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U.S. 9th Circuit Court of Appeals
YAKAMA INDIAN v STATE WASHINGTON
9835068
YAKAMA INDIAN NATION, No. 98-35068 Plaintiff-Appellant, D.C. No. v. CV-97-03012-RHW STATE OF WASHINGTON DEPARTMENT CV-97-03013-RHW OF REVENUE, OPINION Defendant-Appellee.
Appeal from the United States District Court
for the Eastern District of Washington
Robert H. Whaley, District Judge, Presiding
Argued and Submitted
April 15, 1999--Seattle, Washington
Filed June 1, 1999
Before: Harry Pregerson and David R. Thompson,
Circuit Judges, and Barry Ted Moskowitz, District Judge.1
Opinion by Judge Thompson
_________________________________________________________________
_________________________________________________________________
COUNSEL
Leslie Weatherhead, Witherspoon, Davenport, Kelley &
Toole, Spokane, Washington, for the plaintiff-appellant.
John Barnes, Assistant Attorney General, Olympia, Washing-
ton, for the defendant-appellee.
_________________________________________________________________
OPINION
THOMPSON, Circuit Judge:
OVERVIEW
The Yakama Indian Nation ("the Nation") appeals the dis-
missal of its declaratory judgment and injunctive relief action
against the State of Washington Department of Revenue ("the
Department"). In that action, the Nation challenged, on the
ground of sovereign immunity, the Department's seizure of
unstamped packages of cigarettes owned by, and being trans-
ported to, the Nation. The Nation argues that the district court
erred by immunizing the state against suit under the Eleventh
Amendment and by denying the Nation's request to amend its
complaint to include ultra vires claims against state officers.
We have jurisdiction under 28 U.S.C. S 1291 to review the
dismissal of the original action and the denial of leave to
amend, and we affirm those decisions.
The Nation also appeals the district court's order remand-
ing an administrative forfeiture proceeding that the Depart-
ment instituted after it seized the cigarettes, and which the
Nation removed to the district court. Because 28 U.S.C.
S 1447(d) precludes appellate jurisdiction to review the
remand order, we dismiss that portion of the appeal.
BACKGROUND
Washington taxes the sale, use, consumption, handling,
possession, and distribution of cigarettes. See Wash. Rev.
Code S 82.24.020. The Department enforces this tax law,
which provides that, absent some exceptions, cigarette pack-
ages possessed in Washington must bear applicable stamps as
proof of tax payment. See id. S 82.24.030. "Although Indians
are permitted to buy unstamped, tax-exempt cigarettes on
Indian reservations located within the State of Washington, all
deliveries of unstamped cigarettes to Indian reservations in
Washington must be preapproved by [the Department]."
United States v. Baker, 63 F.3d 1478, 1483 (9th Cir. 1995)
(citing Wash. Admin. Code S 458.20.192). Preapproval is
obtained by giving advance notice to the Department. In the
absence of such notice, any unstamped cigarettes are consid-
ered contraband, see id., and are subject to seizure and sale.
See Wash. Rev. Code S 82.24.250(4); Baker, 63 F.3d at 1489.
On January 16, 1997, a Washington state patrol trooper
asked the driver of a truck and trailer that had just crossed the
scales of a weigh station near Plymouth, Washington, to pro-
duce all paperwork related to his shipment. The driver pro-
duced a bill of lading indicating that he was carrying a load
of cigarettes apparently owned by and bound for the Nation
in Toppenish, Washington. While checking the load of the
truck, the state trooper noticed individual cigarette packages
that did not bear the state tax stamps. The state trooper con-
tacted the Washington Department of Revenue and was
informed that the Department had not received notification of
the transport of unstamped cigarettes to the Nation. The state
trooper then obtained a search warrant from the Benton
County Superior Court, searched the truck, seized the load of
cigarettes, inventoried them, and stored them in a warehouse.
The Department notified the Nation that the cigarettes had
been seized as contraband under Washington law. The Nation
then wrote a letter to the Department demanding the return of
the cigarettes. Pursuant to Washington Revenue Code section
82.24.135, the Department sent the Nation notice of an
administrative forfeiture hearing, during which the Nation
would be afforded an opportunity to challenge the seizure and
to assert its claim to the cigarettes.
