United States Ex Rel. Cheyenne River Sioux Tribe v. South Dakota

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Nos. 95-2529
95-2535
95-2720
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United States of America, on *
behalf of the Cheyenne River *
Sioux Tribe and its members, *
*
Plaintiff/Appellant/Cross *
Appellee, *
*
Cheyenne River Sioux Tribe, *
*
Intervenor Plaintiff/ *
Appellant/Cross Appellee, *
*
v. *
*
State of South Dakota; Julie *
M. Johnson, State Secretary of *
Revenue, *
*
Defendants/Appellees/Cross *
Appellants, * Appeals from the United States
* District Court for the
Ronald J. Schreiner; Dewey * District of South Dakota
County, South Dakota; *
John Alley, County Treasurer; *
Ziebach County, South Dakota; *
Virginia Hertel, County *
Treasurer, *
*
Defendants/Appellees. *
*
____________ *
*
No. 95-2688 *
____________ *
*
Rosebud Sioux Tribe, *
*
Plaintiff/Appellant, *
v. *
*
Julie Johnson, State Secretary *
of Revenue, *
*
Defendant/Appellee. *
____________ *
*
United States of America, *
*
Amicus Curiae. *

____________

Submitted: May 16, 1996

Filed: January 17, 1997
____________

Before MURPHY and ROSS, Circuit Judges, and VAN SICKLE,* District Judge.
____________

MURPHY, Circuit Judge.

These two cases challenge the jurisdiction of the State of South
Dakota to impose its motor vehicle excise tax and registration fee on
Indians who live within the boundaries of a reservation. In one case, the
United States sued for declarative, injunctive, and compensatory relief on
behalf of the Cheyenne River Sioux Tribe and its members. The second case
involves claims brought by the Rosebud Sioux Tribe for equitable relief.

South Dakota Codified Laws section 32-5B-1 provides that residents
shall pay an excise tax on the value of any motor vehicle purchased or
acquired for use in the state and required to be registered. S.D. Codified
1
Laws Ann. § 32-5B-1. The excise tax is

*
The HONORABLE BRUCE M. VAN SICKLE, United States District
Judge for the District of North Dakota, sitting by designation.
1
The statute provides:

In addition to all other license and registration fees
for the use of the highways, a person shall pay an excise tax at
the rate of three percent on the purchase price of any motor
vehicle . . . purchased or acquired for use on the streets and
highways of this state and required to be registered under the

2
a one time assessment collected by the county in which the owner resides
when the vehicle is first licensed in the state. Id. § 32-5B-10. Payment
of the excise tax is required for the issuance or transfer of state vehicle
title, id. § 32-5B-14, and is thus a condition precedent to registration
and issuance of state license plates.2 The proceeds are allocated to the
state highway fund. Id. § 32-5B-17. Failure to pay the excise tax is a
misdemeanor. § 35-5B-1.

South Dakota Codified Laws section 32-5-5 imposes a separate motor
vehicle registration fee on state residents. S.D. Codified Laws Ann. § 32-
3
5-5. The annual fee is based on the weight of the vehicle and ranges from
$20 to $40 for average noncommercial

laws of this state. This tax shall be in lieu of any tax levied
by chapters 10-45 and 10-46 on the sales of such vehicles.
Failure to pay the full amount of excise tax is a Class 1
misdemeanor.

S.D. Codified Laws Ann. § 32-5B-1.
2
The issuance or transfer of a certificate of title also
requires payment of a $5 fee, which is not challenged by the
parties in this case.
3
The statute provides:

Subject to the provisions of §§ 32-5-17 to 32-5-45,
inclusive, license fees and compensation for use of the
highways, fees shall be based, except as otherwise
specifically provided, upon manufacturers' weights,
including accessories. If a noncommercial motor
vehicle is an automobile, pickup truck or van with a
manufacturer's shipping weight, including accessories,
of six thousand pounds or less, the license fees for
such a motor vehicle shall be as provided by § 32-5-6.
. . . These fees shall be paid annually to the county
treasurer, and shall be as provided by this chapter.

S.D. Codified Laws Ann. § 32-5-5.

3
vehicles. It is collected at the time the owner obtains license plates or
renewal tags, and is a condition precedent for their issuance. Id. A
percentage of the collected fees goes toward administrative costs, and the
remainder is allocated to various road funds. Failure to pay the
registration fee is a misdemeanor. § 32-5-2.4.

I.

The Cheyenne River Sioux Tribe is a federally recognized Indian
tribe. In 1868 the Fort Laramie Treaty, 15 Stat. 635, established the
Great Sioux Reservation for the use and occupancy of the Sioux Nation.
Congress later created the Cheyenne River Indian Reservation in 1889 on
part of the treaty land as a separate reservation for the Cheyenne River
Sioux Tribe. See South Dakota v. Bourland, 508 U.S. 679 (1993). In 1908
Congress opened a significant portion of the reservation to non-Indian
settlement, but this did not diminish the reservation. See Solem v.
Bartlett, 465 U.S. 463 (1984). The reservation wholly encompasses Dewey
and Ziebach counties in the State of South Dakota. Its residents include
tribal members, nonmember Indians, and non-Indians.

