# Opposition Brief — Hammond v. Coeur d'Alene Tribe of Idaho

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 2005
- **Citation:** 543 U.S. 1187

## Text

No.

IN THE

Supreme Court of the Gnited States

DUWAYNE D. HAMMOND, JR.; COLEEN GRANT; LARRY
WATSON; mt tem HAWS, in their official capacity as

Commissi

of the Idaho State Tax Commission,

Petitioners,

COEUR D’ALENE TRIBE OF IDAHO; NEZ PERCE TRIBE;
SHOSHONE-BANNOCK TRIBES,

Respondents.

On Petition for a Writ of Certiorari to the
United States Court of Appeals
for the Ninth Circuit

OPPOSITION OF RESPONDENTS COEUR D’ALENE
TRIBE OF IDAHO, NEZ PERCE TRIBE,
SHOSHONE-BANNOCK TRIBES TO PETITION
FOR WRIT OF CERTIORARI

BRIAN J. CLEARY

FUNKE & WORK

P.O. Box 969

424 E. Sherman Ave., Suite 308
Coeur d’Alene, ID 83816
(208) 667-5486

Counsel for the Coeur d'Alene
Tribe of Idaho

RICHARD K. EICHSTAEDT

JULIE KANE

OFFICE OF LEGAL COUNSEL,
NEZ PERCE TRIBE

P.O. Box 305

100 Agency Road

Lapwai, ID 83540

(208) 843-7355

Counsel for the Nez Perce Tribe

DOUGLAS B. L. ENDRESON
ANNE D. NOTO *

.SONOSKY, CHAMBERS, SACHSE,

ENDRESON & PERRY, LLP
1425 K Street, N.W., Suite 600
Washington, D.C. 20005
(202) 682-0240

WILLIAM F. BACON
P.O. Box 306

Fort Hall, ID 83203
(208) 478-3815

Counsel for the Shoshone-
Bannock Tribes

* Counsel of Record

WILSON-EPES PRINTING CO., INC. — (202) 789-0096 — WASHINGTON, D.C. 20001

QUESTIONS PRESENTED

1. Where the Idaho Supreme Court had previously held
that the legal incidence of the state motor fuels tax is on the
retailer and therefore does not apply to tribal retailers on
Indian reservations, and the tax was subsequently amended, is
the incidence of the amended tax determined by the State
legislature’s mere statement that it intended to change the
legal incidence of the tax, or by the substantive provisions of
the amended tax, which were not materially changed from
those relied upon by the Idaho Supreme Court and still
require the distributor to pass on and collect the tax from the
tribal retailer?

2. Whether Congress, by enacting the Hayden-Cart-
wright Act without mentioning Indians, Indian tribes: er
Indian reservations, abrogated Indian immunity from state
taxation in unmistakably clear terms.

TABLE OF CONTENTS

Page

Gy EU RNIN BIRD ccsscsccsascescccssscensncsssccesccsosees i
PRE CE FUGF CE UIIURE ETE cecccccecsssncsccccssccescossccssensneece Vv
SEs raE UIT dnkstccdnntesschesnnicennincosincennscdnssbencnsherbennenens l
STATEMENT OF THE CASE .....c.cccsccccsccssssccsessseccceses 3
Fe ee HIN ccsccecccacensesscocnssssnsastecosessonscnne 3
B. District Court Proceedings.................cccccceeeeseeeees 6
. COBIIIE OE PARROTS TRIIIIIND cvsceccccescesnceccccsssccsscccosseses 7
REASONS FOR DENYING THE PETITION ............. 9

I. THE DECISION BELOW, HOLDING THAT
THE LEGISLATURE’S MERE SAY-SO IS
NOT CONCLUSIVE OF THE LEGAL
INCIDENCE OF THE AMENDED STATE
FUEL TAX WHERE THE TAX STILL
REQUIRES THE DISTRIBUTOR TO PASS
GN AND COLLECT THE TAX FROM THE
TRIBAL RETAILER, IS CONSISTENT
WITH CHICKASAW NATION ...........0c0ssc00eseee0s 9

A. The Court of Appeals Properly Applied the
Principles of Chickasaw Nation in Reject-
ing the Contention that the Legislature’s
Mere Statement of Intent Is Conclusive of
I sin cschschatsinnndicennesksndsanseuitiinii 9

B. The Court of Appeals Ruling on Legal
Incidence Is Fully Consistent with Chick-
iI SEIT 6. shanddivashubioneneteonapiinasiontibenaaneseba 15

(iii)

II.

iV
TABLE OF CONTENTS—Continued

THE DECISION BELOW CORRECTLY
HELD, CONSISTENT WITH EVERY
FEDERAL AND STATE COURT TO
CONSIDER THE ISSUE, THAT THE
HAYDEN-CARTWRIGHT ACT DOES NOT
SHOW THAT CONGRESS INTENDED TO

ABROGATE INDIAN IMMUNITY FROM.

STATE TAXATION IN UNMISTAKABLY
CRPUR CRs sasentssnercnnsinesinnniinbannisenniitenininies

A. As the Court of Appeals Held, This
Court’s Rulings Make Clear that Indian
Immunity from State Taxation Is Abro-
gated Only If Congress’ Intent to Do So Is
Ey GIO cenmninitnipnisscnsnsinasssnininninns

B. The Court of Appeals Ruling with Respect
to the Hayden-Cartwright Act Is
Consistent with the Decision of Every
Court to Consider the Issue and Does Not
Warrant Review by This Court....................

Ge NOT spncheninsssniinvnsesinesdneisasiiatinininiaillashantinssenin

Page

19

19

22
27

Vv
TABLE OF AUTHORITIES

CASES Page

Am. Oil Co. v. Neill, 380 U.S. 451 ( | ee 14-15
Bryan v. Itasca County, 426 U.S. 373 (1976)....14, 20, 22
Cal. State Bd. of Equalization v. Chemehuevi

Indian Tribe, 474 U.S. 9 (1985) (per curiam) ... 18
California v. Cabazon Band of Mission Indians,

480 U.S. 202 (1987) woovcccccccsscccscscseeee. 12, 13, 20, 21
Carpenter v. Shaw, 280 U.S. 363 CR iichancésnise 11, 20
Cent. Machinery Co. v. Ariz. State Tax Comm ‘Nn,

GAB US. 1GO (BGG) a cisescscsnnsisisnsnsressocasseosseeses 24
Chickasaw Nation v. Oklahoma, ex. rel. Okla.

Tax Comm'n, 31 F.3d 964 (10th Cir. 1994)... 16
Choate v. Trapp, 224 U.S. 665 (1912) ..eccccccsessssee. 20
Cotton Petroleum Corp. v. New Mexico, 490 U.S.

WO Ge inishinniciedis iG Oe is 25

County of Yakima v. Confederated Tribes and

Bands of the Yakima Indian Nation, 502 U.S.

Fe iit ee ee 11, 13, 14, 20
Fed. Power Comm’n v. Tuscarora Indian Nation,

FOZ US. D9. (1DGD) soins icaccscasiscceecessesecscesarenessesees 21, 22
First Agric. Nat’l Bank v. State Tax Comm ‘n,

SFE OM, FID (UDGG) asecnsccisacorceansseccosnsassscesee, 12
Goodman Oil Co. v. Idaho State Tax Comm n, 28

P.3d 996 (Idaho 2001), cert. denied, 534 U.S.

GN Ds ssltsinicinscececibiiisci ce ea Passim
The Kansas Indians, 72 USS. (S Wall.) 737

Sj Nee ENTREE OS MLE ER CR Mt aoe 13
Kern-Limerick, Inc. v. Scurlock, 347 U.S. 110

Fisichella tii i 11,12
Lorillard v. Pons, 434 U.S. 575 (1978)..............0. 26
Marty Indian Sch. Bd. v. South Dakota, 824 F.2d

OO Ne TI cvviicithitiitcie 19
McClanahan vy. Ariz. State Tax Comm n, 411

Ek RO RnR a Pm a a ree 14, 20

vi
TABLE OF AUTHORITIES—Continued

Page
M'Culloch v. Maryland, 17 U.S. (4 Wheat.) 316
(1819).......csssscsssesecsesessssssnsnsreessnennsnsnnsnsnsssenennsness 14
Merrion v. Jicarilla Apache Tribe, 455 U.S. 130
(19B2).....sccsssessssssereesesssssnsasenerneneensnsanansnesnsnsenenees 20

Moe v. Confederated Salish and Kootenai Tribes
of Flathead Reservation, 425 U.S. 463 (1976).. 11, 14
Montana v. Blackfeet Tribe of Indians, 471 US.

