Miller v. Wright, 11-35850
| Decision Date | 13 November 2012 |
| Docket Number | D.C. No. 3:11-cv-05395-RBL,No. 11-35850,11-35850 |
| Parties | DANIEL T. MILLER; AMBER LANPHERE; PAUL M. MATHESON, Plaintiffs-Appellants, v. CHAD WRIGHT, Puyallup Tribe Tax Department, Enforcement Officer; HERMAN DILLON, SR., Chairman Puyallup Tribe of Indians; PUYALLUP TRIBE OF INDIANS, a federally recognized American Indian tribe, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
FOR PUBLICATION
ORDER ANDAMENDED
OPINIONAppeal from the United States District Court
for the Western District of Washington
and Johnnie B. Rawlinson, Circuit Judges.
Order;
Opinion by Judge Rawlinson
SUMMARY*
Affirming the district court's dismissal of an antitrust action brought by cigarette vendors challenging taxes imposed by virtue of the authority vested in an Indian tribe, the panel held that the district court lacked subject matter jurisdiction in light of the tribe's sovereign immunity.
The panel held that the tribe did not implicitly waive its sovereign immunity by agreeing to dispute resolution procedures nor by ceding its authority to Washington State when entering into a cigarette tax contract. The panel also held that federal antitrust law did not explicitly abrogate tribal immunity, and the Sherman Antitrust Act was not a law of general applicability vis-a-vis the tribe. The panel held that tribal officials were protected by the tribe's sovereign immunity because they acted pursuant to the tribe's authority.
The panel also affirmed the district court's alternative ruling that the action was barred by res judicata in light of prior litigation in state and tribal courts.
Robert Kovacevich, Spokane, Washington, for Appellants Daniel Miller, Amber Lanphere, and Paul M. Matheson.
John Howard Bell (argued) and Andrea George, Tacoma, Washington, for Appellees Herman Dillon Sr., Chairman, Puyallup Tribe of Indians, and the Puyallup Tribe of Indians, a federally recognized Indian tribe.
James H. Jordan, Jr., Miller Nash LLP, Seattle, Washington, for Appellee Chad Wright, Puyallup Tribe Tax Department, Enforcement Officer.
Appellees' Request for Reconsideration and Correction of Footnote 4, filed on November 26, 2012, is construed as a Petition for Panel Rehearing. So construed, the petition is GRANTED. The opinion in this case, filed on November 13, 2012, is AMENDED to delete footnote 4, Slip Opinion, p. 13246.
No further petitions for rehearing or petitions for rehearing en banc will be entertained.
This is the latest iteration of cigarette vendors' challenge to taxes imposed by virtue of the authority vested in an Indian tribe. Appellants Daniel T. Miller (Miller), Amber Lanphere (Lanphere), and Paul M. Matheson (Matheson) appeal the district court's dismissal of their antitrust action against appellees Herman Dillon (Dillon), Chad Wright (Wright) and the Puyallup Tribe (the Tribe). The district court dismissed the action for lack of subject matter jurisdiction in light of the tribe's sovereign immunity.1 We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm the district court.
Matheson is an enrolled Puyallup Indian who owns a retail store that sells cigarettes. Matheson's store is located within the Puyallup Indian Reservation. The Tribe operates retail stores in the same vicinity.
Miller is a non-Indian, non-resident of the reservation who purchased cigarettes from Matheson. As a result of the Tribe's cigarette tax, the price Miller paid for a carton of cigarettes included a $30.00 fee. This $30.00 fee stemmed from the cigarette tax contract (CTC) between the State ofWashington and the Tribe. The price also included a $5 fee for the benefit of Washington's public health fund. Washington requires collection of the $5 fee to comply with provisions of the Master Settlement Agreement (MSA), a settlement between the tobacco industry and numerous states, including Washington. See Wash. Rev. Code § 70.157.010(e). Pursuant to the MSA, tobacco manufacturers make payments to an escrow fund for public health. See Wash. Rev. Code §§ 70.157.020, 43.79.480. Tobacco manufacturers who are not party to the MSA must pay funds into escrow. See Wash. Rev. Code § 70.157.020(a) and (b). Miller seeks a refund of these fees and a permanent injunction against their future collection.
