Seminole Tribe of Fla. v. Stranburg

• Court: U.S. Court of Appeals — Eleventh Circuit
• Writing for the Court: ROSENBAUM, Circuit Judge
• Citation: Seminole Tribe of Fla. v. Stranburg, 799 F.3d 1324 (11th Cir. 2015)
• Decision Date: 26 August 2015
• Docket Number: No. 14–14524.,14–14524.
• Parties: SEMINOLE TRIBE OF FLORIDA, a Federally recognized Indian Tribe, Plaintiff–Appellee, v. Marshall STRANBURG, Interim Executive Director And Deputy Executive Director, Defendant–Appellant.

799 F.3d 1324

SEMINOLE TRIBE OF FLORIDA, a Federally recognized Indian Tribe, Plaintiff–Appellee

v.Marshall STRANBURG, Interim Executive Director And Deputy Executive Director, Defendant–Appellant.

No. 14–14524.

United States Court of Appeals, Eleventh Circuit.

Aug. 26, 2015.

Glen A. Stankee, William S. Spencer, Andrew Paul Gold, Law Offices of Akerman Senterfitt, Fort Lauderdale, FL, Kristen Marie Fiore, Katherine E. Giddings, Michael J. Larson, Akerman, LLP, Tallahassee, FL, for Plaintiff–Appellee.

Osvaldo Vazquez, Jonathan Alan Glogau, Allen C. Winsor, Attorney General's Office, Tallahassee, FL, for Defendant–Appellant.

Before MARTIN and ROSENBAUM, Circuit Judges, and COOGLER,^* District Judge.

Opinion

ROSENBAUM, Circuit Judge:

Benjamin Franklin said, “[I]n this world nothing can be said to be certain, except death and taxes.”¹ He was almost right. As this case illustrates, even taxes are not certain when it comes to matters affecting Indian tribes. In this appeal, we consider whether Florida's Rental Tax and Florida's Utility Tax, as applied to matters occurring on Seminole Tribe lands, violate the tenets of federal Indian law. For the reasons that follow, we find that the Utility Tax as it involves activities on Tribe land does not, but the Rental Tax does.

I. Background

A. Factual Background

The Seminole Tribe of Florida (“the Tribe”) is a federally recognized Indian tribe with multiple reservations in Florida, including one near the city of Hollywood and one near the city of Tampa. The Tribe operates casinos on its Hollywood and Tampa reservations.

In May 2005, the Tribe entered into 25–year leases with two non-Indian corporations—Ark Hollywood, LLC, and Ark Tampa, LLC (“the Ark Entities”)—to provide food-court operations at each casino. The leases required the Ark Entities to pay “to the applicable Federal, tribal and/or Florida governmental authority, any and all sales, excise, property and other taxes levied, imposed or assessed.”² Through the Bureau of Indian Affairs (“BIA”), the Secretary of the Interior approved the leases, as required by statute.

The State of Florida taxes commercial rent payments (the “Rental Tax”).See Fla. Stat. § 212.031. Florida describes the Rental Tax as a tax on the “privilege [of engaging] in the business of renting, leasing, letting, or granting a license for the use of any real property” in the state. Id. § 212.031(1)(a). The tax is assessed against the lessee based on the total amount of rent paid. Id. § 212.031(1)(c), (2)(a). Under the law, the landlord collects and remits the tax to the state and is liable to pay the tax and incur penalties if it fails to perform these duties. Id. § 212.031(3) ; see id. § 212.07(2), (3). The tax itself constitutes a lien on the personal property of the lessee, and not, apparently, the land or property of the lessor. Id. § 212.031(4).

Florida also imposes a tax “on gross receipts from utility services that are delivered to a retail consumer” in Florida (“the Utility Tax”). See Fla. Stat. § 203.01(1)(a)(1) (2012).³ The statute permits a utility provider, at its discretion, to separately state this Utility Tax as a line item on the customer's bill but does not require it to do so. See id. § 203.01(4). If the provider does separately state the tax on the bill, the statute requires the consumer to remit the tax to the service provider and states that the tax becomes part of the debt owed to (and recoverable by) the service provider. Id. The statute clarifies, though, that the “tax is imposed upon every person for the privilege of conducting a utility or communications services business, and each provider of the taxable services remains fully and completely liable for the tax, even if the tax is separately stated as a line item or component of the total bill.” Id. § 203.01(5).

Similarly, Florida's administrative regulations specify that even when stated on the consumer's bill, the “tax is imposed on the privilege of doing business, and it is an item of cost to the distribution company,” who “remains fully and completely liable for the payment of the tax, even when the tax is wholly or partially separately itemized on the customer's bill.” Fla. Admin. Code R. 12B–6.0015(3)(a). A service provider may, however, claim a credit or refund for net uncollected billings when it prepays the tax to the state based on gross billings, as opposed to actual gross receipts. Fla. Admin. Code R. 12B–6.005(1)(e). A service provider who fails to remit the tax to the state is also guilty of a misdemeanor. Fla. Stat. § 203.01(6).