Instead of participating in the hearing, the Nation filed a
complaint against the Department in the district court seeking
(1) a declaration that the State of Washington and its courts
and tribunals cannot exercise jurisdiction over a sovereign
nation and that the Nation is immune from suit by the Depart-
ment; (2) an injunction prohibiting the Department from pro-
ceeding with the administrative hearing; and (3) an order
requiring the Department to return the Nation's cigarettes or
the proceeds from their sale. At the same time, although in a
separate action, the Nation, relying on 28 U.S.C.S 1441,
removed the administrative forfeiture proceeding to the dis-
trict court. The district court did not order the two cases con-
solidated.
Because of the perishable nature of the cigarettes, the
Department sold the cigarettes at auction for $235,000. The
proceeds from the auction were paid into the registry of the
district court pursuant to stipulation of the parties and order
of the court.
The Nation moved to dismiss the removed forfeiture pro-
ceeding, arguing that the Department could not exercise juris-
diction over a sovereign nation. The Nation also sought leave
to amend its original action to include ultra vires claims
against individual state officers. The Department moved to
dismiss the Nation's complaint under the Eleventh Amend-
ment and to remand the removed administrative proceeding to
the state administrative tribunal. The district court granted
both of the Department's motions, denied the Nation's
motions, and ordered disbursement of the auction proceeds to
the Department. The court later denied the Nation's motion
for reconsideration, but stayed disbursement of the auction
proceeds to preserve the status quo pending appeal.
DISCUSSION
A. The State's Eleventh Amendment Immunity
We first consider whether the Eleventh Amendment bars
the Nation's lawsuit against the State of Washington for
declaratory and injunctive relief and for return of the cigarette
proceeds. Immunity under the Eleventh Amendment is a
question of law that we review de novo. See Micomonaco v.
Washington, 45 F.3d 316, 319 (9th Cir. 1995).
[1] The Eleventh Amendment bars suits against a state or
its agencies, regardless of the relief sought, unless the state
unequivocally consents to a waiver of its immunity. See
Romano v. Bible, 169 F.3d 1182, 1185 (9th Cir. 1999) (citing
Pennhurst State Sch. & Hosp. v. Halderman,
465 U.S. 89
, 100
(1984)); see also Blatchford v. Native Village of Noatak, 501
U.S. 775, 782, 788 (1991) (holding that a state's Eleventh
Amendment immunity extends to suits by Indian tribes). The
state's consent must be "unequivocally expressed, " Pennhurst
State Sch. & Hosp.,
465 U.S. at 99
, meaning that the consent
is effective "only where stated by the most express language
. . . ." Port Auth. Trans-Hudson Corp. v. Feeney, 495 U.S.
299, 305 (1990) (internal quotation and citation omitted).
[2] The Nation contends that the state consented to suit by
"involving itself in federal court litigation " and "depositing
the cigarette proceeds into the court's register. " We reject this
argument because the state did not unequivocally express its
assent to suit. As the district court correctly noted, the Depart-
ment asserted sovereign immunity as an affirmative defense
in its first responsive pleading, which was filed before the
parties stipulated to the deposit of the cigarette proceeds into
the district court's registry. Given the Department's clear
assertion of sovereign immunity in its pleadings, its agree-
ment to deposit the forfeited proceeds into the court registry
pending litigation was simply an act of cooperation, not an
unequivocal consent waiving sovereign immunity. Because
the state did not unequivocally waive its Eleventh Amend-
ment immunity, the district court did not err in dismissing the
Nation's complaint on that ground.
B. The Nation's Motion to Amend
The Nation argues that the district court erred in denying its
motion to amend its complaint to include ultra vires claims
against individual state officers not named in the original
complaint. According to the Nation, these individuals were
"involved in the actual seizure in question and[were] the indi-
viduals responsible for the enforcement of the statute under
which the Department claimed authority to seize and forfeit
the Tribe's property." The Nation contends that these state
officers acted ultra vires in violating the Nation's sovereign
immunity.