The tribe believes that all Indians residing on the Cheyenne River
Indian Reservation are immune from state taxation of their motor vehicles,
including both the excise tax and the annual registration fee. The tribal
council has consistently maintained that the state lacks authority to
collect the excise tax and registration fee from tribal members,4 and there
is evidence in the record that at least some members have paid the excise
tax and registration fee under protest.

4
Motor vehicles owned by the tribe itself are statutorily
exempt from the state excise tax and registration fee, and
license plates are issued for a fee based on actual
administrative costs. S.D. Codified Laws Ann. § 32-5-42
(registration fee); id. § 32-5B-2(1) (excise tax).

4
 The statutes do not create an exemption for Indian-owned vehicles
that are driven exclusively on reservation land, but the state apparently
does not enforce its motor vehicle registration laws in such circumstances.
The owner of any vehicle driven outside the reservation is subject to
criminal penalties for improper registration, however. At one time, tribal
law incorporated state traffic laws and required all motor vehicles driven
on the reservation to have valid state license plates. In 1994 the tribe
enacted its own motor vehicle registration system, but has not yet
implemented it to avoid imposing double fees on reservation residents.

On September 3, 1992 the United States brought suit on behalf of the
Cheyenne River Sioux Tribe and its members, seeking a declaration that the
state lacks jurisdiction to impose its motor vehicle excise tax and
registration fee on Indians residing on the Cheyenne River reservation.5
It also sought an injunction against the collection of the fees and taxes,
and monetary damages in the amount of taxes paid between 1986 and the
present. On August 24, 1993, the Cheyenne River Sioux Tribe was permitted
to intervene as a plaintiff pursuant to Federal Rule of Civil Procedure
24(b).

In February 1995 the district court6 ruled on cross motions for
summary judgment. It held that the excise tax was essentially a personal
property tax and thus could not be imposed on tribal members living on the
reservation. See Oklahoma Tax Comm'n v. Sac and Fox Nation, 508 U.S. 114,
127-28 (1993). It viewed the annual registration fee differently,
concluding that it was a nondiscriminatory fee that could validly be
collected from tribal

5
The suit named as defendants the State of South Dakota and
its Secretary of Revenue, as well as two counties and the county
treasurers.
6
The Honorable John B. Jones, United States District Judge
for the District of South Dakota.

5
members residing on the reservation who elected to purchase state license
plates. The district court did not extend immunity from the excise tax to
nonmember Indians and did not award damages to tribal members. Judgment
was entered on February 23, 1995, and the parties filed cross appeals.

The United States and the tribe argue that the registration fee
operates as a tax and thus cannot be imposed on reservation Indians. They
also claim that monetary damages should be awarded for taxes previously
paid. The tribe also argues that tax immunity should be extended to
nonmember Indians residing on the Cheyenne River reservation. South Dakota
responds that the district court correctly determined the registration fee
to be valid, denied monetary damages, and held that nonmember Indians were
not immune from taxation. It argues on cross appeal that the excise tax
is a valid sales and use tax.

A.

As a general rule, a state lacks jurisdiction to tax the lands,
activities, and property of tribal members "'within the boundaries of the
reservation,'" unless there has been a "'cession of jurisdiction or other
federal statutes permitting it.'" California v. Cabazon Band of Mission
Indians, 480 U.S. 202, 215 n. 17 (1987) (quoting Mescalero Apache Tribe v.
Jones, 411 U.S. 145, 148 (1973)). In other words, a tribal member's on-
reservation activities are immune from state taxation absent express
congressional authorization of the tax. McClanahan v. State Tax Comm'n of
Arizona, 411 U.S. 164, 171 (1973). This is because a state's authority to
tax on-reservation activities is limited or preempted by the terms of
treaties which set aside reservations for the exclusive use of Indian
tribes and by various federal statutes

6
defining the limits of state power. Id.7 The doctrine of Indian
sovereignty reflects the "'deeply rooted'" historical policy of "'leaving
Indians free from state jurisdiction and control.'" Id. at 168 (quoting
Rice v. Olson, 324 U.S. 786, 789 (1945)). That doctrine "provides a
backdrop against which the applicable treaties and statutes must be read."
Id. at 172.

Congress has not specifically authorized the taxation of a tribal
member's personal property, and South Dakota thus lacks jurisdiction to
impose such a tax. This would include any tax or fee that operates as a
personal property tax on motor vehicles owned by tribal members living on
the reservation. Oklahoma Tax Comm'n v. Sac and Fox Nation, 508 U.S. 114,
127-28 (1993); Washington v. Confederated Tribes of Colville Indian
Reservation, 447 U.S. 134, 163 (1980); Moe v. Confederated Salish and
Kootenai Tribes of Flathead Reservation, 425 U.S. 463, 480-81 (1976).

The general rule of tax immunity applies to activities that occur on
the reservation, including ownership of property, but "different
considerations" apply to off-reservation activities. Mescalero, 411 U.S.
at 148. Indians who go beyond reservation boundaries are generally "held
subject to nondiscriminatory state law otherwise applicable to all
citizens." Id. at 148-49. This reasoning suggests that states may impose
on tribal members a sales tax or other nondiscriminatory tax on off-
reservation purchases. See Tunica-Biloxi Tribe v. Louisiana, 964 F.2d 1536
(5th Cir. 1992).