759 (1985)......cecsesesesessesesnensnnensnsnennsnsnsnensnsnennenas passim
Morton v. Mancari, 417 U.S. 535 (1974) .....--+-++++ 27
The New York Indians, 72 U.S. (5 Wall.) 761

(1867) .....sccscsscscsssessssesesssssenssssnanennsnsesensansnsnsenenees 13
Okla. Tax Comm'n v. Chickasaw Nation, 515

U.S. 450 (1995) .....sccscsesesesesenessnensnenenenenananensnsees passim
Okla. Tax Comm'n v. Sac and Fox Nation, 508

U.S. 114 (1993) ...ccccsssseseseseseseressnsnenenenensnanenenenss 11, 14
Oneida County v. Oneida Indian Nation, 470

U.S. 226 (1985) ....cscsscssesesesesesenansnnsnsnenennsnnnsnnnens 14
Oneida Indian Nation v, County of Oneida, 414

U.S. 661 (1974) ...cccccscsesessscesssenenensesenenensnanansnnnes 13

Pourier v. S.D. Dep't of Revenue, 658 N.W.2d
395 (S.D. 2003), cert. denied, 124 S. Ct. 2400
(2004), vacated, in part, on other grounds by

674 N.W.2d 314 (S.D. 2004).......-cccscereeeeereeeneees passim
Prairie Band Potawatomi Nation v. Richards,
241 F. Supp. 2d 1295 (D. Kan. 2003)....... 19, 21, 23-25

Prairie Band Potawatomi Nation v. Richards,
379 F.3d 979 (10th Cir. 2004), petition for

cert. pending, No. 04-631 (2004) ........ceeceereeeees 13, 19
Sanford’s Estate v. Comm'r of Internal Revenue,

3O8 U.S. 39 (1939) .....cecccceresseresensnsnsenennnenanensess 26
Sec. and Exch. Comm'n v. Sloan, 436 U.S. 103

(1978).....ccsscsssesssssssecssssssnesnssnsenensennsnsenscnsnnennenees 26

South Carolina v. Baker, 485 U.S. 505 (1988)...... 25

Vii
TABLE OF AUTHORITIES—Continued

Page
Squire v. Capoeman, 351 U.S. 1 (1956)...........0000+ 20
Standard Oil Co. v. California, 291 U.S. 242
CR i iccesiinssstnictitsiniesnisnsnatinicsiaitanieinteansebinnnnans 25
United States v. Celestine, 215 U.S. 278 (1909) ... 23
United States v. State Tax Comm'n of Miss., 421
CA, SCID ay sntcccptreritbenstntensiinsnnciitsiinseniinagpvtcine 12
United States v. Wheeler, 435 U.S. 313 (1978)..... 25
Warren Trading Post Co. v. Ariz. State Tax
Comm'n, 380 U.S. 685 (1965)..........cccccceeeeeeees 24
Washington v. Confederated Tribes of Colville
Reservation, 447 U.S. 134 (1980) ............000. 11, 13,14
White Mountain Apache Tribe v. Bracker, 448
CEE, FG CED cesecssnesnccnniecenseensnatinsseiessnueinesiints 20, 24
Winnebago Tribe of Neb. v. Kline, 297 F. Supp.
BE CAS GA. Tete: BOO caccssssinsscstinsscnitinnsininnnnseces 19, 25
Worcester v. Georgia, 31 U.S. (6 Pet.) 515
(FTIettlcnccnccsncesiscnsbiénnesiendinsaniisentsehebsisctincanenecdioodboaleees 13
CONSTITUTION AND FEDERAL STATUTES
es ee, UE, TiS By cccctisenienntniocersnnennaseanionnds 13
Act of March 3, 1885, ch. 341, 23 Stat. 362.......... 23
Buck Act, ch. 389, 61 Stat. 644 (1947) (codified
as amended at 4 U.S.C. §§ 105-10)... 24
Ss Oe Se iitnteninsinitcinctntnteniinnicininiiinety 24
Hayden-Cartwright Act, ch. 582, 49 Stat. 1519
(1936) (codified as amended at 4 U.S.C.
Be Pe ssicsasekatesntesielintiinesicintinneetiaisieabictianebeeimiiitaddaianeien passim
Indian Reorganization Act, ch. 576, 48 Stat. 984
(1934) (codified as amended at 25 U.S.C.
Se AU cs siscnitactinsinnitiinaicaoeeincaltininaniaiibilacighinni 26

Vill
TABLE OF AUTHORITIES—Continued

Page
Indian Self-Determination and Education Assis-
tance Act, Pub. L. No. 93-638, 88 Stat. 2203
(1975) (codified as amended at 25 U.S.C.
§§ 450 ef SCG.).....cccsseeseesseesesseeereseneeseseeseneeseeneens 26
Transportation Equity Act for the 21st Century,
Pub. L. No. 105-178, 112 Stat. 107 (1998)
(codified as amended at 23 U.S.C. § 204)......... 26
STATE STATUTES AND REGULATIONS
Idaho Code § 63-2402(1).......cscccscesseeseeeeeereeeeseesees 6, 15
Idaho Code § 63-2403 .......:cccescesseeseeseseneereseeseeeees 5,6
Idaho Code § 63-240 .........:cssesssesseesseseeeeeseneeees 15
Idaho Code § 63-2407(4)......:.sscessceeseeseeseeneeeensens 17
Idaho Code § 63-2435 ........:sscsseessesseeseesneesensssesees 16
2002 Idaho Sess. Laws, Ch. 174.........::cccccceeeeees 5-7, 14, 15
Ch. 174 § 1......ccscccsoscorsccccssocecccccsesssessssesssssrcsoooses 5,6
Ce, FFG 6 Docencrccccosnccncssccsncessosessoncescqgupansangnenscesse 6, 15
Chh. 174 § 14...cccccsccserecsccsecsecceerersecsssssncssssoosscsees 6
Idaho Admin. Code § 35.01.05.150.g.........:ce0e 16

IN THE

Supreme Court of the United States

No. 04-624

DUWAYNE D. HAMMOND, JR.; COLEEN GRANT; LARRY
WATSON; SEVERINA SAM HAWS, in their official capacity as
Commissioners of the Idaho State Tax Commission,

Petitioners,
Vv.

COEUR D’ALENE TRIBE OF IDAHO; NEZ PERCE TRIBE;
SHOSHONE-BANNOCK TRIBES,
Respondents.

On Petition for a Writ of Certiorari to the
United States Court of Appeals
for the Ninth Circuit

OPPOSITION OF RESPONDENTS COEUR D’ALENE
TRIBE OF IDAHO, NEZ PERCE TRIBE,
SHOSHONE-BANNOCK TRIBES TO PETITION
FOR WRIT OF CERTIORARI

INTRODUCTION.

The petition for a writ of certiorari should be denied
because it does not present any conflict among the lower
courts or any other question worthy of review by this Court.
Both questions presented concern the application of this
Court’s per se rule barring state taxation of Indian tribes and
their members on Indian reservations unless Congress’ intent

ee ee

2

to abrogate that immunity is unmistakably clear. Montana
v. Blackfeet Tribe of Indians, 471 U.S. 759, 765 (1985).
Whether the per se rule applies turns on the legal incidence of
the state tax. Okla. Tax Comm'n v. Chickasaw Nation, 515
U.S. 450, 458 (1995). The petition provides no valid reason |
why the court of appeals’ application of the per se rule should
be reviewed by this Court. |

Applying this Court’s decision in Chickasaw Nation, the
court of appeals properly held that the substantive provisions
of the state motor fuels tax, not the legislature’s mere say-so,
control the ultimate federal question of where the legal
incidence falls. The court reasoned that petitioners’ assertion
that the legislature’s incantation is conclusive would give the
states complete control over the taxation of Indian tribes and
their members in Indian country, in direct conflict with this
Court’s decisions barring state taxation of Indians absent clear
Congressional authorization. In so holding, the court empha-
sized the unique circumstances in which the question arose,
namely the Idaho Supreme Court had held in Goodman Oil
Co. v. Idaho State Tax Comm'n, 28 P.3d 996 (Idaho 2001),
cert. denied, 534 U.S. 1129 (2002), that the legal incidence of
the tax was on the retailer, and although the State legislature
had then amended the tax to state its intent to impose the legal
incidence on the distributor, the amendments had not substan-
tively altered the provisions on which the legal incidence
ruling in Goodman Oil was based. As the court of appeals
held, the amended tax still requires the distributor to pass on
and collect the tax from the retailer, and in this and other key
respects continues to mirror the Oklahoma statutes at issue in
Chickasaw Nation, thus placing the legal incidence of the tax
on the retailer. Pet. App. 17-22. While petitioners urge that
the South Dakota Supreme Court’s ruling in Pourier v. S.D.
Dep't of Revenue, 658 N.W.2d 395 (S.D. 2003), cert. denied,
124 S. Ct. 2400 (2004), vacated, in part, on other grounds by
674 N.W.2d 314 (S.D. 2004), conflicts with the court of

3

appeals decision in this case, Pourier simply holds that the
legal incidence of a tax which the retailer passes through to
the consumer is on the consumer. No such question is
presented here. The court of appeals ruling is consistent with
Chickasaw Nation, does not present any split of authority, and
does not warrant review by this Court.

