Filed 8/13/21; Certified for Publication 9/9/21 (order attached)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO
LEONARD ALBRECHT et al.,
Plaintiffs and Appellants, E073926
v. (Super.Ct.No. PSC1501100)
COUNTY OF RIVERSIDE, OPINION Defendant and Respondent;
DESERT WATER AGENCY et al.,
Interveners and Respondents.
PATRICIA ABBEY et al.,
Plaintiffs and Appellants,
v. (Super.Ct.No. RIC1719093)
COUNTY OF RIVERSIDE,
Defendant and Respondent;
1 APPEAL from the Superior Court of Riverside County. Craig Riemer, Judge.
Affirmed.
Faegre Drinker Biddle & Reath, Aaron Van Oort, Jerome A. Miranowski, Jane E.
Maschka and Joshua T. Peterson and for Plaintiffs and Appellants.
Gregory P. Priamos, County Counsel, Ronak Patel, Deputy County Counsel;
Perkins Coie, Jennifer A. MacLean and Benjamin S. Sharp for Defendant and
Respondent.
Best Best & Krieger, Roderick E. Walston and Miles Krieger for Intervenor and
Respondent Desert Water Agency.
Colantuono, Highsmith and Whatley, Michael G. Colantuono, Pamela K. Graham
and Liliane M. Wyckoff for Intervenor and Respondent Coachella Valley Water District.
I. INTRODUCTION
This appeal challenges the validity of a possessory interest tax imposed by the
County of Riverside (the county) upon lessees of federally owned land set aside for the
Agua Caliente Band of Cahuilla Indians (Agua Caliente tribe) or its members. A subset
of the more than 450 plaintiffs in this appeal also challenge the validity of voter-approved
taxes funding the Desert Water Agency, Coachella Valley Water District, Palm Springs
Unified School District, Palo Verde School District, and Desert Community College
District. A small minority of the plaintiffs claim to hold a possessory interest in land set
aside for the Colorado River Indian tribe (CRIT), but they argue the challenged taxes are
invalid for the same reasons asserted by the other plaintiffs.
2 Following a court trial based primarily upon stipulated facts, the trial court upheld
the validity of the challenged taxes and plaintiffs’ appeal, arguing the challenged taxes
are preempted by federal law. Specifically, plaintiffs contend: (1) the challenged taxes
are explicitly preempted under Title 25 United States Code section 5108 (section 5108),
originally enacted as Title 25 United States Code section 465, the Indian Reorganization
Act of 1934 (Pub.L. No. 73-383 (June 18, 1934) 48 Stat. 984; IRA); (2) the challenged
taxes are impliedly preempted under the interest balancing test articulated by the United
States Supreme Court in White Mountain Apache Tribe v. Bracker (1980) 448 U.S. 136
(Bracker); and (3) the challenged taxes are impliedly preempted under a separate
infringement test purportedly developed in a separate line of judicial authority stemming
from Williams v. Lee (1959) 358 U.S. 217 (Williams).
The question of whether the county may impose a possessory interest tax on
lessees of land set aside for the Agua Caliente tribe or its members has been the subject
of repeated litigation in both federal and state courts, and the validity of the county’s
possessory interest tax in this context has been repeatedly upheld. (See Palm Springs
Spa, Inc. v. County of Riverside (1971) 18 Cal.App.3d 372; Agua Caliente Band of
Mission Indians v. County of Riverside (9th Cir. 1971) 442 F.2d 1184; Agua Caliente
Band of Cahuilla Indians v. Riverside Cty. (9th Cir. 2019) 749 Fed.Appx. 650.) In fact,
during the pendency of this appeal, this court issued its decision in Herpel v. County of
Riverside (2020) 45 Cal.App.5th 96 (Herpel), again upholding the validity of the
county’s possessory interest tax under almost identical circumstances as those presented
here. Although plaintiffs claim that our decision in Herpel is not controlling because it
3 did not consider many of the arguments presented here, we conclude that the facts and
arguments presented in this case do not materially differ from those already considered in
Herpel, and plaintiffs have not presented any persuasive reason for us to depart from that
recent decision.
