Amicus Curiae Brief — Northwest Airlines, Inc. v. Duncan

MOTION FILED (1)

DEC 29 2000

No. 00-507

In The

Supreme Court of the United States

¢

THE CHICKASAW NATION and

THE CHOCTAW NATION OF OKLAHOMA,

Petitioners,

Vv.

UNITED STATES OF AMERICA,

Respondent.

¢

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Tenth Circuit

e

MOTION FOR LEAVE TO FILE BRIEF

AMICUS CURIAE AND BRIEF AMICUS CURIAE

OF SHAKOPEE MDEWAKANTON SIOUX (DAKOTA)

COMMUNITY AND LITTLE SIX, INC.

IN SUPPORT OF DENIAL OF CERTIORARI

*

Mary J. Srrerrz

Counsel of Record

MicuHaet J. WAHOSKE

Dorsey & Wuirney LLP

220 South Sixth Street

Minneapolis, MN 55402

(612) 340-7813

Kurt V. BiueDoc

BiuEDoc, Orson & SMA. P.L.L.P.

5001 West 80th Street, Suite 500

Minneapolis, Minnesota 55437

(612) 893-1813

Counsel for Amici Curiae

Shakopee Mdewakanton Sioux

Community and Little Six, Inc.

pt

MOTION FOR LEAVE TO FILE

BRIEF AMICUS CURIAE

Pursuant to Rule 37 of this Court, the Shakopee

Mdewakanton Sioux Community, a federally recognized

Indian tribal government, and Little Six, Inc., an arm and

instrumentality of the Community, hereby move for leave

to file the attached brief amicus curiae submitted in sup-

port of denial of certiorari. Consent for filing this brief

was given by Respondent and is being filed with the

Clerk. Consent was requested of Petitioners but no

response was provided by the time of printing of the

brief.

As more fully explained in the brief for which leave

to file is sought, the Community and Little Six are parties

to Little Six, Inc. v. United States, 210 F.3d 1361 (Fed. Cir.

2000), reproduced at Pet. App. p. 101a, which held that

the federal wagering taxes imposed under Chapter 35 of

the Internal Revenue Code do not apply to pull-tab

games conducted by Indian tribal governments. The peti-

tion for certiorari discusses Little Six at length and asserts

that there is a conflict between Little Six and the decision

with respect to which certiorari is sought that warrants

the grant of certiorari. The time period for the United

States to file a petition for a writ of certiorari in Little Six

has not yet expired. If the Court decides to grant cer-

tiorari in this case, the Court’s decision on the merits

could affect the outcome of Little Six. The Community

and Little Six thus have a direct and substantial interest

in this Court’s disposition of the petition for certiorari.

The Community and Little Six, moreover, bring to this

Court arguments made by neither Petitioners nor

Respondent that the Community and Little Six believe

would assist the Court in ruling on the petition for cer-

tiorari, and requests that its motion be granted.

Respectfully submitted,

Mary J. Strerz

_ Counsel of Record

MicHasL J. WAHOSKE

Dorsey & Wuirney LLP

220 South Sixth Street

Minneapolis, MN 55402

(612) 340-7813

Kurt V. BiusDoc

BiueDoc, Otson & Sma te P.L.L.P.

5001 West 80th Street, Suite 500

Minneapolis, Minnesota 55437

(612) 893-1813

Counsel for Amici Curiae

Shakopee Mdewakanton

Sioux Community and

Little Six, Inc.

December 29, 2000

i

TABLE OF CONTENTS

Page

TabBe Gf Acsesthe. 20 ccccccccccccoscccsesvccossoal ii

_ Interest of the Amici Curiae ..........6.00eceeceeees pny

Statement with Regard to the Petition ............. 5

Reasons for Denying the Writ ..............000000- 9

CeGNGGD 000 ccccédcéccciaheasccoubecesebansennees 14

ii

TABLE OF AUTHORITIES

Page

Cases

Choate v. Trapp, 224 U.S. 665 (1912) ..........0eeeeeee 3

Choctaw Nation +) Oklahoma v. United States, 99-1

U.S. Tax Cas. (CCH) ¥ 70,118 (E.D. Okla. 1999) ...6, 7

Cook v. United States, 86 F.3d 1095 (Fed. Cir.), cert.

denied, 519 U.S. 932 (1996) ......... cc cccceeeeceees 4

County of Yakima v. Confederated Tribes and Bands of

the Yakima Indian Nation, 502 U.S. 251 (1992)....... 3

Little Six, Inc. v. United States, 210 F.3d 1361 (Fed.

