Petition for Writ of Certiorari — Wilbur v. Locke

4

(2) that both the Tax Injunction Act; and (3) the Eleventh

Amendment barred their suit; and (4) that the Tribe was

an indispensable party without whom the suit could not

proceed. Wilbur, 423 F.3d at 1105. The Governor filed a

motion for a protective order asking the District Court to

stay the taking of the deposition of Martin Loesch, an

attorney for the Tribe. Petition Appendix C. Because the

Tribe had refused to supply the Wilburs with a copy of the

proposed contract, Loesch was directed by subpoena duces

tecum to bring a copy of it to his deposition.

The Tribe filed a brief in the District Court supporting

the Governor’s motion for a protective order. Petition

Appendix D. The Tribe represented to the District Court:

“Although the Tribe is not a party to this action, the Tribe

has an interest in the Motion for Protective Order,” be-

cause the deponent was one of its attorneys. Petition

Appendix at D-1. In its brief the Tribe stated:

Although the Tribe has not gone to the expense of

independently seeking a protective order from

this Court, it fully supports Defendants’ Motion

for a Protective Order.

Id. at D-2. In addition, the Tribe pointed out that the

Wilburs could not sue the Tribe without the Tribe’s con-

sent. Jd. at D-2.

Finally, the Tribe advised the Court that it fully

supported the Governor’s contentions that the Wilburs’

suit should be dismissed:

The Tribe is clearly an indispensable party in an

action that seeks to bar an agreement to which

the Tribe is a party. Furthermore, Plaintiffs lack

standing because they are not injured in fact by

the proposed Tribal-State agreement.

Id. at D-3. Thus, the Tribe participated in the pending

proceedings, albeit not as a party-defendant.

On August 28, 2003, the District Court granted the

State’s motion for a prot ctive order and stayed the sched-

uled deposition pending a ruling on the State’s motion to

dismiss. Petition Appendix E.

On October 3, 2003, the Tribe and the State of Wash-

ington entered into a cigarette tax compact. Petition

Appendix F. The Tribe contractually obligated itself to

enact and collect a tribal tax on cigarettes sold on the

reservation by Tribal retailers to non-Indian and non-

tribal member Indian purchasers. Jd. at F-7, F-8. In

return, the State obligated itself not to collect state ciga-

rette taxes and sales and use taxes on such sales. Jd. at F-

8. The contract is for a term of eight years, and it auto-

matically renews for successive terms of eight years unless

either the Tribe or the State objects to renewal in writing.

Id. at F-23. In the Preamble, the contract states that “the

mutual interests of the Swinomish Tribe and the State of

Washington brought these two governments together to

pursue their common interests...” Jd. at F-2.

Neither the Governor nor the Tribe informed the

District Court that the contract had been executed by both

parties, and thus the District Court was unaware of this

fact when it granted the State’s motion to dismiss on

October 20, 2003. Wilbur, 423 F.3d at 1105. The District

Court “based its decision on the proposition that the Tax

Injunction Act deprived it of subject matter jurisdiction

over the Wilburs’ suit,” and “dismissed the action without

discussing the State’s other arguments.” Id.

Tre Court of Appeals affirmed but upon different

grounds. The Ninth Circuit rejected the contention that

the Tax Injunction Act barred the suit. The Court of

Appeals also rejected the State’s contentions that the

Wilburs’ lacked standing. Jd. at 1107-09. The State raised

the additional contention that the Wilburs’ suit was moot,

and the Court of Appeals rejected that contention as well.

Id. at 1109. The Court agreed that the Eleventh Amend-

ment barred the Wilburs’ claims against the state agency

defendant (the Washington Department of Revenue), but

rejected the State’s contention that their claims against

the individuai defendants were barred. Jd. at 1111. How-

ever, the Ninth Circuit affirmed the dismissal of the

Wilburs’ suit against the remaining defendants (the

6

Governor and the two Revenue Department officials) on

the ground that the Tribe was both a necessary and an

indispensable party. Id. at 1111-15. —

The Circuit Court recognized that the Tribe had an

interest in the outcome of the Wilburs’ suit because the

Wilburs were seeking to establish the illegality and

unenforceability of the Tribe’s contract with the State. Id.

at 1112. The Court further recognized, and the Wilburs did

not dispute, that joinder of the Tribe was not feasible

because it enjoyed sovereign immunity. Id.

The Wilburs contended that the Tribe’s interests

would be adequately represented by the Governor, who

was both a party to the suit, and a signatory on the con-

tract between the State and the Tribe. Jd. at 1113. The

Ninth Circuit rejected this contention, relying on its prior

decision in American Greyhound Racing, Inc. v. Hull, 305

F.3d 1015 (9th Cir. 2002). The Circuit Court concluded

that because Washington State “owes the Tribe no trust

duty that might ensure vindication of the Tribe’s interest,”

the Governor could not be counted upon to adequately

represent the Tribe's interests. Wilbur, 423 F.3d at 1113.

The Court rejected the Wilburs’ argument that the Gover-

nor could adequately represent the Tribe’s interest in

seeing their contract upheld because it ran counter to the

Ninth Circuit’s longstanding rule that all parties to a

contract must be parties to any suit seeking to invalidate

that contract. /d. at 1114.

Beginning with the case of Lomayaktewa v. Hatha-

way, 520 F.2d 1324 (9th Cir. 1975), and continuing to the

modern day in cases like Dawavendewa v. Salt River

Project, 276 F.3d 1150 (9th Cir. 2002), the Ninth Circuit

has adhered to this inflexible rule, and it applied the rule

to the present case: “As we stated in Dawavendewa, it is a

‘fundamental principle’ that a party to a contract is neces-

sary, and if not susceptible to joinder, indispensable to

litigation seeking to decimate that contract.” Wilbur, 423

F.3d at 1113. Invoking Lomayaktewa, the Court said: “No

procedural principle is more deeply imbedded in the

common law than that, in an action to set aside a lease or

contract, all parties who may be affected by the determi-

nation of the action are indispensable.” Wilbur, at 1113,

quoting Lomayaktewa, 520 F.2d at 1325.

In the course of its decision, the Circuit Court pur-

ported to address the four factors listed in FRCP 19(b).

The Court considered: (1) the extent to which a judgment

in the Tribe’s absence might be prejudicial to the Tribe or

to the State defendants; (2) the extent to which prejudice

could be lessened or avoided by the shaping of relief; (3)

whether a judgment in the absence of the Tribe would be

adequate; and (4) whether the plaintiffs would have an

adequate alternative remedy if their suit was dismissed

for nonjoinder of the Tribe. Jd. The Court concluded that

the first three factors pointed towards dismissal because

the only relief sought by the plaintiffs would, if granted,

prejudice the Tribe. Jd. at 1114-15. The Court concluded

that the fourth factor supported the Wilburs’ contention

that their suit should proceed in the absence of the Tribe

because “it is unclear whether the Wilburs will have an

adequate remedy if the action is dismissed.” Jd. at 1115.

Adhering to Circuit precedent, the Court held that

even though dismissal would leave the Wilburs with no

forum for relief, their suit had to be dismised:

[E]ven assuming the Wilburs have no other fo-

rum in which to pursue a remedy, we have “regu-

larly held that the tribal interest in immunity

' Instead of analyzing the adequacy of a judgment granting

injunctive or declaratory relief to the plaintiffs, the Ninth Circuit

examined the prejudicial effect that such a judgment would have upon

the absent Tribe. Wilbur, 423 F.3d at 1114. Thus the Court simply

treated the third factor of Rule 1%b) as duplicative of the first and

second factors. In effect, the Court eliminated the third factor.

8

overcomes the lack of an alternative remedy or

forum for the plaintiffs.”

Wilbur, 423 F.3d at 1115, citing Hull, 305 F.3d at 1025.

The Wilburs noted that under Ninth Circuit prece-

dent, “if no alternative forum is available to the plaintiff,

the court should be ‘extra cautious’ before dismissing the

suit.” Makah Indian Tribe v. Verity, 910 F.2d 555 (9th Cir.

1990). On the other hand, the Wilburs recognized that the

Makah case also held that “lack of an alternative forum

does not automatically prevent dismissal of a suit.” Id. at

560. The Wilburs challenged the latter holding of Makah,

and asked the Court to overrule, or at least to sharply

narrow and confine, that portion of the Makah decision

which holds that a complete lack of any judicial forum

does not preclude a Rule 19(b) dismissal.

None of the Ninth Circuit’s prior opinions had ad.

dressed the First Amendment ramifications of dismissals

’ which left plaintiffs without any alternative forum in

which to bring suit. The Wilburs argued that in cases like

theirs, where the absent party had both knowledge of the

plaintiff’s suit and the ability to intervene, a Rule 19(b)

dismissal that left a plaintiff without any forum for judi-

cial redress would violate the Petition Clause of the First

Amendment. Brief of Appellants, at 31.

In support of this argument, the Wilburs cited two

recent state supreme court decisions where the courts held

that because an indispensable party dismissal would leave

the plaintiffs without any alternative forum in which to

seek relief, their suits should not be dismissed for failure

to join an Indian tribe whose interests were also at stake

in the litigation. Saratoga County Chamber of Commerce

v. Pataki, 100 N.Y.S.2d 801, 798 N.E.2d 1047, 766

N.Y.S.2d 564 (2003), certiorari denied, 124 S.Ct. 570

(2003); Panzer v. Doyle, 680 N.W.2d 666 (Wis. 2004). The

Ninth Circuit declined to follow the approach taken by the

New York and Wisconsin state courts because those courts

were not applying FRCP 19, and were instead applying

their own state court rules regarding the joinder of parties.

9

Wilbur, 423 F.3d at 1116. Reasoning that it was bound to

apply prior Ninth Circuit precedent interpreting the

identical federal rule, the panel rejected the Wilburs’

request to overrule or limit Circuit precedent.

The New York and Wisconsin state courts did not

expressly rely on the First Amendment, nor did they

mention the Petition Clause. However, they did stress the

importance of affording plaintiffs an opportunity to bring

suit in some judicial forum rather than closing the doors of

every court to them. The Ninth Circuit rejected the

Wilburs’ express reliance upon the Petition Clause, reason-

ing that although the right of access to the courts is a

constitutionally protected aspect of the right to petition

the government for redress of grievances, this right is not

an “absolute” right. Wilbur, 423 F.3d at 1116. The Circuit

Court reasoned that the Wilburs had only a right to

“reasonable” access to the courts, and that this right of

“reasonable” access was not violated even though the

Wilburs were left with no access to any court. Jd. The

Court concluded that so long as there exists a written rule

that governs dismissal motions based upon failure to join a

party, the right to “reasonable” access to the courts will

never be violated, because the Petition Clause merely

requires that there exist “prescribed procedures” for

deciding who gets access to the courts and who does not:

(T]he Wilburs rely on cases stating the general

proposition that “the right of access to the courts

is an aspect of the First Amendment right to pe-

tition the Government for redress of grievances.”

Bill Johnson’s Rests., Inc. v. NLRB, 461 U.S. 731,

741, 103 S.Ct. 2161, 76 L.Ed.2d 277 (1983). This

does not aid the Wilburs, however, for the right of

access to the courts is not absolute. See Hudson

v. Palmer, 468 U.S. 517, 523, 104 S.Ct. 3194, 82

L.Ed.2d 393 (1984) (“[T]he constitutional right to

petition the Government for redress of their

grievances ... includes a reasonable right of ac-

cess to the courts” (emphasis added)). Moreover,

10

the right must be exercised “within the limits...

of [the courts’] prescribed procedures.” Cal. Motor

Transp. Co. v. Trucking Unlimited, 404 U.S. 508,

515, 92 S.Ct. 609, 30 L.Ed.2d 642 (1972).

Wilbur, 423 F.3d at 1116.

Finally, the Wilburs argued that their case fell within

the “public rights” exception to Rule 19(b). Under this

exception, an absent party is not deemed indispensable

and dismissal is not warranted when the plaintiffs’ suit

seeks to vindicate important public rights which transcend

the private interests of the litigants. The Circuit Court

rejected this contention as well. It recognized that the

rights the Wilburs sought to vindicate transcended their

own private interests. Nevertheless, the Court held that

the exception could not be applied because the suit sought

to “destroy the legal entitlement” of the absent Tribe by

invalidating the State’s contractual promise to refrain

from collecting state taxes that it would otherwise collect.

Wilbur, 423 F.3d at 1115.

REASONS FOR GRANTING THE WRIT

1. INTRODUCTION

In the past five years, several courts have struggled

with the issue of whether suits against state and federal

governmental officials can proceed in the absence of

Indian tribes which have interests which may be affected

by the litigation. Indian tribes have sovereign immunity

and, in the absence of Congressional action removing that

immunity, they cannot be sued without their consent.

Therefore, when Indian tribes refuse to waive their sover-

eign immunity and decline to participate in a suit that has

been brought against state or federal government officials,

their nonparticipation can lead to a dismissal if the court

in question determines that the absent tribe is an indis-

pensable party.

Government officials named as defer.dants in these

cases have sought dismissal of the suits against them,

arguing that the absent tribe is an “indispensable party”

11

without whom the suit may not proceed. The Tenth Circuit

and the highest state courts in New York and Wisconsin

have rejected these arguments. Taking a practical ap-

proach, these courts have emphasized the point that a

dismissal would leave the plaintiffs with no alternate

judicial forum. Recognizing that a dismissal would make it

impossible for anyone to litigate serious constitutional

questions, these courts have held that a tribe’s refusal to

consent to participation as a party in such a case cannot be

permitted to effectively foreclose all judicial review of

these questions. Because the absent tribe voluntarily

chose not to participate in the suit, and because as a

practical matter the absent tribe’s interests were either

substantially similar or identical to the interests of gov-

ernment officials who were parties to the suit, these courts

have held that such suits should not be dismissed.

Only the Ninth Circuit has taken a different ap-

proach. Tne Ninth Circuit has consistently held that

whenever an Indian tribe is a party to a contract being

challenged by the plaintiffs, the tribe must always be

considered an indispensable party, and such suits must

always be dismissed pursuant to Rule 19(b). Even in cases

such as the present one, where the “absent” tribe has filed

pleadings with the Court to support the positions taken by

the named party defendants, and even where the tribe’s

interest in upholding the legality of its contract with state

government officials is identical to the interests of the

defendant State government officials, the Ninth Circuit

has adhered to an inflexible rule that all such suits must

be dismissed. According to the Ninth Circuit, it is a “fun-

damental principle” that in all cases where a contract is

challenged, a party to that contract that is not susceptible

to joinder is an indispensable party.

Thus, the decision in this case stands at odds with

decisions of several other courts, both state and federal.

The Ninth Circuit’s inflexible approach is also inconsistent

with this Court’s decisions in Provident Tradesmens Bank

& Trust v. Patterson, 390 U.S. 102 (1968) and National

Licorice Co. v. NLRB, 309 U.S. 350 (1940). This Court has

condemned mechanistic approaches to indispensable party

12

analysis where the result is dictated by invocation of an

inflexible rule. Even though this Court has held that

joinder of all parties to a contract is not required when the

plaintiff’s suit is seeking to vindicate public rights, the

Ninth Circuit continues to apply an inflexible rule that a

party to a contract is always an indispensable party to any

suit where there is a challenge to that contract.

Moreover, the Ninth Circuit’s Rule 19(b) jurisprudence

has consistently refused to recognize the constitutional

significance of dismissals which leave plaintiffs without

any alternate judicial forum in which to litigate their

claims. Petitioners argued below that the dismissal of

their suit would violate the Petition Clause of the First

Amendment because it would leave them with no means of

petitioning the government for redress of their grievances.

The Ninth Circuit’s rejection of this contention is at odds

with several Petition Clause decisions of this Court.

Although other courts, state and federal, have con-

strued and applied Rule 19(b) so as to avoid the Petition

Clause problem of leaying plaintiffs with t any judic.al

forum for redress of their grievances, the Ninth Circuit

refuses to do the same. In addition, although several

decisions of this Court have stressed that the constitu-

tional right of access to the courts requires that regulation

of litigation must leave litigants with some reasonable

alternative means of bringing their claims before a court,

the decision in this case leaves the plaintiffs with no

means of having their claims addressed by any court.

For all of these reasons, a writ of certiorari should

issue in this case so that these conflicts may be resolved.

2. THE DECISION BELOW CONFLICTS WITH THIS

COURT'S PETITION CLAUSE JURISPRUDENCE.

The right to petition is one of “the most precious of the

liberties safeguarded by the Bill of Rights,” BE & K

Construction Company v. NLRB, 536 U.S. 516, 524 (2002);

United Mine Workers v. Illinois Bar Ass’n, 389 U.S. 217,

222 (1967). The right is implied by “[t]he very idea of a

government republican in form.” BE & K, at 525, quoting

13

United States v. Cruikshank, 92 S.Ct. 542, 552 (1876);

accord McDonald v. Smith, 472 U.S. 479, 482 (1985). It

extends not only to efforts to influence legislators and

executive officials, but also to efforts to seek judicial

redress for wrongs suffered by resorting to litigation. This

Court has repeatedly “recognized that the right of access

to courts is an aspect of the First Amendment right to

petition the Government for redress of grievances.” Bill

Johnson’s Restaurants, Inc. v. NLRB, 461 U.S. 731, 741

(1983). Accord BE & K, 536 U.S. at 536 (even losing

retaliatory litigation is protected by Petition Clause unless

it is also baseless); Professional Real Estate Investors v.

Columbia Pictures, 508 U.S. 49 (1993) (same); California

Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508,

510 (1972) (“The right of access to the courts is indeed but

one aspect of the right to petition”); Brotherhood of Rail-

road Trainmen v. Virginia State Bar, 377 U.S. 1, 6 (1964)

(“It cannot be seriously doubted that the First Amend-

ment’s guarantees of free speech, petition and assembly

give railroad workers the right” to recommend lawyers to

injured workmen who wish to bring lawsuits); NAACP v.

Button, 371 U.S. 415, 428-431 (1963) (ban on solicitation of

clients violates First Amendment right to seek “to vindi-

cate the legal rights of members” through litigation).

