IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Transcription

1 Case: /05/2010 Page: 1 of 43 ID: DktEntry: IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT AMBER LANPHERE, Individually and on behalf of oers similarly situated, and PAUL MATHESON; Plaintiffs-Appellants, v. CHAD WRIGHT, Puyallup Tribal Tax Department and THE PUYALLUP INDIAN TRIBE; Defendants-Appellees. ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WASHINGTON NO. 09-cv BHS THE HONORABLE BENJAMIN H. SETTLE UNITED STATES DISTRICT COURT JUDGE OPENING BRIEF OF APPELLANTS ROBERT E. KOVACEVICH Attorney for Appellants 818 W. Riverside Avenue Suite 525 Spokane, Washington (509)

2 Case: /05/2010 Page: 2 of 43 ID: DktEntry: 10-1 TABLE OF CONTENTS -i- Page Introduction Statement of Jurisdiction Statement of Issues Statement of e Case Statement of Facts Argument A. Standard of Review B. The Exhaustion of Remedies Doctrine does not Apply to is Case The Trial Court Erred in Requiring Exhaustion when Tribal Court Jurisdiction is e Only Issue C. This Court is Bound by e Nin Circuit Court Red Wolf Decision D. This Appeal is also Based on e Alternate Ground of Lack of Fundamental Fairness E. The Court Erred in Finding at Amber Lanphere, a Non-Member, Non-Tribal Reservation Resident, for Purposes of Determining Tribal Jurisdiction, had Established a Consensual Relationship wi e Tribe. She had Never Met Maeson and Never had any Contact in any way wi e Tribe

3 Case: /05/2010 Page: 3 of 43 ID: DktEntry: 10-1 F. Party Status in Litigation Does Not Supercede e Montana Factors G. The Trial Court Assumed Facts Contrary to e Complaint Conclusion ii-

4 Case: /05/2010 Page: 4 of 43 ID: DktEntry: 10-1 CASES TABLE OF AUTHORITIES Atkinson Trading Co. v. Shirley, 532 U.S. 645 (2001)...2, 24-28, 31 Bell Atlantic v. Twombly, 550 U.S. 544 (2007) Bird v. Glacier Electric Co-Op, Inc., 255 F.3d 1136 (9 Cir. 2006).20 Boozer v. Wilder, 381 F.3d 931 (9 Cir. 2004) , 18 Boxx v. Long Warrior, 265 F.3d 771 (9 Cir. 2001) ,11 Burlington Norern v. Assiniboine and Sioux Tribe of e Fort Peck Reservation, 323 F.3d 767 (9 Cir. 2003) , 23 Burlington Norern v. Red Wolf, 196 F.3d 1059 (9 Cir. 2000)...16 Burrell v. Armijo, 456 F.3d 1057 (10 Cir. 2006) , 17, 20, 21 Cossey v. Cherokee Nation Enterprises, LLC, 212 P.3d 447 (Okla. 2009) DeMercado v. Mukasey, 566 F.3d 810 (9 Cir. 2009) Dolgen Corp Inc. v. The Mississippi Band of Chucktaw Indians, 2008 WL (S.D.Miss 2008) Hart v. Massanari, 266 F.3d 1155 (9 Cir. 2001) , 22 Keweenaw Bay v. Rising, 477 F.3d 881 (6 Cir. 2007) Martinez v. Martinez, 2008 WL (W.D.Wa 2008) iii-

5 Case: /05/2010 Page: 5 of 43 ID: DktEntry: 10-1 Maeson v. Gregoire, 139 Wash.App 624, 161 P.3d 486 (Div. II 2007) Metro Life Ins. Co. V. Neaves, 912 F.2d 1062 (9 Cir. 1990) Montana v. United States, 450 U.S. 544 (1981) passim Nevada v. Hicks, 533 U.S. 353 (2001) , 13, Ochoa v. J.B. Martin and Sons Farms, Inc., 287 F.3d 1182 (9 Cir. 2002) Phillip Morris USA v. King Mountain Tobacco Co., 569 F.3d 932 (9 Cir. 2009) passim Plains Commerce Bank v. Long Family Cattle Co., 554 U.S., 128 S.Ct 2709 (2008) passim Schnabel v. Lui, 302 F.3d 1023 (9 Cir. 2002) Strate v. A-1 Contractors, 520 U.S. 438 (1997) passim Swierkiewicz v. Sorema N.A., 534 U.S. 506 (2002) Tucson Airport Auority v. General Dynamics Corporation, 136 F.3d 641 (9 Cir. 1998) Water Wheel Camp Recreation Area v. LaRance, 2009 WL (D. Ariz 2009) Wilson v. Marchington, 127 F.3d 805 (9 Cir. 1997) iv-

6 Case: /05/2010 Page: 6 of 43 ID: DktEntry: IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT AMBER LANPHERE, Individually and on behalf of oers similarly situated, and PAUL MATHESON; Plaintiffs-Appellants, v. CHAD WRIGHT, Puyallup Tribal Tax Department and The PUYALLUP INDIAN TRIBE; Defendants-Appellees. ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WASHINGTON NO. 09-cv BHS THE HONORABLE BENJAMIN H. SETTLE UNITED STATES DISTRICT COURT JUDGE INTRODUCTION This case is dependent on wheer or not e general rule set for in Montana v. United States, 450 U.S. 544 (1981), or its exceptions, apply to tribal jurisdiction of non-members. -1-