II. FACTS AND PROCEDURAL HISTORY
A. Complaint and Procedural History
On March 6, 2015, 189 plaintiffs filed a complaint against the county for a tax
refund. Plaintiffs alleged that they each held a leasehold interest in land owned by the
United States and held in trust for the benefit of “Indian Tribes and individual Indians”
(Tribal Land) pursuant to section 5108;1 that federal law prohibits local taxation of such
land; and that, as a result, the possessory interest tax assessed and collected by the county
constitutes an illegal tax. In a second amended complaint, an additional 162 plaintiffs
were added. On October 10, 2017, a separate complaint was filed on behalf of 147
additional plaintiffs asserting identical claims, and the two actions were consolidated.
The parties stipulated, and the trial court ordered that trial in the consolidated
action be bifurcated into two phases, with the first phase addressing the legality of the
challenged taxes and the second phase determining the amount of any tax refunds, should
1 “Section 5108 was originally enacted as section 465 of title 25 of the United States Code, part of the Indian Reorganization Act of 1934.” (Herpel, supra, 45 Cal.App.5th at p. 118.) Plaintiffs briefs continue to refer to this statutory provision as “section 465,” but they acknowledge that the provision has subsequently been reorganized as section 5108. Section 5108 was originally enacted and cited as Title 25 United States Code section 465.
4 plaintiffs prevail in the first phase. In October 2018, a court trial was held on the validity
of the challenged taxes, with the evidence consisting primarily of stipulated facts.
B. Stipulated Facts at Trial
The Agua Caliente tribe and CRIT are federally recognized Indian tribes eligible
for funding and services from the Bureau of Indian Affairs. The Agua Caliente tribe
currently has over 400 members and its own elected governing body. Its reservation
encompasses approximately 31,000 acres of land, spread in a checkerboard pattern across
the Cities of Palm Springs, Cathedral City, and Rancho Mirage, as well as unincorporated
areas of Riverside County. Some of its territory is held in trust by the federal government
for the benefit of the tribe (tribal trust land), and some of the land is owned in trust for the
benefit of one or more members of the tribe (allotted land). Currently, individual
members lease out approximately 4,300 acres of allotted land under approximately
20,000 master leases, and a small portion of tribal trust land is also leased.
CRIT is primarily located in the Colorado River reservation in Arizona. In 1874,
an executive order purported to expand the Colorado River reservation into parts of
California. However, the legality of that expansion is disputed and, as a result, the
western boundary of the reservation is unsettled. In recognition of this ongoing dispute,
Congress has not authorized the Secretary of the Interior to review or approve CRIT
leases of land in California. Nine of the plaintiffs in this litigation purportedly lease land
from CRIT or its members.
Each plaintiff claims to lease one or more tracts of allotted land; claims that the
property tax bill received from the county pertaining to his or her leased allotted land
5 includes a one percent possessory interest tax as well as various voter-approved taxes2
based upon the assessed value of the possessory interest in the allotted land; and seeks a
refund of the portion of taxes paid as a result of these possessory interest and voter-
approved taxes.
The possessory interest tax is a general revenue tax that provides funding to the
county and government agencies within the county. Revenues generated from the
possessory interest tax are comingled with revenues collected from other property taxes,
and the county cannot trace expenditures specifically to the revenues collected from the
possessory interest tax. Overall, the revenues collected from the possessory interest tax
assist in funding county services including education, fire, police, health and sanitation,
sheriffs, district attorneys and public defenders, public infrastructure maintenance, as
well as recreational and cultural services. All such services are available to all residents
or visitors to the county without distinction between the identity of the taxpayer or the
2 For purposes of this litigation, the voter-approved taxes at issue appear to include taxes funding the Palm Springs Unified School District, Palo Verde Unified School District, Desert Community College, Coachella Valley Water District, and the Desert Water Agency. We note that with respect to the Palo Verde Unified School District, plaintiffs have included this tax as part of their claims, but the county did not stipulate that any plaintiff actually pays this tax.
