# Opposition Brief — Central Machinery Co. v. Arizona

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_2014%3A2

## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1987
- **Citation:** 481 U.S. 1042

## Text

cS Supreme Court, U.S,
oN wa FILED
No. 86-1546 | APR 26 1987
JOSEPH F. SPANIOL, JR,
UNITED STATES SUPREME} COURT cLERK a
maar

October Term, 1986

CENTRAL MACHINERY COMPANY,
an Arizona corporation,
Petitioner,

Vv.

STATE OF ARIZONA,
Respondent.

BRIEF IN OPPOSITION TO
PETITION FOR WRIT OF CERTIORARI

ROBERT K. CORBIN
Attorney General
State of of Arizona

ANTHONY B. CHING

Solicitor General

1275 West Washington Street
Phoenix, Arizona 85007
Attorneys for Respondents

QUESTIONS PRESENTED

WHETHER A NON-INDIAN' SELLER OF
MACHINERY TO INDIANS HAS STANDING TO
ASSERT AN INDIAN ENTITY'S’ RIGHTS,
PRIVILEGES AND IMMUNITIES UNDER 42
U.S.C. § 1983.

WHETHER THE INDIAN TRADER STATUTES,
25 U.S.C. §§ 261-264, WHICH PREEMPTED
STATE TAXATION OF MACHINERY BY A
NON-INDIAN SELLER TO AN INDIAN ENTITY
IN CENTRAL MACHINERY v. ARIZONA, 448
U.S. 160 (1980), ALSO CREATED A RIGHT
TO ACTION UNDER 42 U.S.C. § 1983 SO
AS TO ENTITLE THE NON-INDIAN SELLER
TO ATTORNEY'S FEES UNDER 42 U.S.C.
§ 1988.

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TABLE OF CONTENTS

QUESTION PRESENTED

TABLE OF AUTHORITIES

STATEMENT OF THE CASE

ARGUMENT

I. CENTRAL MACHINERY COMPANY, A NON-
INDIAN ARIZONA CORPORATION, LACKS
STANDING TO ASSERT A 42 U.S.C.

§ 1983 CLAIM

II. THERE IS NO CONFLICT BETWEEN THE
ARIZONA COURT'S DECISION AND
THIS COURT'S PRECEDENTS

III. THERE IS NO CONFLICT BETWEEN THE

ARIZONA SUPREME COURT'S OPINION
AND STATE COURT DECISIONS

CONCLUSION

ii

iii

14

16

TABLE OF AUTHORITIES

Case law

Arizona v. Central Machinery
121 Ariz. 183, 589 P.2d 426 (1979),
reversed, 448 U.S. 160 (1980)

Barrow v. Jackson
346 U.S. 249 (1953)

Bateman v. Arizona
429 U.S. 1302 (1976)

Central Machinery Company v. Arizona
Ariz. , 730 P.2d 843 (1986)

Chapman v. Houston Welfare Rights
Organization
441 U.S. 600 (1979)

Consolidated Freightways v. Kassel
556 F.Supp. 740 (S.D.Iowa 1983),
aff‘d, 730 F.2d 1139 (8th Cir.),
cert. denied, 105 S.Ct. 126 (1984)

Doremus v. Board of Education
342 U.S. 429 (1952)

Eisenstadt v. Baird
405 U.S. 438 (1972)

affirmed on other grounds,
U.S. , 106 S.Ct. 1057 (1986)

J & J Anderson v. Town of Erie
767 F.2d 1469 (10th Cir. 1985)

Maine v. Thiboutot
448 U.S. 1 (1980)

iii

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New York Airlines v. Dukes County
623 F.Supp. 1435 (D.Mass. 1985)

Pesticide Public Policy Foundation v.

Village of Wauconda
622 F.Supp. 423 (N.D. Ill.

