in the united states court of appeals for the ninth ... · robert e. kovacevich, #2723 attorney for...

No. 11-36001________________________________________________________________

IN THE UNITED STATES COURT OF APPEALSFOR THE NINTH CIRCUIT

________________________________________________________________TERRY TONASKET, dba STOGIE SHOP, and DANIEL T. MILLER, anindividual;

Plaintiffs-Appellants,

v.

TOM SARGENT, TOBACCO TAX ADMINISTRATOR; THE COLVILLEBUSINESS COUNCIL; MICHAEL O. FINLEY, CHAIRMAN; HARVEYMOSES JR.; SYLVIA PEASLEY; BRIAN NISSEN; SUSIE ALLEN;CHERIE MOOMAW; JOHN STENSGAR; ANDREW JOSEPH; VIRGILSEYMOUR SR.; MIKE MARCHARD; ERNIE WILLIAMS; DOUGSEYMOUR; SHIRLEY CHARLEY; RICKY GABRIEL; and THECOLVILLE CONFEDERATED TRIBES OF THE COLVILLE INDIANRESERVATION, a Federally Recognized Indian Tribe;

Defendants-Respondents.________________________________________________________________ON APPEAL FROM THE UNITED STATES DISTRICT COURT FORTHE EASTERN DISTRICT OF WASHINGTON, NO. CV-11-073-LRSTHE HONORABLE LONNIE R. SUKO, UNITED STATES DISTRICTCOURT JUDGE________________________________________________________________

REPLY BRIEF OF APPELLANTS________________________________________________________________

Robert E. Kovacevich, #2723Attorney for Appellants818 W. Riverside Avenue, Ste 525Spokane, WA 99201(509) 747-2104

Case: 11-36001 05/08/2012 ID: 8169527 DktEntry: 16 Page: 1 of 49

TABLE OF CONTENTS

TABLE OF AUTHORITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .ii

COUNTER-STATEMENT OF ISSUES. . . . . . . . . . . . . . . . . . . . . . . 2

COUNTER-STATEMENT TO RESPONDENTS’ STATEMENT OFFACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

A. The Colville Tribe has no Sovereign Immunity fromFederal Anti-trust Law. . . . . . . . . . . . . . . . . . . . . . . . . 7

B. The Sherman and Clayton Anti-trust Acts Apply toGovernments that Compete with Individuals by Selling tothe Public At Retail. . . . . . . . . . . . . . . . . . . . . . . . . . . 13

C. The Land Is Not Tribal Land but an Exclusive TrustAllotment Held in Trust by the United States. . . . . . . 18

D. Prospective Relief is Alleged and Prohibits Sovereignty ofBoth the Tribe and Tribal Officials When Acting BeyondTheir Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

E. The Individual Defendants have no Immunity . . . . . . . 24

F. Other Contentions . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

G. The Indispensable Party Issue is not Before the AppealsCourt; in any Event, the Tribe is Fully Protecting theState’s interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

H. The Appellants Have Standing. . . . . . . . . . . . . . . . . . 36

CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37

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TABLE OF AUTHORITIES

Cases

Agua Caliente Band of Cahuilla Indians v. Superior Court, 40 Cal.4th239, 148 P.3d. 1126 (Cal. 2006). . . . . . . . . . . . . . . . . . . . . . . . . .12

Arizona v. Maricopa County Medical Society, 457 U.S. 332, 348, 102S.Ct. 2466, 73 L.Ed.2d 48 (1982) . . . . . . . . . . . . . . . . . . . . . . . . 25

Associated Industries v. Lohman, 511 U.S. 641, 114 S.Ct. 1815, 128L.Ed.2d 639 (1994). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Atkinson Trading Co. v. Shirley, 532 U.S. 645, 121 S.Ct. 1825, 149L.Ed.2d 889 (2001). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 11, 20

Attorney General of Canada v. R.J. Reynolds Tobacco Holdings, Inc.,268 F.3d 103 (2 Cir. 2001). . . . . . . . . . . . . . . . . . . . . . . . . . . . .26nd

Bittle v. Bahe, 192 P. 3d 810, 826-8 (S.C. Okla 2008). . . . . . . . . . 26

Bradley v. Crow Tribe of Indians 67 P.3d 306, 81-2 (Mont. 2003). .31

Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124 (9 Cir.th

2010). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Burlington Northern Santa Fe Railroad v. Assiniboine and SiouxTribes, 323 F.3d 767 (9 Cir. 2003) . . . . . . . . . . . . . . . . . . . . . 4, 30th

Burlington Northern Co. v. Vaughn, 509 F.3d 1085, (9 Cir. 2007) .th

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 24

C & L Enterprises Inc. v. Citizen Band Potawatomi Tribe of Oklahoma,532 U.S. 411, 121 S.Ct. 1589, 149 L.Ed.2d 623 (2001). . . . . . . . 12

-ii-


Colorado National Bank v. Bedford, 310 U.S. 41, 60 S.Ct. 800, 84L.Ed.2d 1067 (1940). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Confederated Tribes and Bands of the Yakima Indian Nation v.Gregoire, 658 F.3d 1078 (9 Cir. 2011). . . . . . . . . . . . . . . . . . . . . 21th

Costco v. Maleng, 522 F.3d 874 (9 Cir. 2008). . . . . . . . . . . . 25, 28th

Crowe & Dunlevy v. Stidham, 640 F.3d 1140 (10 Cir. 2011). .11, 23th

Dawavenda v. Salt River Project Agricultural Improvement and PowerDistrict, 276 F.3d 1150 (9 Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . 35th

Disabled Rights Action Committee v. Las Vegas Events, Inc., 375 F.3d861 (9 Cir. 2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34, 35th

Dixon v. C.I.R., 316 F.3d 1041 (9 Cir. 2003). . . . . . . . . . . . . . . . 30th

Donovan v. Coeur d’Alene Tribal Farms, 751 F.2d 1113 (9 Cir.th

1985). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

E.E.O.C. v. Peabody Western Coal Co., 610 F.3d 1070, 1082 (9 Cir.th

2010) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Exner v. Federal Bureau of Investigation, 612 F.2d 1202 (9 Cir.th

1980). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed 714 (1908). .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23, 24

F.T.C. v. Fred Meyer, 390 U.S. 341, 88 S.Ct. 904, 19 L.Ed.2d 1222(1968) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Franchise Tax Board of California v. Hyatt, 538 U.S. 488, 497, 123S.Ct. 1683, 155 L.Ed.2d 702 (2003) . . . . . . . . . . . . . . . . . . . . . . 26

-iii-


Freeman v. San Diego Board of Realtors, 322 F.3d 1133 (9 Cir.th

2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Hart v. Massanari, 266 F.3d 1155 (9 Cir. 2001). . . . . . . . . . . . . . 11th

Hendricks v. Bank of America, N.A., 408 F.3d 1127 (9 Cir. 2005) th

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Hunt-Wesson Inc. v. Franchise Tax Board of California, 528 US 458,464, 120 U.S. Ct. 1022, 145 L.Ed.2d 974 (2000). . . . . . . . . . . . . 28