Nor is the Petition Clause right to resort to litigation

for redress of grievances limited to suits “bound up with

political matters of acute social moment, as in Button ...”;

it applies as well to small economic disputes. Mine Work-

ers, 389 U.S. at 356-57; Railroad Trainmen, 377 U.S. at 8

(rejecting dissenters’ view that personal injury litigation is

not constitutionally protected the way civil rights litiga-

tion is); United Transportation Union v. State Bar, 401

U.S. 576, 585-86 (1971); Thomas v. Collins, 323 U.S. 516,

531 (1945).

a. Conflict With this Court’s Noerr-Pennington

Line of Cases.

Given the Petition Clause’s essential function in our

form of government, this Court has consistently “considered

14

the right to petition when interpreting federal law.” BE &

K, 536 U.S. at 525. This Court has been careful to construe

both the Sherman Anti-Trust Act and the National Labor

Relations Act (“NLRA”) so as to exempt the exercise of the

right to petition from the scope of those statutes. See, e.g.,

Eastern Railroad Presidents Conference v. Noerr Motor

Freight, 365 U.S. 127, 138 (1961) (construing Sherman Act

as not prohibiting lobbying of the legislature or the execu-

tive because a contrary construction “would raise impor-

tant constitutional questions. The right of petition is one of

the freedoms protected by the Bill of Rights, and we

cannot, of course, lightly impute to Congress an intent to

invade these freedoms.”);. United Mine Workers v. Penning-

ton, 381 U.S. 657, 670 (1965) (same); Bill Johnson’s Res-

taurants, 461 U.S. at 741 (1983) (recognizing need to “be

sensitive to these First Amendment values in construing

the NLRA”); BE & K, 536 U.S. at 536 (“because there is

nothing in the statutory text indicating that § 158(a)(1)

must be read to reach all reasonably based but unsuccess-

ful suits filed with a retaliatory purpose, we decline to do

so,” thereby avoiding serious Petition Clause question).

In light of the serious constitutional questions that

would be raised by holding that they could not sue the

Washington State officials in any court, the Wilburs

argued below that Rule 19(b) should be construed so as to

prohibit a dismissal in cases like theirs, where a dismissal

would leave the plaintiff without any judicial forum where

their case could be heard. The Ninth Circuit acknowledged

that the Wilburs were arguing that the Petition Clause

gave added weight to the fourth factor enumerated in Rule

19(b), and explicitly rejected this argument, holding that

the Tribe’s interest in being shielded from suit outweighed

the Wilburs’ Petition Clause rights. Wilbur, 423 F.3d at

1116.

Thus the Ninth Circuit refused to construe Rule 19(b)

so as to avoid the constitutional implications of leaving

a plaintiff without any judicial forum for relief. This

refusal is inconsistent with this Court’s decisions in Noerr,

15

Pennington, Bill Johnson’s Restaurants, and BE & K, all of

which explicitly hold that federal courts should “consider| }

the right to petition when interpreting federal law.” BE &

K, 536 U.S. at 525.

b. Conflict with Avery, Gilmore, Wolff and Bounds

The Ninth Circuit has consistently held that the fact

that a plaintiff will be unable to bring suit in any court

does not preclude the granting of a Rule 19(b) dismissal.

In the present case, the Ninth Circuit for the first time

held that such a dismissal does not violate the Petition

Clause either. This conclusion conflicts with a line of this

Court’s “access to court” cases which specifically hold

statutes and rules which leave a prospective litigant

without any means of litigating are unconstitutional.

Beginning with Ex Parte Hull, 312 U.S. 546, 642

(1941), this Court has struck down laws and regulations

which impair a prisoner’s ability to apply to a federal court

for relief from alleged constitutional violations. In Johnson

v. Avery, 393 U.S. 483 (1969), this Court struck down a

prison regulation because it obstructed prisoners’ access to

the federal courts by denying them one form of legal

assistance without supplying any alternative means of

assistance: “Tennessee does not provide an available

alternative to the assistance provided by other inmates.”

393 U.S. at 488. The effect of banning inmate assistance

without providing some reasonable alternative rendered

the regulation unconstitutional.

[U]nless and until the State provides some rea-

sonable alternative to assist inmates in the

preparation of petitions for post-conviction relief,

it may not validly enforce a regulation such as

that here at issue, barring inmates from furnish-

ing such assistance to other prisoners.

Avery, 393 U.S. at 490.

The scope of the fundamental right to access to the

courts recognized in Avery was subsequently extended from

habeas petitioners challenging their convictions, to civil

rights plaintiffs challenging the conditions of confinement,

16

Cruz v. Beto, 405 U.S. 319 (1972), and then to ali civil

plaintiffs. Wolff v. McDoniiell, 418 U.S. 539 (1974). While

the source of this fundamental right remained unspecified,

the Crurt specifically recognized that it was not confined

to prisoners. Cruz, at 321 (“persons in prison, like other

individuals, have the right to petition the Government for

redress of grievances”).”

In Younger v. Gilmore, 404 U.S. 15 (1971), Wolff,

supra, and Bounds v. Smith, 430 U.S. 817 (1977), this

Court continued to recognize the constitutional require-

ment that when foreclosing one means of legal assistance,

states must provide some alternative means of gaining

access to the courts. The Court repeatedly stressed that

there was more than one way to do this, and that a state

could foreclose one means of gaining access to court, so

long as it provided some alternative means. See Bounds,

430 U.S. at 818, 828 (describing the issue as “whether

States must protect the right of prisoners to access to the

courts by providing them with law libraries or alternative

sources of legal knowledge,” and answering that question

in the affirmative); Wolff, 418 U.S. at 580 (remanding with

* In Wolff the Court stated that “the right of access to the courts...

is founded in the Due Process Clause, and assures that no person will

be demed the opportunity to present to the judiciary allegations

concerning violations of fundamental constitutional rights.” 418 U.S. at

579. Three years later, the dissenters in Bounds suggested that the

right was “created virtually out of whole cloth with little or no reference

to the Constitutio. from which it is supposed to be derived.” Bounds,

430 U.S. at 840 (Rehnquist, J., dissenting). More recently, in Lewis v.

Casey, 518 U.S. 343 (1996), Justice Thomas opined that this right was

“rooted in the Due Process Clause.” Jd. at 381 (Thomas, J., concurring).

In his dissent, Justice Stevens suggested that the right was part of the

First Amendment freedoms retained by prisoners, which includes “the

freedom to petition their government for a redress of grievances,” and

specifically connected the Avery line of cases with Petition Clause cases

such as California Motor Transport, supra. Lewis, at 405 & n.1 (Ste-

vens, J., dissenting). Thus the principle articulated in the prisoner

cases is equally applicable to cases that do not involve prisoners, where

the right of access has consistently been described as rooted in the

Petition Clause.

17

directions that the District Court assess the adequacy of

legal assistance provided to prisoners “under the reason-

able-alternative standard of Avery.”)

In the present case, the Ninth Circuit has held that it

is irrelevant that a Rule 19(b) dismissal leaves the Wilburs

with no forum in which they can sue the state officials.

The Ninth Circuit, quoting Hudson v. Palmer, 468 U.S.

517, 523 (1984), reasons that since the “right of access to

the courts is not absolute,” the Wilburs need only be

provided with “a reasonable right of access to the courts.”

Wilbur, 423 F.3d at 1116 (emphasis added by the Circuit

Court). Paradoxically, the Ninth Circuit then concluded

that even though it assumes that following a Rule 19(b)

dismissal “the Wilburs will have no other forum in which

to pursue a remedy,” id., nevertheless they will have been

afforded “reasonable access to the courts,” and thus the

Petition Clause will not be violated. The Court did not

explain how no access could constitute “reasonable access”

to the courts.

Moreover, Hudson provides no support for the conclu-

sion that dismissal of the Wilburs’ complaint is constitu-

tional. The issue in Hudson was whether a prison inmate

had a reasonable expectation of privacy in his prison cell

entitling him to Fourth Amendment protection against the

warrantless search of his cell. This Court compared the

asserted Fourth Amendment rights with other constitu-

tional rights. The First Amendment right “to petition the

Government for redress of their grievances, which includes

a reasonable right of access to the courts,” was recognized

as fully retained by prisoners. Hudson, 468 U.S. at 523,

citing Avery, supra. In contrast, the retention of such

Fourth Amendment rights by a convicted prison inmate

was held to be fundamentally incompatible with the need

of prison officials to ensure institutional security and

internal order. Accordingly, this Court held that prison

inmates had nos »* Fourth Amendment privacy rights in

their prison cells. . wdson, 468 U.S. at 527-28.

The merits of Hudson’s constitutional claim were

addressed by the federal courts. Although he lost his case,

18

Hudson was afforded access to the courts. Thus, Hudson

provides no support for the Ninth Circuit’s conclusion that

it is constitutionally permissible to reject the Wilburs’ suit

and to leave them without any judicial forum in which

they can seek redress. No one contended that Hudson’s

Fourth Amendment claim could not be litigated in the

federal courts and, thus, there was no occasion for this

Court to make any holding regarding the scope of the

Petition Clause.

In the present case, the Ninth Circuit’s decision has

left law abiding citizens with less First Amendment

Petition Clause freedom than that which this Court

acknowledges is retained and enjoyed by prison inmates.

Moreover, by concluding that the complete absence of any

alternate forum is constitutionally acceptable, the decision

below conflicts with this Court’s decisions in Avery, Gil-

more, Wolff and Bounds, which expressly recognize the

constitutional imperative that some reasonable means of

obtaining access to the courts must be left open. If there is

no way for a litigant to get his federal claims addressed,

then the First Amendment right to seek redress for an

alleged violation of those rights has been violated.

3. THE NINTH CIRCUIT’S DECISION CONFLICTS

WITH THE DECISIONS OF THE HIGHEST

COURTS OF NEW YORK AND WISCONSIN.

THESE COURTS HAVE RECENTLY HELD THAT

A TRIBE’S UNWILLINGNESS TO PARTICIPATE

IN A LAWSUIT CANNOT BE PERMITTED TO

FUNCTION AS A VETO OVER A PLAINTIFF’S

RIGHT TO SEEK JUDICIAL REDRESS AGAINST

STATE GOVERNMENT ACTORS.

The Ninth Circuit recognized that its decision is in

conflict with recent decisions of two state courts, and

declined to follow them, choosing instead to follow prior

Ninth Circuit precedent. In Saratoga County Chamber of

Commerce v. Pataki, 100 N.Y.S.2d 801, 798 N.E.2d 1047,

766 N.Y.S.2d 564 (2003), certiorari denied, 124 S.Ct. 570

(2003), New York’s highest court held that even though a

19

ruling in favor of a plaintiff might impair an interest of an

Indian tribe that was not a party to the suit, the suit

would not be dismissed for failure to join an indispensable

party because such a dismissal would, in conjunction with

the tribe’s sovereign immunity, result in the complete

inability of anyone to litigate a serious claim that constitu-

tional rights were being violated by state officials. That

case, like the present case, also involved a challenge to a

compact entered into by a Indian Tribe and a state Gover-

nor. The plaintiffs contended that by entering into a

compact regulating gaming on Indian reservations, the

Governor had violated the separation of powers provisions

of the New York Constitution.

The Pataki lawsuit was brought by a number of New

York state legislators, a business organization, and by

citizen taxpayers, seeking to vindicate an important

constitutional principle. The New York Court of Appeals

ruled that the suit could not be dismissed for failure to join

the Indian Tribe as an indispensable party, because to do

so would make it impossible for anyone to vindicate the

claimed constitutional right.

The Tribe is not a party to this action. Although

its chosen interests are certainly affected by this

litigation, the Tribe has chosen not to par-

ticipate. Unless Congress provides otherwise,

Indian tribes possess sovereign immunity

against the judicial processes of states. [Cita-

tions]. As a result, New York courts cannot force

the Tribe to participate in this lawsuit. The

State claims that the Tribe’s absence re-

quires us to dismiss this action. We disagree.

* * *

The State ... argues that the prejudice to the

Tribe caused by a judgment eviscerating the au-

thority [the gaming compact] under which it op-

erates the casino should be sufficient to dismiss

the action. In contrast, plaintiffs ... argu[e]

that there can be no remedy for the alleged

constitutional violation if the Tribe’s ab-

- sence requires dismissal.

20

Plaintiff’s arguments are on firmer ground.

Not only will these plaintiffs be stripped of a

remedy if we hold that the Tribe is an indis-

pensable party, but no member of the public

will ever be able to bring this constitutional

challenge.

Pataki, 100 N.Y.2d at 819-820 (bold italics added). Recog-

nizing that it was antithetical to our system of checks and

balances to permit a Governor to engage in conduct

alleged to be unconstitutional, without permitting anyone

to litigate the legality of such conduct, the New York Court

of Appeals held that dismissal for failure to join an indis-

pensable party would not be proper.

The Pataki Court also recognized that the general

purpose of the rule requiring dismissal in the absence of a

party whose interest might be impaired by the litigation

was to guarantee the absent party a meaningful opportu-

nity to be heard. This interest was not implicated in cases

where the only reason why the party would not be heard

was simply that the party chose not to participate in the

suit:

The Tribe has chosen to be absent. Nobody has

denied it the “opportunity to be heard”; in fact

the Oneida Indian Nation, which operates the

Indian Turning Stone Casino, has appeared

amicus making much the same arguments we

would expect to be made by the Tribe had it cho-

sen to participate. While sovereign immunity

prevents the Tribe from being forced to partici-

pate in New York ccurt proceedings, it does not

require everyone else to forego resolution of all

disputes that could affect the Tribe. [Citations.]

While we fully respect the sovereign pre-

rogatives of the Indian tribes, we will not

permit the Tribe’s voluntary absence to de-

prive these plaintiffs (and in turn any mem-

ber of the public) of their day in court.

Pataki, 100 N.Y.2d at 820-21 (bold italics added).

Similarly, in Panzer v. Doyle, 680 N.W.2d 666 (Wis.

2004), the Wisconsin Supreme Court followed the lead of

21

the Pataki Court and held that a suit against the Wiscon-

sin Governor could proceed notwithstanding the absence of

an Indian tribe. In that case two legislators challenged the

constitutional validity of the Governor’s agreement with

an Indian tribe to make certain amendments to a gaming

compact between the tribe and the State. The Wisconsin

Governor argued, just as the Washington Governor argued

in this case, that because the tribe was not a party to the

suit and could not be made a party without its consent, the

action had to be dismissed. Although the tribe had an

interest in the lawsuit which might be impaired by a

ruling in favor of the plaintiffs, the Wisconsin Supreme

Court held that the tribe was not an indispensable party

and rejected the argument that the action had to be

dismissed:

The Tribe’s decision not to participate as a party

cannot deprive this court of its own core power to

interpret the Wisconsin Constitution and resolve

disputes between co-equal branches of state gov-

ernment. The Tribe has been aware of this

litigation from its inception. The Court

would have welcomed its intervention. We

will not venture the delicate balance of shared

power among our three branches of government

on the chosen absence of a potential party.

The upshot of accepting the Governor’s invi-

tation to dispose of this case on procedurai

technicalities would be to insulate this

agreement and any future agreement be-

tween a governor and tribe from the powers

of state judicial review. For over 200 years it

has been the province of the judiciary to inter-

pret the constitution and say what the law is.

[Citations]. We are responsible for resolving legal

disputes among the three branches of our state

government and, therefore, we proceed to the

merits of the case.

Panzer, 680 N.W.2d at 683 (bold italics added).

Like the tribe in the Pataki case, the Swinomish Tribe

did participate in the District Court proceedings, but

22

carefully stopped short of intervening as a party, choosing

instead to file a pleading on behalf of a deponent in which

it supported the positions taken by the Washington State

officers. In this respect the Swinomish Tribe can be seen

as trying to have its cake and eat it too — by participating,

but (technically) not participating as a party, and thus

maintaining its stance as an indispensable “absent” party.

The Tribe deliberately sought to assist the Governor in his

efforts to win dismissal of the suit, and succeeded, thereby

and leaving the Wilburs with no forum in which to litigate.

The Ninth Circuit declined to follow these two state

court decisions, commenting that they were not binding

upon it because they were not rulings applying FRCP

19(b), but were instead applications of parallel state court

joinder rules.*

4. THE NINTH CIRCUIT'S DECISION CONFLICTS

WITH TWO DECISIONS OF THE TENTH CIRCUIT.

The Ninth Circuit’s decision is also in conflict with two

decisions of the Tenth Circuit, Sac & Fox Nation v. Norton,

240 F.3d 1250 (10th Cir. 2001), certiorari denied sub nom.

Wyandotte Nation v. Sac & Fox Nation, 534 U.S. 1078

(2002), and Kansas v. United States, 249 F.3d 1213 (10th

Cir. 2001). In both of these cases the Tenth Circuit held

that an Indian tribe was not an indispensable party to a

lawsuit against government officials because the tribe had

chosen not to participate and the tribe’s interests were

virtually identical to the interests of others who were

parties to the suit. Moreover, these cases did apply FRCP

* While it is true that these state court decisions involved state

court joinder statutes, this technicality provides no logical basis for

rejecting the reasoning of those decisions. Moreover, the wording of

Wisconsin Statute § 803.03(3) is nearly identical to FRCP 19(b), and is

based on the federal rule. See Wis. Judicial Council Committee Note

(1974). For this reason Wisconsin courts have looked to federal cases

applying FRCP 19(b) for guidance when deciding “indispensable party”

issues. See, e.g., Dairyland Greyhound Park, Inc. v. McCallum, 258

Wis.2d 210, 655 N.W.2d 474 (2002).

23

19(b) and, thus, are squarely in conflict with the decision

in the present case.

