Rice v. Rehner

PETITIONER:Rice
RESPONDENT:Rehner
LOCATION:U.S. Court of Appeals for the Fifth Circuit

DOCKET NO.: 82-401
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 463 US 713 (1983)
ARGUED: Mar 21, 1983
DECIDED: Jul 01, 1983

ADVOCATES:
Alan S. Meth – on behalf of the Petitioner
Joshua I. Schwartz – on behalf of the U.S. as amicus curiae
Stephen V. Quesenberry – on behalf of the Respondent

Facts of the case

Question

Audio Transcription for Oral Argument – March 21, 1983 in Rice v. Rehner

Warren E. Burger:

We’ll hear arguments next in Rice against Rehner.

Mr. Meth, I think you may proceed when you are ready.

Alan S. Meth:

Thank you.

Mr. Chief Justice, and may it please the Court:

This case is here under the certiorari from the Court of Appeals from the Ninth Circuit to review a decision of that court which held that California did not have the authority to regulate through licensing Indian country liquor transactions.

In so doing, the Court of Appeals reversed the judgment of the District Court which had upheld the right of California to regulate through licensing Indian country liquor transactions.

This case asked the Court to resolve two well-established and entirely distinct principles.

On the one hand is the principle that Indians and Indian tribes are to be left free of state control and their affairs governed by themselves and by the United States.

The other principle is that it is the states which have the authority to determine how liquor transactions within the state’s borders are to take place.

This case began about six years ago when Respondent, who is a tribal Indian living on a reservation in a northern part of San Diego County, the Pala Reservation, requested that she be allowed to sell distilled spirits from her general store, which is located on the Pala Indian Reservation.

She made the request to the California Department of Alcoholic Beverage Control, which has the authority under California law to require and enforce California’s liquor licensing system.

The Department denied Respondent’s request for an exemption from California’s liquor licensing laws, and Respondent then filed suit in the District Court seeking injunctive and declaratory relief.

And, the basis for that suit was that as a tribal Indian seeking to sell distilled spirits from her store located in Indian country she was exempt from California’s liquor licensing laws.

The Department moved to dismiss the complaint or for summary judgment, and the District Court agreed with the Department that it had the authority to require licenses, and, therefore dismissed the complaint.

The case was then appealed to the Court of Appeals which, after a lengthy stay in that Court, reversed the decision of the District Court and held that California’s liquor licensing laws as opposed to its state substantive laws had no impact in Indian country and need not be followed.

This case thus presents the question whether a state has the authority to require tribal Indians to obtain a state license if state law requires the license be obtained before liquor transactions take place in Indian country.

Sandra Day O’Connor:

May I clarify one thing, Mr. Meth, at the outset.

The state of California does not base any reliance in this case on any jurisdiction it might have obtained under Public Law 280?

Alan S. Meth:

That is correct.

Sandra Day O’Connor:

And, why is that?

Alan S. Meth:

Public Law 280, as we read it, is a criminal jurisdictional type of statute.

The request made in this case was solely for a license.

Sandra Day O’Connor:

And, also some forms of civil jurisdiction, right?

Alan S. Meth:

That is correct.

Public Law 280–

Sandra Day O’Connor:

Then, it is your position that it would not encompass liquor licensing?

Alan S. Meth:

–The criminal and civil jurisdiction which California has under Public Law 280 may come into play somewhere further down the line if Respondent is required to obtain a license and then doesn’t act, which is both punishable under the licensing system and the criminal system.

If it is punishable under the criminal system, Public Law 280 would give California the authority to punish that act criminally.

But, as far as the disciplinary action which California through the Department of Alcoholic Beverage Control would take against Respondent under the licensing system, that authority, we believe, is contained in Section 1161.

Sandra Day O’Connor:

Well, in any event, Public Law 280 is applicable in the state of California?

Alan S. Meth:

That is correct.

California is a Public Law 280 state.

William H. Rehnquist:

It is not just limited to criminal jurisdiction, is it?

Alan S. Meth:

No, civil jurisdiction, as this Court construed Public Law 280 in Bryan that it relates to criminal and civil, but civil jurisdiction was limited by the Court to causes of action cases where a court’s services were required, and it excluded–

Sandra Day O’Connor:

That was because of the Bryan interpretation that you opted to drop any reliance on 280, is that right?

Alan S. Meth:

–That is correct.

Before 1953 this question would not have arisen, for the simple fact that Indian country was dry.

Beginning in 1802, federal legislation prohibited the introduction of liquor into Indian country.

In 1832, the prohibitions were made criminal.

So, under federal law, as well as state law, a number of states also regulated liquor transactions with Indians.

Beginning in 1832, liquor transactions with Indians either on the reservation or off the reservation were prohibited.

The federal prohibitions are now contained in 18 U.S.C. Sections 1154 and 1156.

In 1953, Congress passed 18 U.S.C. Section 1161, which removed the federal criminal penalties unconditionally if the transaction occurred off the reservation.

With respect to on the reservation, acts or transactions occurring in Indian country, the federal penalties were removed conditionally, the conditions being that the acts or transactions had to conform both with the laws of the state in which the acts or transactions occurred and an ordinance duly adopted by the tribe having jurisdiction over that area of Indian country.

The Department asserted in the District Court and the District Court agreed that California had the authority to require Respondent to obtain a license.

Before I analyze Section 1161, with respect to what it actually says, I think it is very important for the Court to consider what the statute does not say in light of the Court of Appeals’ decision.

The Court of Appeals’ decision was based primarily on the concept of jurisdiction, and as I have indicated before, California is not asserting criminal or civil jurisdiction in the Public Law 280 sense under this statute.

John Paul Stevens:

May I ask you then, what is California’s view about… Assume you prevail, how will you enforce your victory?

Alan S. Meth:

California’s liquor licensing laws are enforced administratively.

A license is in effect a decision by the Department of Alcoholic–

John Paul Stevens:

I understand, but supposing your opponent decides just to start selling liquor.

What can you do about it?

Alan S. Meth:

–The sale of liquor without a license in California is a crime.