6 classification of land subject to the tax.3
With respect to the challenged voter-approved taxes, these taxes fund the Palm
Springs Unified School District, Palo Verde Unified School District, Desert Community
College District, Coachella Valley Water District, and the Desert Water Agency. Both
the Desert Water Agency and Coachella Valley Water District provide water-related
services to land within their defined boundaries, regardless of whether the land is allotted
land. The Palm Springs Unified School District, Palo Verde School District, and Desert
Community College District provide public education services to all residents within
their district boundaries, including those that reside on allotted land. The Agua Caliente
tribe does not provide any equivalent services to non-Indian lessees of allotted land.
A non-Indian lessee’s failure to pay the possessory interest tax results in a lien
against the lessee only, but it does not otherwise result in a lien or encumbrance upon the
owner of the allotted land. Nevertheless, the Agua Caliente tribe considers the
possessory interest tax to represent an economic burden. The Agua Caliente tribe has not
taken any steps to quantify the alleged economic burden created by the county’s
possessory interest tax and is not aware of any specific instance in which a potential
lessee of allotted land was dissuaded from leasing the land out of concern over taxation.
The Agua Caliente tribe receives no portion of the revenues collected from the county’s
3 For example, fire services are provided to all unincorporated areas of the county including the portion of the Agua Caliente reservation located in unincorporated areas. Persons who own, lease, or reside on land within the tribe’s reservation still have equal access to public schools, the regional medical center, regional parks, and the public cemetery. Flood control and vector control services are provided without regard to whether a specific parcel of land is considered within the tribe’s reservation.
7 possessory interest tax or the lease payments made pursuant to the leasing of allotted
land. While the Agua Caliente tribe has enacted its own possessory interest tax, it has
never attempted to assess or collect the tax.
There were no stipulated facts addressing the Agua Caliente tribe’s view of the
voter-approved taxes. Nor were there any stipulated facts pertaining to CRIT’s form of
governance, attempts to impose taxes or raise revenues by CRIT, CRIT’s provision of
services, or CRIT’s view of local taxes.
C. Expert Testimony Regarding Economic Harm to the Agua Caliente Tribe
In addition to the stipulated facts, plaintiffs called an expert in tribal government
and tribal economic development. Pursuant to a discovery order, the expert’s testimony
was limited to the economic impact of the possessory interest tax on the Agua Caliente
tribe. The expert opined that the possessory interest tax interferes with the Agua Caliente
tribe’s sovereignty and deprived it of valuable economic development tools. In the
expert’s view, the possessory interest tax should be considered a large tax because it is
reoccurring and imposed each year. The expert explained that, should the Agua Caliente
tribe impose its own possessory interest tax, the additional tax would decrease the
leasehold value of allotted land over time. As a result, the expert believed that the
county’s possessory interest tax deterred the Agua Caliente tribe from imposing its own
possessory interest tax and thereby deprived the Agua Caliente tribe of a source of
revenue to fund its own services.
8 D. Statement of Decision and Judgment
The trial court issued a tentative decision concluding that the challenged taxes
were not expressly preempted by statute and the balance of interests under Bracker did
not support a finding of preemption under federal law. Plaintiffs did not request any
further clarification on these issues, but they requested a statement of decision based
upon the trial court’s failure to address a purported “infringement test” set forth in
Williams. In response, the trial court issued a statement of decision concluding that
plaintiffs had not met their burden to show how the balance of interests necessary to
support a finding of preemption would be any different under Williams. On October 9,
2019, judgment was entered in favor of the county.
III. DISCUSSION
A. Issues Presented and Standard of Review
On appeal, plaintiffs contend the judgment must be reversed because both the
possessory interest tax and the voter-approved taxes at issue are preempted by federal law
for three, independent reasons: (1) the taxes are expressly preempted under section 5108;
(2) the taxes are impliedly preempted under the interest balancing test articulated in
Bracker; and (3) the taxes are impliedly preempted under a purported infringement test
established in a line of judicial authorities following Williams, which plaintiffs contend
provides a separate framework for finding preemption without a balancing of interests.
