# Petition for Writ of Certiorari — Wyandotte Tribe v. Oklahoma ex rel. Oklahoma Tax Commission

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1991
- **Citation:** 501 U.S. 1219

## Text

IN THE
SUPREME COURT OF THE UNITED STATES
OCTOBER TERM, 1990

WYANDOTTE TRIBE OF OKLAHOMA, Petitioner,
v.

STATE OF OKLAHOMA ex rel.
OKLAHOMA TAX COMMISSION, Respondent.

PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

GLENN M. FELDMAN
O'Connor, Cavanagh,
Anderson, Westover,
Killingsworth & Beshears

1 East Camelback Road, #1100
Phoenix, Arizona 85012

(602) 263-2452

Attorneys for Petitioner

QUESTIONS PRESENTED

I. Whether the Oklahoma Tax Commission’s cause of
action to enforce a state tax in state court against. the
Wyandotte Tribe for on-reservation activitics is so "completely
preempted" by federal law as to be deemed to arise under
federal law for purposes of removal to federal court under 28

U.S.C. § 1441(a).

Zz Whether the Oklahoma Tax Commussion’s right to
relich against’ the Wyandotte Tribe requires resolution of
substantial questions of federal law, so as to make the claim one

which arises under federal law for jurisdictional purposes

-

TABLE OF CONTENTS

gs SS
TABLE OF AUTHORITIES ...... ee Iv
ee eee ee
ey ne 5 ek ee et he 2

CONSTITUTIONAL AND STATUTORY

OS SS 2
I 3
: NATURE OF THE CONTROVERSY .... 3
bs eee eames LOW ews j

REASONS FOR GRANTING THE WRIT 7
I. THE COURT SHOULD CONSIDER THE
COMPLETE PREEMPTION DOCTRINE
AS IT RELATES TO STATE
TAXATION OF INDIAN TRIBES .. |... S

IT. THE COURT OF APPEALS IGNORED
BASIC PRINCIPLES OF FEDERAL
INDIAN LAW AND MANY DECISIONS
OF THIS COURT IN HOLDING THAT
THE TAX COMMISSION'S RIGHT
TO TAX THE WYANDOTTE TRIBE:
AROSE UNDER STATE LAW ....... 10

ITI. THE COURT OF APPEALS IGNORED
THREE ISSUES OF FEDERAL LAW
NECESSARY TO RESOLVE THE TAX
COMMISSION’S CAUSE OF ACTION .. 16

CONCLUSION

iv
TABLE OF AUTHORITIES

Cases : Page
Avco Corp. v. Aero Lodge,
PE ae NS oe ok x oes oe a cn oe eee bw 3)

Bryan v. Itasca County,
oO a) ae a 18

California v. Cabazon Band of Mission Indians,
ok kh ee a eee ee aw 12-16, 18

Caterpillar, Inc. v. Williams,
me SI, CAD gg ice ae eee. 4.8.9. 10

County of Oneida v. Oneida Indian Tribe,
WP Sip OP CUED. 5 ee ee tee ee lO, 11, 14

Federated Department Stores, Inc. v. Moitie,
co SE) A aR a a 4
I

Franchise Tax Board v. Construction Laborers Vacation Trust.
Me ey | 5 ei oe 1S, 1%

The Kansas Indians,
> wee 757, te Lite G67 (1867)... ww. ek ee 12

McClanahan vy. Antzona State Tax Comm'n.
Re a ae) 4,13

Merrell Dow Pharmaceuticals v. Thompson,
MOUS CS. ti#i#(#N¥ # ( ...... 17

Mescalero Apache Tribe v. Jones,
Ue Ne ee aps kee wp ne nS

Metropolitan Life Insurance Co. \. Taylor,
co eB: ee ere Y

Moe v. Confederated Salish & Kootenai Tribes,
425 U.S. 465 Ui eee ee ke 4

Montana \. Blackfeet Tribe
471 U.S. 759 (URS ee ass de> ia, 42

National Farmers Union v. Crow Tribe,
471 U.S. S43 CURR ee ee 12

New Mexico v. Mescalero Apache Tribe,
462 U.S. 324 (ESR ee ess 18

Oklahoma Tax Commission v. Citizen Band Potawatomi
Indian Tribe of Oklahoma,
498 U.S. _, 112 Sa ea ee ew a... 1S

Oklahoma Tax Commission v. Graham,
489 U.S. 838 (19SF) . oe ee 3, 5-8, 10, 15-18

Oneida Indian Nation v. County of Oneida,
414 U.S. 661 (1974). oe eee ee ee es 10, 11, 14

Seneca-Cayuga Tribe v. State ex rel. Thompson,
874 F.2d 707 (10th Ge gee. -. 46

State, ex rel. May v. Seneca-Cayuga Tribe of Oklahoma,
711 P.2d 77 (Obie. Ge eee a 16

Three Affiliated Tribes v. Wold Engineering,
476 U.S. 877 (9860) eee, Is

Washington v. Confederated Tribes of the Colville Reservation,
447 US. 134 (PSR ae eee ee 11

White Mountain Apache Tribe v. Bracker,
448 U.S. 136 (1900 ee 14

VI

Williams v. Lee,
ge Pe, es 1]

Worcester v. Georgia,

re aes S05 CORD) Ww... eee 11
Statutes:
ee | OE Se |) Se re 16
28 U.S.C. § 1441 Repent e kb VOM. 8b & ea 8 -4-0-n adle-¥'vs te Ae

28 U.S.C. § 1254 (1) )

No.

IN THI
SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1990

WYANDOTTE TRIBE OF OKLAHOMA, Petitioner.

STATE OF OKLAHOMA ex rel.
OKLAHOMA TAX COMMISSION, Respondent.

PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

The Petitioner, Wyandotte Tribe of Oklahoma, respectiully
prays that a Writ of Certiorart be issued to review the decision
and judgment of the United States Court of Appeals tor the
Tenth Circuit ente-ed in this proceeding on November 26, 1990.

OPINIONS BELOW

The decision and judgment of the Tenth Circuit Court of
Appeals, which is reported at 919 F.2d 1449, is reprinted: in
Appendix A. The March 11, 1991, Order of the Court ot
Appeals denying the Wyandotte Tribe’s petition for rehearing

2

is unreported and is reprinted in Appendix B.' The Order of
the U. S. District Court for the Northern District of Oklahoma,
from which appeal was taken to the Tenth Circuit, is also
unreported and is reprinted in Appendix D.

JURISDICTION

The judgment of the Court of Appeals was entered on
November 26, 1990. The Court of Appeals denied the
Wyandotte Tribe's petition for rehearing by Order entered
March 11, 1991. The jurisdiction of this Court is invoked under
28 U.S.C. $1254(1).

CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED

Article I, Sec. 8, Cl. 3 of the United States Constitution
provides, in pertinent part:

The Congress shall have power . . . to
regulate commerce. . . with the Indian

Tribes.

Title 28, United States Code, §§ 1441(a)(b) and (c) are
reprinted in Appendix E.

