distributors, not on the tribes who owned the retail gas stations located on the tribes' reservations. The tribes sued the Idaho State Tax Commissioners ("Commissioners") in federal district court to enjoin them from collecting the motor fuels tax. Notwithstanding the legislative amendment, the district court reached the same conclusion that the Supreme Court of Idaho had reached, that the incidence of the tax fell on the tribes and that sovereign immunity had not been waived. The district court accordingly granted summary judgment to the tribes and enjoined the Commissioners from enforcing the Idaho Motor Fuel Tax on "motor fuel delivered to, received by, or sold by Tribal or Indian owned retail gasoline stations in the Coeur d'Alene, Nez Perce, or Shoshone Bannock Reservations."
The Commissioners appeal the district court's decision and present two issues: Does the legal incidence of the tax fall impermissibly on Indian retailers, or permissibly on non-tribal distributors? If the incidence falls on the Indians, does the Hayden-Cartwright Act, which authorizes states to tax motor fuel sales on "United States military or other reservations," apply to Indian reservations? On the second of these issues, we must address the tribes' argument on cross-appeal that because the Supreme Court of Idaho has previously ruled on the applicability of the Hayden-Cartwright Act in this context, the state is barred from re-litigating the matter. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.
The federally recognized tribes pursuing this litigation — the Coeur d'Alene Tribe, the Nez Perce Tribe, and the Shoshone-Bannock Tribes (collectively, "Tribes") — own and operate retail gas stations on their Idaho reservations. For several years, the Idaho State Tax Commission ("Commission") imposed a tax of twenty-five cents per gallon on all motor fuel delivered to the Tribes' retail gasoline centers within the borders of the Tribes' reservations. The Tribes' fuel distributor, pursuant to Idaho statute, collected the motor fuels tax and remitted it to the Commission. Substantially all proceeds from the state motor fuel tax are used for highway construction and maintenance.
In 2001, the Supreme Court of Idaho declared unlawful the State's taxation of the Indian reservations. See Goodman Oil Co. v. Idaho State Tax Comm'n, 136 Idaho 53, 28 P.3d 996 (Idaho 2001), cert. denied, 534 U.S. 1129, 122 S.Ct. 1068, 151 L.Ed.2d 971 (2002). In Goodman Oil, the Supreme Court of Idaho held that the legal incidence of the state fuel tax falls on the retailers, and that federal law bars the imposition of the tax on tribal retailers in the absence of clear congressional authorization. The state supreme court ruled, in turn, that section 10 of the Hayden-Cartwright Act, codified as amended at 4 U.S.C. § 104, does not provide the required authorization of the State to collect the fuel tax from distributors who sell fuel to tribal retailers on Indian reservations. Section 10 of the Act, in part, states:
Tax on motor fuel sold on military or other reservation [;] reports to State taxing authority
(a) All taxes levied by any State, Territory, or the District of Columbia upon, with respect to, or measured by, sales purchases, storage, or use of gasoline or other motor vehicle fuels may be levied, in the same manner and to the same extent, with respect to such fuels when sold by or through post exchanges, ship stores, ship service stores, commissaries, filling stations, licensed traders, and other similar agencies, located on United States military or other reservations, when such fuels are not for the exclusive use of the United States.
(b) The officer in charge of such reservation shall, on or before the fifteenth day of each month, submit a written statement to the proper taxing authorities of the State, Territory, or the District of Columbia within whose borders the reservation is located, showing the amount of such motor fuel with respect to which taxes are payable under subsection (a) for the preceding month.
4 U.S.C. § 104 (emphasis added).
Following the decision in Goodman Oil, each Tribe enacted its own fuel tax for improving and maintaining roads on its reservations. The Idaho state legislature responded to the Supreme Court of Idaho's decision in Goodman Oil by amending the motor fuel tax on March 23, 2002. The amended law declared that the legal incidence of the tax was not on the retailer, but was on the distributor. 2002 Idaho Sess. Laws ch. 174 (H.B.732) ("Chapter 174"). The legislature declared explicitly in the law's uncodified "Statement of Intent" that:
The Legislature intends by this act to modify the holding of the Idaho Supreme Court in the case of Goodman Oil.... Specifically, the Legislature intends, by this act, to expressly impose the legal incidence of motor fuels taxes upon the motor fuel distributor who receives (as "receipt" is defined in Section 63-2403, Idaho Code) the fuel in [Idaho]
....
Chapter 174, § 1. In addition to stating that the legal incidence of the tax is intended to fall on the fuel distributor, the legislature amended the statute to indicate that the Commission was no longer imposing the tax "for the privilege of using the public highways upon the use or possession for use of gasoline," but rather, was imposing the tax "upon the receipt of motor fuel in this state by any distributor receiving motor fuel upon which the tax imposed by this section has not previously been paid." Idaho Code § 63-2402(1). See also id. § 63-2405 ().
After the amendments of Chapter 174, which the legislature made retroactive to July 1, 1996,1 the Indians' fuel distributor was required to collect and remit to the state the tax on fuel sold to the Tribes. After the amended law became effective, the Tribes went to federal district court to enjoin the Commissioners from collecting the motor fuels tax. The Tribes argued, inter alia, that the legal incidence of the fuel tax continued to fall unlawfully on the Indian retailers despite the legislative amendment, and that the tax was unenforceable because the United States Congress had not clearly authorized abrogation of the Indian tribes' sovereign immunity.
The district court addressed whether the legal incidence of the tax, as modified by Chapter 174, fell on the distributor, and whether the Hayden-Cartwright Act authorized application of the motor fuels tax to fuel sold to the Indians on their reservations. Answering "no" to both questions, the district court granted the Tribes' motions for summary judgment, and enjoined the state "from enforcing the Idaho Motor Fuel Tax, I.C. § 36-2401, et seq. ... with respect to motor fuel delivered to, received by, or sold by Tribal or Indian owned retail gasoline stations on the Coeur d'Alene, Nez Perce, or Shoshone Bannock Reservations." Coeur D'Alene Tribe v. Hammond, 224 F.Supp.2d 1264, 1271 (D.Idaho 2002). The Commissioners appeal the summary judgment entered against them.2
We first analyze where the legal incidence of the tax falls, considering both the legislative amendments to the statute and its operative provisions. Concluding that the tax incidence still falls on the Tribes, we next address the Tribes' cross-appeal urging that the Commissioners are barred from relitigating the question whether the Hayden-Cartwright Ac...
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