Big Sandy Rancheria Enters. v. Rob Bonta

FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

BIG SANDY RANCHERIA No. 19-16777
ENTERPRISES, a federally-chartered
corporation, D.C. No.
Plaintiff-Appellant, 1:18-cv-00958-
DAD-EPG
v.

ROB BONTA,* in his official capacity OPINION
as Attorney General of the State of
California; NICOLAS MADUROS, in
his official capacity as Director of
the California Department of Tax
and Fee Administration,
Defendants-Appellees.

Appeal from the United States District Court
for the Eastern District of California
Dale A. Drozd, District Judge, Presiding

Argued and Submitted November 19, 2020
San Francisco, California

Filed June 16, 2021

*
Rob Bonta has been substituted for his predecessor, Xavier
Becerra, as California Attorney General under Fed. R. App. P 43(c)(2).
2 BIG SANDY RANCHERIA ENTERS. V. BONTA

Before: Sidney R. Thomas, Chief Judge, and Mary M.
Schroeder and Marsha S. Berzon, Circuit Judges

Opinion by Chief Judge Thomas;
Concurrence by Judge Berzon

SUMMARY**

Indian Tribes

The panel affirmed the district court’s dismissal of an
action in which Big Sandy Rancheria Enterprises, a federally
chartered tribal corporation wholly owned and controlled by
the Big Sandy Rancheria of Western Mono Indians, sought
declaratory and injunctive relief against the Attorney General
of California and the Director of the California Department
of Tax and Fee Administration concerning taxes applied to
inter-tribal sales of cigarettes.

The district court dismissed for lack of subject matter
jurisdiction the Corporation’s challenge to California’s
cigarette excise tax as applied to the Corporation’s wholesale
cigarette distribution business, and dismissed for failure to
state a claim the Corporation’s remaining challenges to other
regulations governing cigarette distribution in California, as
applied to the Corporation’s business.

The Corporation’s fifth cause of action alleged that
federal common law and tribal sovereign immunity

**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
 BIG SANDY RANCHERIA ENTERS. V. BONTA 3

preempted California’s Cigarette Tax Law as applied to the
Corporation. The panel held that the district court properly
dismissed this cause of action on jurisdictional grounds
pursuant to the Tax Injunction Act, which prohibits district
courts from enjoining, suspending, or restraining the
assessment, levy, or collection of any tax under State law
where a plain, speedy, and efficient remedy may be had in the
courts of such State. The panel held that the district court
properly declined to apply the Indian tribes exception to the
Tax Injunction Act’s jurisdictional bar. This exception, set
forth at 28 U.S.C. § 1362, confers federal jurisdiction over
claims brought by any Indian tribe or band with a governing
body duly recognized by the Secretary of the Interior. The
Corporation contended that as an “incorporated tribe” under
§ 17 of the Indian Reorganization Act, it was an “Indian tribe
or band” for jurisdictional purposes. Based on the relevant
statutory language, legislative history, and circuit precedent
narrowly construing § 1362, the panel concluded that the
Corporation was not an “Indian tribe or band” within the
meaning of § 1362, and therefore could not invoke § 1362 to
avoid the Tax Injunction Act’s jurisdictional bar.

The Corporation’s remaining causes of action challenged
California’s Tobacco Directory Law, which requires the
Attorney General to maintain and publish a directory of
tobacco product manufacturers and tobacco brand families
that have been approved for sale in California, and
California’s licensing, reporting, and recordkeeping
requirements in connection with cigarette distribution, on two
grounds: (1) applying the challenged regulations to the
Corporation’s cigarette sales to tribal retailers on other
reservations violates “principles of Indian tribal self-
governance;” and (ii) federal regulation of “trade with Indians
within Indian country” under the Indian Trader Statutes
4 BIG SANDY RANCHERIA ENTERS. V. BONTA

preempts the challenged regulations as applied to the
Corporation’s intertribal wholesale cigarette business.

The panel held that the district court properly dismissed
both theories for failure to state a claim. The panel concluded
that tribal sovereignty principles did not preclude California
from regulating the Corporation’s intertribal wholesale
cigarette sales under the challenged regulations. The
Corporation conceded that it left the Rancheria to sell
cigarettes to tribal retailers on other reservations. The
Corporation did not allege that the challenged regulations
were discriminatory, nor did it plausibly allege that federal
law barred the Directory Statute’s application to the
Corporation. The Corporation therefore failed to state a claim
that the challenged regulations, as applied to its off-
reservation conduct, infringed tribal self-governance. The
panel joined the Tenth Circuit and Oklahoma Supreme Court
in treating tribe-to-tribe sales made outside the tribal
enterprise’s reservation as “off reservation” activities subject
to non-discriminatory state laws of general application. The
panel held that the Corporation also failed to state a claim that
the Indian Trader Statutes preempted any of the challenged
regulations as applied to its intertribal wholesale cigarette
business.

Judge Berzon concurred in part and acquiesced dubitante
in part. Judge Berzon joined the majority opinion in
affirming the dismissal of the Corporation’s first four claims.
She wrote that she differed from the majority in its certainty
that the Corporation was not an “Indian tribe or band” for
jurisdictional purposes under 28 U.S.C. § 1362, the Indian
tribes exception to the Tax Injunction Act’s jurisdictional bar.
Because Judge Berzon had doubts about the majority’s
conclusion but was not prepared to say it was certainly
 BIG SANDY RANCHERIA ENTERS. V. BONTA 5

wrong, she wrote separately, dubitante, as to Part III of the
majority’s opinion, which affirmed the dismissal of the
Corporation’s fifth cause of action for lack of jurisdiction.

COUNSEL

Tim Hennessy (argued), John M. Peebles, and Michael A.
Robinson, Peebles Kidder Bergen & Robinson LLP,
Sacramento, California, for Plaintiff-Appellant.

Michael John von Loewenfeldt (argued), Wagstaffe von
Loewenfeldt Busch & Radwick LLP, San Francisco,
California; James V. Hart (argued) and Peter F. Nascenzi,
Deputy Attorneys General; Karen Leaf, Senior Assistant
Attorney General; Attorney General’s Office, Sacramento,
California; for Defendants-Appellees.
6 BIG SANDY RANCHERIA ENTERS. V. BONTA

OPINION

THOMAS, Chief Judge:

This appeal presents the question whether California
cigarette tax regulations apply to inter-tribal sales of
cigarettes by a federally chartered tribal corporation wholly
owned by a federally recognized Indian tribe. We conclude
that they do, and we affirm the judgment of the district court.
We have jurisdiction under 28 U.S.C. § 1291.

Specifically, this case involves Big Sandy Rancheria
Enterprises (“the Corporation”), a federally chartered tribal
corporation wholly owned and controlled by the Big Sandy
Rancheria of Western Mono Indians (“the Tribe”). The
Corporation sought declaratory and injunctive relief against
the Attorney General of California (“Attorney General”) and
the Director of the California Department of Tax and Fee
Administration (“Director”).

The district court dismissed the Corporation’s challenge
to California’s cigarette excise tax as applied to the
Corporation’s wholesale cigarette distribution business, for
lack of subject matter jurisdiction, and dismissed the
Corporation’s remaining challenges to other regulations
governing cigarette distribution in California, as applied to
the Corporation’s business, for failure to state a claim.

I

A

“Since 1959 California has imposed an excise tax on the
distribution of cigarettes.” Cal. State Bd. of Equalization v.
 BIG SANDY RANCHERIA ENTERS. V. BONTA 7

Chemehuevi Indian Tribe, 474 U.S. 9, 10 (1985) (per
curiam); see also Cigarette and Tobacco Products Tax Law
(“Cigarette Tax Law”), Cal. Rev. & Tax. Code
§§ 30001–30483. “Distribution” includes, in pertinent part,
“[t]he sale of untaxed cigarettes or tobacco products in th[e]
state” or “[t]he use or consumption of untaxed cigarettes or
tobacco products in th[e] state.” Cal. Rev. & Tax. Code
§ 30008.1 “Use or consumption” means “the exercise of any
right or power over cigarettes or tobacco products incident to
the ownership thereof.” Id. § 30009. However, “use or
consumption” excludes the “the keeping or retention” of such
products “by a licensed distributor for the purpose of sale.”
Id. § 30009. The “sale of cigarettes or tobacco products by
the manufacturer to a licensed distributor” is not subject to
the excise tax. Id. § 30103.

Distributors pay the excise tax by purchasing stamps from
the state to affix to each package of cigarettes before
distribution. Id. §§ 30161, 30163(a). California’s scheme
recognizes that the state may not tax certain distributions.
For example, “cigarettes sold . . . by a Native American tribe
to a member of that tribe on that tribe’s land” are “exempt
from state excise tax pursuant to federal law.” Cal. Health &
Safety Code § 104556(j); see also Wagnon v. Prairie Band
Potawatomi Nation, 546 U.S. 95, 101–02 (2005) (“States are
categorically barred from placing the legal incidence of an
excise tax on a tribe or on tribal members for sales made
inside Indian country without congressional authorization.”
(quotation marks omitted; emphasis removed)); Montana v.
Blackfeet Tribe, 471 U.S. 759, 764 (1985) (“Indian tribes and

1
“‘Untaxed cigarette’ means any cigarette which has not yet been
distributed in such manner as to result in a tax liability” under state law.
Id. § 30005.
8 BIG SANDY RANCHERIA ENTERS. V. BONTA

individuals generally are exempt from state taxation within
their own territory.”). In such instances, a “user or
consumer,” who is “obligated to pay the tax,” owes the tax,
and the exempt distributor is responsible for collecting the tax
from such purchasers and remitting it to the state. Cal. Rev.
& Tax. Code §§ 30008(b), 30107, 30108(a), 30184; see also
Chemehuevi, 474 U.S. at 11 (“[Section] 30107 clearly seems
to place on consumers the obligation to pay the tax for all
previously untaxed cigarettes.” (citation omitted)).

The excise taxes “provide funding for local and state
programs, including health services, antismoking campaigns,
cancer research, and education programs.” Cal. Bus. & Prof.
Code § 22970.1. To facilitate the collection of taxes,
California requires all distributors to obtain two state-issued
licenses, one of which must be renewed annually. See Cal.
Rev. & Tax. Code § 30140; see also Cal. Bus. & Prof. Code
§ 22975(a). California enacted the annual licensing
requirement in 2003, see Cigarette and Tobacco Products
Licensing Act (“Licensing Act”), Cal. Bus. & Prof. Code
§§ 22970–22991, upon a finding that “[t]ax revenues ha[d]
declined by hundreds of millions of dollars per year due, in
part, to unlawful distributions and untaxed sales of cigarettes
and tobacco products,” id. § 22970.1(b). To “help stem the
tide of untaxed distributions and illegal sales,” California
imposed licensing obligations on manufacturers, importers,
wholesalers, distributors, and retailers. Id. § 22970.1(d).
Under the Licensing Act, distributors and wholesalers may
not sell to unlicensed entities. See id. § 22980.1(b)(1).
Violations of the Licensing Act are misdemeanors punishable
by a $5000 fine, one year of imprisonment, or both. See id.
§ 22981. The Licensing Act does not apply to any person
“exempt from regulation” under federal law. Id. § 22971.4.
 BIG SANDY RANCHERIA ENTERS. V. BONTA 9

Additionally, California imposes reporting and
recordkeeping requirements on cigarette distributors. They
must file monthly reports with the California Department of
Tax and Fee Administration respecting their distributions
both taxable and exempt. See Cal. Rev. & Tax. Code
§§ 30182(a), 30183(a); 18 Cal. Code Regs. § 4031.
Distributors must also “keep . . . records, receipts, invoices,
and other pertinent papers with respect” to their cigarette
dealings, which the state may examine. Cal. Rev. & Tax.
Code §§ 30453, 30454; 18 Cal. Code Regs. §§ 4026(a), 4901.
Similarly, under the Licensing Act, distributors must retain
copies of transaction records to assist the state’s auditing and
collection efforts. See, e.g., Cal. Bus. & Prof. Code
§§ 22978.1, 22978.5 (requiring distributors and wholesalers
to maintain sale records, including invoices and receipts,
“during the past four years” and to make such records
available upon the state’s request).