7 Case: /05/2010 Page: 7 of 43 ID: DktEntry: 10-1 Lanphere and Maeson assert is Court must apply Atkinson Trading v. Shirley, 532 U.S. 645 (2001) as interpreted by Plains Commerce Bank v. Long Family Land and Cattle Co., 554 U.S., 128 S.Ct 2709, 171 L.Ed.2d 457 (2008) and ereby reversing e District Court s ruling in is matter. STATEMENT OF JURISDICTION The jurisdiction of e District Court was invoked pursuant to 28 U.S.C. 1738, 1331, 1362 and Article III 2 of e U.S. Constitution. Adjudicative auority over non-members by an Indian tribe is a federal question. See e.g., Plains Commerce Bank v. Long Family Land and Cattle Co., 554 U.S.,128 S.Ct 2709, 2716 (2008). This Court has jurisdiction pursuant to 28 U.S.C The district court entered an Order dismissing Plaintiff- Appellants Complaint on October 29, A timely appeal from e Order was filed on November 19, On December 17, 2009, e Court entered a judgment of dismissal. An amended appeal was made from e judgment on January 4, The Appellants brief was due December 30, Appellants obtained -2-

8 Case: /05/2010 Page: 8 of 43 ID: DktEntry: 10-1 an extension pursuant to Nin Circuit Rule Appellants opening brief is due February 12, STATEMENT OF ISSUES 1. Wheer or not e doctrine of exhaustion of remedies required dismissal of e Amended Complaint. 2. Wheer or not e exhaustion of remedies doctrine applies when e only issue is Indian tribal court personal jurisdiction of a non-tribal member. 3. Until tribal jurisdiction of a non-tribal member is established, e doctrine of sovereign immunity of an Indian tribe cannot be adjudicated. 4. Wheer or not federal court jurisdiction in is case establishes denial of fundamental fairness in tribal court. 5. By entering into a cigarette tax agreement in which e State of Washington shares 30% of e tribal tax and which also calls for mediation, e Puyallup Tribe waived its sovereign immunity. -3-

9 Case: /05/2010 Page: 9 of 43 ID: DktEntry: 10-1 STATEMENT OF THE CASE The Purchaser and Retailer Sought Relief from e Tribal Cigarette Tax. Plaintiffs/Appellants, Lanphere and Maeson, sought relief against e Puyallup Tribe s cigarette tax in e Puyallup Tribal Court on October 2, 2006, Case Number PUY-CV They contend in eir Amended Complaint in e District Court at ey did not receive due process or fundamental fairness in e tribal court. Amended Complaint, pages (Excerpts of Record, hereafter ER ). Amber Lanphere, Co-Plaintiff and Co- Appellant in is appeal asserts she has no consensual or any oer legal or actual relationship wi e Puyallup Tribe of Indians at page 2, 3, 4, 19, 27 and 48. The Amended Complaint, page 48, (ER 107), also alleges at e Puyallup Tribe:...cannot tax Amber Lanphere and oer non-indian purchasers from Paul Maeson s retail store and ose similarly situated as e Puyallup Tribe has no consensual relationship wi Plaintiff Paul Maeson s purchasers...since e incidence of tax is on e purchaser, e Puyallup Tribe has no auority to tax non-tribal enrolled Indians who do not live on e Puyallup reservation. -4-

10 Case: /05/2010 Page: 10 of 43 ID: DktEntry: 10-1 Procedural History in Tribal Court The Puyallup Tribal Court Clerk s Order set motions to be heard in open court on January 28, Plaintiffs, on January 12, 2009, sent e Court a Motion in Limine to request at a special judge be assigned. Express mail tracking indicated at e motion arrived at e Court on January 13, (ER 193). It was never heard for e reason at Tribal Court Judge Francis X. Lame Bull on January 16, 2009, wiout contacting Lanphere and Maeson in any way, entered an Order of Dismissal based upon tribal sovereign immunity. (ER 127). Maeson and Lanphere filed a Motion for Reconsideration at was received by e clerk on January 26, It was filed on January 28, Judge Lame Bull denied e motion on February 20, In addition to e Motion in Limine, also pending were e Tribe s Request for Hearing and Motion to Stay Discovery filed December 3, 2008, and Maeson and Lanphere s Motion to Compel Discovery filed December 11, No mention has ever been made of e Motion in Limine or e additional motions in -5-

11 Case: /05/2010 Page: 11 of 43 ID: DktEntry: 10-1 Judge Lame Bull s Order. Apparently, ey are still pending as ey have never been ruled upon. No judgment, as required by Puyallup Tribal Code , (Addendum A-1) was ever issued in is case. The open court notice procedure of Tribal Civil Procedure Code (Addendum A-2) was not followed. Puyallup Tribal Resolution A dated January 5, 1995, (Addendum A-3) enacted a provision to...add a recusal provision setting out a procedure for removing a judge for bias or prejudice. Appellants, pursuant to Tribal Judicial Code (Addendum A-4) questioned impartiality but it was never ruled on. The Tribal Court of Appeals, wiout notice or opportunity allowing Plaintiffs to be heard, declared in e scheduling order dated April 26, 2009, at ey refused to hear all e issues raised in e Complaint and limited e argument to sovereign immunity. (ER 131). An additional issue, timely filing, was eliminated by Plaintiffs proof of timeliness by Express Mail tracking. (ER 193). Plaintiffs moved to recuse e appellate panel by motion filed May 28, This Motion was denied on June 29,