“ ‘We apply a de novo standard of review . . . because federal preemption presents
a pure question of law [citation].’ [Citation.] However, ‘when conflicting inferences
may be drawn from undisputed facts, the reviewing court must accept the inferences
9 drawn by the trier of fact so long as it is reasonable.’ [Citation.] ‘The party who claims
that a state statute is preempted by federal law bears the burden of demonstrating
preemption.’ ” (Herpel, supra, 45 Cal.App.5th at p. 100.) Based upon the record before
us, we disagree that plaintiffs have established that the taxes are preempted, and we
affirm the judgment.
B. Express Preemption Under the Indian Reorganization Act (25 U.S.C. former § 465)
We first address plaintiffs’ argument that section 5108 expressly preempts any
state or local taxes on the possessory interests of leased allotted land or tribal trust land.
Section 5108 authorizes the Secretary of the Interior to acquire “any interest in lands,
water rights, or surface rights to lands . . . for the purpose of providing land for Indians,”
and further provides that “any lands or rights. . . acquired pursuant to this Act . . . shall be
exempt from State and local taxation.” (§ 5108.) It is undisputed that the tribal land at
issue in this case was set aside for the Agua Caliente tribe and CRIT decades prior to the
enactment of the IRA.4 As we explained in Herpel, under a plain reading of section
5108, land set aside or taken in trust through some means other than that provided in the
IRA—such as the land underlying plaintiffs’ leases here—are not “acquired pursuant to”
4 While CRIT voted to adopt the IRA in 1934, the nature of CRIT land located in California remains unsettled. As the parties stipulated, the Colorado River reservation was expanded into territory located in California by executive order in 1873 and 1874. However, that executive order appears to conflict with an earlier act of Congress expressly prohibiting the President from establishing more than four reservations in California. The parties admit that the western boundary of the Colorado River reservation remains unresolved, and the Secretary of the Interior does not exercise authority over the alleged CRIT land located in California in the same manner as land otherwise acquired under the IRA.
10 the IRA and are not subject to the exemptions provided in section 5108. (Herpel, supra,
45 Cal.App.5th at pp. 118-122.)
Plaintiffs here do not claim that the law or the facts have changed since our
decision in Herpel but instead urge us to reexamine the issue because they have presented
a new legal argument that has yet to be considered. Specifically, plaintiffs point out that
the IRA includes a provision indefinitely extending any existing periods of trust until
Congress provides otherwise (25 U.S.C. § 5102); and, that in 1990, Congress enacted an
amendment providing that this provision would apply to all Indian tribes, all land held in
trust for Indians, and all land owned by Indians subject to restrictions on alienation (25
U.S.C. § 5126). Plaintiffs argue that this amendment represented the acquisition of a new
trust right and, under a broad reading of section 5108, “the acquisition of ‘interests’ and
‘rights’ under the IRA brings the ‘land’ within the statute, even if the land itself was not
acquired under the Act.” We find this argument unpersuasive.
First, even if plaintiffs’ proposed interpretation represents a plausible reading of
these statutes, that does not mean that such an interpretation is reasonable. It is true that
“[a]mbiguities in federal law have been construed generously in order to comport with
. . . traditional notions of sovereignty and with the federal policy of encouraging tribal
independence” and, as such, a statute need not contain an express statement of
preemption in order to preempt conflicting state laws. (Bracker, supra, 448 U.S. at
pp. 143-144.) “At the same time any applicable regulatory interest of the State must be
given weight . . . and ‘automatic exemptions “as a matter of constitutional law” ’ are
unusual.” (Bracker, at p. 144.) Thus, it is a rare case in which a statute should be
11 interpreted to provide automatic exemptions to state laws on constitutional grounds, and
courts should not adopt such an interpretation without some clear indication that
Congress intended the statute to have such preemptive effect.
Second, the express terms of the relevant statutes do not support the interpretation
urged by plaintiffs. In amending the IRA, Congress extended the provisions of
section 5102 to all Indian tribes and all lands held in trust. (25 U.S.C. § 5126.) However,
section 5102 by its very terms applies only to “existing periods of trust,” extending those
existing periods of trust indefinitely. (25 U.S.C. § 5102.) Given this language, the 1990
amendment cannot reasonably be interpreted as creating a new trust right. Even as
extended by section 5126, the express terms of section 5102 still require an “existing trust
right” to have any application.
