FILED NOT FOR PUBLICATION JAN 28 2019 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
AGUA CALIENTE BAND OF No. 17-56003 CAHUILLA INDIANS, a federally recognized Indian tribe, on its own behalf D.C. No. and as parens patriae for its members, 5:14-cv-00007-DMG-DTB
Plaintiff-Appellant, MEMORANDUM* v.
RIVERSIDE COUNTY; et al.,
Defendants-Appellees,
DESERT WATER AGENCY,
Intervenor-Defendant- Appellee.
Appeal from the United States District Court for the Central District of California Dolly M. Gee, District Judge, Presiding
Argued and Submitted January 8, 2019 Pasadena, California
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Before: GRABER and WATFORD, Circuit Judges, and ZOUHARY,*** District Judge.
Plaintiff Agua Caliente Band of Cahuilla Indians appeals the summary
judgment entered in favor of Defendant Riverside County and Intervenor-
Defendant Desert Water Agency, upholding the right of the County to assess and
collect a possessory interest tax ("PIT") from non-Indian lessees of Indian trust
lands on the Agua Caliente Reservation. On de novo review, Los Coyotes Band of
Cahuilla & Cupeno Indians v. Jewell, 729 F.3d 1025, 1035 (9th Cir. 2013), we
affirm.
In Agua Caliente Band of Mission Indians v. County of Riverside, 442 F.2d
1184 (9th Cir. 1971), we held that this very tax is permissible. Plaintiff argues that
our cursory preemption analysis there is clearly irreconcilable with White
Mountain Apache Tribe v. Bracker, 448 U.S. 136 (1980), and therefore not
controlling. See Miller v. Gammie, 335 F.3d 889, 893 (9th Cir. 2003) (en banc)
(permitting a three-judge panel to depart from circuit precedent if, but only if, that
precedent is clearly irreconcilable with a later Supreme Court or en banc decision).
We disagree.
*** The Honorable Jack Zouhary, United States District Judge for the Northern District of Ohio, sitting by designation. 2 In Bracker, the Supreme Court recognized that "[m]ore difficult" preemption
questions arise in cases like this, in which "a State asserts authority over the
conduct of non-Indians engaging in activity on the reservation." 448 U.S. at 144.
In such cases, Bracker instructs that a court’s inquiry should not be "dependent on
mechanical or absolute conceptions of state or tribal sovereignty." Id. at 145.
Instead, courts should engage in "a particularized inquiry into the nature of the
state, federal, and tribal interests at stake." Id.
In Agua Caliente, decided nine years before Bracker, we did not expressly
engage in that particularized, interest-balancing inquiry. But we did consider the
congressional purpose behind "the legislation dealing with Indians and Indian
lands," the PIT’s legal incidence, and the indirect economic effect of the PIT on the
tribe and tribal members. See Agua Caliente, 442 F.2d at 1186–87. A few years
later, in Fort Mojave Tribe v. County of San Bernardino, 543 F.2d 1253 (9th Cir.
1976), we again upheld the assessment and imposition of a PIT on non-Indian
lessees of land held in trust by the federal government for an Indian tribe.1 In Fort
Mojave, we engaged in a more extensive analysis of the PIT’s effect on federal and
1 We reject the district court’s characterization of our holding as dictum. See Barapind v. Enomoto, 400 F.3d 744, 750–51 (9th Cir. 2005) (en banc) (per curiam) (holding that a panel majority’s decision concerning an issue presented for review is circuit law even if that decision was not necessary to the disposition of the case). 3 tribal interests, foreshadowing the later requirements of Bracker. Indeed, in
Confederated Tribes of Chehalis Reservation v. Thurston County Board of
Equalization, 724 F.3d 1153, 1158 (9th Cir. 2013), we observed that our PIT cases,
including Fort Mojave, "applied a similar mode of analysis" to Bracker.
We conclude that our PIT precedents are not clearly irreconcilable with
Bracker. We note that
"[t]he clearly irreconcilable requirement is a high standard." United States v. Robertson, 875 F.3d 1281, 1291 (9th Cir. 2017) (quotation marks omitted). Accordingly, "[i]t is not enough for there to be some tension between the intervening higher authority and prior circuit precedent, or for the intervening higher authority to cast doubt on the prior circuit precedent." Id. "So long as the court can apply our prior circuit precedent without running afoul of the intervening authority it must do so." Id. (quotation marks omitted).
Close v. Sotheby’s, Inc., 894 F.3d 1061, 1073 (9th Cir. 2018) (second alteration in
original). Although there may be some tension between the legal theory applied in
Agua Caliente and Fort Mojave and the balancing inquiry required under Bracker,
these decisions are consistent as a practical matter.