12 Case: /05/2010 Page: 12 of 43 ID: DktEntry: 10-1 Plaintiffs filed eir Complaint in United States Federal Court on July 29, (ER 39). It sought relief against e Tribal Court of Appeals. After is suit was filed in e United States District Court of Appeals, e action was stayed by e Tribal Court on August 6, (ER 130). On August 13, 2009, Plaintiff filed its Amended Complaint dropping members of e Tribal Court of Appeals as parties. The Amended Complaint (ER 60) alleges at e United States District Court, citing Burrell v. Armijo, 456 F.3d 1159 (10 Cir. 2006) should not give comity could not be given e tribal court proceedings as due process was violated, including lack of fundamental fairness. In a prior state court proceeding, Paul Maeson, e only Plaintiff, tried to get e Puyallup Tribe into state court to litigate his cigarette tax collection requirement but was denied. Maeson v. Gregoire, 139 Wash.App. 624, 161 P.3d 486 (Div. II 2007). Lanphere was not a party in e state court suit. -7-

13 Case: /05/2010 Page: 13 of 43 ID: DktEntry: 10-1 STATEMENT OF FACTS Amber Lanphere, a non-indian, non-resident of e Puyallup Indian Reservation, drove her car on public streets onto e Puyallup Indian Reservation. She bought a carton of commercially manufactured cigarettes wi cash from Paul Maeson s employees at his drive rough convenience store at Milton, Washington. She is not related to, and has never met, Co-Plaintiff Paul Maeson. She has never had any contact of any kind wi e Puyallup Tribe or its members. She works and lived in Tacoma, Washington. After purchase, she immediately left e Puyallup Reservation. Lanphere, e retail purchaser, was forced to pay e Puyallup tribe cigarette tax and also about four dollars more added by e wholesaler or oers up e chain of distribution to pay into e Washington State Master Settlement Escrow Fund. The Fund is a result of a 1998 master settlement (MSA) by major tobacco manufacturers wi 46 states including Washington. No Indian tribes were parties to e settlement. Lanphere seeks to recover -8-

14 Case: /05/2010 Page: 14 of 43 ID: DktEntry: 10-1 e Tribe s cigarette tax and MSA amounts she paid and also act as a putative class action plaintiff. Paul Maeson, e retailer, requests at he and his similarly situated retailers be relieved of his burden of collecting e cigarette tax and e MSA payments to e State of Washington escrow. No class action has yet been certified. ARGUMENT A. Standard of Review. The District Court s Order on exhaustion of remedies is reviewed de novo. Philip Morris USA v. King Mountain Tobacco Co., 569 F.3d 932, 938, fn.1 (9 Cir. 2009); Boxx v. Long Warrior, 265 F.3d 771, 774 (2001). The burden of establishing tribal court jurisdiction is on e Indian tribe. Plains Commerce Bank v. Long Family Land and Cattle Co., 554 U.S., 128 S.Ct 2709, 2720 (2008). Subject matter jurisdiction based on waiver of immunity is also reviewed de novo. Tucson Airport Auority v. General Dynamics Corporation, 136 F.3d 641, 644 (9 Cir. 1998); Shnabel -9-

15 Case: /05/2010 Page: 15 of 43 ID: DktEntry: 10-1 v. Lui, 302 F.3d 1023, 1029 (9 Cir. 2002). Lack of personal jurisdiction is reviewed de novo. Ochoa v. J.B. Martin and Sons Farms, Inc., 287 F.3d 1182, 1187 (9 Cir. 2002). Rulings based on affidavits and pleadings, when jurisdiction is e issue, are construed in e light most favorable to appellants. Metro Life Ins. Co. v. Neaves, 912 F.2d 1062, 1064, fn. 1 (9 Cir. 1990). B. The Exhaustion of Remedies Doctrine does not Apply to is Case. 1. The Trial Court Erred in Requiring Exhaustion when Tribal Court Jurisdiction is e Only Issue. On e written opinion in e Scheduling Order dated April 26, 2009, (ER 131) e Puyallup Tribal Court of Appeals stated,...because e trial court dismissed e Complaint based on sovereign immunity and did not hear e underlying claims, it would not be appropriate for is Court to review all issues raised in e Complaint and is Court has no intention of doing so. The Court, wiout allowing Maeson and Lanphere to be heard, ruled in advance of any opportunity for anyone to argue e issue in -10-

16 Case: /05/2010 Page: 16 of 43 ID: DktEntry: 10-1 open court. The Plaintiffs-Appellants filed a motion proving timely submissions and to argue oer issues, but e motion was not ruled on. All oer remedies were denied to Plaintiffs-Appellants. The only issue not ruled on in tribal court was tribal court jurisdiction based on sovereign immunity. Jurisdiction is not wiin e exhaustion rule. Boxx v. Long Warrior, 265 F.3d 771, 778 (9 Cir. 2001) holds at tribal exhaustion is not required stating, because we conclude at e tribal court lacks jurisdiction over is claim, exhaustion is not required. In its Order at page 4, (ER 34), e trial court stated, Tribal auority over e activities on non-indians on reservation lands is an important part of tribal sovereignty. See Montana, Id. at At e same page, e Court quoted Boozer v. Wilder, 381 F.3d 931, (9 Cir. 2004) e Court held, a federal court must give e tribal court full opportunity to determine its own jurisdiction. In its Order at pages 6 and 7 (ER 36-7), e trial court reviewed e applicable law but failed to correctly apply e case -11-