The parties do not disagree about the general rule of tax immunity
for tribal members within the boundaries of a reservation or the authority
of the state to tax off-reservation sales

7
The analysis in McClanahan relies on the language in a
treaty with the Navajo. South Dakota does not claim that the
analysis should be different in this case or argue that it has
jurisdiction to tax on-reservation activities or property.

7
transactions. South Dakota admits that it would lack authority to impose
state property taxes on members of the Cheyenne River Sioux Tribe living
on the reservation, and the tribe concedes that its members could validly
be required to pay a sales tax on off-reservation purchases, a properly
limited state road use tax, or certain non-discriminatory fees. The
dispute here is one of classification: what sort of tax or fee is created
by these statutes?

South Dakota argues that the excise tax is a sales tax on off-
reservation purchases of motor vehicles. The statute itself speaks of
levying an excise tax, "in lieu of" any sales or use tax, on the value of
any motor vehicle "purchased or acquired for use" in the state. § 32-5B-1.
Unlike the state sales tax, the excise tax is not imposed on the retailer
or at the time of sale.8 Compare S.D.

8
The dissent attempts to make too much of the mention of the
fact that the South Dakota excise tax is not collected by the
retailer at the time of sale. This is but one of the facts that
make up the total circumstances showing that the excise tax is a
tax on personal property rather than a sales tax. The tax only
applies to certain types of vehicles sales in South Dakota. It
also applies to vehicles purchased by South Dakota residents
outside of the state and to certain vehicles not recently
purchased, but recently brought into the state. Furthermore, it
arises on application for title, rather than on vehicle sale.

Under the teaching of Supreme Court precedent it is the
nature and characteristics of the particular tax that determines
whether the tax is permissible, not the nature of the label
applied to it. Sac and Fox, 508 U.S. at 127-28; Colville, 447
U.S. at 163. This requires examination of all the attributes of
the particular tax. The dissent ignores this principle and
selects only certain factors to analyze.

The dissent also has done its own survey of taxes in other
states in the circuit and concludes that they show some
similarities to the South Dakota excise tax. There is no
information about whether any of these states have attempted to
apply the taxes to on-reservation Indians, and if so, what the
result has been. This discussion of other state taxes is not
based on the record before the court, and the parties have had no
occasion to address the possible relevance or irrelevance of the
dissent’s speculation about other state laws and its invitation

8
Codified Laws Ann. § 10-45-2 (retail sales tax) with § 32-5B-10 (excise
tax). Nor is the excise tax revenue credited to the general revenue fund.
Compare S.D. Codified Laws Ann. § 10-46-48 with § 32-5B-17. Although the
amount of the tax is based on the "purchase price," that term is defined
to include either the actual consideration paid or the actual value of the
vehicle. See S.D. Codified Laws Ann. §§ 32-5B-4(3)-(5), 32-5B-11.

The excise tax does not operate like a sales tax. It might resemble
a sales tax in some cases, such as when a new or used car is purchased from
a licensed dealer in South Dakota and registered there by the new owner.
In other circumstances, however, the tax more obviously relates to the
ownership of the vehicle as property rather than the sales transaction
itself. For example, the tax does not apply to all motor vehicle sales in
the state, but only to those resulting in ownership by a South Dakota
resident. The tax is not paid unless the owner applies for the issue or
transfer of South Dakota title. § 32-5B-14. Conversely, the excise tax
does apply to vehicles purchased out of state by South Dakota residents.
Moreover, the tax applies to motor vehicles that are being newly brought
into the state, but have not recently been purchased. A person moving to
South Dakota and applying for a state motor vehicle title is taxed at a
percentage of the retail value of the vehicle on the day it enters the
state, unless the owner provides sufficient proof that the vehicle was
subject to an equal or greater tax in another state. § 32-5B-11.

South Dakota asserts that Tunica-Biloxi Tribe v. Louisiana, 964 F.2d
1536 (5th Cir. 1992), supports its claim that the excise tax is a valid
sales tax, but the tax at issue in that case was different from the South
Dakota excise tax. Tunica involved a Louisiana tax on the "sale at retail"
of any item of property

for additional litigation.

9
within the state. That tax did not apply to items purchased out of state.9
Purchasers from outside Louisiana could also be subject to the sales tax
unlike the South Dakota tax which is not applied to out-of-state
purchasers. Since the characteristics of the South Dakota tax differ from
the Louisiana tax, the outcome here is not inconsistent with Tunica. It
is simply wrong to suggest that our decision will create a split among the
circuits.10

The South Dakota excise tax resembles the personal property taxes
found to be preempted in Moe, Colville, and Sac and Fox. Colville involved
a Washington "excise tax" which was assessed annually at a percentage of
a motor vehicle's value for the "privilege" of using a motor vehicle in the
state. 447 U.S. at 162. The Supreme Court held that the tax was similar
in all but name to the personal property tax on motor vehicles that had
been invalidated as applied to tribal members in Moe, 425 U.S. at 480-81.
Colville, 447 U.S. at 163. Similarly, in Sac and Fox, the Supreme Court
held that Oklahoma's motor vehicle excise tax and its yearly vehicle
registration fee operated as personal property taxes and thus could not be
imposed on tribal members living on the reservation. 508 U.S. at 127-28.
The South Dakota tax is not identical to the taxes in Moe, Colville, and
Sac and Fox, but it has important similarities. Like them, the South
Dakota tax is applied to motor vehicle owners, rather than simply to
purchasers, and is based on a percentage of the value of the motor vehicle.
Sac and Fox, 508 U.S. at 119; Colville, 447 U.S. at 163 (discussing Moe).
It is true that this tax is not applied annually,

9
Louisiana also imposed a separate "use tax" on the fair
market value of vehicles purchased out of state and later brought
into it. That tax was not at issue in Tunica, but the court
indicated that its validity might have presented a different
question. 964 F.2d at 1540-41.
10
It should also be noted that the Fifth Circuit did not
have the benefit of the most recent Supreme Court guidance in
this area, because Tunica was decided before Sac and Fox.