Jefferson County Pharmaceutical Ass’n v. Abbott Laboratories, 460U.S. 150, 103 S.Ct. 1011, 74 L.Ed.2d 882 (1983). . . . . . . . . . . 9, 13

Knevelbaard Dairies v. Kraft Foods, 232 F.3d 979 (9 Cir. 2000). . .th

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16, 17

L.G. Balfour Company v. F.T.C., 442 F.2d 1 (7 Cir. 1971). . . . . . 15th

Lakoduk v. Cruger, 287 P. 2d 338, 340 (Wash 1955) . . . . . . . . . 33

McClanahan State Tax Commission of Arizona, 411 U.S. 164, 175 93S. Ct. 1257, 36 L.Ed. 129 (1973). . . . . . . . . . . . . . . . . . . . . . . . . 33

Mendoza v. Zirkle Fruit Co., 301 F.3d 1163 (9 Cir. 2002). . . . . . . 17th

Merrion v. Jicarilla Tribe, 455 U.S. 130, 102 S.Ct. 894, 71 L.Ed.2d21 (1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Miller v. Wright, 9 Cir No. 11-35850 . . . . . . . . . . . . . . . . . . . 10, 22th

Moe v. Confederated Salish and Kootenai Tribes of the FlatheadReservation, 425 U.S. 463, 96 S.Ct. 1634, 48 L.Ed.2d 96 (1976). . 33

Montana v. U.S., 450 U.S. 544, 101 S.Ct. 1245, 67 L.Ed.2d 493(1981). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19, 20

-iv-


Narragansett Indian Tribe v. Rhode Island, 449 F.3d 16 (1 Cir.st

2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 8

North Carolina v. Seneca-Cayuga Tobacco Co., 676 S.E.2d 579, 584(N.C. 2009). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Northwest Wholesale Stationers v. Pacific Stationary and Printing, 472U.S. 284, 105 S.Ct. 2613, 86 L.Ed.2d 202 (1985) . . . . . . . . . . . 23

Pacific Coast Agricultural Export Ass’n v. Sunkist Growers, 526 F.2d1196 (9 Cir. 1975) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23th

Plains Commerce Bank v. Long Family Land and Cattle Co., 554 U.S.316, 128 S.Ct. 2709, 171 L.Ed.2d 457 (2008). . . . . . . . 4, 11, 19, 37

R.J. Reynolds v. City of New York Department of Finance, 667N.Y.S.2d 4 (1997). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

R.J. Reynolds v. Premium Tobacco Stores, 1999 WL 1249322 (N.D.Ill 1999). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Red Earth LLC v. United States, 657 F.3d 138, 148 (2 Cir. 2011). .nd

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 6, 18, 25, 28, 32

Rincon Mushroom Corp of America v. Mazzetti, 2010 WL 3768347(D.C.Cal 2010). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Rogers-Dial v. Rincon Band of Luiseno Indians, 2011 WL 2619232,page 5 (D.C.Cal 2011). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Rowe v. New Hampshire Motor Transport Ass’n, 552 U.S. 364, 128S.Ct. 989, 169 L.Ed.2d 933 (2008). . . . . . . . . . . . . . . . . . . . . . 32

St. Clair v. City of Chico, 880 F.2d 199 (9 Cir. 1989). . . . . . . . . . 29th

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Salt River Project Agr. Imp and Power v. Lee, 672 F.3d 1176, 1181(9 Cir. 2012). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24, 34th

Santa Clara Pueblo v. Martinez, 436 U.S. 49, 98 S.Ct 1670, 56L.Ed.2d 106 (1978). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

Savage v. Glendale Union High School Dist No. 205, 343 F.3d 1036(9 Cir 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29th

Southwest Center for Biological Diversity v. Babbitt, 150 F.3d 1152,1153-4 (9 Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36th

State v. Comenout, 267 P. 3d 355, 358 (Wash. 2011) . . . . . . . . . 31

State of Georgia v. Evans, 316 U.S. 159, 62 S.Ct 972, 86 L.Ed. 1346(1942). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Texaco v. Hasbrouck, 496 U.S. 543, 110 S.Ct 2535, 110 L.Ed.2d 492(1990). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16 Tonasket v. State, 488 P.2d 281 (Wash. 1971) . . . . . . . . . . . . . . . 18

U.S. v. Baker, 63 F.3d 1478 (9 Cir. 1995). . . . . . . . . . . . . . . . 7, 9th

U.S. v. Williams, 514 U.S. 527, 115 S.Ct 1611, 131 L.Ed.2d 608(1995). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

United States v. Lara, 541 U.S. 193, 124 S.Ct 1628, 158 L.Ed.2d 420(2004). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

United States v. Silverman, 861 F.2d 571 (9 Cir. 1988) . . . . . . . 2th

Warburton/Buttner v. Superior Court, 104 Cal App 4 1170, 127 Cal.th

Rptr. 2d 706 (2002). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

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Washington v. Confederated Tribes of the Colville Reservation, 447U.S. 134 (1980). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Washington v. Daley, 173 F.3d 1158, 1167 (9 Cir. 1999). . . . . . 36th

Water Wheel Camp Recreation v. LaRance, 642 F.3d 802 (9 Cirth

2011) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Constitution

U.S. Const. Art. I, § 8, cl. 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33U.S. Const. Art. VI, cl. 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11Wash Const. Article 26, Second . . . . . . . . . . . . . . . . . . . . . . . . . 32

Court Rules

Fed R.Civ.P. 8(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Fed.R.Civ.P 12(b)(1) and (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Statutes

15 U.S.C. § 1, 3, 13, 15 and 26. . . . . . . . . . . . . . . . . . 7, 10, 17, 2115 U.S.C. § 376(a)(3,4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2518 U.S.C. § 2341-42. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 725 U.S. Statute at Large c 180. P 676 . . . . . . . . . . . . . . . . . . . . . 3229 U.S.C. §§ 651-678 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Colville Tribe Tobacco Code 6-8-3, 6-8-8, 6-8-10 . . . . . . . . . . 6, 32Wash.Rev.Code 43.06.455(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Texts

Cohen’s 2005 Handbook of Federal Indian Law § 16.01. . . . . . . 18

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No. 11-36001________________________________________________________________

IN THE UNITED STATES COURT OF APPEALSFOR THE NINTH CIRCUIT

________________________________________________________________

TERRY TONASKET, dba STOGIE SHOP, and DANIEL T. MILLER, anindividual;

Plaintiffs-Appellants,

v.

TOM SARGENT, TOBACCO TAX ADMINISTRATOR, and THECOLVILLE BUSINESS COUNCIL; MICHAEL O. FINLEY, CHAIRMAN;HARVEY MOSES JR.; SYLVIA PEASLEY; BRIAN NISSEN; SUSIEALLEN; CHERIE MOOMAW; JOHN STENSGAR; ANDREW JOSEPH;VIRGIL SEYMOUR SR.; MIKE MARCHARD; ERNIE WILLIAMS;DOUG SEYMOUR; SHIRLEY CHARLEY; RICKY GABRIEL; and THECOLVILLE CONFEDERATED TRIBES OF THE COLVILLE INDIANRESERVATION, a Federally Recognized Indian Tribe;

Defendants-Respondents.________________________________________________________________

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FORTHE EASTERN DISTRICT OF WASHINGTON, NO. CV-11-073-LRSTHE HONORABLE LONNIE R. SUKO, UNITED STATES DISTRICTCOURT JUDGE________________________________________________________________

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COUNTER-STATEMENT OF ISSUES

The Defendants’ Statement of Issues ignores the lower court’s

ruling dismissing the case on lack of subject matter jurisdiction. It

upheld tribal sovereign immunity and tribal official immunity. The

court did not reach the issue of indispensable party. (ER 11).

