Agua Caliente Band of Mission Indians v. Cnty. of...
53
Agua Caliente Band of Mission Indians v. Cnty. of Riverside
Transcript of Agua Caliente Band of Mission Indians v. Cnty. of...
Agua Caliente Band of Mission
Indians v. Cnty. of Riverside
•
California Indian Legal Services 332 South Juniper Street Escondido, California 92025 Telephone No. (714) 746-8941
AFFIDAVIT OF SERVICE BY MAIL
STATE OF CALIFORNIA ) ) SSe
COUNTY OF SAi'! DIEGO l
I am a citizen of the United States, over 18 years of age, and not a party to this case; my business address is 332 South Juniper Street, Escondido, California 92025.
I served two copies of the attached Amicus Curiae Brief on the following, by placing them in an envelope addressed as follows:
Steven A. Broiles Office of the County Counsel County Court House, Room 206 Riverside, California 92501
John P. Frank
Raymond C. Simpson Suite 406 Security Bank Building 110 Pine Avenue Long Beach, California 90802
Lewis, Roca, Beanchamp &.Linton 114· West Adams Street Phoenix, Arizona 85003
Each envelope was then, on April 15, 1970, sealed and deposited in the United States mail at Escondido, California, the county in which I am employed, with first class postage fully prepaid.
Executed on April 15, .1970, at Escondido, California.
Subscribed and sworn to before
. me this lS day of April, 1970.
vt.~HA~ iiam H. Cozad
.< , •
" " ,.~
r
OFFICIAL SEAL
DAVID H. GETCH!:S NOTARY PUBL-Ie ~ CALIF,ORNIA
PRINCIPAL OFFICE IN SAN DIEOO COUNTY
'. " : ~ 1 ,( ,~'
;
..
•
, \
NO. 25298
IN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
THE AGUA CALIENTE BAND OF MISSION INDIANS, by and through its TRIBAL COUNCIL, and DORA JOYCE PRIETO, PRISCILLA GONZALES, GLORIA GILLETTEE, PATRICK PATENCIO, and LAWRENCE PIERCE, Allottees, Individually and in Class Action, on behalf of all allottees of allotted land on the Agua Caliente Band of Mission Indians Reservation,
Appellants,
v.
THE COUNTY OF RIVERSIDE, a political subdivision of the State of California,
Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF CALIFORNIA
BRIEF OF AMICUS CURIAE
ROBERT S. PELCYGER DAVID H. GETCHES 332 S. Juniper Street Escondido, California 92025 Telephone (714) 746-8941
Attorneys for California Indian Legal Services, Inc., Amicus Curiae
• TABLE OF CONTENTS
TABLE OF AUTHORITIES • • • • • • • • • • • • • • •
INTEREST OF AMICUS CURIAE · • · · • • · · STATEMENT OF THE CASE • . • • • · •
QUESTIONS PRESENTED • • • · • • • • • •
ARGUMENT . • . • . • • • • • • • • •
I •. THE UNIQUENESS OF THE AGUA CALIENTE INDIAN RESERVATION · . • • · • · • · • · · • •
II. IMPOSITION OF A POSSESSORY INTEREST TAX UPON INDIAN TRUST LANDS IS NOT AUTHORIZED BY 28 U.s.C. § 13601 ON THE CONTRARY, § 1360 RECOGNIZES THE RIGHT OF TRIBAL AUTHOR-
· •
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Page
ii
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2
2
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ITIES TO IMPOSE ·ITS TAX • • • • • •• 8
III.
A. Sections 1360(a) and (c) • • • • • • •
·_B. Section 1360 (b) • • " 9 · " . . . .
C. Section 1360: a Trojan Horse? · . . . UNDER PREVAILING STANDARDS, THE COUNTY'S POSSESSORY INTEREST TAX CANNOT BE APPLIED TO LEASEHOLD INTERESTS IN INDIAN TRUST PROPERTY • • • • • • • • • • • • • • • •. •
A. Interference with sovereignty • • •
B. Interference with federal policy • • •
C. Federal pre-emption · . . . . . · . . D. United States v. Detroit and Oklahoma
Tax Commission v. Texas Co. distin-
8
18
21
23
24
25
29
guished • • • • • • • • • • • • • • •• 33
CONCLUSION
ADDENDUM
• • • • • • • • • • • • • • • • • • • •
• • • • • • • • • • • • • • • • • • • •
39
41
28 U.S.C. § 1360 • • • • • • • • • • • • • 3,8,9,12,
• 15,20,21,22, 33,34,39
28 U.S.C. § 1360 (a) • • • • • • • • • • • • 8, 10, 18, 21, 39
28 U.S.C. § 1360 (b) · · • • • • • • • · • 9, 10, 11, 14, 17, 18, 19, 20, 39
28 U.S.C. § 1360(0) • • • • · • • • • • · 8, 9, 10, 17, 18, 39
42 U.S.C. §§ 2001 et seq. • • · • · • • • • 32
Act of January 12, 1891 (Mission Indian Relief Act) (26 Stat. 712) • · · · · • • • · 3, 31
Public Law 280, 67 Stat 589 (August 15, 9, 21, 1953) • • • • • • • 22, 23
Public Law 322, 63 Stat 705 • • • · • • • • 21
_ Public Law 8:6,.326,73 Stat 597 (September 21, 1959)
• ~ • · • · • · • • 30
Public Law 86-505, § 2, 74 Stat 199 (June 11, 1960) • • • • · • · . . • • • 30
Public Law 87-375, 75 Stat 804 (October 4, 1961) • • • • • • • • • • · 30
Public Law 87-785, 76 Stat 8115 (October 10, 1962) • · • · • · • • • · • 30
Public Law 88-167, 77 Stat 301 (November 4, 1963) · • • · • • • • • • • 30
Public Law 89-408, 80 Stat 132 (April 27, 1966) • • • • • • • · • • 30
Public Law 90-182, 81 Stat 559 (December 8, 1967) • • • .. . • • • • • • 30
iii
• Public Law 90-184, 81 Stat. 560 (December
10, 1967)
Public Law 90-335, § l(f), 82 Stat. 175
• • •
(June 10, 1968) • • • • • • • • • • • • •
Public Law 90-355, 82 Stat. 242 (June 20, 1968) • lIP ••••••••
Public Law 90-534, § 6, 82 Stat. 884 (September 28, 1968) ••••••••
· . . . . · . . . .
Public Law 90-570, 82 Stat. 1003 (October 12, 1968) •••••• • • •
o • • • • • • • • • • •
30
30
30
30
30
13 60 Stat. 237, § 4
25 C.F.R. Part 131 Col • • • • Col 110 III eo • • I). 29
30 F. R. 8172 (June 22, 1965). • • • • • • •
30 F.R. 8722 (July 2, 1965) • o • .. • Q •
33 F.R. 17339 (November 21, 1968) • • • • • 0
California
California Civil Code §
California Government Code §
California Government Code §
California Government Code §
California Government Code §§
1114
38660
65850
29088
29100-29102
• •
.. It .. •
. . . "
California Health & Safety Code § 1901.2
California Health & Safety Code § 1920
California Health & Safety Code § 17922
California Health & Safety Code § 17951
iv
· . • •
• • •
• •
13, 14
13
2
18
17
17
16
16
15
15, 17
17
17
• California Revenue & Taxation Code § 102 •
California Revenue & Taxation Code 5 107 •
California Revenue & Taxation Code § 128 •
• •
• •
• •
California Revenue & Taxation Code S 401 • • •
California Revenue & Taxation Code § 1603 • •
California Revenue & Taxation Code § 2151 · . California Revenue & Taxation Code § 2914 • •
Ordinance of San Diego County No. 3444 • • · .