10
but neither was the tax found invalid in Sac and Fox.11 Sac and Fox, 508
U.S. at 126.

The South Dakota excise tax essentially operates as a tax on the
ownership of a motor vehicle, rather than as a tax on off-reservation sales
transactions. The ownership of a vehicle is the sort of on-reservation
activity that a state is not permitted to tax without express Congressional
authorization. See Sac and Fox, 508 U.S. at 127. The district court did
not err in ruling that the state lacks jurisdiction to impose the excise
tax on tribal members residing on the reservation.

B.

The United States and the Cheyenne River Sioux Tribe argue that the
state similarly lacks jurisdiction to impose its annual registration fee
on reservation Indians because it operates to tax on-reservation
activities. South Dakota responds that it has authority to impose the fee
because it is a nondiscriminatory fee for off-reservation activities. The
issue is again one of classification.

The United States and the tribe claim that the fee actually operates
as a tax on the ownership of vehicles and is therefore preempted under Sac
and Fox, Colville, and Moe. In Sac and Fox the Court held Washington's
annual registration fee to be invalid as applied to reservation Indians,
but that fee was based on the value of a vehicle and thus was like a
personal property tax. Id. at 127-28. It was found to be no different
from the taxes held preempted in Moe and Colville. South Dakota's
registration fee does not resemble a property tax, however. It is not
based on the

11
Contrary to the dissent's implication in its discussion of
Moe and Colville, Sac and Fox indicates that a state without
authority to impose an annual tax has no more authority to impose
a one-time tax.

11
value of the vehicle, but is a flat fee based on weight, and any proceeds
resulting from it are dedicated to highway purposes.

The United States and the tribe also suggest that the fee is a tax
on the use of state roads. They concede that a state might have
jurisdiction to impose a tax on reservation Indians for the use of off-
reservation roads, but argue that the fee here is not "tailored to the
actual amount of off-reservation use" as required by Colville, 447 U.S. at
163-64.

In Colville, the Supreme Court rejected the State of Washington's
claim that its excise tax was actually a tax on the use of the vehicle
within the state. It held that the tax effectively functioned as a
personal property tax, which had previously been held invalid as applied
to tribal members in Moe:

We do not think Moe and McClanahan can be this easily
circumvented. While Washington may well be free to levy a tax
on the use outside the reservation of Indian-owned vehicles, it
may not under that rubric accomplish what Moe held was
prohibited. Had Washington tailored its tax to the amount of
actual off-reservation use, or otherwise varied something more
than mere nomenclature, this might be a different case.

Id. There is no suggestion in the South Dakota statute that the purpose
of the fee is to tax the use of the state roads. Even if it were, the tax
is significantly different from a property tax so that the concerns
expressed in Colville are avoided.

The registration fee is a nondiscriminatory fee for the registration
of a vehicle in the state and the issuance of state license plates. See
Moe, 425 U.S. at 469 (Montana fee required for registration and issuance
of state license plates could be imposed

12
on reservation Indians).12 It is not collected from owners of motor
vehicles that are not registered with the state, including those driven
exclusively within the boundaries of the reservation. The concerns related
to state taxation of on-reservation activities are not present here because
the fee is not based on any on-reservation activity. Accordingly, the
district court did not err in ruling that Indians who elect to purchase
South Dakota license plates or renewal tags can be required to pay the
annual registration fee.

C.

The Cheyenne River Sioux Tribe argues that immunity from the excise
tax should not be limited to tribal members but should extend to nonmember
Indians residing on the reservation. South Dakota responds that the
interests of nonmember Indians have not been properly raised, and argues
that nonmember Indians are subject to state taxation because they have the
same status as non-Indians.
The state's power to tax nonmember Indians is not directly raised by
this action, because no nonmember Indians are parties to this case. The
United States initiated the action "on behalf of the Cheyenne River Sioux
Tribe and its members," and the tribe intervened "to protect its sovereign
right to raise revenue to finance its state government . . . ."

Even if the issue had been properly presented, the arguments made are
not convincing. As discussed above, the tax immunity of reservation
Indians is premised on the preemption of state laws by treaty and statute
and informed by notions of tribal self government. These reasons
underlying immunity do not have the same

12
Montana's registration fee was not challenged by the tribe
in Moe, but the Court's analysis suggests a basis to
differentiate between a registration fee that could be imposed on
reservation Indians and a personal property tax that could not.

13
force as applied to Indians who are not members of the governing tribe.13
See Colville, 447 U.S. at 160-61 (retail sales tax immunity for on-
reservation sales does not extend to nonmember Indians residing on
reservation).