The statement also fails to recognize the central issues of

limitation by the Tribe only to wholesalers who charge more for the

product due to the MSA lawsuit settlement and that the Tribe is a

controlling market competitor who unfairly competes. At ER 45, the

Amended Complaint alleges, “cigarettes, without the state lawsuit

settlement added to the price, can be purchased from wholesalers

that are not regulated by the State of Washington.” United States v.

Silverman, 861 F.2d 571, 576 (9 Cir. 1988) holds that a review of th

a dismissal motion allows the reviewing court to review the case as

if no lower court decision has been rendered. “‘De novo’ means

trying the matter anew, the same as if it had not been heard before

and as if no decision has been previously rendered,” Exner v.

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Federal Bureau of Investigation, 612 F.2d 1202, 1209 (Pregerson

concurrence) (9 Cir. 1980). th

COUNTER-STATEMENT TO RESPONDENTS’ STATEMENT OF FACTS

At page 2, the Respondents’ Brief states that Tonasket’s store

is located on “tribal trust land.” The Tribe does not own the land.

The record does not indicate the relationship, but the Supplemental

Excerpts, SER 6, indicate that Melford Tonasket, Terry Tonasket’s

father, owns the land. Tribal trust land is a material issue as the

Bureau of Indian Affairs, not the Tribe, controls the land. This issue

is discussed at pages 18-20 of this Reply.

The Tribe at 2 also states that Appellant Miller “allegedly

travels to purchase cigarettes.” There is no citation to the

Complaint as the record does not state his motive. This statement

points out the weakness of the Answering Brief. This case does not

determine the accuracy of the facts, but considers them as true for

this review. The Respondents at page 3 argue “blatant ignorance of

Washington v. Confederated Tribes of the Colville Reservation, 447

U.S. 134 (1980).” Throughout the Respondents’ Brief, they

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repeatedly argue that Colville applies. The case predates Plains

Commerce Bank v. Long Family Land and Cattle Co., 554 U.S. 316,

330, 128 S.Ct. 2709, 171 L.Ed.2d 457 (2008) by 28 years;

Burlington Northern Santa Fe Railroad v. Assiniboine and Sioux

Tribes, 323 F.3d 767, (9 Cir. 2003) and Red Earth LLC v. Unitedth

States, 657 F.3d 138, 148 (2 Cir. 2011). Colville does not involvend

anti-trust price fixing or restriction of wholesaler so that Tonasket

has to pay higher prices violating commerce. Essentially, anti-trust

competition, agreement to charge minimum prices, a non-Indian

buyer and wholesaler restriction, all core issues here, were never

involved in the pre-Plains Commerce (554 U.S. 316) and Atkinson

(532 U.S. 645) cases.

Cases on tribal authority are dependent on the law in existence

at the time they were rendered and are subject to change. United

States v. Lara, 541 U.S. 193, 124 S.Ct. 1628, 158 L.Ed.2d 420

(2004). Narragansett Indian Tribe v. Rhode Island, 449 F.3d 16, 24

(1st Cir. 2006) notes “the trend has been away from the idea of

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inherent Indian sovereignty as a bar to State jurisdiction and toward

reliance on federal preemption.”

The Tribe, at page 9, refers to two declarations of Defendant

Tom Sargent. Neither Sargent declaration states that he knows the

facts of his own personal knowledge. At SER 12, he states, “it is my

understanding” giving his legal conclusions. One declaration, SER

5, attaches a title report. Tonasket’s declaration (ER 18) establishes

price cutting competition from Sargent’s store and disputes

Sargent’s declaration of the material facts. SER 12. The Tribe’s

Brief at page 10 stating there are no counter declarations does not

recognize that Tonasket disputes Sargent’s declaration with facts of

his own knowledge. ER 17-23. Tonasket verified the Complaint.

SER 79. Miller also verified the Complaint. ER 7-9.

At SER 11, Sargent states that the Tribe does not collect the

tax but omits to state that the tribal tobacco law, (Addendum A-10,

6-8-6) requires that a retailer must comply with the Tribe/State

Compact requiring purchases only from state regulated wholesalers

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who charge $5 more (ER 86) and that the Tribe will charge 100% of

the state tax. (ER 85-6).

At best, the statement in the declaration and at SER 11 that

wholesalers do not set wholesale prices is a distinction without a

difference as the Compact (ER 86) requires purchases only from

state wholesalers, self-certified wholesalers and tribal wholesalers

who agree by contract to abide by the terms of the Compact. ER 84.

The Sargent declaration admits that the Tribe buys only from

certified wholesalers. SER 12.

Tonasket has no freedom to buy from any wholesalers.

Wash.Rev.Code 43.06.455(5) and tribal compact provision (ER 84)

Addendum A-10, Tribal Tobacco Code 6-8-3(i)(j) and 6-8-8.

Wholesale restrictions violate due process. Red Earth LLC v.

United States, 657 F.3d 138, 148 (2 Cir. 2011) and other casesnd

cited in Appellants’ Opening Brief at page 17 and 18 (ignored by the

Tribe) establish this principle. The Amended Complaint alleges

same like kind and quality price fixing of cigarettes. (ER 38, 41-44,

47, 53, 56-8).

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ARGUMENT

A. The Colville Tribe has no Sovereign Immunity fromFederal Anti-trust Law.

The Complaint (ER 29-30, 40-48) alleges a violation of the

Federal Anti-trust Law 15 U.S.C. 1, 3, 13, 15 and 26.

At pages 11-14 of its Brief, the Tribe states that is has

governmental immunity even in commercial activity if it taxes

cigarettes. The argument misses the Amended Complaint’s thrust

as it alleges anti-trust violations by the Colville engaging in unfair

competition and price fixing by selling cigarettes at retail to non-

Indian non-residents. ER 39, 50, 60-70.

The rule that applies to this case is “Federal laws of general

applicability are presumed to apply with equal force to Indians” U.S.

v. Baker, 63 F.3d 1478, 1474 (9 Cir. 1995) a cigarette tax case thatth

applied the criminal transportation of unstamped cigarettes in

interstate commerce (18 U.S.C. §§ 2341-2342) to on-reservation

Indians. The statute, 18 U.S.C. § 2341(2) applies if any local

government requires cigarettes to be stamped. Baker, Id. at 1489,

expressly held that cigarette commerce is not an intrusion on tribal

-7-


sovereignty. Narragansett Indian Tribe v. Rhode Island, 449 F.3d 16,

26 (1 Cir. 2006) was cited at 25 of Appellant’s Opening Brief butst

not cited by Respondents. The opinion states: “Here, the State is

seeking to enforce laws binding on the Tribe’s commercial

transactions with outsiders, not to dictate, say, tribal membership

on inheritance rules. Whatever the exact contour of the Tribe’s

retained sovereignty, those contours are narrow-and it is perfectly

clear that trafficking in contraband cigarettes is not within them.”