Florida assessed the Rental Tax against the Ark Entities for the period of July 2005 through June 2008. The Tribe has paid the Utility Tax stated as a component of its utility bill. Although the Tribe applied to the Florida Department of Revenue for a refund of the amount of the Utility Tax it paid beginning in 2008 through July 2011, it was denied a refund. The Ark Entities also applied for a refund of the Rental Tax, which was denied.

B. Procedural History

Following these denials, on October 30, 2012, the Tribe filed a federal complaint against the State of Florida and Marshall Stranburg, the interim Executive Director of the Florida Department of Revenue,⁴ seeking declaratory and injunctive relief. Within the next few days, the Ark Entities filed suits in the Florida state courts contesting the denials of their refunds. Both state cases were still pending at the time this appeal was filed, although the case related to the Hollywood casino was apparently stayed pending the disposition of the federal case.

Stranburg sought dismissal of the Tribe's federal complaint on multiple grounds, including “the abstention doctrine and the principles of exhaustion and comity.” The United States District Court for the Southern District of Florida rejected the abstention argument, noting that “this case involves a different plaintiff, seeking prospective injunctive relief and declaratory relief unrelated to Ark Hollywood's and Ark Tampa's requested refund. This Court will not shirk its obligation to adjudicate this matter, when it so clearly has jurisdiction over the issues presented.” Stranburg did not raise the comity or abstention issue again in the district court.⁵

After conducting limited discovery, the parties cross-moved for summary judgment. The district court granted summary judgment in favor of the Tribe on all of its claims. With respect to the Rental Tax, the court concluded that 25 U.S.C. § 465 expressly prohibits the Rental Tax because the Rental Tax is a tax on Indian land rights. See Seminole Tribe of Fla. v. Florida, 49 F.Supp.3d 1095, 1097–98 (S.D.Fla.2014). The district court also held in the alternative that if the statute did not expressly prohibit the Rental Tax, the tax was nonetheless preempted by federal law and impermissibly interfered with tribal sovereignty. Id. at 1098–102. In reaching this holding, the district court gave deference, short of full Chevron deference, to BIA regulations that prohibit taxes on leases of Indian land. See id. at 1099–100.

As for the Utility Tax, the district court similarly found it to be impermissible. In particular, the court reasoned that the legal incidence of the Utility Tax fell on the Tribe, not on the utility company, and federal law generally prohibits taxing Indians for on-reservation activities. See id. at 1103–08.

Stranburg now appeals the district court's rulings. With respect to the Rental Tax, Stranburg contends that the district court erred both in finding a statutory prohibition of the tax and federal preemption of the tax. Stranburg also revives his comity argument, asserting that the district court should never have adjudicated the Rental Tax claim while the Ark Entities' state-court cases were pending.

Stranburg further contends that the district court erred in determining the legal incidence of the Utility Tax to be on the Tribe rather than on the utility company. Because, in Stranburg's view, the tax falls on the utility company, he argues that the district court should have conducted a preemption inquiry. With the benefit of the parties' briefs and oral argument, we now affirm in part and reverse in part.

II. Standards of Review

We review a district court's grant of summary judgment de novo, considering all the evidence and viewing facts in the light most favorable to the non-moving party. Morales v. Zenith Ins. Co., 714 F.3d 1220, 1226 (11th Cir.2013). Summary judgment is appropriate only when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Id. A court should grant summary judgment against a party “who fails to make a showing sufficient to establish the existence of an element essential to that party's case.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986).

We review a district court's ruling on abstention for an abuse of discretion. Ambrosia Coal & Constr. Co. v. Pagés Morales, 368 F.3d 1320, 1332 (11th Cir.2004). A district court abuses its discretion if it misapplies the law or makes findings of fact that are clearly erroneous. Id. (citations omitted).

III. Florida's Rental Tax

Stranburg contends on appeal that the district court erred in finding the Ark Entities statutorily exempt from Florida's Rental Tax, in its alternative holding that federal law preempts the Rental Tax, and in its failure to dismiss the Tribe's challenge on comity grounds. After carefully considering this issue of first impression in our Circuit, we conclude that the district court correctly interpreted 25 U.S.C. § 465 to preclude Florida from collecting its Rental Tax on the rent payments made by non-Indian lessees of protected Indian reservation land. Although Stranburg's arguments are not without some appeal, we nonetheless find that the Tribe's interpretation best comports with the statutory text and purpose, the relevant Supreme Court case law, and the general canon that statutes be construed in Indians'...