1985)

Pirolo v. City of Clearwater
71l F.2d 1006, rehearing denied,
720 F.2d 688 (llth Cir. 1983)

Private Truck Council v. New
Hampshire
N.H. , 517 A.2d 1150 (1986)

Ramah Navajo School Board, Inc. v.
Bureau of Revenue
104 N.M. 302, 720 P.2d 1243 (App.
1986)

Segundo v. City of Rancho Mirage
F.2d = (9th Cir. 4/2/87)

Singleton v. Wulff
428 U.S. 106 (1976)

Tileston v. Ullman
318 U.S. 44 (1943)

United Nuclear Corp. v. Cannon

564 F.Supp. 581 (D.R.I. 1983)

White Mountain Apache Tribe v.
Williams
798 F.2d 1205 (9th Cir. 1986),
cert. denied sub nom White Mountain
Apache Tribe v. Arizona Transporta-

tion Board, U.S. ‘s 6 3
940 (1987), rehearing denied,
os (March 23, 1987); amended,

810 F.2d 844 (9th Cir. 2/10/87)

iv

13

13

14

a

Page
White Mountain Apache Tribe v.
Williams “aa
448 U.S. 136 (1980)
Worth v. Seldin 4
422 U.S. 490 (1975)
Wright v. Roanoke Redevelopment and
Housing Authority 7, &
U.S. , 107 S.Ct. 766 (1987)
Yakima Indian Nation v. Whiteside 13
— 617 F.Supp. 735 (E.D. Wash. 1985)
United States Constitution —
Article III a, 36
United States Code
42 U.S.C. § 1983 he Be Be Gp Fz
26, Bhs O20 B38,
6, 32:
42 U.S.C. § 1988 he De B20 S27 SS

Arizona Revised Statutes

A.R.S. § 42-1339

Other Authorities

J. Chover, Judicial Review in the

—_— —— ll

National Political Process (1980)

9, 10

STATEMENT OF THE CASE

This case originated as a state tax
case. The lawsuit was commenced in the
Arizona Superior Court in 1974 pursuant to
A.R.S. § 42-1339, providing for a taxpay-
er's suit for refund of state taxes paid.
The Arizona Supreme Court held that the
non-Indian seller's sale of tractors to an
Indian entity was subject to Arizona's

transaction privilege tax. Arizona v.

Central Machinery, 121 Ariz. 183, 589 P.2d

426 (1979). This Court reversed. 448
U.8. i360 1986). Upon remand, Central
Machinery attempted to convert its state
tax refund action to a 42 U.S.C. § 1983
action in order to obtain attorney's fees
under 42 U.S.C. § 1988. That attempt was
ultimately rejected by the Arizona Supreme

Court. Central Machinery Company v. State

Of Azigons, . <Afis. ., 30 P26 843

(1986).

’ |

ARGUMENT
I
CENTRAL MACHINERY COMPANY, A NON-INDIAN

ARIZONA CORPORATION, LACKS STANDING
TO ASSERT A 42 U.S.C. § 1983 CLAIM

Arizona does not deny that Central
Machinery, as an Arizona corporation and
a taxpayer, has standing under state law
to challenge its payment of transaction
privilege taxes and was entitled to sue
for a refund of taxes paid under protest.
However, standing under state law to sue
for a tax refund does not transmute into
standing under 42 U.S.C. § 1983 for the
redress of rights, privileges and immuni-
ties protected under federal laws and fed-
eral constitution.

Although the Arizona Supreme Court
found that Central Machinery has standing
to raise the § 1983 issue, a state court's

finding of standing does not ipso facto

confer standing in this Court. In review-

ing a state court judgment, this Court is

inte

bound by the Article III requirement of

case and controversy. Doremus v. Board of

Education, 342 U.S. 429, 434 (1952); Tile-

ston v. Ullman, 318 U.S. 44 (1943); Bate-

man v. Arizona, 429 U.S. 1302 (1976)

(opinion of Mr. Justice Rehnquist).

The Arizona Supreme Court -found that
Central Machinery had standing to raise
ies eon on behalf of the Indian en-
tity because it agreed, through its attor-
ney, that any award of attorney's fees
would be disbursed to Giia River Farms
(the Indian entity). Such a voluntary
agreement cannot confer standing which
will satisfy the Artteie III requirement
of case or controversy.