Third, there is no evidence that Congress intended to enact a sweeping change in
policy by way of the amendment relied upon by plaintiffs. As the Supreme Court has
recognized, section 5108 represents “a mechanism for the acquisition of lands for tribal
communities that takes account of the interests of others with stakes in the area’s
governance and well-being. . . . The regulations implementing [section 5108] are
sensitive to the complex interjurisdictional concerns that arise when a tribe seeks to
regain sovereign control over territory. Before approving an acquisition, the Secretary
must consider, among other things, the tribe’s need for additional land; ‘[t]he purposes
for which the land will be used’; ‘the impact on the State and its political subdivisions
resulting from the removal of the land from the tax rolls’; and ‘[j]urisdictional problems
12 and potential conflicts of land use which may arise.’ ” (City of Sherrill v. Oneida Indian
Nation (2005) 544 U.S. 197, 220-221.)
If, as plaintiffs claim, the 1990 amendment constitutes the acquisition of a new
right within the meaning of section 5108, such an interpretation would represent a
dramatic expansion of the exemption contained in section 5108 without consideration of
the recognized “sensitive and complex interjurisdictional concerns” that the Secretary of
the Interior is otherwise required to balance before taking land into trust pursuant to that
statute. Such an interpretation essentially renders meaningless the language limiting
section 5108’s exemption to land “acquired pursuant to” that statute. There is no
indication that this amendment, which does not even mention section 5108, was intended
to enact such a drastic change to the established statutory scheme.
Finally, “[w]hile a later enacted statute . . . can sometimes operate to amend or
even repeal an earlier statutory provision . . . , ‘repeals by implication are not favored’
and will not be presumed unless the ‘intention of the legislature to repeal [is] clear and
manifest.’ [Citation.] We will not infer a statutory repeal ‘unless the later statute
“ ‘expressly contradict[s] the original act’ ” or such a construction “ ‘is absolutely
necessary [to give the later statute’s words] any meaning at all.’ ” ’ ” (Nat’l Ass’n of
Home Builders v. Defenders of Wildlife (2007) 551 U.S. 644, 662.) As already noted,
plaintiffs’ interpretation of the 1990 amendment to the IRA would effectively render the
“acquired pursuant to” language in section 5108 meaningless and disrupt the long
established statutory and regulatory scheme for acquiring land into trust within the
meaning of section 5108. We see no reason to adopt such an interpretation where the
13 amendment identified by plaintiffs does not expressly contradict any provisions of
section 5108 and does not contain any express language indicating Congress intended to
repeal any provisions of section 5108 or alter the interpretation or implementation of that
section. Nor have plaintiffs identified any conflict in the ability to implement Title 25
United States Code section 5126, such that the traditional understanding of section 5108
must be reconsidered.5
In the absence of any explicit intent to depart from the interpretation or
implementation of section 5108, we will not interpret the 1990 amendments as an
expansion of section 5108’s provisions preempting state and local taxation, and we
decline to depart from our previous interpretation of section 5108 as expressed in Herpel.
C. Implied Preemption Under Bracker Balancing Test
Alternatively, plaintiffs claim that, even in the absence of express preemption, the
possessory interest tax and voter-approved taxes at issue in this case are preempted under
5 If anything, plaintiffs’ proposed interpretation of Title 25 United States Code section 5126 cannot be reconciled with the currently recognized authority of the Secretary of the Interior as expressed in Carcieri v. Salazar (2009) 555 U.S. 379. In Carcieri, the Supreme Court concluded that the Secretary of the Interior was not authorized to take land into trust under the authority provided in section 5108 on behalf of the Narragansett Indian tribe because Congress’s intent was only to authorize taking land into trust for the benefit of tribes under federal jurisdiction at the time of the IRA’s enactment, and the Narragansett Indian tribe was not recognized by the federal government until 1983. (Carcieri, at pp. 384, 395-396.) We observe that section 5126, enacted as an amendment in 1990, applies to all Indian tribes. Thus, while the Supreme Court did not pass on the precise question presented in this case, the Supreme Court’s view in Carcieri that Congress did not intend to authorize the Secretary of the Interior to take land into trust for the benefit of all Indian tribes under section 5108, cannot be reconciled with plaintiffs’ view that Congress intended its 1990 amendment—which applies to all Indian tribes—to constitute the acquisition of a new trust right within the meaning of section 5108.