John Paul Stevens:

I understand.

Alan S. Meth:

I would think that the local district attorney The Department of Alcoholic Beverage Control has no criminal–

Thurgood Marshall:

That only applies to California territorial land, doesn’t it?

Alan S. Meth:

–Pardon me?

Thurgood Marshall:

Well, is the Indian reservation part of the territorial land of California?

Alan S. Meth:

Yes it is, Your Honor.

John Paul Stevens:

News to me.

John Paul Stevens:

I am still not sure I understand the answer to my question.

Let me give you two questions.

One, supposing somebody sells liquor without a license on an Indian reservation.

Secondly, suppose someone who may have a license on an Indian reservation violates some after-hours, sells at the wrong time of day, or something like that.

What can California do about either of those situations?

Alan S. Meth:

There are two ways that California enforces its liquor laws.

The primary way is through licensing, and in that way the Department can take action against the license and if it determines that there has been a violation of the alcoholic beverage control law, then the Department can suspend, for a short period of time, the license, the business operation, or the Department can revoke the license and put the licensee out of business.

The alternative method is if the local district attorney decides that if the act is a criminal offense, and as His Honor mentioned, after-hours sale is a criminal act, the district attorney could take–

John Paul Stevens:

You mean the federal attorney, or the California attorney?

Alan S. Meth:

–California attorney under Public Law 280.

John Paul Stevens:

Are you… Oh, I see, under Public Law 280 you would enforce even the jurisdiction that is left under the Court of Appeals holding criminally in the state courts?

Alan S. Meth:

That is correct.

Byron R. White:

It would also be a federal crime?

Alan S. Meth:

That is correct.

Thurgood Marshall:

You also enforce the laws about obscene dancing in a liquor place on an Indian reservation?

Alan S. Meth:

Off the reservation, those penalties or those prohibitions are contained in the Department’s regulations.

The Department is the California licensing agency.

If the Court of Appeals’ decision is upheld, the California licensing agency would not have any authority in Indian country, and so those regulations, I submit, would not be the kinds of things that if Respondent violated… If Respondent were operating a bar instead–

Thurgood Marshall:

Without that, you could.

That is your position?

Alan S. Meth:

–The only way that–

Thurgood Marshall:

That you could enforce on an Indian reservation the regulation of the California liquor board that you cannot have obscene dancing in a place that sells liquor–

Alan S. Meth:

–That is correct.

It is not a crime–

Thurgood Marshall:

–And, you can enforce that?

Alan S. Meth:

–Only administratively, Your Honor.

Only by action against the licensee.

Those prohibitions are contained in the Department’s regulations, and those regulations are not crimes.

So, by virtue of the limited authority that the Court of Appeals has given the Department, a violation of one of those regulations would not result in a federal crime.

So, there would not be any federal criminal sanctions against nude dancing.

Thurgood Marshall:

I did not mention federal.

I said state.

Alan S. Meth:

It is not a state crime either.

If they are only contained–

Thurgood Marshall:

Obscene dancing–

Alan S. Meth:

–Those are contained–

Thurgood Marshall:

–I thought a case came up here from California–

Alan S. Meth:

–California versus LaRue–

Thurgood Marshall:

–I thought so.

Alan S. Meth:

–in 1972.

The Court upheld–

Thurgood Marshall:

And, we upheld it, didn’t we?

Alan S. Meth:

–The Department’s regulations–

Thurgood Marshall:

That was a state rule, not federal.

Alan S. Meth:

–But it was a state regulatory rule–

Thurgood Marshall:

All I am saying is the courts will enforce that rule on an Indian reservation.

Alan S. Meth:

–If the Court gives the Department the authority to require licensing.

If the Department does not have the authority to license and to take action against the license, those prohibitions cannot be enforced.

That is the basic distinction between the criminal system of enforcing the Alcoholic Beverage Control Act and the administrative system for implementing that Act.

Only regulations promulgated by the Department which are not crimes could not be determined to be substantive state standards which the Court of Appeals has said are those matters which result in federal crimes.

So, the entire regulatory scheme of the Department would be inapplicable.

The only other case to reach this Court involving Section 1161 is United States versus Mazurie in 1975.

I believe that that is a very important case on the matter of this jurisdiction.

In that case non-Indians were convicted of the federal offense of violating Section 1154 because they had not obtained tribal licenses.

The tribal ordinance required that anyone selling liquor in an Indian reservation on that Indian reservation had to obtain a tribal license.

The Mazuries obtained state licenses and so they were in conformity with the state law, but they had not obtained tribal licenses.

By virtue of that act, not obtaining tribal licenses, the tribal license, they were convicted in federal court of violating Section 1154.

All California is asking is to have the same power.

The tribes in that situation in Mazurie did not have criminal jurisdiction over the non-Indians.

This Court’s decision in Oliphant made that clear.

Alan S. Meth:

The jurisdiction was not an issue, and it should not be an issue.

The only authority, the only governmental entity which we know has jurisdiction over Indian country liquor transactions and, in fact, all acts committed on an Indian reservation is the United States.

The United States had jurisdiction over the non-Indians in the Mazurie case.

The United States has jurisdiction over Respondent because she is an Indian.

In this case the United States has the jurisdiction.

In this case, all we are saying, all California is saying is that it has the authority to set the conditions under which lawful Indian country liquor transactions are to take place, and if state law requires a license, just like if a tribal ordinance requires a license, then the person desiring to engage in liquor traffic in Indian country has to obtain a license.

That is all this case is about.

I suggest the proper way to analyze this case is the way this Court did in a number of cases cited in both of the briefs, California versus the United States, EPA versus State Water Resources Control Board, and Hancock versus Train.

In all three of those cases, the Court was faced with a situation where a state was requiring a federal agency to obtain a license.

In each of those cases, the Court looked at the statute, looked at the entire statutory scheme, looked at the legislative history and looked at anything else that the Court thought was relevant to this situation.

But, the Court did not base its decision on the fact that a state does not have jurisdiction over the Secretary of Interior.

Only if Congress has given a state the power to require the Secretary of Interior to obtain a license can a state make the Secretary of Interior obtain a license.