Under Article III analysis, there is
no case or controversy between Arizona and
Central Machinery because Central Machin-
ery has suffered no injury whatsoever as a

result of the imposition of the State's

transaction privilege taxes. The tax was

passed on to the purchaser, Gila River
Farms. Lacking any direct injury, Central
Machinery has no standing to challenge the

validity of the Arizona tax. Worth v.

Seldin, 422 U.S. 490 (1975). Admittedly,

this Court, in Central Machinery v. Ari-

zona, 448 U.S. 160 (1980), reached the
merits of the preemption issue and inval-
idated the tax on the sale of the trac-
tors. However, the standing issue in that
case is vastly different from the case
here. In its opinion this Court referred
to the fact that, in the state court pro-
ceeding, it was stipulated that Central
Machinery would pay over any tax refund to
Gila River Farms, the Indian entity. 448
U.S. at 162, n. 2. That reference simply
stands for the proposition that standing
existed for tax refund purposes. Standing
existed there because only the payer of
the tax, Central Machinery, could have

filed a tax protest under Arizona law.

~~

Accordingly, under jus tertii principles,

Central Machinery had standing to raise
the preemption issue since no one else

could do so. Barrow v. Jackson, 346 U.S.

249 (1953); Eisenstadt v. Baird, 405 U.S.

438 (1972). That standing analysis, how-

ever, does not apply in the case of a 42
U.S.C. § 1983 action. Section 1983 clear-
ly permits the Indian entity, Gila River
Farms, in its own name to sue state tax
officials, asserting the deprivation of
its rights, privileges and immunities.
Accordingly, since Gila River Farms could
have brought its own § 1983 action or in-
tervened in the state court proceeding,
Central Machinery cannot act as a proxy
for Gila River Farms in asserting a § 1983
claim for the purpose of obtaining 42
U.S.C. § 1988 attorney's fees. Indeed,
this case presents the very danger that

this Court noted ‘in Singleton v. Wulff,

428 U.S. 106 (1976):

{T]hird parties themselves usually
will be the best proponents of
their own rights. The courts de-
pend on effective advocacy, and
therefore shold prefer to construe
legal rights only when the most ef-
fective advocates of those rights
are before them. The holders of
the rights may have a like prefer-
ence, to the extent they will be
bound by the courts’ decisions un-
der the doctrine of stare decisis.
Id. at 114.

To confer standing via a voluntary
agreement would also trivialize § 1983.
To permit standing by agreement, an insur-
er of a motor vehicle or other personal
property could claim a § 1983 violation
against a creditor who unconstitutionally
repossessed and damaged the motor vehicle
Or personal property insured. In such
cases, instead of protecting important
personal and civil rights, 42 U.S.C.
§ 1983 would become a vehicle for finan-
cial institutions to reach a deep pocket

for the purpose of obtaining financial

satisfaction and little else.

II

THERE IS NO CONFLICT BETWEEN
THE ARIZONA COURT'S DECISION
AND THIS COURT'S PRECEDENTS

Central Machinery argues that the
Arizona Court's decision is in conflict

with Wright v. Roanoke Redevelopment and

Housing Authority, U.s. » 267 3.6.

766 (January 14, 1987). That argument is
wrong.

Wright is a pure vanilla entitlement

case such as Maine v. Thiboutot, 448 U.S.

1 (1980). in Wright the Brooke Amendment
required that public housing tenants pay
only a reasonable sum for utilities. The
Housing Authority allegedly charged an ex-
cessive amount for utilities which was in-
cluded in the rent charged, resulting in
overpayments of rent by the tenants. The
tenants were therefore deprived of the
protection accorded them by the Brooke
Amendment. This Court held that a claim

under 42 U.S.C. § 1983 existed under these

ates

facts. It is clear that, in Wright, tan-

gible monetary benefits, to which the ten-
ants were entitled, were denied to them
by the action of the Housing Authority.

This case is different from Wright.
It is not an entitlement case. The State
of Arizona had nct traded with the Indians
in contravention of the Indian trader stat-
utes. The transaction privilege tax which
was imposed on all such transactions with-
in the State of Arizona was merely held by
this Court in its decision to have been
preempted by the Indian trader statutes
and invalid under the Supremacy Clause.
Accordingly, Arizona did not violate any
of the Indian trader statutes and did not
deprive any Indians of any benefits they
were entitled to under the Indian trader
statutes.