The tribe argues that the interest in tribal self government extends
to nonmember Indians because Congress has defined tribal self government
to include all Indians. Although Congress has defined tribal powers of
self government to include criminal jurisdiction over "all Indians," 25
U.S.C. § 1301, there is no question that South Dakota retains civil
regulatory jurisdiction over nonmember Indians in the same way that it does
over non-Indians on the reservation. See id.

The tribe also asserts that the terms of the 1868 treaty creating the
Great Sioux Reservation establishes that nonmember Indians have an interest
in tribal self government. It points to language setting aside land for
the use of the Sioux Nation and "for such other friendly tribes or
individual Indians as from time to time they may be willing . . . to admit
amongst them." Art. 2. (15 Stat. 653). Nonmember Indians living on the
reservation are not in fact involved in tribal self government, however.
The Cheyenne River Sioux Tribe's constitution and bylaws do not allow
nonmember Indians to vote in tribal elections or hold office on the
reservation.

The tribe also argues that at a minimum any Sioux Indian residing on
its reservation should be immune from taxation because all Sioux are part
of the Sioux Nation. The Great Sioux Reservation was divided into separate
reservations for various

13
The tribe argues that state taxation of nonmembers is
preempted by the comprehensive federal Indian country road
system, but the statutes and regulations implementing that system
do not demonstrate a Congressional intent to exempt nonmember
Indians from state taxation. See Colville, 447 U.S. at 161.

14
Sioux tribes, including the Cheyenne River Sioux. Although the different
Sioux tribes share common ties, they exist as separate entities with their
own constitutions and governing structures. Nonmember Sioux residing on
the Cheyenne River reservation are not allowed to vote or hold office, and
are not actually constituents of the governing tribe.

D.

The United States and the tribe argue that monetary damages should
be awarded to compensate for past payments of the excise taxes by tribal
members.14 The district court rejected the claim for damages because
previous cases addressing motor vehicle taxation had not been applied
retroactively. South Dakota offers several alternative rationales for
denying monetary relief.

The district court correctly noted that the opinions in Moe,
Colville, and Sac and Fox did not grant retroactive relief, but those cases
did not involve claims for monetary damages. Rather they were claims for
declaratory and injunctive relief. When a state tax is declared to be
invalid either "because . . . it [is] beyond the State's power to impose"
or "because the taxpayers were absolutely immune from the tax," the State
must "'undo' the unlawful deprivation by refunding the tax previously paid
under duress." McKesson Corp. v. Division of Alcoholic Beverages and
Tobacco, 496 U.S. 18, 39 (1990) (citing Ward v. Love County Board of
Comm'rs, 253 U.S. 17, 24 (1920)). In other words, the holding in such
cases would be applied retroactively.

The state claims that a damage award is barred by the Eleventh
Amendment. It cites Blatchford v. Native Village of Noatak, 501

14
They actually seek damages for payments by all reservation
Indians of both the excise tax and the registration fee, but the
claims of nonmembers and those claims based on the registration
fee are foreclosed for the reasons already discussed.

15
U.S. 775 (1991), in which the Supreme Court held that the Eleventh
Amendment would bar damage claims brought by Indian tribes against a
state.15 The Eleventh Amendment does not bar suits brought by the United
States on behalf of Indian tribes or their members, however. United States
v. Minnesota, 270 U.S. 181, 195 (1926); United States v. Board of Comm'rs
of Osage County, 251 U.S. 128, 133 (1919). The Blatchford Court recognized
that the tribal claims would not have been barred if brought by the United
States, but held that tribal access to federal court was not as broad.
Blatchford, 501 U.S. at 783-84. The Eleventh Amendment does not apply in
the Cheyenne River case because the United States brought the action.

The state also argues that damages should be denied because payment
of the taxes was required by tribal law and thus was not coerced by the
state. A 1987 resolution incorporated into tribal law certain provisions
of the South Dakota Traffic Code, including the requirement that vehicles
bear valid state license plates. Neither that resolution nor a clarifying
resolution passed in 1990 addressed the payment of the state excise tax or
suggested that its collection from tribal members was valid. The tribal
council has consistently protested the imposition of state motor vehicle
taxes on its members, and has now adopted its own registration system.

An additional argument by the state is that the excise taxes were
paid voluntarily and thus cannot be recovered back as a matter of law or
equity. Taxes that are voluntarily paid because of a

15
Blatchford distinguished its facts from those in Moe where
there was federal jurisdiction over a state tax injunction action
brought by an Indian tribe. Blatchford suggested that such
actions do not implicate the Eleventh Amendment when brought
against state officers rather than the state itself. 501 U.S. at
785 n. 3. (Moe held that the Tax Injunction Act, 28 U.S.C. §
1341, did not deprive federal courts of jurisdiction over tax
injunction claims brought by Indian tribes, because Congress had
separately provided for jurisdiction over tribal claims in 28
U.S.C. § 1362. 425 U.S. at 472-75).

16
mistake of law cannot be recovered back, see Security National Bank of
Watertown v. Young, 55 F.2d 616, 619 (8th Cir.), cert. denied, 286 U.S. 551
(1932), but taxes paid under duress or coercion are recoverable, and state
refund procedures do not limit such recovery. McKesson, 496 U.S. at 31;
Board of Comm'rs of Jackson County v. United States, 308 U.S. 343, 350
(1939) (citing Osage County, 251 U.S. 128 and Ward, 253 U.S. 17).