' The Tribe’s petition for rehearing was technically filed
out of time. The petition was accompanied by an affidavit of
the Tribe’s counsel stating, under oath and as an officer of the
court, that although the opinion of the Court of Appeals had
been entered on November 26, 1990, he had not received a
copy of the decision until December 17, 1990. The petition for
rehearing was filed four days later, on December 21, 1991, and
was treated as timely filed by the Court of Appeals. A copy of
counsel's affidavit is reprinted in Appendix C.

STATEMENT OF THE CASE
1. NATURE OF THE CONTROVERSY

This case, which involves the scope of federal
removal jurisdiction under 28 U.S.C. §1441(a), is a natural
extension of Oklahoma Tax Commission v. Graham, 489 U.S.
838 (1989). In Graham, the Court held that the federally-
based delense of triba. sovereign immunity from suit does not
convert a suit otherwise arising under state law into one which
arises under federal law for purposes of removal to federal
court. After discussing the “well-pleaded complaint rule" and
the scope of the federal removal statute, the Court held that
the possible existence of a tribal sovereign immunity defense
did not convert Oklahoma tax claims into federal questions, and
then summarily concluded, with no analysis or discussion, “and
there was no independent basis for original federal question
jurisdiction to support removal." Graham, 489 U.S. at 841
(emphasis added).

This case asks the Court to recognize the
independent basis for federal question jurisdiction that it did
not find in Graham. In fact, that jurisdiction is provided by a
well-recognized exception to the well-pleaded complaint ruie:
the complete preemption doctrine. That doctrine, frequently
discussed by the Court but not addressed in Graham, holds that
certain subject areas have been so completely preempted by
federal law that any cause of action raising such a claim, even
if artfully drafted to incorporate only state law theories, is
necessarily federal in character and may, therefore, be removed
to federal court... The Supreme Court has already held that

* In discussing the concept of artful pleading, the Court

has applied what it characterized as a "settled principle.” to hold
that a plaintiff may not “use artful pleading to close off
defendant's right to a federal forum... [and that] occasionally
the removal court will seek to determine whether the real
nature of the claim is federal, regardless of plaintiff's

4

cases involving title to Indian lands are completely preempted
so as to “arise under" federal law. Caterpillar, Inc. v. Williams,
482 U.S. 386, 393, n.& (1987). This case asks the Court to
determine whether state efforts to tax Indian tribes tor on-
reservation activities have likewise been completely preempted
by federal law for jurisdictional purposes.

- PROCEEDINGS BELOW

This action was originally filed by the Oklahoma
Tax Commission (the "Commission") in the District Court otf
Ottawa County, Oklahoma on December 30, 1986. — The
petition sought to enjoin the Wyandotte Tribe of Oklahoma,
(the "Tribe"), from operating a tribal convenience store on its
reservation unless it collected state sales taxes on all sales made
at the store, including sales made to Wyandotte tribal members.
On that same date, the state court entered on ex parte
temporary restraining order against the Tribe, requiring it,
among other things, to collect state taxes on sales made to
members of the Wyandotte Tribe.’

Shortly thereafter, the Tribe removed the state
court action to the United States District Court tor the
Northern District of Oklahoma. The Tax Conimission moved
to remand the case to state court. The District Judge denied

characterization.” Federated Department Stores, Inc. \. Motte,
452 U.S. 394, 397, n.2 (1981) (citation omitted). Plaintills
cannot “avoid removal jurisdiction by ‘artful[ly]) casting their
‘essentially federal law claims’ as state law claims.” /d.

’ To the extent the state court order compelled the Tribe
to collect state sales taxes from its own members. that order
violated well-established federal Indian law principles holding
that states cannot tax tribal members on their own reservation.
Moe v. Confederated Salish & Kootenat Tribes, 425 US. 463.
481-82 (1976); McClanahan v. Arizona State Tax Commission,
411 U.S. 164 (1973).

5

that motion, expressly finding that the Tribe had not argued,
and he was not holding, that removal was based upon the
existence of a tribal sovereign immunit; defense. Instead, the
District Judge premised his finding of federal question
jurisdiction on the doctrine enunciated in Franchise Tax Board
v. Construction Laborers Vacation Trust, 463 U.S.1, 13 (1983),
holding that the Tax Commission’s right to tax the Wyandotte
Tribe required resolution of substantial questions of federal law
in dispute between the parties.*

Following other procedural matters not relevant
here, the District Court decided the parties’ cross motions for
summary judgment. That judgment, which provided both
partics some relief, was cross-appealed to the Tenth Circuit
Court of Appeals.” The Tenth Circuit, after deciding other
issues, remanded the Tax Commission's action against the Tribe
to the District Court to determine whether it was barred by
tribal sovereign immunity from unconsented suit.

Once back before the District Court. the Tribe
filed a motion to dismiss, based on tribal sovercign immunity.
At the same time, the Commission once again moved to
remand the case to state court, this ime on the strength of
Oklahoma Tax Commission v. Graham, 489 U.S. $38 (1989).
which had been recently decided by this Court.

After bricling and oral argument, the District

4

In Franchise Tax Board, the Court stated: "Even though
state law creates appellants’ causes of action, its case might still
“arise under” the laws of the United States if a well-pleaded
complaint established that its right to relief under state law
requires resolution of a substantial question of federal law in
dispute between the parties.” 463 U.S. at 13.

The Tax Commission appealed several aspects of the
judgment but did not appeal from the District Court's denial of
its Motion to remand the case to state court.

6

Court denied the Tax Commission’s motion to remand and
granted the Tribe’s motion to dismiss. See Appendix D.
Although finding some superficial similarity between this case
and Graham, the District Court reiterated its previous holding
that the basis for finding federal question jurisdiction supporting
removal in this case was not the same as the basis reyected in
Graham. Appendix D at D-2. ("The Tribe has maintained
consistently throughout this lawsuit that... the sovereign
immunity defense is not the basis for removal in this case. . . .
The Tribe relied on the authority of Franchise Tax Board in its
previous opposition to remand. [Citation omitted]. This Court
also relied on that authority"). The District Court also went on
to specifically identify the three federal questions that tt
believed would have to be addressed in order to resolve the
Commission’s lawsuit secking to tax the Tribe. These questions
involved matters of constitutional, statutory and treaty
interpretation. Appendix D at D-3, n.3. The Tax Commission
appealed from that ruling.

On appeal, the Tenth Circuit reversed, vacating the
judgment of dismissal and remanding the Tax Commission's
action back to the state court. See Appendix A. The Court ol
Appeals, relying on Graham's analysis of the well-pleaded
complaint rule, held that the Commission’s cause of action did
not present a federal question. Although it recognized the
existence of a “complete preemption” exception, the Tenth
Circuit found that state taxation of an Indian tribe did not fall
within its scope. In addition, the Court of Appeals stated that
the Tribe had failed to identify any issue of federal law other
than tribal sovereign immunity necessary to resolve the
Commission's lawsuit, as required by Franchise Tax Board.

The Tribe filed a petition for rehearing, which was
denied by the Court of Appeals on March 11, 1991. This
petition followed.