17 Case: /05/2010 Page: 17 of 43 ID: DktEntry: 10-1 it cited, Strate v. A-1 Contractors, 520 U.S. 438, 459 (1997). In Strate, supra, at footnote 14, e Supreme Court created an exception to exhaustion holding at e issue of tribal court jurisdiction is an exception to e exhaustion requirement. The court stated, Therefore, when tribal court jurisdiction over an action such as is one is challenged in federal court, e oerwise applicable exhaustion requirement, see supra, at , must give way, for it would serve no purpose oer an delay. The Supreme Court s back reference to pages underscores e now famous lines, As to non-members, we hold, a tribe s adjudicative jurisdiction does not exceed its legislative jurisdiction. Strate, 520 U.S. at 453. The first principle is wheer e non-member has a consensual relationship wi e Indian tribe. Phillip Morris USA v. King Mountain Tobacco Co., 569 F.3d 932, 935 (9 Cir. 2009). Nevada v. Hicks, 533 U.S. 353 (2001), adopts e reasoning at if e Montana jurisdiction is e issue, exhaustion is unnecessary. The Hicks Court, 533 U.S. at 369 quoted e broad -12-

18 Case: /05/2010 Page: 18 of 43 ID: DktEntry: 10-1 exception in Strate, 520 U.S. at , at non-member s conduct covered by e Montana rule is an exception to tribal exhaustion. Phillip Morris v. King Mountain Tobacco Co., 369 F.3d 932, 941 (9 Cir. 2009) follows Hicks stating at e Montana analysis is controlling regardless of party alignment, especially when e nonmember does not consent to jurisdiction. The court also held, Strate, 520 U.S. at 451-2,...e Montana rule does not bear on tribal court adjudicatory auority in cases involving non-member defendants. The conclusion is logical. If a tribe has no jurisdiction, e non-tribal, non-resident litigant does not need to file in tribal court. Since Plains Commerce Bank v. Long Family Land and Cattle Co., 554 U.S.,128 S.Ct. 2709, 2720 (2008) a tribe has e burden of proving jurisdiction over e non-member. The tribal Defendant, if e case is exclusively in tribal court, can obtain a dismissal if ere is no jurisdiction of e non-member. In Plains Commerce, tribal jurisdiction was raised for e first time n e U.S. Supreme Court. The court held at 128 S.Ct 2717, If e tribal court is found to -13-

19 Case: /05/2010 Page: 19 of 43 ID: DktEntry: 10-1 lack such jurisdiction, any judgment as to e non-member is null and void. Plains Commerce was repeatedly cited in Lanphere s legal auorities submitted in all ree courts. The Amended Complaint, (ER 60) states: Civil auority over non-members, including Plaintiff Amber Lanphere is beyond e Tribe s sovereign power unless ere is a specific direct consensual relationship wi e person or entity who bears e burden of e tax... Like e non-member Indian entity in Plains Commerce Bank v. Long Family Land and Cattle Co., 128 S.Ct 2709, 2720, 171 L.Ed.2d 457 (2009). The Tribe has no regulatory or adjudicative power over Lanphere. Montana v. United States, 450 U.S. 544 (1981) itself rejects any application of tribal sovereignty over non-members where exceptions do not exist. Montana, 450 U.S. at 565. The district court in is case, (ER 31) did not recognize at e tribal court could not have any pending matters when all e tribal court s rulings were void for lack of jurisdiction over Lanphere. After Plains Commerce, supra, a tribal court can have jurisdiction over one party if ere is a consensual relationship but not on anoer -14-

20 Case: /05/2010 Page: 20 of 43 ID: DktEntry: 10-1 non-member if ere is no tribal consensual relationship. The order of e tribal court is null and void against e nonconsensual, non-member. Water Wheel Camp Recreational Area v. LaRance, 2009 WL (D.Ariz 2009). The Montana rule e court mentioned refers to Montana v. United States, 450 U.S. 554(1981) promulgated e presumption at as a general rule Indian tribes lack auority over e conduct of non-members. Plains Commerce Bank v. Long Family Land and Cattle Co., 554 U.S.,128 S.Ct 2709 (2008) narrowed jurisdiction of Indian tribes even furer by empaizing e liberty interests of non-members. 128 S.Ct at The Court also held at a consensual relationship, even if established by dealings, must be e direct link on nexus for jurisdiction. Consensual relationship must be e reason for jurisdiction. Occurrence in e course of e commercial transaction will not carry over to establish jurisdiction. It must be e nexus of e issue. Plains Commerce, 128 S.Ct at Lanphere never had any dealing wi e tribe, erefore, since e Tribe had no nexus to tax, e Tribe -15-

21 Case: /05/2010 Page: 21 of 43 ID: DktEntry: 10-1 has no personal or subject matter jurisdiction. Burlington Norern v. Red Wolf, 196 F.3d 1059, 1065 (9 Cir. 2000) follows Strate, supra and clearly states e exception to e exhaustion rule at applies in e Nin Circuit and in is case. The sole issue in Red Wolf, like is case, was tribal court jurisdiction. This Court initially applied e exhaustion rule in Burlington Norern Railroad Co. v. Red Wolf, 106 F.3d 868 (9 Cir. 1997). However, e case was vacated in light of Strate, supra. Red Wolf, 196 F.3d at The Red Wolf court reviewed e exceptions to exhaustion of remedies in tribal matters and imposed e four exception: or (4) it is plain at no federal grant provides for tribal governance of non-members conduct on land covered by Montana s main rule. See Strate, 520 U.S. at 459, n. 14, 117 S.Ct Because tribal courts plainly do not have jurisdiction over is controversy pursuant to Montana and Strate, e Railroad was not required to exhaust its tribal remedies before proceeding in federal court. The district court in e matter before is appellate court did nt acknowledge, understand and properly apply is newer exception -16-