In addition to collecting taxes, California regulates
cigarette manufacturers pursuant to a 1998 settlement
agreement between four major cigarette manufacturers and
46 states, the District of Columbia, and five United States
territories. See King Mountain Tobacco Co., Inc. v.
McKenna, 768 F.3d 989, 991 (9th Cir. 2014). The Master
Settlement Agreement (“Agreement”) requires manufacturers
that are signatories to the Agreement—“participating
manufacturers”—“to make substantial annual cash payments
to the settling states and territories, in perpetuity, to offset the
increased cost to the health care system created by smoking.”
Id.; see also Agreement § IX(c).2 In return, participating
manufacturers obtained “a release of past, present, and certain

2
For the text of the Agreement, see https://oag.ca.gov/sites/
all/files/agweb/pdfs/tobacco/1msa.pdf.
10 BIG SANDY RANCHERIA ENTERS. V. BONTA

future claims against them.” Cal. Health & Safety Code
§ 104555(e); see also Agreement § XII. The parties to the
Agreement further negotiated the “Non-Participating
Manufacturers Adjustment.” See Agreement § IX(d). Under
that provision, a participating manufacturer may substantially
reduce its payment to a state if it has lost market share as a
result of competition from non-participating manufacturers.
However, a state may avoid that result if it enacts and
“diligently enforce[s]” a “[q]ualifying [s]tatute,” under which
non-participating manufacturers must deposit money into an
escrow account based on the number of cigarettes sold in a
state the prior year. Id. § IX(d)(2)(B).

California’s qualifying statute is the California Reserve
Fund Statute (“Escrow Statute”), Cal. Health & Safety Code
§§ 104555–104558. In enacting the Escrow Statute, the
California Legislature found:

It would be contrary to the policy of the state
if non-participating manufacturers could use
a resulting cost advantage to derive large,
short-term profits in the years before liability
may arise without ensuring that the state will
have an eventual source of recovery from
them if they are proved to have acted
culpably. It is thus in the interest of the state
to require that these manufacturers establish a
reserve fund to guarantee a source of
compensation and to prevent those
manufacturers from deriving large, short-term
profits and then becoming judgment proof
before liability may arise.
 BIG SANDY RANCHERIA ENTERS. V. BONTA 11

Id. § 104555(f); see also King Mountain Tobacco, 768 F.3d
at 991 (explaining that because not all tobacco manufacturers
were parties to the Agreement, “[t]he states feared that these
non-participating manufacturers . . . would become insolvent
against future liability for smoking-related health care
costs”).

The Escrow Statute requires non-participating
manufacturers to either become participating manufacturers
under the Agreement or to place funds annually into an
escrow account at a specified rate for each “unit[] sold” in
California during the previous year. Cal. Health & Safety
Code § 104557(a). “Units sold” refers to “the number of
individual cigarettes sold to a consumer in the state by the
applicable tobacco product manufacturer, whether directly or
through a distributor, retailer, or similar intermediary . . .,
regardless of whether the state excise tax was due or
collected.” Id. § 104556(j). “Units sold” excludes “cigarettes
sold . . . by a Native American tribe to a member of that tribe
on that tribe’s land, or that are otherwise exempt from state
excise tax pursuant to federal law.” Id. The required escrow
payment roughly equals the annual per-cigarette-sold
payment required from participating manufacturers and was
around $6.95 per carton in 2018. The money in the escrow
account may be released back to an non-participating
manufacturer only: (i) to pay a judgment or settlement; (ii) as
a refund for overpayment to the account; or (iii) after the
funds have spent 25 years in the account. Id. § 104557(b).

The Escrow Statute further requires non-participating
manufacturers to “certify” annually that they have complied
with their escrow obligations. Id. § 104557(c). To ensure
such compliance, states have enacted “directory” statutes
(also known as “contraband” or “complementary” statutes).
12 BIG SANDY RANCHERIA ENTERS. V. BONTA

California’s Tobacco Directory Law (“Directory Statute”),
Cal. Rev. & Tax. Code § 30165.1, requires the Attorney
General to maintain and publish a directory of tobacco
product manufacturers and tobacco brand families that have
been approved for sale in California. See id. § 30165.1(c).
To be listed on this directory, a manufacturer must annually
certify to the Attorney General that it is either a participating
manufacturer that has made all payments owed under the
Agreement or is a non-participating manufacturer that has
complied with its escrow obligations as well as the Licensing
Act. See id. § 30165.1(b). The Directory Statute deems off-
directory cigarettes contraband. See id. § 30165.1(e)(1)
(prohibiting any person from affixing a tax stamp to or paying
the tax on off-directory cigarettes); see also id.
§ 30165.1(e)(2) (prohibiting any person from “sell[ing],
offer[ing], or possess[ing] for sale” in California, “ship[ping]
or otherwise distribut[ing] into or within [California], or
import[ing] for personal consumption in [California]” off-
directory cigarettes).

B

The Tribe is federally recognized, see Indian Entities
Recognized and Eligible to Receive Services from the U.S.
Bureau of Indian Affairs, 86 Fed. Reg. 7554, 7554 (Jan. 29,
2021), with offices on the Big Sandy Rancheria (the
“Rancheria”) in Auberry, California.

The Tribe has not adopted a tribal constitution according
to the procedures set forth in section 16 of the Indian
 BIG SANDY RANCHERIA ENTERS. V. BONTA 13

Reorganization Act (“IRA”),3 but instead has adopted
governing documents under 25 U.S.C. § 5123(h)(1)
(recognizing tribe’s “inherent sovereign power to adopt
governing documents under procedures other than those
specified” in section 16). The Tribe owns and controls the
Corporation, which was chartered and organized in 2012
under section 17 of the IRA, see id. § 5124.4 The
Corporation’s Board of Directors is comprised of the same
members as the Tribe’s governing body, the Tribal Council.

The Corporation is a “tobacco distribution enterprise”
whose purpose is to “foster economic development on the
Rancheria and to create economic opportunities for Tribal
members.” The enterprise has four subdivisions: (i) BSR
Distributing, a wholesale distributor of tobacco products “to
Indian tribes and Indian-owned entities in Indian Country”;
(ii) BSR Distribution, which was “organized to engage in the
distribution of tobacco products to non-Indian owned
entities,” but has “not made any sales” yet; (iii) Big Sandy
Manufacturing, which was “organized to engage in the
manufacture of tobacco products” on the reservation, but has

3
See 25 U.S.C. § 5123(a) (“Any Indian tribe shall have the right to
organize for its common welfare, and may adopt an appropriate
constitution and bylaws, and any amendments thereto, which shall become
effective when” both “ratified by a majority vote of the adult members of
the tribe or tribes at a special election authorized and called by the
Secretary under such rules and regulations as the Secretary may prescribe”
and “approved by the Secretary[.]”).
4
The Secretary may “issue a charter of incorporation” to “any tribe”
that petitions for one. Id. The charter is not operative until “ratified by
the governing body of such tribe” and “shall not be revoked or surrendered
except by Act of Congress.” Id. “[A]ll Indian tribes” may petition for a
section 17 charter regardless whether they have voted against the IRA’s
application. Id. §§ 5125–26.
14 BIG SANDY RANCHERIA ENTERS. V. BONTA

“not yet received” a Manufacture of Tobacco Products permit
from the United States Department of the Treasury, Alcohol
and Tobacco Tax and Trade Bureau; and (iv) Big Sandy
Importing, which was “organized to engage in the
importation of tobacco and tobacco products onto the Big
Sandy Rancheria” and obtained a Tobacco Importer permit
from the [Department of the Treasury], effective November
8, 2017, and expiring on November 7, 2022.

Through Big Sandy Importing and BSR Distributing, the
Corporation “purchases tobacco products for non-retail resale
exclusively from Indian manufacturers.”5 It is unclear from
the Corporation’s allegations whether these purchases occur
on the Rancheria or the “Indian manufacturers[’]” respective
reservations.

BSR Distributing resells these cigarettes “exclusively to
Indian tribal governmental, and Indian tribal-member,
reservation-based retailers operating within their own Indian
reservations [or] Indian Country within the geographical
limits of the State of California.” According to the
Corporation, these retailers, in turn, sell to “individual

5
The Corporation has purchased cigarettes from Azuma Corporation,
which is wholly owned by the Alturas Indian Rancheria, a federally
recognized Indian tribe in Alturas, California, and Grand River Enterprises
Six Nations (“GRE”), a Canadian corporation wholly owned by members
of the Six Nations of the Grand River, a First Nation of Canada. In
November 2018, after GRE entered into a settlement agreement with
California, agreeing to, among other things, comply with its escrow
obligations, the Corporation stopped importing cigarettes from GRE. See
Settlement Agreement Between the People of the State of California and
Grand River Enterprises Six Nations, Ltd. (Nov. 2018),
https://tinyurl.com/GRE-settlement; see also California Tobacco
Directory, https://oag.ca.gov/tobacco/directory (listing GRE-manufactured
cigarettes).
 BIG SANDY RANCHERIA ENTERS. V. BONTA 15

customers within [the] retailers’ own Indian reservation /
Indian Country.”

In 2008, before obtaining a section 17 charter, the Tribe,
doing business as “BSR Distribution,” applied for a
distributor’s license. In response, a state representative
sought to clarify whether BSR Distribution intended to “sell
to [California] retailers and wholesalers,” in which case “a
distributor’s license [would be] required.” The Corporation
does not allege that it ever responded to this letter or
otherwise followed up on the application.

Between 2011 and 2016, the Attorney General
corresponded with the Corporation and its various business
entities, raising concerns about compliance with state and
federal laws governing cigarette sales. During that period,
the Attorney General accused the Corporation of violating the
Cigarette Tax Law, the Directory Statute, and California’s
licensing requirements by selling “off-directory”
cigarettes—“without collection of state tax”—“to non-tribal
members in California,” and without a state-issued license.
The Corporation continues to distribute cigarettes in
California.