:
REASONS FOR GRANTING THE WRIT

The Court’s per curiam decision in Graham was correct,
but incomplete. The Court was undoubtedly correct in holding
that the existence of an anticipated tribal sovereign immunity
defense would not convert a suit actually arising under state law
Into one arising under federal law for purposes of federal
removal jurisdicuon. The Graham analysis was incomplete,
however, because it summarily concluded that there was "no
independent basis" for finding federal question jurisdiction, 489
U.S. at 841, without considering the issue presented here:
whether the aflempted state taxation of an Indian tribe is so
“completely preempted" by federal law as to necessarily raise a
federal question.

That omission has now been compounded by the Tenth
Circuit's decision in this case, which found that state taxation of
Indian tribes has not been completely preempted by federal law,
and which affirmatively held that the State of Oklahoma's right
to tax the Wyandotte Tribe “arises under state law.” Appendix
A at A-4. That holding is contrary to long-settled principles of
federal Indian law, as repeatedly stated by this Court.

The effect of these two rulings is to improperly subject
the Wyandotte Tribe--and potentially every other tribe in the
United States--to adjudication of its most fundamental rights in
State courts. This is— plainly inconsistent with the well-
established principle that Indian tribes are wards of, and
subordinate to, the federal government, not the | states.
Moreover, this Court has repeatedly noted that subjecting
Indian tribes to state jurisdiction threatens the very existence of
those tribal governments. This ts contrary to current tederal
Indian policy, which seeks to promote and strengthen tribal sell-
government. In order to avoid a perpetuation of this problem,
review of this case by the Court is necessary.

I. THE COURT SHOULD CONSIDER THE
COMPLETE PREEMPTION DOCTRINE AS IT
RELATES TO STATE TAXATION OF INDIAN
TRIBES.

In Graham, the Court analyzed the well-pleaded complaint
rule in these terms:

The presence or absence of federal question
jurisdiction is) governed by the “well-pleaded
complaint” rule. "[W]hether a case is one arising
under [federal law] in the sense of the jurisdictional
Statute, 2... must be determined from what
necessarily appears in the plaintiff's statement of his
own claim in the bill or declaration, unaided by
anything alleged in anticipation or avoidance of
detenses which it is thought the defendant may
interpose.” [Citations omitted].

489 US. at 840-41. In reliance on Caterpillar, Inc. v. Williams,
482 U.S 386 (1987), the Court then held that the existence of
a tribal sovereign immunity defense did -not convert state law
tax claims asserted against the Chickasaw Nation into federal
questions in order to permit removal of that case to federal
court under 28 U.S.C. § 1441(a). Although that holding alone
would have resolved the narrow issue presented in Grafiam, the
Court went on to state, without analysis or discussion, “and
there was no independent basis tor original federal question
jurisdiction to support removal.” 489 U.S. at 841.

The issue not considered by the Court in Gra/iam--but
squarely presented here--is whether the state taxation of Indian
tribes has been so completely preempted by federal law that
any cause of action raising that issue is necessarily federal in
character for jurisdictional purposes.

The “complete preemption" doctrine is a long-recognized

9

exception to the well-pleaded complaint rule. In fact, it was
discussed in Caterpillar, the very case the Court relicd on in
deciding Graham. In Caterpillar, the Court stated:

There does exist, however, an "independent corollary”
to the well-pleaded complaint rule [citation omitted]
known as the "complete pre-emption" doctrine. On
occasion, the Court has concluded that the pre-
emptive force of a statute is so “extraordinary” that
it "converts an ordinary state common-law complaint
into one stating a federal claim for purposes of the
well-pleaded complaint rule.” [Citation omitted].
Once an area of state law has been completely pre-
empted, any claim purportedly based on that preempted
state law ts considered, from its inception, a federal
claim, and therefore arises under federal law. See
Franchise Tax Board, supra, at 24, 77 Lo bed 2d 420.
103 S Ct. 2841 ("[E]f a federal cause of action
completely pre-empts a state cause Of action any
complaint that comes within the scope of the tederal
cause of action necessarily ‘arises under’ tederal law’).

482 U.S. at 393 (emphasis added) (footnote omitted): see also
Metropolitan Life Insurance Co. v. Taylor, 481 U.S. 58, 63-64
(1987) ("Congress may so completely preempt a particular arca
that any civil complaint raising this select group of claims ts
necessarily federal in character"); Avco Corp. v. Aeru Lodge, 390
U.S. 557. 558-59 (1968)(Labor Management Relations Act
completely preempts state law cause of action for violation of
collective bargaining agreement).

The analysis of the complete preemption doctrine trom
Caterpillar, as quoted above, is significant here tor two reasons.
First, the Court in Caterpillar cited and quoted trom Franchise
Tax Board, the same case relied upon by the Wyandotte Tribe
and the District Court as providing the basis tor removal
jurisdiction in this case. See Appendix D at D-2.) Equally as
important, Caterpillar expressly recognized that some aspects ot
the relationship between states and Indian tribes tell within the

10

complete preemption doctrine. Specifically, the Court cited
Oneida Indian Nation v. County of Oneida, 414 U.S. 661 (1974)
as an example of complete preemption. Oneida was a suit
brought in federal court by an Indian tribe secking possession
of tribal lands. The court of appeals dismissed the action,
holding that the claim did not present a federal question under
the well-pleaded complaint rule. The Supreme Court reversed,
holding that the question of Indian land rights "was exclusively
the province of federal law," 414 U.S. at 670, and "is thus
completely preempted and arises under federal law." Caterpillar,
482 US. at 393, n.8. Significantly, Oneida was also cited as an
example of complete preemption in Franchise Tax Board, 463
U.S. at 23, n.25.

In Graham, this Court failed to consider whether state
taxation of Indian tribes has been completely preempted for
jurisdictional purposes. As discussed below, the Court. of
Appeals considered the question in this case, but reached the
wrong conclusion. That error--which will improperly relegate
many Indian tax cases to state court adjudication--should be
reviewed by this Court.

Il. THE COURT OF APPEALS IGNORED
BASIC PRINCIPLES OF FEDERAL
INDIAN LAW AND MANY DECISIONS
OF THIS COURT IN HOLDING THAT
THE TAX COMMISSION'S RIGHT TO
TAX THE WYANDOTTE TRIBE AROSE
UNDER STATE LAW.

Among the most basic tenets of federal Indian law is the
well-established rule that Indian affairs are governed by federal, ”
not state, law. This general principle derives from the
Constitution, which provides at Article I, Section & Cl. 3 that
"The Congress shall have power... to regulate commerce. . .
with the Indian tribes."

