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Miller v. Wright, No. 11-35850 (9th Cir. filed Nov.

13, 2012) On November 13th, the Ninth Circuit, in a three-judge panel opinion authored by Judge Rawlinson, found that neither the Sherman Act nor the Clayton Act abrogates sovereign immunity of Indian tribes. Plaintiffs Miller, Lanphere and Matheson brought an antitrust suit in the Western District of Washington against the Puyallup Tribe of Indians, as well as the Tribes chairman and tax enforcement officer. At issue was an agreement between the state of Washington and the Tribe (i.e., the cigarette tax contract, or, CTC), whereby the state would abstain from taxing tribal retail cigarette sales in exchange for the Tribe agreeing to (1) tax its retail cigarette purchasers at the same rate as that which would otherwise be imposed by the state, using the tax proceeds to fund tribal services; and (2) require tribal retailers to only purchase tobacco products from Washington state-certified tobacco wholesalers. The plaintiffsa retail seller and two retailer purchasers of Puyallup retailer tobacco productsalleged that they are forced to pay more for tobacco products (the retail seller alleged that he pays more from the wholesaler and the retail purchasers alleged that they pay more from the retail sellers) as a result of the CTC. The plaintiffs alleged violations under 1 of the Sherman Act and 14 of the Clayton Act, and sought an injunction, a declaratory judgment, damages, and a refund of fees paid as a result of the charges imposed by the Tribe. The district court granted the Tribes motion to dismiss, finding an absence of subject matter jurisdiction as the plaintiffs had failed to meet their burden of showing that tribal sovereign immunity did not apply. The Ninth Circuit affirmed the district courts holding that sovereign immunity precluded subject matter jurisdiction. The plaintiffs alleged that the Sherman Act and Clayton Act abrogate tribal immunity, making the Tribes conduct susceptible to antitrust scrutiny. The Court ruled that Congress may only abrogate tribal immunity by an unequivocal expression to do so in explicit legislation, and that such abrogation may not be implied. Observing that the Sherman Act (i.e., 1) refers only to states and foreign nations,1 and the Clayton Act (i.e., 12) defines persons as corporations and associations existing under or authorized by the laws of either the United States, the laws of any of the Territories, the laws of any State, or the laws of any foreign country, the Court found that such language does not employ the sort of expansive language that we and other circuits have held to unequivocally abrogate tribal sovereign immunity. For instance, the Tenth Circuit found that Congress negated tribal sovereign immunity in the Safe Drinking Water Act when its definition of persons included municipalities, which in turn included Indian tribes in its definition. Furthermore, the Court looked to state sovereign immunity precedent for guidance on when Congress has abrogated tribal sovereign immunity. Citing Parker v. Brown, 317 U.S. 341 (1943), and Sanders v. Brown, 504 F.3d 903 (9th Cir. 2007), the Court concluded that the
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The Court states that The Sherman Act, for example, refers only to states and foreign nations. See 15 U.S.C. 1. The Court did not address, however, 15 U.S.C. 3, which may in fact apply to tribal land (i.e., including Territory within its definition of covered areas where antitrust scrutiny may apply). While case law interpreting 3 has not addressed whether it applies antitrust scrutiny to actions on Indian land, it is worth noting that the Court declined to address 3 in its analysis.

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Sherman Act did not abrogate state sovereign immunity, and therefore, did not abrogate tribal sovereign immunity. In addition to the Courts finding that federal antitrust law does not explicitly abrogate tribal immunity, the Court also concluded that the Sherman Act is not generally applicable to Indian Tribes. The plaintiffs, citing Donovan v. Coeur dAlene Tribal Farm, 751 F.2d 1113 (9th Cir. 1985), maintained that federal statutes of general applicability apply to Indian tribes unless one of three exceptions applies: (1) the law touches exclusive rights of self-governance in purely intramural matters; (2) the application of the law to the tribe would abrogate rights guaranteed by Indian treaties; and (3) there is proof by legislative history or some other means that Congress intended the law not to apply to Indians on their reservations. The Court found that a Donovan analysis was not warranted because the antitrust laws were not intended to apply to Indian tribes. The Ninth Circuit also held that the Tribe did not waive its immunity merely by entering into the CTC, which contained a dispute resolution clause, calling for mediation between the Tribe and the state of Washington. This mediation clause did not amount to a waiver of immunity because it did not evince an intent to have a dispute resolved by a non-tribal entity, and there was no indication that the Tribe intended to submit itself to the states jurisdiction. Finally, the Court rejected the plaintiffs argument that even if the Tribe itself retained immunity, the tribal officials were not immune. The officials were acting in their official capacities pursuant to the Tribes authority to tax, and therefore, were entitled to the same immunity as the Tribe.

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