Narragansett Indian Tribe of R.I. v. Rhode Island
| Citation | 296 F.Supp.2d 153 |
| Decision Date | 29 December 2003 |
| Docket Number | No. C.A. 03-296S.,C.A. 03-296S. |
| Parties | NARRAGANSETT INDIAN TRIBE OF RHODE ISLAND, Plaintiff, v. The State of RHODE ISLAND and Providence Plantations; Governor Donald L. Carcieri, State of Rhode Island, in his official capacity; Patrick C. Lynch, Rhode Island Attorney General, in his official capacity; Rhode Island State Police; Colonel Steven M. Pare, in his official capacity; Justices of The Rhode Island District and Superior Courts; Town of Charlestown; and Charlestown Police Department, Defendants. State of Rhode Island, by and through the Attorney General, Patrick C. Lynch, Plaintiffs, v. Narragansett Indian Tribe of Rhode Island also Known as the Narragansett Tribe of Indians and Does 1 through 100, Defendants. |
| Court | U.S. District Court — District of Rhode Island |
Andrew M. Hodgkin, Esq., Claire J.V. Richards, Esq., Providence, RI, for Donald L. Carcieri, in his capacity as Governor of the State of Rhode Island.
Joseph S. Larisa, Jr., Esq., Providence, RI, for Town of Charlestown and Charlestown Police Department.
Gavin Clarkson, Esq., University of Michigan, Ann Arbor, MI, for Gavin Clarkson, Amicus Curiae.
Lynette J. Labinger, Esq., Roney & Labinger, Providence, RI, for Rhode Island Affiliate, American Civil Liberties Union, Inc., Interested Party.
Marilyn J. Ward Ford, Esq., Quinnipiac University School of Law, Hamden, CT, for New York Brothertown Indian Nation, Interested Party.
DECISION AND ORDER
The oftentimes tumultuous relationship between the State of Rhode Island ("State") and the Narragansett Indian Tribe of Rhode Island ("Tribe" or "Narragansetts") brings the parties once again to court; the matter in dispute is whether the Tribe may operate a "smoke shop" on its settlement lands unfettered by the State's cigarette tax laws.
Before the Court are the parties' cross-motions for summary judgment in their respective actions for declaratory judgment. The Court concludes that the State properly may impose its tax on cigarettes sold at the tribal smoke shop located on the settlement lands, and may enforce the law's criminal provisions against non-compliance that occurs on the settlement lands. This conclusion is driven by the finding that the legal incidence of the State's cigarette tax scheme falls on the purchaser or consumer of cigarettes, and not on the Tribe. Under the State's cigarette tax scheme, the Tribe (like other retail sellers of cigarettes) acts merely as an agent for the collection of the tax. It is appropriate for the State to impose this burden on the Tribe; and such a burden does not amount to taxation of the Tribe, nor does it violate the Tribe's sovereign rights. Consequently, the Tribe must comply with Rhode Island's applicable tax laws if it wishes to continue to sell cigarette products on the settlement lands. Further, for the reasons discussed in greater detail below, because the legal incidence of the tax scheme falls on the consumer, this Court must decline to reach the question of whether the State may impose the cigarette tax scheme (or any other direct tax) directly on the Tribe. And finally, this Court finds that the State did not violate federal law nor the Tribe's sovereign rights when it enforced the criminal provisions of the State's cigarette tax scheme by executing a search warrant on the settlement lands.
The Tribe is a federally recognized Indian tribe,1 see Final Determination for Federal Acknowledgment of Narragansett Indian Tribe of Rhode Island, 48 Fed.Reg. 6177-05 (Feb. 10, 1983), residing on Settlement Lands2 located within the Town of Charlestown, Rhode Island. On July 12, 2003, the Tribe opened a smoke shop (the "Smoke Shop" or "Shop") on the Settlement Lands for the purpose of producing income for the Tribe. See Joint Stipulations ("Stips.")3 ¶¶ 5, 7.
In general, retailers and distributors of cigarettes must comply with a number of statutory requirements relating to traffic in cigarettes, including provisions governing taxation. See R.I. Gen. Laws § 44-20-1, et seq.; p. 163, infra. Furthermore, Rhode Island law requires cigarette retailers to obtain several permits and licenses, including a retail sales tax permit pursuant to R.I. Gen. Laws § 44-19-1 and a Sunday sales permit from the pertinent municipality in accordance with R.I. Gen. Laws § 5-23-2. Presumably to increase the profitability of the Shop and distinguish itself from other retailers of cigarettes, and believing that the State did not possess the legal authority to enforce its cigarette tax and licensing requirements on it, the Tribe chose not to comply with these laws. See Stips. ¶ 8.