Applying the rule set out by this Court that state taxation of
Indian tribes and tribal members in Indian country is barred
unless Congress has abrogated that immunity in unmistakably
clear terms, the court of appeals properly held that the
Hayden-Cartwright Act, ch. 582, 49 Stat. 1519 (1936) (codi-
fied as amended at 4 U.S.C. § 104), does not abrogate Indian
immunity from state taxation. That ruling is consistent with
the decision of every federal and state court to consider the
issue and does not warrant review.’ As these decisions
establish, because the Hayden-Cartwright Act does not refer
to “Indians” or “Indian tribes,” who hold the immunity peti-
tioners contend was abrogated by the Act, or to “Indian
reservations,” which are legally distinct from the federal
enclaves included within the term “United States military or
other reservations,” it is not unmistakably clear that Congress
intended to abrogate Indian immunity from state taxation in
enacting the Act.

STATEMENT OF THE CASE
A. Factual Background

Respondents Coeur d’Alene Tribe, Nez Perce Tribe and
Shoshone-Bannock Tribes (collectively “Tribes”) are feder-

'This Court previously denied the Idaho State Tax Commission’s
petition for a writ of certiorari with respect to this same issue in Goodman
Oil, 534 U.S. 1129 (2002). The State of Idaho was also among the states
appearing as amici in support of the petition for a writ of certiorari in
Pourier, see Br. for Idaho, et al. as Amici Curiae (May 10, 2004), which
presented the same Hayden-Cartwright Act issue decided in this case, and
in which review was also denied. 124 S. Ct. 2400 (2004).

ee

4

ally recognized Indian tribes residing on Indian reservations
in Idaho, on which they own and operate retail gasoline sta-
tions. Pet. App. 4. For several years prior to the Idaho
Supreme Court’s decision in Goodman Oil Co. v. Idaho State
Tax Comm’n, 28 P.3d 996 (Idaho 2001), cert. denied, 534
U.S. 1129 (2002), the State had imposed a tax of 25 cents per
gallon on all motor fuel delivered to tribal retailers. Pet. App.
4. Pursuant to Idaho statute, the fuel distributor collected the
tax from the tribal retailers and remitted it to the State. Id.’
In Goodman Oil, the Idaho Supreme Court declared the
State’s taxation on Indian reservations to be unlawful. Pet.
App. 5. After the decision in Goodman Oil, each Tribe en-
acted its own fuel tax for use in improving and maintaining
roads on its own Reservation. Pet. App. 6.°

In Goodman Oil, the Idaho Supreme Court first held that the
Hayden-Cartwright Act does not authorize state taxation of
motor fuel sales on Indian reservations because neither the text

- nor the legislative history of the Act makes it “unmistakably

clear” that Congress intended to authorize such taxation.
Goodman Oil, 28 P.3d at 998-1002. Interpreting the Idaho fuel
tax statutes, the court then held that while the tax was imposed
on all gasoline when received by the distributor, id. at 1002, the
legal incidence of the tax fell on the tribal retailer. /d. at 1002-
04. In so holding, the court found controlling the substantial

* In 1994, the Coeur d’Alene Tribe and the Idaho State Tax Commis-
sion entered into an agreement pursuant to which the Tribe collected and
remitted the state fuel tax on retail sales of gasoline to non-Indians.
Goodman Oil, 28 P.3d at 997. These payments were made from that time
until Goodman Oil was decided. Id.

>The Coeur d’Alene Tribe imposes a tax of 25 cents per gallon, Pet.
App. 49 n.2, as do the Shoshone-Bannock Tribes. CR 64 {| 9 (No. CV-02-
185-S-BLW). The Nez Perce Tribe imposes a tax of 15 cents per gallon.
Pet. App. 49 n.2. Each Tribe has its own substantial road maintenance
needs. CR 7 § 2 (No. CV-02-185-S-BLW) (Coeur d’Alene Tribe); CR 6
q 6 (No. CV-02-203-C-BLW) (Nez Perce Tribe); CR 64 9] 10, 11 (No.
CV-02-185-S-BLW) (Shoshone-Bannock Tribes).

5

similarities between the Idaho tax and the Oklahoma tax
invalidated in Chickasaw Nation, including (1) the requirement
that the distributor pass on and collect the tax from the retailer,
and then remit it to the State, (2) the tax credit provided to the
distributor for collecting and remitting the tax on behalf of the
State, (3) the ability of the distributor to deduct tax payments it
was unable to collect from the retailer, and (4) the absence of
any provision setting off the retailer’s liability where consumers
fail to pay. /d. at 1003. As the court concluded, where “I t}he
import of the language and the structure of the fuel tax statutes
is that the distributor collects the tax from the retail pur-
chaser of the fuel; the motor fuel taxes are /egally imposed on
the retailer rather than on the distributor or the consumer.’”
Goodman Oil, 28 P.3d at 1003 (quoting Chickasaw Nation,
515 U.S. at 462).

Idaho then petitioned this Court for a writ of certiorari to
review the ruling in Goodman Oil only with respect to the
Hayden-Cartwright Act issue. Jdaho State Tax Comm'n v.
Goodman Oil Co., No. 01-794. Idaho’s petition was denied
on February 19, 2002. 534 U.S. 1129.

On March 23, 2002, the Idaho legislature amended the
motor fuels tax in an effort to shift the legal incidence of the
tax to the distributor. 2002 Idaho Sess. Laws ch. 174 (“Ch.
174”) (Pet. App. 49). The Statement of Purpose attached to
the bill that enacted Ch. 174 declared “[t]his bill establishes
laws for the application of motor fuels taxes on Idaho’s Indian
reservations.” Pet. App. 151. The legislature also explicitly
stated in the law’s uncodified Statement of Intent that:

The Legislature intends by this act to modify the holding
of the Idaho Supreme Court in the case of Goodman Oil
.... Specifically, the Legislature intends, by this act, to
expressly impose the legal incidence of motor fuels taxes
upon the motor fuel distributor who receives (as “re-
ceipt” is defined in Section 63-2403, Idaho Code) the
fuel in [Idaho]... .

nee iii. B

6

Ch. 174, § 1 (Pet. App. 133). The statutory definition of
“receipt” referred to in § 1, set forth in Idaho Code § 63-2403,
was not substantively amended. Pet. App. 140-41. While § 2
of Ch. 174 amended Idaho Code § 63-2402(1) to impose the
tax “upon the receipt of motor fuel in this state by any
distributor,” Pet. App. 133, the Goodman Oil court had al-
ready construed the tax to be imposed on all gasoline when
received by the distributor. 28 P.3d at 1002. Chapter 174 did
not substantively amend the other provisions on which the
Goodman Oil ruling was based. Pet. App. 15-16.

Chapter 174 was enacted by the State as emergency legisla-
tion, and was declared to be “in full force and effect on and
after its passage and approval, and retroactively to July 1,
1996.” Ch. 174, § 14 (Pet. App. 151).

B. District Court Proceedings

The instant litigation, begun by the action filed by the
Coeur d’Alene Tribe on April 21, 2002, CR 1 (No. CV-02-
185-S-BLW), was consolidated with actions later filed by the
Nez Perce Tribe, CR 1 (No. CV-02-203-C-BLW), and the
Shoshone-Bannock Tribes, CR | (No. CV-02-226-S-BLW).
See CR 23 (No. CV-02-203-C-BLW) (first consolidation
order); CR 56 (No. CV-02-226-S-BLW) (second consolida-
tion order). Each action named the State Tax Commissioners
in their official capacities as defendants and alleged, inter
alia, that the legal incidence of the state motor fuels tax
remained on the retailer after Ch. 174 was enacted, and fed-
eral law therefore barred its imposition on tribal retailers on
Indian reservations.