22 Case: /05/2010 Page: 22 of 43 ID: DktEntry: 10-1 to e exhaustion requirement. When properly applied, is exception mandates at ere was NO requirement of exhaustion in is matter. Phillip Morris USA v. King Mountain Tobacco Co., 569 F.3d 932, 945 (9 Cir. 2009) also holds at if a tribal court has no jurisdiction, exhaustion of remedies in tribal court serves no useful purpose and is inappropriate. In e tribal court complaint, (ER 133), Lanphere asserted, Lanphere has no contractual or any oer type of relationship wi e Puyallup Tribe of Indians. At pages (ER 174-5), e Fif Claim alleges at e Tribe cannot tax e non-indian purchaser as no consensual relationship exists. The assertions contained in ese paragraphs deny e Montana exceptions to jurisdiction. Oer circuits also follow e principle at exhaustion of remedies is not required where personal jurisdiction and e Montana factors are to be determined. Burrell v. Armijo, 456 F.3d 1159, 1168 (10 Cir. 2006). -17-

23 Case: /05/2010 Page: 23 of 43 ID: DktEntry: 10-1 The Puyallup Tribal Court erred by assuming jurisdiction and dismissing on e sovereignty issue. The lower court in is case erred by relying on exhaustion when e tribal court clearly had no jurisdiction. Wheer or not ere is jurisdiction can be addressed at anytime. The reliance by e trial court on Boozer v. Wilder, 381 F.3d 931 (9 Cir. 2004) was improper, as e jurisdiction in tribal court in Boozer, supra, was conferred by e Indian Child Welfare Act, 25 U.S.C. 1911(a) at gives exclusive jurisdiction to e tribal court. The case was improperly applied in is matter. Three Supreme Court cases, Strate, Hicks, and Plains Commerce reject tribal exhaustion when e issue was e Montana general rule or exceptions. The Nin Circuit in Red Wolf follows e Supreme Court opinions. C. This Court is Bound by e Nin Circuit Court Red Wolf Decision. The first case in is circuit binds all subsequent ree judge panels. Hart v. Massanari, 266 F.3d 1155, 1171 (9 Cir. 2001) holds, [A] later ree judge panel considering a case at is -18-

24 Case: /05/2010 Page: 24 of 43 ID: DktEntry: 10-1 controlled by e rule announced in an earlier panel s opinion has no choice but to apply e earlier adopted rule. This rule was followed in DeMercado v. Mukasey, 566 F.3d 810, 816 (9 Cir. 2009). The Strate, supra, exception requires reversal here because e Puyallup Tribal Appellate Court has ruled on all oer issues. Bo e trial court and e appellate court refused to rule or ignored pending motions to compel e Tribe to answer interrogatories, recusal, Plaintiffs Motion in Limine and never allowed oral arguments on anying even ough e court set schedules. After limiting e issue on appeal to sovereignty, e appellate court entered a stay order in e case. Accordingly, is Court must reverse e trial court order granting e dismissal in is matter. D. This Appeal is also Based on e Alternate Ground of Lack of Fundamental Fairness. Burlington Norern v. Assiniboine and Sioux Tribe of e Fort Peck Reservation, 323 F.3d 767, 770 (9 Cir. 2003), a tribal tax -19-

25 Case: /05/2010 Page: 25 of 43 ID: DktEntry: 10-1 case, reversed a case where failure to grant a motion to compel discovery was reversible error. It is directly applicable to is appeal. The Nin Circuit case of Bird v. Glacier Electric Co-Op, Inc., 255 F.3d 1136, 1147 (9 Cir. 2006), denied tribal court comity where due process, and fundamental fairness were violated stating: We are not triers of fact. That role was assigned to e tribal court jury. But e jury s verdict was to have been rendered in a fair proceeding. In view of e closing argument, e tribal court proceeding was not fair. There is no reasoned way now to assess e competing facts presented at trial by e parties. Id. at The Ten Circuit in Burrell v. Armijo, 456 F.3d 1159, 1172 (10 Cir. 2006) held at a tribal court s failure to rule on motions and also indicating a close relationship between e tribal court and e tribe, required at e tribal court decision was not entitled to recognition. In Burrell, supra, e non-member filed in bo e tribal and United States District Court. In tribal court ey filed motions to -20-

26 Case: /05/2010 Page: 26 of 43 ID: DktEntry: 10-1 compel discovery and motions for evidentiary hearings at were never ruled on. The complaint also alleged bias of e tribal judge in favor of e tribe who paid e judge s salary. The tribal judge did not rule on e oer motions but dismissed e case on sovereign immunity of e tribe. Burrell, supra, closely parallels is case and also relies on e Nin Circuit precedent. When e holding of Burrell, supra, is applied to e facts of is case reversal is mandatory. All e oer remedies sought by Maeson and Lanphere were ruled on by bo e trial court and e Tribal Appellate Court. The Amended Complaint in is case, (ER 60) raises e issue of denial of due process in tribal court proceedings. Wilson v. Marchington, 127 F.3d 805, 813 (9 Cir. 1997) allows a federal court appeal on denial of due process by a tribal court. The Decision denied comity because e tribal court lacked subject matter jurisdiction. The tribal court due process cases were also cited to e trial court. A district court must follow Nin Circuit opinions wheer -21-