This principle has been recognized by the Supreme Court
on many occasions. In Oneida Indian Nation v. County of

Oneida, 414 U.S. 661, 671 (1974), the Court relied upon the
doctrine, first expressed by Chict Justice Marshall, that relations
with the Indian tribes "according to the settled principles of our
constitution, are committed exclusively to the government of the
Union" (quoting Worcester v. Georgia, 31 U.S. (6 Pet.) S15, S561
(1832)). Several years later, when that case came back belore
the Court, it reiterated: "With the adoption of the Constitution,
Indian relations became the exclusive province of federal law."
County of Oneida v. Oneida Indian Tribe, 470 U.S. 226, 234
(1985S). In a similar vein, the Court has also noted that “tribal
sovereignty is dependent on, and subordinate to, only the
Federal Government, not the States.” Washington —¥.
Confederated Tribes of the Colville Reservation, 447 U.S. 134.
154 (1980). More generally, the Court has also recognized that
"Congress has... acted consistently upon the assumption that
the States have no power to regulate the affairs of Indians on
a reservation.” Willlams v. Lee, 358 U.S. 217, 220 (1959).

The primacy of federal law, and the inapplicability of state
law, is even more pronounced with respect to taxation of Indian
tribes. Once again, this Court has repeatedly recognized that
fact. In Mescalero Apache Tribe v. Jones, 411 U.S. 145 (1973),
the Court discussed what it characterized as “the special areca”
of state taxation of Indians and staicd that

absent cession of jurisdiction or other federal statutes
permitting it, there has been no satisfactory authority
for taxing Indian reservation lands or income trom
activitics carricd on within the boundarics of the
Reservation.

Id. at 148. In Montana v. Blackfeet Tribe, 471 U.S. 759 (1985)
the Court again recognized that the right to tax Indian tribes is
derived solely from tederal law:

The Constitution vests the Federal Government with
exclusive authority over relations with Indian tribes.
[Citations omitted]. As a corollary of this authority
... Indian tribes and individuals generally are exempt

12
from state taxation within their own territory.

Id. at 764. The Court in Blackfeet Tribe also quoted from
several older Indian tax cases, including The Kansas Indians, 5
Wall 737, 18 L.Ed. 667 (1867) (Indian tribe is "separated from
the jurisdiction of [the State] and to be governed exclusively by
the government of the Union"), and then noted that "this Court
has never wavered from the views expressed in these cases." 471
U.S. at 404-65. Finally, in National Farmers Union v. Crow
Tribe, 471 U.S. 845, $52, (1985), the Court further noted that
in “all” cases involving tribal exemption from state taxation, "the
governing rule of decision has been provided by federal law."

Perhaps the clearest statement by this Court that the
taxation of Indian tribes has been completely preempted by
federal law can be found in California v. Cabazon Band of
Mission Indians, 480 U.S. 202 (1987). In that case, the Court
held that certain tribal gambling activities were not subjcct to
State jurisdiction. In reaching this conclusion, the Court
declined to establish a broad, inflexible rule that would preclude
State jurisdiction over tribes and tribal members under any
circumstances, in the absence of congressional authorization.
480 U.S. at 214-15. However, the Court qualified that refusal
by expressly noting that in "the special area of state taxation of
Indian tribes and tribal members, we have adopted a per se rule.”
Id. at 215, n.17 (emphasis added). Because of its critical
importance to the issue raised in this petition, footnote 17 trom
the Cabazon decision is set forth here in its entirety:

In the special area of state taxation of Indian
tribes and tribal members, we have adopted a per se
rule. In Montana v. Blackfeet Tribe 471 U.S. 759
(1985), we held that Montana could not tax the
Tribe's royalty interests in oil and gas leases issued to
non-Indian lessees under the Indian Mineral Leasing
Act of 1938. We stated: "In keeping with its plenary
authority over Indian affairs, Congress can authorize
the imposition of state taxes on Indian tribes and
individual Indians. It has not done so often, and the

13

Court consistently has held that it will find the
Indians’ exemption from state taxes lifted only when
Congress has made its intention to do so
unmistakably clear." /d., at 765. We have repeatedly
addressed the issuc of state taxation of tribes and
tribal members and the state, federal, and tribal
Interests which it implicates. We have recognized
that the federal tradition of Indian immunity from
State taxation Is very strong and that the state interest
in taxation is correspondingly weak. Accordingly, it
is unnecessary to rebalance these interests in every
case. In Mescalero Apache Tribe v. Jones, 41) US.
145, 148 (1973), we distinguished state taxation trom
other assertions of | state jurisdiction. We
acknowledged that we had made repeated statements
"to the effect that, even on reservations state laws
may be applicd unless such application would
interfere with reservation self-government or would
impair a right granted or reserved by federal law

I:ven so, in the special area of state taxation,
absent cession of jurisdiction or other federal statutes
permitting it, there has been no satisfactory authority
for taxing Indian reservation lands or Indian income
from activities carried on within the boundaries of the
reservation, and McClanahan v. Artzona State Tas
Comm'n, [411 US. 1604 (1973)]. lays to rest any
doubt in this respect by holding that such taxation ts
not permissible absent congressional consent.” /hid.
(emphasis added).

Cabazon, 480 U.S. at 215, n.17.

As this analysis makes clear, then, this Court has
repeatedly held that the "special area” of state taxation of
Indian tribes has been completely preempted by federal law,
and that there is a per se rule under which states have no
authority to tax tribes in the absence of express congressional

14
authorization.®

The teaching of these cases is that from the adoption of
the Constitution, states have had no inherent power to tax
Indian tribes on their reservations. As a result, the State of
Oklahoma has no lawful right to tax the Wyandotte Tribe for
on-reservation activities unless that authority has been conferred
by federal law. In this case, therefore, as in Oneida, the rights
asserted by the Tax Commission "do not depend on... any

. Statutes of the State, but upon "federal law only.

In light of these well-established principles, the holding of
the Tenth Circuit Court of Anpeals in this case ts plainly wrong,
and warrants review by this Court. In its decision, the appellate
court held that the Okiahoma Tax Commission’s right to tax the
Wyandotte Tribe "arises under state law." Appendix A at A-4.
In fact, under federal law as discussed in Cabazon, the Tax
Commission has no right whatsoever under state law to assert
a state tax against an Indian tribe. To the extent that the state
asserts any right to tax the Tribe, that right must be derived
from federal law.

In attempting to justify its erroneous holding, the Tenth
Circuit then merely ignored footnote 17 in Cabazon. — As
support for its conclusion that Indian taxation has not been
completely preempted by federal law, the Court of Appeals

® The effect of this per se rule against state taxation is

significant. In areas other than taxation, where there is no
automatic preclusion, the Court must balance the respective
federal, state and tribal interests involved in cach case to
determine whether a particular assertion of state jurisdiction Is
preempted under federal law. See White Mountain Apache Tribe
v. Bracker, 448 U.S. 136, 144-45 (1980). With respect to state
efforts to tax an Indian tribe, however, the Court in Cabazon
expressly found such efforts to be per se preempted as a matter
of federal law, and therefore “it is unnecessary to rebalance
these interests in every case."

15
stated:

The Supreme Court has recognized that its cases
"have not established an inflexible per se rule
precluding state jurisdiction over tribes and tribal
members in the absence of congressional consent."
California v. Cabazon Band of Mission Indians, 480
U.S. 202, 214-15 (1987) (footnote omitted).

Appendix A at A-4. Yet, it is precisely the footnote omitted
by the Tenth Circuit, and quoted above, that sets forth the very
per se rule in the "special area" of state taxation that the Court
of Appeals failed to apply. As @ result, the ruling of the
appellate court is clearly erroneous.

