Nation v. Okla. Tax Comm'n

Decision Date09 July 2010
Docket NumberNo. 09-5123.,09-5123.
PartiesMUSCOGEE (CREEK) NATION, Plaintiff-Appellant,v.OKLAHOMA TAX COMMISSION; Thomas E. Kemp, Jr., Chairman of the Tax Commission; Jerry Johnson, Vice-Chairman of the Tax Commission; Constance Irby, Secretary of the Tax Commission, Defendants-Appellees.
CourtU.S. Court of Appeals — Tenth Circuit

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Michael Minnis (W. David McCullough of Doerner, Saunders, Daniel & Anderson, LLP and Roger Wiley, Muscogee (Creek) Nation Attorney General, with him on the brief), of Doerner, Saunders, Daniel & Anderson, LLP, Oklahoma City, OK, for Plaintiff-Appellant.

Larry Patton, Assistant General Counsel (Douglas B. Allen, General Counsel, with him on the brief), Oklahoma Tax Commission, Oklahoma City, OK, for Defendant-Appellee.

Before BRISCOE Chief Judge, BALDOCK, and GORSUCH, Circuit Judges.

BALDOCK, Circuit Judge.

Under Oklahoma law, [a]ll unstamped cigarettes ... found in the possession ... of any person, for the purpose of being ... transported from one place to another in this state, for the purpose of evading ... the provisions of [the Cigarette Stamp Tax Act] ... may be seized by any authorized agent of the Tax Commission ..., without process.” 68 Okla. Stat. § 305.E.1. These contraband cigarettes “shall be, from the time of such seizure, forfeited to the State of Oklahoma subject to “a proper proceeding.” Id. Similarly, “all unstamped cigarettes sold or shipped to tribally owned or licensed stores in this state by wholesalers ... not licensed by this state ... for the purpose of selling or consuming unstamped cigarettes in this state in violation of [the Sale of Cigarettes at Tribally Owned or Licensed Stores Act] shall be subject to seizure of the shipments and forfeiture of the inventory pursuant to the provisions of [68 Okla. Stat. § 305].” Id. § 351.A. In support of the latter provision, Oklahoma law authorizes [a]ny peace officer of this state ... to stop any vehicle upon any road or highway of this state in order to inspect the bill of lading or to take such action as may be necessary to determine if unstamped cigarettes are being sold or shipped in violation of the provisions of this section.” Id. § 351.B. In conducting these inspections, [s]uch officers shall ... have a duty to cooperate with the Oklahoma Tax Commission to enforce the provisions of this act.” Id. Purportedly suspicious that Muscogee Creek Nation (MCN) was supplying off-reservation Oklahoma smoke shops with unstamped cigarettes, the Oklahoma Tax Commission (OTC), pursuant to the foregoing provisions, directed the state highway patrol to stop MCN's vehicles on public thoroughfares outside Indian country and inspect their lading. Following inspection and search of the vehicles, OTC agents were summoned to seize any cigarettes failing to bear a tax stamp. Over the course of three stops (only two of which uncovered suspected contraband), OTC seized unstamped cigarettes purportedly worth $107,000. Objecting to OTC's interference with MCN's vehicles and their lading, MCN filed suit.

I.

Specifically, MCN filed suit against both OTC and its Tax Commissioners, the latter in their official capacities: “The individual Defendants are sued in their official capacities as officers of the OTC charged with enforcement of Oklahoma tax laws.” MCN asserted jurisdiction under 28 U.S.C. § 1362, which provides: “The district courts shall have original jurisdiction of all civil actions, brought by any Indian tribe ... wherein the matter in controversy arises under the Constitution, laws, or treaties of the United States.” At the outset of its amended complaint, MCN “complains of Defendants for causing Plaintiff's trucks to be illegally stopped, illegally searched, and for illegally seizing Plaintiff's property.” Consistent therewith, Count I of MCN's amended complaint-the complaint's only substantively labeled count-alleged a violation of MCN's civil rights pursuant to 42 U.S.C. § 1983, specifically that OTC and its Commissioners' conduct denied MCN due process of law and “deprived [MCN] of rights protected by the Fourth and Fourteenth Amendment to be free from unreasonable searches and seizures.” The remaining counts of MCN's amended complaint sought only remedial relief and were so labeled. Count II sought a declaratory judgment that OTC's stops and searches of MCN's vehicles and seizures of their lading were unlawful. Count III sought a prohibitory injunction directing OTC to cease interfering with MCN's vehicles and their lading. Count IV requested mandatory injunctive relief directing the return of the seized cigarettes. Count V, in the alternative, sought damages to compensate MCN for the monetary value of the cigarettes.

