STATE OF OKLAHOMA ex rel. OKLAHOMA TAX COMMISSION, Plaintiff-Appellant, v. Jan GRAHAM and Chickasaw Nation, By and Through Overton James, Governor of the Chickasaw Nation, Defendants-Appellees.
No. 86-1655
United States Court of Appeals, Tenth Circuit
June 26, 1987
822 F.2d 951
The remaining grounds for reversal have been examined and none is meritorious. They are: (1) pre-trial publicity required a change of venue (venue was moved from the Northern District of Oklahoma to the Western District of Oklahoma, but counsel argues the case should have been transferred outside of Oklahoma, if not farther); (2) failure to sequester the jury (no request to sequester was made, and, in any event, sequestration, or no, is a discretionary matter with no abuse shown on appeal); (3) denial of a motion for a continuance (also a discretionary matter for the district court; here defendant had over five months to prepare and received numerous continuances); (4) failure of court to recuse (motion to recuse first made after conviction at a time when defendant sought release pending appeal and is therefore untimely; also defendant did not show evidence suggesting the judge‘s impartiality might be reasonably questioned, see United States v. Gigax, 605 F.2d 507 (10th Cir.1979)); (5) use by government of summary charts (another discretionary matter for a trial court); (6) improper argument in closing wherein prosecution, inter alia, characterized McKinney as a “crook” (no contemporaneous objection and the description, if error, did not rise to the level of plain error); (7) reference to possible commission of other crimes (evidence designed in part to show defendant‘s knowledge of the kiting scheme and therefore admissible under
As indicated, McKinney sought release pending appeal. The district court denied this request. McKinney renewed that request with this court. Another panel of this court declined to rule on the request to be released on bond pending appeal, and deferred ruling until the case was heard on its merits. Accordingly, at this time the motion for release on bond is denied.
Judgment affirmed.
Robert C. Jenkins (J. Lawrence Blankenship with him on the briefs), Oklahoma City, Okl., for plaintiff-appellant.
Bob Rabon of Kile and Rabon, Hugo, Okl., for defendants-appellees.
Before SEYMOUR, MOORE and TACHA, Circuit Judges.
JOHN P. MOORE, Circuit Judge.
The State of Oklahoma ex rel. Oklahoma Tax Commission (State or appellant) appeals the district court‘s denial of its motion to remand and subsequent granting of
The Chickasaw Nation, one of the Five Civilized Tribes early removed to Indian Territory, is a federally recognized Indian tribe which owns and operates the Chickasaw Motor Inn (the motel) in Sulfur, Oklahoma. The motel was purchased by the Chickasaw Nation as part of a tribal economic development project. The tribal legislature authorized the operation of a tobacco shop and bingo game at the motel. Jan Graham, an employee of the Chickasaw Nation, manages the motel, the tobacco shop, and the game.
The State filed its complaint in the District Court of Murray County, Oklahoma, alleging that large quantities of cigarettes not bearing state excise and tax stamps were sold at retail to the general public from the motel. The absence of these tax stamps as well as the Chickasaw Nation‘s failure to file reports of its sales allegedly violated
Subsequently, the Chickasaw Nation removed the action to the United States District Court for the Eastern District of Oklahoma. The State moved to remand the action. Citing Montana v. Blackfeet Tribe of Indians, 471 U.S. 759, 105 S.Ct. 2399, 85 L.Ed.2d 753 (1985), and Moe v. Confederated Salish & Kootenai Tribes of Flathead Reservation, 425 U.S. 463, 96 S.Ct. 1634, 48 L.Ed.2d 96 (1976), the district court denied the State‘s motion. The Chickasaw Nation then moved to dismiss the action pursuant to
We agree with the conclusion reached by the trial court, but we emphasize the issues are subject to two separate inquiries. First, we must determine whether removal jurisdiction was present. Second, if removal is proper, we must determine whether substantive jurisdiction exists.
II.
A.