14 federal law when the balance of competing federal, tribal, and state interests are
considered under the test articulated in Bracker. We disagree.
In Bracker, the Supreme Court explained that “there is no rigid rule by which to
resolve the question whether a particular state law may be applied to an Indian
reservation or to tribal members.” (Id. at p. 142.) Instead, when evaluating the state’s
regulation of non-Indians in relation to activities that affect tribal interests, a court must
“examine[] the language of the relevant federal treaties and statutes in terms of both the
broad policies that underlie them and the notions of sovereignty that have developed from
historical traditions of tribal independence. This inquiry is not dependent on mechanical
or absolute conceptions of state or tribal sovereignty, but has called for a particularized
inquiry into the nature of the state, federal, and tribal interests at stake, an inquiry
designed to determine whether, in the specific context, the exercise of state authority
would violate federal law.” (Id. at pp. 144-145.)
In this case, we need not discuss the application of the Bracker test in detail. Our
recent decision in Herpel considered the balance of federal, tribal, and state interests with
respect to the validity of the same possessory interest tax as applied to allotted land and
tribal trust land held for the benefit of the Agua Caliente tribe. (Herpel, supra,
45 Cal.App.5th at pp. 108-116.)
As in Herpel, plaintiffs here argue the federal interest in preempting local and state
taxation is strong because federal law comprehensively regulates the leasing of Indian
land, citing to the extensive federal regulations governing the leasing of Tribal Land.
However, after consideration of the same regulations in Herpel, we did “not consider the
15 nature of the federal government’s interest in prohibiting the possessory interest tax to
strongly support preemption.” (Herpel, supra, 45 Cal.App.5th at p. 111.) Further, to the
extent that this case includes consideration of the federal interest involved in leasing
CRIT land, such interest would be even more attenuated, since the parties stipulated that
Congress explicitly excluded CRIT land located in California from being subject to the
Secretary of the Interior’s authority to approve leases. Because plaintiffs cite to the same
regulatory scheme in support of the same arguments we already considered and rejected
in Herpel, we see no reason to depart from the conclusion we reached in that case with
respect to the federal government’s relatively weak interest in preemption of local taxes
at issue here.6
With respect to the tribal interests involved, plaintiffs here assert that the county’s
taxes create an economic disincentive preventing the tribes from imposing their own
taxes, thereby depriving the tribes of revenue. Plaintiffs acknowledge that this argument
is essentially identical to the one we considered and found unpersuasive in Herpel, but
they suggest that we should reconsider our analysis because they have provided
additional evidence in the form of an expert who estimated that the Agua Caliente tribe’s
imposition of its own possessory interest tax could result in the value of future leases on
6 As in Herpel, we note that our view that the nature of the federal government’s interest in prohibiting the possessory interest tax as not being sufficiently strong as to support preemption puts us in disagreement with courts that have determined otherwise. (See Seminole Tribe of Florida v. Stranburg (11th Cir. 2015) 799 F.3d 1324, 1341; Segundo v. Rancho Mirage (9th Cir. 1987) 813 F.2d 1387, 1392; Agua Caliente Band of Cahuilla Indians v. Riverside Cty., (C.D. Cal., June 15, 2017, No. ED CV 14-0007-DMG (DTBx)) 2017 U.S. Dist. Lexis 92592 at p. *35, affd. mem., supra, 749 Fed.Appx. 650.)
16 allotted land to fall by over 40 percent, making it practically impossible for the tribe to
impose its own possessory interest tax.7 However, even accepting this testimony at face
value,8 such evidence is not sufficient to compel a conclusion different than the one we
reached in Herpel.