That is all we are asking for in this case is for the Court to look at the statute, look at the legislative history, look at the various relationships and determine whether California has the power to require a license.

I do not believe it would be fruitful at all for the Court to go into the matter of jurisdiction.

The Court of Appeals seemed to assume that the California license was nothing more than a piece of paper, which simply allows someone to do an act.

California’s liquor licensing scheme is much more than that, and I do not believe that the Court’s decision that only a state’s substantive standards as opposed to its licensing scheme is a valid one.

California both in its Constitution and in its statutes has declared that a licensing system is necessary for the protection of the health, welfare, safety and keeps the morals of its people, and the system is designed to eliminate what it views as the evils of unlicensed liquor traffic within the state.

Warren E. Burger:

Can non-Indians purchase liquor at these establishments?

Alan S. Meth:

Yes, they can, Your Honor.

The statute is not limited with respect to the identity of the seller or the identity of the buyer.

So, anyone can sell under this statute in Indian country, and anyone can buy under this statute, assuming that the sale is in conformity with tribal and state laws.

California has also declared that its licensing system involves in the highest degree… and I am reading from the words of the statute… in the highest degree the economic, social and moral well-being and safety of the state and all of its people.

In light of what California believes, I wonder how the Court of Appeals can say that a licensing system is something that can be ignored.

It is an important aspect of California’s regulatory system of liquor traffic, and I think it is quite important for the state to be able to impose its licensing system.

William H. Rehnquist:

Mr. Meth, wasn’t the principle reason that the Court of Appeals found against you, its conclusion that 1161 was not an express grant of legislative jurisdiction to the states to regulate liquor sales on reservations?

Alan S. Meth:

That is eventually what the Court said.

William H. Rehnquist:

So that any observations it might have had or might have had in the back of its mind about the importance of a California liquor license I would think would probably be secondary to that conclusion, don’t you?

Alan S. Meth:

The Court analyzed… I am not sure how the Court analyzed the statute.

I would like to make an observation.

The Court analyzed the words of the statute in the beginning of the opinion.

Alan S. Meth:

In none of the briefs cited by… None of the briefs submitted by Respondent, or the United States or any other amici have that interpretation of the statute.

The words of the statute have been adopted, and I suggest that that is so because the Court of Appeals’ reading of the statute was not understandable.

I have read that opinion many times.

I do not understand how the Court can arrive at the conclusions it did based upon the wording of the statute.

The Court then drew a distinction between licensing and substantive state standards, but the Court nowhere defined the phrase substantive state standards.

What we are saying is that there are many substantive state standards, basic policies, as Respondent put it in her brief.

There are many basic policies which are contained in the licensing system and are not simply criminal statutes.

For those reasons, we believe that the entire state regulatory system and not simply what are called state substantive standards without definition are to be followed in Indian country.

If I can give some examples… Perhaps the most important policy with respect to retail sales of liquor in California is the proposition that there should not be a liquor store or bar on every corner.

California tries to limit the number of people who are engaged in the sale of distilled spirits.

California does that in a number of ways.

It limits the number of licensees, the number of people who may be engaged in the liquor traffic.

That is based on population.

Another way is for the Department… The Department is given the authority to determine if a particular location is the proper location for a retail liquor establishment.

The Department is specifically given the authority–

Thurgood Marshall:

Would you think that the Department would know what was going on in an Indian reservation?

Alan S. Meth:

–I do not see why not, Your Honor.

Thurgood Marshall:

Well, where is the Department?

What city is it in?

Alan S. Meth:

The Department maintains offices throughout California.

Thurgood Marshall:

Does it have one on the Indian reservation?

Of course, they do not.

Alan S. Meth:

That is correct.

Thurgood Marshall:

So, how would they know?

Alan S. Meth:

The Department has investigators, and the Department’s investigators–

Thurgood Marshall:

Indians?

Indian investigators?

Alan S. Meth:

–There is nothing in the statutes which would prohibit an Indian from being an investigator.

Thurgood Marshall:

My question was, do they have any Indians?

Alan S. Meth:

I do not know if any of the employees are Indians–

Thurgood Marshall:

You know they don’t, don’t you?

Alan S. Meth:

–Pardon me?

Thurgood Marshall:

Don’t you know that they don’t have any?

Alan S. Meth:

I do not know that, Your Honor.

There would be nothing in the statutes which would prohibit the Department from hiring Indians.

Warren E. Burger:

If you prohibit them, you might be in trouble with somebody else.

Alan S. Meth:

That is certainly correct, Your Honor.

They have other agencies of the state which would prohibit that sort of activity, and California as an employer has traditionally been one which has hired all kinds of–

Thurgood Marshall:

Well, for example, do you have a rule in California that says you cannot have one near a church?

Alan S. Meth:

–That is correct.

Thurgood Marshall:

How many churches do you have on the reservations?

Alan S. Meth:

Your Honor, there are 75 to 80 reservations in the state of California.

I do not know where the locations of the churches are.

Thurgood Marshall:

I am sure you don’t, and I doubt anybody else does.

That is my point.

Alan S. Meth:

An investigator can drive up to a reservation and determine if the proposed license is to be–

Thurgood Marshall:

And decide what is best for the Indians?

Alan S. Meth:

–For the people of the state of California, not just the Indians.

John Paul Stevens:

You indicated earlier these stores would sell to non-Indians, I assume.

Alan S. Meth:

That is correct.

John Paul Stevens:

And there are some checkerboard reservations, aren’t there?

Alan S. Meth:

That is correct, Agua Caliente being a prime example.

William H. Rehnquist:

Well, they are getting their liquor from the same Oklahoma place that the California wholesalers wanted to get it from in that Oklahoma connection case, aren’t they?

Alan S. Meth:

I do not know where the Agua Calientes are getting their liquor.

Sandra Day O’Connor:

California has amended its laws, I take it, to make it possible for wholesalers to sell to unlicensed establishments on the reservation?

Alan S. Meth:

That is correct.