17
15
16
16
16
16
34
15
Proposed Legislation
H. R. 12589, 91st Congress (1969) 33
Hearings
Cases
Hearings before the House Subcommittee on
Appropriations for the Department of the
"- Interior and Related Agencies for Fiscal
Year 1969. "~"."" •• <iI.O ••••• 27
Alabama v. King & Boozer, 314 U.S. 1 (1941).. 35
Alaska Pacific Fisheries v. United States, 248 U.S. 78 (1918) • • • • • • • • • • • • • • 21
Beecher v. Wetherby, 95 U.S. 517 (1877). • •• 7
Buster v. Wright, 135 Fed. 947 (8th Cir. 1905), appeal dismissed 203 U.S. 599 (1906) • • • •• 11
Cherokee Nation v. Georgia,S Pet. (U.S.) 1 (1831) .. .. .. .. .. .. .. .. .... ...... 9
Choate v. Trapp, 224 U.S. 665 (1912) • • • •• 21, 36
Commissioner of Taxation v. Brun, Minn., 174 N.W.2d 120 (1970), .: ••••• --:-:- :-:-.-:- 25, 38
v
• county of San Bernardino v. La Mar, 271 A.C.A. 821, 76 Cal.Rptr. 547 (1969).
Evans v. Faught, 231 Cal.App.2d 698, 42 Cal.Rptr. 133 (1965) ••••••• • •
Fraser v. Bentel, 161 Cal. 390, 119 Pac.
· . . 14, 16
· . . 19
509 (1911) • • • • • • • • • • 19
Graves v. New York, 306 U.S. 466 (1939). • •
Hopkins v. United States, 414 F.2d 464 (9th Cir. 1969) •••••••• o 0 • Go
35
2
Iron Crow v. Oglala Sioux Tribe of Pine Ridge Reservation, 231 F.2d 89 (8th cir. 1956) • •• 11, 25
James v. Dravo Contracting Co., 302 U.S. 134 (1937) .. Go Go • 0 Go ~ • Go • 0 Go. 35
Johnson v. Bridge, 60 Ca1.App. 629, 213 Pac. 512 (1923) • • • • • • • • • • •• 19
Johnson v. Mc Intosh, 8.Wbeat. (U.S.) 543 (1823) • •• • ••••• • • 7
Kirkwood v. Arenas, 243 F.2d 863 (9th Cir. 1957) 9, 19
Makah Indian Tribe v. Clallam County, 73 Wash.2d 667, 440 P.2d 462 (1968) •• • • • •
Mescalero Apache Tribe v. Hickel, 10th Cir.
26
No. 40-70 • • • • • • • • • • 2
Merris v. Hitchcock, 194 U.S. 384 (1904) •
N.L.R.B. v. Wyman-Gordon Co., 394 U.S. 759 (1969) • • • • • • •
Oklahoma Tax Commission v. Texas Co., 336 U.S. 342 (1969) •••••••• • •
Oklahoma Tax Commission v. un~ted States, 319 U.S •. 598 (1943) ••••••••••
, ,
, "
vi
• •
· .
• •
11
13
34, 37, 38, 39
38
• Osuna v. Johnstone, San Diego Superior (civil No. 313438) . . . . . . . PUlalluE Tribe v. De12artrnent of Game, 391 u.s. 392 (1968) . . • . • • •
Seaboard World Airlines v. Gronouski, 230 F.Supp. 44 (D.D.C. 1964) •••
•
•
Court, •. .. • • • • 14
• • • . 9
• • ~ e 14
Selmour:v SUEerintendent, 368 U.S. 351 (1962). 17
Snohomish County v. Seattle Disrosal Co., 70 Wash. 668, 425 P.2d 22 (1967 cert.denied 389 U.S. 1016 (1967) •••••••••••
SohoP12Y v. Smith, 302 F.Supp. 899 (D.Ore. 1969)
Squire v. CaEoeman, 351 U.S. 1 (1956). •• •
Starrv. Long Jim, 227 U.S. 613 (1913)
United States v. Detroit, 355 U.S. 466 (1958).
United States v. Kagama, 118 U.S. 375 (1886)
United States v. Libbl, McNeil and Libbl, - 107 F.Supp •. 697 (D. Alaska 1!}52) •••••••
United States v. Rickert 188 U.S. 432 (1903) • ===~!,
united States v. Santa Fe Pacific R. Co., 314 U.S. 339, reh.den. 314 u.s. 716 (1941) ••
Vitex Manufacturini Co. v. GOvernment of the Virgin Islands, 35 F.2d 313 (3rd. cir 1965) •
Warren Trading Post v. Tax Comm., 380 U.S. 685 (1965) • • • • • ••••
Williams v. Lee, 358 U.S. 217 (1959) •••••
Worcester v. Georgia, 6 Pet. (U.S.) 515 (1832)
Your Food Stores, Inc. v. Vi11a~e of 68 N.Mex. 327, 361 P.2d 950 (19 1), cert.denieQ,. 368 U.S. 915 (1961) ••
vii
ESEanola,
• • • • •
19
9
19, 26
21
34, 35, 36
9
14
25
7
28
24, 26, 29, 30, 36, 37
9, 24, 36, 37
9, 38
25
TREATISES AND LAW REVIEWS
United States Department of the Interior, Handbook of Federal Indian Law (1958) •• • •
Rosenn, "Puerto Rican Land Reform: The History of an Instructive Experiment" 73 Yale L. J. 334 (1963) ••••••• iii iii Q GI
OTHER AUTHORITIES
California State Advisory Commission on Indian Affairs, "Progress Report to the Governor and Legislature: Indians in Rural and Reservation Areas" (February, 1966)
Executive Order of the President No. 11435
11
28
4,5,6
(November 21, 1968) • • • • • • • • • •• 22
Memorandum Opinion of the Deputy Solicitor, No. 36768, (February 7, 1969).,. • • • • • •• 20
Memorandum Opinion of the Sacramento Solicitor (October 22, 1968) •••
Regional • • • • • 20
1969 California County Fact Book • • • • • •• 17
Sacramento Area Office of the Bureau of Indian Affairs, "Tribal Information and Directory" (1970) •••••••••••••••.••• 3, 4
viii
• NO. 25298
IN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
THE AGUA CALIENTE BAND OF MISSION INDIANS, by and through its TRIBAL COUNCIL, and DORA JOYCE PRIETO, PRISCILLA GONZALES, GLORIA GILLETTEE, PATRICK PATENCIO, and LAWRENCE PIERCE, Allottees, Individually and in Class Action, on behalf of all allottees of allotted land on the Agua Caliente Band of Mission Indians Reservation,
Appellants,
v.
THE COUNTY OF RIVERSIDE, a political subdivision of the State of California,
Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
"- FOR THE CENTRAL DISTRICT OF CALIFORNIA
BRIEF OF AMICUS CURIAE
INTEREST OF AMICUS CURIAE*
California Indian Legal Services is a non-profit
corporation supported by the Legal Services Program of the
Office of Economic Opportunity. Legal assistance to low
income American Indians and Indian tribes is provided by
*Letters from appellants and appellee consenting to the submission of this brief amicus curiae have been submitted to the Clerk.
-1-
• California Indian Legal Services, particularly in the
specialized area of law related to Indian resources and in
economic development activities. Amicus has submitted a
brief amicus curiae before this court in Hopkins v. United
States, 414 F.2d 464 (9th Cir. 1969) and before the Court
of Appeals for the Tenth Circuit in Mescalero Apache Tribe
v. Hickel (No. 40-70) which is now pending.
The decision in this case will be of great signifi
cance to Indians. Amicus is active in promoting and
assisting in the economic development of Indian reserva
tions and therefore has a vital interest in presenting to
this court the full range of issues raised by this case.
STATEMENT OF THE CASE
Amicus adopts the statement of the case in
Appellants' Brief.
QUESTIONS PRESENTED
This case involves the validity of the imposition
of a possessory interest property tax on lands held in
trust by the United States of America for the Agua Caliente
Band of Mission Indians.