27 Case: /05/2010 Page: 27 of 43 ID: DktEntry: 10-1 it likes em or not. Hart v. Massanari, 266 F.3d 1155, 1170 (9 Cir. 2001). Accordingly, is Court should apply e Nin Circuit s holdings to is case and conclude at a reversal is required. E. The Court Erred in Finding at Amber Lanphere, a Non-Member, Non-Tribal Reservation Resident, for Purposes of Determining Tribal Jurisdiction, had Established a Consensual Relationship wi e Tribe. She had Never Met Maeson and Never had any Contact in any way wi e Tribe. In its Order dismissing e Complaint, e trial court concluded: Furer, Ms. Lanphere entered into a consensual relationship wi e Tribe, or its members, in at least two ways. First, by voluntarily purchasing cigarettes from Mr. Maeson s store, she engaged in a consensual relationship wi a tribal member on tribal lands. See Strate, 520 U.S. at 446 (setting out e consensual relationship exception to Montana). Second, by knowingly availing herself of e tribal court system, Ms. Lanphere, a non-member, has entered into a consensual relationship wi e Tribe and is subject to e exhaustion rule. Plaintiffs Amended Complaint, pages 3-4, 8-9, 11-12, 13-14, 27, (ER 62-3, 67-8, 70-1, 72-3, 86) alleges facts at for purposes of is appeal are to be taken as true. The allegation of facts are -22-

28 Case: /05/2010 Page: 28 of 43 ID: DktEntry: 10-1 at Lanphere is a purchaser of cigarettes from a store on e Puyallup Reservation. She is a non-puyallup Indian, non-member, non-reservation resident and has no dealings at all of any kind wi e Puyallup Tribe. She has no relationship wi e Tribe. The Court also concluded at e use of e Tribal Court system established jurisdiction. The State-Tribal Compact (ER 194) states at page 2, number 4: Agreement does not Create Third Party Beneficiaries. No Third Party Shall have any Rights or Obligations under is Agreement. Paul Maeson, a tribal member, tried to obtain state court jurisdiction. The Tribe was dismissed. Res judicata cannot apply unless e parties are in privity of e same and ere is a final judgment on e merits. Burlington Norern Santa Fe Railroad v. Assiniboine and Sioux Tribes, 323 F.3d 767, 770 (9 Cir. 2003). The Tribe never obtained a final decision against anyone in e state court as it was dismissed. Here, Lanphere has been dismissed by e federal court. -23-

29 Case: /05/2010 Page: 29 of 43 ID: DktEntry: 10-1 The Plains Commerce Court also noted at e tribe has no auority to regulate sales of Indian fee land. 128 S.Ct at Here e Tribe attempts to tax a non-member on commercially prepackaged cigarettes brought onto e reservation for retail sale. Lanphere had no sales contract nor anying else wi e Tribe. A sale is not a consensual relationship wi Maeson because he personally never sold e goods. She gave Maeson s employee e money in cash and got e cigarettes. Plains Commerce, supra, holds at e consensual relationship between a non-member and a tribal member cannot extend to oer transactions, even if ey arise out of commercial dealings. 128 S.Ct at Atkinson Trading v. Shirley, 532 U.S. 645 (2001) as interpreted by e Nin Circuit case of Philip Morris USA v. King Mountain Tobacco Co., 569 F.3d 932 (9 Cir. 2009) also requires at e consensual relationship be directly connected to e legal issue at must be decided. The trial court distinguished Philip Morris, supra, on e basis at Ms. Lanphere entered into a consensual relationship wi -24-

30 Case: /05/2010 Page: 30 of 43 ID: DktEntry: 10-1 Paul Maeson when she bought cigarettes. How and why e trial court made ese assumptions is beyond reason and cannot be explained. Lanphere had no relationship wi e Tribe who seeks to tax her. The incidence of cigarette tax is on e purchaser. Keweenaw Bay v. Rising, 477 F.3d 881, 890 (6 Cir. 2007). Also, filing in tribal court is not conclusive. Philip Morris, 569 F.3d at 943 held: King Mountain s argument at bo Philip Morris s contacts wi e tribe and e conduct complained of involve e sale of cigarettes is not unlike e tribe s argument in Atkinson. There, e tribe took e view at it could force a hotel owner to collect a tax, because he had a license to operate a hotel and e tax involved hotel guests. While e subject matter was loosely e same, e required relationship between e two scenarios was missing. Phillip Morris, 569 F.3d at 942 held: In extending e Montana framework to e question of a tribal court s adjudicative jurisdiction, we hold at a tribal court has jurisdiction over a nonmember only where e claim has a nexus to e consensual relationship between e nonmember and e disputed commercial contacts wi e tribe. -25-

31 Case: /05/2010 Page: 31 of 43 ID: DktEntry: 10-1 In Atkinson Trading v. Shirley, 532 U.S. 645 (2001), e suit was brought in tribal court by e non-member hotel owner to enjoin e requirement of e tribe to collect e tax on e hotel guests. The court stated, a non-member s consensual relationship in one area us does not trigger tribal civil auority in anoer. Id. at 656. This is exactly e position of Paul Maeson in is case. The Atkinson Court held at e tribal court had no jurisdiction. The reason was at Montana s consensual relationship exception requires at e tax or regulation imposed by e Indian tribe have a nexus to e consensual relationship itself. Id. at 656. The later case of Nevada v. Hicks, 533 U.S. 353 (2001) quotes Atkinson, 533 U.S. at 360 and holds at Montana applies to bo Indian and non-indian land wiin a reservation. Philip Morris, 569 F.3d at 942, quotes e Atkinson statement and also analyzes e Atkinson holding stating: In Atkinson, e Navajo Tribe sought to collect a hotel tax from all guests at hotels wiin e reservation boundaries. Alough e tax would be imposed -26-