The State urges us to scrutinize the face of its complaint and hold that no federal question is present to permit removal. Bisecting this argument, the State contends, first, that the action involves solely the interpretation of state tax and revenue
We are unswayed by either assertion, mindful instead that our inquiry into whether a federal court has removal jurisdiction and whether it may exercise its limited substantive jurisdiction is not perforce bounded by the face of a complaint. Indeed, when the state plaintiff couches his “necessarily federal cause of action solely in state law terms ... the federal removal court will look beyond the letter of the complaint to the substance of the claim in order to assert jurisdiction.” 14A Wright, Miller & Cooper, Federal Practice & Procedure § 3722, at 243 (1985).
The substance of the State‘s claim embraces the central jurisdictional issue we must decide in this appeal. Indeed, when we strip the State‘s complaint of its statutory baggage, we are left with an action in which the State is attempting to enforce an essential element of its sovereignty, the power to tax, over an Indian tribe.
This recognition underscores the implicit federal question lodged in the State‘s complaint and focuses our inquiry. National Farmers Union Ins. Cos. v. Crow Tribe of Indians, 471 U.S. 845, 105 S.Ct. 2447, 85 L.Ed.2d 818 (1985); Superior Oil Co. v. United States, 798 F.2d 1324, 1328 (10th Cir.1986). “The Constitution vests the Federal Government with exclusive authority over relations with Indian tribes.” Montana v. Blackfeet Tribe of Indians, 471 U.S. at 764, 105 S.Ct. at 2402 (citations omitted). See also Williams v. Lee, 358 U.S. 217, 220, 79 S.Ct. 269, 270, 3 L.Ed.2d 251 (1959). The corollary of this principle is clear. “Absent an effective waiver or consent, it is settled that a state court may not exercise jurisdiction over a recognized Indian tribe.” Puyallup Tribe, Inc. v. Department of Game of Wash., 433 U.S. 165, 172, 97 S.Ct. 2616, 2621, 53 L.Ed.2d 667 (1977). Moreover, it must “affirmatively appear[] that there has been a congressional or tribal waiver of immunity.” Ramey Constr. Co. v. Apache Tribe, 673 F.2d 315, 318 (10th Cir.1982) (emphasis added); see also Weeks Constr., Inc. v. Oglala Sioux Housing Auth., 797 F.2d 668 (8th Cir.1986). Thus, an alleged waiver or consent to suit is a necessary element of the well-pleaded complaint. See also North Davis Bank v. First Nat‘l Bank of Layton, 457 F.2d 820, 822 (10th Cir.1972) (action necessarily presented threshold question of federal law); Madsen v. Prudential Federal Savings & Loan Ass‘n, 635 F.2d 797, 801 (10th Cir.1980), cert. denied, 451 U.S. 1018, 101 S.Ct. 3007, 69 L.Ed.2d 389 (1981) (distinguishing North Davis Bank). Thus, removal jurisdiction as to our first inquiry was correctly asserted.
Furthermore, the State can direct us to no contrary precedent or principle to require remanding this action to the state court. The State‘s citations to authority are limited and distinguishable.1 In fact, appellant is unable to provide us with any authority in which a state, absent a tribe‘s valid waiver or consent to suit, has succeeded in retaining state court jurisdiction in circumstances similar to our case.
Nevertheless, during oral argument, the State refocused its argument and cited Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463 U.S. 1, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983), for the proposition that a federal defense will not deprive a state court of jurisdiction. Appellant contends Franchise Tax prohibits our going beyond the face of the complaint to fashion its cause of action to the Tribe‘s federal defense.
Franchise Tax Board does not defeat federal removal jurisdiction in this case because the defendants are asserting the absence of jurisdiction and not federal preemption. Tribal sovereign immunity is jurisdictional, Ramey Constr. Co. v. Apache Tribe, 673 F.2d 315, 318 (10th Cir.1982), and, as we shall discuss later, places a different spin upon our inquiry. At this juncture, however, we find that removal was proper because of the constitutional grant of federal jurisdiction over Indian affairs.