In Sac & Fox Nation, the Governor of Kansas and

various Indian tribes brought suit against the Secretary of

the Interior, seeking to prevent him from taking a tract of

land into trust on behalf of the Wyandotte Tribe and

approving gaming activities on that land. Like the Swi-

nomish Tribe in the present case, the Wyandotte Tribe

filed pleadings in the District Court, but it refused to

waive its sovereign immunity. The District Court granted

the Interior Secretary’ Rule 19(b) motion to dismiss,

holding that the Wyandotte Tribe was an indispensable

party, but the Tenth Circuit reversed. The arguments

made by the Sac & Fox Nation plaintiffs were virtually

identical to those made by the Wilbur petitioners, and the

Tenth Circuit accepted them. The Court recognized that

the Wyandotte Tribe had an economic interest in gaming

activities which might be impaired by the suit. Neverthe-

less, the Tenth Circuit held that “the district court abused

its discretion in finding the Wyandotte tribe was an

indispensable party” because: (1) the Secretary of the

Interior’s interests were “substantially similar, if not

identical, to those of the Wyandotte Tribe”; (2) “the Wyan-

dotte Tribe has filed pleadings at virtually all stages of

this litigation and has consistently offered its views

regarding why the Secretary’s actions were appropriate”;

and (3) “[flinally, and perhaps most important, there does

not appear to be any alternative forum in which plaintiffs’

claims can be heard.” Jd. at 1259-1260. All three of these

factors are also present in the Wilburs’ case.

Whereas the Ninth Circuit does not see the lack of an

alternative forum as a factor of great or decisive signifi-

cance, the Tenth Circuit does. Sac & Fox Nation, 240 F.3d

at 1260, citing Rishell v. Jane Phillips Episcopal Mem’

Med. Ctr., 94 F.3d 1407, 1413 (10th Cir. 1996), for the

proposition that “the absence of an alternative forum

would weigh heavily, if not conclusively against dismissal.”

Shortly after Sac & Fox Nation was decided, the Tenth

Circuit affirmed a district court denial of a Rule 19(b)

motion to dismiss in another case involving an absent

24

Indian tribe. Once again the Tenth Circuit held that the

absent tribe was not an indispensable party because the

interests of existing defendants were “substantially

similar, if not identical, to the Tribe’s interests.” Kansas v.

United States, 249 F.3d at 1227.

5. THE NINTH CIRCUIT’S ADHERENCE TO AN

INFLEXIBLE RULE OF DISMISSAL IN ALL

CASES INVOLVING A CHALLENGE TO A CON-

TRACT WHERE AN ABSENT PARTY HAS AN IN-

TEREST IN SEEING THE CONTRACT UPHELD,

IS IN CONFLICT WITH THIS COURT’S DECI-

SION IN PROVIDENT TRADESMENS BANK &

TRUST, WHICH HOLDS THAT RULE 19(b) IS TO

BE APPLIED ON A CASE-BY-CASE BASIS.

FRCP 19 was substantially revised in 1966. Two years _

after this revision, this Court clarified the meaning of the

Rule in Provident Tradesmens Bank & Trust v. Patterson,

390 U.S. 102 (1968). The revision of the Rule “was not

intended as a change in principles” but was motivated

instead by the fact that the text of the old Rule was “defec-

tive in phrasing” and did not provide clear guidance to the

district courts. Jd. at 118. The revised text of the Rule -

“emphasizes the pragmatic consideration of the effects of

the alternatives of proceeding or dismissing, “whereas “the

older version tended to emphasize classification of parties

as ‘necessary or ‘indispensable.’” Id. In its Note on the

1966 Revision of Rule 19, the Advisory Committee on the

Federal Rules of Civil Procedure noted that under the old

Rule “there had at times been undue preoccupation with

abstract classifications of rights or obligations, as against

consideration of the particular consequences of proceeding

with the action and the ways by which these consequences

might be ameliorated...” Id.

The imprecise and confusing language of the

original wording of the Rule produced a variety

of responses in the lower courts. In some cases, a

25

formulaic approach was employed, making it dif-

ficult now to determine whether the result

reached was proper or not.

Id. at 120.

The Ninth Circuit continues to employ this kind of

formulaic analysis, even though the 1966 revision of FRCP

19(b) was designed to put an end to it, and even though

this Court held such analysis to be improper in the Prout-

dent Tradesmens case. The Ninth Circuit has adhered to

an inflexible rule that it has routinely applied in all cases

involving suits to invalidate contracts. In all such cases

the Ninth Circuit believes that it is a “fundamental princi-

ple” (Dawavendewa, 276 F.3d at 1157), which is “deeply

imbedded in the common law” (Lomayaktewa, 520 F.2d at

1325), that “in an action to set aside a lease or a contract,

all parties who may be affected by the determination of

the action are indispensable.” Id.

The origin of these modern Ninth Circuit decisions

can be found in cases that pre-date the 1966 revision to

Rule 19, and these pre-1966 cases engage in precisely the

same type of mechanistic analysis which this Court

condemned in Provident Tradesmens. For example, Loma-

yaktewa, the fount of modern Ninth Circuit case law on

this point, purports to rely upon this Court’s decision in

Shields v. Barrow, 58 U.S. 130 (1854). Similarly, in Provi-

dent Tradesmens, the Third Circuit purported to rely on

Shields as support for its conclusion that the absent party

was indispensable. But this Court found the Third Circuit

* The Ninth Circuit was a perfect example of a Court that had been

applying an overly “mechanistic” type of Rule 19(b) analysis that “lent

itself more to a thoughtless reiteration of formulae than to a decision

based on the underlying policy considerations that should lead a court

to find a particular person indispensable.” Wright & Miller, 7 Federal

Practice and Procedure (3d ed.), § 1607, citing Washington v. United

States, 187 F.2d 421 (9th Cir. 1936). In that case the Ninth Circuit

concluded that a person automatically should be categorized as

indispensable if his interest in property was joint rather than several.

Professor Wright criticized such analysis as characteristic of the

woodenness of many pre-1966 decisions.

26

had misread Shields as endorsing a per se rule of indis-

pensability for all absent parties whose interests might be

affected by the litigation. Provident Tradesmens, 390 U.S.

at 125. In Lomayaktewa the Ninth Circuit made the same

of misreading Shields, and continues to make that same

mistake today.”

In Provident Tradesmens, this Court stressed the

point that across-the-board rules for deciding when a case

must be dismissed under Rule 19(b) are improper.

“Whether a person is ‘indispensable,’ that is, whether a

particular lawsuit must be dismissed in the absence of

that person, can only be determined in the context of

particular litigation.” Provident Tradesmens, 390 U.S. at

118. But the Ninth Circuit has eschewed the case-by-case

approach, which this Court has approved, in favor of a

bright line rule for all cases in which contracts are chal-

-lenged. In such cases, every party to the contract whose

joinder is not feasible is an indispensable party whose

absence necessitates a dismissal. This fixed rule approach

conflicts with this Court’s decision in Provident Trades-

mens.

By refusing to consider the particular facts of the case

-- that the Swinomish Tribe submitted a pleading to the

Court supporting the positions taken by the defendant,

and that the Tribe’s interest in upholding the contract was

identical to the Governor’s interests — the Ninth Circuit

applied precisely the type of hidebound, “mechanistic”

Rule 19(b) analysis which this Court condemned in Provi-

dent Tradesmens. This improper formulaic approach to

19(b) analysis led the Ninth Circuit to uphold the District

Court’s dismissal of the Wilburs’ suit, even though the

District Court’s dismissal had not been predicated on Rule

19(b) grounds.

* There is language in Shields which is easily susceptible to such a

misreading, and in Tradesmens Bank this Court acknowledged that the

Shields Court's attempt to state general definitions of the terms

“necessary” and “indispensable” parties was “perhaps unfortunate }.”

Tradesmens Bank, 390 U.S. at 123.

27

As Provident Tradesmens recognizes, the overriding

consideration in any Rule 19(b) case is “whether in equity

and good conscience the action should proceed” in the

absence of the interested party. Rather than consider the

particular facts that bear upon that question, the Ninth

Circuit instead applied its rule for all contract cases and

dismissed the case.

6. THE NINTH CIRCUIT’S DECISION IS IN CON-

FLICT WITH THIS COURT’S DECISION IN

NATIONAL LICORICE.

The decision below is also in conflict with this Court’s

decision in National Licorice, Co. v. NLRB, 309 U.S. 350

(1940), where this Court specifically rejected the conten-

tion that every party to a contract was an indispensable

party to a suit seeking to invalidate that contract. In that

case the NLRB ordered an employer not to enforce con-

tracts it had entered into with its employees, because

those contracts were procured by means of unfair labor

practices in violation of the National Labor Relations Act.

The issue before this Court was whether the Board had

the authority to issue such an order “in the absence of the

employees as parties to the proceeding.” Jd. at 351. This

Court held that because the labor contracts in question

were “the fruits” of unfair labor practices committed in

violation of the National Labor Relations Act, it was

nermissible to litigate the case in the absence of parties to

the contract even though the final result was to invalidate

the contract. Jd. at 361. In the present case, the Wilburs

contend that the cigarette tax contract, like the contracts

whose enforcement was enjoined in National Licorice, was

the fruit of violations of several statutory and constitu-

tional provisions; consequently the Tribe is not an indis-

pensable party to this suit, just as the employees were not

indispensable parties in National Licorice. Id. at 366.

In National Licorice, this Court noted that where

contractual rights may be affected by litigation, courts

ordinarily “refuse to adjudicate the rights of some of the

parties to the contract if the others are not before it.” Id. at

28

363. But in a proceeding to enforce “public rights, there is

little scope or need for traditional rules governing the

joinder of parties in litigation determining private rights.”

Id. “{D]ifferent considerations may apply even in private

litigation where the rights asserted arise independently of

any contract which an adverse party may have made with

another, not a party to the suit, even though their asser-

tion may affect the ability of the former to fulfill his

contract.” Id. Because the rights asserted by the NLRB

were not rights “arising upon or derived from the con-

tracts” between the employer and the absent employees,

this Court held that the absence of the employees did not

prevent the suit from going forward, and the argument

that the employees were indispensable parties was re-

jected. Id. at 364, 366.°

In the present case, the Wilburs were also seeking to

vindicate public rights. Their suit alleged violations of the

U.S. Constitution, the Washington Constitution, and

several federal statutes. The Ninth Circuit’s dismissal of

their suit pursuant to an inflexible rule that all contract

parties are indispensable parties conflicts with this Court’s

holding in National Licorice that they are not always

indispensable parties, especially when the suit seeks to

vindicate public rights.

* For examples of cases where courts have applied National

Licorice and held that the absence of parties to contracts did not require

dismissal of the plaintiff’s suit, see Kirkland v. New York State De-

partment of Correctional Services, 520 F.2d 420, 424 (2d Cir. 1975)

(“When litigation seeks the vindication of a public right, third persons

who may be adversely affected by a decision favorable to the plaintiff do

not thereby become indispensable parties.”), Jeffries v. Georgia Residen-

tial Finance Authority, 678 F.2d 919, 929 (5th Cir. 1982) (same);

Natural Resources Defense Council, Inc. v. Berklund, 458 F. Supp. 925,

933 (D..D.C. 1978), aff’d 609 F.2d 553 (D.C. Cir. 1979).

29

CONCLUSION

Over two hundred years ago, this Court acknowledged

that “the very essence of civil liberty ... consists in the

right of every individual to claim the protection of the

laws, whenever he receives injury,” and that one of the

“first duties of government is to afford that protection.”

Marbury v. Madison, 5 U.S. (1 Cranch) 137, 163 (1803).

Chief Justice Marshall traced this right to the “settled and

invariable principle ... that every right, when withheld,

must have a remedy, and every injury its proper redress.”

Id. Similarly, Hamilton defended the Constitution’s crea-

tion of an independent judiciary by reasoning “that there

ought always to be a constitutional method of giving

efficacy to constitutional provisions.” The Federalist, No.

80, p. 475 (C. Rossiter ed. 1961).

The decision below ignores this bedrock principle and

holds that the Wilbur plaintiffs may not seek redress for

constitutional and statutory wrongs done to them by

Washington State officials solely because the Swinomish

Tribe refuses to participate as a party in the lawsuit.

Using FRCP 19(b) and sovereign immunity as a sword, the

state officials and the Tribe have succeeded in entering

into a contract that neither the Wilburs, nor anyone else in

this country, may challenge in any court. The Tribe, fully

cognizant of the Wilburs’ suit, filed pleadings with the

District Court and advocated support for the positions

taken by the state officials and yet simultaneously de-

clined to intervene as a party in the suit. With the Tribe

choosing to sit on the sidelines in the passive role of

cheerleader for the Governor, together Tribe and the

Governor have perverted Rule 19(b)’s goal of preventing

unfair litigation in the absence of a party whose interests

might be impaired. The Ninth Circuit, woodenly applying

a per se rule that all parties to contracts are indispensable

_ parties in suits to invalidate such contracts, has permitted

the Governor’s tactic to succeed.

30

The highest courts in New York and Wisconsin, and

the Tenth Circuit, in similar circumstances, have ruled

that Indian tribes should not be allowed to use their

immunity to suit as a means of preventing everyone in the

world from challenging the constitutional and statutory

legality of their interactions with government officials.

Petitioners ask this Court to decide whether the approach

taken by these courts is the proper course, and whether

failure to follow this approach would violate the _petition-

ers’ right to seek judicial redress for their grievances

under the Petition Clause of the First Amendment. For the

reasons stated above, petiticners ask this Court to grant a

writ of certiorari to review the decision entered below.

DATED this 6th day of December, 2005.

CARNEY BADLEY SPELLMAN, PS.

JAMES E. LOBSENZ*

JOHN C. DIPPOLD

*Counsel of Record

Attorneys for Petitioner

A-1

APPENDIX A

2005 WL 2174485

United States Court of Appeals, Ninth Circuit.

Marvin WILBUR, Jr., Trustee of the Salish Trust

dba Trading Post at March Point; Marvin Wilbur, Sr.;

Joan Wilbur, Plaintiffs-Appellants,

v.

Gary LOCKE, Governor of the State of Washington;

Frederick Kiga, Director, Revenue Department of the

State of Washington; Gary O’Neil, Assistant Director,

Revenue Department of the State of Washington;

Revenue Department of the State of Washington;

State of Washington, Defendants-Appellees.

No. 03-35911.

Argued and Submitted May 6, 2005.

Filed Sept. 9, 2005.

James E. Lobsenz. Carney Badley Spellman, PS., Seattle,

WA, for the plaintiffs-appellants.

Christine O. Gregoire, Attorney General, and David M.

Hankins, Assistant Attorney General, Olympia, WA, for the

defendants-appellees.

Appeal from the United States District Court for the

Western District of Washington; Robert S. Lasnik, District

Judge, Presiding. D.C. No. CV-03-00873-RSL.

Before: WALLACE, SILVERMAN, and PAEZ, Circuit

Judges.

WALLACE, Senior Circuit Judge:

The plaintiffs sought relief from an anticipated

contract between the State of Washington and the Swi-

nomish Indian Tribe (Tribe) regarding taxation of cigarette

sales by Indian retailers. The district court held that the

A-2

Tax Injunction Act (TIA), 28 U.S.C. § 1341, barred the action

and dismissed it. The district court had jurisdiction over this

timely appeal pursuant to 28 U.S.C. §§ 1331 and 2201, and

we have jurisdiction pursuant to 28 U.S.C. § 1291. We affirm,

but on grounds different from the district court.

I.

Washington law authorizes the Governor “to enter

into contracts concerning the sale of cigarettes” with

certain Indian tribes. Wash. Rev.Code § 43.06.450. Such

contracts must “provide for a tribal cigarette tax in lieu of

all state cigarette taxes and state and local sales and use

taxes on sales of cigarettes in Indian country by Indian

retailers,” but the tribe may “allow an exemption for sales

to tribal members.” Jd. § 43.06.455(3). The contracts must

also “provide that the tribal cigarette tax rate be one

hundred percent of the state cigarette and state and local

sales and use taxes within three years of enacting the

tribal tax.” Id. § 43.06.460. Tax revenue retained by a tribe

must be used for certain statutorily defined “essential

government services.” Id. § 43.06.455(8), (14)(a). Thus,

cigarette tax contracts must provide that the state will not

impose any tax, and must require a tribe to collect taxes

effectively equal to the previously imposed state taxes, and

use the revenue for essential government services. In

addition, cigarette tax contracts must include a number of

provisions regulating Indian retailers’ activities, such as

provisions requiring tax stamps, governing the purchase of

cigarettes by retailers, and ensuring compliance. /d.

§ 43.06.455(4), (5), (7).

Marvin Wilbur, Jr., Marvin Wilbur, Sr., and Joan Wilbur

are enrolled members of the Tribe and the operators of a

A-3

retail store located on trust land within the Swinomish

Indian Reservation. In April 2003, the Wilburs filed an action

against various Washington officials and the Department of

Revenue (State) alleging that the State and the Tribe were

negotiating a cigarette tax contract. They alleged that the

statutes governing cigarette tax contracts and the proposed

agreement violated the Indian Commerce Clause, U.S.

Const. art. I, § 8, cl. 3, the Sherman Antitrust Act, 15 U.S.C.

§§ 7-276, the Treaty of Point Elliot, 12 Stat. 927 (Jan. 22,

1855), and a host of other constitutional and statutory

provisions. The Tribe was not named as a defendant.

The complaint requested, among other relief, a de-

claratory judgment that Wash. Rev.Code §§ 43.06.450,

43.06.455, and 43.06.460 are “void, unlawful and unen-

forceable as applied to cigarettes transported, distributed,

received or sold by Plaintiffs’ retail businesses located

within the exterior boundaries of the Swinomish reserva-

tion”; an injunction “preventing the Defendants from

enforcing any provision of the statutes or contracting in

any way with the Swinomish Tribe or any person or entity

regarding a cigarette tax on any cigarettes to be received

or sold by Indian-owned retail businesses within the

exterior boundaries of the Swinomish Reservation”; and a

“declaration that any agreement or contract entered into

by the Swinomish Tribe with Defendants is invalid when

attempted to be imposed or any way applied to Plaintiffs.”

The State filed a motion to dismiss the Wilburs’

complaint, arguing that the Wilburs lacked standing, that

the TIA and the Eleventh Amendment barred the Wilburs’

action, that the Tribe was an indispensable party, and that

the ce mplaint failed to state a claim for which relief could

be granted. While that motion was pending, the State and

the Tribe executed a cigarette tax contract (Compact).