This Court's decision in Central Ma-

Chinery was a recognition that, in this

field of taxation, Congress has allocated

-~

authority between national and state gov-
ernments and, in that allocation, Arizona
taxation of the sale of tractors by a non-
Indian to an Indian entity is invalid be-
cause such taxation intrudes into the
sphere allocated solely to the national
government.

When a litigant contends that the
mational government (usually the
Congress, but occasionally the ex-
ecutive, either alone or in concert
with the Senate) has engaged in ac-
tivity beyond its delegated author-
ity, or when it is alleged that an
attempted state regulation intrudes
into an area of exclusively nation-
al concern, the constitutional is-
sue is wholly different from that
posed by an assertion that certain
government action abridges a per-
sonal liberty secured by the Con-
stitution. The essence of a claim
of the latter type--which falls in-
to the individual rights category
of constitutional issues ... --is
that no organ of government, na-
tional or state, may undertake the
Challenged activity. In contrast,
when a person alleges that one of
the federalism provisions of the
constitution has been violated, he
implicitly concedes that one of the
two levels of government--national
Or state--has the power to engage
in the questioned conduct. The
core of the argument is simply that
the particular government that has

a.

acted is the constitutionally im-
proper one. To put it another way,
a federalism attack on conduct of
the national government contends
that only the states may so act; a
federalism challenge to a state
practice asserts that only the cen-
tral government possesses the ex-
erted power; neither claim denies
government power altogether.

J. Choper, Judicial Review in the National

Political Process, 174-75 (1980), quoted

with approval in the following cases:

United Nuclear Corp. v. Cannon, 564 F.Supp.

581, 586-7, (D.R.I. 1983); Consolidated

Freightways v. Kassel, 556 F.Supp. 740,

746 (S.D.Iowa 1983), aff'd, 730 F.2d 1139

(8th Cir.), cert. denied, 105 S.Ct. 126

(1984); and White Mountain Apache Tribe v.

Williams, 798 F.2d 1205, 1209 (9th Cir.

1986), cert. denied sub nom White Mountain

Apache Tribe v. Arizona _ Transportation

Board, U.S. » 207 S.Ct. 940 (i967),

rehearing denied, 0.8. (March 23,

1987), amended, 810 F.2d 844 (9th Cir. Feb-

ruary i0, 1987).

io Yin

In White Mountain Apache Tribe v.

Williams, id.,- based on facts’ very

Similar tc those in this case, the Nintn
Circuit Court of Appeals held that this
Court's invalidation of the Arizona motor

— carrier license tax and a use fuel tax un-
der the Supremacy Clause, based on the pre-
emption by federal Indian timber laws, did
not implicate a 42 U.S.C. § 1983 claim and
reversed the award of § 1988 attorney's
fees by the district court.

In the White Mountain opinion, the

Court of Appeals carefully examined the
underpinnings of the Supremacy Clause and
concluded that it was essentially a power-
conferring peuwision that protects indi-

viduals against government intrusion.”

1. The White Mountain Apache Tribe case
was a companion case to the Central Ma-
chinery case in this Court in 1980.
See White Mountain Apache Tribe v. Wil-
liams, 448 U.S. 136 (1980).

2. The White Mountain Apache Tribe case
was followed in Segundo v. City of Ran-
cho Mirage, F.ce.- (9Gm Cit.
4/2/87).

= se

, 2

See Chapman v. Houston Welfare Rights Or-

ganization, 441 U.S. 600 (1979) (the Su-

premacy Clause is not a substantive con-
stitutional provision that creates rights
within the meaning of 28 U.S.C. § 1343(3)).

