Confederated Tribes and Bands of the Yakima Nation v. County of Yakima

• Decision Date: 16 May 1990
• Docket Number: No. 88-3926,88-3926
• Citation: 903 F.2d 1207
• Parties: CONFEDERATED TRIBES AND BANDS OF THE YAKIMA NATION, Plaintiff-Appellee, v. COUNTY OF YAKIMA; and Dale A. Gray, Yakima County Treasurer, Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1207

903 F.2d 1207

CONFEDERATED TRIBES AND BANDS OF THE YAKIMA NATION, Plaintiff-Appellee, v. COUNTY OF YAKIMA; and Dale A. Gray, Yakima County Treasurer, Defendants-Appellants.

No. 88-3926.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Sept. 12, 1989.

Decided Jan. 9, 1990.

As Amended May 16, 1990.

John V. Staffan, Deputy Pros. Atty., Yakima, Wash., for defendants-appellants.

Tim Weaver, Cockrill, Weaver & Bjur, P.S., Yakima, Wash., for plaintiff-appellee.

Appeal from the United States District Court for the Eastern District of Washington.

Before WRIGHT, WALLACE and THOMPSON, Circuit Judges.

WALLACE, Circuit Judge:

Yakima County appeals from the district court's summary judgment in favor of the Confederated Tribes and Bands of the Yakima Nation (Yakima Nation). Pursuant to section 6 of the General Allotment Act of 1887, 24 Stat. 388, 25 U.S.C. Sec. 349 (General Allotment Act), the County claims power to impose and levy taxes on fee patented land owned by members of the Yakima Nation and located within their reservation. We have jurisdiction over this timely appeal pursuant to 28 U.S.C. Sec. 1291. We affirm in part, reverse in part, and remand to the district court for further proceedings.

I

The policy behind the General Allotment Act and similar allotment acts was "the gradual extinction of Indian reservations and Indian titles" through a process of steady assimilation. Draper v. United States, 164 U.S. 240, 246, 17 S.Ct. 107, 109, 41 L.Ed. 419 (1896). In particular, the General Allotment Act was designed to provide for the " 'breaking up, as rapidly as possible, of all the tribal organizations and for the allotment of lands to the Indians in severalty, in order that they may possess them individually and proceed to qualify themselves for the duties and responsibilities of citizenship.' " United States v. Mitchell, 445 U.S. 535, 544-45 n. 5, 100 S.Ct. 1349, 1354-55 n. 5, 63 L.Ed.2d 607 (1980), quoting Statement of Rep. Perkins, 18 Cong.Rec. 191 (1886); see generally D. Getches, D. Rosenblatt, and C. Wilkinson, Federal Indian Law 69-79 (1979). Under this statutory scheme of allotments, a number of Indians on the Yakima Indian Reservation, and the Yakima Nation itself, own land patented in fee. This case concerns the power of the State of Washington to levy and collect ad valorem and excise sales taxes upon such land.

The Yakima Indian Reservation consists of approximately 1,300,000 acres of land located almost entirely in Yakima County in the eastern part of Washington State. There are approximately 7,600 enrolled members of the Yakima Nation. One hundred four of these members own a total of 139 parcels of fee-patented land within the Yakima Indian Reservation. The Yakima Nation also has ownership interests in some of the fee lands.

Prior to the commencement of this action, Yakima County routinely levied and collected ad valorem taxes on the fee patented parcels pursuant to Title 84 of the Revised Code of Washington. Wash.Rev.Code chs. 84.52, 84.56 (1962 and Supp.1989). The County also collected real estate excise taxes upon the sale of these properties pursuant to Wash.Rev.Code ch. 82.46 ( Supp.1989). Yakima County claims authority to tax these parcels pursuant to section 6 of the General Allotment Act. The County claims the power to tax only fee patented land; it does not claim the power to tax land held in trust for the Indians by the federal government or land with other restrictions on alienation.

On November 9, 1987, the Yakima Nation, on its own behalf and on behalf of its members owning fee patented parcels of land within the reservation, brought an action in the United States District Court for the Eastern District of Washington requesting a declaratory judgment stating that the taxes imposed by Yakima County were inconsistent with applicable federal law. The Yakima Nation also requested an injunction against the further levy or collection of taxes by the County. The Yakima Nation brought this action in response to efforts by Yakima County to sell 28 parcels of the fee patented land at a tax sale. Shortly after the lawsuit was commenced, the district court entered an order restraining the tax sales.