32 Case: /05/2010 Page: 32 of 43 ID: DktEntry: 10-1 directly on guests, hotel owners and operators were charged wi collecting it. Atkinson, a nonmember proprietor of a hotel located wiin e boundaries of e reservation put him in a consensual commercial relationship wi e tribe. Nevereless, is relationship was not enough to support tribal jurisdiction under e first Montana exception, because e tribe did not seek to impose e tax on activities arising out of at relationship. (Underlining Added). When ese cases are applied to e facts, ere is no nexus or consensual relationship between Lanphere and e Tribe at seeks to tax her. The lack of e requisite relationship denies e Tribe e right to tax Lanphere, a peripatetic purchaser, from a non-tribal store located on e reservation. Accordingly, e district court ruling must be reversed. F. Party Status in Litigation Does Not Supercede e Montana Factors. Lanphere had exhausted her remedies. The Tribe forced her into court by mandating at Maeson charge her e tax. Plains Commerce Bank v. Long Family Land and Cattle Co., 128 S.Ct 2709, 2727 (2008) holds at applying to e tribal court for service of notice to quit is not enough consent. A notice to quit or pay rent -27-

33 Case: /05/2010 Page: 33 of 43 ID: DktEntry: 10-1 is a substantial lawsuit. The court also noted at e jurisdictional argument was immediately raised. Here, Lanphere raised e issue at e start of all e litigation. (ER 135). Furermore, Paul Maeson, a tribal member, had to bring suit in tribal court as he also was stymied in obtaining tribal jurisdiction in state court. Requiring Maeson to litigate in tribal court and Lanphere in state or federal court makes no sense and probably would have resulted in removal. The party status is based on Justice Souter s concurrence in Nevada v. Hicks, 533 U.S. 353, 382 (2001). Justice Souter is no longer on e court. Lanphere never wanted to go into tribal court but had to go where e party was at tried to tax her. Even under Justice Souter s analysis, she was a non-consenting party. In Atkinson Trading Inc. v. Shirley, 532 U.S. 645 (2001), e non-indian was Plaintiff in tribal court. Justice Souter concurred but did not raise e issue of party status in tribal court. Atkinson Trading, 532 U.S. 645, 659 (2001). The reason is at e Indian trader license e non-member had wi e Tribe was still -28-

34 Case: /05/2010 Page: 34 of 43 ID: DktEntry: 10-1 sufficient because e incidence of tax was on e hotel guests. The tribe was a stranger to e transaction. The court held at fn. 6, 532 U.S. at 655 as follows: Because e legal incidence of e tax falls directly upon e guests, not petitioner, it is unclear wheer e Tribe s relationship wi petitioner is at all relevant. We need not, however, decide is issue since e hotel occupancy tax exceeds e Tribe s auority even considering petitioner s contacts wi e Navajo Nation. In Plains Commerce, 128 S.Ct at 2729 Justice Ginsberg noted at e bank and filed a counterclaim and summary judgment motion claiming tribal court jurisdiction and regularly filed suit in at forum. Justice Souter joined e Justice Ginsberg s concurrence in part, dissenting in part, on jurisdiction on e basis at a consensual relationship occurred. 128 S.Ct at Nevada v. Hicks, 533 U.S. 353, 358, n. 2,(2001) states at Strate v. A-1 Contractors, 520 U.S. 438, 453 (1997), wiout distinguishing between non-member plaintiffs and non-member defendants. -29-

35 Case: /05/2010 Page: 35 of 43 ID: DktEntry: 10-1 Plains Commerce, 128 S.Ct 2727 indicates at filing in tribal court is not an issue when e non-member raises e jurisdictional issue at e outset of e case. Phillip Morris USA v. King Mountain Tobacco Co., 569 F.3d 932, 941 (9 Cir. 2009), holds at if e Plaintiff is a non-member, e Montana factors of jurisdiction still apply. Notwistanding e presence of a member defendant and non-member plaintiff, we applied Montana. Accordingly, e district court s order must be reversed. G. The Trial Court Assumed Facts Contrary to e Complaint. This case was dismissed on a Fed.R.Civ.P 12(b)(6) motion at e Complaint did not state facts sufficient to survive e motion. In construing e Complaint, e court must assume at all e factual allegations of Plaintiffs are true. Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007). The standard is wheer or not e claimant is entitled to offer evidence to prove e claims. The trial court assumed a -30-

36 Case: /05/2010 Page: 36 of 43 ID: DktEntry: 10-1 consensual relationship contrary to e allegations of e Complaint and also assumed at e sale took place on tribal lands, a fact not yet established. Swierkiewicz v. Sorema, N.A., 534 U.S. 506, 514 (2002), states at a complaint, in order to survive a motion to dismiss, only has to give fair notice. The trial court indicated at Philip Morris USA v. King Mountain Tobacco Co., 569 F.3d 932, 941 (9 Cir. 2009) did not help Plaintiffs-Appellants, but it does. The reason is at e court in King Mountain, 569 F.3d at 941 states, nor has Phillip Morris oerwise consented to tribal jurisdiction by choosing to file its infringement claims against a tribal member in tribal court. The case followed Atkinson Trading Co. v. Shirley, 532 U.S. 645, 659 (2001), which held at a tribe s sovereign powers do not extend to taxation of a non-member merely visiting e reservation. The tax must be directly related for e tribal court to have jurisdiction. The lack of consensual relationship is resolved in Lanphere s favor by e Supreme Court case of Atkinson Trading Co. v. Shirley, 532 U.S. at 656 (2001). The Supreme Court held at a non- -31-