The record related to the nature and amount of the damage claims in
the Cheyenne River case has not been fully developed. There is anecdotal
evidence describing informal protests by several tribal members at the time
of payment, claiming that the tax was paid to avoid criminal penalties, and
suggesting that the state refund procedure is inadequate. These issues
were not reached by the district court because of the mistaken view that
damages were necessarily barred. The judgment should be reversed to the
extent that it eliminated any possibility of damages. On remand the
district court should determine whether damages should be awarded and, if
so, in what amount.

II.

The Rosebud Sioux Tribe is also a federally recognized Indian tribe,
and the initial history of the Rosebud Indian Reservation parallels that
of the Cheyenne River reservation. Initially part of the Great Sioux
Reservation established by the Fort Laramie Treaty, 15 Stat. 635, the
Rosebud reservation was set apart by the Act of March 2, 1889, 25 Stat.
888, 892. The reservation was diminished by Congressional acts near the
turn of the century, and now consists of Todd County, South Dakota. See
Rosebud Sioux Tribe v. Kneip, 430 U.S. 584, 615 (1977). Tribal members
living on allotted lands outside the reservation are considered to be in
Indian country. Id. at 615 n. 48.

On October 3, 1994, the Rosebud Sioux Tribe brought suit in

17
federal district court against the South Dakota Secretary of Revenue for
declaratory and injunctive relief against the imposition of state motor
vehicle excise taxes and registration fees on Indians residing on the
reservation. The case was assigned to the same judge before whom the
Cheyenne River action was pending. The Secretary filed a motion to
dismiss, and the tribe moved for a preliminary injunction.

On February 23, 1995, the same day that judgment was entered in the
Cheyenne River case, the district court held a hearing on the motions in
the Rosebud case. On May 23, 1995 it issued an opinion and order denying
the Secretary's motion to dismiss, partially granting and partially denying
the tribe's request for a preliminary injunction, and transferring the case
to another judge. The opinion and order was short, and the court did not
make detailed findings or discuss the basis for its disposition.

The district court's opinion recognized that the issues were similar
to those raised in the Cheyenne River case. It granted a preliminary
injunction against the collection of the motor vehicle registration fee
from tribal members who drive only within the undiminished portion of the
Rosebud reservation, but denied the tribe's motion in all other respects.
It did not specifically enjoin the collection of the excise tax from tribal
members living on the reservation, and the tribe filed this interlocutory
appeal from that partial denial of its motion.16

The Rosebud tribe argues that the reasoning in the Cheyenne River
case should apply to Indians residing on the Rosebud reservation and that
the district court erred by failing to enter an injunction against the
collection of excise taxes. The tribe

16
At the time the case was argued on appeal, there was no
indication that the case had proceeded any further in district
court. The Secretary has yet to file an answer to the complaint
or to assert any defenses.

18
argues that the order is inconsistent with the Cheyenne River judgment
because it did not enjoin the state from continuing to collect excise taxes
from members of the Rosebud tribe living on the reservation. The Secretary
responds that the district court did not abuse its discretion when it
partially denied the motion for a preliminary injunction and that the
merits of the underlying action are not an issue on appeal.

The issue on this interlocutory appeal is whether the district court
abused its discretion or committed an error of law.17 See Dakota Indus.,
Inc. v. Dakota Sportswear, Inc., 988 F.2d 61, 63 (8th Cir. 1993). Although
the order would be easier to review if it contained more detailed findings
and reasoning, it appears that the earlier ruling in the Cheyenne River
case was a major factor in the court's thinking. The same judge had
entered a declaratory judgment in that case three months before, holding
that South Dakota could not impose its motor vehicle excise tax on tribal
members living on the reservation. In its opinion in that case, the
district court denied injunctive relief since there was "no reason to
believe the defendants will not comply with the requirements of this
decision." Implicit in its Rosebud ruling is a similar assumption that the
state was complying with the requirements of the Cheyenne River decision
and had stopped collecting excise taxes from tribal members living on
reservations. Injunctive relief is unnecessary where there is no showing
of irreparable harm, and nothing in the record suggests that South Dakota
continues to collect the excise tax from tribal members residing on Indian
reservations. The tribe has not shown that the grant of only partial
relief was an abuse of discretion or clearly erroneous.

17
The Rosebud tribe also seeks entry of judgment in its
favor on the excise tax issue, but the only issues before us on
this interlocutory appeal relate to the injunction.

19
 III.

In conclusion, the judgment entered in the Cheyenne River case is
affirmed in part and reversed in part and remanded for consideration of the
remaining damages issues. The order granting partial injunctive relief in
the Rosebud case is affirmed.

ROSS, Circuit Judge, concurring in part and dissenting in part.

I concur in the majority opinion to the extent that it concludes the
State of South Dakota has the authority to impose an annual motor vehicle
registration fee on Native Americans who live within the boundaries of a
reservation. S.D. Codified Laws Ann. § 32-5-5. I dissent, however, with
respect to the majority's conclusion that the State lacks the authority to
impose the motor vehicle excise tax set forth in S.D. Codified Laws Ann.
§ 32-5B-1. In my opinion, the excise tax is indistinguishable from a sales
tax levied on the sale of motor vehicles, and as such is a valid state tax
on a non-reservation transaction. I also dissent from the majority's
determination that the State of South Dakota must refund the taxes
previously paid.