Lanphere is also a non-Indian, non-resident of the reservation who purchased cigarettes from Matheson's store. Like Miller, the price Lanphere paid included the tribe's cigarette tax and the health fund fee. Lanphere also seeks a refund of fees paid and a permanent injunction.
Prior to this litigation, Miller and other plaintiffs pursued legal relief in other fora. Matheson first filed suit for injunctive relief, declaratory judgment, and damages in Washington state court. He specifically sought a ruling that the cigarette tax contract with the state was invalid. The Washington Court of Appeals affirmed the trial court's dismissal of the action, and the Washington and United States Supreme Courts denied review. Matheson v. Gregoire, 139 Wash. App. 624 (2007), rev. denied, 163 Wash. 2d 1020, cert. denied, 555 U.S. 881 (2008).
Matheson and Lanphere then filed a similar action in Puyallup Tribal Court, seeking to invalidate the cigarette tax contract. This action was dismissed by the tribal courtbecause of the Tribe's sovereign immunity. The Tribal Court of Appeals affirmed the dismissal.
Before the conclusion of proceedings in the tribal court, Matheson and Lanphere filed suit in the United States District Court for the Western District of Washington. That action was dismissed for failure to complete the tribal proceedings. See Lanphere v. Wright, No. C09-5462 BHS, 2009 WL 3617752 (W.D. Wash. Oct. 29, 2009). We affirmed the dismissal. See Lanphere v. Wright, 387 F. App'x 766 (9th Cir. 2010).
Chad Wright "is or was the Tax Enforcement Officer of the Puyallup Tribe" and Chief Executive Officer of the Tribe's store located near Matheson's. Herman Dillon, Sr., is the tribal chairman of the Puyallup Tribe.
The Puyallup Tribe entered into a compact with the State of Washington whereby the Tribe agreed that tribal retailers would purchase only from Washington State Tobacco Wholesalers or state certified wholesalers. Likewise, the Tribe agreed to require retailers to charge a cigarette tax equal to the amount of the tax that would otherwise be imposed by the state. The Tribe's agreement with the state provides that "[r]esponsibility for enforcement of the terms of this agreement shall be shared by the State and the Tribe. . . ." The agreement also provides for mediation.
Miller, Lanphere, and Matheson alleged that the Tribe forces them "to pay more for the cigarettes by adding illegal charges and restricting [Matheson's] purchases at wholesale to wholesalers who charge more to [sic] the product than other wholesalers would charge. . . ." Their complaint sought an injunction, a declaratory judgment, damages, and a refund of fees paid as a result of the charges imposed by the Tribe.
The district court granted the Tribe's motion to dismiss, explaining that Miller, Lanphere, and Matheson "failed [to meet their] burden of showing that sovereign immunity has been waived and that [the district court] has jurisdiction to hear the matter."
Miller, Lanphere, and Matheson timely appealed.
We review de novo a district court's dismissal for lack of subject matter jurisdiction. See Leeson v. Transamerica Disability Income Plan, 671 F.3d 969, 974 (9th Cir. 2012). "Once challenged, the party asserting subject matter jurisdiction has the burden of proving its existence." Robinson v. United States, 586 F.3d 683, 685 (9th Cir. 2009) (citation omitted).
We review de novo questions of sovereign immunity. See Alvarez v. Hill, 667 F.3d 1061, 1063 (9th Cir. 2012).
A. Sovereign Immunity
Miller, Lanphere, and Matheson argue that the Tribe implicitly waived its sovereign immunity by agreeing to dispute resolution procedures and by ceding its authority to Washington State when entering into the cigarette tax contract.
Cook v. AVI Casino Enters., Inc., 548 F.3d 718, 725 (9th Cir. 2008) (citations omitted). "[T]he settled law of our circuit is that tribal corporations acting as an arm of the tribe enjoy the same sovereign immunity granted to a tribe itself. . . ." Id.
The nature of the cigarette tax contract between the Tribe and the State of Washington does not reflect a waiver of tribal sovereign immunity simply by entering into the contract.
As we recently recognized, "[t]here has been a long-standing dispute about the state's power to tax cigarette sales by tribal retailers on Indian reservations to non-Indians. . . ." United States v. Wilbur, 674 F.3d 1160, 1165 (9th Cir. 2012). As a means of resolving this dispute, Washington law Id. at 1166 (citation omitted). ...
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