A-4

However, because the parties did not inform the district

court of this fact, the court was under the impression that

the Compact was still awaiting approval by the Governor

when it granted the State’s motion to dismiss. Based

largely on this misunderstanding, the court concluded that

the Tribe was not a necessary party. The court asserted

that the Wilburs “likely” lacked standing, but based its

decision on the proposition that the TIA deprived it of

subject matter jurisdiction over the Wilburs’ suit. There-

fore the district court dismissed the action without dis-

cussing the State’s other arguments.

II.

The State urges us to affirm the district court’s ruling

that the TIA bars this action, or to affirm on one of the

other grounds that it argued in the district court or on the

additional ground that the case is now moot. See Wolfe v.

Strankman, 392 F.3d 358, 362 (9th Cir.2004) (“We may

affirm the district court’s dismissal on any ground sup-

ported by the record”). Because we now know facts, undis-

closed to the district court, bringing into question whether

the Tribe is an indispensable party pursuant to Rule 19,

we first determine whether we may proceed directly to the

Rule 19 issue or whether we must first address jurisdic-

tional issues.

The Supreme Court has “adhered to the requirement

that a court address questions pertaining to its or a lower

court’s jurisdiction before proceeding to the merits.” Tenet

v. Doe, _ _U.S.__, __n. 4, 125 S.Ct. 1230, 1235 n. 4, 161

L.Ed.2d 82 (2005), citing Steel Co. v. Citizens for a Better

Environment, 523 U.S. 83, 94-95, 118 S.Ct. 1003, 146

L.Ed.2d 210 (1998). However,

A-5

{[w]hile Steel Co. reasoned that subject-matter ju-

risdiction necessarily precedes a ruling on the

merits, the same principle does not dictate a se-

quencing of jurisdictional issues. “{A] court that

dismisses on ... non-merits grounds such as...

personal jurisdiction, before finding subject-

matter jurisdiction, makes no assumption of law-

declaring power that violates the separation of

powers principles underlying Mansfield [C. &

L.M. Ry. Co. v. Swan, 111 U.S. 379, 4 S.Ct. 510,

28 L.Ed. 462 (1884)] and Steel Company.” It is

hardly novel for a federal court to choose among

threshold grounds for denying audience to a case

on the merits. Thus, as the Court observed in

Steel Co., district courts do not overstep Article

III limits when they decline jurisdiction of state-

law claims on discretionary grounds without de-

termining whether those claims fall within their

pendent jurisdiction, or abstain under Younger v.

Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d

669, without deciding whether the parties pre-

sent a case or controversy.

Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 584-85,

119 S.Ct. 1563, 143 L.Ed.2d 760 (1999) (citations omitted);

see also Kowalski v. Tesmer, 543 U.S. 125, & n. 2, 125

S.ut. 564, 567 & n.2, 160 I Ed.2d 519 (2004) (assuming

existence of Article III standing and addressing “alternative

threshold question” whether prudential requirements of

standing were satisfied).

The difficulty here is that it is unclear whether a Rule

19 issue is the sort of “threshold” question to which a court

may directly proceed without first addressing other

“threshold” questions. We are unaware of any case discuss-

ing how Rule 19 fits within the Steel Co./RuArgas scheme,

and the parties have not briefed the issue. Moreover, it is

A-6

not always easy to determine whether a particular issue is

the type of “threshold” matter which, if decided adversely

to the plaintiff, obviates the need to address other thresh-

old questions. Compare Dominguez-Cota v. Cooper Tire &

Rubber Co., 396 F.3d 650, 652-54 (5th Cir.2005) (holding

that “district court erred in dismissing the case on forum

non conveniens grounds without first determining

whether it had subject matter jurisdiction”) with Mone-

gasque De Reassurances S.A.M. v. Nak Naftogaz of

Ukraine, 311 F.3d 488, 497-98 (2d Cir.2002) (holding that

court could pass over question of statutory subject matter

jurisdiction and “go[} directly to [a] forum non conveniens

issue”); compare also Calderon v. Ashmus, 523 U.S. 740,

745 & n. 2, 118 S.Ct. 1694, 140 L.Ed.2d 970 (1998) (stating

that court “must first address” whether action presented

Article III case or controversy before addressing Eleventh

Amendment issue) and Cox v. City of Dallas, 256 F.3d 281,

303-04 (5th Cir.2001) (stating that Article III standing

“must be examined before the Eleventh Amendment”) with

Snoeck v. Brussa, 153 F.3d 984, 988 (9th Cir.1998) (“Be-

cause the Eleventh Amendment bar conclusively ends this

dispute we need not address the related issue of [Article

III] standing which the district court found plaintiffs

lacked”) and Pederson v. La. State Univ., 213 F.3d 858, 866

(5th Cir.2000) (addressing issues of Article III standing

and state sovereign immunity “in no particular order”).

Although there is no clear precedent, we conclude that

jurisdictional issues should be decided before reaching the

Rule 19 issue. This is so because questions of subject

matter jurisdiction, “t.e., the courts’ statutory or constitu-

tional power to adjudicate the case,” Steel Co., 523 U.S. at

89, 118 S.Ct. 1003, must generally be decided before the

merits. See Ruhrgas, 526 U.S. at 577, 119 S.Ct. 1563 (“[A]

A-7

federal court may not hypothesize subject-matter jurisdic-

tion for the purpose of deciding the merits”). Thus, we

must decide the questions of standing and mootness, both

of which “go[] to the Article III jurisdiction of this Court

and the courts below,” Arizonans for Official English v.

Arizona, 520 U.S. 43, 67, 117 S.Ct. 1055, 137 L.Ed.2d 170

(1997), as well as the question whether the TIA barred

subject matter jurisdiction. See A ‘kansas v. Farm Credit

Servs. of Cent. Ark., 520 U.S. 821, 825, 117 S.Ct. 1776, 138

L.Ed.2d 34 (1997) (“We have interpreted and applied the

Tax Injunction Act as a ‘jurisdictional rule’ and a ‘broad

jurisdictional barrier’” (quoting Moe v. Confederated

Salish & Kootenai Tribes of Flathead Reservation, 425 U.S.

463, 470, 96 S.Ct. 1634, 48 L.Ed.2d 96 (1976))). We have

also held that “we may not bypass [an Eleventh Amend-

ment] issue in favor of deciding the case on the merits.”

Cardenas v. Anzai, 311 F.3d 929, 934 n. 2 (9th Cir.2002),

citing Cal. Franchise Tax Bd. v. Jackson (In re Jackson),

184 F.3d 1046, 1048 (9th Cir.1999). Thus, we will decide

certain jurisdictional issues before turning to the Rule 19

question.

IIT.

“To satisfy Article III’s standing requirements, a

plaintiff must show (1) she has suffered an ‘injury in fact’

that is (a) concrete and particularized and (b) actual or

imminent, not conjectural or hypothetical; (2) the injury is

fairly traceable to the challenged action of the defendant;

and (3) it is likely, as opposed to merely speculative, that

the injury will be redressed by a favorable decision.”

Bernhardt v. County of Los Angeles, 279 F.3d 862, 868-69

(9th Cir.2002), quoting Friends of Earth, Inc. v. Laidlaw

Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180-81, 120 S.Ct.

A-8

693, 145 L.Ed.2d 610 (2000). “Standing is a question of law

reviewed de novo.” Jd. at 867.

“A plaintiff has the burden of establishing the ele-

ments required for standing, and ‘[flor purposes of ruling

on a motion to dismiss for want of standing, both the trial

and reviewing courts must accept as true all material

allegations of the complaint, and must construe the

complaint in favor of the complaining party.” Takhar v.

Kessler, 76 F.3d 995, 1000 (9th Cir.1996), quoting Warth v.

Seldin, 422 U.S. 490, 501, 95 S.Ct. 2197, 45 L.Ed.2d 343

(1975).

“As with all questions of subject matter jurisdiction

except mootness, standing is determined as of the date of

the filing of the complaint.... The party invoking the

jurisdiction of the court cannot rely on events that un-

folded after the filing of the complaint to establish its

standing.” Kitty Hawk Aircargo, Inc. v. Chao, 418 F.3d 453,

460 (5th Cir.2005) (quotation marks and citations omit-

ted); see also Lujan v. Defenders of Wildlife, 504 U.S. 555,

570 n. 4, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) (stating

that “‘[t]he existence of federal jurisdiction ordinarily

depends on the facts as they exist when the complaint is

filed’” and rejecting argument that events which occurred

after filing “retroactively created a redressability (and

hence a jurisdiction) that did not exist at the outset”

(quoting Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S.

826, 830, 109 S.Ct. 2218, 104 L.Ed.2d 893 (1989) (empha-

sis in Lujan))). Thus, we examine whether the Wilburs had

standing under the facts extant at the time of filing, when

the Compact had not yet been signed.

The complaint alleged anticipated injuries from two

types of provisions in the proposed Compact. The first

A-9

anticipated injury concerns provisions of the Compact

imposing taxes on sales to other tribe members and the

second anticipated injury relates to compliance with the

regulatory scheme articulated in Wash. Rev.Code

§ 43.06.455(4), (5), (7). We need not get to the first if we

conclude that the Wilburs had standing to seek prospec-

tive relief to prevent the regulatory burden. We therefore

turn to that issue.

The regulations contemplated by the proposed Com-

pact would cause the Wilburs cognizable economic injury

by forcing them to incur additional costs. See Clark v. City

of Lakewood, 259 F.3d 996, 1007 (9th Cir.2001) (““‘The

Court routinely recognizes ... economic injury resulting

from governmental actions ... as sufficient to satisfy the

Article III ‘injury in fact’ requirement’” (quoting Clinton v.

City of New York, 524 U.S. 417, 432-33, 118 S.Ct. 2091, 141

L.Ed.2d 393 (1998))). The district court stated that be-

cause the Compact had not been executed, the injury was

“likely” not “actual or imminent.” However, the Wilburs

sought a declaration that the challenged statutes were

invalid, an injunction preventing the consummation of any

cigarette tax contract pursuant to those statutes, and a

declaration that any contract actually executed was

invalid. While plaintiffs seeking injunctive and declaratory

relief “must show that the feared harm is ‘actual or immi-

nent, not conjectural or hypothetical,’ ‘ijo]Jne-does not have

to await the consummation cf threatened injury’ before

challenging a statute.” Canatella v. State of California,

304 F.3d 843, 852 (9th Cir.2002), quoting Lujan, 504 U.S.

at 560, 112 S.Ct. 2130, and Babbitt v. United Farm Work-

ers Natl Union, 442 U.S. 289, 298, 99 S.Ct. 2301, 60

L.Ed.2d 895 (1979). Nothing in the complaint suggests

that, at the time of filing, the Compact’s consummation

~ A-10

was not “‘certainly impending.’” Lujan, 504 U.S. at 564

n. 2, 112 S.Ct. 2130, quoting Whitmore v. Arkansas, 495

U.S. 149, 158, 110 S.Ct. 1717, 109 L.Ed.2d 135 (1990). On

the contrary, the complaint alleged that the State and

Tribe were in negotiations and that the Compact would be

executed “within the near future.” At the pleading stage,

we accept this allegation as true. See Takhar, 76 F.3d at

1000. Thus, the prospect of injury to the Wilburs from the

proposed Compact was sufficiently imminent to satisfy the

requirement of an injury in fact.

The causation and redressability requirements are

also satisfied. True, the Wilburs’ injury was partly depend-

ent on the actions of the Tribe, in the sense that the

Compact could not be executed without its participation.

See Yesler Terrace Cmty. Council v. Cisneros, 37 F.3d 442,

446 (9th Cir.1994) (“[Ijt usually is difficult to establish

causation and redressibility when a plaintiff’s alleged

injury depends on the actions of a third party not before

the court”). But the opposite is also true: had the State not

enacted statutes authorizing cigarette tax contracts and

negotiated with the Tribe, the prospect of injury from the

proposed Compact would not have materialized. Thus, the

Wilburs’ injuries are adequately traceable to the State’s

actions. See Artichoke Joe’s v. Norton, 216 F.Supp.2d 1084,

1104 (E.D.Cal.2002) (where plaintiffs sued Governor and

sought declaration that gaming compacts between state

and Indian tribes violated federal law, causation was

satisfied because “the Governor approved the compacts

that gave rise to the plaintiffs’ injuries”), aff’d, 353 F.3d

712, 719 n. 9 (9th Cir.2003) (agreeing with district court’s

standing analysis). Indeed, we have held that causation

was satisfied at the pleading stage where the connection

between the defendants’ conduct and the plaintiff’s injury

A-11

was more tenuous than that involved here. See Bernhardt,

279 F.3d at 869 (where plaintiff alleged that “[a]s a direct

result of the [County’s policy of settling civil rights actions

for a lump sum including attorney fees], plaintiff has been

unable to obtain a civil rights lawyer,” plaintiff’s “pleading

adequately established the causation element required for

standing”).

Redressability likewise is satisfied. “Plaintiffs need

not demonstrate that there is a ‘guarantee’ that their

injuries will be redressed by a favorable decision... ..

{Pllaintiffs ‘must show only that a favorable decision is

likely to redress [their injuries], not that a favorable

decision will inevitably redress [their injuries].’” Graham

v. FEMA, 149 F.3d 997, 1003 (9th Cir.1998) (citation

omitted). The Wilburs’ requests for prospective relief, if

granted, would have been likely to redress the injury from

the anticipated Compact. We hold that the requirements of

Article III standing are satisfied.

IV.

The State contends that the case is moot because the

Wilburs sought an injunction barring the State from

consummating the Compact with the Tribe, and the

Compact has now been executed. However, the Wilburs

sought not only such an injunction, but also declaratory

relief voiding several statutes and any cigarette tax

contract executed by the State and Tribe. “(T]he contro-

versy regarding [these requests for relief] is as ‘live’ now as

it was when [the Wilburs] first sought relief.” S. Pac.

Transp. Co. v. Pub. Util. Comm’n, 9 F.3d 807, 810 (9th

Cir.1993). Thus, although the Wilburs’ request for an

injunction might be moot, this does not prevent us from

A-12

considering other requests for relief which are not moot.

See Powell v. McCormack, 395 U.S. 486, 496 n. 8, 89 S.Ct.

1944, 23 L.Ed.2d 491 (1969) (“Where several forms of relief

are requested and one of these requests subsequently

becomes moot, the Court has still considered the remain-

ing requests”); S. Pac. Transp. Co., 9 F.3d at 810 (although

one claim was moot, court “may address the remaining,

live claims”).

V.

The district court held that the TIA deprived it of

subject matter jurisdiction over the Wilburs’ action. We

review the district court’s dismissal for lack of subject

matter jurisdiction, as well as its interpretation of a

federal statute, de novo. See May Trucking Co. v. Oregon

Dep't of Transp., 388 F.3d 1261, 1265 (9th Cir.2004). The

TIA provides: ©

The district courts shall not enjoin, suspend or

restrain the assessment, levy or collection of any

tax under State law where a plain, speedy and

efficient remedy may be had in the courts of such

State.

28 U.S.C. § 1341.

In dismissing the action, the district court did not

conclude that the Wilburs sought to “enjoin, suspend or

restrain the assessment, levy or collection” of a tax under

Washington law. Rather, the court held that the “antici-

pated tribal tax arises under state law for purposes of the

Tax Injunction Act” because, among other reasons, “[i]n

the absence of [the anticipated Compact] Indian retailers

selling cigarettes to individuals who are not members of

the Tribe could be required to collect state taxes on such

A-13

transactions.” See United States v. Baxer, 63 F.3d 1478,

1489 (9th Cir.1995) (“[T]he right of a state to impose and

enforce a tax on cigarettes sold by Indians to nontribal

members is . . . clearly established”).

The district court’s focus on the anticipated Tribal tax

misses the point. Even accepting the premise that the

Wilburs’ suit sought to “enjoin, suspend or restrain the

assessment, levy or collection” of the Tribal tax (which the

Wilburs dispute), the anticipated Tribal tax was not a

State tax. If the Tribe imposed a tax independently of any

contract with the State and retained the revenues, the TIA

would not apply to a suit seeking to “enjoin, suspend or

restrain the assessment, levy or collection” of that tax for

the obvious reason that the Tribe is not a state. Cf. Blue-

beard’s Castle, Inc. v. Gov't of the Virgin Islands, 321 F.3d

394, 397 & n. 5 (3d Cir.2003) (TIA does not apply to Virgin

Islands because it is not a state). We are aware of no

authority for the proposition that a tax under Tribal law is

transformed into a tax “under state law” simply because

the Tribe agrees to enact that law in exchange for a

promise by the State not to levy similar taxes. Such an

agreement does not alter the fact that the Tribe remains

the taxing authority and the sovereign to which tax

payments are remitted. Thus, the question is not whether

the Wilburs sought to “enjoin, suspend or restrain the

assessment, levy or collection” of a Tribal tax, but whether

they sought to “enjoin, suspend or restrain the assess-

ment, levy or collection” of a Washington tax.

We are assisted by the Supreme Court’s decision in

Hibbs v. Winn, 542 U.S. 88, 124 S.Ct. 2276, 159 L.Ed.2d

172 (2004). In Hibbs, the plaintiffs challenged a state law

authorizing certain tax credits, and sought to enjoin the

law’s operation, on Establishment Clause grounds. See id.

A-14

at 2281. The Court rejected the position that the TIA

“prevent(s} federal-court interference with all aspects of

tax administration,” id. at 2288 (quotation marks omit-

ted), and held that the TIA did not bar the plaintiffs’ action

“because that action, if successful, ‘would result in the

state’s receiving more funds that could be used for the

public benefit.’” May Trucking, 388 F.3d at 1267, quoting

Hibbs, 124 S.Ct. at 2283. Thus, “[a]fter Hibbs, the disposi-

tive question in determining whether the Act’s jurisdic-

tional bar applies is whether ‘[flederal-court relief ...

would have operated to reduce the flow of state tax reve-

nue.’” Id., quoting Hibbs, 124 S.Ct. at 2288. Although

Hibbs had not been decided at the time of the district

court’s decision, our decision which Hibbs affirmed, Winn

v. Killian, 307 F.3d 1011(9th Cir.2002), had been.

Here, the Wilburs sought a declaration of the invalid-

ity of the statutes governing cigarette tax contracts, an

injunction preventing the State from entering into any

contract, and a declaration that any agreement actually

executed was void. This relief would not have operated to

reduce the flow of Washington’s tax revenues; instead, it

would have prevented the State from agreeing not to

impose a tax. Thus, the district court erroneously dis-

missed the case on TIA grounds.