GEE BD cccccccccssevceccscsoccconsceoes 1, 4, 10, 11

Lower Sioux Indian Community in Minnesota v.

United States, Civ. No. 99-911 (D. Minn. filed

a tik Pi neceodheddonsknnensesondhdeseseeuess 12

Montana v. Blackfeet Tribe of Indians, 471 U.S. 759

TD <dideatpendédeniaelh dd ie edtbedeneaned ices 3

Sierra Club v. Hodel, 848 F.2d 1068 (10th Cir. 1998) .... 10

Squire v. Capoeman, 351 U.S. 1 (1956)........ 3, 4, 11, 12

The Chickasaw Nation v. United States, 208 F.3d 871

tt Sis oo. di denenadscatuanenasaosbinoed 8, 9

The Chickasaw Nation v. United States, 99-1 U.S. Tax

Cas. (CCH) ¢ 70,121 (E.D. Okla. 1998)............. 7

United States v. Alvarez-Sanchez, 511 U.S. 350 (1994) .... 10

United States v. Smith, 781 F.2d 184 (10th Cir. 1986) .... 10

United States v. Williams, 504 U.S. 36 (1992) .......... 9

Yee v. City of Escondido, 503 U.S. 519 (1992) ....... 9, 10

TABLE OF AUTHORITIES - Continued

Page

STATUTES

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BD Wc BBE 0 ccccdescucscccccescestacssceccees 2

ee Ge Ei dccdscescticosoessé 1, 2, 3, 5, 9, 10, 11

By Gs Eas cbencoceececucécsateceseesacntes 1, 6

i iD 0 tc cceduecnns caetaeneesesadbokts 2

Bp Be cemncevecectbocccsocschansceséocetes 1, 6

By es IS bb cde hoc sicecnncdccessenescoscbégecs 6

Pp ds cdcunsenddaensusetaceeeesossesses 2

Bp Be Sn cctinocecasectessedacennseececaste 2,3

I on cn cvavidccduccéecdiotbwened 6, 7

es Oe ss ccd budcedeteeses seedécodsetee 12

OrHER AUTHORITIES

S. 555, 100th Cong., Ist Sess. (1987)................. 11

H.R. Rep. No. 488, 99th Cong., 2d Sess. 12 (1986) .... 11

127 Cong. Rec. $2270-71 (Feb. 17, 1981)............. 13

127 Cong. Rec. $32084-85 (Dec. 16, 1981)............ 13

IRS Tech. Adv. Mem. 9229005 (CCH) (Apr. 2, 1992) .... 13

www.irs.ustreas.gov/tax_stats/soi/exc_

exc.html, file eee he Sor ean nS ae 13

INTEREST OF THE AMICI CURIAE'

The Shakopee Mdewakanton Sioux (Dakota) Com-

munity is a federally recognized Indian tribal govern-

ment. Little Six, Inc. is an arm and instrumentality of the

Community established to operate the Community’s

gaming operations, which have been conducted since the

early 1980s to raise revenues for the tribal government.

The Community and Little Six are sometimes referred to

collectively as the “Community.”

The Community and Little Six are parties to Little Six,

Inc. v. United States, 210 F.3d 1361 (Fed. Cir. 2000), repro-

duced at Pet. App. p. 10la. In Little Six, a unanimous

panel of the U.S. Court of Appeals for the Federal Circuit,

a court of nationwide jurisdiction, held in a straightfor-

ward and well-reasoned opinion that the 0.25% excise tax

and the $50 annual occupational tax imposed under Sec-

tions 4401 and 4411 in Chapter 35 of the Internal Revenue

Code (the “Code”) do not apply to pull-tab games con-

ducted by Indian tribal governments under the Indian

Gaming Regulatory Act, 25 U.S.C. § 2701 et seq. (1994 &

Supp. 1997) (“IGRA”).2 IGRA was enacted in the fall of

1988 to foster the tribal governments’ revenue-raising

1 Pursuant to this Court’s Rule 37.6, amici state that no

counsel for any party authored this brief in whole or in part, and

no person or entity other than amici, its members, or their

counsel made a monetary contribution to the preparation or

submission of the brief.