Like here, the State and the Tribe had an agreement that State law

would be in effect. The Court also held that sovereign immunity

was waived by the State-Tribe agreement as waiver “need not use

magic words”, id. at 25. The Court also concluded that if State law

applies, as it does here to wholesaler restriction, sovereignty is

abrogated. It also emasculates the perceived distinction between

Tribal sovereignty and Tribal immunity, id. at 24, that Respondents

assert in their brief at footnote 2 page 13 confuses Appellants.

Baker, id. at 1485, quotes the seminal case of Donovan v. Coeur

d’Alene Farms, 751 F.2d 1113, 1116 (9 Cir. 1985) that applied theth

-8-


Federal OSHA law, 29 U.S.C. §§ 651-678 to the Coeur d’Alene’s farm

activities that, like the Tribe sells cigarettes in this case, sold farm

products on the open market. The three exceptions (Donovan, id. at

1116) i.e. no intermural matters, treaty rights, or specific exceptions

are not present here; hence, there are no exceptions. None of the

exceptions applied in Donovan because the Tribe sold at retail to

non-Indians. It operated the farm as a commercial enterprise, and

the Colville Tribe has no treaty allowing exclusion. Baker, supra at

1485, removed the treaty exception by holding that the Federal

Cigarette Act did not prohibit “trading in cigarettes.” These

principles uphold Appellant’s Amended Complaint for the reason

that trading in cigarettes must also comply with the federal anti-

trust law. Jefferson County Pharmaceutical Ass’n v. Abbott

Laboratories, 460 U.S. 150, 155, 103 S.Ct. 1011, 74 L.Ed.2d 882

(1983) applies the anti-trust law to governments that sell at retail.

State of Georgia v. Evans, 316 U.S. 159, 162, 62 S.Ct. 972, 86 L.Ed.

1346 (1942) holds: “We can perceive no reason for believing that

Congress wanted to deprive a state, as purchaser of commodities

-9-


shipped in interstate commerce, of the civil remedy of treble

damages which is available to other purchasers who suffer through

violation of the Act.” The case sought price fixing relief allowed by

15 U.S.C. § 15. The anti-trust law applies to governments selling

products to the public or buying products in commercial

transactions. At 14 of its brief, the Tribe asserts that Jefferson

County “has no bearing on tribal sovereignty citing the lower court

decision of Miller v. Wright now on appeal in this Court No. 11-

35850.

This argument is wrong as Jefferson County, supra, at 153

expressly states at footnote 5 that the case was dismissed in the

lower court on Eleventh Amendment sovereign immunity, a holding

that was reversed. Since the Tribe loses immunity by violating

federal law in selling cigarettes to the public, it is liable for damages

and also can be enjoined.

The Tribe, at page 8 of its brief, insists that the burden of

establishing subject matter jurisdiction is on the party invoking

jurisdiction. This statement ignores Appellant’s Opening Brief at

-10-


pages 16-7. “The Navajo Nation’s Imposition of a tax on non-

members on non-Indian fee land within the reservation is therefore

presumptively invalid.” Atkinson Trading v. Shirley, 532 U.S. 645,

659, 121 S.Ct. 1825, 149 L.Ed.2d 889 (2001), is approved by Plains

Commerce stating “especially on non-Indian fee land” Plains

Commerce Bank v. Long Family Land and Cattle Co., 554 U.S.316,

330, 128 S.Ct. 2709, 171 L.Ed.2d 457 (2008). The statement infers

that the Tribe cannot regulate sales to non-members, regardless of

land status. Plains Commerce holds that a tribe’s adjudicative

jurisdiction does not exceed its legislative jurisdiction. Plains

Commerce, Id. at 330. The Respondents did not cite these important

cases in their brief even though cited in Appellant’s Opening Brief

as binding authority. Hart v. Massanari, 266 F.3d 1155, 1171 (9th

Cir. 2001).

Crowe & Dunlevy, P.C. v. Stidham, 640 F.3d 1140, 1155 (10th

Cir. 2011) applied the similar rational of lack of sovereign immunity

of state officials for an ongoing violation of federal law to tribes and

tribal officials joining the D.C., 8 and 11 Circuits on this issue. th th

-11-


It is mandated by the supremacy clause, U.S. Const. Art. VI, cl. 2

“the laws of the United States . . . . shall be the supreme law of the

land.”

The rule is stated in Stidham, Id 1156. It states that an

ongoing violation of federal law allows even the Tribe to be enjoined.

If state law requires tribal reports, the U.S. Const., Tenth

Amendment, reserving power to the states, abrogates tribal

immunity. Agua Caliente Band of Cahuilla Indians v. Supreme Court,

148 P.3d 1126, 1140 (S.C. Cal. 2006).

At pages 15-17 of their brief, Respondents contend that a

waiver of immunity by a tribe must be specific, and at 18, that the

mediation provision is not arbitration but in any event applies only

to the parties. This argument is inconsistent with their argument

at page 7 that Appellants seek to “decimate the Compact”. C & L

Enterprises v. Citizen Band Potawatomi Tribe of Oklahoma, 532 U.S.

411, 418-9, 121 S.Ct. 1589, 149 L.Ed.2d 623 (2001) rebuts all these

contentions. The arbitration clause did not specifically waive

immunity. The clause itself waived it. Whether mediation or

-12-


arbitration, any dispute resolution procedure is waiver. See C & L

id. at 420.

The mediation clause in this case mandates a “mediator

selected by the Judicial Arbitration and Mediation Service’s

(“J.A.M.S.”) Seattle office.” ER 93. The office includes mediation.

The “reach compact” statement at 19.3.2 (ER 93) is confusing.

Regardless, the “mediator” may enforce the contract. 19.3.3. This is

arbitration, not mediation.

B. The Sherman and Clayton Anti-trust Acts Apply toGovernments that Compete with Individuals by Selling tothe Public At Retail.

The Complaint and Tonasket’s declaration allege that the

Tribe is in direct competition on sale of pre-packaged goods with

Tonasket selling to the general public at retail. ER 26, 29, 41-46,

ER 16-24.

Jefferson County Pharmaceutical Ass’n v. Abbott Laboratories,

460 U.S. 150, 170, 103 S.Ct. 1011, 74 L.Ed.2d 882 (1983) states

“there simply no unambiguous evidence of congressional intent to

exempt purchases by a State for the purpose of competing in the

-13-


private retail market with a price advantage.” The court noted that

the state was “the strongest competitor of them all” and that

Congress feared any law that “intended to deny small business”

anti-trust relief from competing governments. Id. at 171. At page

14, the Tribe, without citation of authority, argues that the

sovereign immunity of the Tribe prevails over the anti-trust law,

Jefferson County, id. at 159-160 carefully reviews the legislative

history and concludes exactly the opposite. “We find no legislative

intention to enable a State, by an unexpressed exemption, to enter

private competitive markets with congressionally approved price

advantages”, id 162.