The State argues that the TIA applies because the

cigarette tax contract scheme “benefits the State by saving

the State resources in enforcing collection of the state

taxes,” and points to a legislative finding that cigarette tax

contracts will “enhance enforcement of the state’s cigarette

tax law, ultimately saving the state money and reducing

conflict.” Wash. Rev.Code § 43.06.450 (emphasis added).

Because the Wilburs’ action, if successful, might harm the

public fisc by depriving the State of the benefits of cigarette

A-15

tax contracts, the State submits that it should be barred

by the TIA. But the TIA proscribes only those actions

which would operate to decrease a state’s tax revenue, see

May Trucking, 388 F.3d at 1267, not any lawsuit which

might place financial burdens upon the State. Whatever

impact the Wilburs’ action might have on the State’s

litigation and enforcement costs, it surely will not reduce

the State’s tax revenues. Further, the State’s prediction

about how this action might affect the State’s financial

bottom line in the future is too speculative to circumvent

the holding of Hibbs.

Nor do principles of comity bar this lawsuit. The

Supreme Court has relied on such principles “to preclude

original federal-court jurisdiction only when plaintiffs

have sought district-court aid in order to arrest or coun-

termand state tax collection.” Hibbs, 124 S.Ct. at 2289

n. 9. The Wilburs seek no such relief.

VI.

The State also argues that the Eleventh Amendment

precludes the Wilburs’ action, another jurisdictional

hurdle we must discuss, even though the district court did

not address this argument.

“The Eleventh Amendment bars suits against a state

or its agencies, regardless of the relief sought, unless the

state unequivocally consents to a waiver of its immunity.”

Yakama Indian Nation v. State of Wash. Dep’t of Revenue,

176 F.3d 1241, 1245 (9th Cir.1999). The Wilburs concede

that the State has not waived its immunity and that all

claims against the state and its agency, the Department of

Revenue, must therefore be dismissed.

A-16

However, the Wilburs properly contend that the

Eleventh Amendment does not bar their claims for de-

claratory and injunctive relief against the Governor and

the Director and Assistant Director of the Department of

Revenue. “Since the Supreme Court’s decision in Ex parte

Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714. . . (1908),

courts have recognized an exception to the Eleventh

Amendment bar for suits for prospective declaratory and

injunctive relief against state officers, sued in their official

capacities, to enjoin an alleged ongoing violation of federal

law.” Agua Caliente Band of Cahuilla Indians v. Hardin,

223 F.3d 1041, 1045 (9th Cir.2000); see also Los Angeles

County Bar Ass’n v. Eu, 979 F.2d 697, 704 (9th Cir.1992)

(“(T]he Eleventh Amendment does not bar actions seeking

only prospective declaratory or injunctive relief against

state officers in their official capacities”).

“(I]Jn determining whether ‘the doctrine of Ex Parte

Young avoids an Eleventh Amendment bar to suit, a court

need only conduct a straightforward inquiry into whether |

[the] complaint alleges an ongoing violation of federal law

and seeks relief properly characterized as prospective.’”

ACS of Fairbanks, Inc. v. GCI Communication Corp., 321

F.3d 1215, 1216-17 (9th Cir.2003) (Order), quoting Verizon

Md., Inc. v. Pub. Serv. Comm’n, 535 U.S. 635, 645, 122

S.Ct. 1753, 152 L.Ed.2d 871 (2002). The complaint alleged

that the challenged statutes authorize the state to enter

into agreements which violate federal law and, accord-

ingly, sought a declaration that the statutes were invalid,

an injunction preventing the state from utilizing the au-

thority granted by those statutes to enter into any agree-

ment, and a declaration that any agreement entered was

invalid. The complaint therefore “alleges an ongoing viola-

tion of federal law and seeks relief properly characterized

A-17

as prospective.” Id.; see also Artichoke Joe’s, 216 F.Supp.2d

at 1109-11 (Ex Parte Young permitted claim against

Governor seeking declaration that gaming compacts

between state and Indian tribes violated federal law).

Thus, the State of Washington and its Department of

Revenue must be dismissed but not the individual gov-

ernment officers.

VII.

With these jurisdictional issues behind us, we can now

address the Rule 19 question. In the district court, the

State argued that the action should be dismissed pursuant

to Federal Rule of Civil Procedure 12(b)(7) because the

Tribe is an indispensable party pursuant to Rule 19. The

district court held that the Tribe was not a necessary

party. We generally review for an abuse of discretion the

district court’s decision regarding joinder, but review de

novo any legal conclusions underlying that decision. See

Disabled Rights Action Comm. v. Las Vegas Events, Inc.,

375 F.3d 861, 879 (9th Cir.2004).

Application of Rule 19 involves “three successive

inquiries.” EEOC v. Peabody W. Coal Co., 400 F.3d 774,

779 (9th Cir.2005).

First, the court must determine whether a

nonparty should be joined under Rule 19{a). We

and other courts use the term “necessary” to de-

scribe those “[plersons to [ble [jjJoined if

If an absentee is a necessary party under

Rule 19(a), the second stage is for the court to de-

termine whether it is feasible to order that the

absentee be joined....

A-18

Finally, if joinder is not feasible, the court

must determine at the third stage whether the

case can proceed without the absentee, or

whether the absentee is an “indispensable party”

such that the action must be dismissed ... . Rule

19 uses “the word ‘indispensable’ only in a con-

clusory sense, that is, a person is ‘regarded as

indispensable’ when he cannot be made a party

and, upon consideration of the factors [in Rule

19(b)], it is determined that in his absence it

would be preferable to dismiss the action, rather

than to retain it.”

Id. at 779-80 (citations omitted). We address each of these

inquiries in turn.

A.

The State argues that the Tribe is a “necessary” party

because the Tribe “claims an interest relating to the

subject of the action and is so situated that the disposition

of the action in the [Tribe’s] absence may ... as a practical

matter impair or impede the [Tribe's] ability to protect

that interest.” Fed.R.Civ.P. 19(a)(2)(i). In deciding whether

Rule 19(a)(2)(i) is satisfied, we “must determine whether

the absent party has a legally protected interest in the

suit,” and, if so, whether “that interest will be impaired or

impeded by the suit.” Makah Indian Tribe v. Verity, 910

F.2d 555, 558 (9th Cir.1990).

The district court, laboring under the mistaken

impression that the Compact was still awaiting approval

from the Governor, concluded that “[b]ecause the subject of

this action does not affect the Tribe’s interest in an exist-

ing, enforceable agreement, ... the interest claimed on

behalf of the tribe is [not] ‘legally protected.’” We need not

A-19

determine whether the court correctly held that the Tribe

had no “legally protected” interest in this action prior to

execution of the Compact, but instead determine whether

the Tribe has such an interest now that we are aware that

the Compact was in effect at the time of the district court

decision. Because Federal Rule of Evidence 201 permits us

to “take judicial notice of the records of state [entities] and

other undisputed matters of public record,” we may take

notice of the executed Compact even though it was not in

the district court record. Disabled Rights Action Comm.,

375 F.3d at 866 n. 1 (taking notice of licensing agreements

to which state agency was a party that had not been

entered into district court record).

Here, the Wilburs must establish the illegality of the

Compact in order to succeed on the merits of any of their

claims. Because the Tribe has an interest in retaining the

rights granted by the Compact, the requirement of a

“legally protected” interest is satisfied. See Dawavendewa

v. Salt River Project Agric. Improvement & Power Dist.,

276 F.3d 1150, 1156-57 (9th Cir.2002) (holding that tribe

was necessary party under Rule 19(a)(2) where tribe

“claim|[ed} a legally protected interest in its contract rights

with [the defendant}”).

In addition, disposition of this action in the Tribe’s

absence may impair or impede the Tribe’s ability to protect

its interest. If the Compact is invalidated, the State would

be released from its contractual obligation to refrain from

taxing cigarette sales by Indian retailers to non-Indians

and non-Tribe members. If the State resumed imposing

such taxes, the Tribe would be forced to choose between

double-taxing its own retailers or foregoing tax revenue for

essential government services. Thus, “the instant litiga-

tion threatens to impair the [Tribe’s} contractual interests,

A-20

and ... its fundamental economic relationship with [the

State].” Jd. at 1157. As we stated in Dawavendewa, it is a

“fundamental principle” that “a party to a contract is

necessary, and if not susceptible to joinder, indispensable

to litigation seeking to decimate that contract.” Jd; see

also Manybeads v. United States, 209 F.3d 1164, 1166 (9th

Cir.2000) (where plaintiff sought to “undo[]” agreements

to which tribe was a party, tribe “qualifie[d] as a necessary

party under both parts of Rule 19(a)”); Kescoli v. Babbitt,

101 F.3d 1304, 1310 (9th Cir.1996) (where plaintiff’s

action would affect agreements to which tribes were

parties, tribes were necessary pursuant to Rule

19(a)(2)(i)); Northrop Corp. v. McDonnell Douglas Corp.,

705 F.2d 1030, 1044 (9th Cir.1983) (“[A]ll parties who may

be affected by a suit to set aside a contract must be pre-

sent”); Lomayaktewa v. Hathaway, 520 F.2d 1324, 1325

(9th Cir.1975) (“No procedural principle is more deeply

imbedded in the common law than that, in an action to set

aside a lease or a contract, all parties who may be affected

by the determination of the action are indispensable”); 4

James Wm. Moore et al., Moore’s Federal Practice § 19.06

(3d ed. 2005) (“As a general rule, all parties to a contract

will be necessary in an action to set aside the contract”).

The Wilburs argue that the Tribe is not necessary

because the State can adequately represent its interest.

See Washington v. Daley, 173 F.3d 1158, 1167 (9th

Cir.1999) (“As a practical matter, an absent party’s ability

to protect its interest will not be impaired by its absence

from the suit where its interest will be adequately repre-

sented by existing parties to the suit”). We have held,

however, that absent tribes’ interests were not adequately

represented by a state in a case similar to this one. In

American Greyhound Racing, Inc. v. Hull, 305 F.3d 1015,

A-21

1018 (9th Cir.2002), plaintiffs “challenge[d] the legality of

the [Arizona] Governor’s actions in negotiating new

gaming compacts with Indian tribes, or in extending the

tribes’ existing compacts.” We held that the Governor could

not adequately represent the absent tribes because, among

other reasons, “the State and the tribes have often been

adversaries in disputes over gaming, and the State owes

no trust duty to the tribes.” Jd. at 1023 n. 5. Here, too, the

Wilburs challenge the state’s actions in entering into

agreements with the Tribe; the Tribe and the state have

been adversaries in disputes over the subject of those

agreements in the past (indeed, resolution of a “long-

standing disagreement” regarding cigarette taxation was

one of purposes recited in the Compact’s preamble); and

the state owes the Tribe no trust duty that might ensure

vindication of the Tribe’s interest. Hull thus requires us to

reject the Wilburs’ contention.

The Wilburs argue, however, that the state is an

adequate representative because the state and the Tribe

“have the exact same interest in seeing to it that their

contract is not invalidated.” This argument assumes too

much. Virtually any party to a contract would prefer to see

that contract preserved. Under the Wilburs’ logic, one

seeking to nullify an agreement could simply sue one of

the signatories and then argue that the remaining signa-

tories were not necessary because the existing defendant

would “adequately represent” their interest in defending

the contract. However, the general rule is exactly the oppo-

site: all parties to a contract are necessary in litigation

seeking to “decimate” that contract. See Dawavendewa, 276

F.3d at 1157. There is no reason to depart from that general

rule in this case. We conclude that the State cannot

A-22

adequately represent the interests of the Tribe, and thus

the Tribe is a necessary party pursuant to Rule 19(a)(2)(i).

B.

We now address whether joinder is feasible. “Feder-

ally recognized Indian tribes enjoy sovereign immunity

from suit, and may not be sued absent an express and

unequivocal waiver of immunity by the tribe or abrogation

of tribal immunity by Congress.” Jd. at 1159 (citations

omitted). The Wilburs offer no persuasive argument that

the Tribe’s immunity has either been waived or abrogated.

Accordingly, joinder is not feasible. See id.

C.

We now address “whether in equity and good con-

science the action should proceed among the parties before

it, or should be dismissed, the absent person being thus

regarded as indispensable.” Fed.R.Civ.P. 19(b). In making

this determination, we consider four issues:

first, to what extent a judgment rendered in the

person’s absence might be prejudicial to the per-

son or those already parties; second, the extent to

which, by protective provisions in the judgment,

by the shaping of relief, or other measures, the

prejudice can be lessened or avoided; third,

whether a judgment rendered in the person’s ab-

sence will be adequate; fourth, whether the

plaintiff will have an adequate remedy if the ac-

tion is dismissed for nonjoinder.

Id.

A-23

The first three tests point toward dismissal. “(T]he

first factor of prejudice, insofar as it focuses on the absent

party, largely duplicates the consideration that made a

party necessary under Rule 19(a): a protectible interest

that will be impaired or impeded by the party’s absence.”

Hull, 305 F.3d at 1024-25; see also Dawavendewa, 276 F.3d

at 1162 (“The prejudice to the Nation stems from the same

impairment of legal interests that makes the Nation a

necessary party under Rule 19(a)(2)(i)”). If the Compact is

invalidated in the Tribe’s absence, the Tribe will be preju-

diced to a great extent.

As to the second test, it is not possible to lessen or

avoid any prejudice by the shaping of relief or protective

provisions in the judgment. The Wilburs want nothing less

than nullification of the Compact. If they succeed, the

Tribe will be deprived of the contractual benefits for which

it bargained. Moreover, although the Wilburs stress that

the Tribe could have intervened if it wished, “we cannot

require the [Tribe] to intervene to minimize the potential

prejudice, since intervention would require a waiver of

sovereign immunity.” Pit River Home & Agric. Coop. Ass’n

v. United States, 30 F.3d 1088, 1102 (9th Cir.1994).

The third test, whether a judgment rendered in the

Tribe’s absence will be adequate, also “does not favor the

plaintiffs,” because if the Compact is invalidated, the

Tribe’s “protectible interests [would be] impaired.” Hull,

305 F.3d at 1025; see also Dawavendewa, 276 F.3d at 1162

(no partial relief adequate when “[a]ny type of injunctive

relief necessarily results in ... prejudice to [absent

tribe]”); Pit River Home, 30 F.3d at 1102 (adequate judg-

ment not possible when plaintiff’s claims could not be

addressed without prejudicing absent party).

A-24

The fourth test supports proceeding in the Tribe’s

absence, as it is unclear whether the Wilburs will have an

adequate remedy if the actien is dismissed. Nonetheless,

even assuming the Wilburs have no other forum in which

to pursue a remedy, we have “regularly held that the tribal

interest in immunity overcomes the lack of an alternative

remedy or forum for the plaintiffs.” Hull, 305 F.3d at 1025,

citing Dawavendewa, 276 F.3d at 1162; see also Clinton v.

Babbitt, 180 F.3d 1081, 1090 (9th Cir.1999); Kescoli, 101

F.3d at 1311; Pit River Home, 30 F.3d at 1102; Quileute

Indian Tribe v. Babbitt, 18 F.3d 1456, 1460 (9th Cir.1994);

Confederated Tribes of Chehalis Indian Reservation v.

Lujan, 928 F.2d 1496, 1500 (9th Cir.1991); Verity, 910 F.2d

at 560; Lomayaktewa, 520 F.2d at 1326-27. Thus, a bal-

ance of the four tests in Rule 19(b) supports dismissal of

the action.

Undeterred, the Wilburs contend that this case falls

within the “public rights” exception to joinder rules.

“Under this exception, even if the [Tribe is a] necessary

part/(y], [it is] not deemed indispensable and, consequently,

dismissal is not warranted.” Kescoli, 101 F.3d at 1311. In

Kescoli, we explained that, although “[t]he contours of the

public rights exception have not been clearly cefined,”

there are two requirements that must be satisfied before

the exception may properly be invoked. /d. First, “the

litigation must transcend the private interests of the

litigants and seek to vindicate a public right.” Jd. Second,

“although the litigation may adversely affect the absent

parties’ interests, the litigation must not ‘destroy the legal

entitlements of the absent parties.’” Id., quoting Conner v.

Burford, 848 F.2d 1441, 1459 (9th Cir.1988); see also

Shermoen v. United States, 982 F.2d 1312, 1319 (9th

Cir.1992) (“[T]he public rights exception to joinder rules is

A-25

an acceptable intrusion upon the rights of absent parties

only insofar as the adjudication does not destroy the legal

entitlements of the absent parties” (quotation marks,

alterations and citation omitted)). We need not decide

whether the first requirement is satisfied, because the

second is not.

The Tribe would lose valuable contractual benefits if

the Compact was held invalid. This threat to the Tribe’s

contractual interests precludes application of the public

rights exception. See Kettle Range Conservation Group v.

United States Bureau of Land Mgmt., 150 F.3d 1083, 1087

(9th Cir.1998) (where plaintiffs sought rescission of con-

tract pursuant to which land had been transferred to

absent private parties, court had “no doubt that an order

declaring the executed portion of the land exchange void

ab initio would ‘destroy the legal entitlements of the

absent parties’” (citation omitted)); Kescoli, 101 F.3d at

1311-12 (public rights exception inapplicable because,

among other reasons, rights of absent tribes’ members

under lease agreements “could be significantly affected” if

action proceeded in tribes’ absence).

D.

Finally, the Wilburs contend that the First Amend-

ment right to “petition the government for a redress of

Grievances,” U.S. Const. amend. I, cl. 6, prohibits, or at

least weighs against, dismissal of this action for nonjoin-

der pursuant to Rule 19. In support of this novel argu-

ment, the Wilburs cite two sets of cases. First, they rely

upon two state court cases suggesting that the lack of an

alternative forum prevents dismissal of an action for

nonjoinder even where an absent tribe has not waived its

A-26

sovereign immunity. See Panzer v. Doyle, 271 Wis.2d 295,

680 N.W.2d 666, 682-83 (2004); Saratoga County Chamber

of Commerce, Inc. v. Pataki, 100 N.Y.2d 801, 766 N.Y.S.2d

654, 798 N.E.2d 1047, 1057-59 (2003). These decisions,

however, do not apply Federal Rule of Civil Procedure 19

and do not even discuss the Petition Clause. Rather, they

apply state law governing joinder of indispensable parties.