We review for abuse of discretion a district court's refusal
to grant leave to amend after a responsive pleading has been
filed. See Schlachter-Jones v. General Tel. of Cal., 936 F.2d
435, 443 (9th Cir. 1991). Amendment under the Federal Rules
of Civil Procedure should be granted "unless amendment
would cause prejudice to the opposing party, is sought in bad
faith, is futile, or creates undue delay." Martinez v. Newport
Beach City, 125 F.3d 777, 785 (9th Cir. 1997).
The district court denied the Nation leave to amend, con-
cluding that Eleventh Amendment immunity also protected
the state officers from suit--in essence holding that the
Nation's proposed amendment would be futile because it
would fail as a matter of law on a motion for summary judg-
ment. See Roth v. Garcia Marquez, 942 F.2d 617, 628-29 (9th
Cir. 1991). To determine whether the district court abused its
discretion by this ruling, we consider whether Eleventh
Amendment immunity would bar claims against the individ-
ual state officers as a matter of law, rendering the Nation's
proposed amendment futile.
[3] The Supreme Court has held that a suit against state
officers acting in their individual capacities does not violate
a state's Eleventh Amendment immunity in certain circum-
stances where the claimant is seeking only declaratory and
injunctive relief. See Idaho v. Coeur d'Alene Tribe of Idaho,
521 U.S. 261, 269
(1997) (citing Ex parte Young , 209 U.S.
123 (1908)). The four circumstances in which such declara-
tory and injunctive relief actions against individual state offi-
cials have been allowed to proceed in federal court are when
(1) state officials are plainly acting outside their statutory
authority, see Coeur d'Alene Tribe ,
521 U.S. at 270
; (2) no
state forum exists to vindicate federal interests, see id. at 270-
74; (3) " `it is necessary to permit the federal courts to vindi-
cate federal rights,' " id. at 277 (quoting Papasan v. Allain,
478 U.S. 265, 277
(1986)); and (4) "a plaintiff seeks prospec-
tive relief to end a state officer's ongoing violation of federal
law." Coeur d'Alene Tribe,
521 U.S. at 288
(O'Connor, J.,
concurring). We consider each of these aspects of the Young
doctrine in turn.
1. Acting Outside of Statutory Authority
[4] A state officer acts ultra vires "only when he acts with-
out any authority whatever." Pennhurst State Sch. & Hosp.,
465 U.S. at 101
n.11 (internal quotations and citation omit-
ted). Washington law permits state officials to seize as contra-
band unstamped cigarettes bound for Indian tribes when the
tribe has not notified the Department of the shipment. See
Wash. Rev. Code S 82.24.250. In addition, the Supreme Court
has specifically approved of states enforcing their tax laws
through the off-reservation seizure of unstamped cigarettes.
See Washington v. Confederated Tribes of Colville Indian
Reservation,
447 U.S. 134, 161
-62 (1980); see also Baker, 63
F.3d at 1483. Clearly, the state officials here were acting
within their delegated authority when they seized the ciga-
rettes, sold them at auction, and scheduled an administrative
hearing.
2. State Forum to Vindicate Federal Interests
[5] A state forum existed for the vindication of the Nation's
federal interests. Along with having a right to challenge the
seizure in the state administrative forum, the Nation had the
option of bypassing that forum and instead bringing an action
in state court. See Wash. Rev. Code S 82.24.135(5);
Comenout v. Washington, 722 F.2d 574, 578 (9th Cir. 1983).
3. Vindication of a Federal Right in Federal Court
[6] It is undisputed that the Nation is a sovereign entitled
to sovereign immunity and that, absent a clear waiver by the
Nation, or congressional abrogation, a suit against the Nation
is barred by sovereign immunity. See Oklahoma Tax Comm'n
v. Citizen Band Potawatomi Indian Tribe of Okla., 498 U.S.
505, 509 (1991). The Nation contends that, by reason of its
sovereign immunity, it has a federal right not to have its ciga-
rettes seized and forfeited by the Department. To vindicate
this federal right, the Nation argues it should be permitted to
amend its complaint to include ultra vires claims against the
individual state officers who participated in the seizure and
forfeiture.