For an unspecified period of time prior to the opening of the Shop, the Tribe imported unstamped cigarettes onto its lands from other states in anticipation of the Shop's grand opening. See Stips. ¶ 4. When the Shop opened, the Tribe offered unstamped and untaxed cigarettes to the general, retail public at prices substantially lower than the minimum established by State law. See Stips. ¶ 7. The Tribe also did not collect Rhode Island's 7% retail sales tax from customers purchasing cigarettes at the Smoke Shop. See id. Although some of the cigarettes were being sold to tribal members, a large proportion of the Shop's customers were not members of the Tribe. See id.
Believing that the operation of the Smoke Shop violated this myriad of laws (and specifically R.I. Gen. Laws §§ 44-20-35, 36, 37 and 38, which make it a misdemeanor criminal offense to sell unstamped cigarettes, and allow the seizure of such cigarettes as contraband), on July 14, 2003, the Rhode Island State Police executed a search warrant at the Shop and confiscated the Tribe's inventory of unstamped cigarettes. See Stips. ¶ 9. During the execution of the search warrant, an altercation occurred between some members of the Tribe and several State police officers. See Stips. ¶ 10. Eight tribal members, including the Chief Sachem of the Tribe, were arrested following the melée. See id.
In the wake of the police raid, both the State and the Tribe brought the dispute to court. On July 15, 2003, the Tribe brought the first action in this Court, seeking a declaratory judgment against the State, the Governor and Attorney General of Rhode Island in their official capacities, the Rhode Island State Police, Colonel Steven Pare of the Rhode Island State Police in his official capacity, the Justices of the Superior and District Courts of the State of Rhode Island (in their official capacities),4 the Town of Charlestown, and the Charlestown Police Department. (For simplicity's sake, these Defendants are collectively referred to herein as "Defendants" or "the State".) The Tribe's Complaint sets forth allegations that the Tribe's status under the Rhode Island Indian Claims Settlement Act ("Settlement Act"), 25 U.S.C. § 1701, et seq., and its sovereign immunity as a federally recognized Indian tribe preclude the State and its officials from enforcing the State's cigarette sales and excise tax scheme with respect to tribal activities occurring on the Settlement Lands. The Tribe also filed a Motion for a Temporary Restraining Order in an effort to reopen the Smoke Shop pending the resolution of the case.
On July 17, 2003, the State brought a separate declaratory judgment action in Rhode Island State Superior Court seeking a declaration that the Tribe's failure to comply with State excise, retail, and sales taxes is unlawful. The State also moved for a temporary restraining order to prevent the Tribe from selling cigarettes on its Settlement Lands without complying with Rhode Island's sales and excise tax laws. Later that same day, the Tribe removed the state court action to this Court, purportedly pursuant to 28 U.S.C. § 1441(b). The State did not object to this procedural maneuver. After conferring with counsel in chambers on the parties' respective Motions for Temporary Restraining Orders, the parties represented to the Court that the essential facts were not in dispute. They agreed, therefore, to file stipulated facts and cross-motions for summary judgment on an expedited schedule. Further, the parties agreed that the Smoke Shop would remain closed pending the resolution of the issues in the case, thereby mooting the requests for Temporary Restraining Orders.
On July 18, 2003, the Court consolidated the actions pursuant to Federal Rule of Civil Procedure 42(a). Thereafter, the Court consolidated the parties' Motions for Preliminary Injunctive Relief with the trial of the action on the merits, and, with the agreement of the parties, the Court established an expedited schedule. On July 30, 2003, the parties submitted factual stipulations and on August 20, 2003, they filed their cross-motions for summary judgment. The Court heard oral argument on September 23, 2003.
Although these cases have been consolidated pursuant to Fed.R.Civ.P. 42(a), the actions remain separate and this writer must first determine whether this Court has subject matter jurisdiction over each case independent of the other. The Court's subject matter jurisdiction in one case does not automatically confer it in the other.
Subject matter jurisdiction clearly exists in the action originally filed by the Tribe in this Court. See 28 U.S.C. § 1362 (...
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