So, that would eliminate one of the enforcement methods that California has for preventing the unlawful sales by non-licensees.

Sandra Day O’Connor:

But, California has kept on the books, at least, its requirements that these establishments be licensed so you assert it is not moot?

Alan S. Meth:

That is correct, Your Honor.

Lewis F. Powell, Jr.:

Does California regulate the price of liquor sold in its liquor stores?

Alan S. Meth:

No, it does not, Your Honor.

Lewis F. Powell, Jr.:

It does regulate the hours during which they may be sold, I suppose?

Alan S. Meth:

That is correct.

Sales cannot be between 2 a.m. and 6 a.m.–

Lewis F. Powell, Jr.:

Yes.

Alan S. Meth:

–And, to just follow that up for a moment, it does not seem to me that it makes much sense to draw a distinction between the hours of operation in which Respondent and the United States seem to say are ones which California may regulate and the location of a liquor store or a bar.

What we are talking about is access to liquor.

Byron R. White:

Do you think they concede that you can regulate it or do they just concede that the store owner must abide by California law?

Alan S. Meth:

No, they are saying that it is a federal offense–

Byron R. White:

That is right, but they do not say that California can do anything about it–

Alan S. Meth:

–Not in the licensing scheme, that is correct.

Byron R. White:

–Well, or any other way?

Alan S. Meth:

Well, the–

Byron R. White:

They do not concede that?

Alan S. Meth:

–They are conceding that under 1161–

Byron R. White:

It would be a federal crime.

Alan S. Meth:

–A federal crime.

Byron R. White:

They do not concede that California can do anything at all about it if the store owner was selling to minors?

Alan S. Meth:

That is correct.

However, California could enforce those laws under Public Law 280, but as I said before, Public Law 280 is not involved in this case.

And, California’s authority under Public Law 280 is not involved in this case, only its licensing scheme.

If I may reserve the remainder of my time–

Harry A. Blackmun:

May I ask you one other question before you sit down?

Alan S. Meth:

–Certainly.

Harry A. Blackmun:

Am I correct in my impression, the 21st Amendment aspect of the case was not argued below?

Alan S. Meth:

It was not argued by California in the District Court.

When Respondent filed her opening brief in the Court of Appeals, she raised the 21st Amendment.

We did not… California did not respond to the 21st Amendment argument.

However, when the case was consolidated with Washington’s case, the Washington Attorney General advocated the 21st Amendment issue, and then the Court of Appeals did dispose of the 21st Amendment issue.

Warren E. Burger:

Mr. Quesenberry.

Stephen V. Quesenberry:

Thank you, Justice Burger, and may it please the Court:

The state has taken inconsistent positions in this case as Mr. Meth has indicated, first asserting clear jurisdiction under this statute and then moving to a position where we are at today.

The state is saying that this federal criminal statute incorporates an entire state licensing scheme as a condition for immunizing persons who engage in liquor transactions on Indian reservations to federal criminal prosecutions.

I would like to go directly to the words of that statute and the language that we are dealing with today, the in conformity with state laws language.

William H. Rehnquist:

Mr. Quesenberry, do you basically agree with the Court of Appeals construction of that relevant part of that statute?

Stephen V. Quesenberry:

Yes, we do, Justice Rehnquist.

The in conformity with language modifies the statement that acts or transactions within Indian country shall be in conformity with state law and with a tribal ordinance.

That in conformity with language is a convenient technique that Congress has used in other contexts, other contexts involving federal penal statutes, the Assimilated Crimes Act and the Major Crimes Act, to utilize state law as a standard for determining whether that conduct may or may not violate federal law.

This Court in cases under other federal statutes, the federal Water Pollution Control Act and the federal Clean Air Act, where Congress has used language, shall conform with state law, has said that that means that state standards, state law would serve as standards for regulating federal facilities, but by no measure would require those facilities to obtain a state license.

When Congress passed this statute, its overriding concern was to eliminate discrimination against Indians in the sale of alcoholic beverages.

So, it is reasonable to look at this statute and the act or transactions language and imply or assume that Congress was concerned about the sale or use of alcohol within Indian country, and by no means was concerned with matters such as licensing and taxation of liquor within Indian country.

William H. Rehnquist:

Mr. Quesenberry, what is the effect, in your view, of the in conformity language insofar as it talks about conformity with the laws of the state in which such act or transaction occurs?

Stephen V. Quesenberry:

Our position is that that language deals with… that that language applies state law to the sale or use of alcohol.

That is sales to minors, sales to habitual drunkards, sale during hours–

William H. Rehnquist:

Well, how was that state law to be enforced?

Stephen V. Quesenberry:

–That state law is to be enforced through the United States Attorney or through some type of action brought by the tribe.

The tribe would have civil enforcement authority under its own ordinance if there was a violation, but essentially the violation of state standards would be enforced by the United States Attorney.

As to a situation where a non-Indian was selling in violation of a state standard, for example selling to minors, the state has criminal jurisdiction over non-Indians under McBratney and Draper, very early decisions by this Court.

The state seems to imply in its reply brief that it does not have that type of jurisdiction–

Sandra Day O’Connor:

But only criminal jurisdiction… You would have to go through the processes of trying to get criminal prosecutions as opposed to some kind of suspension of the license or other disciplinary action as an administrative matter, in your view, and under the view of the CA 9?

Stephen V. Quesenberry:

–There is an additional mechanism here and that is the Federal Indian Traders Laws.

Any non-Indian doing business on the reservation would be required to comply with those laws, and they would be licensed–

Sandra Day O’Connor:

Well, provided the state authorities could convince the federal Bureau of Indian Affairs to take some kind of action?

Stephen V. Quesenberry:

–In that particular situation, yes.

Sandra Day O’Connor:

And that may be quite a difficult task.

Let me ask you, this statute, 1161, arose really out of situation that existed in the state of Arizona, did it not?

Stephen V. Quesenberry:

Yes, it was initially designed just to apply to a single state.

Sandra Day O’Connor:

Right, and later in the process of the congressional hearings it was expanded to encompass other states as well and to remove the disabilities that the federal law had imposed on the use and possession of alcohol on reservations?