C

In July 2018, the Corporation sued the Attorney General
and the Director in their official capacities. Seeking
declaratory and injunctive relief, the complaint alleged that:
(i) federal common law and tribal sovereignty preempt the
Directory Statute as applied to the Corporation; (ii) the Indian
Trader Statutes, 25 U.S.C. §§ 261–64, do so as well;
(iii) federal common law and tribal sovereignty preempt
California’s licensing requirements as applied to the
16 BIG SANDY RANCHERIA ENTERS. V. BONTA

Corporation; (iv) the Indian Trader Statutes do so as well; and
(v) federal common law and tribal sovereignty preempt the
Cigarette Tax Law as applied to the Corporation. In
connection with its fifth cause of action, the Corporation
sought a declaration that it “has no liability” for taxes
imposed under the Cigarette Tax Law.

Both the Attorney General and the Director moved to
dismiss the fifth cause of action under the Tax Injunction Act,
28 U.S.C. § 1341, which prohibits district courts from
“enjoin[ing], suspend[ing] or restrain[ing] the assessment,
levy or collection of any tax under State law where a plain,
speedy and efficient remedy may be had in the courts of such
State.” They both acknowledged an exception to the Tax
Injunction Act available to Indian tribes (the “Indian tribes
exception”) under 28 U.S.C. § 1362, which confers federal
jurisdiction over claims “brought by any Indian tribe or band
with a governing body duly recognized by the Secretary of
the Interior.” See also Moe v. Confederated Salish &
Kootenai Tribes of the Flathead Rsrv., 425 U.S. 463, 470–74
(1976) (holding that the Indian tribes exception extends to
claims challenging state tax laws). But they countered that
the Corporation is not itself an “Indian tribe or band” and,
thus, cannot invoke the federal courts’ jurisdiction under
§ 1362.

The Corporation subsequently amended its complaint to
allege that the Corporation itself is a federally recognized
Indian tribe, rather than a “federally-chartered corporation
wholly owned by . . . a federally recognized Indian tribe.”
The Director again moved to dismiss the fifth cause of action
for lack of subject matter jurisdiction. The Attorney General
likewise moved to dismiss on that ground and to dismiss the
other four causes of action for failure to state a claim.
 BIG SANDY RANCHERIA ENTERS. V. BONTA 17

After a hearing on the motions, the district court
dismissed the fifth cause of action for lack of jurisdiction and
the remaining causes of action with prejudice for failure to
state a claim. See Big Sandy Rancheria Enters. v. Becerra,
395 F. Supp. 3d 1314, 1334 (E.D. Cal. 2019) (“Big Sandy”).
The Corporation timely appealed.

II

We review dismissals for lack of subject matter
jurisdiction and for failure to state a claim de novo. See Hyatt
v. Off. of Mgmt. & Budget, 908 F.3d 1165, 1170 (9th Cir.
2018). To determine whether the Corporation “state[s] a
claim to relief that is plausible on its face,” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (citation omitted), and “sufficient
as a legal matter to invoke the court’s jurisdiction,” we accept
the Corporation’s factual allegations as true and draw all
reasonable inferences in its favor, Leite v. Crane Co.,
749 F.3d 1117, 1121 (9th Cir. 2014).

III

The district court properly dismissed the Corporation’s
fifth cause of action on jurisdictional grounds pursuant to the
Tax Injunction Act, 28 U.S.C. § 1341, and properly declined
to apply the Indian tribes exception to the Tax Injunction
Act’s jurisdictional bar, see id. § 1362.

A

The Tax Injunction Act prohibits district courts from
“enjoin[ing], suspend[ing] or restrain[ing] the assessment,
levy or collection of any tax under State law where a plain,
speedy and efficient remedy may be had in the courts of such
18 BIG SANDY RANCHERIA ENTERS. V. BONTA

State.” Id. § 1341. It is well-settled, and the Corporation
does not dispute, that the Tax Injunction Act’s jurisdictional
bar extends to actions for declaratory relief. See California
v. Grace Brethren Church, 457 U.S. 393, 408–09 (1982)
(“[T]he principal purpose of the Tax Injunction Act [is] to
limit drastically federal district court jurisdiction to interfere
with so important a local concern as the collection of taxes.”
(internal citation and quotation marks omitted)); see also
Lowe v. Washoe County, 627 F.3d 1151, 1155 (9th Cir. 2010)
(“The Supreme Court repeatedly has characterized the [Tax
Injunction] Act as a broad jurisdictional barrier . . . that
prohibits both declaratory and injunctive relief.” (internal
citation and quotation marks omitted)). Nor does the
Corporation dispute that California provides a “plain, speedy
and efficient remedy” within the meaning of § 1341. See
Grace Brethren, 457 U.S. at 414 n.31, 417; see also Jerron
W., Inc. v. Cal. State Bd. of Equalization, 129 F.3d 1334,
1339 (9th Cir. 1997).

The only objection that the Corporation raises to the
district court’s jurisdictional determination is based on
28 U.S.C. § 1362, which grants district courts “original
jurisdiction of all civil actions” arising under federal law and
“brought by any Indian tribe or band with a governing body
duly recognized by the Secretary of the Interior
[(“Secretary”)].” Id. Section 1362 constitutes an exception
to the Tax Injunction Act. See Moe, 425 U.S. at 470–74. The
Corporation contends that as the “incorporated tribe” under
section 17 of the Indian Reorganization Act, it is an “Indian
tribe or band” for jurisdictional purposes. We disagree.
 BIG SANDY RANCHERIA ENTERS. V. BONTA 19

B

Congress enacted the Indian Reorganization Act to enable
tribes “to revitalize their self-government through the
adoption of constitutions and bylaws” under section 16 of the
IRA, see 25 U.S.C. § 5126, and “through the creation of
chartered corporations, with the power to conduct the
business and economic affairs of the tribe,” under section 17
of the IRA, see id. § 5124. Mescalero Apache Tribe v. Jones,
411 U.S. 145, 151 (1973) (“Mescalero”); see also S. Rep. No.
73-1080 (1934) (explaining that Congress enacted section 17
to “permit Indian tribes to equip themselves with the devices
of modern business organization, through forming themselves
into business corporations”).

By incorporating, a tribe may waive tribal sovereign
immunity for its business operations without having to waive
that immunity for nonbusiness liability. Cf. Linneen v. Gila
River Indian Cmty., 276 F.3d 489, 493 (2002) (explaining
that a waiver of immunity from suit in a tribe’s “corporate
charter in no way affects the sovereign immunity of the
[tribe] as a constitutional, or governmental, entity”). A tribal
corporation’s waiver of sovereign immunity “removes a
major market hurdle for a tribal business (because third
parties generally do not want to enter into contracts with
parties they cannot sue to enforce agreements or to seek tort
damages) and puts a tribal business on equal footing with
nontribal businesses.” Uniband, Inc. v. Comm’r, 140 T.C.
230, 261 (2013).

Under section 17, the Secretary “may, upon petition by
any tribe, issue a charter of incorporation to such tribe.”
25 U.S.C. § 5124. To “become operative,” the charter must
be ratified “by the governing body of such tribe.” Id.
20 BIG SANDY RANCHERIA ENTERS. V. BONTA

“Corporations chartered under section 17 must be wholly
owned by the tribe.” Felix S. Cohen’s Handbook of Federal
Indian Law (“Cohen’s Handbook”) § 4.04[3][a][ii] p. 258
(2012 ed.); see also Bureau of Indian Affairs, Example of a
Federal Charter, https://tinyurl.com/BIA-example-charter
(“[The Corporation] is a legal entity wholly owned by the
EXAMPLE TRIBE, a federally recognized Indian tribe, but
distinct and separate from the Tribe.”). The charter “may
convey to the incorporated tribe the power to purchase, take
by gift, or bequest, or otherwise, own, hold, manage, operate,
and dispose of property of every description . . ., including
the power to purchase restricted Indian lands.” 25 U.S.C.
§ 5124.

C

Based on the relevant statutory language, legislative
history, and circuit precedent narrowly construing § 1362, we
conclude that the Corporation is not an “Indian tribe or band”
within the meaning of § 1362, and that the Corporation
therefore may not invoke § 1362 to avoid the Tax Injunction
Act’s jurisdictional bar. These conclusions align with
Congress’s purpose in enacting section 17—“giving tribes the
power to incorporate,” including “enabl[ing] tribes to waive
sovereign immunity, thereby facilitating business
transactions.” Am. Vantage Cos., Inc. v. Table Mountain
Rancheria, 292 F.3d 1091, 1098 (9th Cir. 2002). In light of
this purpose, it would be odd to allow a section 17
corporation to selectively claim the benefits of sovereignty in
order to challenge a tax.
 BIG SANDY RANCHERIA ENTERS. V. BONTA 21

1

We begin by interpreting “Indian tribe or band,” bearing
in mind that “statutes passed for the benefit of Indian tribes,
such as [§] 1362, are to be liberally construed, with doubtful
expressions being resolved in the Indians’ favor.” Gila River
Indian Cmty. v. Henningson, Durham & Richardson,
626 F.2d 708, 712 (1980). “[F]ederal law ordinarily uses the
term ‘Indian tribe’ to designate a group of native people with
whom the federal government has established some kind of
political relationship or ‘recognition.’” Cohen’s Handbook
§ 3.02[2] at 132–33 (emphasis added). As stated in the
House Report accompanying the bill that became the
Federally Recognized Indian Tribe List Act of 1994, Pub. L.
No. 103-454, 108 Stat. 4791 (Nov. 2, 1994), 25 U.S.C.
§ 5131:6

[F]ederal recognition is . . . [a] formal
political act, it permanently establishes a
government-to-government relationship
between the United States and the recognized
tribe . . . . Concomitantly, it institutionalizes
the tribe’s quasi-sovereign status, along with
all the powers accompanying that status such
as the power to tax, and to establish a
separate judiciary. Finally, it imposes upon
the Secretary of the Interior specific

6
This act requires the Secretary to publish in the Federal Register a
“list of all Indian tribes which the Secretary recognizes to be eligible for
the special programs and services provided by the United States to the
Indians because of their status as Indians.” 25 U.S.C. § 5131; see also
25 C.F.R. §§ 83.5, 83.11.
22 BIG SANDY RANCHERIA ENTERS. V. BONTA

obligations to provide a panoply of benefits
and services to the tribe and its members.

H.R. Rep. No. 103-781 (1994) (emphasis added); accord
Cohen’s Handbook § 3.02[3] at 133.

Although these authorities do not construe “Indian tribe
or band” as used in § 1362, they tend to support the district
court’s construction of “Indian tribe or band” as limited to
“the Tribe in its constitutional form,” as distinct from its
corporate form. Big Sandy, 395 F. Supp. 3d at 1324. Section
1362’s legislative history provides some additional support
for that construction, explaining that the “tribe’s desire to
have a Federal forum for matters based upon Federal
questions is justified” by, inter alia, the “unique
governmental status of Indian tribes.” H.R. Rep. No. 89-
2040, at 3146 (1966) (emphasis added).