Unlike state courts applying state law, we are bound by

our own decisions interpreting federal Rule 19.

Second, the Wilburs rely on cases stating the general

proposition that “the right of access to the courts is an

aspect of the First Amendment right to petition the Gov-

ernment for redress of grievances.” Bill Johnson’s Rests.,

Inc. v. NLRB, 461 U.S. 731, 741, 103 S.Ct. 2161, 76

L.Ed.2d 277 (1983). This does not aid the Wilburs, how-

ever, for the right of access to the courts is not absolute.

See Hudson v. Palmer, 468 U.S. 517, 523, 104 S.Ct. 3194,

82 L.Ed.2d 393 (1984) (“[T]he constitutional right to

petition the Government for redress of their grievances .. .

includes a reasonable right of access to the courts” (em-

phasis added)). Moreover, the right must be exercised

“within the limits ... of [the courts’] prescribed proce-

dures.” Cal. Motor Transp. Co. v. Trucking Unlimited, 404

U.S. 508, 515, 92 S.Ct. 609, 30 L.Ed.2d 642 (1972).

It is important to put this argument in context. Rule

19(b) itself requires consideration of “whether the plaintiff

will have an adequate remedy if the action is dismissed for

nonjoinder” as one of four tests relevant to the determina-

tion whether an action should be dismissed. Fed.R.Civ.P.

19(b). What the Wilburs are arguing, then, is that the

Petition Clause requires us to give the lack of an alterna-

tive forum more weight in the Rule 19(b) calculus than we

have in our prior cases. Although our prior decisions did

A-27

not specifically discuss the relevance of the Petition Clause

to the Rule 19 analysis, we do not believe our colleagues

ignored the obvious constitutional implications of depriv-

ing a party of a forum in which to pursue its claims. Our

prior cases turn not on a disrespect for a plaintiff’s right

of access to the courts, but “on the fact that society has

consciously opted to shield Indian tribes from suit without

congressional! or tribal consent.” Quileute Indian Tribe, 18

F.3d at 1461 (quotation marks and citation omitted). The

Wilburs’ invocation of the Petition Clause does not compel

a different result.

Lastly, the Wilburs argue that, if we hold that dis-

missal pursuant to Rule 19 is proper, we should allow

them to amend their complaint to name a Tribal official as

a defendant. That issue is not before us because the

Wilburs never sought to amend their complaint in the

district court and they raise this issue for the first time in

their reply brief. See Ventura Packers, Inc. v. F/V

JEANINE KATHLEEN, 305 F.3d 913, 916 n.1 (9th

Cir.2002) (declining request for leave to amend complaint

because it was not made in district court); Black v. Payne,

591 F.2d 83, 89 (9th Cir.1979) (denying leave to amend

because, among other reasons, request was made for first

time in reply brief on appeal). We express no opinion on

whether the Tribal official could have been sued and, if so,

whether this would have enabled the suit to proceed in the

Tribe’s absence.

DISMISSAL AFFIRMED.

B-1

APPENDIX B

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT SEATTLE

MARVIN WILBUR, JR., et al.

Plaintiffs, Case No. CO3-0873L

: ORDER GRANTING

MOTION TO DISMISS

GARY LOCKE, et al., (Filed Oct. 20, 2003)

Defendants.

I. INTRODUCTION

This matter comes before the Court on a motion to

dismiss (Dkt. #13) filed by defendants Gary Locke, et al.

(collectively, “the State”). The State contends that the

action against it by Marvin Wilbur, Jr., et al. (collectively,

“Plaintiffs”) should be dismissed on multiple grounds. For

the reasons set forth in this Order, the Court grants the

State’s motion to dismiss.

II. DISCUSSION

A. Background.

Plaintiffs, members of the Swinomish Tribe (the

“Tribe”), operate a store that sells cigarettes and other

goods on tribal land. Plaintiffs seek an order enjoining the

Governor of Washington State from entering into a ciga-

rette tax contract with the Tribe.

(Complaint (Dkt. #1) J] 34-36). The Washington State

Legislature has authorized the Governor to enter into such

contracts to permit Indian tribes to charge a tribal cigarette

B-2

tax in lieu of all state cigarette taxes and state and local

sales and use taxes on the sale of cigarettes on tribal land

by Indian retailers. See RCW 43.06.455. Indian tribes may

retain the taxes for use for “essential government ser-

vices.” RCW 43.06.455(8). The purpose of such cigarette

tax contracts is to “provide a means to promote economic

development, provide needed revenues for tribal govern-

ments and Indian persons, and enhance enforcement of

the state’s cigarette tax law, ultimately saving the state

money and reducing conflict.” RCW 43.05.450. The law

provides that tribes “may allow an exemption [to the

taxes] for sales to tribal members.” RCW 43.06.455(3).

B. Failure to Join an Indispensable Party.

Pursuant to Fed. R. Civ. P. 12(b)(7), the State seeks

dismissal of this action for Plaintiffs’ failure to join a

necessary and indispensable party, the Tribe. Determina-

tion of this issue requires a two-part analysis. First, the

Court must determine whether the Tribe is a “necessary”

party pursuant to Fed. R. Civ. P. 19(a). Quileute Indian

Tribe v. Babbitt, 18 F.3d 1456, 1458 (9th Cir. 1994). If the

Tribe is necessary and cannot be joined, the Court “must

determine whether the party is indispensable so that in

‘equity and good conscience’ the action should be dis-

missed.” Id. (quoting Confederated. Tribes of the Chehalis

Indian Reservation v, Lujan, 928 F.2d 1496, 1498 (9th Cir.

1991)).

Fed. R. Civ. P. 19(a) provides for joinder of a party if

any of the following conditions is met:

(1) in the person’s absence complete relief can-

not be accorded among those already par-

ties, or

B-3

(2) the person claims an interest relating to the

subject of the action and is so situated that

the disposition of the action in the person’s

absence may

(i) as a practical matter impair or impede

the person’s ability to protect that in-

terest or

(ii) leave any of the persons already parties

subject to a substantial risk of incur-

ring double, multiple, or otherwise in-

consistent obligations by reason of the

claimed interest.

The State contends that the Tribe is a necessary party

because the Tribe has an interest in the subject of this

action and that the disposition of this action in the Tribe’s

absence may impair or impede the Tribe's ability to protect

that interest. Specifically, the State argues that “[t]he

Tribe has a direct interest in defending itself and the

State’s authority to enter into a cigarette tax contract,

Without the Tribe’s participation, its interest will be

impaired.” (Motion at 16).

The State represents that the cigarette tax contract

between it and the Tribe “has been finalized and is await-

ing approval from the Governor.” Jd. at 15 n.5. However,

because the contract is “awaiting approval from the

Governor,” neither the State nor the Tribe is bound by its

contents. When a party contends that an absent party is

necessary because the absent party “claims an interest

relating to the subject of the action,” that claimed interest

must be “legally protected.” Dawavendewa v. Salt River

Project Agric. Improvement Power Dist., 276 F.3d 1150, 1155

(9th Cir. 2002). Because the subject of this action does not

affect the Tribe’s interest in an existing, enforceable

B-4

agreement, the Court cannot find that the interest claimed

on behalf of the Tribe is “legally protected.” See, e.g.,

American Greyhound Racing, Inc. v. Hull, 305 F.3d 1015,

1023 (9th Cir. 2002) (finding that because existing com-

pacts called for automatic renewal if neither party gave-

termination notice; lawsuit seeking to enjoin Governor

from renewing or forming new compacts impaired the

legally protected interests of absent tribes); Clinton v.

Babbitt, 180 F.3d 1081, 1089 (9th Cir. 1999) (finding that

suit seeking to enjoin the Secretary of the Interior from

approving leases between the Hopi Tribe and certain

Navajo Tribe members would impair legally protected

interest by prohibiting Hopi Tribe from fulfilling agree-

ment with United States and depriving the Hopi Tribe

from substantial compensation pursuant to that agree-

ment); Pit River Home and Agric. Coop. Ass’n v. United

States, 30 F.3d 1088, 1099 (9th Cir. 1994) (finding that the

Pit River Tribal Council was a necessary party because

lawsuit would impair the Council’s interest in certain

property, acquired by virtue of the Secretary of the Inte-

rior’s designation of the Pit River Tribe as the beneficial

owner of the property). In contrast to American Grey-

hound, which afforded absent parties a very generous

reading of the term “legally protected interest,” here the

State cannot reasonably claim that this litigation impairs

any of the Tribe’s legally protected interests.’ Because the

* For the same reason that the Tribe is not a necessary party to

this action, Plaintiffs likely lack standing to challenge the anticipated

contract between the Tribe and Washington State. The judicial power of

the United States is limited to resolution of “cases” and “controversies.”

Valley Forge Christian College v. Americans United for Separation of

Church & State, Inc., 454 U.S. 464, 471 (1982). The standing require-

ment demands “at an irreducible constitutional minimum” that the

plaintiff have [sic] suffered a “concrete and particularized” injury that is

(Continued on following page)

B-5

Tribe is not a necessary party to this litigation, this

lawsuit is not subject to dismissal for failure to join a

necessary and indispensable party.

C. Tax Injunction Act.

The State argues that the Tax Injunction Act bars this

Court from granting an injunction, issuing a declaratory

judgment, or granting relief pursuant to 42 U.S.C. § 1983.

(Motion at 3-7), That Act provides:

The district courts shall not enjoin, suspend, or

restrain the assessment, levy or collection of any

tax under State law where a plain, speedy and

efficient remedy may be had in the courts of such

state.

28 U.S.C. § 1341. The purpose of the Tax Injunction Act is

to prevent federal court interference with the States’

assessment and collection of taxes. See Rosewell v. LaSalle

Natl Bank, 450 U.S. 503, 522 (1981) (“[T)his legislation

was first and foremost a vehicle to limit drastically federal

court jurisdiction to interfere with so important a local

concern as collection of taxes.”).

Plaintiffs contend that the Tax Injunction Act does not

apply to this matter because “[t]his case is about Washing-

ton’s Governor forcing the Tribe to impose a tribal tax, not

(1) “actual or imminent,” (2) caused by or fairly traceable to the

challenged act, and (3) redressable by the court. Lujan v. Defenders of

Wildlife, 504 U.S. 555, 560-61 (1992). Just as the Tribe does not have a

legally protected interest at stake in this litigation, Plaintiffs appear

not to have suffered an “actual or imminent” injury. Dismissal for lack

of standing therefore likely would be appropriate.

B-6

a state tax, on Plaintiffs.” (Response at 4). In support of

this argument, Plaintiffs note that the statute provides

that “a cigarette tax contract with a tribe shall provide for

* The Plaintiffs alsc argue that the State lacks authority to enter

into an agreement such as this with the Tribe. See Response at 20-21.

Although the Court recognizes that the subject matter of agreements

between states and tribes may be limited by federal preemption and

provisions of the United States Constitution, agreements such as that

at issue here are permissible and increasingly common, as recognized

recently by Justice O’Connor in a concurring opinion:

State governments may enter into consensual relationships

with tribes, such as contracts for services or shared author-

ity over public resources...Some States have formally

sanctioned the creation of state-tribal agreements. See, e.g.,

Mont. Code Ann. § 18-11-101 et seg. (1997) (State-Tribal Co-

operative Agreements Act); Neb. Rev. Stat, § 13-1502 et seq.

(1997) (State-Tribal Cooperative Agreements Act); Okla.

Stat., Tit. 74, § 1221 (Supp. 2001) (authorizing Governor to

enter into cooperative agreements on behalf of the State to

address issues of mutual interest). In addition, there are a

host of cooperative agreements between tribes and state au-

thorities to share control over tribal lands, to manage public

services, and to provide iaw enforcement. See, e.g., Cal,

Health & Safety Code Ann. § 25198.1 et seg. (West 1992 and

Supp. 2001) (cooperative agreements for hazardous waste

management); Cal. Pub. Res. Code Ann. § 44201 et seq.

(West 1996) (cooperative agreements for solid waste man-

agement); Minn. Stat. § 626.90 et seg. (Supp. 2001) (authoriz-

ing cooperative agreements between state law enforcement

and tribal peace officers); Nev. Rev. Stat. § 277.058 (Supp.

1999) (cooperative agreements concerning sites of archeo-

logical or historical significance); N.M. Stat. Ann. § 9-11-

12.1 (Supp. 2000) (cooperative agreements for tax admini-

stration); Ore. Rev. Stat. § 25.075 (1999) (cooperative

agreements concerning child support and paternity mat-

ters); Wash. Rev. Code § 26.25.010 et seg. (1999) (coopera-

tive agreements for child welfare); § 79.60.010 (cooperative

agreements among federal, state, and tribal governments

for timber and forest management).

Nevada v. Hicks, 533 U.S. 353, 393 (2001) (O’Connor, J, concurring).

B-7

a tribal cigarette tax.” Id. (quoting RCW 43.06.455(3)).

However, the statute also provides that such a “tribal

cigarette tax” shall be assessed “in lieu of all state ciga-

rette taxes and state and local sales and use taxes on sales

of cigarettes in Indian country by Indian retailers.” RCW

43.06.455(3). The State notes that if the Tribe did not

impose the tribal tax in lieu of the state taxes, the Plain-

tiffs would be required to collect the State’s cigarette tax

and sales tax from purchasers who are not members of the

Tribe. (Response at 3 (citing Washington v. Confederated

Tribes of the Colville Indian Reservation, 447 U.S. 134, 161

(1980)).

The Washington State Legislature authorized con-

tracts such as that at issue here to “provide a means to

promote economic development, provide needed revenues

for tribal governments and Indian persons, and enhance

enforcement of the state’s cigarette tax law, ultimately

saving the state money and reducing conflict,” RCW

43.05.450. In the absence of such a contract Indian retail-

ers selling cigamettes to individuals who are not members

of the Tribe éaid be required to collect state taxes on such

transactions. Cenfederated Tribes, 447 U.S. at 161. For

these reasons the Court finds that the anticipated tribal

tax arises under state law for purposes of the Tax Injunc-

tion Act, and that the Act deprives this Court of jurisdic-

tion over this matter.’

* Plaintiffs do not argue that the Tax Injunction Act’s requirement

that “a plain, speedy, and efficient remedy may be had in the [state]

court” is absent here. This element requires “a state-court remedy that

meets certain minimal procedural criteria.” Rosewell; 450 U.S. at 522.

Plaintiffs may challenge the legality of the anticipated contract

pursuant to the provisions of RCW Chapter 7.24. The Court therefore

(Continued on following page)

B-8

Ill. CONCLUSION

For the foregoing reasons, the Court GRANTS the

State’s motion to dismiss (Dkt. #13). The Clerk of the

Court is directed to enter judgment in favor of the State

and egainst Plaintiffs. The Clerk of the Court is also

directed to send copies of this Order to all counsel of

record.

DATED this 20th day of October, 2003.

/s/ Robert S. Lasnik

Robert S. Lasnik

United States District Judge

finds that “a plain, speedy, and efficient remedy” is available to

Plaintiffs in state court.

C-1

APPENDIX C

03-CV-00873-M

The Honorable Robert S. Lasnik

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT SEATTLE

NO. CV03-0873

DEFENDANTS’ MOTION

FOR PROTECTIVE ORDER

Plaintiffs, . (STAY OF DEPOSITION)

v. NOTE FOR MOTION

CALENDAR:

GARY LOCKE, et al., AUGUST 27, 2003

Defendants.

(Filed Aug. 15, 2003)

MARVIN WILBUR JR.,

et al

COMES NOW, CHRISTINE O. GREGOIRE, Attorney

General for the State of Washington and DAVID M.

HANKINS, Assistant Attorney General, for the above

defendants and hereby moves for the entry of a protective

order pursuant to FRCP 26(c), staying the taking of a

deposition until after the court has ruled on defendants’

FRCP 12(b)(1)(6)(7) dismissal motion. This motion is based

on the attached affidavit of counsel, its attachments,

plaintiffs’ complaint, and the files and records herein.

FACTS & PROCEDURE

Plaintiffs counsel, on August 5, 2003, without prior

consultation with defendants’ counsel, noted a deposition

of Martin Loesch, one of the attorneys who represents the

Swinomish Tribe, for September 3, 2003 in La Conner,

C-2

Washington. Mr. Loesch was also served with a subpoena

duces tecum to produce substantial documentation at that

same time.’ In compliance with FRCP 26(c), see the Affi-

davit of David Hankins, I conferred with opposing counsel,

Robert Kovacevich, requesting that he stay the deposition

until I filed my motion to dismiss. He declined. The defen-

dants herein, by motion dated August 14, 2003 have

moved for dismissal of the above-entitled action on several

grounds. The hearing on defendant’s FRCP 12(b) dismissal

motion is scheduled for September 12, 2003. The grounds

are entirely procedural in that plaintiffs’ case is completely

lacking in subject matter jurisdiction, failing to name an

indispensable party, the Tribe and fails to state a claim

upon which relief can be granted.” Consequently, neither

party needs proof of any additional facts in order for this

court to rule on the dismissal motion.

ISSUE

To save time and expense, should the September 3,

2003 deposition of Martin Loesch, a non party deponent,

be stayed pending this court’s ruling on Defendant’s FRCP

12(b)(1)(5)(7) dismissal motion?

DISCUSSION

FRCP 26(c)(1) and (2) allows the court to issue a Protec-

tive Order preventing discovery, or only allowing it on certain

_ conditions including time and place. In circumstances where

" See attachment to affidavit of David Hankins.

* See Defendants’ FRCP 12(b\(1)6)(7) dismissal motion and

accompanying brief on file herein.

C-3

“justice” is required “... to protect a party or person from

annoyance, embarrassment, oppression, or undue burden

or expense ...” the court can issue a protective order. The

present request is that the court stay Mr. Loesch’s deposi-

tion pending a ruling on defendants’ dismissal motion. If

the court grants the defendants’ dismissal motion, the

plaintiffs’ complaint would be dismissed, and no discovery

would be allowed. If the motion is denied, the deposition

can simply be re-scheduled.