As we explained in Herpel, “the fact that marginal demand for leases on Allotted
Land or Tribal Trust Land could go down if the Tribe also collected its own possessory
interest tax alone is not enough to show harm.” (Herpel, supra, 45 Cal.App.5th at
p. 113.) Thus, our decision in Herpel already assumed that a separate tax imposed by the
tribal authority would lead to a diminution in the value of leases but nevertheless
concluded that the state’s interest, when compared to that of the tribal interest involved,
did not warrant a finding of preemption. The fact that plaintiffs here have presented an
expert’s estimate purporting to quantify that diminution in value does not add anything
significant to our previous analysis.
7 We point out that this argument must necessarily be limited to the plaintiffs leasing allotted land or tribal trust land held by the Agua Caliente tribe, as plaintiffs expert failed to include any discussion of the impact of any taxes on CRIT in his report and was precluded from offering any opinions pertaining to CRIT at trial. Further, unlike the stipulated facts pertaining to the Agua Caliente tribe regarding its decision to hold its own possessory tax in abeyance, there is no similar evidence in the record regarding CRIT or its attempts to impose taxes on any of the alleged CRIT land at issue.
8 We note that the actual diminution in value of future leases is uncertain, as plaintiffs’ expert admitted on cross-examination that he did nothing to assess whether the lease values would decrease as a result of the loss of any specific services currently provided by the county or potentially increase as the result of any additional services the Agua Caliente tribe might provide to lessees in exchange for imposing its own possessory interest tax.
17 Finally, nothing in this case suggests that our view of the state interest in
upholding the county’s possessory interest tax, as well as the voter-approved taxes,
should be any different from that expressed in Herpel. In Herpel, supra, 45 Cal.App.5th
96, we concluded that the state’s interest in imposing the possessory interest tax was
strong because the tax was directly connected to the provision of numerous services that
were provided by the county to non-Indian lessees of allotted land or tribal trust land,
such as education, fire, police, health and sanitation, road maintenance, and flood control.
(Id. at pp. 114-115.) Thus, unlike other cases in which the state’s interest was minimal,
the county’s possessory interest tax represents a situation “ ‘in which the State seeks to
assess taxes in return for governmental functions it performs for those on whom the taxes
fall.’ ” (Id. at p. 116.) The undisputed facts in this case are no different than those
presented in Herpel with respect to the types of services funded by the possessory interest
tax, the nature of the services provided by the county as compared to those provided by
the tribes, and the availability of services to all persons residing within the county
regardless of whether they reside on leased allotted land or tribal trust land.
Our view of the state interest with respect to the possessory interest tax expressed
in Herpel would apply equally to the voter-approved taxes in this case, since the parties
stipulated these taxes fund specific governmental entities providing specific
governmental services available to all residents within the entities’ geographic
boundaries, regardless of whether the recipient of services is a lessee of allotted land or
tribal trust land. Thus, the state interest with respect to the voter-approved taxes
18 challenged in this case is no different than that found sufficient to uphold the tax in
Herpel.
Plaintiffs argue that the availability of intergovernmental agreements is a
preferable alternative to the imposition of the challenged taxes. However, we do not
believe the record in this case is sufficient for us to consider this in the context of the
balancing of interests required under Bracker. While the evidence shows the Agua
Caliente tribe has successfully entered into intergovernmental agreements in other
contexts, there was no evidence to suggest that it could successfully do so—or even had
any desire to do so—with respect to the services funded by the possessory interest and
voter-approved taxes in this case. Nor was there any evidence regarding the practical
feasibility or financial impact of such agreements given the checkerboard, interspersed
nature of the Agua Caliente tribe’s reservation within the county.
Ultimately, our role in conducting an interest balancing test is to determine
whether the state has identified a legitimate interest in exercising the challenged authority
and, if so, the relative strength or weakness of such interest when compared to the
competing federal and tribal interests involved. The fact that the state might be able to
address the same interests through alternative means in the absence of these taxes does
not reduce the legitimacy of the interests identified in this case or the strength of such
interests when compared with relatively weaker federal or tribal interests identified by
plaintiffs. We therefore disagree that the taxes challenged in this case are impliedly
preempted under the interest balancing test articulated in Bracker.