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• ARGUMENT
I. THE UNIQUENESS OF THE AGUA CALIENTE INDIAN RESERVATION.
According to the January, 1970 edition of the
"Tribal Information and Directory" published by the Sacra
mento Area Office of the Bureau of Indian Affairs, there
are seventy-six Indian Reservations or Rancherias in the
State of California (not including the four Reservations
along the Colorado River, which are under the jurisdiction
of the Phoenix Area Office of the Bureau). The State of
California has attempted to assume certain jurisdiction,
the precise nature of which is at issue in this proceeding,
over Indians residing on all of these lands pursuant to
28 U.S.C. § 1360 and 18 U.S.C. § 1162. Of the seventy-six
Reservations and Rancherias listed, the Bureau of Indian
Affairs "Tribal Information and Directory" indicates that
twenty-five Reservations (including Agua Caliente) were
established under authority of the Act of January 12, 1891,
the Mission Indian Relief Act (26 stat. 712). Of these
twenty-five, nine are located in Riverside County, two in
San Bernardino County, thirteen in San Diego County, and
one in Santa Barbara County.
According to the same Bureau of Indian Affairs,
Sacramento Area Office "Tribal Information and Directory,"
the Indian Reservations in California range in size from
less than one acre (Sheep Ranch Rancheria) to more than
-3-
• 85,000 acres (Hoopa Valley Reservation). Bureau of Indian
Affairs, supra at pp. 34 and 67. Agua Caliente (approxi
mately 27,000 acres, T. 39) is the second largest Reserva
tion in Southern California, the largest being the Morongo
Reservation (32,254 acres, ~. at p. 51) and the smallest
being the Santa Ynez Reservation (99 acres, Id. at p. 65).
Populations of California Indian Reservations vary from
zero (La Posta, Cuyapaipe) to more than 850 (Hoopa Valley).
~. at pp. 27, 34 and 39. Obviously, there are very few
statements that are applicable to all of the Indian lands
in California but one generalization does apply, almost
without exception: the. Indians residing in virtually every
Reservation or Rancheria are impoverished. The major
exception is Agua Caliente.
In "Progress Report to the Governor and the Legis
lature by the State Advisory Commission on Indian Affairs
on Indians in Rural and Reservation Areas" (February, 1966),
the California State Advisory Commission on Indian Affairs
made the following findings and recommendations concerning
the social and economic characteristics which define the
position of California's rural Indian population:
1. Two of the major underlying factors which
account for the problems of underdevelopment of reserva
tion economies are the poor quality and remoteness of
Indian lands and the almost complete lack of higher
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• job skills among Indians. "Progress Report," supra
at p. 9.
2. The rate of unemployment in the Commission's
survey of 10 reservations is 25.5 percent; the rate of
unemployment reported by the [questionnaire of the
House Committee on Interior and Insular Affairs in 1963]
is 35 percent. Id. at p. 9.
3. The commission survey finds that over 70 per
cent of the families residing on 10 California
reservations earn, on the average, less than $3,000
annually, with one-half of these earning less than
$1,500 per year. Id. at p. 9.
4. The conditions under which Indians live in
California are the lowest of any minority group.
Housing is grossly inadequate: living quarters are
small, crowded and poorly furnished; existing houses
are structurally unsound; foundations are lacking in
many cases; the building materials used, together with
faulty electrical wiring and the unsafe use of gas,
kerosene, and wood stoves, constitute a constant men
ace to life; houses generally do not provide the mini
mum necessary protection from extreme climatic
conditions. Reports from federal, state and local
agencies agree with the commission's findings: from
30 to 50 percent of the homes need complete replacement
-5-
and 40 to 60 percent need improvements, taken together,
this means that 90 percent of all homes need replace
ment or repairing to provide adequate living quarters
for California Indians. Sewage disposal facilities are
unsatisfactory in 60 to 70 percent of cases. Water
from contaminated sources is used in 38 to 42 percent
of the homes. Water must be hauled, under unsanitary
conditions, by 40 to 50 percent of all Indian families.
Id. at p. 10.
5. The key to the solution of the problems of
Indians, whether in the areas of education, welfare and
health, or living conditions lies in the development of
the employment potential of Indians and in the economic
development of their land resources. Id. at p. 10.
When viewed against this sobering background, the
uniqueness of the Agua Caliente situation is apparent. To
mark the comparison, it is sufficient to point out that 103
of the 150 members of the Agua Caliente tribe each own
interests in trust land (allotments) that had appraised
values of $335,000 in 1959 (T. 38). Undoubtedly, most of
the remaining members of the tribe are the allottees' minor
children.
It may be that the Agua Caliente Indians have
progressed to the point, both economically and in terms of
their competency to manage their own affairs, when it is
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• no longer necessary or desirable for the United States to
hold title to property for the Indians' sole use and
benefit. However, this judgment is not one for the courts
to make but rather for the congress. l United States v.
Santa Fe Pacific R. Co., 314 U.S. 339, reh. den. 314 U.S.
716 (1941); Beecher v. Wetherby, 95 U.S. 517 (1877); Johnson
v. M'Intosh, 8 Wheat (U.S.) 543 (1823). Therefore, in
determining the merits of this litigation, this court should
not be guided by whatever opinions it may have concerning
the wisdom of continuing this nation's trust responsibilities
to the appellant.
The questions to be decided in this proceeding are
not unique to the Agua Caliente-Palm Springs situation.
This court's decision will have a direct impact upon all
Indians residing on or near Indian trust land in California
and throughout the Western United States. what may appear
to be logical or equitable in one set of circumstances may
turn out to be utterly disasterous when applied elsewhere. 2
lFrom the available evidence, Congress has apparently determined that the trust relationship with the Agua Caliente Tribe needs to be strengthened, not weakened. ~ 25 U.S.C. § 954.
2This is not to imply that in the circumstances presented here imposition of the appellee's possessory interest tax is either reasonable or equitable. To the contrary, the uncontradicted evidence shows the severe detrimental consequences of the tax on the economic development of the Indian lands (T. 80).
-7-
• For this reason, we implore this court to consider carefully
not only the impact of its decision on Indians generally,
but also the kind of judicial decision that is best cal-
culated to achieve the flexibility of approach demanded by
the diverse nature of the problems confronting the many
distinct Indian communities in their relations with the
dominant society. While a decision affirming the trial
court mayor may not solve the unique problems involved in
Agua Caliente-Palm Springs-County of Riverside relationship,
it would certainly severely hamper the efforts of other
Indian communities to improve conditions on their reserva-
tions.
II. IMPOSITION OF A POSSESSORY INTEREST TAX UPON INDIAN TRUST LANDS IS NOT AUTHORIZED BY 28 U.S.C. § 1360; ON THE CONTRARY, § 1360 RECOGNIZES THE RIGHT OF TRIBAL AUTHORITIES TO IMPOSE ITS TAX.
A. Sections 1360(a) and (c).
The appellee's authority to impose a possessory
interest tax on leased Indian land is specifically excluded
from the grant of civil jurisdiction to California in 28
U.S.C. § 1360. Title 28 U.S.C. § 1360, far from authorizing
taxation of Indian lands, prohibits any direct tax on Indian
land. The Court of Appeals for the Ninth Circuit said of
§ 1360 that it "negatives the idea that any change in the
law as to 'alienation, encumbrance, or taxation' of Indians'
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• property was intended." Kirkwood v. Arenas, 243 F.2d 863,
865 (9th Cir. 1957).
In enacting "Public Law 280" (28 U.S.C. § 1360 and
18 U.S.C. § 1162, 67 Stat. 589), which authorized assumption
of limited civil and criminal jurisdiction of certain named
states (including California) and territories over the
"Indian country" within their boundaries, Congress care
fully preserved areas of immunity from state jurisdiction
(28 U.S.C. § 1360(b) and 18 U.S.C. § 1162(b» and acknowledged
the traditional authority of Indian tribes and communities
to govern themselves. 28 U.S.C. § 1360(c); ~. William v.
~, 358 U.S. 217(1959). In carefully carving out an area
of exclusive tribal jurisdiction and erecting legal barriers
to prevent the state:'s. political subdivisions from assuming
dominion and control over Indian Reservations, Congress
recognized not only the traditional sovereignty of Indian
communities, but also the history of strained, indeed at
times hostile, relations between Indians and surrounding
localities. Cf. Worcester v. Georgia, 6 Pet. (U.S.) 515
(1832); Cherokee Nation v. Georgia, 5 Pet. (U.S.) 1 (1831);
and more recently, Puyallup Tribe v. Department of Game,
391 U.S. 392 (1968); and Sohappyv. Smith, 302 F.Supp. 899
(D. Ore. 1969). In United States v. Kagama', 118 U.S. 375
(1886), a criminal case arising on an Indian Reservation in
California, the court observed: "Because of the local ill
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• feeling, the people of the States where the [Indian Tribes]
are found are often their deadliest enemies."
