Seminole Tribe of Florida v. Marshall Stranburg
2015 U.S. App. LEXIS 15061
| 11th Cir. | 2015Background
- The Seminole Tribe operates casinos on Hollywood and Tampa reservations and entered into 25-year leases (2005) with non-Indian Ark Hollywood, LLC and Ark Tampa, LLC to run food-court operations; leases were BIA‑approved and required lessees to pay applicable taxes.
- Florida assessed its commercial Rental Tax (privilege tax on renting real property) against the Ark Entities for 2005–2008; Tribe paid an itemized Utility (gross‑receipts) Tax on utilities and sought refunds for amounts paid; state denied refunds.
- Tribe sued the Florida Department of Revenue seeking declaratory and injunctive relief; district court granted summary judgment to Tribe, holding both taxes impermissible as applied on reservation (statutory prohibition and/or federal preemption for Rental Tax; legal incidence on Tribe for Utility Tax).
- Florida (through the Department director, Stranburg) appealed, arguing the district court erred on statutory interpretation, preemption analysis, legal incidence, and that comity/exhaustion principles barred the federal suit while related state refund suits were pending.
- The Eleventh Circuit affirmed that 25 U.S.C. § 465 bars application of Florida’s Rental Tax to rents for leases of trust Indian land and, alternatively, held the Rental Tax preempted under the Bracker balancing test; it reversed as to the Utility Tax, concluding legal incidence falls on the utility company and the Utility Tax is not preempted as applied to the utility.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 25 U.S.C. § 465 precludes Florida’s Rental Tax on rent payments for leases of §465 trust land | §465 exempts land and "rights in land"; leasing/lease payments are a land right akin to the Mescalero use‑tax holding | §465 does not reach transactional rent taxes; Cotton Petroleum limits §465’s reach; Ninth Circuit precedents allow possessory taxes | Held: §465 bars Florida’s Rental Tax as applied to these leases; statutory exemption affirmed |
| If §465 did not apply, whether the Rental Tax is preempted by federal law under Bracker | Tribal/federal interest: leasing of Indian land is comprehensively regulated; state tax would conflict with federal scheme and tribal economic/self‑government interests | State interest: general revenue and some state services; not sufficiently connected to leasing activity to outweigh federal scheme | Held: Even de novo Bracker analysis yields preemption — federal regulatory scheme pervasive and exclusive; Rental Tax preempted |
| Whether comity/abstention or Tax Injunction Act barred federal adjudication of the Rental Tax claim | State urged comity/abstention and Tax Injunction Act effects because related refund suits were filed in state court | Tribe: tax‑injunction statute does not bar tribes from federal suits; federal forum appropriate for federal Indian law and preemption claims | Held: Court lacked jurisdiction to review district court’s earlier dismissal order challenge; on merits, district court did not abuse discretion—federal suit properly adjudicated |
| Legal incidence and preemption of Florida’s Utility (gross‑receipts) Tax | Tribe: legal incidence falls on Tribe (consumer) because tax is stated on bills and Tribe paid it; if incidence on Tribe, tax impermissible for on‑reservation tribal activities and preempted | State: statute and regs show tax imposed on utility as privilege of doing business; itemization discretionary; utility remains fully liable; incidence on utility not Tribe | Held: Legal incidence falls on utility company (not Tribe); therefore, on record, the Tribe did not show the Utility Tax is preempted generally; district court’s contrary ruling reversed |
Key Cases Cited
- Mescalero Apache Tribe v. Jones, 411 U.S. 145 (1973) (§465 exempts land and closely related rights; use taxes so connected to land can be treated as property taxes)
- White Mountain Apache Tribe v. Bracker, 448 U.S. 136 (1980) (preemption test requires particularized balancing of federal, tribal, and state interests)
- Cotton Petroleum Corp. v. New Mexico, 490 U.S. 163 (1989) (Bracker balancing is fact‑sensitive; state taxes on non‑Indian lessees can be upheld where federal regulation is not exclusive)
- Chickasaw Nation v. Oklahoma Tax Comm’n, 515 U.S. 450 (1995) (legal incidence—question of state law; courts look for dispositive pass‑through language or fair statutory interpretation)
- Ramah Navajo Sch. Bd. v. Bureau of Revenue, 458 U.S. 832 (1982) (state gross‑receipts tax on non‑Indian contractor building on reservation preempted where state services were not tied to taxed activity)
- Wyeth v. Levine, 555 U.S. 555 (2009) (agency views may inform preemption analysis but courts should not defer to agency on ultimate preemption conclusion)