Additionally, relying on Mescalero Apache Tribe v. Jones, 411 U.S. 145
(1973), Plaintiff argues that 25 U.S.C. § 465 bars this tax. Once again, we already
addressed this issue: "In Agua Caliente, for example, we stressed that ‘[t]he
California tax on possessory interests does not purport to tax the land as such,’
4 which would be barred by § 465, ‘but rather taxes the "full cash value" of the
lessee’s interest in it,’ which is not covered by § 465." Chehalis, 724 F.3d at 1158
n.7 (alteration in original) (quoting Agua Caliente, 442 F.2d at 1186). That
conclusion is not clearly irreconcilable with Mescalero, and we therefore remain
bound by it.
AFFIRMED.
5 FILED Agua Caliente Band of Cahuilla Indians v. Riverside County, No. 17-56003 JAN 28 2019 WATFORD, Circuit Judge, concurring: MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS
I agree with my colleagues that the possessory interest tax (PIT) at issue is
not preempted by federal law. It is not categorically preempted because its
incidence falls on non-tribal-member lessees, rather than the Tribe or its members.
See Oklahoma Tax Commission v. Chickasaw Nation, 515 U.S. 450, 458–59
(1995). The preemption analysis is therefore governed by the test established in
White Mountain Apache Tribe v. Bracker, 448 U.S. 136 (1980), which requires
balancing federal, state, and tribal interests. See id. at 145.
As the district court noted, the federal interests involved here are substantial:
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FILED NOT FOR PUBLICATION JAN 28 2019 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
AGUA CALIENTE BAND OF No. 17-56003 CAHUILLA INDIANS, a federally recognized Indian tribe, on its own behalf D.C. No. and as parens patriae for its members, 5:14-cv-00007-DMG-DTB
Plaintiff-Appellant, MEMORANDUM* v.
RIVERSIDE COUNTY; et al.,
Defendants-Appellees,
DESERT WATER AGENCY,
Intervenor-Defendant- Appellee.
Appeal from the United States District Court for the Central District of California Dolly M. Gee, District Judge, Presiding
Argued and Submitted January 8, 2019 Pasadena, California
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Before: GRABER and WATFORD, Circuit Judges, and ZOUHARY,*** District Judge.
Plaintiff Agua Caliente Band of Cahuilla Indians appeals the summary
judgment entered in favor of Defendant Riverside County and Intervenor-
Defendant Desert Water Agency, upholding the right of the County to assess and
collect a possessory interest tax ("PIT") from non-Indian lessees of Indian trust
lands on the Agua Caliente Reservation. On de novo review, Los Coyotes Band of
Cahuilla & Cupeno Indians v. Jewell, 729 F.3d 1025, 1035 (9th Cir. 2013), we
affirm.
In Agua Caliente Band of Mission Indians v. County of Riverside, 442 F.2d
1184 (9th Cir. 1971), we held that this very tax is permissible. Plaintiff argues that
our cursory preemption analysis there is clearly irreconcilable with White
Mountain Apache Tribe v. Bracker, 448 U.S. 136 (1980), and therefore not
controlling. See Miller v. Gammie, 335 F.3d 889, 893 (9th Cir. 2003) (en banc)
(permitting a three-judge panel to depart from circuit precedent if, but only if, that
precedent is clearly irreconcilable with a later Supreme Court or en banc decision).
We disagree.
*** The Honorable Jack Zouhary, United States District Judge for the Northern District of Ohio, sitting by designation. 2 In Bracker, the Supreme Court recognized that "[m]ore difficult" preemption
questions arise in cases like this, in which "a State asserts authority over the
conduct of non-Indians engaging in activity on the reservation." 448 U.S. at 144.
In such cases, Bracker instructs that a court’s inquiry should not be "dependent on
mechanical or absolute conceptions of state or tribal sovereignty." Id. at 145.
Instead, courts should engage in "a particularized inquiry into the nature of the
state, federal, and tribal interests at stake." Id.
In Agua Caliente, decided nine years before Bracker, we did not expressly
engage in that particularized, interest-balancing inquiry. But we did consider the
congressional purpose behind "the legislation dealing with Indians and Indian
lands," the PIT’s legal incidence, and the indirect economic effect of the PIT on the
tribe and tribal members. See Agua Caliente, 442 F.2d at 1186–87. A few years
later, in Fort Mojave Tribe v. County of San Bernardino, 543 F.2d 1253 (9th Cir.
1976), we again upheld the assessment and imposition of a PIT on non-Indian
lessees of land held in trust by the federal government for an Indian tribe.1 In Fort
Mojave, we engaged in a more extensive analysis of the PIT’s effect on federal and
1 We reject the district court’s characterization of our holding as dictum. See Barapind v. Enomoto, 400 F.3d 744, 750–51 (9th Cir. 2005) (en banc) (per curiam) (holding that a panel majority’s decision concerning an issue presented for review is circuit law even if that decision was not necessary to the disposition of the case). 3 tribal interests, foreshadowing the later requirements of Bracker. Indeed, in
Confederated Tribes of Chehalis Reservation v. Thurston County Board of
Equalization, 724 F.3d 1153, 1158 (9th Cir. 2013), we observed that our PIT cases,
including Fort Mojave, "applied a similar mode of analysis" to Bracker.