Stephen V. Quesenberry:

That is correct.

Sandra Day O’Connor:

And, during the course of the legislative history there was some indication, at least, by, I think, then Representative John Rhodes and maybe others, it was their understanding that state laws would then apply in the liquor area, right?

Stephen V. Quesenberry:

Yes, the idea of state laws applying.

Sandra Day O’Connor:

And, the thing that concerns me a little bit about the history, which is far from clear, of course, is that at least in Arizona where all of this emerged many of the reservations are right there in urban areas, in Scottsdale, in the heart of Scottsdale, all along the Colorado River where there are now casinos developing and quite a population area.

Do you think that Congress may have been concerned about applying the full state administrative mechanism in those areas?

Stephen V. Quesenberry:

I cannot really respond to that because Congress was very unclear in articulating its overall intent.

It did not tell us a great deal about its intent, so we have the language of the statute.

We also have the strong federal policies that have protected Indian reservations, particularly tribal members, from incursions of state jurisdiction.

Byron R. White:

If you say… If you concede what you do that the Indian trader selling liquor would have to comply with the state laws except for licensing, hours and that sort of thing, why couldn’t the state, although it would not have any, under your theory, would not have any licensing leverage, why couldn’t it go to a state court and enjoin a persistent course of conduct in violation of state law and not just rely on the United States Attorney who would probably tell him to go piddle his papers?

Stephen V. Quesenberry:

If the state… If there is a violation of the state criminal law, particularly–

Byron R. White:

Well, there is a statute that says nobody can sell to minors.

Stephen V. Quesenberry:

–That is a state criminal statute.

Nobody can sell to minors.

Byron R. White:

Whether it says criminal or not, it is a state law.

Why shouldn’t the state be able to enjoin the persistent violation of that law?

Stephen V. Quesenberry:

Are we referring here to a non-Indian person or an Indian person?

Byron R. White:

I am referring to anybody… The state comes in and alleges in court that this Indian trader, this trader is consistently selling to minors, and Indians, non-Indians, and he openly announces that he is not obeying the state law about minors.

Why shouldn’t the state be able to enjoin him.

Stephen V. Quesenberry:

Oh, I think, clearly as far as a non-Indian violating they would have jurisdiction–

Byron R. White:

What do you mean a non-Indian?

What about an Indian?

Stephen V. Quesenberry:

–As far as an Indian, I think that there is a question there.

Byron R. White:

Why?

Stephen V. Quesenberry:

Becase 1161 was initially part of the body of legislation which was Public Law 280–

Byron R. White:

You concede, though, that whether the seller is an Indian or a non-Indian that he must abide by state law except for licensing.

Stephen V. Quesenberry:

–Right.

He must abide by standards governing the sale–

Byron R. White:

Exactly, and let’s assume that it is true.

He has announced that he is not going to abide by this state law with respect to hours or sales to minors, and he just doesn’t live up to the state law.

Why shouldn’t the state be able to enjoin him, whether he is an Indian or not?

Stephen V. Quesenberry:

–I cannot answer why or why not.

I can answer that it is my opinion that based on the legislative history of 1161 and Public Law 280 that Public Law 280 was focused on a grant of criminal jurisdiction to the states.

Stephen V. Quesenberry:

Eleven sixty-one was part of Public Law 280.

It was pulled out of Public Law 280 because of the concern by Indian people that the acceptance of criminal jurisdiction, the repeal of liquor was tied to the acceptance of criminal jurisdiction.

I would say that if the violation was directly related to a transaction in liquor that the exclusive enforcement procedure against an Indian person that was violating would be by federal statute or by tribal action against that person.

Thurgood Marshall:

Didn’t we say that you could not enforce a state liquor law on an Army base?

We said that, I think.

Stephen V. Quesenberry:

Yes, you did, Your Honor.

You said that under the 21st Amendment.

Thurgood Marshall:

Why didn’t you bring it up a minute ago?

Stephen V. Quesenberry:

Well, the cases that this Court has decided have said that you cannot allow a state to regulate on military reservations.

We don’t see any of those cases… We don’t see the case distinguishing those–

Thurgood Marshall:

I frankly don’t see where a state gets a right to regulate the liquor drinking on a reservation by Indians.

Stephen V. Quesenberry:

–We are not conceding that.

In fact, that is specifically what I am saying, Your Honor.

We do not concede that type of regulation.

The state’s remedy in the event that one of the standards is violated in the sale or use of liquor they must go to the United States Attorney.

John Paul Stevens:

But you do concede, if I understand you correctly, that the Indians must obey those state standards that you agree are applicable within the reservation?

Stephen V. Quesenberry:

We definitely–

John Paul Stevens:

There are some state standards, and you are not concerned in this case about how they enforce them.

You are just saying the only state standard you do not have to obey is the licensing requirement.

Stephen V. Quesenberry:

–That is correct, Your Honor.

John Paul Stevens:

What about state standards that are merely implementations of a licensing requirement, such as those things that they say if you do A, B, and C, then your license may be revoked, but there is no criminal state sanctions.

Are they binding, or not, under your view?

Stephen V. Quesenberry:

They would not be binding.

Under our view what we are saying, and let me clarify it, is that the determinations leading up to the actual sale of liquor, the unique determinations of licensing and the qualifications of the licensee, the determination of whether these premises are fit for liquor to be sold, are within the prerogative of the tribal governmental authority under Section 1161.

John Paul Stevens:

And that would include, for example, method of operation, for example, the problem Justice Marshall brought up about the obscene dancing which is in one of their administrative regulations but is not a criminal offense.

You say that regulation does not apply within the reservation?

Stephen V. Quesenberry:

If it was part of their administrative regulations–

John Paul Stevens:

Well, it is.

Stephen V. Quesenberry:

–and tied to licensing, we would say that it is not applicable.

If it was a state criminal offense–

John Paul Stevens:

So that your real position is there is no licensing requirement and no requirement that merely relates to licensing is enforceable within the state.

Stephen V. Quesenberry:

–That is our position.