On cross-motions for summary judgment, the district court
addressed two issues: (1) whether the Hayden-Cartwright Act
authorized application of the state tax to fuel sold to Indians
and the Tribes on their Reservations, and (2) whether the
legal incidence of the tax, as amended by Ch. 174, fell on the
retailer or the distributor. Pet. App. 47-59. The court first

7

ruled, as the Idaho Supreme Court had a year earlier, that the
Hayden-Cartwright Act did not expressly authorize state
taxation of fuel sales on Indian reservations. /d. at 52-55.
The court held that the use of the word “reservation” in the
Act did not establish that Congress intended to grant states
authority to tax Indians inside Indian country because Indian
reservations are distinct from the types of reservations
referred to in the Act. Jd. at 54-55. While Congress had
given up the federal government’s exemption from state
taxation to a limited extent in the Act, the court held that this
did not mean that the federal government had given up the
Indians’ exemption from state taxation on Indian reservations.
Id. at 55.

The court then determined that Ch. 174 did not change the
legal incidence of the tax. While the new statute declared that
the legal incidence fell on the distributor, the key provisions
of the tax remained unchanged. “[E]ven while declaring the
distributor legally obligated to pay the tax, the legislature
imposed no real burden on the distributor. Instead, the statute
retains the ‘pass through’ quality of the prior statute. No
difference exists between the old statute and the new one.”
Id. at 58. Regarding the State’s argument that the legisla-
ture’s declaration was conclusive, the court held that a state
could not be permitted to avoid a constitutional prohibition on
taxing tribes by a “mere incantation” that the legal incidence
fell on the distributor, with no change in the substance of the
tax at all. /d.

C. Court of Appeals Ruling

The Ninth Circuit affirmed, holding that as a matter of
federal law, the legal incidence of the tax remains on the
tribal retailer and that the Hayden-Cartwright Act does not
provide the express Congressional authorization necessary for
the State to impose its motor fuels tax on Indian tribes.

8

Addressing the State’s contention that the legislature’s
incantation on legal incidence conclusively resolved the issue,
the court of appeals held that while the legislature’s designation
was dispositive of its intent, the “incidence of a state tax on a
sovereign Indian nation inescapably is a question of federal law
that cannot be conclusively resolved in and of itself by a state
legislature’s mere statement.” Pet. App. 11. As the court held,
if state legislatures were permitted to do so, it would wholly
undermine this Court’s precedent prohibiting state taxation of
Indians absent clear Congressional authorization, id. at 12, and
allow states to tax Indian tribes simply by declaring that “the
incidence of the tax lies elsewhere, [which] would permit the
states indirectly to threaten the very existence of the Tribes,” id.
at 14. As the amended tax was substantively indistinguishable
from the prior tax law, which the Idaho Supreme Court had
already held imposed the legal incidence on the retailer, id. at
15-20, and continued to require the distributor to pass on and
collect the tax from the retailer and then remit it to the State, id.
at 17-22, the court held that the legal incidence remained on the
retailer. Jd. at 22.

The court of appeals then held that the Hayden-Cartwright
Act does not provide the “unmistakably clear” Congressional
intent necessary to abrogate the tribes’ immunity from state
taxation under this Court’s decision in Blackfeet Tribe, 471
US. at 765. As the court noted, “[t]he Eighth Circuit, every
federal district court, and every state court to address the issue
thus far has held that clear congressional authorization under
the Hayden-Cartwright Act is not present.” Pet. App. 28.
The court rejected the State’s argument that the unmistakably
clear standard does not apply to a statute of general appli-
cability, determining that “this argument misses the prelimi-
nary point of statutory interpretation,” namely whether the
Act gives a general command permitting state taxation of
motor fuel sales on reservations. /d. at 31. The court de-
clined to construe the Act’s waiver of federal tax immunity as

9

an implied waiver of tribal tax immunity, especially where no
mention was made in the text or legislative history of the
abrogation of the tribes’ immunity. /d. at 37. It determined
that to interpret the Act as authorizing state taxation of on-
reservation sales to tribally-owned retailers would require two
unsupported assumptions: that Congress meant to include
Indian reservations in the terms of the Act without specifi-
cally so stating, and that Congress intended to abrogate the
immunity of Indian tribes- without saying so. Jd. In view of
the ambiguous terms and legislative history, the court held
that the Act did not provide the unmistakably clear intent
necessary to achieve this abrogation. /d.

Judge Kleinfeld filed a dissenting opinion addressing only
the Hayden-Cartwright Act issue. His opinion invoked the
same “unmistakably clear” standard, but interpreted the Act
as providing the requisite level of clarity.

REASONS FOR DENYING THE PETITION

I. THE DECISION BELOW, HOLDING THAT
THE LEGISLATURE’S MERE SAY-SO IS NOT
CONCLUSIVE OF THE LEGAL INCIDENCE
OF THE AMENDED STATE FUEL TAX
WHERE THE TAX STILL REQUIRES THE
DISTRIBUTOR TO PASS ON AND COLLECT
THE TAX FROM THE TRIBAL RETAILER, IS
CONSISTENT WITH CHICKASAW NATION

A. The Court of Appeals Properly Applied the

" Principles of Chickasaw Nation in Rejecting the
Contention that the Legislature’s Mere State-
ment of Intent Is Conclusive of Legal Incidence

Petitioners’ contention that the State legislature’s explicit
intent to place the legal incidence of the state fuel tax on the
distributor is conclusive of the question does not warrant
review by this Court. Petitioners do not cite any case that has

10

ever so held, much less establish a split of authority on the
question. Instead, petitioners’ argument is based exclusively
on this Court’s statement in Chickasaw Nation of what was
not before the Court, namely the statutes there at issue did not
“expressly identify who bears the tax’s legal incidence,” or
“contain a ‘pass through’ provision, requiring distributors and
retailers to pass the tax’s cost to consumers” and that “[i]n the
absence of such dispositive language, the question is one of
fair interpretation of the taxing statute as written and applied.”
515 USS. at 461 (internal quotations omitted). In arguing that
the legislature’s mere say-so is conclusive of legal incidence,
petitioners contend that in Chickasaw Nation, this Court
authorized states to tax Indians and Indian tribes in Indian
country as long as the legislature declares that the legal
incidence is elsewhere, and that if such a declaration is made
it makes no difference how the tax statute is written and
applied. Chickasaw Nation did not so hold and may not be so
construed. To the contrary, in Chickasaw Nation this Court
“adhere[d] to settled law” in holding that if the legal inci-
dence of a state tax rests on a tribe or its members in Indian
country, it is invalid absent clear Congressional authorization.
Id. at 453, 458-59.

While acknowledging that the “Supreme Court in Chicka-
saw Nation was not facing the case of an explicit legislative
designation,” Pet. App. 11, the court of appeals gave careful
consideration to the language in Chickasaw Nation on which
petitioners rely. Based on this analysis, the court held “the
Supreme Court’s use of the term ‘dispositive’ in context
appears to us to relate to the legislature’s intent about where
the incidence of the tax lies, and not to the ultimate federal
question of where the tax’s legal incidence lies.” Pet. App.
12. This holding fully comports with this Court’s decision in
Chickasaw Nation and the settled law on which it is based.

The court of appeals began by recognizing that “if the state
tax’s incidence falls on the Indians, it is unlawful absent a

11

‘clear congressional authorization’ to the contrary,” Pet. App.
8-9 (quoting Chickasaw Nation, 515 U.S. at 459), and that the
determination of legal incidence is a question of federal law,
id. at 9 (citing Kern-Limerick, Inc. v. Scurlock, 347 U.S. 110,
121 (1954)).