Section 1360(a) makes applicable to all "Indian
country" within the State of California those civil laws
"that are of general application to private persons or pri
vate property· and provides further that such laws "shall
have the same force and effect within such Indian country
as they have elsewhere within the State." (emphasis added)
The law thereby draws an important distinction between the
civil laws of state-wide application on the one hand and
the civil law promulgated by the state's various political
subdivisions on the other. While the "Indian country"
described in the act was to be subject to the state-wide
civil laws of general application (except for the limita
tions set forth in § l360(b», the law specifically excluded
such "Indian country" from the jurisdiction of local
political subdivisions.
This distinction is also embodied in § 1360(c)
which specifically recognizes the authority of Indian tribes
within the affected states to govern themselves and their
property subject to only one limitation. The section reads:
Any tribal ordinance or custom heretofore or hereafter
adopted by an Indian tribe, band, or community in the
exercise of any authority which it may possess shall,
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• if not inconsistent with any applicable civil law of
the State, be given full force and effect in the deter-
mination of civil causes of action pursuant to this
section. (emphasis supplied)
The authority of tribal governing communities
recognized in this section is at least equal to the author
ity of the state's political subdivisions. Obviously, a
city or county is not permitted to enact ordinances incon-
sistent with applicable civil law of the state. See Cal. ---Const. Art. II, § 11. The same limitation applies to
Indian governing authorities (subject to the limitations
on state jurisdiction in § l360(b». However, in all other
respects Indian tribes, bands, and communities are free to
govern themselves and this authority necessarily entails
the collection of revenue. 3
As the discussion, infra, of the assessment, levy,
and collection of the possessory interest tax will show,
appellant Agua Caliente Tribe, by and through its Tribal
Council, has the right, power, and authority to impose a
3Merris v. Hitchcock, 194 U.S. 384 (1904); Iron Crow v. 0hIaIa sioux Tribe of Pine Ridge Reservation;--231 F.2d 9, 96 (8th C~r. 1956); Buster v. Wright, 135
. Fed. 947 (8th Cir. 1905), appeal dismissed 203 U.S. 599 (1906). See generall¥ United States Department of the Interior, Federal Ind~an Law (1958), pp. 435 et seq.
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• possessory interest tax, or for that matter, any kind of
tax, property or otherwise, consistent with applicable
state civil laws of general application. Once it is
clear that the Tribe has such authority (which is specifi
cally recognized and affirmed by § 1360), it is manifest
that the lands within so-called "Indian country" are immune
from the appellee's possessory interest tax, just as the
appellee is without authority to assess, levy, or collect
property taxes on lands outside the County of Riverside.
There is no overlapping jurisdiction shared by the appellant
Tribe and the appellee County because the political sub
divisions of the state are specifically excluded by Congress
from applying their local laws, ordinances, etc. to the
"Indian country" within their exterior boundaries.
This obvious distinction between jurisdiction con
ferred on the state and jurisdiction withheld from the
state's political subdivision has been recognized by the
Secretary of the Interior, by the California courts, and by
the state's political subdivisions themselves.
Thus, in purporting to adopt and make applicable
the laws of the State of California relating to the use of
land leased from Indians, the regulation promulgated by
the Secretary of the Interior specifically provided:
This adoption and application does not include the
-12-
• laws, ordinances, codes, resolutions, rules, or other
regulations of the various counties and cities within
the State of California which will be adopted and
applied by separate action with such exceptions as
are determined to be appropriate. 30 F.R. 8722 (July
2, 1965).
To the knowledge of amicus, the only regulation issued by
the Secretary purporting to adopt and apply the laws and/or
other regulations of any of the political subdivisions in
California to leased Indian land involved the unique cir
cumstances of the Agua Caliente Reservation and the City of
Palm Springs, 30 F.R. 8172 (June 22, 1965). Although these
regulations (both 30 F.R. 8722 and 30 F.R. 8172) made appli-
cable to leased Indian land state and local laws "limiting,
zoning, or otherwise governing, regulating, or controlling
[its] use or development," state and local tax laws were
specifically excluded. 4
4Amicus cites these regulations for two purposes: first, to demonstrate governmental awareness of the different status accorded state and local laws under Public Law 280, and second, to point out that although the regulations purportedly authorize some state or local control of the use or development of leased Indian land, state or local taxation of leased Indian land was clearly not authorized. However, amicus has grave doubts concerning the meaning and/or validity of the regulations. The proposed regulations were not published in the Federal Register in advance of their promulgation as required by 5 U.S.C. § 553(b) (3) and its predecessor 60 Stat. 237, § 4, and is therefore void. NLRB v. Wyman-Gordon Co., 394 U.S. 759 (1969); Seaboard Worl~
-13-
• In County of San Bernardino v. La Mar, 271 A.C.A.
821, 76 Cal.Rptr. 547 (1969), the State Mobile Home Parks
Act was found to be applicable to leased Indian land
pursuant to 30 F.R. 8172 and, since enforcement power was
specifically delegated to the counties by the state law,
the County of San Bernardino was permitted to enforce the
provisions of the state law of general application.
However, the county could not enforce its own mobile park
ordinance. In fact, San Bernardino County conceded on
appeal its lack of authority to apply its ordinance (as
opposed simply to enforcing the state law) to land leased
from Indians.
In Osuna v. Johnstone (San Diego Superior Court,
civil No.31343B), Indians residing on the Barona Indian
Reservation in San Diego County brought a class action
challenging the application of the county's dog licensing
Airlines v. Gronouski, 230 F.Supp. 44 (D. D.C. 1964); United States v. Libby, r4cNeil and Libby, 107 F.Supp. 697 (D. Alaska 1952). Further, the July 2,1965 regulation (purporting to make certain state laws applicable to leased Indian land) provides: "Nothing contained in this notice shall be construed to in any way alter or limit the provisions of" 28 U.S.C. § 1360(b) and 18 U.S.C. § l162(b). The subsequent rulings of the Solicitor~p Office of the
JDepartment of the Interior, infra fn. 8, holding that these sections conferred jurisdiction upon the State of California only to the extent its laws operate upon the person, but that state laws may not be applied if their enforcement, directly or indirectly, would involve the regulation of trust property, would appear to undercut completely the effect of these purported regulations.
-14-
•
· ... _.
ordinance to dogs kept on the Reservation. In granting
plaintiffs' motion for a preliminary injunction, the court
held that S 1360 does not grant jurisdiction for the
application of laws, regulations and ordinances which are
local in nature. Because California Health and Safety
Code S 1920 does not require the County of San Diego to
collect a dog license fee, the county ordinance imposing
a dog license tax was found to be an ordinance local in
nature which could not be applied to dogs kept on the
Indian Reservation. The remainder of S 1920, to the extent
its enforcement by the county was made mandatory by state
law, in "rabies areas" .such as San Diego County (Cal.
Health and Safety Code S 1901.2), was held to be enforcible
by the county. Following the issuance of this preliminary
injunction, the County Board of Supervisors adopted an
ordinance (No. 3444) accepting this decision by formally
recognizing the exemption.. of. the owners of dogs kept on
federal Indian trust land from the county's license fee.
The tax here assessed, levied, and collected by , appellee County is clearly local in nature and non-mandatory,
and is decidedly not a civil law of general application
throughout the State of California. California Revenue and
Taxation Code S 107 merely defines the meaning of
"possessory interests." Pursuant to the state statutory
-15-
• state law.is not self-executing here, nor is it mandatory •
state law does no more than provide basic guidelines on
the model of enabling legislation. 6 The result is a
pattern of property taxation that differs markedly among
the counties. See 1969 California County Fact Book, p. 31.