2 The panel's opinion was authored by Judge Lourie and

joined by Chief Judge Mayer and Judge Schall.

efforts.> The Federal Circuit grounded its decision on an

interpretation of Section 2719(d) of IGRA, which provides

(with emphasis supplied by the court):

(1) The provisions of the Internal Revenue

Code of 1986 (including sections 1441,

3402(q), 6041, and 60501, and chapter 35 of

such Code) concerning the reporting and

withholding of taxes with respect to the

winnings from gaming or wagering opera-

tions shall apply to Indian gaming operations

conducted pursuant to this chapter, or

under a Tribal-State compact entered into

under section 2710(d)(3) of this title that is

in effect, in the same manner as such provi-

sions apply to State gaming and wagering oper-

ations.

(2) The provisions of this subsection shall

apply notwithstanding any other provision

of law enacted before, on, or after October

17, 1988, unless such other provision of law

specifically cites this subsection.

The Federal Circuit concluded that, because Chapter 35

provides an exemption for state lotteries (in its Section

4402(3)) and is one of the specific Code provisions which

Section 2719(d) explicitly provides “shall apply to Indian

gaming operations . . . in the same manner as such

provisions apply to State gaming and wagering opera-

tions,” Section 2719(d) should be construed to provide an

3 IGRA’s stated central purpose is “to provide a statutory

basis for the operation of gaming by Indian tribes as a means of

promoting tribal economic development, self-sufficiency, and

strong tribal governments... . ,” 25 U.S.C. § 2702(1), three

longstanding goals of federal Indian law.

i

Se |

exemption for pull-tab games and other lotteries con-

ducted by Indian tribes.

In the Federal Circuit, the United States had con-

tended that Section 2719(d) only involves provisions con-

cerning the reporting and withholding of taxes with

respect to winnings, notwithstanding the explicit refer-

ences in the statute to Chapter 35 and Section 60501, two

provisions which have nothing to do with winnings.* The

Federal Circuit rejected the United States’s construction

and decided in favor of the Community, based on a

straightforward analysis of statutory language and legis-

-lative history and on the Indian canon of statutory con-

struction which has been applied in numerous decisions

of this Court from Choate v. Trapp, 224 U.S. 665 (1912),

Squire v. Capoeman, 351 U.S. 1 (1956), and Montana v.

Blackfeet Tribe of Indians, 471 U.S. 759 (1985), through

County of Yakima v. Confederated Tribes and Bands of the

Yakima Indian Nation, 502 U.S. 251 (1992). The Indian

canon requires generally that statutes enacted to benefit

Indian tribes or Indians must be construed liberally, with

ambiguities resolved in favor of the Indians. In the fed-

eral tax area, the canon requires specifically that statutes

or treaties that contain language that can reasonably be

construed to confer a federal tax exemption for Indian

tribes or Indians should be so construed in their favor.

4 Chapter 35 taxes only the operator of the gaming facility,

not the players, and the tax is based on gross wagers, not

winnings. Section 60501 requires a gaming operator to report

cash receipts of $10,000 or more. It does not require reporting of

cash payments to players, and therefore is also unrelated to

“winnings.”

Capoeman, 351 U.S. at 6-7; Cook v. United States, 86 F.3d

1095, 1097 (Fed. Cir.), cert. denied, 519 U.S. 932 (1996).

On October 12, 2000, after the Chickasaw Nation and

the Choctaw Nation (the “Nations”) filed their petition

for a writ of certiorari in this case, the Federal Circuit

denied the United States’s petition for rehearing en banc

in Little Six.5 The time period for the United States to file

a petition for a writ of certiorari in Little Six has not yet

expired. If the Court decides to grant the writ of certiorari

in this case, the Court’s decision on the merits could

affect the outcome of Little Six.