Burlington Northern Santa Fe Ry. Co. v. Vaughn, 509 F.3d

1085, 1092 (9 Cir. 2007) applies lack of immunity of states toth

tribes. The same logic should apply to anti-trust violations. The

statute, 15 U.S.C. § 15, works both ways.

The Colville Tribe, at page 4 of its brief, states “Appellants

mistakenly contend that CCT is fixing cigarette prices.” The

compact and tobacco code requires that all cigarettes be purchased

-14-


from state controlled wholesalers who charge more, or the Tribe who

also has to charge $5 more. The allegations of the Complaint allege

price fixing that are within 15 U.S.C. § 13(a), the price fixing statute.

The Colville Tribe, at pages 4 and 5, admits that only

wholesalers that are limited to certification by the State or Tribe and

who attach stamps equal to 100% of the state tax are the only

wholesalers that Tonasket can buy from. This class of wholesalers

all charge about $5 more for their product. This is wholesale price

inflation is of items of the same like kind and quality.

Exclusive dealing contracts to supply products by a natural

college fraternity organization that set prices and controlled the

market were held as violating the federal anti-trust law and were

enjoined. L.G. Balfour Company v. F.T.C., 442 F.2d 1, (7 Cir.th

1971). Balfour is in point as it parallels this case. An agreement to

restrict competition violated 15 U.S.C. 1, 2 and 45 defining unfair

methods of competition. Injunctions were upheld.

Another reason is that R.J. Reynolds v. Premium Tobacco

Stores, 1999 WL 1249322 page 3 (N.D. Ill 1999); F.T.C. v. Fred

-15-


Meyer, 390 U.S. 341, 88 S.Ct. 904, 19 L.Ed.2d 1222 (1968) and

Texaco v. Hasbrouck, 496 U.S. 543, 110 S.Ct. 2535, 110 L.Ed.2d

492 (1990) all hold that sales of items of like kind and quality, a

description that includes cigarettes, must be sold to retailers at the

same prices to prevent a violation of the federal anti-trust act, 15

U.S.C. § 13(a).

The Tribe got at least $11.75 and probably more from Miller,

and receives $11.75 more from its own sales since it pays the tax to

no one. Tonasket’s declaration also includes price fixing facts. ER

17-24.

Appellants allege that paying into the MSA settlement was not

required by the Tribe and forces Tonasket to pay $2 to $5 more per

carton. (ER 42-3). Cigarettes can be purchased at lower prices if

the lawsuit settlement is ignored. (ER 45).

Knevelbaard Dairies v. Kraft Foods, 232 F.3d 979, 988 (9 Cir.th

2000) conclusively rejects the Colville Tribe’s argument as it holds

that any combination to prevent horizontal competition in the

purchase of any commodity are per se price fixing violations of the

-16-


Sherman and Clayton Acts. 15 U.S.C. § 1. Knevelbaard alleged a

combination to depress milk prices and restrain competition.

The Opinion states, “When horizontal price fixing causes

buyers to pay more, or sellers to receive less than the prices that

would prevail in a market free of the unlawful trade restraint, anti-

trust injury occurs. This is seen most often in claims of overcharged

buyers.”

The case reversed a dismissal of the complaint, held that a

private action for anti-trust injury was properly pled and sent the

case back to trial. The case, id at 994, states the uniform rule that

“we are not concerned with which side will prevail at trial.” It holds

that the complaint alleged facts that survived a motion to dismiss.

Here, the Respondents seek to try a case or dispute allegations of

the facts in complaint which are to be taken as true.

Mendoza v. Zirkle Fruit Co., 301 F.3d 1163, 1169 (9 Cir.th

2002) follows Knevelbaard holding a complaint alleging harm to

legally documented employees injured by illegal hiring schemes is

a price fixing injury.

-17-


Mendoza also reversed a dismissal of the complaint holding

that the allegations were to be taken as true, and that they were

victims of illegal conduct. Applied to this case, the Red Earth, LLC

v. United States, 657 F.3d 138, 148 (2 Cir. 2012) holding that thend

a constitutional violation of due process is caused by tampering

with out-of-state shippers requiring them to put stamps on

cigarettes. The allegation of a due process violation is sufficient

even without the anti-trust violation. (ER 56).

C. The Land Is Not Tribal Land but an Exclusive TrustAllotment Held in Trust by the United States.

The assertions at page 2 and 28 that Tonasket’s store is on

tribal land is wrong. Tonasket v. State, 488 P.2d 281 (Wash. 1971)

(vacated on an unrelated issue) 411 U.S. 451, 93 S.Ct. 1941, 36

L.Ed.2d 129 (1973) held that the land is a trust allotment now held

by three generations of the Tonasket family.

Cohen’s, “2005 Handbook of Federal Indian Law” § 16.03[1]

(Nell Jessup Newton ed. 2005) pages 1036-7 makes the distinction.

It states: “Allotment is a term of art in Indian law, describing either

a parcel of land owned by the United States in trust for an Indian

-18-


(“‘trust’ allotment”) or owned by an Indian subject to a restriction on

alienation in the United States or its officials (‘restricted’ allotment).”

Cohen at § 15.02, page 966, also states, “Tribal property may

be formally defined as property in which an Indian tribe has legally

enforceable interest. It must be distinguished, on the one hand,

from the property of individual Indians. . .”

Plains Commerce Bank v. Long Family Cattle Co., 554 U.S. 316,

328-31, 128 S.Ct. 2709, 171 L. Ed.2d 457 (2008) discusses

allotments including the fact that the Tribe cannot stop sales of

allotment and concludes that activities of non-members on land

within the reservation cannot be taxed by an Indian tribe if there is

no consensual relationship required by Montana v. U.S., 450 U.S.

544, 101 S.Ct. 1245, 67 L.Ed.2d 493 (1981).

The all important presumption is that the Tribe must prove

that they have a consensual relationship with the non-member.

Here, Appellant Miller did not buy cigarettes on tribal land, nor from

the Tribe. He bought from a tribal Indian who had a store on a trust

allotment exclusively occupied by Terry Tonasket. This is non-

-19-


member transaction that excepts Merrion v. Jicarilla Tribe, 455 U.S.

130, 102 S.Ct. 894, 71 L.Ed.2d 21 (1982) for the reason that the

activity of a business on allotted lands does not imperil or have an

adverse effect on the Tribe.

The distinction is material to this case in that the legal

incidence of the tax falls on the non-member as stated at footnote

6 of Atkinson Trading v. Shirley, 532 U.S. 645, 655, 121 S.Ct. 1825,

149 L.Ed.2d 889 (2001).

Atkinson, supra at 657, fn. 12, holds that the Tribe cannot

assert authority beyond Tribal land. At page 28, the Respondents

cite Water Wheel Camp Recreation v. LaRance, 642 F.3d 802 (9th Cir.

2011) in support of tribal regulation. Water Wheel involved a

trespasser lease and found jurisdiction of the non-members because

they were trespassers who violated the conditions of their entry.

Water Wheel, (Id. at 809), reviewing current U.S. Supreme Court

cases noted that a non-member is only subject to tribal regulation

if the Montana (450 U.S. at 564) consensual relationship is

established. The allotment is not tribal land.