From the nature of the state statutory scheme, it
is readily apparent that, pursuant to the Tribe's inherent
authority, supra fn. 1, and 2B U.S.C. § l360(c), the
appellant tribe has the authority to impose a possessory
interest tax consistent with applicable state laws of
general applicatio~. State law, however, does bar double <
taxation. 7 Cal. Const. Art. XIII, § 1 and Cal. Rev. and
Tax. Code § 102. B The two possessory interest taxes
imposed, respectively, by the appellee and the appellant
6For other examples of state legislation enabling its political subdivisions to enact certain kinds of ordinances, see, ~., Cal. Health and Safety Code § 1920 (dog licenseSfT C~ Govt. Code § 65B50 (zoning); Cal. Govt. Code § 3B660, and Cal. Health and Safety Code-§§ 17922,17951 (building codes).
7The taxing authority of the tribe clearly extends to the interests of non-Indian lessees. See Seymour v. Superintendent, 36B U.S. 351 (1962), and cases cited in footnote 3.
BWe assume, arguendo, that the state law proscribing double taxation is not within the limitation of state civil jurisdiction in § l360(b). If it is included with the limitations of that section, so, too, must the rest of the state tax·scheme, including the tax challenged in the instant case. See infra.
-17-
• tribe cannot be allowed to stand together; the county tax
must fail. Title 28 U.S.C. § l360(c) protects the ability
of the tribe to impose its tax in that it is a tribal law
"not inconsistent" with state law. On the other hand, 28
U.S.C. § l360(a) prohibits collection of the county tax-
a law which is local and not general in nature.
B. Section l360(b).
In Part II B of their opening brief, appellants
argue persuasively that 28 U.S.C. § l360(b) specifically
precludes imposition of the tax in question by appellee.
As they correctly point out, the trial court's distinction
between taxing Indian property and taxing the property of
the non-Indian lessee (the former being proscribed, the
latter permissible), a distinction which is essential to
sustain the holding of the court below, leads to impossible
difficulties because state courts are specifically denied
jurisdiction to adjudicate the right to possession of
Indian property. Yet state courts cannot possibly escape
that very undertaking if the tax here in question is
permitted.
The trial court's purported distinction must fail
for another reason. Section l360(b) precludes not only
the taxation of Indian trust property, but also its "encum
brance." section 1114 of the Cal. Civil Code provides that
-18-
• the term "incumbrances" "includes taxes, assessments, and
all liens upon real property." Interpreting this statute,
the California Supreme Court declared in Johnson v. Bridge,
60 Cal.App. 629, 213 Pac. 512 (1923) incumbrance was
defined to include "whatever charges, burdens, obstructs, or
impairs" the use of an estate in land, or "impedes its 9
transfer." Similarly, in Snohomish County v. Seattle
Disposal Co., 70 Wash. 668, 425 P.2d 22 (1967), cert.
denied 389 U.S. 1016 (1967), zoning ordinances were held to
be "encurnbrances,"(defined as "a burden on land deprecia-
tive of its value, such as a lien, easement, or servitude,
which, though adverse ,to the interests of the landowner,
does not conflict with his conveyance of the land in fee")
within the meaning of S 1360(b). And most importantly,
the United States Supreme Court and the Court of Appeals
for the Ninth Circuit have held the clause "free of all
charge or incumbrance whatsoever" to preclude imposition of
taxes on trust land. In Squire v. Capoeman, 351 U.S. 1
(1956) the taxation of income from the sale of timber on
allotted (Indian trust) lands was proscribed. In Kirkwood
v. Arenas, supra, the imposition of an inheritance tax on
the transfer of an allotment to one's heirs was invalidated.
9See also Fraser v. Bentel, 161 Cal. 390, 119 Pac. 509 (1911), and Evans v. Faught, 231 Ca1.App.2d 698, 42 Ca1.Rptr. 133 (1965) and cases therein cited.
-19-
• Clearly, the imposition of appellee's possessory
interest tax constitutes an "elncumbrance" within existing
judicial definitions, on the estate of the Indian bene-
ficiary. The uncontradicted evidence in this case shows
that the tax operates to "impair" and "burden" the trust
property, preventing or obstructing its use. The tax is
depreciative of the land's value. Needless to say, the tax
is an "encumbrance" whether or not the land is actually
leased because the threatened or potential application of
the tax is itself a burden that depreciates the value of
the land and obstructs or impairs its use. Therefore,
even if imposition of appellee's possessory interest tax
does not constitute taxation of Indian trust property
(because the tax is formally imposed on the non-Indian's
leasehold interest) the tax operates as an encumbrance on
the Indian trust property and is outside the scope of
jurisdiction conveyed by § 1360. 10
lOIn interpreting § 1360(b), the Solicitor of the Department of the Interior has ruled: (1) That 28 U.S.C. § 1360 conferred jurisdiction upon the State of California to apply its laws to Indians only to the extent such laws operate upon the person, but state laws may not be aPplied to Indians if their enforcement, directly or indirectly, would have an impact on or involve the regulation of trust property in any significant way (Memorandum Opinion of the Deputy Solicitor No. M36768 [February 7,1969]). (2) That § 1360 did not authorize the imposition of the state sales tax on Indian trading activities on Indian Reservations in California (Memorandum Opinion of the Sacramento Regional Solicitor [October 22,1968]).
-20-
• If there is any doubt about what Congress intended
by the language it used, the rule of construction of laws
relating to Indians that doubtful expressions are to be
resolved in favor of the Indians should be invoked.
Alaska Pacific Fisheries v. United States, 248 U.S. 78 (1918);
Choate v. Trapp, 224 U.S. 665 (1912); starr v. Long Jim,
227 U.S. 613 (1913).
C. Section 1360: a Trojan Horse?
There are policy considerations which also compel
this court to reject appellee's argument that their posses
sory interest tax is authorized by § 1360. Appellant tribe,
even before the enactment of Public Law 280, recognized the
"law and order" problems resulting from the absence of state
jurisdiction within the Indian Reservation, and joined with
local authorities in requesting Congress to pass Public Law
322 (63 Stat. 705), applicable only to the Agua Caliente
Reservation. Many tribal authorities, including appellant,
also p~rticipated in the deliberations which led to the
enactment of § 1360. See generally plaintiffs' Trial Brief
and Points and Authorities in Support Thereof, pp. 23-26.
Congressional willingness to consider the opinions of such
tribal authorities is apparent from the exceptions to state
jurisdiction ennumerated in § 1360(a). The entire statute
seems to have been drafted to assure the affected Indian
-21-
, tribes that there would be no adverse consequences to the
assumption of the limited state jurisdiction conferred by
the act. Obviously, no tribal authority would have con-
sented to the assumption of state jurisdiction if they had
thought that this legislation would have allowed the imposi-
tion of a possessory interest tax upon their lessees. To
construe Public Law 280 as authorizing the imposition of
such a tax would not only be a cruel irony (since the Indians
had helped to procure its passage) but yet another breach of
trust.
Further, in 1968 Congress amended Public Law 280
to require the consent.of the tribe before any state not
previously granted civil jurisdiction over Indians could
acquire such jurisdiction. 25 U.S.C. § 1322.11
Insofar as
llAt the same time, Congress provided for the retrocession of the jurisdiction conferred by 28 U.S.C. § 1360 and 18 U.S.C. § 1162. 25 U.S.C. § 1323 and Executive Order of the President No. 11435 (November 21, 1968), 33 F.R. 17339. This is an indication that Congress was less than completely satisfied with the fifteen years of experience under Public Law 280. In view of this congressional policy to retreat from the old policy of encouraging the states to assume civil jurisdiction over Indian country, manifested in both §§ 1322 and 1323 of 25 U.S.C., it would be unwise and counter productive for the courts to expand p.L •. 280 jurisdiction to anything beyond that which was clearly in the contemplation of the Congress at the time of its enactment.
-22-
, it still remains a congressional policy to provide for the
assumption of state civil and criminal jurisdiction over
Indians, with the consent of the appropriate tribal
authorities, that policy will be undermined considerably,'
if indeed it is not dealt the death below, by a holding
that Public Law 280 authorizes the imposition of a posses-
sory interest tax on lessees of Indian land. It is not
very likely that tribal authorities will consent to the
assumption of state civil jurisdiction if they know in
advance that the state will thereby acquire authority to
control the use of their land through the imposition of a
possessory interest tax.