As the Corporation acknowledges, the Tribe, not the
Corporation, appears on the Federally Recognized Indian
Tribes List, see 86 Fed. Reg. 7554, 7554, as a tribe entitled to
receive benefits and services from the Department of the
Interior. Cf. Price v. Hawaii, 764 F.2d 623, 627–28 (9th Cir.
1985) (concluding that “the same factors which govern
[tribal] eligibility for federal benefits” under federal
regulations “provide some guidance for the jurisdictional
inquiry” under § 1362). Even more significantly, the
Corporation does not allege that the federal government, in
issuing the Tribe a section 17 charter, recognized the
Corporation as a distinct political entity or a government.
Nor does the Corporation allege that it may exercise
governmental functions, such as imposing taxes or
establishing a judiciary—powers that Congress has expressly
associated with tribal status. See H.R. Rep. No. 103-781; see
 BIG SANDY RANCHERIA ENTERS. V. BONTA 23

also Washington v. Confederated Tribes of Colville Indian
Rsrv., 447 U.S. 134, 152 (1980) (“Colville”) (“The power to
tax transactions occurring on trust lands and significantly
involving a tribe or its members is a fundamental attribute of
sovereignty which the tribes retain unless divested of it by
federal law or necessary implication of their dependent
status.”).

Section 17 simply does not provide for such recognition.
See 25 U.S.C. § 5124. By permitting “any tribe” to petition
for a charter of incorporation, which—once ratified “by the
governing body of such tribe”—may convey certain powers
to the “incorporated tribe,” the statute plainly distinguishes
between the tribe and the incorporated tribe. Id. (emphasis
added); see also Memphis Biofuels, LLC v. Chickasaw Nation
Indus., Inc., 585 F.3d 917, 921 (6th Cir. 2009) (“[T]he
language of Section 17 itself—by calling the entity an
‘incorporated tribe’—suggests that the entity is an arm of the
tribe.” (emphasis added)).

Because Congress enacted § 1362 (in 1966) a few decades
after enacting section 17 (in 1934), Congress could have used
the phrase “incorporated tribe” or cross-referenced section 17
in § 1362. Cf. Big Sandy, 395 F. Supp. 3d at 1325 (“Congress
was aware when it passed § 1362 that Indian tribes could act
in both sovereign and proprietary capacities.”). It did not do
so, reinforcing the conclusion that “Indian tribe or band”
under § 1362 and the “incorporated tribe” created under
section 17 are not synonymous.

2

In addition to being a poor fit with the relevant statutory
language, the Corporation’s position is difficult to square
24 BIG SANDY RANCHERIA ENTERS. V. BONTA

with our mandate to “narrowly construe[]” the § 1362
“exception to the Tax Injunction Act for Indian tribes.”
Ashton v. Cory, 780 F.2d 816, 820–21 (9th Cir. 1986). For
instance, in Navajo Tribal Utility Auth. v. Ariz. Dep’t of
Revenue, 608 F.2d 1228 (9th Cir. 1979), the Navajo Tribal
Utility Authority (“Utility Authority”), a “subordinate
economic enterprise of the Navajo Indian Tribe,” sued
Arizona in federal court to challenge state taxes passed
through to it by a company from which it purchased electrical
power. 608 F.2d at 1229–30. We concluded that the Utility
Authority could “not ground jurisdiction on [§] 1362.” Id.
at 1231. We reasoned that § 1362, by its plain terms, “makes
no provision for wholly controlled or owned subordinate
economic tribal entities.” Id. We further rejected the
argument (made by both the Utility Authority and the United
States, as amicus curiae) that because the “[Utility Authority]
is ultimately controlled by and closely related to the Tribe
itself, it should be treated as a tribe for jurisdictional
purposes.” Id. at 1232. We reasoned that “[i]f the leadership
of a tribe or band decides that litigation is necessary to protect
the rights of the tribe or band, then [§]1362 will provide
federal court access to the tribe or band when the other
jurisdictional requirements of the section are also met.” Id.

The Corporation maintains that Navajo “is not controlling
here” because Navajo “did not involve a section 17
corporation,” and the Corporation’s Board of Directors is
identical to the membership of the Tribal Council, whereas
the Utility Authority’s leadership was “not synonymous with
the Tribal Council.” Id. at 1232. The Corporation
accordingly reasons that its decision to challenge California’s
tax enforcement scheme is the functional equivalent of the
tribal leadership’s decision to do so. These arguments are
unavailing. Navajo’s observation that § 1362 “makes no
 BIG SANDY RANCHERIA ENTERS. V. BONTA 25

provision for wholly controlled or owned subordinate
economic tribal entities,” id. at 1231, easily extends to the
Corporation, regardless of its section 17 status, because the
Corporation is an economic entity wholly owned and
controlled by the Tribe. See Cohen’s Handbook
§ 4.04[3][a][ii] at 258 (“Corporations chartered under
section 17 must be wholly owned by the tribe.”).

Additionally, we agree with the district court that
Navajo’s holding “did not hinge on the overlap of interests
between the political and corporate entities.” Big Sandy,
395 F. Supp. 3d at 1325. Indeed, we acknowledged that there
may be circumstances in which a tribal corporation’s interests
are “identi[cal]” to the tribe’s, but concluded that, even then,
“the Tribe itself will be able to protect those interests” if it
decides to do so. Navajo, 608 F.2d at 1233; cf. also Agua
Caliente Band of Cahuilla Indians v. Hardin, 223 F.3d 1041,
1043, 1046 n.5 (9th Cir. 2000) (noting that the Indian tribes
exception to the Tax Injunction Act was satisfied where a
section 17 corporation and the governing tribe were co-
plaintiffs).

Navajo also requires us to reject the Corporation’s
reliance on Mescalero. There, the Mescalero Apache Tribe
appealed from unfavorable state rulings regarding its liability
for state taxes imposed on an off-reservation ski resort that
the tribe owned and operated. Mescalero, 411 U.S.
at 146–47. Reversing in part and affirming in part, the Court
observed that it was “unclear from the record whether the
Tribe has actually incorporated itself as an Indian chartered
corporation” under section 17, but remarked that “the
question of tax immunity cannot be made to turn on the
particular form in which the Tribe chooses to conduct its
business.” Id. at 157 n.13. Based on this, the Corporation
26 BIG SANDY RANCHERIA ENTERS. V. BONTA

argues that “[t]he fact that an Indian tribe has the same
federal immunity from state taxes whether acting” as a
section 16 or 17 entity is “compelling evidence that” § 1362
was intended to permit both entities to “litigate such
immunity” in federal court.

But Navajo declined to adopt that same reasoning. It
explained that Mescalero “does not assist” with the
jurisdictional question that arises when a tribal corporation
invokes § 1362 because the tribe initiated the litigation in
Mescalero and did so “in state court.” Navajo, 608 F.2d
at 1232–33 (emphasis added). Then, assuming arguendo that
Mescalero stands for the proposition that “a tax against a
tribal enterprise is a tax against the tribe itself,”we
nonetheless concluded that “[s]uch a view speaks only to the
question of tax immunity, not to the question of federal
jurisdiction.” Id. at 1233.7

3

The Corporation’s reliance on Price is likewise
misplaced. There, after assuming arguendo that a native
Hawaiian tribal group was an “Indian tribe or band,” we
focused our analysis on whether the tribe had a “governing
body duly recognized by the Secretary.” Price, 764 F.2d

7
The Corporation cites various federal tax authorities reflecting that
a section 17 tribal corporation shares the tribe’s immunity from federal
income tax. See Rev. Rul. 81-295 (1981); Rev. Rul. 94-16 (1994);
26 C.F.R. § 301.7701-1(a)(3) (“[T]ribes incorporated under section 17 of
the [IRA] . . . are not recognized as separate entities for federal tax
purposes.”); Uniband, 140 T.C. at 262 (“[T]he tribe exists, at least in part,
through its section 17 corporation.”). Like Mescalero, those authorities
“speak[] only to the question of tax immunity, not to the question of
federal jurisdiction.” Navajo, 608 F.2d at 1233.
 BIG SANDY RANCHERIA ENTERS. V. BONTA 27

at 626 (quoting § 1362). We concluded that the group could
not claim federal recognition of its governing body under
either provision of the IRA because, as Native Hawaiian
groups are excluded from the IRA “by its terms,”
Kahawaiolaa v. Norton, 386 F.3d 1271, 1280 (9th Cir. 2004),
it had not adopted a constitution and bylaws under section 16
or received a section 17 charter. Price, 764 F.2d at 626.
Because Native Hawaiian groups are not eligible for charters
under section 17, we had no occasion to decide whether
section 17 incorporation actually satisfies § 1362’s
requirement that a tribe have a federally recognized
governing body. Thus, Price is inapposite.8

IV

The Corporation’s remaining causes of action challenge
the Directory Statute and California’s licensing, reporting,
and recordkeeping requirements in connection with cigarette
distribution on two grounds: (i) applying the challenged
regulations to the Corporation’s cigarette sales to tribal
retailers on other reservations violates “principles of Indian
tribal self-governance”; and (ii) federal regulation of “trade
with Indians within Indian country” under the Indian Trader
Statutes, see 25 U.S.C. §§ 261–64, preempts the challenged
regulations as applied to the Corporation’s intertribal
wholesale cigarette business. The district court properly
dismissed both theories for failure to state a claim.

8
Given our determination that the Corporation has failed to meet the
threshold requirement of being an “Indian tribe or band,” we need not
reach the distinct question whether the Corporation has a duly recognized
governing body. In addition, because we affirm the dismissal of the fifth
cause of action for lack of jurisdiction, we express no opinion as to
whether the Corporation has stated a claim that California may not impose
any excise taxes on the Corporation’s intertribal transactions.
28 BIG SANDY RANCHERIA ENTERS. V. BONTA

A

“Long ago the [Supreme] Court departed from Mr. Chief
Justice Marshall’s view that ‘the laws of [a state] can have no
force’ within reservation boundaries.” White Mountain
Apache Tribe v. Bracker, 448 U.S. 136, 141 (1980) (quoting
Worcester v. Georgia, 31 U.S. 515, 520 (1832)). “[T]here is
no rigid rule” that resolves “whether a particular state law
may be applied to an Indian reservation or to tribal
members.” Id. at 142. Rather, there are “two independent
but related barriers to the assertion of state regulatory
authority over tribal reservations and members.” Id.

The first barrier is that state action may not burden “the
right of reservation Indians to make their own laws and be
ruled by them.”9 Id. (citation and quotation marks omitted).
“Indian tribes retain attributes of sovereignty over both their
members and their territory.” Id. (citation and quotation
marks omitted). But tribal sovereignty does not extend
“beyond what is necessary to protect tribal self-government
or to control internal relations.” Montana v. United States,
450 U.S. 544, 564 (1981).