[7] The Nation's argument depends on the extent of its sov-
ereign immunity. If that immunity does not extend to shield
the Nation from the Department's seizure and forfeiture of the
Nation's unstamped cigarettes, then the federal right the
nation asserts does not exist in this case and there is no federal
right that requires vindication in federal court.
In support of its argument, the Nation contends the ciga-
rettes cannot be "contraband" subject to seizure unless an
adjudicative tribunal lawfully makes such a determination;
such a lawful adjudication requires subjecting the Nation to
the tribunal's jurisdiction; the Nation's sovereign immunity
protects it from being subjected to the state's jurisdiction
without its consent; because the Nation did not consent to the
state's jurisdiction, the state cannot treat the cigarettes as
"contraband"; thus, the state's seizure and sale of them was
unlawful.
[8] We reject this argument. The premise on which it is
founded is false. The notion that the State of Washington can
treat the Nation's cigarettes as contraband only after an adju-
dicative hearing with properly conferred jurisdiction over the
Nation simply is not so. We have held that, absent advance
notice to the Department, the shipment of unstamped ciga-
rettes to purchasers on an Indian reservation in Washington
renders the cigarettes "contraband subject to seizure and
sale." Baker, 63 F.3d at 1483; see also Wash. Rev. Code
S 82.24.250. Although the Department must schedule a forfei-
ture hearing to allow a claimant to seek the return of seized
property, see Wash. Rev. Code S 82.24.135(5), a hearing to
determine whether unstamped cigarettes are contraband is not
a prerequisite to their seizure as contraband nor to their sale
at auction as a perishable commodity. Because the Depart-
ment had the right to treat the cigarettes as contraband, it had
the right to seize and sell them. See Baker, 63 F.3 at 1483; see
also Confederated Tribes of Colville Indian Reservation, 447
U.S. at 161-62.
As a corollary to its argument against seizure and sale, the
Nation argues that Washington's implementation of its
administrative scheme, by which the Nation may participate
in an administrative hearing and challenge the state's action,
unduly interferes with the Nation's sovereignty. We also
reject this argument.
[9] As we have noted, the Nation's participation in the
administrative proceeding is optional. The Nation may elect
either to challenge the cigarette seizure in an administrative
hearing or bring suit in Washington state court. See
Comenout, 722 F.2d at 578. Without question, the practical
effect of the seizure is that the Nation has to contest it in one
state forum or the other, or suffer the loss of its cigarettes. But
if the state's administrative seizure of the cigarettes is not an
undue interference with the Nation's sovereign immunity (and
under Baker it is not), the availability of a post-deprivation
due process proceeding to challenge that action surely is not.
We hold, therefore, that the Department did not unduly inter-
fere with the Nation's sovereign immunity by affording it the
opportunity to challenge the seizure in an administrative hear-
ing. Neither the seizure and sale of the cigarettes, nor the
implementation of Washington's administrative scheme to
allow a challenge to the state's action, violated a federal right
of the Nation.
4. Ongoing Violation of Federal Law
[10] This case does not involve an ongoing violation of fed-
eral law. This aspect of the Young doctrine is inapplicable.
[11] In sum, the district court did not abuse its discretion
by denying the Nation's motion to amend its complaint to
include ultra vires claims against individual state officers.
Such an amendment would have been futile. The state officers
did not plainly act outside their statutory authority, a state
forum exists to vindicate the Nation's federal interests, no
federal right requires vindication by a federal court, and the
case does not involve any ongoing violation of federal law.
C. Jurisdiction to Review the District Court's
Remand Order
The Nation next argues the district court erred in remand-
ing the administrative forfeiture proceeding. As a threshold
matter, we must determine whether we have appellate juris-
diction to review the district court's remand order. Under 28
U.S.C. S 1447(d), "[a]n order remanding a case to the State
court from which it was removed is not reviewable on appeal
or otherwise."
[12] While section 1447(d) appears on its face to bar all
review of remand orders, courts have consistently interpreted
it as precluding review only of remands based on a timely
raised defect in removal procedure or lack of subject matter
jurisdiction. See Quackenbush v. Allstate Ins. Co., 517 U.S.
