[No. 35067-0-II. Division Two. July 10, 2007.]
[1] Indians — Sovereignty — Scope — Contracting. Tribal sovereign immunity protects tribes from suit; it does not prevent tribes from entering into contracts. [2] Courts — Jurisdiction — In Personam — Immunity — Tribal Sovereign Immunity — Question of Law or Fact — Review. Whether a court has personal jurisdiction over a party asserting tribal sovereign immunity is a question of law that an appellate court reviews de novo. [3] Indians — Sovereignty — Immunity From Suit — Governmental and Commercial Activities — On or Off Reservation.Tribes are considered "domestic dependent nations," and as such exercise inherent sovereign authority over members and territories, including sovereign immunity from suit, absent a clear and unequivocal waiver by the tribe or congressional abrogation. Tribal sovereign immunity protects tribes from suits arising from both governmental and commercial activities, whether conducted on or off a reservation. [4] Indians — Sovereignty — Immunity From Suit — Nature of Relief Sought — Effect. Tribal sovereign immunity will protect a tribe from a suit regardless of whether the relief sought is at law or in equity. [5] Indians — Sovereignty — Waiver — Agreement With State — Disclaimer of Waiver. A tribe does not waive sovereign immunity by entering into an agreement with a state unless the agreement contains an explicit waiver of that immunity. [6] Indians — Sovereignty — Immunity From Suit — Scope — Tribal Officials. Tribal sovereign immunity protects individual tribal officials acting in their representative capacity and within the scope of their authority, but it will not protect officials acting pursuant to an unconstitutional statute in cases seeking merely prospective relief. [7] Indians — Sovereignty — Immunity From Suit — Agreement With State — Taxation of Cigarettes. Tribal sovereign immunity protects a tribe from suit in state court where it has entered into an agreement with the State governing the taxation of cigarette sales in Indian country, absent a clear and unequivocal waiver. [8] Parties — Joinder — Indispensable Parties — Failure To Join — Dismissal — Review — Standard of Review. A trial court's dismissal of an action under CR 12(b)(7) for failure to join an indispensable party under CR 19 is reviewed for an abuse of discretion; any legal conclusions underlying the ruling are reviewed de novo. [9] Courts — Judicial Discretion — Abuse — What Constitutes — Test. A court abuses its discretion when its decision is manifestly unreasonable, is based on untenable grounds, or is made for untenable reasons. An abuse of discretion exists if the court relies on unsupported facts, takes a view no reasonable person would take, applies the wrong legal standard, or bases its ruling on an erroneous view of the law. [10] Parties — Joinder — Indispensable Parties — Failure To Join — Dismissal — Disfavored Status. The dismissal of an action under CR 12(b)(7) for failure to join an indispensable party under CR 19 is a drastic remedy that should be employed sparingly when there is no other ability to obtain relief. A trial on the merits is the preferred course. [11] Parties — Joinder — Failure To Join — Two-Step Inquiry. A court undertakes a two-part analysis to determine whether a party is indispensable. First, the court must determine whether the party is needed for a just adjudication. Second, if the party is needed but it is not possible to join them, the court must determine whether in equity and good conscience the action should proceed among the parties before it or should be dismissed, the absent party thus being regarded as indispensable. The factors to be considered by the court include: (1) to what extent a judgment rendered in the party's absence might be prejudicial to him or to those already parties; (2) if there is prejudice, the extent to which, by protective provisions in the judgment, shaping or relief, or other measures, the prejudice can be reduced or avoided; (3) whether a judgment rendered in the party's absence will be adequate; and (4) whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder. This analysis is heavily influenced by the facts and circumstances of individual cases. [12] Parties — Joinder — Indispensable Parties — Burden of Proof. The burden of proof for establishing indispensability is on the party urging dismissal under CR 19. [13] Contracts — Parties — Joinder — Indispensable Parties — Party to Contract. A party to a contract is necessary and, if not susceptible to joinder, indispensable to an action seeking invalidation of that contract. [14] Indians — Sovereignty — Immunity From Suit — Lack of Alternative Remedy or Forum. A tribe's immunity from suit applies even if the plaintiff has no alternative remedy or forum. [15] Parties — Joinder — Indispensable Parties — Indian Tribe — Sovereign Immunity — Effect. A court does not err by dismissing the action under CR 19 even where the plaintiff has