Daniel Miller v. Chad Wright

Procedural entryThis page is a short order in Daniel Miller v. Chad Wright. Read the opinion of the Court — 705 F.3d 919
Court of Appeals for the Ninth Circuit·Decided January 14, 2013·No. 11-35850·Published

Opinion

FOR PUBLICATION

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

DANIEL T. MILLER; AMBER No. 11-35850 LANPHERE; PAUL M. MATHESON , Plaintiffs-Appellants, D.C. No. 3:11-cv-05395- v. RBL

CHAD WRIGHT , Puyallup Tribe Tax Department, Enforcement Officer; ORDER AND HERMAN DILLON , SR., Chairman AMENDED Puyallup Tribe of Indians; OPINION PUYALLUP TRIBE OF INDIANS, a federally recognized American Indian tribe, Defendants-Appellees.

Appeal from the United States District Court for the Western District of Washington Ronald B. Leighton, District Judge, Presiding

Argued and Submitted August 6, 2012—Seattle, Washington

Filed November 13, 2012 Amended January 14, 2013 2 MILLER V . WRIGHT

Before: John T. Noonan, Susan P. Graber, and Johnnie B. Rawlinson, Circuit Judges.

Order; Opinion by Judge Rawlinson

SUMMARY*

Affirming the district court’s dismissal of an antitrust action brought by cigarette vendors challenging taxes imposed by virtue of the authority vested in an Indian tribe, the panel held that the district court lacked subject matter jurisdiction in light of the tribe’s sovereign immunity.

The panel held that the tribe did not implicitly waive its sovereign immunity by agreeing to dispute resolution procedures nor by ceding its authority to Washington State when entering into a cigarette tax contract. The panel also held that federal antitrust law did not explicitly abrogate tribal immunity, and the Sherman Antitrust Act was not a law of general applicability vis-a-vis the tribe. The panel held that tribal officials were protected by the tribe’s sovereign immunity because they acted pursuant to the tribe’s authority.

The panel also affirmed the district court’s alternative ruling that the action was barred by res judicata in light of prior litigation in state and tribal courts.

* This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. MILLER V . WRIGHT 3

COUNSEL

Robert Kovacevich, Spokane, Washington, for Appellants Daniel Miller, Amber Lanphere, and Paul M. Matheson.

John Howard Bell (argued) and Andrea George, Tacoma, Washington, for Appellees Herman Dillon Sr., Chairman, Puyallup Tribe of Indians, and the Puyallup Tribe of Indians, a federally recognized Indian tribe.

James H. Jordan, Jr., Miller Nash LLP, Seattle, Washington, for Appellee Chad Wright, Puyallup Tribe Tax Department, Enforcement Officer.

ORDER

Appellees’ Request for Reconsideration and Correction of Footnote 4, filed on November 26, 2012, is construed as a Petition for Panel Rehearing. So construed, the petition is GRANTED. The opinion in this case, filed on November 13, 2012, is AMENDED to delete footnote 4, Slip Opinion, p. 13246.

No further petitions for rehearing or petitions for rehearing en banc will be entertained. 4 MILLER V . WRIGHT

OPINION

RAWLINSON, Circuit Judge:

This is the latest iteration of cigarette vendors’ challenge to taxes imposed by virtue of the authority vested in an Indian tribe. Appellants Daniel T. Miller (Miller), Amber Lanphere (Lanphere), and Paul M. Matheson (Matheson) appeal the district court’s dismissal of their antitrust action against appellees Herman Dillon (Dillon), Chad Wright (Wright) and the Puyallup Tribe (the Tribe). The district court dismissed the action for lack of subject matter jurisdiction in light of the tribe’s sovereign immunity.1 We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm the district court.

I. BACKGROUND

A. Plaintiffs Matheson, Miller, and Lanphere

Matheson is an enrolled Puyallup Indian who owns a retail store that sells cigarettes. Matheson’s store is located within the Puyallup Indian Reservation. The Tribe operates retail stores in the same vicinity.

Miller is a non-Indian, non-resident of the reservation who purchased cigarettes from Matheson. As a result of the Tribe’s cigarette tax, the price Miller paid for a carton of cigarettes included a $30.00 fee. This $30.00 fee stemmed from the cigarette tax contract (CTC) between the State of

1 In reviewing a district court’s grant of a motion to dismiss, we “accept the factual allegations of the complaint as true and construe them in the light most favorable to the plaintiff.” AE ex rel. Hernandez v. County of Tulare, 666 F.3d 631, 636 (9th Cir. 2012) (citation omitted). MILLER V . WRIGHT 5

Washington and the Tribe. The price also included a $5 fee for the benefit of Washington’s public health fund. Washington requires collection of the $5 fee to comply with provisions of the Master Settlement Agreement (MSA), a settlement between the tobacco industry and numerous states, including Washington. See Wash. Rev. Code § 70.157.010(e). Pursuant to the MSA, tobacco manufacturers make payments to an escrow fund for public health. See Wash. Rev. Code §§ 70.157.020, 43.79.480. Tobacco manufacturers who are not party to the MSA must pay funds into escrow. See Wash. Rev. Code § 70.157.020(a) and (b). Miller seeks a refund of these fees and a permanent injunction against their future collection.

Lanphere is also a non-Indian, non-resident of the reservation who purchased cigarettes from Matheson’s store. Like Miller, the price Lanphere paid included the tribe’s cigarette tax and the health fund fee. Lanphere also seeks a refund of fees paid and a permanent injunction.

Prior to this litigation, Miller and other plaintiffs pursued legal relief in other fora. Matheson first filed suit for injunctive relief, declaratory judgment, and damages in Washington state court. He specifically sought a ruling that the cigarette tax contract with the state was invalid. The Washington Court of Appeals affirmed the trial court’s dismissal of the action, and the Washington and United States Supreme Courts denied review. Matheson v. Gregoire, 139 Wash. App. 624 (2007), rev. denied, 163 Wash. 2d 1020, cert. denied, 555 U.S. 881 (2008).

Matheson and Lanphere then filed a similar action in Puyallup Tribal Court, seeking to invalidate the cigarette tax contract. This action was dismissed by the tribal court 6 MILLER V . WRIGHT

because of the Tribe’s sovereign immunity. The Tribal Court of Appeals affirmed the dismissal.

Before the conclusion of proceedings in the tribal court, Matheson and Lanphere filed suit in the United States District Court for the Western District of Washington. That action was dismissed for failure to complete the tribal proceedings. See Lanphere v. Wright, No. C09-5462 BHS, 2009 WL 3617752 (W.D. Wash. Oct. 29, 2009). We affirmed the dismissal. See Lanphere v. Wright, 387 F. App’x 766 (9th Cir. 2010).

B. The Tribe

Chad Wright “is or was the Tax Enforcement Officer of the Puyallup Tribe” and Chief Executive Officer of the Tribe’s store located near Matheson’s. Herman Dillon, Sr., is the tribal chairman of the Puyallup Tribe.

The Puyallup Tribe entered into a compact with the State of Washington whereby the Tribe agreed that tribal retailers would purchase only from Washington State Tobacco Wholesalers or state certified wholesalers. Likewise, the Tribe agreed to require retailers to charge a cigarette tax equal to the amount of the tax that would otherwise be imposed by the state.

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