The district court granted summary judgment in favor of the Yakima Nation. Essentially, the district court based its decision upon two interrelated grounds. First, the court reasoned that while the tax is seemingly permitted under the terms of the General Allotment Act, that act is "inconsistent" with the Indian Reorganization Act, Act of June 18, 1934, 48 Stat. 984, codified at 25 U.S.C. Sec. 461 et seq. (Indian Reorganization Act), and therefore without legal effect. Second, the district court found that "[t]he map entered as an exhibit by stipulation of the parties clearly demonstrates the checkerboard effect of the imposition of ad valorem property taxes upon the fee patented land." The court reasoned that this "checkerboard jurisdiction" was prohibited by the Supreme Court's decision in Moe v. Confederated Salish & Kootenai Tribes, 425 U.S. 463, 96 S.Ct. 1634, 48 L.Ed.2d 96 (1976) (Moe ).

We review a district court's entry of summary judgment de novo. Kruso v. International Telephone & Telegraph Corp., 872 F.2d 1416, 1421 (9th Cir.1989). Our review is governed by the same standard used by the trial court under Fed.R.Civ.P. 56(c). Darring v. Kincheloe, 783 F.2d 874, 876 (9th Cir.1986). Viewing the evidence in the light most favorable to the nonmoving party, we must determine whether there are any genuine issues of material fact and whether the court correctly applied the relevant substantive law. Tzung v. State Farm Fire and Casualty Co., 873 F.2d 1338, 1339-40 (9th Cir.1989).

II

As a threshold matter, we must examine whether Yakima County is empowered to levy these taxes under Washington state law. The ad valorem and excise tax provisions of the Revised Washington Code constitute a positive statutory grant of authority to the County to impose such taxes upon land and land sales within its jurisdiction. See Wash.Rev.Code chs. 82.46, 84.52, 84.56 (1962 and Supp.1989). The Yakima Nation contends that Washington's state constitution forbids these taxes. Article XXVI of the Constitution of the State of Washington provides:

That the people inhabiting this state do agree and declare that they forever disclaim all right and title to the unappropriated public lands lying within the boundaries of this state, and to all lands lying within said limits owned or held of any Indian or Indian tribes; ... and said Indian lands shall remain under the absolute jurisdiction and control of the Congress of the United States ... and ... no taxes shall be imposed by the state on lands or properties therein, belonging to or which may be hereafter purchased by the United States or reserved for use: Provided, That nothing in this ordinance shall preclude the state from taxing as other lands are taxed any lands owned or held by any Indian who has severed his tribal relations, and has obtained from the United States or from any person a title thereto by patent or other grant, save and except such lands as have been or may be granted to any Indian or Indians under any act of congress containing a provision exempting the lands thus granted from taxation, which exemption shall continue so long and to such extent as such act of congress may prescribe.

(Emphasis added.) This Article expressly permits the state to tax certain lands owned by Indians who have severed their tribal relations, but it does not speak directly to the issue of whether the state may tax fee patented lands owned by Indians who have retained their tribal affiliations. Rather, the Article states that "said Indian lands shall remain under the absolute jurisdiction and control of the congress of the United States." Id. (emphasis added). This plainly suggests that Congress may give its consent to the states to tax Indian lands. Indeed, this is the interpretation the Supreme Court of Washington gave to the clause in the context of other federally controlled land. In Boeing Aircraft Co. v. Reconstruction Finance Corp., 25 Wash.2d 652, 663, 171 P.2d 838, 845 (1946), that court interpreted Article XXVI to mean that "Federal property shall be taxed by this state when consent is given by the Congress of the United States." We are bound to defer to the judgment of a state's highest court in interpreting a state statute or constitution. 28 U.S.C. Sec. 1652; Tom v. Sutton, 533 F.2d 1101, 1106 (9th Cir.1976). Therefore, under Boeing, Congress may permit the state to tax federally controlled land, including Indian land. We conclude that, under Washington state law, the issue as to whether Yakima County may tax the patented fee parcels is governed by whether Congress has consented to such a tax.

III

The test stated by the Washington Supreme Court in Boeing--whether or not Congress has consented to permit a state to tax--is also the one used by the Supreme Court in its cases dealing with state taxation and regulation of Indian affairs. The Yakima Nation contends that a line of modern cases illustrates a trend against permitting a state to impose regulations or taxes on fee patented lands. See California v. Cabazon Band of Mission Indians, 480 U.S. 202, 107 S.Ct. 1083, 94 L.Ed.2d 244 (1987) (Cabazon Band ) (County may not apply Bingo and gambling ordinances against reservation); Montana v. Blackfeet Tribe of Indians, 471 U.S. 759, 105 S.Ct. 2399, 85 L.Ed.2d 753 (1985) (Blackfeet Tribe ) (State may not tax oil, gas, and other mineral royalties derived from reservations lands); Bryan v. Itasca County, Minnesota, 426 U.S. 373, 96 S.Ct. 2102, 48 L.Ed.2d 710 (1976) (Bryan) (County may not impose tax upon mobile home located on trust land); McClanahan v. Arizona State Tax Commission, 411 U.S. 164, 93 S.Ct. 1257, 36 L.Ed.2d 129 (1973) (McClanahan) (state has no jurisdiction to impose tax upon income derived wholly from reservation...