no other adequate remedy or forum. [16] Parties — Joinder — Necessity — In General. Under CR 19, a necessary party may be indispensable, but a dispensable party may still be necessary. [17] Appeal — Decisions Reviewable — Ripeness — Trial Motion — Absence of Ruling. An issue is not ripe for review if the trial court has not ruled on the motion. [18] Appeal — Assignments of Error — Argument — Authority — Absence — Effect. An appellate court may decline to consider a claim or issue that is unsupported by legal authority or argument. [19] Appeal — Decisions Reviewable — Ripeness — Dismissed Action — Merits. An appellate court will not consider the merits of a claim where the trial court's dismissal did not reach those merits. [20] Appeal — Review — Constitutional Issues — Insubstantial Argument — Effect. An appellate court may decline to consider an issue where the trial court did not reach the merits of the argument. [21] Costs — Attorney Fees — On Appeal — Frivolous Appeal — What Constitutes. For purposes of awarding attorney fees under RAP 18.9(a), an appeal is frivolous where there are no debatable issues upon which reasonable minds could differ, the appeal is so totally devoid of merit that there is no reasonable possibility of reversal, or the appellant fails to address the basis of the trial court's decision. Nature of Action: A tribal member sought a declaration that an agreement between his tribe and the State governing taxation of cigarette sales in Indian country was unlawful and invalid. The plaintiff also sought injunctive relief and damages. Superior Court: After dismissing the tribe from the case based on sovereign immunity, the Superior Court for Thurston County, No. 05-2-00892-7, Richard A. Strophy, J., on June 9, 2006, dismissed the case on the grounds that the tribe was an indispensable party. Court of Appeals: Holding that the tribe is protected by sovereign immunity and is an indispensable party to the action, the court affirms the dismissal order. Robert E. Kovacevich-, (of Robert E. Kovacevich, PLLC), for appellant. Robert M. McKenna-, Attorney General, and Heidi A. Irvin- and David M. Hankins-, Assistants; and John H. Bell- (of Puyallup Indian Tribe), for respondents. ¶1 PENOYAR, J. — The Puyallup Tribe (Tribe) and the Washington Department of Revenue (State) entered into an Agreement (Agreement) regulating imposition of taxes on cigarette sales in Indian country. FACTS ¶2 On April 20, 2005, the Tribe entered into an Agreement with the State governing the taxation of cigarettes sold by the Tribe and tribally-licensed retailers in Indian country. The Washington Legislature previously authorized the governor to enter into such an Agreement, and the Agreement took effect immediately. See RCW 43.06.465. ¶3 The Tribe agreed to impose and maintain a retail tax on cigarettes that would increase in lockstep with any future increase in the State cigarette tax. In return, the State agreed to waive its right to collect State cigarette sales and use taxes on transactions from "the Tribe, Tribally-licensed retailers, state licensed wholesalers . . . or retail buyers." Clerk's Papers (CP) at 101. Additionally, the Tribe agreed to provide the State 30 percent of the revenue from the new cigarette tax. The Agreement also (1) limits the Tribe and tribally-licensed retailers' acquisition of cigarettes to wholesalers or manufacturers licensed by the State to sell cigarettes wholesale and (2) requires that all cigarettes sold by tribally-licensed retailers and the Tribe bear a tribal tax stamp that includes the wholesaler's serial number. The Tribe also agreed to impose the tax on sales to tribal members. ¶4 The State and the Tribe divided enforcement responsibilities under the Agreement—the State agreed to enforce against non-Tribal and nonmember wholesalers, and the Tribe agreed to enforce against member retailers. ¶5 On May 10, 2005, Matheson filed a complaint in Thurston County Superior Court against both State ¶6 The Tribe filed a motion to dismiss, which the State defendants joined, arguing that it and its officials were protected from suit due to sovereign immunity. The State later filed another motion to dismiss, arguing that the Tribe was an indispensable party under CR 19. On May 26, 2006, the trial court dismissed the Tribe on the basis of sovereign immunity, found that it was an indispensable party, and therefore dismissed the State. Matheson filed a motion for reconsideration, which was denied on June 9, 2006. ¶7 However, two days before the court's decision on his motion for reconsideration, Matheson filed a motion to serve a second supplemental complaint, noting it for hearing on July 7, 2006. In this new complaint, Matheson added a new plaintiff and two new State defendants, removed all Tribal defendants, and asked for a refund of cigarette taxes paid. ¶8 On July 6, 2006, one day before the scheduled motion hearing, Matheson filed a notice of appeal of the trial court's order denying