19 D. Implied Preemption for Infringement on Tribal Sovereignty
Finally, plaintiffs argue that separate and distinct from the preemption analysis
under Bracker, the taxes at issue here “strike so deeply at the heart of Indian
independence and self-governance that it is preempted for that reason alone, without any
balancing required,” citing principally to Williams, supra, 358 U.S. 217, in support of this
argument. We disagree that Williams provides an alternative framework for finding
federal preemption in this case.
In Williams, the Supreme Court concluded that principles of federal preemption
prohibited a state court’s exercise of jurisdiction over civil suits arising from transactions
that occur within tribal territory and involve members of a tribe. (Id., supra, 358 U.S. at
pp. 218, 223.) However, since Williams, numerous courts have concluded that the
imposition of a tax does not necessarily infringe on tribal sovereignty in a manner that
warrants a finding of preemption, including the Supreme Court (Wash. v. Confederated
Tribes of Colville Indian Reservation (1980) 447 U.S. 134, 156 [A state “does not
infringe the right of reservation Indians to ‘make their own laws and be ruled by them,’ ”
within the meaning of Williams “merely because the result of imposing its taxes will be
to deprive the Tribes of revenues.”]); the United States Court of Appeals for the Ninth
Circuit (Agua Caliente Band of Mission Indians v. Riverside County, supra, 442 F.2d
1184 [possessory interest tax not preempted by federal law]); and this court (Palm
Springs Spa, Inc. v. County of Riverside, supra, 18 Cal.App.3d 372 [same]) and (Herpel,
supra, 45 Cal.App.5th 96 [same].) Thus, we reject any suggestion that the imposition of
20 a tax, in and of itself, can represent such an infringement to tribal sovereignty that federal
preemption is required absent a balance of competing interests.
Further, we note that the Supreme Court has strongly suggested the argument
plaintiffs advance here is not tenable. In Arizona Dep’t. of Revenue v. Blaze Constr. Co.
(1999) 526 U.S. 32, the high court expressed the belief that its precedents “squarely
foreclose” any argument that imposition of a state tax “infringes on [a tribe’s] right to
make [its] own decisions and be governed by them and that this is sufficient, by itself, to
preclude application” of a state tax under Williams. (Id. at p. 37, fn. 2.) More recently,
the Supreme Court has cited Williams as one of “the cases identified in Bracker as
supportive of the balancing test.” (See Wagnon v. Prairie Band Potawatomi Nation
(2005) 546 U.S. 95, 111.) These authorities strongly suggest that the Supreme Court
does not view Williams or its progeny as an alternative framework for finding preemption
of local or state taxes absent a balancing of interests.
As we have already concluded, the balancing of interests under Bracker supports
upholding the validity of the taxes challenged in this appeal. We believe that the question
of whether such taxes are impliedly preempted under federal law is properly resolved by
a balancing of interests as articulated in Bracker, and we are not persuaded that a separate
infringement test that does not require a balancing of interests can be properly applied in
this case. As we found in Herpel, the balance of interests does not support a finding of
federal preemption, and the trial court in this case did not err when it reached the same
conclusion.
21 IV. DISPOSITION
The judgment is affirmed. Respondents are awarded their costs on appeal.
FIELDS J. We concur:
McKINSTER Acting P. J.
MILLER J.
22 Filed 9/9/21 CERTIFIED FOR PUBLICATION
ORDER
LEONARD ALBRECHT et al., E073926 Plaintiffs and Appellants, (Super.Ct.No. PSC1501100 & v. RIC1719093)
COUNTY OF RIVERSIDE, Defendant and Respondent; The County of Riverside DESERT WATER AGENCY, et al., Interveners and Respondents. ______________________________________ PATRICIA ABBEY, et al., Plaintiffs and Appellants,
v.
COUNTY OF RIVERSIDE, Defendant and Respondent;
DESERT WATER AGENCY, et al., Interveners and Respondents. ______________________________________
THE COURT
The request for publication of the nonpublished opinion filed in the above matter September 1, 2021, is GRANTED. The opinion meets the standards for publication as specified in California Rules of Court, rule 8.1105(c)(1), (4), (6), and (7).
1 IT IS SO ORDERED that said opinion filed August 13, 2021, be certified for publication pursuant to California Rules of Court, rule 8.1105(b).