The Tax Injunction Act (TIA) 28 USC § 1341 acts as a

limitation on Federal District Court subject matter juris-

diction. Under this statute, generally, lawsuits involving

state taxes may not be broug}:t in Federal District Courts.

While an enrolled Indian tribe may maintain a tax

action against a state, individual tribal members may not.

Dillon v. Montana, 634 F. 2d 463 (9th Cir. 1980); Lac Du

Flambeau Band of Lake Chippewa Indians v Zueske, 145

F. Supp. 2d 969 (W.D. Wis. 2000). Plaintiffs claim to be

enrolled members of the Swinomish Tribe, but this is not

an action by or on behalf of the* tribe. The same proce-

dural circumstances were present in United States v.

County of Nassau, 188 F.R.D. 187 (1999). In that case the

Defendant had requested a stay oi discovery pending the

outcome of its dismissal motion. Th at motion, like the one

in the instant case, was also based on lack of jurisdiction

under the Tax Injunction Act. In County of Nassau, the

Court found good cause to support the stay of discovery

pending the dismissal motion’s outcome:

[3] I find that Nassau County has made an ade-

quate showing of good cause to support the issu-

ance of a stay. First, the issue raised is strictly

one of law and does not involve issues relating to

C-4

the “sufficiency” of the allegations. See Hachette

Distribution v. Hudson County News Company.

Inc., 186 F.R.D. 356, 358 (E.D.N.Y.1991) (Spatt,

J.). Secoudly, the motion, if successful, is disposi-

tive of the entire action. See Rivera v. Heyman,

96 CV 4489, U.S.Dist. LEXIS 2003, at *3

(S.D.N.Y. February 27, 1997). Thirdiy, while not

expressing any opinion as to the outcome of the

motion to dismiss, I believe that it raises a sub-

stantial issue that may be dispositive of the en-

tire action. Fourth, the issue is one that in all

likelihood cannot be cured by an amended plead-

ing. In this regard, I further note that in its op-

position papers, the government has not sought

leave to replead in the event that the motion is

granted. Fifth, there is no showing — or even a

claim — of any prejudice by the government in the

event that the court were to stay discovery. In

this regard, Nassau County has stated that not-

withstanding a stay of discovery, it will continue

to make any public document available to the

government at its request.

Id. at 188.

Here, the circumstances, like in the County of Nassau,

the defendants have moved to dismiss plaintiffs’ Com-

plaint based upon the Tax Injunction Act and the Court

granted the parties’ motion to stay discovery. Further, the

discovery cut-off in the present case is May 2004, and with

the dismissal motion calendared for September 12, 2003

there is plenty of time to re-schedule the deposition in the

event the motion is denied. There is no prejudice to Plain-

tiffs, and both parties save the time and expense of travel-

ing out-of-town for a deposition that may be likely

rendered moot by the results of the FRCP 12(b) motion

just a few days after the deposition. Additionally, the State

C-5

has moved to dismiss the entire complaint based upon the

Eleventh Amendment, failure to name a necessary and

indispensable party, the Tribe, and failing to state a claim

upon which relief can be granted. All of which would be

fatal to plaintiffs’ pursuing such complaint in Federal

District Court and require dismissal of plaintiffs’ action.

CONCLUSION

Defendants request the Court issue a protective order

staying the deposition of a non-party deponent, until the

Court considers defendants’ dispositive motion. The

Court’s affirmative ruling on behalf of the defendants on

any one of these enumerated grounds, extinguishes any

need for discovery and saves parties time and expense.

DATED this 14th day of August, 2003.

CHRISTINE O. GREGOIRE

Attorney General

/s/ David M. Hankins

DAVID M. HANKINS,

WSBA No. 19194

Assistant Attorney General

(360) 753-7084

D-1

APPENDIX D

THE HONORABLE ROBERT S. LASNIK

03-CV-00873-MEM

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT SEATTLE

— WILBUR JR., | 7. CVv03-0873

ae SWINOMISH MEMORANDUM

Plaintiffs, IN SUPPORT OF

ve. DEFENDANTS’ MOTION

GARY LOCKE, et al, |FOR PROTECTIVE ORDER

Defendants, | Filed Aug. 26, 2003)

This memorandum is filed by the Swinomish Indian

Tribal Community (the “Tribe”) in support of Defendants’

Motion for Protective Order (Stay of Deposition), which

has been noted for the August 27, 2003, motion calendar.

Although the Tribe is not a party to this action, the Tribe

has an interest in the Motion for Protective Order, because

Defendants seek to stay the deposition of one of the Tribe’s

attorneys until Defendants’ pending Motion to Dismiss is

decided.

I. Background.

In this action the Plaintiffs, individual Swinomish

tribal members, seek to have this Court intrude into the

government-to-government relationship between the Tribe

and the State of Washington. Plaintiffs seek to bar a

proposed agreement between the Tribe and State that

would prevent the double taxation of cigarettes sold by

D-2

Indian retailers within the Swinomish Reservation.

Plaintiffs have not named the Tribe as a defendant,

despite the fact that the lawsuit directly affects the Tribe’s

legal interests, because the Tribe’s sovereign immunity

prevents it from being sued without its consent.

Il. Defendants’ Motion for Protective Order Should

be Granted.

Plaintiffs have noted the deposition of Swinomish

Tribal Attorney Martin Loesch for September 3, just nine

days prior to the calendar date for Defendants’ Motion to

Dismiss, and have served a subpoena duces tecum seeking

a broad range of tribal records related to the proposed

Tribal-State agreement. Defendants’ Motion for Protective

Order, staying the deposition and subpoena duces tecum

until the court rules on Defendants’ pending Motion to

Dismiss, should be granted for several reasons.

First, contrary to Plaintiffs’ implication, the Tribe has

not “consented” to the deposition of its attorney. Although

the Tribe has not gone to the expense of independently

seeking a protective order from this court, it fully supports

Defendants’ Motion for Protective Order.

Second, although Plaintiffs claim that they do not

seek privileged material, in fact several categories of

documents described in the subpoena duces tecum include

attorney work product and documents covered by attor-

ney-client privilege. For instance, the subpoena seeks from

the Tribe’s attorney “handwritten notes” and “any other

material pertaining to the proposed compact.” See attach-

ment to Affidavit of David Hankins. Furthermore, all of

the documents sought by Plaintiffs that are not attorney

work product or covered by attorney-client privilege are

D-3

communications between the Tribe and the State, and

could be obtained by Plaintiffs directly from Defendants.

Third, there is a high likelihood that Defendants’

pending Motion to Dismiss will be successful. The Tribe is

clearly an indispensable party in an action that seeks to

bar an agreement to which the Tribe is a party. Further-

more, Plaintiffs lack standing because they are not injured

in fact by the proposed Tribal-State agreement. The Tribe

exercises its own sovereign powers, independent of any

Tribal-State agreement, when it taxes cigarette sales by

tribal members on its reservation. The effect of the pro-

posed Tribal-State contract is solely to eliminate State

taxation of such sales, thereby preventing double taxation.

III. Conclusion.

For the foregoing reasons, Defendants’ Motion for

Protective Order should be granted.

RESPECTFULLY SUBMITTED this 26th day of

August, 2003.

SWINOMISH INDIAN

TRIBAL COMMUNITY

By: /s/ David A. Bricklin, WSBA 7583

er tc [Illegible] for

James B. Weber, WSBA #9594

Office of Tribal Attorney

Swinomish Indian Tribal Community

P.O. Box 817; 11404 Moorage Way

LaConner, Washington 98257

Tel: 360/466-3163

Fax: 360/466-5309

E-1

APPENDIX E

03-CV-00873-ORD

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT SEATTLE

MARVIN WILBUR JR.,

et al.,

Plaintiffs, Case No. C03-0873L

vs. PROTECTIVE ORDER

GARY LOCKE, et ai.,

Defendants.

This matter comes before the Court on a motion for

protective order (Dkt. #14) filed by Defendants. Having

considered the motion, response, reply, and attached

declarations, the Court finds that Plaintiffs’ deposition of

Martin Loesch scheduled for September 3, 2003, should be

stayed pending resolution of Defendants’ motion to dismiss

(Dkt. #13). The Court therefore GRANTS Defendants’

motion for protective order. Plaintiffs’ notice of deposition

of Martin Loesch is SET ASIDE pending the Court’s ruling

on Defendants’ motion to dismiss.

DATED this 28th day of August, 2003.

/s/ Robert S. Lasnik

Robert S. Lasnik

United States District Judge

F-1

APPENDIX F

CIGARETTE TAX CONTRACT

Between

THE SWINOMISH TRIBE

And

THE STATE OF WASHINGTON

PREAMBLE

WHEREAS, the Swinomish Tribe is a federally recognized

Indian Tribe, possessed of the full inherent sovereign

powers of a government; and

WHEREAS, the state of Washington is a state within the

United States of America, possessed of full powers of state

government; and

WHEREAS, the body of Federal Indian law and policy

recognizes the right and the importance of self-

determination for Indian Tribes, the authority of a Tribe to

tax certain activities, and the need for economic develop-

ment in Indian country by Indian Tribes; and

WHEREAS, the state of Washington has committed,

through the Centennial Accord and Millennium Agree-

ment, to the political integrity of the federally recognized

Indian Tribes within the state of Washington and has

formally recognized that the sovereignty of each Tribe

provides paramount authority for the Tribe to exist and to

govern; and

WHEREAS, the imposition of the State cigarette taxes on

Swinomish Indian Tribal Community sales of cigarettes

from Tribal retailers to nonmember purchasers has the

practical effect of limiting the Tribe’s ability to impose

F-2

cigarette taxes on such sales for essential Tribal govern-

mental purposes; and

WHEREAS, a long-standing disagreement exists between

the Tribe and the State over questions regarding jurisdic-

tion over and the taxation of the sale and distribution of

cigarettes; and

WHEREAS, the State and Tribe will benefit from resolu-

tion of that disagreement by the change in focus from

enforcement and litigation to a focus on the administration

of this cigarette tax Contract; and

WHEREAS, the Tribe and State will benefit from resolu-

tion of that disagreement by the tax base this Contract

will enable, taxation being an essential attribute of sover-

eignty and a tool of self-sufficiency; and

WHEREAS, the State and Tribe will also benefit by the

exercise of the attributes of Tribal sovereignty and from

the improved well-being of members of the Tribe that. will

result from economic development by the Tribe and its

members; and

WHEREAS, both the Tribe and the State desire a positive

working relationship in matters of mutual interest and

disagreements by conducting discussions on a govern-

ment-to-government basis; and

WHEREAS, the mutual interests of the Swinomish Tribe

and the state of Washington brought these two govern-

ments together to pursue their common interest; and

WHEREAS, this contract is authorized, on the part of the

State, by legislation, including House Bill 5372, enacted by

the 2001 Regular Session of the 57th Legislature and

signed by the Governor, effective July 22, 2001, and House

F-3

Bill 2553, enacted by the 2002 Regular Session of the 57th

Legislature and signed by the Governor, effective June 13,

2002, as codified in RCW 43.06.450, RCW 43.06.455, RCW

43.06.460, and RCW 82.24.295; and on the part of the

Tribe, by a Tribal Ordinance duly adopted by the Swi-

nomish Indian Community Senate and signed by the

Tribal Chair.

_ NOW THEREFORE, the Tribe by and through the Swi-

nomish Indian Community Senate, and the state of Wash-

ington by and through its Governor, do hereby enter into

this Contract for the mutual benefit of the Tribe and the

State to wit:

PART I

Definitions

1. “Auditor” means the auditor selected pursuant to Part

VII of this Contract.

2. “Carton” or “carton of cigarettes” means, unless

otherwise indicated, a carton of two hundred (200)

cigarettes.

3. “Cigarette” means any roll for smoking made wholly

or in part of tobacco, irrespective of size or shape and

irrespective of the tobacco being flavored, adulterated,

or mixed with any other ingredient, where such roll

has a wrapper or cover made of paper or any mate-

rial, except where such wrapper is wholly or in the

greater part made of natural leaf tobacco in its natu-

ral state.

4. “Contract” means this contract entered into by the

state of Washington and the Swinomish Tribe.

5. “Department” means the Washington State Depart-

ment of Revenue.

10.

12.

13.

F-4

“Essential government services” means services such

as Tribal administration, public facilities, fire, police,

public health, education, job services, sewer, water,

environmental and land use, transportation, utility

services, and economic development.

“Indian country,” consistent with the meaning given

in 18 U.S.C. 1151 means:

e All land within the limits of the Swinomish In-

dian Reservation under the jurisdiction of the

United States government, notwithstanding the

issuance of any patent, and, including rights of

way running through the reservation; and

¢ _ All Indian allotments or other lands held in trust

for a Swinomish Tribal member or the Tribe, or

otherwise subject to a restriction against alien-

ation imposed by the United States, the Indian

titles to which have not been extinguished, in- -

cluding rights of way running through the same.

“Liquor Control Board” means the agency of the state

responsible for enforcement of chapter 82.24.RCW

pursuant to RCW 82.24.550.

“Local retail sales tax” means the combined Washing-

ton local retail sales taxes applicable in the area.

“NonIndian” means an individual who is neither a

Tribal member nor a nonmember Indian.

“Nonmember Indian” means an enrolled member of a

federally recognized Indian Tribe other than the Swi-

nomish Tribe.

“Parties to the agreement” or “parties” mean the

Swinomish Tribe and the state of Washington.

“Retail selling price” means the ordinary, customary,

or usual price paid by the consumer for each package

of cigarettes, which price includes the Tribal cigarette

tax.

14.

15.

16.

17.

18.

19.

20.

21.

22.

F-5

“Self-certified tribal wholesaler” means a wholesaler

who is a federally recognized Indian Tribe or a mem-

ber of such a Tribe, who is not required to be licensed

under any state law.

“Self-certified wholesaler” means an_ out-of-state

wholesaler who is not a self-certified tribal whole-

saler.

“State” means the state of Washington.

“Tobacco products” means cigars, cheroots, stogies,

periques, granulated, plug cut, crimp cut, ready

rubbed, and other smoking tobacco, snuff, snuff flour,

cavendish, plug and twist tobacco, fine-cut and other

chewing tobaccos, shorts, refuse scraps, clippings, cut-

tings and sweepings of tobacco, and other kinds and

forms of tobacco, prepared in such manner as to be

suitable for chewing or smoking in a pipe or other-

wise, or both for chewing and smoking. “Tobacco

product” does not include cigarettes.

“Tribal cigarette tax” means the tax or taxes enacted

as a provision of Tribal law on the units of cigarettes

sold and on the purchase of cigarettes by retail buy-

ers.

“Tribal member” or “member” means an enrolled

member of the Swinomish Tribe.

“Tribal retailer” means a cigarette retailer wholly

owned by the Swinomish Tribe and located in Indian

country or a member-owned smokeshop located in In-

dian country and licensed by the Tribe.

“Tribal tax stamp” means the stamp or stamps that

indicate the Swinomish Tribal cigarette tax imposed

under this Contract is paid or that identify those

cigarettes with respect to which no tax is imposed.

“Tribe” or “Tribal” means or refers to the Swinomish

Tribe, a federally recognized Tribe.

23.

24.

F-6

“Swinomish Indian Reservation” or “reservation”

means the area recognized as the Swinomish Indian

Reservation by the United States Department of the

Interior.

“Wholesaler” means every person who purchases,

sells, or distributes cigarettes for the purpose of re-

sale only.

PART II

Applicability of the Contract

Execution of Contract

This Contract shall become effective when approved

by the Swinomish Indian Community Senate and

signed by the authorized signatory for the Tribe, and

signed by the Governor of the state of Washington.

This Contract shall be executed in duplicate originals,

with each party retaining one fully-executed duplicate

original of the Contract.

Application

From its execution, and contingent on the imposition

of the Tribal cigarette tax pursuant to a Tribal ordi-

nance meeting the terms of Part III of this Contract,

this Contract shall apply to the retail sale of ciga-

rettes by Tribal retailers. Sales subject to the Tribal

cigarette tax imposed pursuant to this Contract are

those in which delivery and physical transfer of pos-

session of the cigarettes from the retail seller to the

buyer occurs within Indian country. “Delivery and

physical transfer of possession” within Indian country

does not include mail order type sales, including

internet, catalog, and telephone sales, unless the

cigarettes are delivered to the buyer within Indian

country.

2.

Scope Limited

This Contract does not apply to:

a.

Cigarettes sold at retail by nonIndians or non-

member Indians; and

Tobacco products as that term is defined in Part I

of this contract.

PART III

Imposition of Tribal Cigarette Taxes

Tribal Retailers

a.

The Tribe agrees to notify the Department 30

days prior to the start up of cigarette sales by

any Tribal retailer other than a retailer in exis-

tence on the effective date of this Contract.

The Tribe agrees that any cigarette retailer

wholly owned by the Swinomish Tribe is subject

to this Contract.

The Tribe agrees that it will require any mem-

ber-owned smokeshop located in Indian country

to be in compliance with the terms of this Con-

tract. In addition the Tribe agrees that it will

maintain and enforce a requirement that any

such member-owned smokeshop obtain a license

from the Tribe and that a condition of such li-

cense is access of the Department to observe

sales pursuant to section 1 of Part IX of this Con-

tract.

The Tribe agrees to enact ordinances regarding

Auditor access to records of tribal members sell-

ing cigarettes in Indian Country.

Tax Imposed on Sales by Tribal Retailers

a.

The Tribe shall impose by ordinance taxes pur-

suant to the requirements of this Part on all

F-8

sales by Tribal retailers of cigarettes to non-

Indian and nonmember Indian purchasers within

Indian country. Such ordinance may provide for

compensation for wholesalers for their services in

affixing the Tribal tax stamp.

Beginning no sooner than the date this contract

is signed, and subject to enactment of a Tribal

ordinance authorizing the imposition of a tax on

cigarettes, the Tribe shall impose and maintain

in effect a tax on the retail sale of cigarettes

equaling no less than the sum of an amount

equal to 100 percent of the state cigarette tax,

which is expressed in cents per cigarette, plus an

amount equal to 100 percent of the state and lo-

cal retail sales taxes.

