Unpublished Disposition, 904 F.2d 710 (9th Cir. 1990)

No. 89-35882.

United States Court of Appeals, Ninth Circuit.

Before EUGENE A. WRIGHT and WALLACE, Circuit Judges, and ROBERT E. JONES,^**  District Judge.

MEMORANDUM

Cross appeals from a judgment of the district court dismissing his claim for lack of jurisdiction. The district court found that it lacked subject matter jurisdiction pursuant to 28 U.S.C. § 1341. We have jurisdiction over this timely appeal pursuant to 28 U.S.C. § 1291. We affirm.

The existence of subject matter jurisdiction is a question of law reviewed de novo. Kruso v. International Telephone & Telegraph Corp., 872 F.2d 1416, 1421 (9th Cir. 1989).

The scope of the jurisdictional bar of section 1341 clearly encompasses injunctive relief. Dillon v. Montana, 634 F.2d 463, 464 (9th Cir. 1980) (Dillon) . Section 1341 has been construed to be a broad jurisdictional bar to virtually any state tax related claim where a plain, speedy, and efficient remedy may be had in state court. Id. at 466.

In this case, Cross pleads for injunctive tax relief. Such an action would clearly interfere with the fiscal operations of the state. Id. 465. This case is legally indistinguishable from Dillon and Comenout v. Washington, 722 F.2d 574, 577-78 (9th Cir. 1983) (Comenout), where we held that individual Indians claiming injunctive tax relief were barred by section 1341.

Cross appears to contend that his challenge presents an exception to our general rule. We have recognized only two exceptions to section 1341. Under the "federal instrumentality" doctrine, we have found jurisdiction when individual Indians could properly be joined with the United States as co-plaintiff in a federal action to enjoin state tax collection, even in the absence of the United States as a party. See Moses v. Kinnear, 490 F.2d 21, 24-25 (9th Cir. 1975). However, we held in Dillon that the federal instrumentality doctrine is "inapplicable to suits not brought by an Indian tribe." Dillon, 634 F.2d at 469. Therefore, Cross does not qualify under the federal instrumentality doctrine since he brought the action as an individual Indian.

Our second exception to section 1341 is available to Indian tribes by virtue of 28 U.S.C. § 1362. This exception also applies only to tribes and not individual Indians. Navajo Tribal Utility Authority v. Arizona Department of Revenue, 608 F.2d 1228, 1231 (9th Cir. 1979) (Navajo) . Thus, the section 1362 exception is not applicable in this case.

Other than the these two exceptions, we have refused to acknowledge any new exception to section 1341. See Dillon, 634 F.2d at 469. Nevertheless, Cross contends that federal preemption precludes the bar of section 1341, relying on Moe v. Confederated Salish & Kootenai Tribes, 425 U.S. 463, 475 n. 14 (1976) (Moe). This contention misconstrues Moe. In Moe, the Supreme Court was not called upon to consider, and did not consider, the interaction of section 1341 with the tax claim. Moreover, in Dillon we explicitly held that footnote 14 of Moe is dictum and not decisive with regard to section 1341 questions. Dillon, 634 F.2d at 465-66. Following Dillon, we therefore conclude that Cross's strained interpretation of Moe is not persuasive.

Cross argues that Dillon recognized an exception to section 1341 since there the State of Montana acquiesced in the tax exemption allowed "on" reservation Indians and did not appeal that portion of the district court's judgment. Cross has mischaracterized Dillon. No reasonable reading of Dillon suggests that Montana's concession of tax exemption to "on" reservation Indians creates a right for individual Indian litigants to proceed in a district court without the limitation of section 1341. After McClanahan v. Arizona State Tax Commission, 411 U.S. 164 (1973), Montana was clearly foreclosed from taxing income from reservation residents who were enrolled residents of its tribe. See Dillon v. State, 451 F. Supp. 168, 173 & n. 5 (D. Mont. 1978). It is not surprising then that Montana conceded the issue on the merits rather than appeal the lower court ruling. Dillon did not address the section 1341 issue with regard to these plaintiffs but acknowledged Montana's concession on the merits. Dillon, 634 F.2d at 464. We cannot accept Cross's reading of Dillon which would allow a plaintiff to proceed on the merits before having to address the jurisdictional question under section 1341.

Cross wishes to draw a distinction between "on" and "off" reservation Indians in the application of section 1341. This position is without support. There is no authority finding an exception to section 1341 for an individual Indian, independently, to bring an action based on reservation residency. On the other hand, we have held that an Indian ecomonic entity with a very clear "on" reservation nexus was barred pursuant to section 1341. Navajo, 608 F.2d at 1234.

Cross further alleges that section 1341 does not apply because he is immune from state taxation. Cross has confused the merits of this action with the jurisdiction issue. Such a holding would have us proceed on the merits before addressing the jurisdictional question.

Cross also contends that the obligations sought to be impressed upon him are not in the nature of taxation and thus, section 1341 should not apply. In Moe, the state required that the Indian seller collect a tax validly imposed on non-Indians. The Court stated that the "burden is not, strictly speaking, a tax at all." Moe, 425 U.S. at 483. However, Moe did not deal with the jurisdictional issue under section 1341 but was merely addressing the merits of the case. Moreover, we have found that section 1341 should be invoked in a similar circumstance. Comenout, 722 F.2d at 574, 576. We have never made a distinction based on whether the "legal incidence" of the tax was on the Indian retailer when faced with a section 1341 issue.

It is clear that the actions of the State under challenge are those undertaken to ensure compliance with its excise tax laws. In addition, Cross has not alleged that the State of Washington will not provide a "plain, speedy, and efficient remedy" pursuant to section 1341. Therefore, we hold that the action be dismissed pursuant to the jurisdictional bar of section 1341.

AFFIRMED.

Note: This disposition is not appropriate for publication and may not be cited to or by the Courts of this Circuit except as provided by Ninth Circuit Rule 36-3.