-20-


D. Prospective Relief is Alleged and ProhibitsSovereignty of Both the Tribe and Tribal Officials WhenActing Beyond Their Authority.

The Tribe, at page 6 and 21 of its brief, asserts that sovereign

immunity does not apply as “Appellants seek retrospective relief.”

At 21, they acknowledge that prospective relief is an exception

denying sovereign immunity to tribal officials.

Tonasket’s Amended Complaint (ER 43) states that if

Defendant is not restrained, he will be driven out of business.

Miller had the incidence and burden to pay the tax as he is

ultimately liable. Colorado Nat. Bank of Bedford, 310 U.S. 41, 52,

60 S.Ct. 800, 84 L.Ed. 1067 (1940); U.S. v. Williams, 514 U.S. 527,

536, 145 S.Ct. 1611, 131 L.Ed.2d 608 (1995); Confederated Tribes

and Bands of the Yakima Indian Nation v. Gregoire, 658 F.3d 1078,

1089 (9 Cir 2011). th

Appellants’ Amended Complaint (ER 29) requests an

injunction against price fixing violating 15 U.S.C. § 26.

At ER 65, “Terry Tonasket had to apply additional sums to his

sale prices which has reduced or eliminated profit in the future.

-21-


Additional facts and request for prospective relief are alleged in the

Amended Complaint. (ER 28-9, 43, 52, 55, 57-60, 73-75).

Allegations of lack of jurisdiction over non-Indians seeking

prospective relief overcomes tribal officials claims of immunity.

Rogers-Dial v. Rincon Band of Luiseno Indians, 2011 WL 2619232,

page 5 (D.C.Cal 2011); Rincon Mushroom Corp of America v. Mazzetti,

2010 WL 3768347, page 6 (D.C.Cal 2010). At page 6, the Tribe

argued that retrospective, i.e. look back relief is sought, so

prospective relief is not allowed. Pleading rules allow different and

alternative types of relief. Fed.R.Civ.P. 8(a)(3).

At page 27 of the Tribe’s brief, the Tribe cites the District

Court cases of Miller v. Wright, No 3:11 cv-05396-RBL, 2009 WL

4712245 cases that are now on appeal in this Court No. 11-35850

involving the Puyallup Tribe Cigarette Compact. In these cases, the

Puyallup Tribe did not allege that the State was an indispensable

party. The cases have some common issues.

The Tribe’s brief at 21 also admits that tribal officials are not

immune from suits for “prospective relief” and to “protect wrongful

-22-


impairment of federally protected rights.” Allegations of violation of

federally protected rights are also alleged. ER 28, 36, 37.

The case cited in Tonasket and Miller’s opening brief, Crowe &

Dunlevy v. Stidham, 640 F.3d 1140, 1154 (10 Cir. 2011) holds thatth

Ex parte Young also deprives a tribe of sovereign immunity for

prospective relief. Tonasket’s opening brief at page 21 cites three

Ninth Circuit cases and Santa Clara Pueblo v. Martinez, 436 U.S. 49,

59, 98 S.Ct. 1670, 56 L.Ed.2d 106 (1978), that also waive immunity

of tribal officials and allow injunctive relief.

Contrary to the private party argument at page 13-14 of their

brief, Freeman v. San Diego Board of Realtors, 322 F.3d 1133, 1145

(9 Cir. 2003) held that indirect buyers represented by private realth

estate agents had price fixing standing. Injunctive relief was allowed

against price fixing. It is also sought here. (ER 85). Freeman, id. at

1114 holds that price fixing, without more, allows private actions.

Pacific Coast Agricultural Export Ass’n v. Sunkist Growers, 526 F.2d

1196, 1203 (9 Cir. 1975) and Northwest Wholesale Stationers v.th

-23-


Pacific Stationary and Printing, 472 U.S. 284, 298, 105 S.Ct. 2613,

86 L.Ed.2d 202 (1985) support private rights of action.

E. The Individual Defendants have no Immunity whenActing Beyond Their Authority.

The Amended Complaint alleges that the tribal officials acted

beyond their authority. (ER 39, 45-7, 53-4, 57-9, 66-7, 69, 74-6).

The Amended Complaint (ER 47) states, “The Defendant Colville

Tribe, a market competitor, acted beyond its lawmaking jurisdiction

and also agreed to a price fixing provision violating federal anti-trust

laws.”

Actions against tribal officials in their official capacity to enjoin

them from violating federal statutes, and also federal common law,

is an exception to sovereign immunity. Salt River Project Agr. Imp

and Power v. Lee, 672 F.3d 1176, 1177 (9 Cir. 2012). th

Burlington Northern Santa Fe Railway v. Vaughn, 509 F.3d

1085, 1092 (9 Cir. 2007) holds that tribal officials imposingth

unconstitutional tribal taxes are not immune from injunctive and

declaratory relief. The opinion holds “under the doctrine of Ex parte

Young, immunity does not extend to officials acting pursuant to an

-24-


alleged unconstitutional statute.” Unconstitutional laws are alleged

in this case. (ER 38, 62-65).

Tribal Code 6-8-7 and 6-8-8 (Addendum A-10) and

Wash.Rev.Code 43.06.455(5) mandates out-of-state stamping before

delivery to the reservation. The Tribal Code states “or to ship to

Indian country.” Currently, this is a violation of the injunction

against the Jenkins Act, 15 U.S.C. § 376(a)(3,4). Red Earth LLC v.

U.S., 657 F.3d 138, 148 (2 Cir. 2011). The Tribe and tribal officialsnd

enacted an unconstitutional law beyond their authority.

Costco v. Maleng, 522 F.3d 874, 895 (9 Cir. 2008) applies asth

it invalidated a wholesale pricing system.

Arizona v. Maricopa County Medical Society, 457 U.S. 332, 348,

102 S.Ct. 2466, 73 L.Ed.2d 48 (1982) states that setting maximum

or minimum prices is per se price fixing.

At page 5 of its brief, the Tribe indicates that it does not keep

the MSA addition, but pays it for administrative services. The

Amended Complaint (ER 56-7) alleges price fixing by collecting

money for the State’s escrow and violation of the revenue rule.

-25-


However, the State gets MSA money from Tonasket’s forced buying

from wholesalers who must charge the MSA. These accounts are

paid to the State. When a tribe agrees to be bound by state law, as

it agreed here (ER 285-6), the Tribe waives sovereignty. Bittle v.

Bahe, 192 P. 3d 810, 826-8 (S.C. Okla 2008).

Attorney General of Canada v. R.J. Reynolds Tobacco Company,

268 F.3d 103, 109 (2 Cir. 2001) recognized and followed thend

common law revenue rule providing that the courts of one sovereign

will not enforce unajudicated tax claims of another sovereign. Here,

the MSA is merely a lawsuit settlement agreed upon by the State

and the major tobacco companies. The attempt to collect state

revenue or charge taxes on the same amount by the Tribe waives its

sovereignty. Franchise Tax Board of California v. Hyatt, 538 U.S.

488, 497, 123 S.Ct. 1683, 155 L.Ed.2d 702 (2003) states, “the

Constitution does not confer sovereign immunity on States in the

courts of sister states.”