B.
This initial holding recognizes that when removal was effected automatically in this case, the federal district court instantly acquired the threshold jurisdiction to decide whether it had the power to exercise jurisdiction over the action. This “jurisdiction to determine jurisdiction” is an essential power, subject to review of any court, particularly the federal courts of limited jurisdiction. Land v. Dollar, 330 U.S. 731, 739, 67 S.Ct. 1009, 1013, 91 L.Ed. 1209 (1947); Chicot County Drainage Dist. v. Baxter State Bank, 308 U.S. 371, 376, 60 S.Ct. 317, 319, 84 L.Ed. 329 (1940). For this reason, upon removal, the federal district court acquired the same threshold jurisdiction that was vested in the state court as well. This jurisdiction to determine jurisdiction is not defeated by a subsequent determination that a court does not have subject matter jurisdiction over the issues in controversy.2
C.
The State‘s second argument to defeat removal jurisdiction ignores established precedent. The Tax Injunction Act,
III.
Having concluded removal was proper, we turn to the State‘s contention that the district court erred in dismissing the suit against the Tribe and Jan Graham, individually, on the basis of tribal sovereign immunity. Support for this argument is difficult to discern because the State relies on precedent in which the issue of sovereign immunity was not raised3 and because the State interweaves the merits of the action
The Court has consistently recognized that “Indian tribes retain attributes of sovereignty over both their members and their territory.” California v. Cabazon Band of Mission Indians, --- U.S. ---, ---, 107 S.Ct. 1083, 1087, 94 L.Ed.2d 244 (1987). This tribal sovereignty is historically recognized to have a unique and limited character. “It exists only at the sufferance of Congress,” United States v. Wheeler, 435 U.S. 313, 323, 98 S.Ct. 1079, 1086, 55 L.Ed.2d 303 (1978); serves to promote Indian self-government and economic self-sufficiency, White Mountain Apache Tribe v. Bracker, 448 U.S. 136, 100 S.Ct. 2578, 65 L.Ed.2d 665 (1980); and represents an accommodation between valid though competing Indian and state interests, Rice v. Rehner, 463 U.S. 713, 719, 103 S.Ct. 3291, 3295, 77 L.Ed.2d 961 (1983). Although the sovereign immunity enjoyed by tribes is not absolute, we may infer state authority only “where Congress has expressly provided that state laws shall apply.” McClanahan, 411 U.S. at 171, 93 S.Ct. at 1261.
Hence, tribal sovereign immunity prohibits suit against Indian nations without Congressional authorization. This sovereign immunity enjoyed by a tribe is “as though the immunity which was theirs as sovereigns passed to the United States for their benefit.” United States v. United States Fidelity & Guar. Co., 309 U.S. 506, 512, 60 S.Ct. 653, 656, 84 L.Ed. 894 (1940). Thus, before any court can acquire jurisdiction over a tribe, it must affirmatively appear that “there has been a congressional or tribal waiver of immunity.” Ramey Constr. Co. v. Apache Tribe, 673 F.2d at 318. “The judicial doctrine of tribal sovereign immunity has long protected Indian tribes from suit in state and federal courts.” White v. Pueblo of San Juan, 728 F.2d 1307, 1312 (10th Cir.1984); see also Kennerly v. United States, 721 F.2d 1252, 1258 (9th Cir.1983).
There is no indication in the record on the motion to dismiss that an unequivocal waiver, Santa Clara Pueblo v. Martinez, 436 U.S. at 58, 98 S.Ct. at 1677, or consent to suit was offered to permit the State to litigate this action. Chemehuevi Indian Tribe v. California State Bd. of Equalization, 757 F.2d 1047, 1052 (9th Cir. 1985), rev‘d in part, 474 U.S. 9, 106 S.Ct. 289, 88 L.Ed.2d 9 (1985). (“Like the United States, an Indian tribe can consent to suit, but ‘such consent must be unequivocally indicated.‘” (citations omitted)). Moreover, we are directed to no authority, absent these conditions, to authorize the suit.4 Instead, at this stage, resolution must be guided by the established tradition of that sovereign immunity inherent in the distinct status of the Chickasaw Nation. Santa Clara Pueblo v. Martinez, 436 U.S. at 49, 98 S.Ct. at 1672; Puyallup Tribe, 433 U.S. at 165, 97 S.Ct. at 2617. Thus, the district court correctly dismissed the action as to the Chickasaw Nation.