Byron R. White:

So a state statute that says no licensee selling liquor shall sell to minors, that would not be applicable to the Indians?

Stephen V. Quesenberry:

No, that would be applicable.

That is governing–

Byron R. White:

Why?

It is tied to a licensee.

Stephen V. Quesenberry:

–That is governing the sale or use of liquor, Your Honor.

We are focusing on the sale or use of liquor.

I think you can reasonably distinguish between the determinations about the qualifications of the seller and where the liquor is sold and the actual sale or use of liquor.

Congress–

William J. Brennan, Jr.:

How about a regulation that liquor may be sold only between the hours of 12 and 6, if that is a state regulation?

Stephen V. Quesenberry:

–That liquor can only be sold during the hours of 12 and 6?

William J. Brennan, Jr.:

Yes, and may not be sold on Sunday.

Stephen V. Quesenberry:

Then that is… The Indian on the reservation is going to have to abide by that.

That is going to be a standard that is going to be enforced–

William J. Brennan, Jr.:

No food may be sold where liquor is sold.

Stephen V. Quesenberry:

–That is also, if that is a state standard, that is one that would be applicable.

John Paul Stevens:

But what if those that Justice Brennan gave you were not in any state statute but were merely in regulations promulgated by the liquor authority saying that every licensee must do the following or his license will be revoked.

Then, under your view, they would not be enforceable, as I understand you.

Stephen V. Quesenberry:

I think in that situation you would have to just ask if that is a determination that is leading up to the ultimate grant of the license.

John Paul Stevens:

Well, assume it is, that the only source of state law is that if you do not follow these rules your license will be revoked.

That is our hypothesis.

Stephen V. Quesenberry:

I agree with you.

I think that if you say that it is part of their regulatory structure, I would say that Congress in enacting this federal penal statute did not intend to incorporate this whole state civil regulatory scheme–

William H. Rehnquist:

Well, does your distinction turn on the difference between a regulation and a statute?

Stephen V. Quesenberry:

–In this particular situation–

William H. Rehnquist:

What particular situation?

Stephen V. Quesenberry:

–In the situation presented by Justice Stevens that it would turn on that because the state standard in that particular hypothetical was tied to the administrative regulation, to its civil regulatory structure rather than imposed in the specific statute imposing a criminal penalty.

Thurgood Marshall:

Do you agree that the Indian reservations are subject to the licensing provisions of California?

Thurgood Marshall:

Do you agree to that?

Stephen V. Quesenberry:

No, I do not.

Thurgood Marshall:

Well, it sounded like you did a minute ago.

Stephen V. Quesenberry:

Well, I certainly did not mean to indicate that at all.

That is what this case is about–

Thurgood Marshall:

That is what I thought.

Stephen V. Quesenberry:

–That is what this case is about.

We contend that the statute by no means is a grant of any type of licensing authority, nor does it impose the state licensing requirements by way of this in conformity with language.

In our briefs we go into discussion of the previous decisions by this case, including the Moe decision which dealt with state licensing, cigarette vendors license.

Now, that particular case did not have a specific federal statute such as we have in this particular instance.

But, we do not see any clear indication in the legislative history or in the language of the statute that Congress intended to impose a state civil regulatory scheme as a condition–

William H. Rehnquist:

But, they certainly did decide in 1161 to treat liquor transactions differently than cigarette transactions and that sort of thing, which really are not covered by a specific statute.

Stephen V. Quesenberry:

–That is correct, and that was against the backdrop of total federal preemption of the area of liquor trade.

This Court in Mazurie held that there was a valid delegation of congressional authority to tribes, which as a group exercised some inherent, independent authority over both the territory, the members, and the subject matter.

William H. Rehnquist:

But Mazurie was basically an argument between a private individual and the federal government prosecuting as on the basis of an Indian regulation and argue unlawful delegation and that sort of thing.

The state, Wyoming, was not involved in Mazurie at all.

Stephen V. Quesenberry:

No, I think they may have participated as a amicus, but there was no real conflict between the state and the tribe because there was a state license that was required by virtue of tribal ordinance, in fact, in that case.

I would point out that in that case Indian tribal members were subject only to a tribal licensing requirement.

Essentially what the state… We see the state’s position as trying to come in the back door from Public Law 280 essentially trying to obtain civil regulatory control in this area that has been denied–

John Paul Stevens:

May I ask one other question about their trying to gain control?

This statute was passed 30 years ago.

Why do you suppose it took so long for this issue to get here?

I know there was an Interior Department opinion in 1971 that indicated that you were correct.

Before that had anybody tried to get these licenses, before that 1971… What took… I do not understand why it takes 30 years for this issue to arise.

Stephen V. Quesenberry:

–I think that part of the answer to that is that Indian reservations are beginning to experience economic development.

They have been suppressed for a long time.

Tribal governments are developing.

They are regulating more, and we have a situation where non-Indian communities and Indian communities are maybe closer together.

We have tribal authority being exerted to a greater extent than it was before.

John Paul Stevens:

Is it correct that prior to 1971 that there was no attempt to get any liquor license within an Indian reservation?

Stephen V. Quesenberry:

I cannot really answer that.

I do not have the facts to answer that question.

Sandra Day O’Connor:

Mr. Quesenberry, why couldn’t the state of California simply make selling liquor without a license a crime and punish them for a crime?

Stephen V. Quesenberry:

Again, I would say that is a civil regulatory-type act.

Sandra Day O’Connor:

No, they make it a criminal offense.

Stephen V. Quesenberry:

They could absolutely prohibit the sale of liquor.

They could maintain a dry state and that would be… If an Indian on a reservation chose to sell liquor in violation of that, they could be subject to prosecution under federal law.

But, that would be–

Byron R. White:

Not under state law, you say?

Stephen V. Quesenberry:

–The position that I took before on that was as to criminal violations–

Byron R. White:

Under Justice O’Connor’s example there is a state criminal statute.

Let’s assume that nobody may sell liquor in the state of California.

Now, could the Indian be prosecuted under state law for selling liquor?