F. Other Contentions.

-26-


At page 14 of its Brief, the Tribe asserts that arm of the Tribe

is not involved in this case. At SER 12, the Declaration of Tom

Sargent refers to Colville tribal competitor with Tonasket Colville

Tribal Enterprise Corporation, CTEC, stating that it is a tribally

chartered corporation owned by the Tribe. The tribally chartered

corporation operates the retail outlet competing with Tonasket. ER

29, 26. The declaration contradicts the argument. CTEC is an arm

of the Tribe.

Even though the Tribe states at page 21 that it does not collect

the MSA, the Tribe agreed that it had an interest in the MSA, ER 82.

It is impossible to determine why a tribe had an interest in a lawsuit

settlement when no Indian tribe was a party and is immune from

the MSA. North Carolina v. Seneca-Cayuga Tobacco Co., 676 S.E.2d

579, 584 (N.C. 2009).

The Tribe at pages 28-9 argues that the dormant commerce

clause is not implicated. It is directly involved as the Tribe agreed

to impose 100% of the state tax on goods of like kind and quality.

ER 85-86.

-27-


The attempt to equalize the tax by both governmental entities

and their respective jurisdictions is a dormant commerce clause

violation. Associated Industries of Missouri v. Lohman, 511 U.S. 641,

646, 114 S.Ct. 1815, 128 L.Ed.2d 639 (1994) invokes “a negative

command forbidding the States to discriminate against interstate

trade.” Costco Wholesale v. Maleng, 522 F.3d 874, 901 (9 Cir.th

2008) sustains a commerce clause violation on uniform pricing.

Since the Colville Tribe does not have to pay the MSA, by requiring

higher prices to equalize the amount of tax outside its jurisdiction,

it violates the commerce clause. R.J. Reynolds v. City of New York

Department of Finance, 667 N.Y.S.2d 4 (New York 1997). Hunt-

Wesson Inc. v. Franchise Tax Board of California, 528 U.S. 458, 464,

120 S.Ct. 1022, 145 L.Ed.2d 974 (2000) and Red Earth LLC v.

United States, 657 F.3d 138, 148 (2nd Cir. 2011) also hold that the

discrimination is a due process violation.

At 8-9 of its brief, the Tribe seems to indicate that Sargent’s

declaration, SER 13, and exhibits are contrary to the “Appellants

Contentions.” The facts alleged in the Complaint are verified and

-28-


presumed true. Conflicts are resolved in favor of the non moving

party. The Respondents’ Motion in this case was not designated but

is a Fed.R.Civ.P 12(b)(1) and (7) motion. Uncontroverted allegations

in the Complaint where lack of jurisdiction is at issue, are taken as

true. Brayton Purcell v. Recordon & Recordon, 606 F.3d 1124, 1127

(9 Cir. 2010).th

If a dispute of material fact exists, the case goes to trial

Fed.R.Civ.P. 56(a). The cases cited by the Respondents at page 9 do

not involve an exhibit or declaration allowing Plaintiff to prove

jurisdiction. St. Clair v. City of Chico, 880 F.2d 199 at 201 (9 Cir.th

1989). Savage v. Glendale Union High School Dist No. 205, 343 F.3d

1036, 1040 (9th Cir. 2003)(cited by Respondent) holds that

sovereign immunity is a question of law and allegations of the

Amended Complaint are taken as true. Affidavits are considered

only if the immunity is factual, not facial. The review of the

declarations in this case do not contain information on the issue for

the reason that immunity question is facial. There is no factual

-29-


question that the Tribe is a recognized Tribe as this is admitted by

Appellants. ER 39.

G. The Indispensable Party Issue is not Before the AppealsCourt; in any Event, the Tribe is Fully Protecting theState’s Interest.

The Appellees, at page 33, state that Appellant’s indispensable

party argument suffers from a “fatal flaw”. The lower court, ER 11,

stated “Because the Court finds above that the Defendants have

sovereign immunity in this case, which has not been waived, the

Court does not have to determine if the state law can or cannot be

joined.”

This Court has inherent power to fashion a remedy and

remand, but it must be exercised with restraint. Dixon v. C.I.R., 316

F.3d 1041, 1047 (9 Cir. 2003). Here, the case is an appeal from ath

Motion to Dismiss. The only facts are contained in the Amended

Complaint. ER 25-79. Appellants are deprived of a full record as

they have not had the opportunity for discovery and “no fair

opportunity to develop the record.” Burlington Northern Santa Fe R.

Co. v. Assiniboine and Sioux Tribes of the Fort Peck Reservation, 323

-30-


F. 3d 767, 774 (9 Cir. 2003). Discovery should be allowed to developth

the facts of waiver and competition. Warburton/Buttner v. Superior Court,

104 Cal App 4 1170, 127 Cal. Rptr. 2d 706 (Cal. 2002), Bradley v. Crowth

Tribe of Indians, 67 P.3d 306, 81-2 (Mont. 2003).

The Compact, ER 82, states that “No third party shall have any

rights or obligations under the Compact.” The Appellants are not

obliged to join the State as the Tribe, not the State, caused the

harm. ER 26. Appellants alleged that the State is not a competitor.

ER 28.

The Tribe agreed to “Require any Colville Tribe member selling

cigarettes in Indian Country to be in compliance with the terms of

this Compact.” ER 85. The Compact also requires a tribal license

that is “access for purposes of enforcement” (ER 85). If a tribal

member is not licensed, the state cigarette tax applies. State v.

Comenout, 267 P. 3d 355, 358 (Wash. 2011).

The Tribe admits that in its brief at page 34 that injunctions

are sought, but fails to note that only the tribal officials and the

Tribe are parties. Complete prospective relief is sought to prevent

-31-


the Tribe from anti-trust competition. The state of state officials are

not required this or other relief stated in the following sentence. The

Tribe is both the competitor and has passed a price fixing law. ER

28, A-10, 6-8-6, 6-8-7, 6-8-10. The Tribe also passed a law

attempting to require all wholesalers, regardless of whether they

were tribal members within the Tribe’s jurisdiction, to put the

stamps on the cigarettes. The wholesaler restrictions are not

confined to wholesalers who are resident tribal members. All

wholesalers, regardless of location, are attempted to be regulated by

the Tribe. Rowe v. New Hampshire Motor Transport Ass’n, 552 U.S.

364, 373, 128 S.Ct. 989, 169 L.Ed.2d 933 (2008); Red Earth LLC v.

United States, 657 F.3d 138, 148 (2 Cir. 2011) holds that duend

process is violated if interstate or tribal jurisdiction does not apply.

The State has jurisdiction of Miller, but the Tribe does not. ER

51-3. The State agreed not to govern Tonasket in its 1899 Enabling

Act (25 U.S. Statute at Large c 180. P 676) and in Article 26, Second

of the State Constitution stating that Congress shall have exclusive

control of tribal members living on the reservation. The lack of state

-32-


jurisdiction and control is established by the disclaimers in the

State Constitution and preserved in the U.S. Const. Art I, § 8, cl. 3.