In a thorough order, the district court granted OTC and its Commissioners' Rule 12(b) motion and dismissed MCN's amended complaint in its entirety. As to OTC, the court dismissed the complaint for want of subject matter jurisdiction based on OTC's defense of sovereign immunity. See Republic of Austria v. Altmann, 541 U.S. 677, 700, 124 S.Ct. 2240, 159 L.Ed.2d 1 (2004) (recognizing a claim of sovereign immunity “raises a jurisdictional defense”). The court rejected MCN's argument that in enacting § 1362 Congress abrogated OTC's Eleventh Amendment immunity. As to MCN's official capacity suit against the Commissioners, the district court concluded that, despite the Eleventh Amendment bar, it possessed subject matter jurisdiction under the fiction of Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908), but only to the extent that Counts II and III of MCN's amended complaint sought prospective relief in the form of a declaratory judgment and prohibitory injunction. The court held, however, that such relief was unavailable to MCN because its § 1983 claim, upon which those (and all other) counts depended, failed to state a cause of action. The court reasoned that because MCN's claim to relief as alleged in the complaint depended on its sovereign status, MCN did not constitute a “person” entitled to maintain suit under § 1983.

MCN appeals the district court's judgment, challenging each of the court's adverse determinations. Our jurisdiction arises under 28 U.S.C. § 1291. Our review of the district court's dismissal of MCN's amended complaint, for lack of subject matter jurisdiction and for failure to state a claim respectively, is de novo.1 See Kane County Utah v. Salazar, 562 F.3d 1077, 1085 (10th Cir.2009). In ascertaining the sufficiency of MCN's pleading, we accept its well-pleaded factual allegations as true. See Smith v. United States, 561 F.3d 1090, 1097-98 (10th Cir.2009). But we need not accept its unsupported conclusory allegations. See Hackwell v. United States, 491 F.3d 1229, 1233 (10th Cir.2007). Mindful of the applicable standards, we now address the sufficiency of MCN's amended complaint, and affirm.

II.

The Supreme Court has interpreted the Eleventh Amendment to mean “States may not be sued in federal court unless they consent to it in unequivocal terms or unless Congress, pursuant to a valid exercise of power, unequivocally expresses its intent to abrogate the immunity.” Green v. Mansour, 474 U.S. 64, 68, 106 S.Ct. 423, 88 L.Ed.2d 371 (1985). This prohibition encompasses suits against state agencies. See Puerto Rico Aqueduct and Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 144, 113 S.Ct. 684, 121 L.Ed.2d 605 (1993). Suits against state officials acting in their official capacities similarly fall within the amendment's proscription because “a suit against a state official in his or her official capacity ... is no different than a suit against the State itself.” Will v. Mich. Dept. of State Police, 491 U.S. 58, 71, 109 S.Ct. 2304, 105 L.Ed.2d 45 (1989). Because § 1983 does not abrogate a state's sovereign immunity see Quern v. Jordan, 440 U.S. 332, 338-40, 99 S.Ct. 1139, 59 L.Ed.2d 358 (1979), and Oklahoma has not consented to MCN's suit against OTC and its Commissioners in their official capacities, we first address whether MCN can establish that Congress abrogated OTC and its Commissioners' immunity through enactment of § 1362.2See Sydnes v. United States, 523 F.3d 1179, 1183 (10th Cir.2008) (noting the party asserting jurisdiction has the burden of overcoming a sovereign immunity defense).3

A.

In Blatchford v. Native Village, 501 U.S. 775, 111 S.Ct. 2578, 115 L.Ed.2d 686 (1991), the Supreme Court held § 1362 did not foreclose a state official's sovereign immunity defense to a tribe's suit challenging implementation of a state revenue-sharing statute. The Court opined that § 1362 does not reflect an unmistakably clear intent to abrogate immunity, made plain in the language of the statute.” Blatchford, 501 U.S. at 786, 111 S.Ct. 2578 (internal quotations omitted). And “the fact that Congress grants jurisdiction to hear a claim does not suffice to show Congress has abrogated all defenses to that claim.” Id. at 786 n. 4, 111 S.Ct. 2578 (emphasis omitted). The Court further rejected the proposition that § 1362 represents not an abrogation of the State's sovereign immunity, but rather a delegation to tribes of the Federal Government's exemption from state sovereign immunity.” Id. at 785, 111 S.Ct. 2578 (emphasis omitted). The Court reasoned: “Assuming that delegation of exemption from state sovereign immunity is theoretically possible, there is no reason to believe that Congress [in enacting § 1362] ever contemplated such a strange notion.” Id. at 785-86, 111 S.Ct. 2578. MCN all but ignores Blatchford (only mentioning it in passing in its reply brief), and instead relies on our decision in Sac & Fox Nation v. Pierce, 213 F.3d 566 (10th Cir.2000), to support its argument that the Eleventh Amendment does not proscribe this action against OTC and its Commissioners. MCN, however, reads Pierce far too broadly and fails to account for the substantial narrowing effect Blatchford has upon our holding in that case.

In Pierce...

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