U.S. on Behalf of Cheyenne River Sioux Tribe v. State of S.D., s. 95-2529

Citation105 F.3d 1552
Decision Date17 January 1997
Docket NumberNos. 95-2529,95-2720 and 95-2688,95-2535,s. 95-2529
PartiesUNITED STATES of America, on behalf of THE CHEYENNE RIVER SIOUX TRIBE and its members, Plaintiff/Appellant/Cross Appellee, Cheyenne River Sioux Tribe, Intervenor Plaintiff/Appellant/Cross Appellee, v. STATE OF SOUTH DAKOTA; Julie M. Johnson, State Secretary of Revenue, Defendants/Appellees/Cross Appellants, Ronald J. Schreiner; Dewey County, South Dakota; John Alley, County Treasurer; Ziebach County, South Dakota; Virginia Hertel, County Treasurer, Defendants/Appellees. ROSEBUD SIOUX TRIBE, Plaintiff/Appellant, v. Julie JOHNSON, State Secretary of Revenue, Defendant/Appellee. United States of America, Amicus Curiae.
CourtUnited States Courts of Appeals. United States Court of Appeals (8th Circuit)

Ellen J. Durkee, Washington, D.C. (argued), for appellant/cross-appellee United States in 95-2529/2535, Amicus Curiae United States in 95-2688, and appellant United States in 95-2720.

Steven C. Emery, Eagle Butte, South Dakota (argued), for appellant/cross-appellee Cheyenne River Sioux Tribe in 95-2529/2535 and Rosebud Sioux Tribe in 95-2688.

Lawrence E. Long, Pierre, South Dakota (argued), for appellees/cross-appellants State of South Dakota, Julie M. Johnson, and Ronald J. Schreiner in 95-2529/2535, appellee Julie M. Johnson in 95-2688, and appellees State of South Dakota and Julie M. Johnson in 95-2720.

Steven Lyle Aberle, Timber Lake, South Dakota (argued), for appellees/cross-appellants Dewey County, John Alley, Ziebach County, and Virginia Hertel in 95-2529/2535, and appellee Julie M. Johnson in 95-2688 and appellees Julie M. Johnson, Dewey County, John Alley, Ziebach County and Virginia Hertel in 95-2720.

Before MURPHY and ROSS, Circuit Judges, and VAN SICKLE, * District Judge.

MURPHY, Circuit Judge.

These two cases challenge the jurisdiction of the State of South Dakota to impose its motor vehicle excise tax and registration fee on Indians who live within the boundaries of a reservation. In one case, the United States sued for declarative, injunctive, and compensatory relief on behalf of the Cheyenne River Sioux Tribe and its members. The second case involves claims brought by the Rosebud Sioux Tribe for equitable relief.

South Dakota Codified Laws section 32-5B-1 provides that residents shall pay an excise tax on the value of any motor vehicle purchased or acquired for use in the state and required to be registered. S.D. Codified Laws Ann. § 32-5B-1. 1 The excise tax is a one time assessment collected by the county in which the owner resides when the vehicle is first licensed in the state. Id. § 32-5B-10. Payment of the excise tax is required for the issuance or transfer of state vehicle title, id. § 32-5B-14, and is thus a condition precedent to registration and issuance of state license plates. 2 The proceeds are allocated to the state highway fund. Id. § 32-5B-17. Failure to pay the excise tax is a misdemeanor. § 32-5B-1.

South Dakota Codified Laws section 32-5-5 imposes a separate motor vehicle registration fee on state residents. S.D. Codified Laws Ann. § 32-5-5. 3 The annual fee is based on the weight of the vehicle and ranges from $20 to $40 for average noncommercial vehicles. It is collected at the time the owner obtains license plates or renewal tags, and is a condition precedent for their issuance. Id. A percentage of the collected fees goes toward administrative costs, and the remainder is allocated to various road funds. Failure to pay the registration fee is a misdemeanor. § 32-5-2.4.

I.

The Cheyenne River Sioux Tribe is a federally recognized Indian tribe. In 1868 the Fort Laramie Treaty, 15 Stat. 635, established the Great Sioux Reservation for the use and occupancy of the Sioux Nation. Congress later created the Cheyenne River Indian Reservation in 1889 on part of the treaty land as a separate reservation for the Cheyenne River Sioux Tribe. See South Dakota v. Bourland, 508 U.S. 679, 113 S.Ct. 2309, 124 L.Ed.2d 606 (1993). In 1908 Congress opened a significant portion of the reservation to non-Indian settlement, but this did not diminish the reservation. See Solem v. Bartlett, 465 U.S. 463, 104 S.Ct. 1161, 79 L.Ed.2d 443 (1984). The reservation wholly encompasses Dewey and Ziebach counties in the State of South Dakota. Its residents include tribal members, nonmember Indians, and non-Indians.

The tribe believes that all Indians residing on the Cheyenne River Indian Reservation are immune from state taxation of their motor vehicles, including both the excise tax and the annual registration fee. The tribal council has consistently maintained that the state lacks authority to collect the excise tax and registration fee from tribal members, 4 and there is evidence in the record that at least some members have paid the excise tax and registration fee under protest.