We file this brief in order to call the Court's attention

to an important misstatement in the petition that bears on

what issues would properly be before the Court if cer-

tiorari were granted. In addition, we wish to point out to

the Court a number of additional reasons why we believe

certiorari should not be granted. These relevant matters

have not been addressed by the Nations in their petition

or by the United States in its brief acquiescing in the

petition.

5 Three of the court’s twelve active judges dissented from

the denial of rehearing. Judge Dyk authored the dissenting

opinion, which was joined by Judges Newman and Plager.

Sa"

~—

STATEMENT WITH REGARD TO THE PETITION

The Nations have represented in their petition that

“[iJn their appeals, the Nations asserted that [Section

2719(d) of IGRA] provided Indian tribes with the same

wagering tax exemption afforded by Chapter 35 of the

Internal Revenue Code . . . to states engaged in wagering

operations.” Pet. p. 3. This statement by the Nations,

repeated by the United States in its brief (p. 3), is incor-

rect. The Nations did not raise the Section 2719(d) exemp-

tion question in their appeals to the Tenth Circuit. In fact,

the Nations contended - just as the United States did -

that Section 2719(d) only concerns winnings provisions.®

From the outset, the Nations chose to pursue their

cases on entirely different legal grounds than the ground

on which the Community prevailed in the Federal Cir-

cuit. The Nations’ central argument in the district court

was that indian tribes are not taxable entities under fed-

eral common law, and that neither the Internal Revenue

Code nor IGRA altered that result by imposing the fed-

eral wagering taxes on the tribes.? Noting that Sections

6 The Nations’ argument before the Tenth Circuit regarding

Section 2719(d) is set forth in Appellant’s Opening Brief dated

June 23, 1999 (“Chickasaw Br.”), filed in 10th Cir. No. 99-7042,

pp. 20-21; Appellant’s Reply Brief dated Sept. 28, 1999

(“Chickasaw Reply Br.”), filed in 10th Cir. No. 99-7042, pp. 8-9;

Appellant’s Opening Brief dated August 10, 1999 (“Choctaw

Br.”), filed in 10th Cir. No. 99-7072, pp. 20-22; and Appellant's

Reply Brief dated Oct. 12, 1999 (“Choctaw Reply Br.”), filed in

10th Cir. No. 99-7072, pp. 8-9.

7 As in the Tenth Circuit, both Nations were represented by

the same counsel in the district court and each Nation made the

same arguments as the other. The Chickasaw Nations’ district

——

=

4401 and 4411 of the Code impose the federal wagering

taxes only on “persons” as defined in Section 7701(a)(1)

of the Code, the Nations argued that Indian tribes are not

“persons” under this definition. D. Ct. Br. pp. 10-13.

Section 2719(d) of IGRA also did not alter the common

law result, the Nations argued, because that provision

applies the Code “only to the carefully delineated func-

tion of reporting and withholding of players’ winnings.”

Id., p. 14 (emphasis in original); see also id. pp. 15-16; D.

Ct. Reply Br. pp. 10 n. 7, 11. Thus, the Nations’ position

regarding the meaning of Section 2719(d) closely resem-

bled the United States’s position.® In the Choctaw Nation

case, District Judge Burrage recognized that the Nation

had not raised the Section 2719(d) exemption question

and expressly refused to reach that question. Choctaw

Nation of Oklahoma v. United States, 99-1 U.S. Tax Cas.

(CCH) { 70,118 (E.D. Okla. 1999), reproduced at Pet. App.

p. 33a.9 In the Chickasaw Nation case, Magistrate Judge

court arguments are set forth in the Brief in Support of

Plaintiff's Motion for Summary Judgment dated May 8, 1998,

filed in E.D. Okla. No. CV-97-511-P (“Chickasaw D. Ct. Br.”), pp.

9-16; and Plaintiff’s Brief in Opposition to Defendant’s Cross-

Motion for Summary Judgment dated June 23, 1998, filed in E.D.

Okla. No. CV-97-511-P (“Chickasaw D. Ct. Reply Br.”), pp. 4-11.

The Choctaw Nation’s district court arguments were the same

as the Chickasaw Nation’s arguments.

