People v. Rose
C080546
Cal. Ct. App.Oct 17, 2017Background
- Darren Paul Rose, an enrolled Indian and member of the Alturas Indian Rancheria, operated two smoke shops (Burning Arrow I & II) located on federal allotments classified as Indian country; the allotments were distant from and not owned by the Alturas Rancheria.
- From 2011–2013/14 Rose sold at least 51,000 cartons of cigarettes that were not listed in California’s cigarette directory, not certified for reduced ignition propensity, and for which he failed to collect or remit California excise tax, depriving the state of over $443,700.
- Federal Bureau of Indian Affairs notified Rose in 2009–2010 that California could collect excise taxes on cigarettes sold to non‑Indians in Indian country; the California Attorney General sent a cease‑and‑desist letter in 2012. Rose continued sales.
- The People sued in Shasta County superior court alleging violations of the tobacco directory law, the California Cigarette Fire Safety and Firefighter Protection Act, excise tax laws, and the Unfair Competition Law (UCL); the court granted summary adjudication on the statutory claims, found at least 51,000 UCL violations, and issued a permanent injunction.
- The superior court imposed civil penalties of $15 per violation (total $765,000) after finding Rose had substantial assets and offered no evidence of inability to pay; Rose appealed, arguing California lacked jurisdiction in Indian country and the penalties were inequitable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether California may apply its civil/regulatory cigarette laws to sales in Indian country (preemption/sovereignty) | State: California’s public‑health, fire‑safety, and tax interests justify applying state laws to non‑tribal commerce in Indian country; no federal scheme preempts state regulation here. | Rose: Federal law and tribal sovereignty preempt California regulation of conduct in Indian country; Public Law 280 limits state civil regulatory authority. | Court: No preemption; California may apply its civil/regulatory laws to Rose’s sales because federal/tribal interests do not outweigh state interests. |
| Whether the state court had subject‑matter jurisdiction to adjudicate enforcement of state civil/regulatory laws against an Indian in Indian country | State: Even if Public Law 280 is not the basis, state courts can adjudicate where federal preemption and tribal‑sovereignty concerns do not bar state regulation. | Rose: Superior court lacked subject‑matter jurisdiction to decide whether California can regulate an Indian’s conduct in Indian country. | Court: Rejects Rose’s challenge; prior cases and principles permit state courts to adjudicate these civil/regulatory disputes when not preempted. |
| Appropriateness/amount of civil penalties under the UCL | State: Civil penalties up to statutory caps are proper; court’s $15 per violation award is supported by findings (knowledge, notice, assets, and lack of contrary evidence). | Rose: Penalties inequitable because most violations occurred before the AG put him on notice; AG delayed and allowed liability to accrue. | Court: Affirms penalties; trial court findings show Rose had notice (BIA letters) and would not have ceased even with later AG notice; penalties not inequitable. |
Key Cases Cited
- California v. Cabazon Band of Mission Indians, 480 U.S. 202 (states’ limited jurisdiction under Pub. L. 280 and tribal sovereignty principles)
- Bryan v. Itasca County, 426 U.S. 373 (Pub. L. 280 does not confer broad state civil regulatory authority over reservations)
- White Mountain Apache Tribe v. Bracker, 448 U.S. 136 (framework for weighing federal, tribal, and state interests in preemption disputes)
- New Mexico v. Mescalero Apache Tribe, 462 U.S. 324 (state regulation preempted where it would disturb a comprehensive federal/tribal regulatory scheme)
- Washington v. Confederated Tribes of Colville Indian Reservation, 447 U.S. 134 (state taxation of nonmember Indians on reservation may be permissible when tribal interests are limited)
- People v. McCovey, 36 Cal.3d 517 (California exposition of the balancing test for state regulation in Indian country)
- People ex rel. Harris v. Black Hawk Tobacco, Inc., 197 Cal.App.4th 1561 (upholding application of California tobacco‑control and tax laws to Indian smoke shop sales)