37 Case: /05/2010 Page: 37 of 43 ID: DktEntry: 10-1 Indian hotel owner, who had a consensual relationship wi his hotel guests nevereless did not allow a tribal tax on e nonmember guest. The reason was at e incidence of tax was on e guest. The case holds: Montana s consensual relationship exception requires at e tax or regulation imposed by e Indian tribe have a nexus to e consensual relationship itself.... A nonmember s consensual relationship in one area us does not trigger tribal civil auority in anoer-it is not in for a penny, in for a Pound. E. Ravenscroft, e Canterbury Guests; Or a Bargain Broken, act v., sc. 1. The hotel occupancy tax at issue here is grounded in petitioner s relationship wi its nonmember hotel guests, who can reach e Cameron Trading Post on United States Highway 89 and Arizona Highway 64, non-indian public rights-of-way. Petitioner cannot be said to have consented to such a tax by virtue of its status as an Indian trader. The court in a footnote questioned wheer e business owner s relationship wi e Tribe was relevant since e legal incidence of e tax fell upon e patron of e hotel. Id. at 654, fn. 6. Here, e cigarette tax incidence falls on Lanphere. What is crystal clear is at a patron who pays a store owner has no consensual relationship wi a tribe requiring payment of a tribal -32-

38 Case: /05/2010 Page: 38 of 43 ID: DktEntry: 10-1 tax where e incidence is on e patron. Therefore, e tribal tax is invalid. Cossey v. Cherokee Nation Enterprises, LLC, 212 P.3d 447, 460 (Okla 2009) applies. The case holds at entering a casino as a customer does not establish a consensual relationship wi an Indian tribe casino owner. The court noted at even ough e tribe had a compact wi e state regarding e casino, e patron, Cossey, was not a party to it. The court held: Cossey entered into no consensual relationship wi e Tribe rough commercial dealing, contracts, leases, or oer arrangements by entering e casino as a customer. The Compact represents a consensual relationship between e Tribe and e State, but Cossey was not a party to it. Moreover, his presence at e casino on reservation lands was not conduct which reatens or has some direct effect on e political integrity, e economic security, or e heal or welfare of e tribe. See Montana, 450 U.S. at 566, 101 S.Ct at Neier Montana exception helps e Tribe in is case. Martinez v. Martinez, 2008 WL (W.D.Wa 2008) a district court case in Tacoma rejects exhaustion of remedies in tribal court where jurisdiction is e issue. The plaintiff was a -33-

39 Case: /05/2010 Page: 39 of 43 ID: DktEntry: 10-1 non-member who had brought suit before in tribal court. The court held at party status did not prevent application of e Montana factors. Similarly, a tribe has no consensual relationship wi a store manager of a store operated on e reservation who allegedly assaulted a trainee placed at e store by e tribe. Dolgen Corp. Inc. v. The Mississippi Band of Chucktaw Indians, 2008 WL (S.D.Miss 2008). Conclusion. All e oer remedies Maeson and Lanphere alleged in e Complaint were ruled on and erefore exhausted in e tribal forums. The sovereignty issue is an exception to exhaustion. The Trial Court s decision must be reversed and e case returned for trial. -34-

40 Case: /05/2010 Page: 40 of 43 ID: DktEntry: 10-1 DATED is 5 day of February Respectfully Submitted, s/ Robert E. Kovacevich Robert E. Kovacevich Attorney for Appellants 818 W. Riverside Avenue, Ste 525 Spokane, Washington (509)

41 Case: /05/2010 Page: 41 of 43 ID: DktEntry: 10-1 STATEMENT OF RELATED CASES Pursuant to Circuit Rule , counsel hereby certifies at, to e best of his knowledge and belief, ere are no cases pending in his Court involving closely related issues. DATED is 5 day of February s/ Robert E. Kovacevich Robert E. Kovacevich Attorney for Appellants 818 W. Riverside Avenue, Ste 525 Spokane, Washington (509)

42 Case: /05/2010 Page: 42 of 43 ID: DktEntry: 10-1 BRIEF FORMAT CERTIFICATION PURSUANT TO CIRCUIT RULE 32(a)(7) Pursuant to Fed.R.App.P. 32(a)(7), I hereby certify at e OPENING BRIEF OF APPELLANTS is: proportionateley spaced, has a typeface of 14 point or more, contains fewer an 14,000 words (opening and answering briefs). DATED is 5 day of February, s/ Robert E. Kovacevich ROBERT E. KOVACEVICH Attorney for Appellants 818 W. Riverside Ave, Ste 525 Spokane, Washington (509)

43 Case: /05/2010 Page: 43 of 43 ID: DktEntry: 10-1 CERTIFICATE OF SERVICE I certify at two copies of Appellants Opening Brief and Excerpts were served on Counsel for Appellee, by mailing e same by regular mail on February 5, 2010, in a postage-paid envelope addressed as follows: John Bell Director of Legal Department Puyallup Indian Tribe 3009 E. Portland Ave Tacoma, WA Dated is 5 day of February, s/ Robert E. Kovacevich ROBERT E. KOVACEVICH Attorney for Appellants 818 W. Riverside Avenue, Ste 525 Spokane, Washington (509)

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