8 The Nations also contended in the district court that a

pull-tab game is a “live game” rather than a “lottery” and,

therefore, is excluded from Section 4421's definition of taxable

“wagers.” See D. Ct. Br. pp. 17-19.

9 Judge Burrage stated:

Plaintiff . . . does not argue that § 2719(d) provides an

excise tax exemption for Indian gaming activities.

Payne did address the Section 2719(d) exemption ques-

tion, but only at the invitation of the United States and

only by adopting portions of the United States’s proposed

conclusions of law nearly verbatim. The Chickasaw Nation

v. United States, 99-1 U.S. Tax Cas. (CCH) { 70,121, at

88,759 (E.D. Okla. 1998) (conclusions of law 26 and 27),

reproduced at Pet. App. 47a; see United States’ Proposed

Findings of Fact and Conclusions of Law filed May 18,

1998, in E.D. Okla. No. CV-97-511-P, pp. 10-11.

The Nations’ central argument in the Tenth Circuit

was that the federal wagering taxes are imposed only on

“persons” as defined in Section 7701(a)(1) of the Wode,

and that Indian tribes are not “persons” under this defini-

tion. Chickasaw Br. pp. 10-18; Choctaw Br. pp. 10-19. Asa

corollary to this argument, the Nations contended that

Section 2719(d) of IGRA only concerns reporting and

withholding requirements and not the federal wagering

taxes and, thus, does not alter the Code’s exclusion of

tribes from the “persons” subject to the taxes. Each

Nation stated in its opening brief:

[In Section 2719(d)], the application of the IRC is

limited to only reporting and withholding as to

the player’s winnings. ,

Indeed, in footnote 7 of Plaintiff's opposition brief,

Plaintiff’s states “[nJo exemption is necessary since

Indian tribes are not taxable entities and are not

‘persons’ subject to tax.” The Court therefore does not

address the issue of whether § 2719(d) provides an

excise tax exemption for Indian gaming activities.

99-1 U.S. Tax Cas. at 88,744.

Chickasaw Br. p. 21; Choctaw Br. p. 21. Similarly, each

Nation stated in its reply brief:

[T]he Nation is not contending that 25 U.S.C.

§ 2719(d) provides an exemption. No exemption

is needed or claimed.

Chickasaw Reply Br. p. 8; Choctaw Reply Br. p. 8. Thus,

in the Tenth Circuit, the Nations’ position regarding the

meaning of Section 2719(d) continued to closely resemble

the United States’s position. The Tenth Circuit panel

addressed the Section 2719(d) exemption question briefly

in its opinion, but only at the invitation of the United

States and only by adopting the United States’s conten-

tions without analysis or the benefit of the adversary

briefing that took place in the Federal Circuit. See The

Chickasaw Nation v. United States, 208 F.3d 871, 883 (10th

Cir. 2000), reproduced at Pet. App. p. 1a; see also id. at 882

(recognizing that Nation contended that Section 2719(d)

concerns only those “IRC provisions . . . pertaining to the

reporting and withholding of taxes with respect to

players’ winnings”).

After losing before the panel, the Nations attempted

to argue that Section 2719(d) provides an exemption in

their petitions for rehearing and suggestions for rehear-

ing en banc, but the petitions were denied.

10 The Nations also made the “live game” argument they

had made in the district court and made a new treaty-based

exemption argument. See Chickasaw Br. pp. 23-29; Choctaw Br.

pp. 24-30.

As discussed more fully below, the Nations’ misstate-

ment that they raised the Section 2719(d) exemption ques-

tion in their appeals bears on what issues would properly

be before the Court if certiorari were granted.

S

REASONS FOR DENYING THE WRIT

There are several reasons why certiorari is inap-

propriate in this case.

1. There is no square conflict in the circuits with

respect to the question presented in the Nations’ petition.

The petition raises only one question for review: whether

under the Indian canon of construction, Section 2719(d)

of IGRA confers on Indian tribes the same exemption

from federal wagering taxes that is provided to states

under Chapter 35 of the Code. Unlike the Federal Circuit,

the Tenth Circuit did not address whether the Indian

canon should be applied in interpreting Section 2719(d).