III. UNDER PREVAILING STANDARDS, THE COUNTY'S POSSESSORY INTEREST TAX CANNOT BE APPLIED TO LEASEHOLD INTERESTS IN INDIAN TRUST PROPERTY.
In recent years, the Supreme Court has set forth
three related tests for determining the applicability
of state law to Indian lands and Indian affairs, under
anyone of which appellee's possessory interest tax would
be invalid. 12 They are:
1. Whether the state action infringes on the right
of Indian Reservations to make their own laws and be ruled
l2This discussion assumes that Congress has not specifically authorized imposition of the appellee's possessory interest tax. ~ Part II, supra.
-23-
• by them, i.e., wKether the state action interferes with
tribal sovereignty; Williams v. Lee, 358 U.S. 217, 220
(1959) •
2. Whether the state laws interfere with federal
policies concerning the reservations; Warren Trading Post
v. Arizona Tax Comm., 380 U.S. 685, 687 (1965).
3. Whether the federal government has pre-empted
the field so that no room remains for any state action;
Warren Trading Post v. Arizona Tax Comm., supra at 690-91.
A. Interference with sovereignty.
The imposition of the County's tax prevents the
tribe' from imposing its. own tax on the lessees of Indian
land. Even if imposition of both the tribe's and the
County's tax does not constitute double taxation,13 as a
practical matter, as the facts in this case clearly demon
strate, taxing by the County renders ineffective the
possibility of a tax by the tribe. If the tribe were to
insist that its tax be paid, along with the County's, it
would completely undermine the economic desirability of
leasing Indian land.
It is not necessary, however, for the court to find
that the tribe would not be able to levy and collect its
tax if the County's tax is imposed in order to find an
l3~ p. 17, supra.
-24-
• interference with tribal sovereignty. It is sufficient
interference with the Tribe's right to make its own laws
and to be ruled by them for the County to levy a tax on
property that is within the jurisdiction of the Tribe and
potentially subject to the Tribe's tax. "Two self-governing
bodies cannot have dual and co-existent jurisdiction and
control within the same territory at the same time." Your
Foods stores, Inc. v. Village of Espanola, 68 N.M. 327, 361
P.2d 950,956 (1961), cert. denied 368 U.S. 915 (1961).
See also Iron Crow v. Oglala Sioux Tribe of Pine Ridge
Reservation, supra.
In Commissioner of Taxation v. Brun, Minn.
--'0' 174 N.W.2d 120 (1970), the Supreme Court of Minnesota
held that the state lacked authority to impose an income
tax on Indians residing on the Red Lake Reservation stating,
"It cannot be argued that siphoning off part of the earnings
from employees of a sawmill operated for the benefit and
welfare of enrolled members of the tribe does not interfere
with the tribal right of self-government." 174 N.W.2d at
126.
B. Interference with federal pOlicy.
There is an express federal policy to encourage the
economic development of Indian land and to encourage Indians
to become economically self-sufficient. United States v.
-25-
,
.... -' .
Rickert, 188 U.S. 432 (1903). Squire v. Capoeman, supra.
In Makah Indian Tribe v. Clallam County, 73 wash.2d
667, 440 p.2d 462 (1968), the Supreme Court of Washington
held that personal property of an Indian kept on the
reservation is exempt from a county's personal property
tax. The personal property in question was utilized in a
commercial enterprise which did business with non-Indians.
The court stated,
The reasons for such a ruling lie almost exclusively
in the discernable federal policy of encouraging
Indians to become economically self-sufficient on
their reservations •• . . That the Makahs will, while receiving most of the
benefits of taxpayers and citizenship, escape some
of the correlative responsibilities of citizenship
is a problem for the Congress and the President to
solve. (440 p.2d at 447-48)
This is consistent with the reasoning of the Supreme Court
in invalidating the State of Arizona's sales tax on the
.gross income of a retail business on the Navajo Indian
Reservation partly because of the added financial burden
such a tax would impose on the Indian purchasers. Warren
Trading Post v. Arizona TaxComm., supra at 691.
Every year, as part of its proposed budget for the
-26-
• coming fiscal year, the Bureau of Indian Affairs makes
the following statement to the House and Senate Appropria
tion Subcommittees considering its budget request:
The ultimate goals of the Bureau of Indian Affairs
for the Indian people are maximum economic se1f
sufficiency, equal participation in American life and
equal citizenship privileges and responsibilities.
The Bureau is working toward the attainment of these
goals through two basic programs, one of which is
education, and the other is the economic development
of reservation resources.
See, ~., Hearings before the House Subcommittee
on Appropriation for the Department of the Interior
and Related Agencies for Fiscal Year 1969 at p. 744.
That exemption from the County's tax is an effec
tive means of increasing the development of the trust
land to accomplish this federal policy was shown conclusively
in the court below (T. 207-8). Exemption adds to the value
of the Indians' land by providing them with the possibility
of a greater net return on their land (T. 202). As was
established in the District Court, the tax sought to be
imposed by appellee clearly frustrates this federal policy.
The tax has caused rent arrearages (T. 129-30) and lease
defaults (T. 107, 139). Because of the tax lower rentals
-27-
• must be accepted (T. 109); in fact, fewer leases are made
because of the tax (T. SO). The effect of the tax is to
frustrate severely the federal goal of encouraging Indians
to utilize their land to become economically self-sufficient
(T.70). The tax has had this effect on the Agua Caliente
Band of Mission Indians, a band of Indians who are, as was
pointed out above, in a far better financial position than
the vast majority of Indians in the state of California.
If the tax can be so damaging to Agua Calientes, it is not
hard to comprehend the devastating effects similar taxes
would have on less fortunate Indians (~T. 196, et seq.).
Many communities offer tax incentives to attract
commerce. See generally Rosenn, "Puerto Rican Land Reform:
The History of an Instructive Experiment," 73 Yale L.J. 334
(1963) and Vitex Manufacturing Co. v. Government of the
Virgin Islands, 351 F.2d 313 (3rd Cir. 1965). The federal
government has established the Indians' tax-exemption to
provide for the maximum economic benefit to the Indians.
The imposition of the County's possessory interest tax on
lessees of Indian land destroys the tribe's right and
authority to offer such incentives and thus is another
way in which tribal sovereignty is invaded. On many Indian
reservations in California, the presence of even one
industry would eliminate most of the unemployment and would
-2S-
• tend to help alleviate the omnipresent poverty. See
Part I, supra. If, as the record reveals in this case, it
is difficult to attract commerce to the Agua Caliente
Reservation in the Palm Springs area because of the County's
tax, what chance do the other reservations in far less
desirable areas have to bring industry to their localities
unless they are able to offer some kind of tax incentive?
C. Federal pre-emption.
In Warren Trading Post v. Arizona Tax Comm., supra,
imposition of Arizona's state sales tax on federally
licensed traders with respect to sales made to reservation
Indians on the~reservation was held to be precluded by the .-comprehensive federal scheme regulating reservation trading.
"There-is no room for the States to legislate on the
subject." 380 U.S. at 391, fn. 18.
The federal statutes and regulations concerning the
leasing of Indian trust land evidence the same intention to
pre-empt the field. The purpose of 25 U.S.C. § 415 and the
comprehensive regulations promulgated to interpret and
apply the leasing statutes, 25 C.F.R. Part 131, is obviously
to encourage the leasing of Indian lands as one means to
effectuate federal Indian policy by generating jobs and
income on the reservations. Prior to the enactment of §
415 in 1955, Congress had not authorized long term leasing
-29-
• of IndJ."an 1ands.14 S b ue t dm t t 25 USC § u seq n amen en so. • •
415 extending the terms for which leases on the lands of
certain tribes would be authorized to 99 year leases (in
1959 Agua Caliente was the first tribe so authorized,
P.L. 86-326, 73 Stat. 597 (Sept. 21, 1959» show the
popularity of the leasing device with both the Congress and
many Indian tribes. P.L. 90-570, 82 Stat. 1003 (Oct. 12,
1968); P.L. 90-534 § 6, 82 Stat. 884 (sept. 28, 1968);
P.L. 90-355, 82 Stat. 242 (June 20, 1968); P.L. 90-335
§ l(f), 82 Stat. 175 (June 10, 1968); P.L. 90-184, 81 Stat.