706, 711 (1996); Krangel v. General Dynamics Corp., 968
F.2d 914, 915-16 (9th Cir. 1992). Remand orders based on a
defect in removal procedure or lack of subject matter jurisdic-
tion are immune from review even if the district court's order
is erroneous. See Krangel, 968 F.2d at 916.
The district court in this case remanded the administrative
proceeding after concluding that "the factors under [28
U.S.C.] S 1441 are not met since the administrative forfeiture
proceeding is not a state court action and, in any event, there
is no original jurisdiction." Thus, the remand order was based
on two alternative holdings, one for lack of a state court
action and the other for lack of subject matter jurisdiction. As
to the latter holding, the district court held that it lacked juris-
diction because "[n]o federal statute applies to an action
brought by a state against a piece of property found in the
state that is deemed contraband according to state law."
[13] This case is somewhat muddied by the district court's
alternative holdings. A remand based only on the "lack of a
state court action" would not be insulated from appellate
review. On the other hand, a remand order based primarily on
the lack of subject matter jurisdiction is insulated from
review, even if the district court's jurisdictional determination
is erroneous. See Kunzi v. Pan American Airways, Inc., 833
F.2d 1291, 1293-95 (9th Cir. 1987) (determining that remand
order based mainly on jurisdictional grounds was nonreview-
able). Here, the district court not only stated it lacked subject
matter jurisdiction, it couched its alternative holding (no state
court action) in jurisdictional language as well. We conclude
that the court's jurisdictional concerns played a central
enough role in its remand decision that its remand was pri-
marily for lack of subject matter jurisdiction, and as a result
we lack appellate jurisdiction to review the propriety of the
remand order.
[14] Alternatively, we conclude that the district court did
not err in remanding the administrative proceeding because
the Nation is not a defendant in that proceeding. The right to
remove a case from state to federal court is vested exclusively
in "the defendant or the defendants . . ." 28 U.S.C. S 1441(a).
Federal law, not the applicable state statute or even the plead-
ings in state court, determines who is a plaintiff and who is
a defendant. See Chicago, R.I. & P.R. Co. v. Stude, 346 U.S.
574, 580 (1954). In the present case, the Department seized
the property and then notified the Nation of the seizure and
intended forfeiture, thereby affording the Nation "a reason-
able opportunity to be heard as to the claim or right." Wash.
Rev. Code S 82.24.135(5). Because the nature of the adminis-
trative proceeding placed the Nation in the role of a quasi-
plaintiff with the burden of proof of establishing a claim to
the property (the same role the Nation would have if it chose
to challenge the seizure in state court), the Nation was not a
"defendant," and removal of the administrative proceeding
was improper.
D. Return of Proceeds to the State
[15] Because the cigarettes were "contraband subject to sei-
zure and sale," Wash. Rev. Code S 82.24.250(4); see also
Baker, 63 F.3d at 1483, the Department had the power not
only to seize and sell the cigarettes but to retain the auction
proceeds pending the outcome of any administrative forfeiture
proceeding or state court action, depending on which forum
the Nation chose if it decided to contest the seizure. The dis-
trict court, therefore, properly ordered the auction proceeds
returned to the state.
CONCLUSION
Because the Department is immunized from suit under the
Eleventh Amendment, we AFFIRM the dismissal of the
Nation's original action. We also AFFIRM the district court's
denial of leave to amend the Nation's complaint to include
ultra vires claims against individual state officers. Such an
amendment would have been futile. Because the district court
remanded the removed administrative proceeding primarily
for lack of subject matter jurisdiction, we lack appellate juris-
diction to review the remand order and therefore DISMISS
that portion of the Nation's appeal. Alternatively, if we were
to reach the merits of the district court's decision to remand
the administrative proceeding, we would affirm the remand
order because the Nation is not a "defendant" in that proceed-
ing. Finally, we direct the district court to lift the stay of its
order directing that the auction proceeds be disbursed to the
Department.
AFFIRMED in part and DISMISSED in part. the end
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