Ramsey v. U.S.
| Citation | 134 F.Supp.2d 1203 |
| Decision Date | 02 November 2000 |
| Docket Number | No. CY-99-3070-WFN.,CY-99-3070-WFN. |
| Court | U.S. District Court — District of Washington |
| Parties | Kip R. RAMSEY, d/b/a Tiin-Ma Logging Co., Plaintiff, v. UNITED STATES of America, Defendant. |
Michael Martin Megaard, Lukins & Annis, Spokane, WA, Timothy Roy Weaver, Cockrill & Weaver, PS, Yakima, WA, for Plaintiff.
James P. Connelly, U.S. Attorney's Office, Spokane, WA, W. Carl Hankla, U.S. Department of Justice, Trial Attorney, Tax Division, Washington, DC, Defendant.
WM. FREMMING NIELSEN, District Judge.
On October 30, 2000, the Court heard oral arguments on both Plaintiff's and Defendant's Motion for Summary Judgment. Timothy Weaver represented the Plaintiff; W. Carl Hankla represented Defendant. The Court has reviewed the Motions and briefing, has considered the oral arguments, and is fully informed. For the reasons stated below, the Court grants Plaintiff's Motion for Summary Judgment and denies Defendant's Motion.
Plaintiff lives in White Swan, Washington, and owns Tiin-Ma Logging Company, a sole proprietorship. Plaintiff filed this action seeking a refund of federal excise taxes, penalties, and interest based on heavy vehicle use taxes paid pursuant to 26 U.S.C. § 4481 and diesel fuel excise taxes paid pursuant to 26 U.S.C. § 4041. An 1855 Treaty between the United States Government and the Yakama Indians provides Plaintiff's basis for seeking this refund of federal taxes. Plaintiff successfully challenged the similar highway-related taxes imposed by the state of Washington. Yakama Indian Nation v. Flores, 955 F.Supp. 1229 (E.D.Wash.1997), aff'd sub nom. Cree v. Flores, 157 F.3d 762 (9th Cir.1998). Defendant argues that the Court in the instant case must apply a different, more stringent standard for determining whether the Treaty exempts Plaintiff from the federal taxes at issue.
Plaintiff on September 15, 2000, filed a Motion for Summary Judgment; on the same date, Defendant also filed a Motion for Summary Judgment. Both parties agree this case should be decided as a matter of law.
The following facts can be found in the parties' statements of material facts (Ct. Recs. 14 and 20), submitted pursuant to Fed.R.Civ.P. 56 and Local Rule 56.1. The Court deems admitted any material fact stated by a moving party and not rebutted by a non-moving party. LOCAL RULE 56.1(d).
Plaintiff's Logging Business on the Yakama Reservation. Plaintiff is an enrolled member of the Yakama Indian Tribe who conducts a logging business involving tribal resources on the Yakama Reservation. Plaintiff hauls timber cut on tribal land to off-Reservation mill sites, using trucks that run on diesel fuel, exceed 55,000 pounds gross vehicle weight, and travel on public highways. The logs are "tribal goods," as Judge McDonald and the Ninth Circuit used that term in Plaintiff's prior case challenging state taxes and fees.
Plaintiff's Payment of Federal Excise Taxes. Under the Internal Revenue Code, 26 U.S.C. § 4481, Plaintiff has been required to pay federal tax on the use of any trucks exceeding a gross vehicle weight of 55,000 pounds. Under 26 U.S.C. § 4041, Plaintiff also must pay federal tax on the diesel fuel used by his trucks. Failure to pay such taxes could subject Plaintiff to monetary penalties, prosecution, or impoundment of his trucks. Between 1986 and 1993, Plaintiff paid $460,702.55 in federal excise taxes, penalties, and interest under 26 U.S.C. § 4481 and § 4041. Plaintiff now seeks a refund for that amount plus interest.
1855 Yakama Treaty. Article III, paragraph 1 of the 1855 Treaty between the United States Government and the Yakamas provides as follows:
And provided, That, if necessary for the public convenience, (953) roads may be run through the said reservation; and on the other hand, the right of way, with free access from the same to the nearest public highway, is secured to them; as also the right in common with citizens of the United States, to travel upon all public highways.
12 Stat. 951, 953 (1855). Several other passages from the Treaty recognize the Yakamas' right to travel on roads outside the Reservation and take goods to market. In the mid-1800s, the Yakamas communicated regularly with the Puget Sound tribes and routinely traveled to trade with neighboring Indians and to hunt buffalo. During the Treaty negotiations between the United States Government and the Yakamas, the parties never discussed the possibility that the Yakamas' right to access public highways could be conditioned upon payment of any fees or taxes. The Yakamas in 1855 highly valued their continued free access to travel throughout the region; the Yakama Chiefs who signed the Treaty placed great importance on preserving that right. The primary Government representatives in the Treaty negotiations, Governor Isaac Stevens and General Joel Palmer, recognized the Yakamas' desire and need to travel freely.
