Kahn v. Arizona State Tax Commission, 71-1263

• Citation: 36 L.Ed.2d 404,93 S.Ct. 1917,411 U.S. 941
• Decision Date: 23 April 1973
• Docket Number: No. 71-1263,71-1263
• Parties: Edmund D. KAHN et ux. v. ARIZONA STATE TAX COMMISSION
• Court: United States Supreme Court

411 U.S. 941

93 S.Ct. 1917

36 L.Ed.2d 404

Edmund D. KAHN et ux.

v ARIZONA STATE TAX COMMISSION.

No. 71-1263.

Supreme Court of the United States

April 23, 1973

The motion to dispense with printing the jurisdictional statement is granted. The appeal is dismissed for want of a substantial federal question.

Mr. Justice DOUGLAS, with whom Mr. Justice BRENNAN concurs, dissenting from dismissal.

Appellants, after exhausting administrative remedies, brought suit in the Superior Court of the State of Arizona to recover personal income tax assessments paid under protest for the years 1967-1969. The assessments in question were imposed on the income of the appellant husband, which he earned while being employed first as a law clerk and then later as an attorney for the Navajo Tribe. Appellant's salary was paid out of Indian tribal funds. Appellants, who are not Indians, resided within the reservation. The Superior Court dismissed the suit for failure to state a claim upon which relief could be granted. The Arizona Supreme Court affirmed the dismissal.

Appellant's employment was controlled by 25 U.S.C. § 81, which governs the conditions under which contracts can be made with Indian tribes or Indians. Even more specifically, appellant's employment was subject to the regulations promulgated by the Secretary of the Interior in 25 CFR §§ 72.1-72.25. Under these regulations, any attorney performing legal services for the Indian tribe must have his employment contract, which includes fees and expenses, approved by the Secretary of the Interior. (25 CFR § 72.1.) In addition, in determining the appropriateness of the fees, the amount of tribal funds held in the tribal treasury, not otherwise appropriated and available for payment, must be considered. (25 CFR § 72.5.) Tribal funds may not be used for payment of attorney fees and expenses in the absence of express authorization by Congress. (25 CFR § 72.6.) In order to be eligible to act as an attorney for an Indian tribe, the area director must review the applying attorney's references and qualifications and transmit a recommendation to the Secretary of the Interior. (25 CFR § 72.4.) In order to be qualified to provide such representation, the attorney must be admitted to practice before the Department of the Interior and the bureaus thereof. (25 CFR § 72.2.) An attorney performing legal services for an Indian tribe is subject to criminal penalties for the violation of the statutes governing attorney contracts with Indian tribes (18 U.S.C. § 438), and can be fired by the Secretary of the Interior (Udall v Littell, 125 U.S.App.D.C. 89, 366 F.2d 668 (1966), cert. denied, 385 U.S. 1007, 87 S.Ct. 713, 17 L.Ed.2d 545).

As this Court recently stated in McClanahan v. Arizona State Tax Comm'n, 411 U.S. 164, 93 S.Ct. 1257, 36 L.Ed.2d 129, '[t]he policy of leaving Indians free from state jurisdiction and control is deeply rooted in the Nation's History.' Rice v. Olson, 324 U.S. 786, 789, 65 S.Ct. 989, 89 L.Ed. 1367 (1945). In McClanahan the Court rejected the theory that nothing remains of the notion that reservation Indians are a separate people to whom state jurisdiction, and therefore state tax legislation, may not extend. (McClanahan v. Arizona State Tax Comm'n, 411 U.S. at p. 168, 93 S.Ct. 1257.)

In Warren Trading Post Co. v. Arizona Tax Comm'n, 380 U.S. 685, 85 S.Ct. 1242, 14 L.Ed.2d 165, this Court struck down a state attempt to assess a 2% tax on the 'gross proceeds of sales,...