The second barrier is preemption by federal law, as
“Congress has broad power to regulate tribal affairs.”
Bracker, 448 U.S. at 142–43; see also U.S. Const. Art. 1, § 8,
cl. 3 (empowering Congress to “regulate Commerce . . . with
the Indian Tribes”). “Ambiguities in federal law have been
construed generously in order to comport with . . . traditional
notions of sovereignty and with the federal policy of

9
This right is also known as the “right of tribal self-government.” Id.
at 143. The first amended complaint refers to this right as “tribal
sovereignty.”
 BIG SANDY RANCHERIA ENTERS. V. BONTA 29

encouraging tribal independence.” Bracker, 448 U.S.
at 143–44. Thus, “in order to find a particular state law to
have been preempted by operation of federal law,” we need
not identify “an express congressional statement to that
effect.” Id. at 144. Rather, where a state seeks to regulate
tribal activity that is already governed by a “comprehensive,”
“detailed,” and “pervasive” federal regulatory scheme, this
preemption barrier applies. Id. at 145–46, 148. “At the same
time any applicable regulatory interest of the State must be
given weight.” Id. at 144.

1

Whether state regulation infringes tribal sovereignty
depends on who is being regulated—Indians or
non-Indians—and where the activity to be regulated takes
place—on or off a tribe’s reservation. Wagnon, 546 U.S.
at 101. Based on the “who” and “where,” one of three
analytical frameworks applies.

First, “[w]hen on-reservation conduct involving only
Indians is at issue, state law is generally inapplicable, for the
State’s regulatory interest is likely to be minimal and the
federal interest in encouraging tribal self-government is at its
strongest.” Bracker, 448 U.S. at 144. Applying this rule in
Moe, 425 U.S. 463, the Supreme Court invalidated Montana’s
“vendor license fee” as “applied to a reservation Indian
conducting a cigarette business for the Tribe on reservation
land; and [the state’s] cigarette sales tax, as applied to on-
reservation sales by Indians to Indians.” Id. at 480–81; see
also, e.g., Okla. Tax Comm’n v. Chickasaw Nation, 515 U.S.
450, 454–55 (1995) (invalidating motor fuels tax as applied
to tribal retail stores on tribal trust land); McClanahan v. Ariz.
Tax Comm’n, 411 U.S. 164, 165–66 (1973) (invalidating a tax
30 BIG SANDY RANCHERIA ENTERS. V. BONTA

on income earned from reservation sources by tribal members
residing on the reservation).

Second, when a state “asserts authority over the conduct
of non-Indians engaging in activity on the reservation,”
courts must conduct “a particularized inquiry into” and
balance the “state, federal, and tribal interests at stake.”
Bracker, 448 U.S. at 145 (emphasis added). Under Bracker’s
balancing test, “State jurisdiction is preempted by the
operation of federal law if it interferes or is incompatible with
federal and tribal interests reflected in federal law, unless the
state interests at stake are sufficient to justify the assertion of
state authority.” New Mexico v. Mescalero Apache Tribe,
462 U.S. 324, 334 (1983). When “a tribe plays an active role
in generating activities of value on its reservation” with the
aid of non-Indian entities, it has a “strong interest in
maintaining those activities free from state interference,” in
contrast to when tribes “simply allow the sale of items such
as cigarettes to take place on their reservations.” Gila River
Indian Cmty. v. Waddell, 967 F.2d 1404, 1410 (9th Cir.
1992).

The Court has “balanced federal, state, and tribal interests
in diverse contexts,” including where—as here—the
challenged regulations are not themselves taxes. Chickasaw
Nation, 515 U.S. at 458. The Court has upheld such
regulations where they are “minimal burden[s] designed to
avoid the likelihood that in [their] absence non-Indians
purchasing from the tribal seller will avoid payment of a
concededly lawful tax.” Moe, 425 U.S. at 483. These
permissible burdens have included requiring on-reservation
tribal retailers to collect and remit cigarette taxes from non-
Indian purchasers, id., and requiring such retailers to maintain
records regarding tax-exempt sales, see Colville, 447 U.S. at
 BIG SANDY RANCHERIA ENTERS. V. BONTA 31

160 (“[T]he Tribes have failed to demonstrate that
[Washington’s] recordkeeping requirements for exempt sales
are not reasonably necessary as a means of preventing
fraudulent transactions.”).

Third, because “state power over Indian affairs is
considerably more expansive” “outside the reservation . . .
than it is within reservation boundaries,” id. at 162, when a
tribe or tribal members act outside their reservation, they are
subject to “non-discriminatory state law otherwise applicable
to all citizens of the State,” “[a]bsent express federal law to
the contrary.” Mescalero, 411 U.S. at 148–49; see also
Bracker, 448 U.S. at 144 n.11 (reaffirming principle).
Applying this rule, the Supreme Court has upheld a state’s
taxation of income derived from a tribe’s off-reservation ski
resort, Mescalero, 411 U.S. at 148–49, and a state cigarette
tax on Indian purchasers who were “not members of the
Tribe” on whose reservation the sales took place, Colville,
447 U.S. at 161. As to the latter, the Court has explained that
taxing such purchasers typically does not “contravene the
principle of tribal self-government” because “[f]or most
practical purposes those Indians stand on the same footing as
non-Indians resident on the reservation.” Id. Absent
evidence that such nonmembers “have a say in tribal affairs
or significantly share in tribal disbursements,” “the State’s
interest in taxing these purchasers outweighs any tribal
interest that may exist in preventing the State from imposing
its taxes.” Id. The Court has warned that balancing interests
under Bracker when the regulated activity is off-reservation
is “inconsistent with the special geographic sovereignty
concerns that gave rise to that test.” Wagnon, 546 U.S.
at 112–13.
32 BIG SANDY RANCHERIA ENTERS. V. BONTA

2

We next turn to the specific federal law that the
Corporation identifies as preempting all the challenged state
regulations: the Indian Trader Statutes (the “Statutes”),
25 U.S.C. §§ 261–64. Since 1790, the federal government
has sought to regulate persons trading with Indians to
“prevent fraud and imposition upon” the latter. Cent. Mach.
Co. v. Ariz. Tax Comm’n, 448 U.S. 160, 162 (1980)
(quotation marks omitted); see also Dep’t of Tax’n & Fin. of
New York v. Milhelm Attea & Bros., Inc., 512 U.S. 61, 70
(1994). Under the present regulatory scheme, the
“Commissioner of Indian Affairs [(“Commissioner”)] shall
have the sole power . . . to appoint traders to the Indian
tribes” and to issue regulations “specifying the kind and
quantity of goods and the prices at which such goods should
be sold to the Indians.” 25 U.S.C. § 261. “Any person
desiring to trade with the Indians on any Indian reservation”
must follow regulations that the Commissioner “may
prescribe for the protection of said Indians.” Id. § 262. The
Statutes further authorize the President “to prohibit the
introduction of goods, or any particular article, into the
country belonging to any Indian tribe,” id. § 263, and set forth
sanctions for “any person other than an Indian of the full
blood” who attempts to trade “on any Indian reservation”
“without [a] license,” id. § 264.

Under the Statutes, “the Commissioner has promulgated
detailed regulations” regarding “who may qualify to be a
trader and how he shall be licensed; penalties for acting as a
trader without a license; conditions under which government
employees may trade with Indians; articles that cannot be
sold to Indians; and conduct forbidden on a licensed trader’s
premises.” Warren Trading Post Co. v. Ariz. State Tax
 BIG SANDY RANCHERIA ENTERS. V. BONTA 33

Comm’n, 380 U.S. 685, 689 (1965); see also 25 C.F.R.
§§ 140.1–.26. Only one implementing regulation, however,
addresses traders’ on-reservation cigarette sales, and it
prohibits such sales to “any Indian under 18 years of age.”
25 C.F.R. § 140.17.

On two occasions, the Supreme Court has deemed the
Statutes preemptive with respect to state taxation of traders
to Indian tribes. In Warren Trading Post, the Court
concluded that the Statutes barred Arizona from imposing a
gross sales tax on a non-Indian retail trading business
“federally licensed” as an “Indian trader with respect to sales
made to reservation Indians on the reservation.” 380 U.S. at
691–92. The Court explained that the tax could “disturb and
disarrange the statutory plan Congress set up in order to
protect Indians against prices deemed unfair or unreasonable
by the Indian Commissioner.” Id. at 691. Later, the Court
held that Arizona could not tax the gross receipts of a non-
tribal corporation’s on-reservation tractor sales to a tribal
entity, even though the corporation was not a federally
licensed Indian trader. See Cent. Mach., 448 U.S. at 164–65.
The Court noted, however, that the Bureau of Indian Affairs
had expressly approved the contract for sale and the tribe’s
budgetary allocation for the tractor purchases. Id. at 161, 165
n.4. In the Court’s view, it was “irrelevant that [the
corporation] was not a licensed Indian trader” because it is
“the existence of the Indian trader statutes . . ., and not their
administration, that preempts the field of transactions with
Indians occurring on reservations.” Id. at 165.

Subsequent Supreme Court cases have taken a narrower
view of the Statutes’ preemptive effect. For instance, in
upholding Washington’s taxation of non-Indians that
purchase cigarettes from on-reservation tribal retailers, the
34 BIG SANDY RANCHERIA ENTERS. V. BONTA

Court clarified that the Statutes “incorporate a congressional
desire comprehensively to regulate businesses selling goods
to reservation Indians . . . , but no similar intent is evident
with respect to sales by Indians to nonmembers of the Tribe.”
Colville, 447 U.S. at 155–56. The Court rejected the notion
that the Statutes “go[] so far as to grant tribal enterprises
selling goods to nonmembers an artificial competitive
advantage over all other businesses in a State.” Id. at 155.

And most recently, as the Corporation acknowledges, the
Court retreated from Warren Trading Post’s suggestion that
“no state regulation of Indian traders can be valid,” Milhelm,
512 U.S. at 71; see also id. at 74 (rejecting the proposition
that the Indian Trader Statutes “bar[] any and all state-
imposed burdens on Indian traders”). In Milhelm, non-Indian
“wholesalers licensed by the Bureau of Indian Affairs . . . to
sell cigarettes to reservation Indians” contended that the
Statutes preempted various state regulations, including a limit
on the number of tax-free cigarettes that they could sell to
tribes and reservation retailers as well as requirements that
they “hold state licenses,” “keep records reflecting the
identity of the buyer in each tax-exempt sale[,] and make
monthly reports to [New York] on all such sales.” Id. at
66–67. The Court clarified that the Statutes preempt state
regulatory authority only insofar as the state seeks to “dictate
‘the kind and quantity of goods and the prices at which such
goods shall be sold to the Indians.’” Id. at 75 (quoting
25 U.S.C. § 261). New York’s quantity limitation on tax-free
cigarettes did not have this impermissible purpose because
“Indian traders remain[ed] free to sell Indian tribes and
retailers as many cigarettes as they wish[ed], of any kind and
at whatever price.” Id.
 BIG SANDY RANCHERIA ENTERS. V. BONTA 35

Applying the reasoning of Moe and Colville, even though
those cases “dealt most directly with claims of interference
with tribal sovereignty,” id. at 74, the Court upheld the other
challenged regulations as “minimal burdens reasonably
tailored to the collection of valid taxes from non-Indians,” id.
at 73–74, 76. It explained that “[i]t would be anomalous” to
permit states, under Moe and Colville, to “impose tax
collection and bookkeeping burdens on reservation retailers
who are themselves enrolled tribal members,” but to hold that
the Statutes bar “similar burdens . . . on wholesalers who
often (as in this case) are [non-Indian].” Id. at 74. The Court
reasoned that “[j]ust as tribal sovereignty does not completely
preclude States from enlisting tribal retailers to assist
enforcement of valid state taxes, the Indian Trader Statutes do
not bar the States from imposing reasonable regulatory
burdens upon Indian traders for the same purpose.” Id.