The court held that because the legal incidence of a state
tax is a question of federal law, it “cannot be conclusively
resolved in and of itself by the state legislature’s mere
statement.” Pet. App. 11. As this Court held in Carpenter v.
Shaw, 280 U.S. 363, 367-68 (1930), in rejecting a state’s
claim that its tax was imposed on oil and gas severed from the
realty, rather than on an Indian allottee’s legal interest in
allotted lands: “[w]here a federal right is concerned we are
not bound by the characterization given to a state tax by state
courts or Legislatures, or relieved by it from the duty of
considering the real nature of the tax and its effect upon the
federal right asserted.” Were the law otherwise, the state

* More broadly, this Court has consistently made its own determination
of whether a state tax is barred by the Indian immunity from state taxation,
rather than deferring to the state’s construction of the tax. See, e.g.,
County of Yakima v. Confederated Tribes and Bands of the Yakima Indian
Nation, 502 U.S. 251, 269 (1992) (rejecting state’s contention that
because state law made a state excise tax on sales of fee land a lien upon
the property sold, the tax fell within the Burke Act’s authorization of the
“taxation of land” because “otherwise all sorts of state taxation of
reservation-Indian activities could be validated (even the cigarette sales
tax disallowed in Moe [v. Confederated Salish and Kootenai Tribes of
Flathead Reservation, 425 U.S. 463 (1976)]) by merely making the
unpaid tax assessable against the taxpayer’s fee-patented mineral estate”);
Okla. Tax Comm’n v. Sac and Fox Nation, 508 U.S. 114, 126-28 (1993)
(rejecting state’s assertion that state vehicle excise tax should be treated as
a sales tax on transactions occurring outside Indian country, and holding
that state tax was a personal property tax preempted by the holdings in
Moe and Washington v. Confederated Tribes of Colville Reservation, 447
U.S. 134 (1980)); Colville, 447 U.S. at 162-63 (state cannot avoid Indian
exemption from state personal property tax recognized in Moe by labeling
its tax an excise tax).

12

could name one party the taxpayer, while requiring another to
pay the tax, and in the process defeat the second party's tax
immunity, which the court of appeals found would directly
conflict with this Court’s decision in Kern-Limerick. Pet.
App. 14.° That decision “squarely rejected the idea that ‘a
state court might interpret its tax statute so as to throw tax
liability where it chose, even though it arbitrarily eliminated
an exempt sovereign’ because ‘[s]uch a conclusion . . . would
deny the long course of judicial construction which estab-
lishes as a principle that the duty rests on this Court to decide
for itself facts or constructions upon which federal constitu-
tional issues rest.’”” Pet. App. 13-14 (quoting Kern-Limerick,
347 US. at 121).

Assessing the conflict between this Court’s precedent and
petitioners’ contention, the court of appeals held “[i]f the
legislature could indirectly tax Indian nations merely by recit-
ing ipso facto that the legal incidence of the tax was on
another party, it would wholly undermine the Supreme
Court’s precedent that taxing Indians is impermissible absent
clear congressional authorization.” Pet. App. 12 (citing
Blackfeet Tribe, 471 U.S. at 765). That conclusion is well
supported. “In the special area of state taxation of Indian
tribes and tribal members, [this Court has] adopted a per se
rule,” under which the Court “‘will find the Indians’ exemp-
tion from state taxes lifted only when Congress has made
its intention to do so unmistakably clear.” California v.

‘The court properly rejected petitioners’ contention that legal inci-
dence is determined by who the State intends the taxpayer to be. Pet. App.
11 n.4. While petitioners urge that position here, Pet. 19 (citing First
Agric. Nat'l Bank v. State Tax Comm'n, 392 U.S. 339, 347-48 (1968)),
this Court has made clear that “the test formulated by [First Agric.]” for
determining legal incidence is that “where a State requires that its sales tax
be passed on to the purchaser and be collected by the vendor from him,
this establishes as a matter of law that the legal incidence of the tax falls
upon the purchaser.” United States v. State Tax Comm'n of Miss., 421
U.S. 599, 608 (1975).

13

Cabazon Band of Mission Indians, 480 U.S. 202, 215 n.17
(1987) (quoting Blackfeet Tribe, 471 U.S. at 765); see also
Yakima, 502 U.S. at 258.° That rule is rooted in the Constitu-
tion and the retained sovereignty of Indian tribes:

The Constitution vests the Federal Government with
exclusive authority over relations with Indian tribes.
Art. I, § 8, cl. 3; see Oneida Indian Nation v. County of
Oneida, 414 U.S. 661, 670 (1974), citing Worcester v.
Georgia, 6 Pet. 515, 561 (1832). Asa corollary of this
authority, and in recognition of the sovereignty retained
by Indian tribes even after formation of the United
States, Indian tribes and individuals generally are exempt
from state taxation within their own territory.

Blackfeet Tribe, 471 U.S. at 764.’ The per se rule protects the
exclusive constitutional authority of the United States in In-
dian affairs by “accord{ing] due deference to the lead role of
Congress in evaluating state taxation as it bears on Indian
tribes and tribal members.” Chickasaw Nation, 515 U.S. at
459 (citing Yakima, 502 US. at 267). Petitioners’ contention

* in contrast, the petition for a writ of certiorari in Richards v. Prairie
Band Potawatomi Nation, No. 04-631, concerns the balancing test, which
is applied to determine whether federal law preempts state taxation of non-
Indians. See Colville, 447 U.S. at 154-64. In this area, “no categorical bar
prevents enforcement of the tax; if the balance of federal, state, and tribal
interests favors the State, and federal law is not to the contrary, the State
may impose its levy.” Chickasaw Nation, 515 U.S. at 459 (citing Colville,
447 U.S. at 154-57). While the Brief Amicus Curiae of the Multistate Tax
Commission in Prairie Band, at 10-11, seeks to link that case to the
instant one, this Court’s decisions establish that the Indian immunity from
state taxation is governed by principles that are categorically distinct from
the rules which apply to state taxation of non-Indians, as discussed in the
text above. Thus, the link suggested by Amicus Curiae in Prairie Band is
plainly not legally significant.

7 This Court has applied these principles since 1867, The Kansas
Indians, 72 U.S. (5 Wall.) 737 (1867); The New York Indians, 72 U.S. (5
Wall.) 761 (1867), and “has never wavered from the views expressed in
these cases.” Blackfeet Tribe, 471 U.S. at 765.

|

4

seeks to place states in the position that the Constitution has
reserved for Congress, in direct conflict with the decisions of
this Court.*

The court of appeals further found that “[i]f state legisla-
tures could tax Indian tribes merely on the assertion that the
incidence of the tax lies elsewhere, it would permit states
indirectly to threaten the very existence of the Tribes”
because “the unchecked power to tax is the power to de-
stroy.” Pet. App. 14 (citing M’Culloch v. Maryland, 17 U.S.
(4 Wheat.) 316, 431 (1819)). The per se rule, which is
““rooted in the unique trust relationship between the United
States and the Indians,’” Blackfeet Tribe, 471 U.S. at 766
(quoting Oneida County v. Oneida Indian Nation, 470 U.S.
226, 247 (1985)), is informed by this same concern. As this
Court stated in Yakima, “[i]n the area of state taxation, .. .
Chief Justice Marshall’s observation that ‘the power to tax
involves the power to destroy,’ counsels in favor of the
categorical approach.” 502 U.S. at 258 (citation omitted).

In rejecting petitioners’ contention that the State legisla-
ture’s designation of legal incidence is conclusive of the
issue, the court emphasized that its conclusion was reinforced
by the unique circumstances in which the issue arose. Pet.
App. 15-16. Specifically, before the Idaho legislature enacted
Ch. 174, the Idaho Supreme Court had determined in Gooa-
man Oil that the retailer bore the legal incidence of the motor
fuels tax. That holding, the court of appeals found, was
“entitled to weight on how we assess the legal incidence of
the tax from its operation.” /d. at 15 (citing Am. Oil Co. v.

* Applying the per se rule, this Court has held that states may not tax
Indian tribes and Indians in Indian country with respect to their income,
Okla. Tax Comm'n, 508 U.S. at 126; McClanahan v. Ariz. State Tax
Comm'n, 411 U.S. 164 (1973), personal property, Colville, 447 U.S. at
163-64; Bryan v. Itasca County, 426 U.S. 373 (1976); Moe, 425 U.S. at
480-81, or on-reservation sales and purchases, Yakima, 502 U.S. at 258;
Colville, 447 U.S. at 160; Moe, 425 U.S. at 475-81.