See Chickasaw Nation, 208 F.3d at 883. Thus, there is no

square conflict in the circuits with respect to the question

presented in the petition.

2. The Court has stated in numerous cases that cer-

tiorari is inappropriate to consider a question neither

pressed nor passed upon below. E.g., United States v.

Williams, 504 U.S. 36, 40 (1992); Yee v. City of Escondido,

503 U.S. 519, 533 (1992). The question raised in the

petition not only was not passed upon in either the Tenth

Circuit or the district court, it also was not pressed in

either of these courts. Indeed, as discussed above, the

Nations never raised any aspect of the Section 2719(d)

10

exemption question in either of the lower courts.!! While

the Tenth Circuit panel did address the exemption ques-

tion in its opinion, it merely adopted the United States’s

contentions without analysis, without the benefit of

adversary briefing, and, as the Federal Circuit noted,

without considering how the Indian canon of construc-

tion bears on this issue. See 210 F.3d at 1365 n. 2. Under

these circumstances, certiorari is inappropriate. See

United States v. Alvarez-Sanchez, 511 U.S. 350, 360 n. 5

(1994) (declining to depart from Court’s general practice

not to review claims not argued either in district court or

court of appeals); Yee, 503 U.S. at 538 (declining to

address a question because it had not been “fully litigated

below, [with] the benefit of developed arguments on both

sides and lower court opinions squarely addressing the

question”).

3. The Federal Circuit reached the correct result in

Little Six, applying well-established rules of statutory

construction requiring an examination of statutory lan-

guage and legislative history and application of the

Indian canon of construction. In its brief filed in this

Court, the United States continues its efforts to harmo-

nize Section 2719(d)’s reference to “Chapter 35” with the

11 The Nations’ belated attempt in their petitions for

rehearing to argue that Section 2719(d) provides an exemption,

a point they previously conceded, was justifiably ignored by the

Tenth Circuit as too late to be considered. See, e.g., Sierra Club v.

Hodel, 848 F.2d 1068, 1100-01 (10th Cir. 1998) (party may not

assert new ground for relief in petition for rehearing); United

States v. Smith, 781 F.2d 184, 184-85 (10th Cir. 1986) (party may

not use petition for rehearing to raise issue previously

conceded).

11

“winnings” language (pp. 6-7), but even Judge Dyk’s dis-

senting opinion from the denial of rehearing in Little Six

concedes “there is no way to reconcile” these references in

the statute. U.S. Br. App. p. 3a. The United States also

persists in relying on an isolated change in the original bill

language to support its position regarding Section 2719(d)

(pp. 7-8), omitting to mention another change in language

and other legislative history that supports the Federal

Circuit's holding in Little Six.12 Even Judge Dyk goes no

farther in dissent than to conclude that the “legislative

history here provides no clear guidance” regarding the

meaning of Section 2719(d). U.S. Br. App. p. 7a. Under

these circumstances, the Federal Circuit properly relied on

the Indian canon of statutory construction as well as statu-

tory language and legislative history to reach its holding

regarding congressional intent.'°

12 Most important in this history, Congress deliberately

added “Chapter 35” to Section 2719(d) at the same time that

“taxation” was removed. Compare 27 U.S.C. § 2719(d) with S.

555, 100th Cong., 1st Sess. (1987). This supports the Federal

Circuit’s holding, because “Chapter 35” and “taxation” had

been used interchangeably during the legislative process. See

H.R. Rep. No. 488, 99th Cong., 2d Sess. 12 (1986) (equating

original “taxation” language and “Chapter 35”).

13 Despite the United States’s suggestions to the contrary,

this Court has never enunciated a different standard for

application of the Indian canon in federal and state tax cases.

Squire v. Capoemen is the leading federal Indian law case on

statutory construction and federal taxation. There, the Court

relied in part on the Indian canon to hold that a statute

providing for “restrictions as to . . . taxation of such land”

provided Indians with an exemption from federal income tax.