The statutes do not create an exemption for Indian-owned vehicles that are driven exclusively on reservation land, but the state apparently does not enforce its motor vehicle registration laws in such circumstances. The owner of any vehicle driven outside the reservation is subject to criminal penalties for improper registration, however. At one time, tribal law incorporated state traffic laws and required all motor vehicles driven on the reservation to have valid state license plates. In 1994 the tribe enacted its own motor vehicle registration system, but has not yet implemented it to avoid imposing double fees on reservation residents.

On September 3, 1992 the United States brought suit on behalf of the Cheyenne River Sioux Tribe and its members, seeking a declaration that the state lacks jurisdiction to impose its motor vehicle excise tax and registration fee on Indians residing on the Cheyenne River reservation. 5 It also sought an injunction against the collection of the fees and taxes, and monetary damages in the amount of taxes paid between 1986 and the present. On August 24, 1993, the Cheyenne River Sioux Tribe was permitted to intervene as a plaintiff pursuant to Federal Rule of Civil Procedure 24(b).

In February 1995 the district court 6 ruled on cross motions for summary judgment. It held that the excise tax was essentially a personal property tax and thus could not be imposed on tribal members living on the reservation. See Oklahoma Tax Comm'n v. Sac and Fox Nation, 508 U.S. 114, 127-28, 113 S.Ct. 1985, 1992-93, 124 L.Ed.2d 30 (1993). It viewed the annual registration fee differently, concluding that it was a nondiscriminatory fee that could validly be collected from tribal members residing on the reservation who elected to purchase state license plates. The district court did not extend immunity from the excise tax to nonmember Indians and did not award damages to tribal members. Judgment was entered on February 23, 1995, and the parties filed cross appeals.

The United States and the tribe argue that the registration fee operates as a tax and thus cannot be imposed on reservation Indians. They also claim that monetary damages should be awarded for taxes previously paid. The tribe also argues that tax immunity should be extended to nonmember Indians residing on the Cheyenne River reservation. South Dakota responds that the district court correctly determined the registration fee to be valid, denied monetary damages, and held that nonmember Indians were not immune from taxation. It argues on cross appeal that the excise tax is a valid sales and use tax.

A.

As a general rule, a state lacks jurisdiction to tax the lands, activities, and property of tribal members " 'within the boundaries of the reservation,' " unless there has been a " 'cession of jurisdiction or other federal statutes permitting it.' " California v. Cabazon Band of Mission Indians, 480 U.S. 202, 215 n. 17, 107 S.Ct. 1083, 1091 n. 17, 94 L.Ed.2d 244 (1987) (quoting Mescalero Apache Tribe v. Jones, 411 U.S. 145, 148, 93 S.Ct. 1267, 1270, 36 L.Ed.2d 114 (1973)). In other words, a tribal member's on-reservation activities are immune from state taxation absent express congressional authorization of the tax. McClanahan v. State Tax Comm'n of Arizona, 411 U.S. 164, 171, 93 S.Ct. 1257, 1261-62, 36 L.Ed.2d 129 (1973). This is because a state's authority to tax on-reservation activities is limited or preempted by the terms of treaties which set aside reservations for the exclusive use of Indian tribes and by various federal statutes defining the limits of state power. Id. 7 The doctrine of Indian sovereignty reflects the " 'deeply rooted' " historical policy of " 'leaving Indians free from state jurisdiction and control.' " Id. at 168, 93 S.Ct. at 1260 (quoting Rice v. Olson, 324 U.S. 786, 789, 65 S.Ct. 989, 991, 89 L.Ed. 1367 (1945)). That doctrine "provides a backdrop against which the applicable treaties and statutes must be read." Id. at 172, 93 S.Ct. at 1262.

Congress has not specifically authorized the taxation of a tribal member's personal property, and South Dakota thus lacks jurisdiction to impose such a tax. This would include any tax or fee that operates as a personal property tax on motor vehicles owned by tribal members living on the reservation. Oklahoma Tax Comm'n v. Sac and Fox Nation, 508 U.S. 114, 127-28, 113 S.Ct. 1985, 1992-93, 124 L.Ed.2d 30 (1993); Washington v. Confederated Tribes of Colville Indian Reservation, 447 U.S. 134, 163, 100 S.Ct. 2069, 2086, 65 L.Ed.2d 10 (1980); Moe v. Confederated Salish and Kootenai Tribes of Flathead Reservation, 425 U.S. 463, 480-81, 96 S.Ct. 1634, 1644-45, 48 L.Ed.2d 96 (1976).

The general rule of tax immunity applies to activities that occur on the reservation, including ownership of property, but "different considerations" apply to off-reservation activities. Mescalero, 411 U.S. at 148, 93 S.Ct. at 1270. Indians who go beyond reservation boundaries are generally "held subject to nondiscriminatory state law otherwise applicable to all citizens." Id. at 148-49, 93 S.Ct. at 1270. This reasoning suggests that...

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