Finally, the basic question raised here--whether issucs
involving the taxation of Indian tribes should be litigated in
federal or state courts--has not been rendered moot by the
Court's recent decision in Oklahoma Tax Commission v. Citizen
Band Potawatomi Indian Tribe of Oklahoma, 498 U.S.
112 L.Ed. 2d 1112 (1991). In that case, the Court held that
tribal sovereign immunity barred the Tax Commission trom suing
the tribe directly in order to collect state taxes from. on-
reservation activitics. However, the Court also made clear that
a number of Issues concerning the extent of possible judicial
remedies available to the state were yet to be determined. For
example, the Court suggested that suits against individual tribal
agents or officers might be permissible. /d. at 1123. Since the
Potawatomi decision was rendered, the Tax Commission has
already advanced this theory in two pending Indian tax cases in
Oklahoma state courts. If other states follow suit, this raises
the possibility of conflicting state and Federal court decisions as
to the proper scope of tribal sovereign immunity from state tax
suits. That result would clearly undermine the traditional notion
of a single body of federal Indian law governing Indian affairs

16
throughout the United States.’

The purpose behind the complete preemption doctrine is
to promote federal adjudication of uniquely federal issues. The
taxation of Indian tribes is just such an issue. The decision of
the Court of Appeals in this case will generate inconsistent
state court rulings in an area that has traditionally been
governed by federal law. To avoid this result, the Court should
grant review in this case.

Ill. THE COURT OF APPEALS IGNORED
THREE SUBSTANTIAL ISSUES OF
FEDERAL LAW NECESSARY TO
RESOLVE THE TAX COMMISSION'S
CAUSE OF ACTION.

Finally, in addition to ignoring footnote 17 in Cabazon,
the Court of Appeals also ignored the express holding of the
District Court in its analysis of Franchise Tax Board. As
discussed above, that case held that "a case may still arise under
the laws of the United States if a right to relief under state law
requires resolution of a substantial question of federal law in

7

This possibility is very real. The Oklahoma Supreme
Court has held that the extent of tribal sovereign immunity from
suit available to Oklahoma tribes in state court is determined
by balancing the respective federal, state and tribal interests
involved in cach case. State ex rel. May v. Seneca-Cayuga Tribe
of Oklahoma, 711 P.2d 77, 83-84, 89-92 (Okla. 1985) (tribal
sovereign immunity does not bar suit by state secking to
prohibit tribal bingo games). The Tenth Circuit Court of
Appeals, in enjoining further state court proceedings in that
case, found that Oklahoma’s method of analysis "has never been
applied by a federal court to sovereign immunity questions.”
Seneca-Cayuga Tribe v. State ex rel. Thompson, 874 F.2d 707.
715, n.7 (10th Cir. 1989). Thus, the scope of tribal sovercign
immunity in Oklahoma could vary dramatically depending on
whether the issue was being litigated in f- eral or state court.

17

dispute between the parties.” 463 U.S. at 13.* In discussing this
aspect of federal jurisdiction, the Court of Appeals stated:

The Tribe does not, however, indicate any other issuc
of federal law that must be resolved to decide the
dispute between the parties other than the issue of
sovereign immunity. We believe that the Court's
decision in Graham forecloses any argument that the
sovereign immunity of the Tribe is a sufficient
question of federal law to allow removal of the case
to federal court.

Appendix A at A-S. Indeed, Graham docs foreclose such an
argument. However, neither the Wyandotte Tribe nor the
District Court even relied upon the existence of tribal sovereign
immunity as the basis for removal in this case. Appendix D at
D-2. To the contrary, the District Judge himself cxpressly
stated the three specific issues of federal law that he believed
required resolution in order to decide the Tax Commission's suit
seeking to tax the Tribe, and which supported removal
jurisdiction. /d. at D-3, n.3. Those three issues--the scope of
the Indian Commerce Clause, the effect of a 1795 treaty
between the United States and the Wyandotte Tribe; and the
tax exemption provided Indian tribes under the Buck Act, 4
U.S.C. $104 et seq.--are separate and distinct from any argument
based upon the Wyandotte Tribe’s federal common law
immunity from unconsented suit. The Tenth Circuit's failure to
recognize this fact also warrants review by this Court.

* The Court affirmed the continued vitality of this principle
of federal question jurisdiction in Merrell Dow Pharmaceuticals
v. Thompson, 478 U.S. 804, 808-09 and n.5 (1986).

18

CONCLUSION

The Supreme Court has repeatedly recognized that current
federal Indian policy supports the twin goals of tribal self-
government and strengthened reservation economies. See, e.g.
Cabazon, 480 U.S. at 216-17 and ns. 19 and 20; New Mexico v.
Mescalero Apache Tribe, 462 U.S. 324, 335 and n.17 (1983).
The Court has also recognized on many occasions that tribal
sovereignty and self-government are seriously threatened when
subjected to state jurisdiction. Cabazon, 480 U.S. at 208 ("a
grant to States of general civil regulatory power over Indian
reservations would result in the destruction of tribal institutions
and values"); Three Affiliated Tribes v. Wold Engineering, 476
U.S. 877, 891 (1986) (state court jurisdiction over Indian tribe
"invites a potentially severe impairment of the authority of the
tribal government, its courts and its laws"), Bryan v. ltasca
County, 426 U.S. 373, 388 (1976) (subjecting tribes to state
taxing authority would "result in the undermining or destruction
of... tribal governments").

If the most fundamental rights of American Indian tribes
are to be subjected to state court adjudication, that decision
should ‘be reached only after the most rigorous legal analysis
possible. That analysis has not yet been done with respect to
the issues presented here. The Court in Graham did not
consider the complete preemption doctrine as it applics to state
taxation of Indian tribes. The Tenth Circuit considered it, but
ignored the most important analytical principles. This case

19

presents the opportunity for the Court to fully address this far-
reaching Indian law issue. Accordingly, this petition for a writ
of certiorari should be granted.

Dated this 10th day of May, 1991.
Respectfully submitted,
GLENN M. FELDMAN
O'Connor, Cavanagh, Anderson
Westover, Killingsworth & Beshears

One East Camelback Road., #1100
Phoenix, Arizona 85012-1656

Attorneys for Petitioner

APPENDIX A
PUBLISH
UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

STATE OF OKLAHOMA, )
ex rel. OKLAHOMA TAX )

COMMISSION, ) No. 90-5100
)
Plaintiff-Appellant, )
)
V. )
)
WYANDOTTE TRIBE OF )
OKLAHOMA, a Federally _ )
Chartered Corporation, )

Defendant-Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF OKLAHOMA
(D.C. No. 87-C-9-E)

Submitted on the briefs:

Joe Mark Elkouri, General Counsel, and David Allen Miley,
Assistant General Counsel, Oklahoma Tax Commission,
Oklahoma City, Oklahoma, for Plaintiff-Appellant.

Glenn M. Feldman of O'Connor, Cavanagh, Anderson,
Westover, Killingsworth & Beshears, Phoenix, Arizona, tor
Defendant-Appellee.