See also Consolidated Freightwavs v. Kas-

sel, 730 F.2d 1139 (8th “Cir. 1984), cert.
denied, 105 S.Ct. 126 (1984), (a Commerce
Clause claim does not come within the
meaning of 42 U.S.C. § 1983). The Seventh,
Tenth and Eleventh Circuit Courts of Ap-
peal have all decided that federal preemp-
tion claims do not come within the meaning

of § 1983. Gould, Inc. v. Wisconsin, 750

F.2d 608 (7th Cir. 1984), affirmed on

other grounds, U.S. » meas 3.08.

1057 (1986) (claim of preemption of state
labor laws by the federal National Labor
Relations Act does not come within § 1983
so as to authorize § 1988 attorney's fees);

J & J Anderson v. Town of Erie, 767 F.2d

1469 (10th Cir. 1985) (claim of preemption

atiw

of town ordinance by Federal Aviation Act

does not come under § 1983). Pirolo v.

City of Clearwater, 711] F.2d 1006, rehear-

ing denied, 720 F.2d 688 (llth Cir. 1983)

(preemption of city ordinance by Federal
Aviation Act does not come within § 1983).
A number of district courts have

come to the same conclusion. Yakima Indi-

an Nation v. Whiteside, 617 F.Supp. 735

(E.D. Wash. 1985) (federal preemption
claim asserted by the Indian tribe does
not come within the meaning of § 1983);

Pesticide Public Policy Foundation v. Vil-

lage of Wauconda, 622 F.Supp. 423 (N.D.

Ill. 1985) (alleged conflict between vil-
lage ordinance and Federal Fungicide and
Rodencide Act does not come within § 1983);

United Nuclear Corp. v. Cannon, 564 F.Supp.

581 (D.R.I. 1983) (preemption of state law
by the Federal Atomic Energy Act does not

fall within § 1983); New York Airlines,

Inc. wv. Dukes County, 623 F.Supp. 1435

—t™

\

oe

(D.Mass. 1985) (preemption of county ordi-
nance by the Federal Aviation Act does not

come within § 1983).

III

THERE IS NO CONFLICT BETWEEN THE
ARIZONA SUPREME COURT'S OPINION
AND STATE COURT DECISIONS

In addition to the four circuit
courts of appeal and the four district
court decisions cited, supra, the New Hamp-
shire Supreme Court concluded that a Su-
premacy Clause challenge does not impli-

cate § 1983. Private Truck Council v. New

Hampshire, N.H. » 517 A.2d 1150

(1986).

Arrayed against this overwhelming
weight of authority is one state court de-
cision cited by the petitioner to be in
conflict with the Arizona decision here.
It can be easily distinguished.

The New Mexico decision, Ramah Nava-

30 School Board, Inc. v. Bureau of Revenue,

aide

104 N.M. 302, 720 P.2d 1243 (Ct.App. 1986),
is not in direct conflict with the Arizona
decision here. The New Mexico court agrees
that the Supremacy Clause does not create
§ 1983 rights. 720 P.2d at 1255. It
found, however, that the Indian Self-

Determination and Educational Assistance
Act granted to the Indians the right to
education, and that the New Mexico law, in
taxing the building of the school, violat-
ed that right. It is noteworthy that the
Ramah lawsuit originally proceeded in New
Mexico on two claims: (1) that the state
tax violated the Indian Self-Determination
and Education Act, and (2) the preemption
claim under the Supremacy Clause. See Ra-
mah, 720 P.2d at 1252. Unlike Ramah, Cen-
tral Machinery never asserted any claim
other than the preemption claim throughout
the litigation on its tax claim. This
stands in sharp contrast to Ramah, where

the New Mexico state court awarded attor-

athe

ney's fees under § 1988 on the non-preemp-

tion claim.

CONCLUSION

The petition or writ of certiorari
should be dismissed, since Central Machin-
ery lacks standing under Article III's case
or controversy requirement.

The petition for writ of certiorari
should also be denied. The Arizona Supreme
Court's decision follows all controlling
decisions of this Court. It is consistent-
with all other federal circuit and district
court cases on the issue of whether pre-
emption claims under the Supremacy Clause
come within the meaning of § 1983.

Respectfully submitted,

ROBERT K. CORBIN
Attorney General

ANTHONY B. CHING
Solicitor General

nite

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_2014%3A2. Public record. Not legal advice.