The South Dakota motor vehicle excise tax is a one-time tax based on
the purchase price of a motor vehicle, and is collected by the county when
application is made for a South Dakota motor vehicle title. S.D. Codified
Laws Ann. § 32-5B-10. It is clear that all of the sales occur outside the
reservation. Although the majority attempts to distinguish the excise tax
from a sales tax based on the fact that the excise tax is collected at the
time of registration by a government employee, as opposed to at the time
of sale by the seller, the excise tax and its method of collection are
virtually identical to the taxes imposed upon the disposition of motor
vehicles by every other state within our circuit. In all cases, the taxes
operate in a similar fashion, yet are given various labels. While each of
the seven states within our circuit

20
levy similar taxes, I will discuss only those five states, including South
Dakota, that also have a reservation within their borders.18
The State of Nebraska imposes a one-time "sales" tax, based on the
purchase price of the motor vehicle. Neb. Rev. Stat. § 77-2703(1)(i).
Although called a "sales" tax, the tax is not collected by the retailer at
the time of the sales transaction, as is the case with retail sales in
general. Id. § 77-2703(1)(a). Instead, the motor vehicle sales tax is
collected by a county official at the time the vehicle is registered.

The State of North Dakota imposes a one-time "excise" tax based on
the purchase price of the motor vehicle. N.D. Cent. Code § 57-40.3-02.
Again, the tax is collected by the director of the department of
transportation at the time of vehicle registration. Id. § 57-40.3-12.
Because of the imposition of the motor vehicle excise tax, the sale of
motor vehicles is specifically exempted from North Dakota's sales tax. Id.
§ 57-39.2-04(13).

The State of Iowa calls its one-time tax upon the sale of motor
vehicles a "use" tax, Iowa Code Ann. § 423.7, even on the in-state
purchases of motor vehicles. The tax is collected by the county treasurer
at the time of vehicle registration. Id. § 423.7. Because of the
imposition of this use tax, the sale of motor vehicles is specifically
exempted from Iowa's sales tax. Id.

18
Although Arkansas and Missouri do not have Indian
reservations within their borders, I note that both of these
states impose and collect sales taxes on the disposition of motor
vehicles in a manner identical to that of their sister states.
The State of Arkansas imposes a "gross receipts tax" on the sale
of motor vehicles. Ark. Code Ann. § 26-52-510. This tax is
"paid by the consumer to the Director of the Department of
Finance and Administration instead of being collected by the
dealer or seller, . . . at the time of registration." Id. § 26-
52-510(a)(1)(A). Similarly, the State of Missouri imposes a
"sales" tax upon the sale of a motor vehicle. The tax is not
collected by the seller but by the state department of revenue at
the time of registration. Mo. Rev. Stat. §§ 144.069, 144.070.

21
§ 422.45(4).

Finally, the State of Minnesota imposes a one-time tax called a
"sales tax on motor vehicles." Minn. Stat. Ann. § 297B.02. The tax is
based on the purchase price of the motor vehicle and is collected by the
motor vehicle registrar, not by the seller at the time of sale. Id.
§ 297B.11. As with the other states in our circuit, Minnesota has
reciprocity with other states in the form of a use tax, applicable, in
part, to out-of-state purchases. Id. § 297B.08. Again, because of the tax
imposed under § 297B.02, the sale of motor vehicles is specifically
exempted from the general sales taxes levied under § 297A. Id. § 297B.13.
A particularly interesting point to note regarding Minnesota's motor
vehicle tax, is that prior to 1994, what is now denominated a "sales tax
on motor vehicles" was labeled a "motor vehicle excise tax." The 1994
amendment modified only the label ascribed to the tax, leaving the taxing
scheme otherwise unchanged.

The majority attempts to distinguish the taxing scheme found to be
valid in Tunica-Biloxi Tribe v. Louisiana, 964 F.2d 1536 (5th Cir. 1992),
noting as significant that "Tunica involved a Louisiana tax on the 'sale
at retail' of any item of property within the state." Ibid. at 9-10.
Regardless of the label given to the tax by the Louisiana legislature,
however, Louisiana's taxing scheme is virtually identical to every other
motor vehicle taxing scheme within our circuit. Relying exclusively on
form rather than substance, the majority overlooks the fact that Louisiana
sales tax on motor vehicles is collected, not by the seller at the time of
the sale, but by the "vehicle commissioner as the agent of the collector
of revenue at the time of application for a certificate of title or vehicle
registration license." La. Rev. Stat. Ann. § 47:303B(1).

The majority's attempt to distinguish the Louisiana tax from the
South Dakota tax is simply unavailing. The majority's only

22
noted distinction between the two taxes is that "[p]urchasers from outside
Louisiana could also be subject to the sales tax unlike the South Dakota
tax which is not applied to out-of-state purchasers." Ibid. at 10. This
is a distinction without basis. Both the South Dakota and the Louisiana
taxes are identical in that neither differentiates between resident or non-
resident purchasers in the imposition of their respective taxes. Instead,
both resident and non-resident purchasers must pay the tax at the time the
vehicle is registered in either South Dakota or Louisiana, unless the
purchaser can show that the tax has been paid to another state. This is
simply the use tax component of a typical sales tax scheme and in no way
detracts from its characterization as a sales tax. But for the label
attributed to the taxes, Tunica is indistinguishable from the case now
before us.