The conclusion that the Tribe is immune from suit does not end our inquiry, however. The state contends that even if the suit against the Tribe is barred, tribal employee Jan Graham is still subject to suit under the doctrine announced in Tenneco Oil Co. v. Sac & Fox Tribe, 725 F.2d 572, 574 (10th Cir.1984). We disagree.
Tribal officials “do not have the same immunity as the Tribe itself.” Kennerly, 721 F.2d at 1259 (citing Mar-tinez, 436 U.S. at 59, 98 S.Ct. at 1677). But tribal immunity “extends to tribal officials when acting in their official capacity and within the scope of their authority.” United States v. Oregon, 657 F.2d 1009, 1012 n. 8 (9th Cir.1981). The State cannot avoid the doctrine of sovereign immunity by nominally suing a tribal officer when the suit in substance is against the sovereign. See Larson v. Domestic & Foreign Commerce Corp., 337 U.S. 682, 687-88, 69 S.Ct. 1457, 1460, 93 L.Ed. 1628 (1949). The State does not contend that Graham was not acting in an official capacity or without authorization by the Tribe.
Nevertheless, in Tenneco Oil we recognized that “[w]hen the complaint alleges that the named officer defendants have acted outside the amount of authority that the sovereign is capable of bestowing, an exception to the doctrine of sovereign immunity is invoked.” 725 F.2d 574, 576 (McKay, J., concurring). The concurrence in Tenneco Oil noted that “[w]ere it not for such an allegation in this case, the sovereign immunity of the tribe would extend to its officers.” Id. We thus must examine the State‘s petition and complaint to determine whether employee Graham is immune from suit.
Nowhere in the State‘s petition is there an allegation that defendant Graham acted outside of the amount of authority that the Tribe is capable of bestowing as a matter of federal or constitutional law. It is well-established that only the Federal Government can limit the scope of tribal sovereignty. The petition only alleges that defendants failed to comply with state law. Thus, the Tenneco Oil exception does not apply.
Additionally, the relief sought by the State would operate directly against the Tribe and thus the suit in substance is against it rather than Graham. “The general rule is that a suit is against the sovereign if ‘the judgment sought would expend itself on the public treasury or domain, or interfere with the public administration,’ ... or if the effect of the judgment would be ‘to restrain the Government from acting, or compel it to act.‘” Dugan v. Rank, 372 U.S. 609, 620, 83 S.Ct. 999, 1006, 10 L.Ed.2d 15 (1963) (citations omitted). The State seeks an accounting of “taxes, penalties, and interest” allegedly due, and seeks to enjoin the operation of the Chickasaw Nation‘s motel, cigarette sales, and bingo games until payment of the amounts allegedly due. The suit would in effect grant relief against the sovereign itself, “over which the court, in the absence of consent, has no jurisdiction.” Larson, 337 U.S. at 688, 69 S.Ct. at 1461. Thus, the suit as to Graham is also barred. Id.
The judgment of the district court dismissing the suit is AFFIRMED.
TACHA, Circuit Judge, dissenting.
I respectfully dissent. This is not a case about the sovereign immunity of an Indian tribe. This is a case about who decides the sovereign immunity of an Indian tribe. In my opinion the majority has incorrectly concluded that a claim of sovereign immunity satisfies the removal jurisdiction requirement that a federal question appear in the plaintiff‘s well-pleaded complaint. I would find that the federal courts do not have jurisdiction and that this case should not have been removed from state court.
I.