Stephen V. Quesenberry:

–Our contention would be that they could not, that Public Law 280, that 1161 was pulled outside of Public Law 280 and was treated differently, that liquor has been treated differently historically by Congress and that the remedy is through the federal enforcement scheme.

Thank you.

I think my comments are concluded.

Warren E. Burger:

Mr. Schwartz.

Lewis F. Powell, Jr.:

Mr. Schwartz, before you commence, I wish you would try to clarify for me exactly what the federal government thinks that the state may regulate, and I am thinking primarily about matters such as Sunday operation, hours of operation, sales to minors, location of stores.

May the state regulate all of those under the government’s position?

Joshua I. Schwartz:

Mr. Justice Powell, I think it may, but perhaps we better be crystal clear about our terms here.

I am not sure what you mean by regulate.

Lewis F. Powell, Jr.:

Well, determine whether they can operate on Sunday or not, when they must close, et cetera.

Joshua I. Schwartz:

State laws on that subject do determine the terms, in our view, as to which–

Lewis F. Powell, Jr.:

But, only the federal government can enforce them?

Joshua I. Schwartz:

–Well, as we understand it, we would suggest that certain state laws which do not have any licensing related terms that say in the absolute, no person may sell alcohol to a minor, or give alcohol to a minor at certain hours are pure criminal statutes and are not the kind of essentially a subterfuge–

Lewis F. Powell, Jr.:

But the state could revoke the license if these regulations were violated?

Joshua I. Schwartz:

–Our view is that the state lacks licensing authority so that a pure criminal violation would in California because it is a Public Law 280 state could actually be prosecuted by the state.

Byron R. White:

Under state law?

Joshua I. Schwartz:

Under state law.

Byron R. White:

So, you disagree with your colleague on that?

Joshua I. Schwartz:

I may to some extent.

What the–

Byron R. White:

Well, to some extent he said that the state could not prosecute him.

Joshua I. Schwartz:

–It is the government’s view–

Byron R. White:

You say that he may be prosecuted.

That is not just to some extent.

Joshua I. Schwartz:

–If I may, Mr. Justice White–

Byron R. White:

You may.

Joshua I. Schwartz:

–There are… Section 1161 and Public Law 280 were passed on the same day by Congress.

They do have a common background, and it is necessary to sort out a sensible in pari materia construction of the two.

We would submit that a state may not, given that background, pass a statute, as California, in fact, has, that says it is a misdemeanor to sell liquor without one of our licenses because that would totally frustrate the sense of Section 1161, even though that is on its face a criminal violation.

I take it that was what fueled Justice O’Connor’s question.

On the other hand, it is our sense that some criminal violations which are written in the absolute and they are not tied to the requirement of a license may fairly be regarded as distinct and true criminal proscriptions and that those may be enforced by the state.

If that is in conflict with private counsel’s answer, so be it, Justice White.

Thurgood Marshall:

Well it is.

Counsel, the statute says,

“no one Indian or otherwise in the state of California may sell liquor to a minor. “

Can that be enforced?

Joshua I. Schwartz:

I would think that it could.

Thurgood Marshall:

By the state?

They could send in an officer and arrest?

Joshua I. Schwartz:

Pursuant to Public Law 280, Justice Marshall, because California is a Public Law 280 state and does have some jurisdiction which permeates the reservation, that is not resting on the statute which is the focus of this case.

Thurgood Marshall:

But that statute could be enforced?

Joshua I. Schwartz:

That would be our understanding.

Thurgood Marshall:

How far would you go?

Where are you going to draw the line now?

Joshua I. Schwartz:

Well, one line that we would clearly draw is that no proscription which is tied by the state in its own scheme to possession of a license may be enforced in that manner because that must be regarded as part of the regulatory scheme.

Thurgood Marshall:

There is also a regulation by the state liquor board which says that nobody operating a licensee place shall sell to a minor.

Would that make the criminal statute invalid?

Joshua I. Schwartz:

I am not sure I understand the question.

Thurgood Marshall:

I do.

You say the difference is between whether it is criminal or it is a regulation.

I have given you one that you have both.

Joshua I. Schwartz:

Mr. Justice Marshall–

Thurgood Marshall:

Now, are they both good, or is one good?

Joshua I. Schwartz:

–Let me try this and see if this will answer your question.

Our view is not that the distinction depends on whether something is embodied in a regulation or a state statute.

Let us be clear about that.

We suppose that for purposes of Section 1161 if the state of California delegates to an administrative agency the authority to enact a regulation proscribing terms of conduct in general terms not depending on whether or not you hold one of their licenses or not, that that is part of the state law.

If that state law is criminal, then California being a Public Law 280 state it may be enforced.

But, whether or not the state is a Public Law 280 state because it is part of the terms of state law which must be conformed to, the federal sanction does apply.

If I have not helped you, come back at me.

Thurgood Marshall:

Well, I just do not understand how you say that you can do one by merely putting the word criminal on it.

Unless you put criminal on it, it does not work.

Joshua I. Schwartz:

The answer is in part that Public Law 280, which stands outside this case, says that the state shall have certain criminal jurisdiction.

Now, the state as… California has a system whereby certain acts are proscribed only through the licensing scheme, but should the state wish to, proscribe those acts in general terms, those would be incorporated within the Section 1161 structure.

John Paul Stevens:

Does that mean then… You do take a different view.

Say they have a regulation that says, no obscene dancing in a liquor establishment, and anyone who violates this regulation can have his license revoked, but there is no criminal prohibition against it.

Is that enforceable or is it not, in Indian reservations?

Joshua I. Schwartz:

I think we would say not because the sanction is license revocation but the same regulation could be written a different way to accomplish the same effect.

John Paul Stevens:

Do you find that in the text of 1161, that distinction?

Joshua I. Schwartz:

No, Justice Stevens… In an indirect sense we do.

What our contention is that Section 1161 does not authorize the state to regulate through licensure.

That means it cannot do any of these things indirectly through licensure.

If it wishes to enact laws–

John Paul Stevens:

Well, but would you say that a person who runs a liquor establishment in which there is the kind of dancing I described that violates a state regulation, is that liquor being sold in conformity with state law within the meaning of 1161?