B

Applying these principles, we affirm the dismissal of the
Corporation’s preemption challenges to the Directory Statute
and California’s licensing, recordkeeping, and reporting
requirements.

1

Tribal sovereignty principles do not preclude California
from regulating the Corporation’s intertribal wholesale
cigarette sales under the challenged regulations.

The Corporation concedes that it leaves the Rancheria to
sell cigarettes to tribal retailers on other reservations. The
Corporation does not allege that the challenged regulations
are discriminatory nor, for the reasons stated below, does the
36 BIG SANDY RANCHERIA ENTERS. V. BONTA

Corporation plausibly allege that federal law bars the
Directory Statute’s application to the Corporation. See
Mescalero, 411 U.S. at 148–49. The Corporation therefore
fails to state a claim that the challenged regulations, as
applied to its off-reservation conduct, infringe tribal self-
governance. See id. at 148, 153 (explaining that “off-
reservation activities are within the reach of state law” so
long as the state law is not discriminatory and “[a]bsent
express federal law to the contrary”); see also King Mountain
Tobacco, 768 F.3d at 993 (“Mescalero requires that we
determine whether Washington’s escrow statute is
discriminatory and whether King Mountain’s activities go
beyond the boundaries of the reservation.”).

The Corporation does not remain “on reservation” for
purposes of the tribal-sovereignty analysis by selling
cigarettes on other tribes’ reservations. The Corporation’s
contention that it undertakes its sales activities entirely in
“Indian country” disregards that “[t]here is a significant
geographical component to tribal sovereignty,” Bracker, 448
U.S. at 151, and that “Indian tribes are unique aggregations
possessing attributes of sovereignty over both their members
and their territory.” United States v. Mazurie, 419 U.S. 544,
557 (1975) (emphasis added). The Corporation fails to
plausibly allege that California hinders the Tribe’s ability to
govern its territory and members by prohibiting the
Corporation, an unlicensed distributor, from selling off-
directory cigarettes outside the Rancheria. See Mescalero,
411 U.S. at 157 (explaining that a tribe does not have
“expansive immunity from ordinary” regulation that applies
to “businesses throughout the State” when that tribe travels
“beyond its reservation borders for the purpose of carrying on
a business enterprise” (emphasis added)).
 BIG SANDY RANCHERIA ENTERS. V. BONTA 37

We therefore join the Tenth Circuit and Oklahoma
Supreme Court in treating tribe-to-tribe sales made outside
the tribal enterprise’s reservation as “off reservation” activity
subject to non-discriminatory state laws of general
application. See Muscogee (Creek) Nation v. Pruitt, 669 F.3d
1159, 1172 (10th Cir. 2012) (“[W]hen Indians . . . act outside
of their own Indian country . . ., including within the Indian
country of another tribe, they are subject to non-
discriminatory state laws otherwise applicable to all citizens
of the state.” (emphasis added));10 Edmondson v. Native
Wholesale Supply, 237 P.3d 199, 215–16 (Okla. 2010)
(concluding that “tribal to tribal transactions” that
“extend[ed] beyond the boundaries of any single
‘reservation’” constituted “off-reservation conduct”), cert.
denied, 563 U.S. 960 (2011), abrogated on other grounds by
Bristol-Meyers Squibb Co. v. Super. Ct., 137 S. Ct. 1773
(2017).

In these circumstances, the district court properly
declined to balance federal, state, and tribal interests under
Bracker. See Big Sandy, 395 F. Supp. 3d at 1328–30.
Bracker balancing is appropriate when a tribe or tribal entity
challenges a state’s regulation of transactions between the
tribe and nonmembers on the tribe’s reservation. See, e.g.,
Bracker, 448 U.S. at 141 (balancing interests where a tribe

10
Like the tribe in Muscogee, where the Tenth Circuit rejected a
preemption challenge to Oklahoma’s directory statute, see 669 F.3d
at 1179–80, the Corporation does not allege that California has enforced
or threatened to enforce the Directory Statute on the Rancheria—for
example, by seizing contraband cigarettes there. Cf. Muscogee, 669 F.3d
at 1180 & n.9 (declining to perform Bracker balancing where the tribe
alleged enforcement and threatened enforcement of the directory statute
outside of its reservation, e.g., the seizure of cigarettes “in transit to the
Indian country of the Nation”).
38 BIG SANDY RANCHERIA ENTERS. V. BONTA

intervened as a plaintiff to challenge Arizona’s taxation of a
non-Indian company that provided the tribe logging services
on the tribe’s reservation); California v. Cabazon Band of
Mission Indians, 480 U.S. 202, 216 (1987) (balancing
interests where tribes challenged California’s attempt to
prohibit them from offering non-Indians high stakes bingo
games on their reservations); Gila River Indian Cmty.,
967 F.2d at 1407, 1410–11 (balancing interests where a tribe
challenged Arizona’s taxation of non-Indian entity that
operated performing arts center on the tribe’s reservation).

Here, the Corporation does not allege that California
seeks to regulate its transactions with non-Indians or
nonmembers on the Rancheria in a way that infringes on the
Tribe’s self-governance. Rather, the Corporation claims that
the Directory Statute, as applied to the Corporation’s sales
activities off the Rancheria, infringes the Tribe’s self-
governance. For the reasons already stated, this claim is not
cognizable under Mescalero, 411 U.S. at 148–49.

2

The Corporation has likewise failed to state a claim that
the Indian Trader Statutes preempt any of the challenged
regulations as applied to its intertribal wholesale cigarette
business.

a

As a preliminary matter, the complaint is devoid of any
allegations that the federal government has exercised any
shred of oversight—still less “comprehensive,” “detailed,” or
“pervasive” oversight—with respect to the Corporation’s
alleged Indian trading. Bracker, 448 U.S. at 145–46, 148.
 BIG SANDY RANCHERIA ENTERS. V. BONTA 39

Accordingly, the transactions that the Corporation seeks to
immunize from state regulation are fundamentally different
from the transactions that have led the Court to deem the
Statutes preemptive of state regulation as applied to Indian
traders. Specifically, the Corporation does not allege that the
federal government has licensed it as an Indian trader or
otherwise approved its cigarette sales to tribal retailers on
other reservations. See Warren Trading Post, 380 U.S.
at 691; Cent. Mach., 448 U.S. at 165 n.4. Moreover, it strains
credulity to deem a lone federal regulation that prohibits on-
reservation cigarette sales to Indian minors, see 25 C.F.R.
§ 140.17, “comprehensive” and preemptive federal regulation
of cigarette trade within Indian country. Warren Trading
Post, 380 U.S. at 688–89.

b

The Supreme Court’s reasoning in Milhelm further
requires dismissal of the Corporation’s claims that the
Statutes preempt the Directory Statute and California’s
licensing, recordkeeping, and reporting requirements.

(1)

First, the Corporation’s allegation that the Directory
Statute impermissibly “specifies the kind and price of goods
that may be sold to Indians by limiting the cigarettes that the
Tribe may sell . . . to cigarettes of a tobacco product
manufacturer or brand family included in the directory” fails
under Milhelm. The Directory Statute prohibits the
Corporation from selling certain tobacco products based
solely on the product manufacturer’s violation of state law
and without regard to the type, price, or quantity of the
product itself. So long as the Corporation sources its
40 BIG SANDY RANCHERIA ENTERS. V. BONTA

cigarettes from manufacturers that comply with their escrow
obligations, it “remain[s] free to sell Indian tribes and
retailers as many cigarettes” as it wishes, “of any kind, and at
whatever price.” Milhelm, 512 U.S. at 75.

To be sure, non-participating manufacturers may have an
economic incentive to pass the cost of escrow deposits on to
their consumers, such that the Corporation’s compliance with
the Directory Statute may very well increase the cost of the
cigarettes that it sells. Notwithstanding this potential
downstream effect on pricing, the Directory Statute, unlike
the preempted taxation in Warren Trading Post and Central
Machinery, does not directly affect the price that the
Corporation charges its consumers.

In sum, the Corporation fails to plausibly allege that the
Directory Statute “disturb[s] and disarrange[s] the statutory
plan to protect Indians against prices deemed unfair or
unreasonable,” Warren Trading Post, 380 U.S. at 691; see
also 25 C.F.R. § 140.22 (describing federal government’s
“duty” to ensure that prices charged to Indians are “fair and
reasonable”), or that it impermissibly seeks to “dictate ‘the
kind and quantity of goods and the prices at which such
goods shall be sold to the Indians.’” Milhelm, 512 U.S. at 75
(quoting 25 U.S.C. § 261).

(2)

The Corporation also fails to state a claim that the
Statutes preempt California’s licensing, recordkeeping, and
reporting requirements because it does not plausibly allege
that those requirements are not “reasonable regulatory
burdens” imposed on Indian traders “to assist enforcement of
valid state taxes.” Id. at 74; see also Colville, 447 U.S. at 160
 BIG SANDY RANCHERIA ENTERS. V. BONTA 41

(placing the burden on the tribe to show that the challenged
regulations are “not reasonably necessary as a means of
preventing fraudulent transactions”). Valid state taxes
include the cigarette excise taxes that California seeks to
collect from customers who purchase cigarettes on
reservations to which they do not belong. See Chemehuevi,
474 U.S. at 11–12; see also Colville, 447 U.S. at 156–59.

These minimal burdens may be imposed on Indian
businesses that, like the Corporation, purport to engage only
in tax-exempt transactions. See Colville, 447 U.S. at 159–60
(reversing the district court, which had struck down
recordkeeping requirements with respect to all on-reservation
cigarette sales by Indian retailers after finding that none of
these retailers’ sales were taxable); Milhelm, 512 U.S. at 76
(upholding New York law requiring that cigarette wholesalers
making on-reservation cigarette sales to tribal retailers
“maintain detailed records on tax-exempt transactions”
(emphasis added)).

The Corporation does not plausibly allege that
California’s licensing, recordkeeping, and reporting
requirements, as applied to its sales to nonmember Indian
retailers, are excessive burdens. As the district court noted,
tax enforcement schemes “with even more demanding
requirements than those of California have been repeatedly
upheld by the Supreme Court as imposing only a ‘minimal
burden.’” Big Sandy, 395 F. Supp. 3d at 1332–33; see also
Milhelm, 512 U.S. at 64–67, 76 (upholding state laws
requiring “[w]holesale distributors of tax-exempt cigarettes”
to “hold state licenses,” maintain records regarding tax-
exempt transactions, and adhere to quantity limitations on the
untaxed cigarettes that they could sell to reservation
retailers); Colville, 447 U.S. at 159–60 (upholding
42 BIG SANDY RANCHERIA ENTERS. V. BONTA

recordkeeping requirements, which required Indian
smokeshop operators to “keep detailed records of both
taxable and nontaxable transactions,” including, in connection
with the latter, “the names of all Indian purchasers, their
tribal affiliations, the Indian reservations within which sales
are made, and the dollar amount and dates of sales”).