15

Neill, 380 U.S. 451, 455-56 (1965)). Acknowledging that
Goodman Oil had construed the tax before Ch. 174 was
enacted, the court found that the operative provisions of
the tax on which Goodman Oil was based “remained in
substance unchanged by the state legislative efforts to circum-
vent Goodman Oil.” Pet. App. 15. While the State relied
heavily on § 2 of Ch. 174, which amended Idaho Code § 63-
2402(1) to provide that the tax is imposed “upon the receipt
of motor fuel,” the court held that this change had not
substantively altered the state fuel tax. Pet. App. 16.8. As
the court explained, before Ch. 174 was enacted, the
unamended tax had been “imposed on all gasoline received”
by the distributor, as shown by Idaho Code § 63-2405, and
“the Goodman Oil court had already interpreted the un-
amended statute as imposing a tax when the gasoline was
received by the fuel distributor.” Jd. (emphasis omitted). In
these circumstances, the court of appeals correctly held that it
should not automatically defer to the Idaho legislature’s
statement of intent on legal incidence. /d. at 16. That holding
does not present any split of authority and does not warrant
review by this Court.

B. The Court of Appeals Ruling on Legal Inci-
dence Is Fully Consistent with Chickasaw
Nation

On legal incidence, petitioners seek review of only the
question whether the State legislature’s designation of legal
incidence is conclusive. However, the soundness of the court
of appeals’ determination of legal incidence provides an
additional reason for rejecting petitioners’ position.” As the

’ Petitioners also contend that the rule for which they argue was the
“quid pro quo” which the amici curiae states urged upon the Court in
Chickasaw Nation for their rejection of the Oklahoma Tax Commission’s
position in that case, Pet. 16, but this assertion reveals only the lack of
support for their argument in the law.

16

court held, when a party simply collects taxes for transmittal
to the state, the collecting party does not bear the legal
incidence of the tax. Pet. App. 9 (citing Chickasaw Nation,
515 U.S. at 461-62). Rather, where ““‘[t]he import of the
language and the structure of the fuel tax statutes is that the
distributor collects the tax from the retail purchaser of the
fuel’; the ‘motor fuel taxes are legally imposed on the retailer
rather than on the distributor or the consumer.’” Chickasaw
‘Nation, 515 U.S. at 462 (quoting Chickasaw Nation v. Okla-
homa, ex. rel. Okla. Tax Comm'n, 31 F.3d 964, 971-72 (10th
Cir. 1994)).

The court of appeals began by emphasizing that “[c]ritical
to our analysis is our conclusion that the relevant operative
provisions of the fuel tax that the state supreme court ana-
lyzed have not changed.” Pet. App. 17. ‘The court of appeals
first determined that Idaho law “still requires the non-tribal
distributor who receives the motor fuel and sells it to the
Indian tribes to pass on and to collect the tax from the retailer,
and then to remit the taxes to the State.” Jd. at 17 and n.
In these respects, the court held, the Idaho motor fuels tax was
similar to the state tax statutes at issue in Chickasaw Nation,
which were held to impose the legal incidence of the tax on

'0 As the court of appeals further held, the express language of Idaho
Code § 63-2435 “declares that state fuel taxes are included in every
taxable sale of gasoline made by a distributor and that upon receipt of
payment by the distributor, an amount equal to the tax is money due the
state, which the distributor holds in trust for payment to the state.” /d. at
17. Under this provision, the court explained “the source of the funds the
distributor collects—which are placed in trust for the state—is the tax that
is assessed on and collected from the retailers. That is, the distributor
never receives title to the state’s share of the retailer’s funds.” /d. at 18
n.li. As the court further found, state regulations also expressly require
that “all invoices for sales by distributors to retailers must show that the
state fuel tax was charged to the retailer.” /d. at 18 (citing Idaho Admin.
Code § 35.01.05.150.g).

17

the retailer. Jd. at 18.'' Second, the court of appeals found
that State law “provides tax credits to the distributor for
‘collecting and remitting’ the tax on behalf of the State.” Pet.
App. 19 (quoting Idaho Code § 63-2407(4)). Here too, the
court of appeals found that the Idaho tax was like the statutory
scheme at issue in Chickasaw Nation. Id. Third, the court
held that the Idaho statutes provided “tax credits to the
distributor for fuel taxes that the-distributor has paid but
cannot then collect from the retailer,” which again “square(d]
with Chickasaw Nation.” Id. at 20. Fourth, the court held
that “Idaho law provides that the retailer has the right to any
refund of fuel taxes sought by the distributor that the retailer
has paid.” /d. at 21. In contrast, the court of appeals pointed
out, retailers are neither offered a tax credit when consumers
fail to pay the tax, nor are they offered a tax credit for
collecting and remitting the tax. Jd. Furthermore, the tax
must be paid whether or not the Indian retailer sells the fuel to
consumers. Jd. As the court stated, “it is plain that the tax
buck stops with the Indian tribal retailers.” /d.

While petitioners did not rely on the decision in Pourier v.
S.D. Dep’t of Revenue, 658 N.W.2d 395, 399 (S.D. 2003),
cert. denied, 124 S. Ct. 2400 (2004), vacated, in part, on
other grounds by 674 N.W.2d 314 (S.D. 2004), to support
their position on legal incidence before the court of appeals,
they now contend that the court of appeals decision conflicts
with Pourier on that very issue. This contention has no merit.

'! Petitioners simply ignore this analysis and the explicit statutory re-
quirements quoted by the court of appeals, asserting that “the court of
appeals did not identify, or even suggest the existence of, an explicit pass-
through requirement.” Pet. 20 (emphasis omitted). This contention is
simply incorrect.

'2 Petitioners did, however, seek to distinguish the Pourier court’s
holding on the application of the Hayden-Cartwright Act. Reply Br. of
Appellants in Nos. 02-35965, 02-35998 and 02-36020, at 14 and n.3 (9th
Cir. July 8, 2003).

18

In Pourier, the South Dakota Supreme Court held that the
legal incidence of the South Dakota fuel tax was on the
consumer because the tax was passed through to the
consumer.'? That holding presents no conflict with the court
of appeals’ holding in this case that the legal incidence of a
state tax which the distributor is required to pass on and
collect from the retailer is on the tribal retailer.'* Further-
more, Pourier did not pose the question whether a state may
tax Indian tribes “merely on the assertion that the incidence of
the tax lies elsewhere,” as was the case here. Pet. App. 14.
Indeed, the state conceded in Pourier that the legal incidence
of the tax fell on the tribe or its members. 658 N.W.2d at 403
n.4. Pourier thus does not conflict with the court of appeals
decision in this case.

'3 That holding was based on the state trial court’s finding that the
retailer passed the tax through to the consumer, Pourier, 658 N.W.2d at
398, as well as the state tax statute, and this Court’s statement in
Chickasaw Nation that the state could “‘declar[e] the tax to fall on the
consumer and direct[] the Tribe to collect and remit the levy.’” /d. at 405
(quoting Chickasaw Nation, 515 U.S. at 460). That statement simply
recognizes that an express pass-through provision is not required to place
the legal incidence of a state tax on the consumer. Cal. State Bd. of
Equalization v. Chemehuevi Indian Tribe, 474 U.S. 9, 11 (1985) (per
curiam).

'4 That ruling is also consistent with Chickasaw Nation.

19

Il. THE DECISION BELOW CORRECTLY HELD,
CONSISTENT WITH EVERY FEDERAL AND
STATE COURT TO CONSIDER THE ISSUE,
THAT THE HAYDEN-CARTWRIGHT ACT
DOES NOT SHOW THAT CONGRESS _IN-
TENDED TO ABROGATE INDIAN IMMUNITY
FROM STATE TAXATION IN UNMISTAKA-
BLY CLEAR TERMS

A. As the Court of Appeals Held, This Court’s
Rulings Make Clear that Indian Immunity
from State Taxation Is Abrogated Only if
Congress’ Intent to Do So Is Unmistakably
Clear

Petitioners seek review of the court of appeals ruling that
the Hayden-Cartwright Act does not abrogate the tribes’
immunity from state taxation, but do not allege any split of
authority on the question presented. Nor could they. As the
court of appeals held, “{t]he Eighth Circuit, every federal
district court, and every state court to address the issue thus
far has held that clear congressional authorization under the
Hayden-Cartwright Act is not present, rejecting states’ at-
tempts to tax Indians for motor fuel delivered and sold on
their own reservations.” Pet. App. 28 (citing Marty Indian
Sch. Bd. v. South Dakota, 824 F.2d 684, 688 (8th Cir. 1987);
Winnebago Tribe of Neb. v. Kline, 297 F. Supp. 2d 1291,
1304 (D. Kan. 2004); Prairie Band Potawatomi Nation v.
Richards, 241 F. Supp. 2d 1295, 1307 (D. Kan. 2003);'°

'S Prairie Band is now before this Court on the State of Kansas’
petition for a writ of certiorari with respect to other issues. Richards v.
Prairie Band Potawatomi Nation, No. 04-631. The district court’s ruling
with respect to the Hayden-Cartwright Act was not cross-appealed to the
court of appeals by the state, and accordingly was not addressed by the
court of appeals in Prairie Band Potawatomi Nation v. Richards, 379 F.3d
979 (10th Cir. 2004).