351 U.S. at 7. The statutory language of Section 2719(d) provides

stronger support for a tax exemption than the statute at issue in

"

12

4. The conflict in outcomes between the Tenth Cir-

cuit case and the Federal Circuit case is tolerable. The

Nations exaggerate in stating that the conflict in out-

comes “prevents uniform application of our national

scheme of taxation.” Pet. p. 11. The Federal Circuit is a

court of nationwide jurisdiction, and its decisions help

ensure uniform application of the federal tax laws. The

vast majority of tribes have not yet litigated their refund

claims and presumably will pursue them in the U.S.

Court of Federal Claims, which is bound by the decision

of the Federal Circuit.’* Apart from the Nations’ cases,

we are aware of only one other pending case, Lower Sioux

Indian Community in Minnesota v. United States, Civ. No.

99-911 (D. Minn. filed Jun. 16, 1999), appealable to the

Eighth Circuit, which presents questions regarding the

applicability of the federal wagering taxes to Indian

tribes. The three tribal plaintiffs in that case are seeking

refunds on the basis that Section 2719(d) provides an

exemption for tribal pull-tab games. Assuming the case

reaches the Eighth Circuit, the Eighth Circuit may agree

_ with the Federal Circuit that Section 2719(d) provides an

Capoeman, because Section 2719(d) explicitly refers to Chapter

35 among the Code provisions to be applied to tribes in the same

manner as to states, whereas the statute in Capoeman did not

mention the federal income tax.

14 In any case in which the IRS seeks to impose the Chapter

35 taxes on an Indian tribe, the tribe may contest the liability by

paying the amount in dispute and bringing refund litigation

either in the U.S. Court of Federal Claims or in the U.S. District

Court for the district in which the tribe is located. 28 U.S.C.

§ 1346(a)(1) (1994). The U.S. Tax Court does not have

jurisdiction to determine liability for the federal wagering taxes.

re, ee

13

exemption, on the basis of the same established rules of

statutory construction applied by the Federal Circuit.'5

5. This case is not sufficiently important to warrant

this Court's attention. The federal wagering taxes are

very narrow taxes that raise a very small amount of

revenue for the United States. The Treasury Department

in both the Carter and Reagan administrations advocated

the complete abolition of the federal wagering taxes,

because they raise only “extremely minor” revenues and

are a poor tool for enforcing the criminal gambling laws

and therefore no longer serve their intended purpose. See

127 Cong. Rec. $2270-71 (Feb. 17, 1981), S32084-85 (Dec.

16, 1981). By fiscal year 1999, the wagering excise tax

raised only $13.8 million, even less than the $19.8 million

raised by the excise tax on bows and arrows and far less

than the $6.6 billion and $21.2 billion raised by the excise

taxes on air transportation and gasoline, respectively. See

www.irs.ustreas.gov /tax_stats/soi/exc_exc.html, file

OOEX20TE.EXE. Moreover, the imposition of the federal

wagering taxes on tribal governments was only an after-

thought of the Internal Revenue Service, which did not

develop the position that tribal governments are subject

to the taxes until 1992, over ten years after the tribes had

begun to conduct pull-tab games. See IRS Tech. Adv.

Mem. 9229005 (CCH) (Apr. 2, 1992) (first statement of IRS

position that tribes are subject to Chapter 35 taxes).

5 Likewise, if any tribes choose to pursue refund litigation

in the Tenth Circuit in the future and there is adversary briefing

regarding the Section 2719(d) exemption question, the Tenth

Circuit may decide that it agrees with the Federal Circuit.

a ee ee ee ll ee a s

» . s 7 oe

14

Finally, if Congress is concerned about the Federal Cir- :

cuit’s interpretation of Section 2719(d), it can amend the

statute without the need for intervention by this Court.

e

CONCLUSION

For the foregoing reasons, the petition for a writ of

certiorari should be denied.

Respectfully submitted,

Mary J. Srrerrz

Counsel of Record

MicHae. J. WAHOSKE

Dorsey & Wuirney LLP

220 South Sixth Street

Minneapolis, MN 55402

(612) 340-7813

Kurt V. BiueDoc

BiueDoc, Orson & Sma P.L.L.P.

5001 West 80th Street, Suite 500

Minneapolis, Minnesota 55437

(612) 893-1813

Counsel for Amici Curiae

Shakopee Mdewakanton Sioux

Community and Little Six, Inc.

December 29, 2000

2, = ae