Indeed, as the Supreme Court reasoned in Milhelm,
cigarette wholesalers, like the Corporation—which must
“maintain detailed records” regarding their transactions—are
generally less burdened than Indian retailers whom the state
may require to do the same under Colville because
“wholesale trade typically involves a comparatively small
number of large-volume sales.” 512 U.S. at 74. The
Corporation does not allege otherwise.

In asserting that California’s licensing, recordkeeping,
and reporting requirements are not “designed to prevent non-
Indians from evading taxes,” the Corporation disregards the
Legislature’s findings to the contrary. See Cal. Bus. & Prof.
Code §§ 22970.1(c) (“The enforcement of California’s
cigarette and tobacco products tax laws is necessary to collect
millions of dollars in lost tax revenues each year.”),
22970.1(d) (finding that licensing every person in the
distribution chain would “help stem the tide of untaxed
distributions and illegal sales”). And as the Attorney General
explained below, “[e]ven if [the Corporation] does not owe
the tax, or [the Corporation’s] customers do not owe the tax,
the State’s licensing and reporting requirements allow [the
State] to see if someone owes the tax, and then, if they do, to
collect it.” Big Sandy, 395 F. Supp. 3d at 1332.

Just because the state-mandated “reports would not
identify [the Corporation’s] retail customers” or any
 BIG SANDY RANCHERIA ENTERS. V. BONTA 43

information about those retailers’ downstream transactions,
i.e., “the information necessary to ascertain the products’
ultimate taxability,” that does not make California’s
requirements unreasonable. “[A]lthough the Corporation’s
reports would not list the identity of its customers, each of its
customers’ filings would list the Corporation as the seller,
thereby allowing the State to compare the Corporation’s
aggregate monthly outflow with the monthly inflow reported
by its customers, and to follow up in the event of
discrepancies.” Id. Morever, wholesale distributors must
“maintain and make available for examination underlying
invoices and other records supporting the required
reports”—that is, “exactly the kind of information that would
aid . . . in tracking [the Corporation’s] downstream sales.”
Id.; see also Cal. Bus. & Prof. Code § 22978.5.

The Corporation likewise fails to state a claim that the
licensing, recordkeeping, and reporting requirements are
generally “incompatible with the federal regulation of trade
with Indians in Indian country.” The Corporation does not
allege, for instance, that the challenged requirements “could
. . . disturb and disarrange the statutory plan” by imposing an
“economic burden” on the Corporation that “would
eventually be passed on to” tribal purchasers in the form of
either pricier, fewer, or shoddier products. Bracker, 448 U.S.
at 152; see also Cent. Mach., 448 U.S. at 162 (noting that the
seller had added the amount of the challenged state tax,
nearly $3000, to the price of the tractors purchased by a tribal
entity on the reservation). Nor does the Corporation plausibly
allege that the challenged regulations, which enable the state
to monitor and police statewide cigarette distribution, usurp
or interfere with the Commissioner’s “sole power and
authority to appoint traders to the Indian tribes.” 25 U.S.C.
§ 261. The Corporation does not, for example, attribute its
44 BIG SANDY RANCHERIA ENTERS. V. BONTA

failure to apply for an Indian trader license under 25 U.S.C.
§ 262 and 25 C.F.R. § 140.9 to California’s regulatory
scheme or contend that holding the licenses required under
California law would somehow prevent it from obtaining an
Indian trader license under federal law.

V

For the foregoing reasons, we affirm the district court’s
dismissal for lack of subject matter jurisdiction and for failure
to state a claim.

AFFIRMED.

BERZON, Circuit Judge, concurring in part and acquiescing
dubitante in part:

I join the majority opinion in affirming the dismissal of
Big Sandy Rancheria Enterprises’ (“BSRE” or “the
Corporation”) first four claims. Where I differ from the
majority is in the certainty that BSRE is not an “Indian tribe
or band” for jurisdictional purposes. 28 U.S.C. § 1362. Nor
am I certain, however, that BSRE is an “Indian tribe or band.”
Because I have doubts about the majority’s conclusion but am
not prepared to say it is certainly wrong, I concur in the
judgment but write separately, dubitante, as to Part III,
affirming the dismissal of BSRE’s fifth claim for lack of
jurisdiction. See United States v. Campbell, 937 F.3d 1254,
1259–61 (9th Cir. 2019) (Berzon, J., dubitante); United States
v. $11,500.00 in U.S. Currency, 869 F.3d 1062, 1076–77 (9th
Cir. 2017) (Hurwitz, J., concurring in part and acquiescing
dubitante in part). As the matter of the tribal status of
 BIG SANDY RANCHERIA ENTERS. V. BONTA 45

corporations incorporated under § 17 of the Indian
Reorganization Act (IRA), 25 U.S.C. § 5124, is likely to be
of continuing significance and the pertinent case law is scant,
it seems worth spelling out some of my concerns even
though, in the end, they are not of sufficient weight to
convince me to reject the majority’s ultimate holding.

Under the “Indian Tribes exception,” any action that
could be brought in federal court under 28 U.S.C. § 1362 is
exempt from the Tax Injunction Act’s command that
challenges to state law be brought first in state court. See
28 U.S.C. § 1341; Moe v. Confederated Salish & Kootenai
Tribes of the Flathead Rsrv., 425 U.S. 463, 474–75 (1976);
Barona Band of Mission Indians v. Yee, 528 F.3d 1184, 1187
n.1 (9th Cir. 2008). Section 1362 confers federal jurisdiction
over “all civil actions, brought by any Indian tribe or band
with a governing body duly recognized by the Secretary of
the Interior,” arising under federal law. 28 U.S.C. § 1362.
Whether this provision encompasses the current suit turns on
the scope of the term “any Indian tribe or band.”

As the majority points out, Maj. Op. at 22, our analysis of
this question must be guided by the canon that “statutes
passed for the benefit of Indian tribes, such as [§] 1362, are
to be liberally construed, with doubtful expressions being
resolved in the Indians’ favor.” Gila River Indian Cmty. v.
Henningson, Durham & Richardson, 626 F.2d 708, 712
(1980); see Bryan v. Itasca County, 426 U.S. 373, 392 (1976).
In this case, construing the statute “liberally . . . in the
Indians’ favor” with regard to any “doubtful expressions”
would mean holding that the statute includes tribes
incorporated under § 17 of the IRA, like BSRE, and that the
district court therefore has jurisdiction to consider BSRE’s
claim under the Tax Injunction Act. The key question, then,
46 BIG SANDY RANCHERIA ENTERS. V. BONTA

is whether the scope of “any Indian tribe or band” in § 1362
is the type of “doubtful expression[]” to which the Indian
canon of construction applies.

Case law construing either § 1362 or § 17 is extremely
sparse, and Congress has provided little guidance on how the
statutes’ terms are to be construed. The question whether
§ 17 corporations are an “Indian tribe or band” for
jurisdictional purposes appears to have never been squarely
addressed by our circuit or by any other federal court of
appeals. Faced with an untrodden statutory and precedential
backdrop, the majority has reached a conclusion that is
plausible and perhaps correct. I write separately, however,
because the majority’s conclusion is not the only one that
could be drawn against the pertinent backdrop.

First, I view the majority’s focus on whether the
Corporation, itself and independently, is a federally
recognized tribe as misguided. See Maj. Op. at 22–25. It is
undisputed that Big Sandy Rancheria is a federally
recognized tribe. The relevant question is therefore not
whether BSRE is federally recognized for the purposes of
§ 1362, but whether BSRE, in its incorporated form, is
identical with Big Sandy Rancheria for jurisdictional
purposes.

Framed in this way, I am not certain that BSRE’s position
that § 17 corporations are “Indian tribe[s] or band[s]” for
jurisdictional purposes is, as the majority has it, a “poor fit
with the relevant statutory language.” Maj. Op. at 23.
Section 17 of the IRA empowers the Secretary of the Interior
to “upon petition by any tribe, issue a charter of incorporation
to such tribe,” provided that “such charter shall not become
operative until ratified by the governing body of such tribe.”
 BIG SANDY RANCHERIA ENTERS. V. BONTA 47

25 U.S.C. § 5124 (emphasis added). The § 17 charter “may
convey to the incorporated tribe” the power to purchase and
alienate property, including restricted Indian lands. Id.
(emphasis added).

This statutory language does, as the majority points out,
distinguish between the Tribe’s governing body and its
corporate entity. But by issuing the corporate charter “to
such tribe” and referring to a § 17 corporation as the
“incorporated tribe,” the statute can be read to identify § 17
corporations as also “tribe[s],” whether or not distinct entities
from the tribe as organized in its governmental capacity.
Section 1362—enacted, as the majority points out, several
decades after § 17, see Pub. L. 89-635, § 1, Oct. 10, 1966, 80
Stat. 880 (codified at 28 U.S.C. § 1362)—does not limit its
grant of jurisdiction to suits brought by the governing body of
an Indian tribe or band, nor to tribes organized under the
specific structures set out in the IRA. A plausible reading of
the statute’s silence is that § 1362 encompasses tribal entities
regardless of the organizational structure or capacity in which
they bring suit.

It is this reasoning that guided the only other Ninth
Circuit opinion to consider whether § 17 corporations qualify
for the Tax Injunction Act’s “Indian tribes exception.” In
White Mountain Apache Tribe v. Williams, 810 F.2d 844 (9th
Cir. 1985), the White Mountain Apache Tribe, in its capacity
as a § 17 corporation, brought a § 1983 claim in federal court
challenging Arizona’s power to tax a joint venture between
the incorporated tribe and a private timber operation. See id.
at 846–47; id. at 865 (B. Fletcher, J., dissenting). The
majority concluded that the Tribe had failed to state a claim
under § 1983; it did not consider whether the court had
jurisdiction to consider any such claim.
48 BIG SANDY RANCHERIA ENTERS. V. BONTA

In dissent, however, Judge Fletcher concluded that it did.
Because she would have held that the Tribe had asserted a
viable § 1983 claim, she considered whether the incorporated
tribe was entitled to bring suit based on those claims and, if
so, whether any such action was “barred in the federal courts”
by the Tax Injunction Act. Id. at 865 (Fletcher, J.,
dissenting). Judge Fletcher reasoned that, because “[t]he
plain language of section 1362 . . . does not distinguish
between the ‘governmental’ tribe provided for in IRA section
16 and the ‘incorporated tribe’ provided for in section 17,”
the § 17 entity was an “Indian tribe or band” under § 1362.
Id. at 868 (quoting 25 U.S.C. §§ 476–77 (now codified at
25 U.S.C. § 5123–24)). So, reviewing the same statutory
text, Judge Fletcher drew the opposite conclusion to that
drawn by the majority here.