Before McKAY, MOORE, and BRORBY, Circuit Judges.

McKAY, Circuit Judge.

After examining the briefs and appellate record, this panel
has determined unanimously that oral argument would not
materially assist the determination of this appeal. See Fed. R.
App. P. 34(a); 10th Cir. R. 34.1.9. The case is therefore
ordered submitted without oral argument.

The Oklahoma Tax Commission appeals here the district
court’s denial of the Commission’s motion to remand this action
to collect state taxes against the Wyandotte Tribe of Oklahoma
to state court for lack of federal jurisdiction. In the alternative,
it appeals the district court’s dismissal of the case based on the
court’s finding that the Tribe is immune from suit. Because we
find that the district court did not have jurisdiction over the
suit, we need not reach the immunity issuc.

The Commission originally filed suit in the District Court
of Ottawa County to enjoin the Tribe from operating a
convenience store until it had collected and paid all applicable
state taxes. The Tribe then filed suit in the United States
District Court for the Northern District of Oklahoma to enjoin
the Commission from enforcing state tax laws against the store.
The store is owned by the Tribe and located on tribal property.
The action in state court was removed to federal court, and the
cases were consolidated for trial.

At the district court, the Tribe filed a motion to dismiss
the action it had filed in federal court, so that the only
remaining case would be the action the Commission originally
filed in state court. The Commission did not oppose the Tribe's

motion. The Commission instead moved to remand the state
action back to state court. The district court denied both
motions and reached the merits of the case. On appeal, this
court held that the Tribe’s action in federal court should be
dismissed pursuant to its own motion. The Commission's action
was then remanded to the district court for a determination of
whether the Tribe is immune from suit under the doctrine of
sovereign immunity.

On remand, the Commission once again moved the district
court to remand the case back to state court. The Tribe
submitted a motion to dismiss based on sovereign immunity.
The district court denied the Commission’s motion to remand
and dismissed the case based on the Tribe's defense of
sovercign immunity. The Commission then brought this appeal.

Unless expressly authorized by Act of Congress, an action
brought in state court may not be removed to federal court
unless the action may have been brought there originally. See
28 U.S.C. § 1441 (1988); Caterpillar, Inc. v. Williams, 482 U.S.
386, 392 (1987). Under the "well-pleaded complaint" rule,
federal jurisdiction exists only when the plaintiffs well-pleaded
complaint raises issues of federal law. Franchise Tax Board vy.
Construction Laborers Vacation Trust, 463 U.S. 1, 9-12 (1983).
Appellees claim federal jurisdiction here under 28 U.S.C. § 1331
(1988). We review questions of law de novo. Morgan v. City
of Rollins, 792 F.2d 975, 978 (10th Cir. 1986).

Citing the Supreme Court’s recent decision in Oklahoma
Tax Comm'n v. Graham, 489 U.S. 838 (1989), the Commission
argues that the action was improperly removed to federal court
because there is no federal question that appears on the face of
its complaint. In Graham, the Court held that a delense of
tribal immunity “to the claims asserted does not convert a suil
otherwise arising under state law into one which, in the

A-4

statutory sense, arises under federal law." Graham, 489 U.S. at

The Court therefore concluded that the state law tax
claims against the tribe did not present a federal question.
Though acknowledging Graham, the Tribe’s response is two-
fold. Initially, the Tribe argues that federal law has so
completely preempted this area of the law that appellant's
complaint is federal in character, thereby vesting federal courts
with jurisdiction over the Commission’s complaint. Second, the
Tribe contends that the suit requires the resolution of a
substantial question of federal law to establish a right to relict
under state law. We address, in turn, cach of the Tribe's
arguments.

A.

A well-established exception to the well-pleaded complaint
rule is the complete preemption doctrine. It is premised on the
proposition that "Congress may so completely pre-cmpt a
particular area that any civil complaint raising this select group
of claims is necessarily federal in character." Metropoliuan Life
Ins. Co. v. Taylor, 481 U.S. 58, 63-64 (1987). The Tribe claims
that Indian taxation is such a creature of federal law. Citing
Oneida Indian Nation v. County of Oneida, 414 U.S. 661 (1974),
the Tribe argues that relations with Indian tribes, “according to
the principles of our constitution, are committed exclusively to
the government of the union.” /d. at 671 (quoting Worcester
v. Georgia, 6 Pet. 515, 561 (1832)).

The dispute in Oneida, however, centered around title to
certain property. In determining that the suit could be removed
to federal court, the Court stated: "Nor in sustaining the
jurisdiction of the District Court do we disturb the well-pleaded
complaint rule .... Here, the right to possession itself is
claimed to arise under federal law in the first instance." /d. at
676. The Commission’s claim of right to tax the Tribe here,
however, arises under state law. The Supreme Court has
recognized that its cases "have not established an inflexible per

A-5

se rule precluding state jurisdiction over tribes and _ tribal
members in the absence of congressional consent." California
v. Cabazon Band of Mission Indians, 480 U.S. 202, 214-15
(1987) (footnote omitted). We are therefore faced with a
situation "where the underlying right or obligation arises under
state law and federal law is merely alleged as a barrier to its
effectuation.”. Oneida, 414 U.S. at 675. Under Graham, this
barrier does not convert this to a case arising under federal law.

B.

We turn next to the Tribe's claim that the Commission's
complaint runs afoul of what it terms the artful pleading
exception to the well-pleaded complaint rule. The Supreme
Court, in Franchise Tax Board v. Construction Laborers Vacation
Trust, 463 U.S. 1, 13 (1983), stated that "a case may still arise
under the laws of the United States if a right to relief under
State law requires resolution of a substantial question of federal
law in dispute between the parties." The Tribe argues that the
question of whether the Commission may properly plead a cause
of action to tax the Tribe requires analysis- of a substantial
question of federal law.

The Tribe does not, however, indicate any other issue of
federal law that must be resolved to decide the dispute between
the parties other than the issue of sovereign immunity. We
believe that the Court's decision in Graham ftorecloses any
argument that the sovereign immunity of the Tribe is a
sufficient question of federal law to allow removal of the case
to federal court. We therefore are bound by the Graham
decision.

ITT.

The decision of the district court denying the Commission's
motion to remand the case back to the district court is
therefore REVERSED. The issue of whether the Tribe is

A-6

immune from suit should not have been addressed and,
accordingly, we VACATE the judgment of tie district court
dismissing the action. We remand the cause to the district
court with directions to remand the action to the District Court
of Ottowa County for further proceedings.

APPENDIX B

UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

STATE OF OKLAHOMA, )

ex rel. OKLAHOMA TAX _)
COMMISSION, ) No. 90-5100

)

Plaintiff-Appellant, )

)

v. )

: )
WYANDOTTE TRIBE OF )
OKLAHOMA, a Fedcrally _ )
Chartered Corporation, )

)
Defendant-Appellee. )
ORDER

Filed March 11, 199]

Before HOLLOWAY, Chicl Judge, McKAY, LOGAN,
SEYMOUR, MOORE, ANDERSON, TACHA, BALDOCK,
BRORBY, and EBEL, Circuit Judges

This matter comes on for consideration of appellec’s
untimely petition for rehearing and suggestion for rehearing cn
banc in the captioned cause.