Summary Judgment Standard. The purpose of summary judgment is to avoid unnecessary trials when no dispute exists over the facts before the Court. Zweig v. Hearst Corp., 521 F.2d 1129 (9th Cir.1975). A party is entitled to summary judgment where the documentary evidence produced by the parties permits only one conclusion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The party seeking summary judgment must show that no genuine issue of material fact exists and that the party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "A material issue of fact is one that affects the outcome of the litigation and requires a trial to resolve the parties' differing versions of the truth." S.E.C. v. Seaboard Corp., 677 F.2d 1301, 1306 (9th Cir.1982). The Court must construe all facts and all justifiable inferences in favor of the non-moving party. Anderson, 477 U.S. at 255, 106 S.Ct. 2505.
The party opposing summary judgment must go beyond the pleadings to designate specific facts establishing a genuine issue for trial. Celotex, 477 U.S. at 324, 106 S.Ct. 2548; Marks v. United States, 578 F.2d 261, 263 (9th Cir.1978). The nonmoving party may use affidavits, depositions, answers to interrogatories, and admissions to do this. Celotex, 477 U.S. at 323-24, 106 S.Ct. 2548. A court must enter summary judgment against a party who fails to make a showing sufficient to establish an essential element of a claim, even if genuine factual disputes exist regarding other elements of the claim. Id. at 322-23, 106 S.Ct. 2548. No issue for trial exists "unless there is sufficient evidence favoring the non-moving party for a jury to return a verdict for that party." Anderson, 477 U.S. at 249, 106 S.Ct. 2505. Thus, "a scintilla of evidence" in support of the non-moving party's position will not suffice. Id. at 252, 106 S.Ct. 2505.
Federal Taxes Generally Applicably to Indians. Both Plaintiff and Defendant agree that the central issue in this case is whether the 1855 Treaty between the Yakama Indian Tribe and the United States Government exempts Plaintiff from federal excise taxes. As a general rule, federal taxes apply to Indian tribes and their members unless an exemption can be found in the language of a treaty or federal statute. Confederated Tribes of Warm Springs Reservation of Oregon v. Kurtz, 691 F.2d 878, 881 (9th Cir.1982); United States v. Anderson, 625 F.2d 910, 913 (9th Cir.1980). Such an exemption must be definitely expressed where the general language of the tax statute is broad enough to include the subject matter. Id. at 913; Choteau v. Burnet, 283 U.S. 691, 693-94, 51 S.Ct. 598, 75 L.Ed. 1353 (1931). For example, in Choteau, the Supreme Court found that a statute taxing the income of "every individual" did include Indians since the Court found no intent to exclude the Indians in the tax statute, a treaty, or any federal law. 283 U.S. at 693-94, 51 S.Ct. 598.
Standard for Determining Federal Tax Exemptions. While Plaintiff and Defendant agree that federal taxes apply to Indians in lieu of treaty or statutory language granting an exemption, the parties disagree on the appropriate standard the Court should apply in determining whether the Treaty contains such an exemption. Both parties acknowledge that the Ninth Circuit looks for "express exemptive language" in a treaty or federal statute before finding an exemption to a generally applicable federal tax. United States v. Anderson, 625 F.2d 910, 913 (9th Cir.1980). However, Plaintiff argues that the Court may examine extrinsic evidence showing how the Indians interpreted the Treaty at the time it was signed. Defendant, on the other hand, argues that if the Treaty does not include language specifically referring to taxation or encumbrances, then the Court may proceed no further in determining whether a federal tax exemption exists and must find for the Government.
Plaintiff urges the Court to follow the precedent set in Yakama Indian Nation v. Flores, 955 F.Supp. 1229 (E.D.Wash.1997), aff'd sub nom. Cree v. Flores, 157 F.3d 762 (9th Cir.1998), a case initiated by the same Plaintiff as the instant case and based on the same facts now before the Court. In that case, Plaintiff claimed that Washington state's truck license and permit fees violated his rights under the Yakama Treaty. Plaintiff prevailed on his claim after the district court conducted a factual investigation into the historical context and intent of the parties to the Treaty. 955 F.Supp. 1229. The Ninth Circuit affirmed the district court's finding that "the Treaty clause must be interpreted to guarantee the Yakamas the right to transport goods to market over public highways without payment of fees for that use." 157 F.3d at 769. Plaintiff argues that the Court must follow that precedent here.
Defendant, on the other hand, asserts that a different, more stringent standard applies to challenges of federal taxes, not the standard in Cree....
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