Likewise, Judge Fletcher in White Mountain Apache took
the opposite view from that of the majority here as to other
indicia of congressional intent. She noted first that “[w]hen
Congress passed section 1362 in 1966, it was fully aware that
Indian tribes could act in both sovereign and proprietary
capacities,” and then concluded that the “failure to limit
explicitly the scope of section 1362 to actions brought by
tribes in their governmental capacity suggests that [Congress]
intended the provision to encompass actions brought by tribes
in their corporate capacity as well.” Id. The majority here
draws the exact opposite conclusion from the same legislative
history. See Maj. Op. at 22–23. That the text and legislative
history of the jurisdictional statute have been interpreted by
different members of this court as commanding directly
opposite outcomes suggests that, at the very least, § 1362’s
reference to “Indian tribe[s] or band[s]” may be the type of
doubtful expression entitled to construction favorable to the
tribe.
 BIG SANDY RANCHERIA ENTERS. V. BONTA 49

Nor do I find, in my own review of the legislative history,
a persuasive answer to the question whether Congress
intended § 1362’s application to “Indian tribe[s] or band[s]”
to include § 17 corporations. As the Supreme Court pointed
out in Moe, Congress’s purpose in enacting § 1362 was “to
open the federal courts to the kind of claims that could have
been brought by the United States as trustee, but for whatever
reason were not so brought.” 425 U.S. at 472. The relevant
case law does not paint a crystal-clear picture of what actions
could be brought by the United States as trustee. But the
United States appears to have represented the interests of § 17
incorporated tribes in at least one legal action. See Md. Cas.
Co. v. Citizens Nat. Bank of W. Hollywood, 361 F.2d 517,
518–19 (5th Cir. 1966). The federal government is also
empowered to hold lands in trust for § 17 incorporated tribes.
See Carlson v. Tulalip Tribes of Wash., 510 F.2d 1337, 1339
(9th Cir. 1975). And, as Moe held, the United States is
empowered to “seek[] to enjoin the enforcement of a state tax
law” to vindicate tribal interests. 425 U.S. at 474. Against
this limited case law, a plausible inference from the statute’s
purpose and ambiguous text is that Congress intended to open
federal courts to claims vindicating the interests of tribes in
their § 17 incorporated capacity.

Third, I believe the majority overstates our mandate to
“narrowly construe[]” the § 1362 exception to the Tax
Injunction Act. Maj. Op. at 24 (quoting Ashton v. Cory,
780 F.2d 816, 820 (9th Cir. 1986)). Ashton’s conclusion that
the § 1362 exception to the Act “has been narrowly construed
by our court” relied exclusively on cases “refus[ing] to extend
the exception to include individual members of Indian tribes”
suing in a personal capacity. Id. at 820–21 (emphasis added)
(citing Comenout v. Washington, 722 F.2d 574, 577 (9th
Cir.1983); Dillon v. Montana, 634 F.2d 463, 469 (9th
50 BIG SANDY RANCHERIA ENTERS. V. BONTA

Cir.1980)). Its holding has been applied only once since, in
a case declining to apply the exception to a private enterprise
owned by tribal members. See Amarok Corp. v. Nev. Dep’t
of Tax’n, 935 F.2d 1068, 1069–71 (1991).

I do not read these cases as sanctioning in general a
cramped construction of the jurisdictional statute. Rather, the
construction of § 1362 in the cited cases reflects a
straightforward understanding of the distinction between a
sovereign entity and its citizens. A court’s refusal to apply
the jurisdictional statute to private citizens and corporations
does not narrow the statutory definition of “Indian tribe or
band,” any more than a refusal by the Supreme Court to assert
original jurisdiction over a suit by a private citizen of a state
would constitute a narrow construction of Art. III, § 2, cl. 2
of the U.S. Constitution, which extends the Court’s original
jurisdiction to suits in which states are a party.

Navajo Tribal Util. Auth. v. Arizona Dep’t of Revenue,
608 F.2d 1228 (9th Cir. 1979), does, however, present a
wrinkle for a more forgiving reading of the case law. As the
majority points out, Navajo rejected an expansive reading of
the jurisdictional statute in part on the ground that “[i]f the
leadership of a tribe or band decides that litigation is
necessary,” then that leadership is free to bring suit itself
under § 1362. Id. at 1232. In the present case, I remain
puzzled as to why the Big Sandy Rancheria tribal council—a
body that, by the § 17 charter, is identical in its membership
to the BSRE Board—chose not to sidestep the jurisdictional
question altogether by bringing suit qua tribal council. But
even so, that the tribal council could have initiated suit in its
governmental capacity does not necessarily mean that, as a
statutory matter, the same body is foreclosed from initiating
a federal suit in its incorporated form. Cf. Mescalero Apache
 BIG SANDY RANCHERIA ENTERS. V. BONTA 51

Tribe v. Jones, 411 U.S. 145, 158 n.13 (1973) (“[T]he
question of tax immunity cannot be made to turn on the
particular form in which the Tribe chooses to conduct its
business.”).

In the end, I am not convinced that Navajo’s
interpretation of the jurisdictional statute squarely forecloses
federal jurisdiction here. Navajo held only that § 1362 “does
not cover subordinate, semi-autonomous tribal entities.”
608 F.2d at 1231.1 That case concerned the Navajo Nation’s
public utility company, which enjoyed a “substantial”
relationship with the tribe and over which the tribal
government “exercise[d] some measure of control.” Id.
at 1232. But in declining to assert jurisdiction, the Navajo
court emphasized the utility authority’s “substantial degree of
autonomy” from the tribal government, noting that the
corporation’s Board was “not synonymous with the Tribal
Council or even a committee thereof. Rather, it [wa]s a
somewhat, although not a completely, independent entity.”
Id.

By contrast, § 17 corporations appear by definition to lack
autonomy. Charters of incorporation are issued at the
discretion of the Secretary of the Interior; may be revoked
only by an Act of Congress; and “confer only powers that the
Secretary of the Interior is willing for the corporation to
possess.” Uniband, Inc. v. Comm’r, 140 T.C. 230, 262
(2013) (citing Md. Cas. Co., 361 F.2d at 520); see 25 U.S.C.
§ 5124. What’s more, § 17 corporations are treated as

1
Even with this holding—which may or may not encompass § 17
corporations—the Ninth Circuit appears to go further in limiting the scope
of § 1362 than other circuits have. See 1 Cohen’s Handbook of Federal
Indian Law § 7.04 n. 18 (N. Jessup, Ed., 2019).
52 BIG SANDY RANCHERIA ENTERS. V. BONTA

identical to tribal governments for purposes of federal tax
immunity. See 26 C.F.R. § 301.7701-1(a)(3). And, although
this court has never addressed the question, several circuits
have held—as the majority acknowledges, Maj. Op.
at 23—that § 17 corporations are “arms of the tribe” for
purposes of sovereign immunity. See Amerind Risk Mgmt.
Corp. v. Malaterre, 633 F.3d 680, 685 (8th Cir. 2011);
Memphis Biofuels, LLC v. Chickasaw Nation Indus., Inc.,
585 F.3d 917, 921 (6th Cir. 2009); Md. Cas. Co, 361 F.2d
at 521–22 (adopted as binding precedent by the 11th Circuit,
see Bonner v. City of Prichard, 661 F.2d 1206, 1207 (11th
Cir. 1981) (en banc)). The analyses relevant to assessing
federal tax and sovereign immunity are, of course, distinct
from the jurisdictional analysis. See In re Prairie Island
Dakota Sioux, 21 F.3d 302, 304 (8th Cir. 1994). But in my
view, these features of the § 17 corporation complicate the
latter question and render the present case sufficiently distinct
from Navajo to merit closer consideration.

Finally, I address the majority’s assertion that it would be
“odd” to allow tribes to allow a § 17 entity to “selectively
claim the benefits of sovereignty.” Maj. Op. at 20. I do not
see why this is so. First, I note again that, although this
circuit has never addressed the question, every circuit to have
considered whether § 17 corporations are entitled to inherent
sovereign immunity has held that they are. See cases cited
supra; see also Breakthrough Mgmt. Grp., Inc. v. Chukchansi
Gold Casino & Resort, 629 F.3d 1173, 1184 n.8 (10th Cir.
2010); Clay Smith, Tribal Sovereign Immunity: A Primer,
50 Advocate 19, 20–21 (May 2007) (“The principal legal
difference [between § 17 corporations and other tribal
corporations] is that, while section 17 corporations retain
their tribal status—and, accordingly, sovereign immunity in
the absence of a ‘sue and be sued’ waiver—the other species
 BIG SANDY RANCHERIA ENTERS. V. BONTA 53

of corporations are not imbued automatically with such
status.”). The Supreme Court reinforced this principle in
Michigan v. Bay Mills Indian Cmty., 572 U.S. 782 (2014),
when it held that tribes are entitled to sovereign immunity
when engaging in commercial activity both on- and off-
reservation, id. at 790.

That many § 17 corporations choose to waive their
inherent immunity has no bearing on whether they are
“tribe[s]” under § 1362. Tribes, like all sovereigns, may
waive immunity when doing so is beneficial to their interests.
See United States v. State of Oregon, 657 F.2d 1009, 1014
(9th Cir. 1981). As we held in State of Oregon, one of the
“[c]lear policy considerations . . . militat[ing] in favor of [a]
tribe’s power to consent to suit” is the concern that “non-
Indian interests might prudently avoid contracts with Tribes
that would otherwise prove beneficial to the Indians, with the
result that Tribes wishing to engage in business would be
needlessly impeded.” Id. Accordingly, tribes may consent to
suit as an act of prudent self-government. See id.

As our precedent and that of other circuits makes clear, a
waiver of sovereign immunity does not negate inherent
sovereignty. As State of Oregon pointed out, some tribal
constitutions ratified under § 16 of the IRA, like some § 17
charters, contain “sue or be sued” clauses that can be
interpreted as waiving immunity for the relevant government.
See id. at 1013 n. 11; see also Linneen v. Gila River Indian
Cmty., 276 F.3d 489, 492 (9th Cir. 2002). But the majority
does not and cannot plausibly argue that tribes with
constitutions ratified by the Department of the Interior
pursuant to § 16 are not “Indian tribe[s] . . . duly recognized
by the Secretary of the Interior.” 28 U.S.C. § 1362. Native
nations organized under § 16, like all sovereign entities, may
54 BIG SANDY RANCHERIA ENTERS. V. BONTA

waive immunity in some contexts while invoking the benefits
of sovereignty in others. I see no reason why, as a matter of
principle, tribes incorporated under § 17 should be any
different.

This is not to conclude definitively that § 17 entities are
the “tribe” for jurisdictional purposes. But I am dubious as to
the majority’s assertion that an entity that waives sovereign
immunity may not at the same time selectively claim the
benefits of sovereignty in other contexts. The selective
enjoyment of the benefits of sovereignty is the prerogative of
all sovereign entities; tribes are no different.

I join the majority’s conclusion because, with the
exceptions noted, its reasoning is persuasive, and I cannot be
certain, faced with an ambiguous statutory text, a thin
legislative history, and sparse case law, that the majority’s
conclusion is incorrect. But I am quite certain that the
question is a closer one than the majority opinion indicates.
And as we appear to be the first federal circuit court to
address this precise question, I believe there is some value in
expressing these doubts publicly. I therefore concur with the
majority in full as to Parts I, II, and IV, and concur, dubitante,
as to Part III.