560 (Dec. 10, 1967); P.L. 90-182, 81 Stat. 559 (Dec. 8,
1967); P.L. 89-408, 80 Stat. 132 (April 27,1966); P.L.
88-167, 77 Stat. 301 (Nov. 4, 1963) ; P.L. 87-785, 76 Stat.
805 (Oct. 10, 1962) ; P.L. 87-375, 75 Stat. 804 (Oct. 4,
1961); P.L. 86-505 § 2, 74 Stat. 199 (June 11, 1960) ;
P.L. 86-326, 73 Stat. 597 (Sept. 21, 1959) •
In view of the federal government's paramount trust
responsibilities to Indians and Indian tribes, it is
inconceivable that Congress intended to leave to the County
the privilege of levying this tax. Warren Trading Post v.
140wing to the vast bureaucracy of the federal Indian establishment, and the period of time it takes for Indians to adjust to the vagaries of federal policy, in Indian affairs fifteen years is a very short time in which to even begin to implement the purposes of a statute.
-30-
--"--
•
C_·' ___ .... v·~·, _ ___.~ ..... ~~ "',. _ ..... -'-'_~ ';1( ... •
Arizona Tax Comrn., supra at 691. To do so would make
the implementation of national Indian policy dependent upon
fluctuating local tax rates.
Two other kinds of congressional enactments also
demonstrate congressional intent to exclude states from
exercising taxing authority within Indian country. First,
the Congress has given the Secretary of the Interior
authority to issue fee patents to Indian allottees "whenever
he shall be satisfied that any Indian allottee is competent
and capable of managing his or her affairs." 25 U.S.C.
§ 349. This statute expressly provides that after the
issuance of a fee paten,t, all restrictions as to sale, in
cumbrance, or taxation of the allotted land shall be removed
but that until the fee patent is issued,"all allottees to
whom trust patents shall be issued shall be subject to the
exclusive jurisdiction of the United States." Id. See also
§§ 4 and 5 of the Act of January 12, 1891, the Mission
Indian Relief Act. 26 Stat. 712 and 25 U.S.C. § 483. If
the Agua Caliente Indian allottees are, in the judgment of
the Secretary of the Interior (not the County of Riverside)
financially and otherwise competent, and if the Secretary
(not the County) concludes that the tax exemption is no
longer warranted, the Secretary is authorized to issue a
fee patent, thereby subjecting the land to state and local
taxation.
-31-
• Other statutes indicative of congressional intent
to pre-empt the field are the acts providing for certain
services at federal expense to Indian reservations and
Indian people that would otherwise be provided by the state
or its subdivisions. These statutes are a recognition that
the welfare of Indians is primarily a federal responsibility.15
The federal government contributes funds either directly or
indirectly (through the states or local school districts)
for reservation roads (25 U.S.C. § 318(a», Indian education
(20 u.s.c. §§ 236, et ·seg. and 244 et seg., and 25 U.S.C.
§§ 452-54) and Indian health (42 U.S.C. §§ 2001, et seg.).
If the state or its political subdivisions believe that
the minuses outweigh the pluses, the appropriate remedy is
an application to Congress or the Executivel6 for greater
contributions through existing channels or for the creation
15It bears emphasis that the property tax is only one of the state's sources of revenue and that California Indians do contribute to the state's revenue in many other ways. For example, California Indians pay sales taxes, excise taxes, taxes in their income from non-exempt property, gasoline taxes, etc.
160ne of the most obvious advantages of proceeding through the Congress or Executive branches is that they have ·the flexibility to look at the unique circumstances of each case and act accordingly. If the state or its subdivision is allowed to impose its tax, the tax will fall across the board upon those who might be able to afford it and upon those who will not. In the past, Congress has acted to authorize the state and local authorities to tax the output and improvements of oil, gas, and mining lessees of Indian lands. 25 U.S.C. § 398(c). See Part II A of Appellants' Opening Brief. ---
-32-
•
17 of new channels. Through the enactment of such legisla-
tion, Congress has indicated that the funds to provide
essential services for Indians and Indian Reservations
will come from sources that will not impose additional
burdens on the Indians and that the determination of the
appropriate source is exclusively within the province of
Congress.
Taken together, the federal statutes and regulations
authorizing and encouraging the leasing of Indian land, the
federal statutes authorizing the Secretary of the Interior
to issue allottees taxable fee patents under certain cir-
cumstances, and the federal statutes providing, either
directly or indirectly, for the services required by Indians,
show as clearly as any federal regulatory scheme could that
there is simply no room for the County to impose its posses
sory interest tax on Indian lands.
D. United States v. Detroit and Oklahoma Tax Commis-
sion v. Texas Co. distinguished.
In addition to finding authority for the County's
possessory interest tax in 28 U.S.C. § 1360, the trial
17congressman Tunney of Riverside County has recently introduced legislation in the House of Representatives which would authorize the Secretary of the Interior to pay the states or counties, upon their request, an amount equal to any tax or levy which would be imposed on Indian lands if they were not held in trust by the United States. H.R. 12589, 91st Congress.
-33-
• court's holding rests largely on a line of cases culminating
in United states v. Detroit, 355 U.S. 466 (1958) and
Oklahoma Tax Commission v. Texas Co., 336 U.S. 342 (1949).
These cases are clearly distinguishable under the principles
discussed in the preceding three sections.
In United states v. Detroit, supra, the Supreme
Court upheld a possessory interest tax imposed on a lessee
of government land pursuant to a Michigan statute. The case
does stand for the proposition that a state tax that is
eventually borne in some measure by the United States is not
invalid for that reason alone.
The case at bar is distinguishable in several respects.
First, in Detroit, the Court recognized that Congress could
confer immunity by statute (355 U.S. at 474), and Congress
did precisely that with respect to the County's tax at issue
in this case by enacting 28 U.S.C. § 1360. See Part II.
Second, the Supreme Court expressly noted that the Michigan
tax could not be enforced against the property. 355 U.S. at
467, n.l, 469. Possessory interest taxes imposed in the
State of California are, by contrast, collectable by seizure
and sale. Cal. Rev. and Tax. Code §§ 107 and 2914. Third,
there was no claim that Congress had excluded the state from
imposing its tax because the federal government had pre
empted the field to such a degree that there was no room
-34-
• left for state legislation. Fourth, the County's tax
imposed on the lessees of Indian land is inconsistent with
federal policy objectives while in Detroit the tax resulted
only in slightly increased cost to the government. As set
forth above, Part III B, there is a discernable and express
federal policy to encourage economic development on Indian
land and Indian economic self-sufficiency with which the
County's tax interferes and undermines. In the cases relied
upon by the trial court the tax did not strike at the
government's overriding goal as it does here.
In James v. Dravo Contracting Co., 302 U.S. 134
(1937), the government sought to have dams built, and con
tracted with the plaintiff to construct them. The tax on
the contractor which the Supreme Court sustained had as its
burden on the government the increased cost of construction;
it did not frustrate its primary purpose of having the dam
built. In Alabama v. King and Boozer, 314 U.S. 1 (1941),
the tax also resulted in a higher cost to the government,
but it did not frustrate its purpose--the acquisition of
building materials. In both Graves v. New York, 306 U.S.
466 (1939) and Detroit, the tax simply had an adverse
financial effect on the federal government. The taxes in
these cases resulted only in a degree of financial burden
on the federal government. Faced with deciding whether
-35-
• they should afford a private party a tax benefit which
would interfere with the state's power to tax or to impose
a financial burden on the federal government, the courts
have chosen the latter. However, when the very purpose of
the tax exemption is to provide an economic incentive to
develop Indian lands and to enable Indians to derive income
from their lands in order to become self-sufficient,
government interests of an entirely different magnitude are
involved. ~., Choate v. Trapp, supra, and Part II B
supra. Instead of merely imposing a financial burden on the
government, the County's tax contravenes the underlying
federal policy and, in.addition, directly conflicts with the
tribe's sovereignty.