During the term of this Contract, upon any fu-

ture increase in the state cigarette tax, state re-

tail sales tax or local retail sales tax, the Tribal

tax on cigarettes shall increase by no less than

100 percent of the increase in the combined state

and local tax rates.

Upon any future decrease in the state cigarette

tax, state retail sales tax or local retail sales tax,

the Tribal tax on cigarettes may decrease to a

minimum of no less than 100 percent of the com-

bined state and local tax rates.

Pursuant to RCW 43.06.455, the State retrocedes

from its tax during the time this Contract is in

effect.

The Tribe shall provide advance notice to the De-

partment regarding the date the tribal tax goes

into effect.

F-9

PART IV

Purchase of Cigarettes by Tribal Retailers

Wholesale Purchases — Requirements

The Tribe agrees to add to Tribal law, and maintain in

effect, a requirement that the Tribal retailers pur-

chase cigarettes only from sources authorized pursu-

ant to this Contract.

Delivery of Cigarettes to the Tribal Retailer Outside ,

of Indian Country

Cigarettes bearing the Swinomish Tribe Tribal tax

stamp required by this Contract may be delivered or

transferred within or outside Indian country by a

wholesaler to the Tribe or a Tribal retailer. Such ciga-

rettes must be accompanied by invoices identifying

the cigarettes as Swinomish Tribe cigarettes.

PART V

Tribal Tax Stamps

Tribal Tax Stamp Required

a. All cigarettes sold by the Tribal retailer shall

bear a Tribal tax stamp.

b. . The Tribe may by ordinance allow for an exemp-

tion from the tax imposed under Part III of this

Contract for Tribal members. If the Tribe pro-

vides for such tax exemption, the following shall

apply:

i. The Tribe agrees that members will be ex-

empted from all or a specified portion of the

cigarette tax and sales tax at the point of

sale. Such cigarettes shall bear the Tribal

tax stamp; however, the non-applicable tax

value of the stamp shall be deducted from

the selling price at the time of sale. The

F-10

books and records of the Tribal retailer must

indicate the sales made to members. The

Tribe agrees that it will enact an ordinance

requiring that eligibility for the exemption is

conditioned on members providing documen-

tation substantiating enrolled status. The

Tribe agrees that the ordinance will estab-

lish a reasonable limit on purchases by

Tribal members and shall provide a penalty

for violation of the ordinance, the objective

being to preclude resales of untaxed ciga-

rettes by members. The State and the Tribe

agree that the Tribe may reimburse the

Tribal retailer for tax stamps on tax exempt

cigarettes purchased by the retailer prior to

the start of the Tribal tax.

Creation and Supply of Tribal Tax Stamps

The Tribe shall arrange for the creation and supply of

a Tribal tax stamp from a nationally recognized

stamp manufacturer. Tribal tax stamps will have a

serial number or some other discrete identification so

that stamps may be traced to the wholesaler.

Stamp Vendor Contract

a.

The Tribe shall contract with a bank or other

stamp vendor to distribute tax stamps. The

stamp vendor shall distribute stamps to whole-

salers, upon payment of the applicable Tribal

cigarette tax by the wholesaler, and remit the

collected taxes to the Tribe. The contract shall

provide that the stamp vendor shall purchase a

supply of Tribal tax stamps from the manufac-

turer and make them available for purchase. The

Tribe may, at its option, select as the stamp ven-

dor the bank with which the Department con-

tracts for that service, or some other third party

stamp vendor satisfactory to both the Tribe and

F-11

the Department. The Tribe shall require the

stamp vendor to remit to the Tribe all revenue

collected from the Tribal cigarette tax. The Tribe

shall require that the stamp vendor provide to

the Tribe and to the Department timely reports

detailing the number of Tribal tax stamps sold,

and make its records available for auditing by

the Tribe and the Department.

The Tribe may, at a later date, and as part of its

tax administration function, choose to maintain

and distribute tax stamps, and be deemed the

“stamp vendor” for purposes of this Contract. The

Tribe and the State agree that should the Tribe

choose to be its own stamp vendor that this shall

be addressed in a memorandum of agreement be-

tween the Tribe and the Department of Revenue.

The memorandum of agreement shall at a mini-

mum address the following:

i. Verifiable procedures for ordering, receiving,

and inventorying tax stamp, including hold-

ing stamps in a secure location.

ii. Distribution of stamps by the Tribe.

iii. Recordkeeping by the Tribe and its whole-

salers.

iv. Audit protocols and access of the Auditor to

stamping records of the Tribe and its whole-

salers.

v. Reporting by the stamp manufacturer.

4. Requirements for Affixation of Stamps by Wholesalers

a.

Wholesalers shall be responsible for affixing the

Tribal tax stamps to the smallest container of ciga-

rettes that will be sold or distributed by the Tribal

retailer. Stamps shall be affixed so that the stamps

may not be removed from the package without

F-12

destroying the stamp. Stamps shall be affixed so

that it may be readily ascertained by inspection

that the tax has been paid.

b. The State agrees that it will refund tax attribut-

able to cigarette tax on those cigarettes that bear

the state stamp and that on the effective date of

the Tribal cigarette tax are in the inventory of

the Tribal retailers. The Tribe agrees to allow the

Department access to its inventory and floor

stock so that an accounting of taxed cigarettes

may be made. The Tribe agrees to provide access

of verification to the stock of its member retailers

for an inventory of cigarettes on hand when the

tax ordinance goes into effect for the purposes of

providing refunds of cigarette taxes remitted to

the state.

c. The State agrees that the Tribe may continue to

purchase cigarettes with the state stamp affixed

after the effective date of the Tribal cigarette tax

until such time as the Tribe arranges for the use

of a Tribal stamp. The State will refund to the

Tribe on a monthly basis the tax attributable to

such cigarettes, provided that the invoices from

the wholesaler to the tribal retailer indicate that

the cigarette tax was passed on to the tribal re-

tailer. The Tribe agrees that it will require mem-

bers to use the state stamp until such time as the

Tribal stamp is available for use. The Tribe

agrees that it will require the member retailers

to provide a regular accounting of such stamps in

order to facilitate the refund of tax to the Tribe.

Wholesaler Obligation under State Law

Collection of the Tribal cigarette tax (unless prepaid

to the stamp vendor by the Tribal retailer), affixing of

the Tribal tax stamps, retention and production of re-

cords required by state law (in the case of state

F-13

licensed wholesalers) and by this Contract and any

memorandum of agreement (in the case of self-

certified out-of-state or self-certified Tribal wholesal-

ers), and compliance with other requirements in this

Contract, shall be deemed to satisfy the state ciga-

rette excise tax obligation of a wholesaler.

State Agreement Regarding Compliance with State

and Federal Law

As to all transactions that conform with the require-

ments of this Contract, such transactions do not vio-

late state law, and the State agrees that it will not

assert that any such transactions violate state law for

the purpose of 18 U.S.C. § 2342 or other federal law

specifically based on violation of state cigarette laws.

PART VI

Wholesalers

Wholesalers Licensed by the State

Wholesalers licensed by the State are subject to the

requirements as set forth in Title 82 RCW and any

rules adopted thereunder, and therefore must main-

tain adequate records detailing which cigarettes are

subject to state tax and which cigarettes are subject

to the Swinomish Tribe Tribal cigarette tax.

Self-Certified C .‘-of-State Wholesalers — Memoran-

dum of Agree1 ser.

The Tribe agic vs that it will adopt a policy requiring

that it, the Tribe, and any member retailers, will pur-

chase cigarettes for resale only from wholesalers li-

censed with the state of Washington. If the Tribe

chooses to change this’ policy to allow purchase from

out of state wholesalers not licensed with the state of

Washington, the Tribe agrees that it will enter into a

memorandum of agreement that addresses the follow-

ing concerns:

F-14

a. An assurance that the out-of-state wholesaler

can and will meet the terms of this Contract;

b. A means to determine if the out-of-state whole-

saler is licensed to do business with the state in

which they reside;

c. Arequirement that cigarettes transported in the

state of Washington be accompanied by invoices;

and

d. An agreement by the out-of-state wholesaler that

the Auditor have access to its records.

3. Self-Certified Tribal Wholesalers - Memorandum of

Agreement

The Tribe agrees that it will adopt a policy requiring

that it, the Tribe, and any member retailers, will pur-

chase cigarettes for resale only from wholesalers li-

zensed with the state of Washington. If the Tribe

chooses to change this policy to allow purchase from

out-of-state wholesalers not licensed with the state of

Washington, the Tribe agrees that it will enter into a

memorandum of agreement that addresses the follow-

ing concerns:

a. An assurance that the tribal wholesaler can and

will meet the terms of this Contract;

b. A requirement that cigarettes transported in the

state of Washington be accompanied by invoices;

and

c. A requirement by the Tribai wholesaler that the

Auditor have access to its records.

4. Tribe as Own Wholesaler - Memorandum of Agree-

ment

This Contract contemplates that the Swinomish Tribe

will, at some future date, act as its own wholesaler. In

the event that the Swinomish Tribe decides to act as

F-15

its own wholesaler in regards to sales to the Tribal re-

tailers, it agrees to first enter into a memorandum of

agreement with the Department regarding this activ-

ity. The memorandum of agreement shall reference

any applicable requirements of this Contract and con-

tain audit standards that at a minimum meet those

set forth in this Contract.

PART VII

Audit Process

The Tribe wishes to provide assurance that all parties to

this Contract and persons named in this Contract are in

compliance with the spirit and terms of this Contract. The

purpose of this Part is to provide a process for regular

verification of the requirements o this Contract. The

verification process is intended to reconcile data from all

sources that make up the stamping, selling, and taxing

activities under this Contract.

;

Selection of Auditer

The Tribe and the State agree that, for the purposes

of verifying compliance with this Contract, the Tribe

may choose to contract with an independent third

party auditor or may choose to use the auditing ser-

vices of the Department for all or part of the verifica-

tion requirements of this Part. The Tribe agrees that

the third party auditor will be a certified public ac-

countant in good standing.

a. Independent third party audit- = If the Tribe con-

tracts with an independent tiurd party auditor,

the Auditor will be retained by the Tribe and the

Tribe shall bear the cost of the auditing services.

The Tribe shall be allowed to freely communicate

with the Auditor.

F-16

Department auditor: If the Tribe uses the De-

partment’s auditing services, the Tribe agrees to

allow the Department access to its books and re-

cords for the sole purpose of verifying compliance

with this Contract. Department access to records

shall be-coordinated in advance with the Tribes.

The Department of Revenue shall bear all the

costs of the auditing services. The Tribe shall be

allowed to freely communicate with the Auditor.

Audit Protocol

To ensure compliance with this Contract, the Auditor

must adhere to the following protocol:

a.

Review of records: To verify the requirements of

this Contact, the auditor must review at a mini-

mum the records specified below.

i. Tribal retailers: financial statements or pur-

chase invoices relating to purchases of ciga-

rettes from licensed wholesalers or other

wholesalers noted under a memorandum of

agreement under Part VI, financial state-

ments or sales invoices relating to sales of

stamped cigarettes, sales of exempt ciga-

rettes, cigarette inventory, records to verify

whether Tribal cigarette and sales taxes

were remitted to the Tribe for deposit into

Tribal accounts, and records to verify that

the retail selling price included the applica-

ble tribal taxes.

ii. Tribe: records such as account records and

contract invoices necessary to verify that all

Tribal cigarette tax revenue was used to

fund essential government services de-

scribed in Part XII, section 8 of this Con-

tract.

F-17

iii. Self-certified out-of-state wholesaler, self-

certified Tribal wholesaler, or Tribe as own

wholesaler: records noted as subject to audit

in a memorandum of agreement under Part

VI of this Contract, such audit to be con-

ducted by a third party auditor on behalf of

the Tribe.

b. Period under review: To verify the requirements

of this Contract, the auditor may review records

for all years during the current appropriate audit £

cycle. Records relating to the period before the ef-

fective date of the Tribal cigarette tax are not

open to review under this Part.

c. Auast cycle: The audit cycle shall be no more fre-

quently than once every four years, unless oth-

erwise specified below.

i. Initial review: The first required review

must cover the period starting on the effec-

tive date of the tax and ending September

30, 2004. The Auditor must provide its find-

ings by January 1, 2004.

ii. Use of Tribal cigarette tax revenue: The

auditor will review records of the Tribe on

an annual basis, consistent with the Tribe’s

fiscal year, to verify that all Tribal cigarette

tax revenue was used to fund essential gov-

ernment services.

3. Format of Auditor Report

The Auditor must submit its findings in final written

reports to the Tribe, with a copy to the Department.

The report must indicate what types of records were

examined for each party audited, what periods were

reviewed, and must include a statement regarding

verification of the specific requirement listed in sec-

tions 4 and 5 of this Part. In addition, if a statistical

F-18

sampling process was used, the report must indicate

the sampling method used.

Tribal Retailers

The Auditor will be responsible for reviewing the

records of the Tribal retailer to verify that only stamped

cigarettes are sold, that cigarettes are only purchased

from licensed wholesalers or from wholesalers specified

in agreements under Pari VI of this Contract, that ex-

empt sales are not made to nonmembers, that the retail

selling price included the applicable Tribal taxes, and

that the cigarette and sales taxes are remitted to the

Tribe for deposit into Tribal accounts.

Essential Government Services

The Auditor will be responsible for reviewing the

relevant records of the Tribe to verify that Tribal ciga-

rette tax revenue was used for essential government

services in accordance with the requirements of Part

XII section 8 of this Cortract.

Communication between Auditors — Confidentiality

In the event that the Tribe chooses to contract with an

independent third party auditor to verify only part of

the requirements of this Contract, the Depa.tment shall

verify the remaining requirements as described above.

The independent third party auditor and the Depart-

ment shall share information as necessary to jointly ver-

ify the requirements of this Contract. Information

and/or records shared between the auditors are confi-

dential under the provisions of Part XI of this Contract.

Dispute Resolution

In the event that either the Tribe or the Department

disagrees with the Auditor’s final report, either party

may notify the other of the disagreement and follow

the procedures for resolution of the disagreement in

Part VIII of this Contract.

F-19

8. Joint Audit Implementation and Review

The Tribe and the State shall meet jointly with the

Auditor prior to the beginning of an audit cycle. The

purpose of such meeting is to discuss the objectives of

the upcoming audit, the exnectations of both the Tribe

and the State, the audit sta..uards to be used in such

audit, and any issues regarding detail of the audit,

records pertinent to the review, or substance of the

Auditor’s report. As soon as possible after the issu-

ance of the Auditor’s final report, the Tribe and the

State shall meet jointly with the Auditor to review the

report and discuss any issues of concern. For the pur-

poses of this Section 8, “audit cycle” refers to the reoc-

curring scheduled-audit of an entity.

PART VIII

Dispute Resolution

The ‘ribe and the State wish to prevent disagreements

and violations whenever possible, and to quickly and

effectively resolve disagreements and violations when they

arise. The parties agree that, to the extent possible,

informal methods shall be used before engaging in the

formal processes provided by this Part. The Tribe and the

State agree to consult with each other and work together

to address issues raised by persons not party to this

agreement regarding the implementation of this Contract.

As used in this Part “days” means calendar days, unless

otherwise specified.

1. Notification of Violation

If either party believes a violation of the agreement

has occurred, it shall notify the other party in writing.

The notice shall state the nature of the alleged viola-

tion and any proposed corrective action or remedy.

F-20

The parties agree to meet within fourteen days of re-

ceipt of the notice, unless a different date is agreed to

by the parties. The purpose of the meeting will be to

attempt to resolve between themselves the issues

raised by the notice of possible violation, and provide

an opportunity to implement any agreed corrective

action.

Mediation

If the parties are unable to resolve the disputed

issues through joint discussions under section 1 of

this Part, either party may request mediation by giv-

ing a written mediation demand to the other party.

The parties shall first attempt to agree on a mediator.

If the parties cannot agree on a mediator within 30

days of written demand, a three person mediation

panel shall be used and shall be selected as follows:

each party shall select a mediator and the two media-

tors selected by the parties shall jointly select a third

mediator.

The parties shall share equally the costs of mediation.

Remedies

Whenever an issue is submitted to mediation under

this section, the mediators may recommend corrective

action to remedy any violation that has occurred. In

no case shall a mediator render an independent rec-

ommendation or decision on any issue on which the

parties reach agreement. Remedies may include: au-

dit of relevant tribal records, interpretation of Con-

tract terms, changes in reporting, record keeping,

enforcement practices, business practices, or similar

actions. Remedies shall not include an award of

monetary damages or costs of any kind, or the disclo-

sure of any records not specifically subject to disclo-

sure under this Contract.

F-21

Termination of Contract

If, after no more than eight months from the initial

Notice of Violation, the parties are unable to resolve a

disagreement regarding an alleged violation and/or

the appropriate corrective action using the dispute

resolution methods authorized in this section, or if a

party continues to violate a Contract term after the

completion of the mediation process authorized in this

section, this Contract may be terminated. The parties

may, after no less than six (6) months following any

such termination, enter into a new Contract.

Disagreements Regarding Reports of the Auditor

Should either party have a concern about a report

from the Auditor, which cannot be resolved through

the joint audit review process described in Part VIII

of this Contract, that party may choose to resolve the

concern through the use of a mediator. Failure of ei-

ther party to grant the mediator access to any records

necessary to review the report is a violation under

~this Contract. The mediator may use the services of

an independent third-party certified public account-

ant in undertaking such review.

Notification of For Cause Termination

Upon forty-five (45) days written notice, either party

may terminate the Contract for cause. For the pur-

poses of this section, “for-cause” shall mean only the

following violatiors:

(a) Retail sales of unstamped cigarettes during the

effective period of a Tribal cigarette tax;

(b) Failure to submit to mediation as required by

this Part IX;

(c) A breach of the confidentiality provisions of Part

XII of this Contract; or

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(d) Use of tax proceeds in violation of the terms of

this Contract.

The Party seeking the termination for cause shall

notify the other party and the mediation organization,

who shall select a mediator to review the facts upon

which the for cause termination notice is based. The

party

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