You say it is, even though it violates a plain rule of California law.

Joshua I. Schwartz:

–The answer is whether that plain rule is a rule that says, our licensees may not permit such conduct or whether, on the other hand–

John Paul Stevens:

No, the question is whether the person within the meaning of 1161 has been acting in conformity with state law.

That is what that statute says.

Joshua I. Schwartz:

–In conformity with state law, we understand to mean–

John Paul Stevens:

Conforming with some state laws?

Joshua I. Schwartz:

–If you will, Justice Stevens, but the point is that licensing is a very different kind of authority to exercise and that the state can accomplish the same objective through enacting general purpose standards.

What is offensive, if I may, about the licensing, regulatory authority that the state claims, is its discretionary element, as well as the fact that a tax is being imposed.

The substantial fee is exacted before for the privilege of doing business on the reservation.

Sandra Day O’Connor:

Well, the Court of Appeals did not really base its holding on the theory that it was a tax which the government had argued, did it?

Joshua I. Schwartz:

I think it is fair to say that the Court of Appeals did not base its holding on it.

It did not reject it.

It simply did not rely on it.

What we would lay emphasis on, Justice O’Connor, is the discretionary element.

It is important to understand that in operating a licensing scheme the state does not disavow the full range of discretionary powers that exist under a licensing scheme.

It is useful to actually look at the California statutes and see what may happen.

For instance, when one applies for an Alcoholic Beverage Control Department license the duty of the Department is to determine whether the licensee is qualified.

Among the things that must be taken into consideration are the results of an investigation.

The Department is enjoined to investigate all matters affecting the public welfare or morals, and it has been held under California law that a license may be denied on the basis of a determination respecting these considerations.

The statute also incorporates other relatively vague criteria.

John Paul Stevens:

But, suppose those criteria were made specific, such as you cannot get a license if you are convicted of a felony.

Another state, not California, has a law that you cannot sell liquor if you have been convicted of a felony.

That law could be enforced in the other state but not California, as I understand it.

Joshua I. Schwartz:

Yes, Justice Stevens, and I would draw an analogy here to the Court’s decision in the Grendel’s Den case.

If a state chooses to make its criteria unconditional then those criteria come outside the realm of discretionary administration and then they are part of the laws of the state for purposes of Section 1161.

If the state makes the choice to insist on retaining discretion to sort these factors out for itself then the consequence under Section 1161 is that that is not part of the law of the state.

John Paul Stevens:

Do you find any support for this in either the language of the statute or the legislative history, this rather subtle distinction?

Joshua I. Schwartz:

Justice Stevens, if I may, a one sentence answer… The key thing in our view is that there is no support for the rather remarkably intrusive authority that the state does claim.

The more modest authority that we would accord the state is consistent with a traditional pattern.

John Paul Stevens:

But it is equally intrusive as to its own citizens.

It treats them exactly like it treats the people who live in California off a reservation.

Joshua I. Schwartz:

Yes, but I think it is common ground here that those who live on Indian reservations may not in general be treated the same way absent federal authority, and that is why we draw that distinction.

Sandra Day O’Connor:

Well, I suppose you could have argued just simply that the federal laws on Indian traders preempted in this area but not make the further distinction that you appear to be trying to make.

Joshua I. Schwartz:

We think that… An argument that the state has no authority whatsoever because of the federal Indian trader statutes would be difficult to reconcile with the fact that Congress does appear to have recognized some role for the states in Section 1161.

Joshua I. Schwartz:

This distinction, perhaps not totally satisfactory and certainly not lucidly clear, is the best way we can find to draw some line in an area where it appears that some line must be drawn.

Thank you.

Warren E. Burger:

Mr. Meth, you have about four minutes remaining.

Let me ask you a question.

I am confused somewhat by these arguments.

Does California have the same control, in your view, in terms of issuing licenses over Indians on Indian reservations as over all the other people within the outer perimeter boarders of California.

Alan S. Meth:

Yes, that is California’s position, Your Honor, based on the wording of the statute and the legislative history.

Warren E. Burger:

In other words, Indians are no different from any other person?

Alan S. Meth:

That is correct.

I think it is reasonably clear from Section 1161 that a state has the, what Mr. Schwartz called the remarkably intrusive authority of telling an Indian reservation that it cannot sell liquor at all.

The way that a state has that authority is by making the entire state dry.

In 1953, there were two states that were actually dry, Mississippi and Oklahoma.

The Court on a number of occasions has said that if a governmental entity has a greater power, it also has all of the lesser powers included within that greater power.

Two early 21st Amendment cases, Ziffrin, Inc. v. Reeves and State Board of Equalization v. Young’s Market Co. cited in our briefs indicate that a state has the authority under the 21st Amendment to totally prohibit the introduction of liquor within the state, and if a state has that authority it has the authority to strictly control how liquor is to be distributed within the state.

Another case, a recent Indian case, Merrion v. Jicarilla Apache Tribe… and I hope I pronounced it correctly… the Court dealt with the question of whether a tribe could exclude nonmembers, and the Court said that the power to exclude nonmembers from the reservation included the power to condition entry onto reservation land, to condition the continued presence on Indian land, and also condition reservation conduct.

If a state has the greater power to totally prohibit liquor within Indian country, I do not understand why the distinction has to be drawn that some laws, lesser laws should be followed but other lesser laws should not be followed.

If a state under Section 1161 has the greater power, it should also have the lesser power.

In summary, California is only asserting that it has concurrent authority with the tribes and with the United States to control liquor traffic in Indian country.

We are not asserting that because of California’s licensing laws.

Those laws are exclusive.

Section 1161 gives the United States the authority to criminally prosecute.

Section 1161 also gives certain responsibilities to the state… to the tribes, and if the powers to the tribe include the power to license, all California is saying that that statute with the words both and the words in conformity with, and the words laws of the state includes the same powers to the state.

Warren E. Burger:

Thank you, gentlemen.

The case is submitted.

The Honorable Court is now adjourned until tomorrow at 10 a.m..