Fifth, the Supreme Court has held in Williams v. Lee,
supra, and Warren Trading Post v. Arizona Tax Comm., supra,
that the presumptions operative in Indian cases are exactly
the reverse of the presumptions applied in Detroit. In
Detroit the court said;
Wise and flexible adjustment of inter-governmental tax
immunity calls for political and economic considera
tions of the greatest difficulty and delicacy. Such
complex problems are ones which Congress is best
qualified to resolve. (355 u.S. at 474)
In the absence of such congressional action, the state's
tax was upheld. By contrast, in Williams v. Lee, supra,
-36-
• the court held that state jurisdiction over Indian reserva
tions would be permitted only when specifically authorized
by Congress. 358 U.S. at 223. In the absence of congres
sional action, the state would not be permitted to exercise
its authority. Similarly, in Warren Trading Post v. Arizona
Tax Comm., supra, the presumption operated against the state
imposed tax in the absence of congressional authorization.
380 U.S. at 691. In fact, in Warren Trading Post it was held
that a general statute permitting states to levy sales or
use taxes within certain federal areas did not apply to
Indian reservations because there was no suggestion that
Congress meant to give.states new power to tax federally
licensed Indian traders. 380 U.S. at 391, n.18. The
court's holding establishes that state taxation on Indian
reservations is an altogether different matter than state
taxation within other federal areas.
Oklahoma Tax Commission v. Texas Co., supra upheld
the validity of two Oklahoma taxes, a tax on the gross
value of petroleum production and an excise tax on each
barrel of petroleum produced, as applied to lessees of
Indian land. The taxes were expressly found to have an
"insubstantial" effect on the lessees. 336 U.S. at 351.
There was no claim that the federal government had occupied
the field to the exclusion of Oklahoma's authority to tax.
• The case simply marks the demise of the "federal instru
mentality" doctrine as applied to the lessees of Indian
land. The interests of the Indian owners were neither
presented to nor considered by the court. Nor was the
issue of the possible infringement of tribal sovereignty
before the court. The Supreme Court noted earlier, in
Oklahoma Tax Commission v. United States, 319 U.S. 598
(1943) (cited in Oklahoma Tax Commission v. Texas Co.,
supra fn. 37),
Worcester v. Georgia, 6 Pet (U.S.) 515, held that
a state might not regulate the conduct of persons in
Indian territory on the theory that the Indian tribes
were separate political entities with all the rights
of. independent status--a condition which has not existed
for many years in the State of Oklahoma. (319 U.S. at
602)
The court later stated that the Oklahoma Indians possessed
but a "remnant" of their former tribal sovereignty and
"have no effective tribal antonomy." 319 U.S. at 603.
See also Commissioner of Taxation v. Brun, supra.
In the case at bar, the allottees and the tribe
are represented and have asserted their rights and interests
protected and fostered by federal law. The Agua Caliente
Tribe is alive and well, and has imposed its own tax, which
-38-
• directly conflicts with the County's tax, pursuant to its
authority recognized in 28 U.S.C. § 1360(c). As the record
clearly shows, the County's tax has had a substantial impact
on the economic development of the Reservation. Oklahoma
Tax Commission v. Texas Co., supra is inapplicable because
Oklahoma's tax had no substantial effect, was not pre-empted
by comprehensive federal regulation, and did not interfere
with tribal sovereignty.
CONCLUSION
Imposition of Riverside County's possessory interest
tax upon lessees of the Indian trust lands of the Agua
Caliente Band of Mission Indians is proscribed by 28 U.S.C.
§§ 1360(a), 1360(b), and 1360(c). Furthermore, such taxa
tion would frustrate the federal Indian policy of fostering
economic development, would interfere with an area pre
empted by federal regulation, and would infringe upon the
tribal sovereignty of the Agua Caliente Band. The County's
tax is invalid on anyone of these grounds. The three
subsections of § 1360 provide three entirely separate grounds
for prohibiting the County from such taxation.
These legal principles governing this case must not
be obscured by the relative wealth of many members of the
Agua Caliente Band among their Indian brethren, nor by the
-39-
• attractiveness of the property which is theirs due to the
accidents of history. The Agua Calientes are the extra
ordinary case, but their fate in this case will be of pro
found influence upon all Indian tribes throughout California
and indeed, throughout the nation.
Congress and the Executive are best qualified to
resolve the complex problems involving the relations of
all the various, widely divergent Indian communities with
their surrounding localities.
Dated: April 15, 1970
Respectfully submitted,
ROBERT S. PELCYGER DAVID H. GETCHES California Indian Legal Services
By Robert S. pelcyge~ \
(Law Clerks William H. Cozad and Richard L. Perez assisted on the Brief.)
-40~
• ADDENDUM
18 U.S.C.
§ 1162. State jurisdiction over offenses committed
by or against Indians in the Indian
Country.
(a) Each of the States listed in the following
table shall have jurisdiction over offenses committed by
or against Indians in the areas of Indian country listed
opposite the name of the State to the same extent that
such State has jurisdiction over offenses committed else
where within the State, and the criminal laws of such
State shall have the same force and effect within such
Indian country as they have elsewhere within the State:
State of Indian 'countiy':af·fected
California All Indian country within the State
Minnesota
Nebraska
Oregon
Wisconsin
- - - - All Indian country within the State
except the Red Lake Reservation
- - - - All Indian country within the State
- - - - All Indian country within the State
except the Warm Springs Reservation
- - - - All Indian country within the State
except the Menominee Reservation
(b) Nothing in this section shall authorize the
alienation, encumbrance, or taxation of any real or per
sonal property, including water rights, belonging to any
-41-
• Indian or any Indian tribe,ban~,or community that is held
in trust by the united States or is subject to a restric
tion against alienation imposed by the United States; or
shall authorize regulation of the use of such property in
a manner inconsistent with any Federal treaty, agreement,
or statute or with any regulation made pursuant thereto;
or shall deprive any Indian or any Indian tribe, band, or
community of any right, privilege, or immunity afforded
under Federal treaty, agreement, or statute with respect
to hunting, trapping, or fishing or the control, licensing,
or regulation thereof.
(c) The provisions of sections 1152 and 1153 of
this chapter shall not be applicable within the areas of
Indian. country listed in subsection (a) of this section.
28 U •. S.C.
S 1360. State civil jurisdiction in actions to
which Indians are parties.
(a) Each of the States listed in the following
table shall have jurisdiction over civil causes of action
between Indians or to which Indians are parties which
,arise in the areas of Indian country listed opposite the
name of the State to the same extent that such State has
jurisdiction over other civil causes of action, and
-42-
• those civil laws of such State that are of general appli
cation to private persons or private property shall have
the same force and effect within such Indian country as
they have elsewhere within the State:
State of Indian country affected
California - - - - - All Indian country within the State
Minnesota
Nebraska
Oregon
Wisconsin
- All Indian country within the State
except the Red Lake Reservation
- All Indian country within the State
- - - All Indian country within the State
except the Warm Springs Reservation
- - - - - All Indian country within the State
except the Menominee Reservation
_ (b) Nothing in this section shall authorize the
alienation, encumbrance, or taxation of any real or per
sonal property, including water rights, belonging to any
Indian '.or any Indian tribe, band, or community that is held
1n trust by the United States or is subject to a restrie
tion against alienation imposed by the United States; or
shall authorize regulation of the use of such property in
a manner inconsistent with any Federal treaty, agreement,
or statute or with any regulation made pursuant thereto;
or shall confer jurisdiction upon the State to adjudicate,
in probate proceedings or otherwise, the ownership or
right to possession of such property or any interest
-43-
• therein.
(c) Any tribal ordinance or custom heretofore or
hereafter adopted by an Indian tribe, band, or community
in the exercise of any authority which it may possess shall,
if not inconsistent w~th any applicable civil law of the
State, be given full force and effect in the determination
of civil causes of action pursuant to this section.
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