20

Pourier, 658 N.W.2d at 399: Goodman Oil, 28 P.3d at
1001-02)).'°

The principal basis on which review is sought is petition-
ers’ contention that the court of appeals improperly “in-
vok[ed] the Indian canons of construction” in ruling on the
Hayden-Cartwright Act, which petitioners contend is a gen-
eral act of Congress to which the Indian canons of construc-
tion do not apply. Pet. 25; see also Pet. 26 and n.10-11. But
the only “canon of statutory construction from the Indian
context” applied by the court of appeals was the settled rule
that “Indian tribes and individuals generally are exempt from
state taxation within their own territory,’ unless Congress has
‘made its intention to do so unmistakably clear,’” Pet. App.
31 (quoting Blackfeet Tribe, 471 U.S. at 764-65).'' See
Yakima, 502 U.S. at 258; Cabazon, 480 U.S. at 215 n.17;
Blackfeet Tribe, 471 U.S. at 765; see also Chickasaw Nation,
515 US. at 459 (“If the legal incidence of an excise tax rests
on a tribe or on tribal members for sales made inside Indian
country, the tax cannot be enforced absent clear congressional

16 As the court of appeals also noted, this Court has twice expressly de-
clined to consider the Hayden-Cartwright Act issue presented by peti-
tioners. Pet. App. 28 n.20 (citing Chickasaw Nation, 515 U.S. at 456-
57; White Mountain Apache Tribe v. Bracker, 448 U.S. 136, 151 n.16
(1980)).

'7 Contrary to petitioners’ assertion, this Court has consistently applied
the canon which requires that statutes be construed liberally in favor of the
Indians, and that ambiguous provisions be interpreted to their benefit, to
statutes which are claimed to abrogate Indian tax immunities, without
regard to whether the statute is general or specific. Yakima, 502 US. at
269; Blackfeet Tribe, 471 US. at 766; Merrion v. Jicarilla Apache Tribe,
455 U.S. 130, 149-52 (1982); Bryan, 426 U.S. at 392; McClanahan, 411
U.S. at 174; Squire v. Capoeman, 351 US. 1, 6-7 (1956); Carpenter v.
Shaw, 280 U.S. 363, 366-67 (1930); Choate v. Trapp, 224 U.S. 665, 675
(1912). In any event, the court of appeals did not apply this canon.

21

authorization.”). As this Court’s decisions show, the court of
appeals’ application of this standard was clearly proper.

These decisions reject petitioners’ novel contention, unsup-
ported by the ruling of any court, that this Court’s decision in
Fed. Power Comm’n vy. Tuscarora Indian Nation, 362 U.S. 99
(1960), set forth the standard for determining whether Con-
gress has authorized state taxation of Indian tribes and their
members. In Tuscarora, this Court held that a licensee under
the Federal Power Act was empowered by Section 21 of the
Act to condemn land owned in fee by the Tuscarora Indian
Nation. While petitioners rely on the statement in Tuscarora,
that “general Acts of Congress apply to Indians as well as to
all others in the absence of a clear expression to the contrary,”
362 U.S. at 120, this Court has made clear that “ijn the
special area of state taxation of Indian tribes and tribal
members,” the per se rule is controlling, and that rule requires
that Congress’ intent to abrogate Indian immunity from state
taxation be unmistakably clear. Cabazon, 480 U.S. at 215
n.17. The court of appeals properly rejected petitioners’
contention that Tuscarora requires otherwise. Pet. App. nu.”

18 coe also Pourier, 658 N.W.2d at 399 (unmistakably clear standard);
Goodman Oil, 28 P.3d at 1001-02 (unmistakably clear standard); Prairie
Band, 241 F. Supp. 2d at 1304 (state taxation of Indians barred “[u]nless
Congress makes it abundantly clear that it intends to grant taxing authority
to the states”).

'9 Furthermore, the statement from Tuscarora on which petitioners rely
did not provide the basis of the decision. As the Court explained:

[The Federal Power Act] neither overlooks nor excludes Indians or
lands owned or occupied by them. Instead, as has been shown, the
Act specifically defines and treats with lands occupied by Indians—
“tribal lands embraced within Indian reservations.” See §§ 3(2) and
10(e). The Act gives every indication that, within its comprehensive
plan, Congress intended to include lands owned or occupied by any
person or persons, including Indians.

362 U.S. at 118. As the Tuscarora lands there involved were not “reser-
vation” lands as defined by the Act, id. at 110-15, nor were they subject to

22

There is no split of authority with respect to that ruling and
review is not warranted here.

B. The Court of Appeals Ruling with Respect to
the Hayden-Cartwright Act Is Consistent with
the Decision of Every Court to Consider the
Issue and Does Not Warrant Review by This
Court

Beyond this, petitioners simply restate their position with
respect to the Hayden-Cartwright Act, which the court of
appeals and every other federal and state court to consider the
issue have rejected. In view of the fact that two federal courts
of appeals, two state supreme courts and three federal district
courts all have held that the Hayden-Cartwright Act does not
apply to Indian reservations, it cannot be “unmistakably clear”
that Congress intended the Act to so apply. Review of the
court of appeals decision on this issue is not warranted.

While the Hayden-Cartwright Act “effectively waived the
federal government’s sovereign immunity from state tax
collection,” Pet. App. 37, this does not establish that Congress
intended also to abrogate tribal immunity from state taxation.
The Act makes no reference to Indian tribes, which are
immune from state taxation as an element of their retained
sovereignty. Blackfeet Tribe, 471 U.S. at 764. It cannot be
said to be unmistakably clear that Congress extinguished that
immunity without even referring either to its holder or to its
existence. Pet. App. 37 (quoting Bryan, 426 U.S. at 381)
(““[S]ome mention [of the abrogation of tribal immunity]
would normally be expected if such a sweeping change in the
status of tribal government and reservation Indians had been
contemplated by Congress.””). The district court reached the

any treaty between the Tuscarora and the United States, id. at 123, the
Court held that Section 21 of the Federal Power Act applied to these lands.
Id. at 123-24.

23

same conclusion. Pet. App. 55 and n.4; see also Prairie
Band, 241 F. Supp. 2d at 1306; Pourier, 658 N.W.2d at 403.

Nor does the Hayden-Cartwright Act refer to “Indian
reservations.” As the court of appeals held, simply because
the term “reservation” could include Indian reservations does
not mean that it does so whenever it is used. Pet. App. 32.
As this Court made clear in United States v. Celestine, 215
U.S. 278, 285 (1909), “a reservation is not necessarily “Indian
country.”””° It has long been clear, as the court explained in
Goodman Oil, that “Indian reservations are different; distinct
from every other type of reservation, i.e., national parks,
wilderness areas, military reservations, and even further,
Indian reservations are a distinct entity within the law.” 28
P.3d at 1000; accord Prairie Band, 241 F. Supp. 2d at 1303-
05; Pourier, 658 N.W.2d at 399. That an express reference to
Indian reservations is required before a federal statute may be
held to authorize state taxation on Indian reservations is clear

20 In Celestine, this Court interpreted the Act of March 3, 1885, ch.
341, 23 Stat. 362 (“1885 Act”), which made the laws of the United States
which apply to crimes committed within the exclusive jurisdiction of the
United States applicable to seven listed crimes when committed by Indians
on indian reservations. 215 U.S. at 283-84. The defendant argued that the
1885 Act did not apply to Indian allotments because such lands, though
within the Indian reservation on which the crime occurred, were not
“Indian country,” as that term was then defined by federal law. Id. at
283-87. In rejecting this argument, the Court stated that:

the word ‘reservation’ has a different meaning, for while the body of
land described in the section quoted as ‘Indian country’ was a res-
ervation, yet a reservation is not necessarily ‘Indian country.” The
word is used in the land law to describe any body of land, large or
small, which Congress has reserved from sale for any purpose. It
may be a military reservation, or an Indian reservation, or, indeed,
one for any purpose for which Congress has authority to provide.

Id. at 285 (emphasis added). In Celestine, the statute made its meaning
clear by expressly referring to “any Indian reservation,” id. at 284, thus
recognizing that the term “Indian reservation” has a separate and distinct
meaning in the law.