We conclude that our PIT precedents are not clearly irreconcilable with
Bracker. We note that
"[t]he clearly irreconcilable requirement is a high standard." United States v. Robertson, 875 F.3d 1281, 1291 (9th Cir. 2017) (quotation marks omitted). Accordingly, "[i]t is not enough for there to be some tension between the intervening higher authority and prior circuit precedent, or for the intervening higher authority to cast doubt on the prior circuit precedent." Id. "So long as the court can apply our prior circuit precedent without running afoul of the intervening authority it must do so." Id. (quotation marks omitted).
Close v. Sotheby’s, Inc., 894 F.3d 1061, 1073 (9th Cir. 2018) (second alteration in
original). Although there may be some tension between the legal theory applied in
Agua Caliente and Fort Mojave and the balancing inquiry required under Bracker,
these decisions are consistent as a practical matter.
Additionally, relying on Mescalero Apache Tribe v. Jones, 411 U.S. 145
(1973), Plaintiff argues that 25 U.S.C. § 465 bars this tax. Once again, we already
addressed this issue: "In Agua Caliente, for example, we stressed that ‘[t]he
California tax on possessory interests does not purport to tax the land as such,’
4 which would be barred by § 465, ‘but rather taxes the "full cash value" of the
lessee’s interest in it,’ which is not covered by § 465." Chehalis, 724 F.3d at 1158
n.7 (alteration in original) (quoting Agua Caliente, 442 F.2d at 1186). That
conclusion is not clearly irreconcilable with Mescalero, and we therefore remain
bound by it.
AFFIRMED.
5 FILED Agua Caliente Band of Cahuilla Indians v. Riverside County, No. 17-56003 JAN 28 2019 WATFORD, Circuit Judge, concurring: MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS
I agree with my colleagues that the possessory interest tax (PIT) at issue is
not preempted by federal law. It is not categorically preempted because its
incidence falls on non-tribal-member lessees, rather than the Tribe or its members.
See Oklahoma Tax Commission v. Chickasaw Nation, 515 U.S. 450, 458–59
(1995). The preemption analysis is therefore governed by the test established in
White Mountain Apache Tribe v. Bracker, 448 U.S. 136 (1980), which requires
balancing federal, state, and tribal interests. See id. at 145.
As the district court noted, the federal interests involved here are substantial:
The leasing of Indian trust lands is pervasively regulated by the Bureau of Indian
Affairs. See 25 C.F.R. §§ 162.001–.029 (2013). But pervasive regulation does not
always require preemption. Cotton Petroleum Corp. v. New Mexico, 490 U.S. 163,
186 (1989). The Bracker test requires that we proceed to consider the interests of
the State.
Unlike in Bracker, the County has readily identified “service[s] performed
by the State that would justify the assessment of taxes.” 448 U.S. at 148–49. The
PIT taxes “the full cash value of the lessee’s interest in” the property leased. Agua
Caliente Band of Mission Indians v. County of Riverside, 442 F.2d 1184, 1186 (9th
Cir. 1971) (internal quotation marks omitted). That interest is valuable because of Page 2 of 3
a bevy of State-provided services, including water, electricity, road maintenance,
trash collection, and the protection afforded by police officers and firefighters. See
Gila River Indian Community v. Waddell, 91 F.3d 1232, 1238–39 (9th Cir. 1996).
The on-reservation provision of those substantial services gives the County the
kind of strong interest that justifies its imposition of a tax. “This is not a case in
which the State has had nothing to do with the on-reservation activity, save tax it.”
Cotton Petroleum, 490 U.S. at 186. Indeed, it appears that the County’s
connection to the taxed activity is greater than that approved by the Supreme Court
in Cotton Petroleum. See id. at 170–72 & nn. 6–7.
Nor do tribal interests weigh in favor of preemption. Any impact the
collection of the PIT may have on the Tribe is “too indirect and too insubstantial to
support [a] claim of pre-emption.” Id. at 187. Given the strong connection
between the services provided and the activity taxed, no “special factor” requires
preemption. Id. I would therefore conclude that the PIT is not preempted under
Bracker.
In my view, we are not bound by our earlier decisions in Agua Caliente and
Fort Mojave Tribe v. County of San Bernardino, 543 F.2d 1253 (9th Cir. 1976).
As the district court correctly determined, neither of those cases undertook the
analysis that the Supreme Court’s later decision in Bracker requires: “a
particularized inquiry into the nature of the state, federal, and tribal interests at Page 3 of 3
stake.” 448 U.S. at 145. For the reasons stated above, however, even under the
new balancing framework established in Bracker, the outcome here remains the
same: The PIT is not preempted.