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Ninth Circuit Decision Dismisses Challenge to Tribal Taxing Authority and Upholds Sovereign Immunity

November 15, 2012 | Posted by Jordan, James | Print this page

In a decision issued November 13, the Ninth Circuit Court of Appeals dismissed a challenge to the tribal cigarette taxing authority, upholding the district court ruling. 

In Miller v. Wright the court held the tribe's sovereign immunity protected it against the antitrust action brought by cigarette vendors. The vendors were challenging taxes imposed by the Puyallup tribe pursuant to a tribal-state cigarette compact. The court held that the tribe did not implicitly waive its sovereign immunity by agreeing to dispute resolution procedures when entering into a cigarette tax compact.

Further, the court also agreed with the tribe that the Sherman Antitrust Act was not a law of general applicability and did not subject the tribe to suit under that law.  Finally, the court also agreed with the lower court that tribal officials were protected by the tribe’s sovereign immunity because they acted within the scope of their employment and pursuant to the tribe’s taxing authority.

In its ruling, the district court had also offered an alternative rationale that the action was barred by res judicata because of prior litigation in state and tribal courts.  The Ninth Circuit agreed and also upheld the alternative ruling.  James Jordan, of Miller Nash, successfully defended Mr. Wright, the tribal tax enforcement officer, in this action.