24

from this Court’s decision in Warren Trading Post Co. v.
Ariz. State Tax Comm'n, 380 U.S. 685 (1965). There, this
Court held that the Buck Act, ch. 389, 61 Stat. 644 (1947), 4
U.S.C. §§ 105-10, which authorizes states to apply sales and
use taxes in “federal area[s],” defined by the Act as “any
lands or premises held or acquired by or for the use of the
United States or any department, establishment, or agency of
the United States,” 4 U.S.C. § 110(e), does not apply to
Indian reservations. Jd. at 691 n.18. This Court has since
twice reaffirmed that holding. Cent. Machinery Co. v. Ariz.
State Tax Comm’n, 448 U.S. 160, 166 n.5 (1980); White
Mountain Apache, 448 U.S. at 151 n.16. Accordingly, as the
court of appeals held, it is not “unmistakably clear” that
Congress, without saying so, intended that the phrase “United
States military or other reservations” include Indian reser-
vations. Pet. App. 37; see also Goodman Oil, 28 P.3d at
1000; Prairie Band, 241 F. Supp. 2d at 1305; Pourier, 658
N.W.2d at 399, 401.

Petitioners’ contention that, notwithstanding the absence of ©

any reference to Indians, Indian tribes or Indian reservations
in the Hayden-Cartwright Act, the inclusion of the term
“licensed trader” extends its terms to Indian retailers on
_Indian reservations, has also been rejected by every court to
consider it. As the court of appeals recognized, the term
could well refer to non-Indian traders licensed to conduct
business on the federal reservations which are subject to the
Hayden-Cartwright Act. Pet. App. 33:7! accord Goodman
Oil, 28 P.3d at 1000 (“The term ‘licensed trader’ could refer
to licensed distributors or sellers of goods in all federal
reservations.”); Pourier, 658 N.W.2d at 401 (“Congress gave
no indication in the statute that the term referred to Indian

21 As the court of appeals further found, even if the term could be so
construed, it is not clear “that the tax could be imposed on Indian tribes, as
opposed to on non-Indian traders licensed to do business on Indian
reservations.” Pet. App. 33.

5B a A Ik aR AG aa a LA ila a a a

25

traders as opposed to those non-Indian traders who were
required to obtain a license to sell fuel.”); Prairie Band, 241
F. Supp. 2d at 1304.

Acknowledging that the Hayden-Cartwright Act was
passed in response to this Court’s decision in Standard Oil
Co. v. California, 291 U.S. 242 (1934), which invalidated a
state tax on a gasoline distributor delivering fuel to a post
exchange on a military reserve, petitioners assert that
Congress “clearly had no thought of limiting the grant to
military reserves.” Pet. 24.” But what is required is an
“unmistakably clear” showing of Congressional intent to
abrogate tribal immunity, Blackfeet Tribe, 471 U.S. at 765,
and as the court of appeals held, nothing in the legislative
history of the Act shows that Congress unmistakably intended
to extend the Act to Indian reservations. Pet. App. 35-36
(citing Pourier, 658 N.W.2d at 402-03).”° Petitioners’ argu-

22 While the State refers to the federal instrumentality doctrine, Pet. 24-
25, suggesting its relevance to the Hayden-Cartwright Act issue, this
Court’s decision in Blackfeet Tribe makes clear that the Indian immunity
from state taxation is instead based on the federal government's exclusive
constitutional authority in Indian affairs, and the retained sovereignty of
Indian tribes. 471 U.S. at 764. It is also settled that Indian tribes are
separate sovereigns, not arms of the United States. United States v.
Wheeler, 435 U.S. 313, 328 (1978). In contrast, as this Court explained in
Cotton Petroleum Corp. v. New Mexico, 490 U.S. 163 (1989), the federal
instrumentality doctrine was applied to Indian lands to invalidate state
taxes imposed on non-Indian lessees of Indian land. /d. at 174. The
doctrine “has now been ‘thoroughly repudiated’ by modern case law.” Id.
(quoting South Carolina v. Baker, 485 U.S. 505, 520 (1988)).

23 Detitioners also argue that, by reenacting the Hayden-Cartwright Act,
Congress adopted two executive branch opinions interpreting the Act as
applying to Indian reservations. This argument was rejected by the court
of appeals, which held that “the agency interpretations underscore the
ambiguity, not the clarity, of the executive branch’s statements insofar as
they speak to the applicability of the Act to Indian reservations.” Pet.
App. 36-37 n.28. Other courts have reached the same conclusion. See
Prairie Band, 241 F. Supp. 2d at 1306-07; Goodman Oil, 28 P.3d at 1001;
Pourier, 658 N.W.2d at 402; see also Winnebago Tribe, 297 F. Supp. 2d

26

ment that the Act was passed to allow states to build and
maintain roads throughout the state fails for the same reason.
Indeed, prior to passage of the Hayden-Cartwright Act,
Congress had already passed legislation authorizing the
‘appropriation of funds for survey, improvement, construc-
tion, and maintenance of Indian reservation roads.” See Pet.
App. 36 (quoting Goodman Oil, 28 P.3d at 1000).”*
Authorizing state taxation of Indian tribes would also have
been directly in conflict with the federal Indian policy set
forth in the Indian Reorganization Act (“IRA”), ch. 576, 48
Stat. 984, 25 U.S.C. §§ 461-79, which was enacted in 1934.
The “overriding purpose of [the IRA] was to establish
machinery whereby Indian tribes would be able to assume a

at 1304. In fact, this Court rejected a nearly identical argument regarding
deference to administrative interpretation in Blackfeet Tribe. 471 U.S. at
768 n.7.

Petitioners’ reliance on Lorillard v. Pons, 434 U.S. 575 (1978),
is also misplaced. Lorillard concerned enforcement of the Age Discrimi-
nation Enforcement Act (ADEA), which incorporated sections of the Fair
Labor Standards Act (FLSA). The presumption that Congress was aware
of existing interpretations was “particularly appropriate [in that case]
since, in enacting the ADEA, Congress exhibited . . . a detailed knowledge
of the FLSA provisions and their judicial interpretation.” 434 U.S. at 581.
Such a situation is not present here. Reenactment of a statute cannot be
deemed to be legislative approval of an administrative interpretation that
is ambiguous and not clearly established by longstanding, consistent regu-
lations or decisions. Sanford’s Estate v. Comm’r of Internal Revenue, 308
U.S. 39, 49-53 (1939); see also Sec. and Exch. Comm'n v. Sloan, 436
U.S. 103, 121 (1978) (“We are extremely hesitant to presume general
congressional awareness of the [agency’s] construction based only upon a
few isolated statements . . . .”).

4 Today, Indian tribes may assume responsibility for administering the
Bureau of Indian Affairs Indian Reservation Roads program pursuant
to the Indian Self-Determination and Education Assistance Act, Pub. L.
No. 93-638, 88 Stat. 2203 (1975) (codified as amended at 25 U.S.C.
§§ 450 et seq.), and the Transportation Equity Act for the 21st Century,
Pub. L. No. 105-178, 112 Stat. 107 (codified as amended at 23 U.S.C.
§ 204).

greater degree of self-government, both politically and eco-
nomically.” Morton v. Mancari, 417 US. 535, 542 (1974).

The court of appeals ruling with respect to the Hayden-
Cartwright Act presents no basis for review by this Court.

CONCLUSION

The petition for a writ of certiorari should be denied.

BRIAN J. CLEARY

FUNKE & WORK

P.O. Box 969

424 E. Sherman Ave., Suite 308
Coeur d’Alene, ID 83816
(208) 667-5486

Counsel for the Coeur d'Alene
Tribe of Idaho

RICHARD K. EICHSTAEDT

JULIE KANE

OFFICE OF LEGAL COUNSEL,
NEZ PERCE TRIBE

P.O. Box 305

100 Agency Road

Lapwai, ID 83540

(208) 843-7355

Counsel for the Nez Perce Tribe
December 23, 2004

Respectfully submitted,

DOUGLAS B. L. ENDRESON
ANNE D. NoTOo *

SONOSKY, CHAMBERS, SACHSE,
ENDRESON & PERRY, LLP
1425 K Street, N.W., Suite 600
Washington, D.C. 20005

(202) 682-0240

WILLIAM F. BACON
P.O. Box 306

Fort Hall, ID 83203
(208) 478-3815

Counsel for the Shoshone-
Bannock Tribes

* Counsel of Record

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386003_1547%3A2. Public record. Not legal advice.