Upon consideration whereof, the petition shall be

considered timely filed on December 21, 1990, and is denied by
the panel that rendered the decision sought to be reheard.

| eceees

B-2

In accordance with Rule 35(b), Federal Rules of Appellate
Procedure, the suggestion for rehearing en banc was transmitted
to al! of the judges of the court who are in regular active
service. No member of the panel and no judge in regular active
service on the court having requested that the court be polled
on rehearing en banc, Rule 35, Federal Rules of Appellate
Procedure, the suggesticu for rehearing en banc is denied.

Entered for the Court

_/S/

ROBERT L. HOECKER, Clerk

APPENDIX C
UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT
STATE OF OKLAHOMA, )

ex rel. OKLAHOMA TAX _ )

COMMISSION, NO. 90-5100

—

Plaintiff-Appellant,
VS.

WYANDOTTE TRIBE OF
OKLAHOMA,

Defendant-
Appellee.

me eee eee eee Se”

AFFIDAVIT OF GLENN M. FELDMAN

STATE Or ARIZONA _ )
) SS.

County of Maricopa )

Glenn M. Feldman, being duly sworn upon his oath, states
as follows:

l. I am the attorney of record for the Wyandotte
Tribe of Oklahoma, the defendant-appellce in this matter.

ra I am admitted to practice law in the State of
Arizona and the District of Columbia. I am a member of the
bar of the Tenth Circuit Court of Appeals and, therefore, | am
an officer of this Court.

3. I make this affidavit in order to explain why the
Wyandotte Tribe’s Petition for Rehearing and Suggestion for En

C-2

Banc Consideration has been filed more than 14 days alter the
entry of judgment in this matter.

4. I never received a copy of the judgment in this
case from the Clerk’s office, although the judgment was
apparently filed with the Clerk on November 26, 1990.

x The first indication I had that this case had been
decided occurred on Monday, December 17, 1990. On that
date, I received in the mail, from David Miley. the attorney for
the Oklahoma Tax Commission, a Bill of Costs that Mr. Miley
had filed in the District Court secking costs with respect to this
appeal. A copy of that Bill of Costs is attached hereto.

6. This Bill of Costs plainly indicated that Mr. Miley
believed that he had prevailed on this appeal, although | had
never received any opinion or judgment from the Court.

7. I immediately called the Office of the Clerk and
explained the situation. After some checking. | was then
advised that a judgment had been entered on November 26,
1990. 1 told the Clerk’s assistant with whom I was speaking
that | had never received a copy. She contirmed my mailing
address, which was correct. (In fact, | had received a letter
from the Court in mid-November advising me that this matter
would be decided without oral argument). I asked her if she
could fax a copy of the judgment to me. She said that she
could not, but that she would mail another copy to me.

s. I then immediately called Mr. Miley. He advised
me that a decision had been rendered, dated November 26,
1990, and that he had a copy. After bricfly discussing the
Courts’ holding, I asked him to fax a copy to me. He did so,
and I received a copy of the judgment, for the first time, at
approximately 2:30 p.m. on Monday, December 17, 1990.

9. Prior to that time, I was not aware of the existence
of the Court's judgment in this case, nor had I received oF seen
a copy.

C-3

10. Based upon these facts, I would respectfully request
that the Court consider the Wyandotte Tribe’s Petition for
Rehearing and Suggestion for En Banc Consideration, even
though it is being filed more than 14 days after the Court's
judgment was entered.

Dated this 20th day of December, 1990.

JSS/
Glenn M. Feldman
O'CONNOR, CAVANAGH,
ANDERSON, WESTOVER,
KILLINGSWORTH & BESHEARS
One East Camelback, #1100
Phoenix, Arizona 85012-1656

Attorneys for Wyandotte Tribe:
of Oklahoma

SUBSCRIBED AND SWORN TO betore me this
20th, day of December, 1990.

is
Notary Public

My Commission Expires:

April 9, 1993

APPENDIX D
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OKLAHOMA

STATE OF OKLAHOMA, )
ex rel, OKLAHOMA TAX)

COMMISSION, ) No. 87 C- 9-E

) 87-C-63-E
Plaintiff, ) Consolidated

)

Vv. )
)

WYANDOTTE TRIBE OF )

OKLAHOMA, )

Detendant.

ORDER

This matier is before the court on the mandate of the
United States Court of Appeals for the Tenth circuit remanding
to this court the issue of sovercign immunity.” The Tribe moves
to dismiss the State’s lawsuit on the grounds of sovercign
immunity. The State moves to remand the case on the
authority of Oklahoma Tax Commission v. Graham, US.

, 109 S.Ct. 1519 (1989).

The State asks the court to revisit the issue of removal in
this case. This court previously denied the State’s motion to

Order and Judgment of April 5. 1989.) The Tenth
Circuit reversed this court’s order denying the motion of the
Wyandotte Tribe of Oklahoma (Tribe) to voluntarily dismiss its
suit for declaratory and injunctive relict. This reversal dismisses
the Tribe’s lawsuit and consequently the issue of sovereign
immunity must be addressed.

D-2

remand.” The State presented the same argument it now urges,
that its action against the Tribe has been removed on the basis
of a tribal immunity defense which presents a federal question
only when Congress expressly provides and, Congress has not
expressly provided for federal court adjudication of tribal
IimmMunitics,

The Tribe has maintained consistently throughout this
lawsuit that although the above is truc, the sovereign immunity
defense is not the basis for removal in this case. The Tribe
asserts that this court has original jurisdiction because the right
to relief under state law--to tax Indian sales of cigaretics on
Indian Jand--requires resolution of a substantial question of
federal law in dispute between the partics. The Tribe argues
that a federal court has original jurisdiction to determine
whether Congress has provided for state taxation of Indians in
these circumstances. The Tribe relics primarily upon branchise
Tax Board v. Laborers Vacation Trust, 464 US. 1, 1038 S.Ct.
2841 (1983) for the proposition that a case may sull arise under
the laws of the United States if a right to relic! under state law
requires resolution of a substantial question of federal law in
dispute between the parties. The Tribe relied of the authority
Of Franchise Tax Board in its previous opposition to remand
463 US. at, 103 S.Ct. at 2848. This court also relied on
that authority:

As the Court stated in Franchise Tax
Board with regard to the principics
for determining when a federal
question is presented in a removal
action, ‘simply to state these principles
is not to apply them to the case at
hand. Although the State’s petition
would at first blush appear to rely

“Order of March 31, 1987 in Case No. 87-C-63-E,
consolidated with this case pursuant to the Order of the same
date.

D-3

purely on state law, ultimately the
State must prove that it has the power
to tax the Wyandottes in order to be
able to recover on its claims.
Although the Wyandottes certainly
argue federal law in defense, the right
to relicf of the State under state law
requires resolution of a substantial
question of federal law in dispute
between the partics because the State
must, as an clement of its claim, prove
that it has the power to apply its laws
to the Wyandottes. Therelore the
court concludes that a federal
question Is presented by the State's
petition, and the motion to remand
should be denied.