McClanahan State Tax Commission of Arizona, 411 U.S. 164, 175, 93

S. Ct. 1257, 36 L.Ed. 129 (1973), exempting tribal Indians from

state tax and Moe v. Confederated Salish and Kootenai Tribes of the

Flathead Reservation, 425 U.S. 463, 480, 96 S.Ct. 1634, 48 L.Ed.2d

96 (1976) expressly exempted tribal members from state cigarette

taxes and licensing to sell tobacco products on the reservation.

Tonasket has no need to join the State as the State has no

jurisdiction of him. None of the money from the Compact can benefit

Tonasket as Wash.Rev.Code 43.06.455 (8) prohibits a subsidy to

him. The Compact only allows the Tribe to use the money to fund

“essential government services”. ER 91. A proprietary income is

used to pay for governmental functions. Lakoduk v. Cruger, 287

P.2d 338, 340 (Wash 1955).

If the case only seeks prospective relief against present tribal

officials, ER 39, and complete relief can be obtained by Appellants

if the Tonasket’s can buy from any wholesaler and price fixing and

-33-


matching taxation to the State is restrained and damages allowed.

The joinder issue should not be rigidly applied or dictate a

harsh result. The Court can also fashion a meaningful relief by

providing remedies that do not require the State’s cooperation.

Hendricks v. Bank of America, N.A., 408 F.3d 1127, 1136 (9 Cir.th

2005); Disabled Rights Action Committee v. Las Vegas Events, Inc.,

375 F.3d 861, 880 (9 Cir. 2004). Here, a ruling that the Tribe isth

not immune from Federal anti-trust laws would not affect the State.

The Compact makes no reference to the Tribe competing with its

members. Allowing the Tonasket unlimited wholesaler access would

allow him greater profit as he would also save money. This also

would not affect the State.

Salt River Project Agricultural Improvement and Power District v.

Lee, 672 F.3d 1176, 1179 (9 Cir. 2012) applies and denies joinderth

of the State. The reason is that the three elements of 19(a) reviewed

in the case are not present here, and even if they were, the Tribe is

adequately representing the states as all the possible arguments

have been and will be made by the Tribe.

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At page 36 of its brief, the Defendants cite E.E.O.C. v. Peabody

Western Coal Co., 610 F.3d 1070, 1087 (9 Cir. 2010) in support ofth

dismissal due to indispensable party. Peabody has relevance and

is in favor of Appellants as it holds, id. at 1087, that a request for

injunctive relief (here at CR 55-59) allows a defendant to implead a

party who would be indispensable but is immune from a damage

claim and otherwise claim sovereign immunity. The case is complex,

but the issue applies to the injunction sought in this case.

The Tribe, at 36, relies on Dawavenda v. Salt River Project

Agricultural Improvement and Power District, 276 F.3d 1150 (9 Cir.th

2002) stating that the party to a contract is necessary. The case

does not apply for the reason that the Compact would not be

decimated by a holding that it cannot compete with Tonasket or

regulate Miller. Like the later case of Disabled Rights Action

Committee v. Las Vegas Events, 375 F.3d 861, 881 (9 Cir. 2004) theth

compact does not require the Tribe to compete with Tonasket. Nor

is this case a suit to set aside the contract. The contract provided for

further negotiation of the Tribe’s right to sell on the internet (ER 84).

-35-


The Compact can unilaterally dissolve in two years, ER 93, and

expires in five more years. ER 95. The contract would be legally

binding regardless of success of Appellants. It states that only the

parties are obligated. ER 82. This is not a reason to find necessary

party. Las Vegas, id. at 881.

The provision in the Compact (ER 85-86) imposing the same

tax as the State clearly indicates the State’s interest in the Compact

to maintain prices is identical to the Tribe’s. The pleadings and

briefs prove that the Tribe is making all the arguments the State

would make. Under these circumstances, even if the anti-trust

allegations are disregarded, the State is not a necessary party.

Southwest Center for Biological Diversity v. Babbitt, 150 F.3d 1152,

1153-4 (9 Cir. 1998). Washington v. Daley, 173 F.3d 1158, 1167th

(9 Cir. 1999).th

H. The Appellants Have Standing.

Respondents argue at page 40 of their brief that despite the

fact that standing was not raised in its Motion, ER 14, nor

determined by the trial court, ER 11, that standing can be

-36-


considered sua sponte. Standing is clearly alleged in the Amended

Complaint CR 30, 43, 50-52, 58, 65, 71, 72. The declaration of

Sargent merely recites his arguments and legal conclusions, not

facts. SER 9-13 has no facts that would even remotely dispute the

allegations. The allegations are that Article III standing exists. Lack

of jurisdiction of a tribe confers standing. Plains Commerce Bank v.

Long Family Land and Cattle Co., 554 U.S. 316, 326-7, 128 S.Ct.

2709, 171 L.Ed.2d 457 (2008). The Tribe engaged in price fixing

that reduced sales and increased costs to Appellants and that

damages from the Defendants will redress the injury. ER 30, 72.

All of the elements for Article III standing are alleged.

The argument is completely without merit.

CONCLUSION

Respondent’s Brief fails to overcome the facts that the Tribe

has no jurisdiction of Miller. Respondents cannot restrict Tonasket

to wholesalers who charge more. The federal anti-trust law applies

to price fixing and horizontal restraints by the Defendant Tribe and

the other Defendants. The case must be reversed.

-37-


DATED this 8 day of May 2012.th

Respectfully Submitted,

s/ Robert E. Kovacevich Robert E. KovacevichAttorney for Appellants818 W. Riverside Avenue, Ste 525Spokane, Washington 99201(509) 747-2104

-38-


STATEMENT OF RELATED CASES

Pursuant to Circuit Rule 28-2.6, counsel hereby certifies that,

to the best of his knowledge and belief, that there is one case that

has issues related to this case. It is Miller, et al, v. Wright, et al.,

Case No. 11-35850.


s/ Robert E. Kovacevich Robert E. KovacevichAttorney for Appellants818 W. Riverside Avenue, Ste 525Spokane, Washington 99201(509) 747-2104

-39-


BRIEF FORMAT CERTIFICATION PURSUANT TOCIRCUIT RULE 32(a)(7)

Pursuant to Fed.R.App.P. 32(a)(7)(B)(ii), I hereby certify that the

REPLY BRIEF OF APPELLANTS is: proportionately spaced, has a

typeface of 14 point or more, contains no more than 7,000 words

(reply briefs).


s/ Robert E. Kovacevich ROBERT E. KOVACEVICHAttorney for Appellants818 W. Riverside Ave, Ste 525 Spokane, Washington 99201(509) 747-2104

-40-


CERTIFICATE OF SERVICE

I certify that a copy of Appellants’ Reply Brief and Excerpts

were served on Counsel for Appellee, by ECF and mailing the same

by regular mail on May 8, 2012, in a postage-paid envelope

addressed as follows:

Mr. Richard M. BerleyZiontz, Chestnut, Varnell, Berley & Slonim2101 Fourth Avenue, Ste 1230Seattle, WA 98121

Dated this 8 day of May 2012.th

s/ Robert E. Kovacevich ROBERT E. KOVACEVICHAttorney for Appellants818 W. Riverside Avenue, Ste 525Spokane, Washington 99201(509) 747-2104

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in the united states court of appeals for the ninth ... · robert e. kovacevich, #2723 attorney for...

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