I also disagree with the majority that the South Dakota excise tax
resembles the personal property taxes found to be invalid in Oklahoma Tax
Comm'n v. Sac and Fox Nation, 508 U.S. 114 (1993); Washington v.
Confederated Tribes of Colville Indian Reservation, 447 U.S. 134 (1980);
and Moe v. Confederated Salish and Kootenai Tribes, 425 U.S. 463 (1976).
In both Colville and Moe, the court invalidated the imposition of taxes
assessed annually at a percentage of market value of the vehicles.
Rejecting the State of Washington's attempt to exalt form over substance,
the Court noted that "the only difference between the taxes [in Colville]
and the one struck down in Moe is that [the former] are called excise taxes
and imposed for the privilege of using the vehicle in the State, while the
Montana tax was labeled a personal property tax." Colville, 447 U.S. at
163. The important distinction between the taxes in Colville and Moe and
the South Dakota excise tax, is that the taxes in Colville and Moe were
annual taxes contingent upon the continued ownership of a motor vehicle.
In sharp contrast, the tax at issue here is a one-time tax triggered upon
the disposition of a motor vehicle. Colville and Moe simply are not
controlling in the present case.

23
 Sac and Fox is also distinguishable from the case now before us. The
Supreme Court noted as significant several times throughout its discussion
that the excise tax at issue in Sac and Fox was paid "in addition to the
state sales tax,"19 508 U.S. at 119, 126, 127. Accordingly, the Court
rejected the state's argument that the excise tax resembled a sales tax on
transactions occurring outside Indian country. Id. at 126. Just the
opposite is true here, where South Dakota law specifically states that the
excise tax "shall be in lieu of any tax levied . . . on the sales of such
vehicles." S.D. Codified Laws Ann. § 32-5B-1. Unlike Sac and Fox, the
South Dakota motor vehicle excise tax is meant to be in lieu of the state's
sales tax, not to augment it.

In my view, the majority relies upon distinctions without substance
in concluding that the excise tax is not the equivalent of a sales tax.
First, the majority finds significant the fact that the tax is not
collected by the automobile dealer at the time of the sale, but instead is
collected by the county treasurer at the time application is made for a
South Dakota motor vehicle title. As previously stated, however, this
procedure in tax collection is the same procedure used by all of the states
within our circuit, including those that call the tax a "sales" tax.

Second, the majority makes much of the fact that "the tax does not
apply to all motor vehicle sales in the state, but only to those resulting
in ownership by a South Dakota resident," and "[c]onversely, the excise tax
does apply to vehicles purchased out of state by South Dakota residents."
Ibid. at 9. What the majority describes, however, is simply the
complementary use tax element of a retail sales tax scheme. See, e.g., La.
Rev. Stat. Ann. § 47:303A(3); Minn. Stat. Ann. §§ 297A.14(1), (2), 297B.08;
Neb. Rev. Stat. § 77-2703(2). The existence of a use tax within

19
Oklahoma's "sales" tax levied on motor vehicles was not
challenged in Sac and Fox.

24
the state's taxing scheme does not nullify, or in any way alter, the nature
of its sales tax.

South Dakota's excise tax is the equivalent of a sales tax on motor
vehicles. The fact that the tax is applied only to motor vehicles and not
the general sale of personal property does not alter the substance of the
tax in any way. My concern with the holding adopted by the majority today
is the far-reaching ramifications this decision is sure to have on the
taxing schemes of other states within our circuit, and conceivably in other
circuits as well. Each of the remaining four states within our circuit,
which also have Indian reservations within their boundaries, impose motor
vehicle taxes virtually identical to that struck down by our court today.
As with South Dakota, the remaining four states impose a one-time tax;
based on the purchase price of the motor vehicle; imposed in lieu of the
general retail sales tax; collected not by the retailer at the time of
sale, but by a county official at the time of registration; and have
complementary use tax provisions. Two of the four states now call their
one-time tax a "sales" tax, although identical in all other respects to the
"use" or "excise" taxes of their sister states. The question is whether
this difference in nomenclature will be sufficient to withstand our court's
scrutiny?

By failing to recognize the similarities between Louisiana and South
Dakota's taxing schemes, the majority now creates a split among the
circuits with regard to the validity of taxing the off-reservation sales
of motor vehicles. Further, by failing to recognize the distinct method
of collecting motor vehicle sales taxes, as opposed to other retail sales
taxes, by every state in our circuit and possibly the majority of states
across this country, our court today takes a step toward a blanket
invalidation of sales taxes on the off-reservation purchases of motor
vehicles. This clearly intrudes upon the Supreme Court's affirmation that
"Indians going beyond reservation boundaries have generally been

25
held subject to non-discriminatory state law otherwise applicable to all
citizens of the State," including its state tax laws. Mescalero Apache
Tribe v. Jones, 411 U.S. 145, 148-49 (1973).

Because it is my opinion that the South Dakota excise tax functions
as a valid sales tax of off-reservation transactions, I would uphold S.D.
Codified Laws Ann. § 32-5B-1. Accordingly, I respectfully dissent from the
majority opinion to the extent that it concludes otherwise. I note that
the other states within our circuit may wish to seek leave to file amicus
briefs in the event a petition for rehearing is requested and granted in
this case.

A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.

26