(Order of March 31, 1987, at p. 3)’

Although the court did not specilically so state, it
believed that the federal questions implicated by the case
included at least the following: (1) the Constitution, Article 1,
§8 which gives the federal government, not the states, the
power to regulate commerce with the Indian tribes see,
Washington v. Confederated Tribes, 447 U.S. 134, i00 S.Ct. 2009
(1980) (the power to tax affects the regulation of commerce
with the tribes); (2) treaty rights, including the Treaty with the
Wyandotte, et. al., of 1795, specifically Article VII which states
that Indians may not be imposed on their trade. and (3) section.
109 of the Buck Act, 4 U.S.C. §104 ct. seq... which exempts
Indians trom state sales or use taxes, see, Warren Trading Post
Co. v. Arizona State Tax Comm'n, 85 S.Ct. 1242, 1245-1246, 380
U.S. 685, 690-691 (1965) (The Buck Act, in which Congress
permits states to levy sales or use taxes within certain federal
areas, docs not apply to Indian reservations.”)

D-4

Oklahoma Tax Commission v. Graham appears to overrule
this court’s earlier reasoning that the taxation issue presents a
basis for removal. The Court did not refer to Franchise Tax
Board but, did state:

In Caterpillar, [Caterpillar, Inc. v.
Williams, 482 U.S. 386 (1987)| we
ruled that application of the well-
pleaded complaint rule defeated
federal question jurisdiction, and
therefore removability, in a case in
which employees sucd on personal
State law employment contracts. We
refused to characterize these state law
claims as arising under federal law
even though an interpretation of the
collective bargaining agreement might
ultimately provide the employer a
complete defense to the individual
claims, and even though employee
claims on the collective bargaining
agreement would have been thie
subject of original federal jurisdiction.
Caterpillar, supra, at 396-398. The
State law tax claims in the present
case must be analyzed in the same
manner. Tribal immunity may provide
a federal defense to Oklahoma's
claims. See Puyallup Tribe, Inc. \.
Washington Game Dept., 433 U.S. 165
(1977). But it has long been settled
that the existence of a federal
immunity to the claims asserted does
not convert a suit Otherwise arising
under state law into one which, in the
Statutory sense, arises under federal
law. Gully v. First National Bank, 299
U.S. 109 (1936). The — possible
existence of a tribal immunity detense,

D-5

then, did not convert Oklahoma tax
claims into federal questions, and
there was no independent basis for
original federal jurisdiction to support
removal.

U.S. at , 109 S.Ct. at 1521. Therein lies the basis
upon which the State reurges its motion to remand.

Despite the authority of Graham, this court must address
the case in its current procedural context. Graham was decided
before the Tenth Circuit issued its mandate directing this court
to address the sovercign immunity issuc and, this court must
assume that it is to comply with these directions despite
Graham. Further, if sovereign immunity operates as a complete
defense to the State’s action, then neither this court nor the
State court has jurisdiction to hear this suit and remand would
be futile. Neither a federal nor a state court has jurisdiction
Over a Suit against a tribe absent either “an clfective waiver or
consent" by the tribe, Puyallup Tribe, Inc. v. Washington Game
Department, 433 U.S. 165, 172, 97 S.Ct. 2616, 2621 (1977), oF
an ‘unequivocal expression of contrary legislative intent” to
waive sovercign immunity. Santa Clara Pueblo v. Martinez, 436
U.S. 49, 59, 98 S. Ct. 1670, 1677 (1978). While tribal sovercign
immunity is not absolute, waivers of sovercign immunity are
strictly construed. Seneca-Cayuga Tribe of Oklahoma \. State.
874 F.2d 709, 715 (10th Cir. 1989). It is, therclore, appropriate
to address the sovercign immunity tssuc.

The court previously has held that the convenience store
over which the state seeks to impose Cigarette Excise Laxes Is
Indian Country within the meaning of 18 U.S.C. §115SI(a).
Because the convenience store is located in Indian Country, the
Tribe possesses sovercign powers with respect to the land and
the store. The Cuizen Band Potawatomi Indian Tribe of
Oklahoma v. The Oklahoma Tax Commission, 888 F.2d 1303,
1306 (10th Cir. 1989). The State does not contend that the
Tribe has in any way given its consent to suit against it, nor
does it argue that Congress has abrogated the Tribe's sovercign

D-6

immunity.“ Neither this court nor the state courts have
jurisdiction to hear the State’s suit in the face of the Tribe's
sovercign immunity. This case must, therefore, be dismissed.
IY IS THEREFORE ORDERED that this action is
dismissed. '
ORDERED this __ 9th day of April, 1990.

a

JAMES O. ELLISON

UNITED STATES DISTRIC
JUDGE

4

In The Ctitzen Band Potawatomt, the Venth Circuit also
noted that Oklahoma has no authority to tax the transactions ol
a convenience store located in Indian Country unicss Oklahoma
has received an independent jurisdictional grant of authority
from Congress, citing to Bryan v. Itasca County, 426 US. 373.
376-377, 98 S.Ct. 2101, 2105-2106 (1976); Moe 1. ¢ onfederated
Salish and Kootenai Tribes, 425 U.S. 463, 475-476. 96 SCL. 1634.
1645-1646 (1976); McClanahan +. Anzona Tax Comm'n. 41)
US. 164, 175-177, 93 S.Ct. 1257. 1265-1267 (1973). United
States v. Barquin, 799 F.2d 619, 621 (10th Cir. 1986). $88 F.2d
1306-1307,

APPENDIX E

Tithe 28, United States Code, §§ 1441(a)(b) and (ce).

$1441. Actions removable gencrally.

(a) Except as otherwise expressly provided by Act of
Congress, any civil action brought in a State court of which the
district courts of the United States have original jurisdiction,
may be removed by the defendant or the defendants, to the
district court Of the United States for the district and division
embracing the place where such action is pending. — bor
purposes of removal under this chapter, the citizenship) of
defendants sued under fictitious names shall be disregarded.

(b) Any civil action of which the district courts have
original jurisdiction founded on a claim or right arising under
the Constitution, treaties or laws of the United States shall be
removable without regard to the citizenship or residence of thc
parties. Any other such action shall be removable only i none
of the partics ino interest: properly joined and served as
defendants is a citizen of the State in which such action is
brought.

(¢) The court to which such civil action is removed is not
preciuded trom hearing and determining any claim in such civil
acuion because the State court from which such civil action ts
removed did not have jurisdiction over that claim.

(As amended Oct. 21, 1976, Pub... 94-583, 8 6, 90 Stat. 289%.
June 19, 1986, Pub... 99-336, § 3(a), 100 Stat. 637. Nov. 19.
1988, Pub.L. 100-702, Tithe X, § 1016(a), 102 Stat. 4669, Dec.
1, 1990, Pub.L. 101-6050, Tithe TIT, § 312, 104 Stat. S11

i

=

= >

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385009_2086%3A1. Public record. Not legal advice.