In Franchise Tax Board v. Construction Laborer‘s Vacation Trust, 463 U.S. 1, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983), the Supreme Court held that a suit filed in state court can be removed to federal court only if the suit could have been filed originally in federal court. “If it appears before final judgment that a case was not properly removed, because it was not within the original jurisdiction of the United States district courts, the district court must remand it to the state court from which it was removed.” Id. at 8, 103 S.Ct. at 2845. Thus, we must decide whether the federal courts would have original jurisdiction over the state‘s tax suit against the tribe.
Federal question jurisdiction exists only if the plaintiff‘s well-pleaded complaint establishes that the case arises under federal law. Id. at 9-10, 103 S.Ct. at 2846; see
The [well-pleaded complaint] rule ... may produce awkward results, especially in cases in which neither the obligation created by state law nor the defendant‘s factual failure to comply are in dispute, and both parties admit that the only question for decision is raised by a federal ... defense. Nevertheless, it has been correctly understood to apply in such situations.
Id. at 12, 103 S.Ct. at 2847-48 (footnote omitted).
It is not disputed that the face of the state‘s complaint in this case raises only state tax questions. The majority, however, finds that the state‘s attempt “to enforce an essential element of its sovereignty, the power to tax, over an Indian tribe ... underscores the implicit federal question lodged in the state‘s complaint.” Maj. op. at 954. I disagree. This is not a case in which the plaintiff has couched a “necessarily federal cause of action solely in state law terms.” 14A C. Wright, A. Miller, & E. Cooper, Federal Practice & Procedure § 3722 (1985). There are no questions of federal law in the state‘s well-pleaded complaint.
“The Constitution vests the Federal Government with exclusive authority over relations with Indian tribes.” Montana v. Blackfeet Tribe of Indians, 471 U.S. 759, 764, 105 S.Ct. 2399, 2402, 85 L.Ed.2d 753 (1985). Indeed, the Supreme Court has adopted a per se rule precluding state taxation of Indian tribes and tribal members. See California v. Cabazon Band of Mission Indians, --- U.S. ---, ---, 107 S.Ct. 1083, 1091 n. 17, 94 L.Ed.2d 244 (1987). Congress, however, can authorize a state to tax an Indian tribe if the congressional intention to do so is unmistakably clear. Montana, 471 U.S. at 765, 105 S.Ct. at 2403. Thus, the tribe argues that because it is necessary for the state to rely upon a grant of congressional authority to tax the tribe, the state has raised a federal question in its complaint.
Gully v. First Nat‘l Bank, 299 U.S. 109, 57 S.Ct. 96, 81 L.Ed. 70 (1936), instructs otherwise. In Gully, the state of Mississippi filed suit in state court to collect state taxes from a national bank. The lower courts granted the bank‘s petition to remove the action to federal court because “the power to lay a tax upon the shares of national banks has its origin and measure in the provisions of a federal statute, and that by necessary implication a plaintiff counts upon the statute in suing for the tax.” Id. at 112, 57 S.Ct. at 97 (citation omitted). The Supreme Court held that removal was improper. Justice Cardozo wrote:
Not every question of federal law emerging in a suit is proof that a federal law is the basis of the suit. The tax here in controversy if valid as a tax at all, was imposed under the authority of a statute of Mississippi. The federal law did not attempt to impose it or to confer upon the tax collector authority to sue for it. True, the tax, though assessed through the action of the state, must be consistent with the federal statute consenting, subject to restrictions, that such assessments may be made. It must also be consistent with the Constitution of the United States. If there were no federal law permitting the taxation of shares in national banks, a suit to recover such a tax would not be one arising under the Constitution of the United States, though the bank would have the aid of the Constitution when it came to its defense. That there is a federal law permitting such taxation does not change the basis of the suit, which is still the statute of the state, though the federal law is evidence to prove the statute valid.
Id. at 115, 57 S.Ct. at 99 (emphasis original) (citations omitted).
Gully establishes that although a state must rely upon federal authorization to tax a particular institution, a suit to collect such taxes does not necessarily raise a
Ramey also acknowledged that “[t]he Indian tribes’ sovereign immunity is co-extensive with that of the United States.” 673 F.2d at 319-20. The determination of federal question removal jurisdiction thus should be the same in cases involving Indian tribes and in cases involving the United States. While federal officials are allowed to remove all suits brought against them to federal court, the basis of removal in those instances is a separate statute rather than a pervasive federal question.
Suits against foreign sovereigns are treated similarly to suits against federal officials. In Verlinden B.V. v. Central Bank of Nigeria, 461 U.S. 480, 103 S.Ct. 1962, 76 L.Ed.2d 81 (1983), a Dutch corporation sued a Nigerian state bank in federal court for breach of contract. The bank moved to dismiss, arguing that the court lacked jurisdiction because of the state bank‘s sovereign status. The Court held that the Foreign Sovereign Immunities Act,
Prior to passage of the Foreign Sovereign Immunities Act, which Congress clearly intended to govern all actions against foreign sovereigns, state courts on occasion had exercised jurisdiction over suits between foreign plaintiffs and foreign sovereigns.... Congress did not prohibit such actions when it enacted the Foreign Sovereign Immunities Act, but sought to ensure that any action that might be brought against a foreign sovereign in state court could also be brought in or removed to federal court.
Id. at 491 n. 16, 103 S.Ct. at 1970 n. 16 (citations omitted). Congress has not enacted an equivalent provision that would allow the removal of actions brought against an Indian tribe in state court.
II.
Tribal sovereign immunity is jurisdictional. Ramey, 673 F.2d at 318; see also Note, In Defense of Tribal Sovereign Immunity, 95 Harv.L.Rev. 1058, 1058 (1982) (“The judicial doctrine of tribal sovereign immunity traditionally has protected Indian tribes from suit in state and federal courts.“) (footnotes omitted). The question here is which court decides the question of sovereign immunity. Either the state court or the federal court must have jurisdiction to decide whether sovereign immunity applies in this case. See, e.g., Land v. Dollar, 330 U.S. 731, 739, 67 S.Ct. 1009, 1013, 91 L.Ed. 1209 (1947) (a court has jurisdiction to determine if it has jurisdiction). As the majority properly recognizes, the federal district court did not acquire the threshold jurisdiction to determine the sovereign immunity of the Chickasaw Nation until the court found that removal from state court was proper. Maj. op. at 954, 955. For the reasons I have described, I conclude that removal was improper in this case. Therefore, I would not reach the question of the sovereign immunity of the tribe.
The implication of the majority‘s position is that federal court removal jurisdiction exists whenever “the defendants are asserting the absence of jurisdiction.” Maj. op. at 955. A challenge to state court jurisdiction cannot be sufficient to invoke removal jurisdiction. A federal court obtains removal jurisdiction only when it would have original jurisdiction. Federal law may well determine the result in a state court case, but a showing that a federal question very likely will be dispositive of a case falls short of a showing that the plaintiff‘s original cause of action arises under federal law.
III.
This court must afford “proper respect for the ability of state courts to resolve federal questions presented in state court litigation.” Pennzoil Co. v. Texaco, Inc., --- U.S. ---, ---, 107 S.Ct. 1519, 1527, 95 L.Ed.2d 1 (1987). The state court is constitutionally obligated to follow the commands of federal law regarding Indian tribal sovereignty. Should the state court fail to do so, the Supreme Court can review that decision on appeal. See Franchise Tax Bd., 463 U.S. at 12 n. 12, 103 S.Ct. at 2848 n. 12.
Because the state of Oklahoma‘s complaint in this case does not raise a federal question, there would be no original jurisdiction in the federal courts, and thus there is no removal jurisdiction. I would hold that this action was improperly removed to federal court and that it should now be remanded to state court.
JOHN P. MOORE
UNITED STATES CIRCUIT JUDGE