his motion for reconsideration. The next day, the parties stipulated that the trial court would not consider Matheson's second supplemental complaint due to this appeal. ANALYSIS I. DISMISSAL OF TRIBAL DEFENDANTS—TRIBAL SOVEREIGN IMMUNITY A. Sovereignty Issues Raised by Matheson ¶9 Matheson generally assigns error to the trial court's dismissal of his complaint, but he fails to specifically assign error to the trial court's dismissal on the basis of sovereign immunity. Indeed, he does not specifically address the Tribe's sovereign immunity in his opening brief but instead makes claims regarding only "antitrust immunity" and "tribal sovereignty." Appellant's Br. at 16, 18. While Matheson does address tribal sovereign immunity in his reply briefs, none of these arguments are persuasive. ¶10 For example, Matheson contends that the Tribe's sovereign immunity "has been waived by ceding control to the State to regulate on-reservation tribal retailers." 1 Appellant's Reply Br. at 6. ¶11 Matheson later states that "[t]he contemporary rule is that the Puyallup Tribe has no immunity when it has no jurisdiction to tax since Indians no longer have a right to govern persons other than themselves." 1 Appellant's Reply Br. at 9. He then cites Montana v. United States, 450 U.S. 544, 565, 101 S. Ct. 1245, 67 L. Ed. 2d 493 (1981), for the proposition that "inherent sovereign powers of an Indian tribe do not extend to the activities of non-members of the tribe." 1 Appellant's Reply Br. at 9. This statement neither supports Matheson's "contemporary rule" nor has any application or bearing on the issue of the Tribe's sovereign immunity. ¶12 Additionally, Matheson argues that the Tribe's agreement to raise its tax automatically, in lockstep with the State, constitutes "off-reservation conduct and joint control." 2 Appellant's Reply Br. at 2. Matheson appears to contend that the Tribe is subject to State law when it goes off-reservation, but this is unclear. He states that "[w]here joint control is shared by agreement, a tribe has no immunity," but again does not offer legal authority to support that statement. 2 Appellant's Reply Br. at 2. ¶13 Matheson relies on a recent United States Supreme Court case, Wagnon v. Prairie Band Potawatomi Nation, 546 U.S. 95, 126 S. Ct. 676, 163 L. Ed. 2d 429 (2005), for the proposition that "taxing non-Indian wholesalers who sold to on-reservation Indians did not violate tribal sovereignty." Appellant's Br. at 18. Matheson confuses a violation of tribal sovereignty with a waiver of tribal sovereign immunity. In Wagnon, the tribe was the plaintiff—the opinion does not discuss the issue of tribal sovereign immunity. Furthermore, Wagnon did not address a tax mutually agreed to by a tribe and the state but a state tax imposed on gasoline distributors (not retailers), both on and off the reservation. Wagnon, 546 U.S. at 99-100. ¶15 Finally, Matheson claims that "the Puyallup Tribe went off the reservation to require Matheson to buy his inventory exclusively from wholesalers licensed by the [S]tate," and therefore the Tribe is subject to state court jurisdiction. 2 Appellant's Reply Br. at 2. However, neither the record nor the cases Matheson relies on support this proposition. Tribal sovereign immunity protects tribes from suits arising from both governmental and commercial activities, whether conducted on or off a reservation. Wright v. Colville Tribal Enter. Corp., B. Application of Sovereignty Principles ¶16 Personal jurisdiction over a party asserting tribal sovereign immunity is a question of law we review de novo. See Anderson & Middleton Lumber Co. v. Quinault Indian Nation, 130 Wn.2d 862, 876, 929 P.2d 379 (1996). ¶17 Under federal law, tribal sovereign immunity comprehensively protects recognized American Indian tribes from suit absent explicit and "unequivocal" waiver or abrogation. See Wright, ¶18 We recognize that the Fifth Circuit has held that Kiowa preserves tribal sovereign immunity from damage awards only; under that rule, tribal immunity does not protect tribes from declaratory and injunctive relief. See Comstock Oil & Gas v. Ala. & Coushatta Indian Tribes of Tex., 261 F.3d 567, 571-72 (5th Cir. 2001); TTEA v. Ysleta Del Sur Pueblo, 181 F.3d 676, 680-81 (5th Cir. 1999). However, neither the Ninth Circuit nor Washington State has adopted a similar rule—Wright preserved tribal sovereign immunity in the face of a suit for damages but did not address any equitable claims. See Wright, ¶19 Because Matheson requested both equitable relief and damages, sovereign immunity protects the Tribe from his suit, even under the narrow Fifth Circuit rule. Furthermore, the Tribe did not waive its sovereign immunity; the Agreement specifically states that nothing in it shall be construed as a waiver, in whole or in part, of either party's sovereign immunity. ¶20 The Ninth Circuit carved out an exception to absolute sovereign immunity in Burlington Northern Railroad Co. v. Blackfeet Tribe, 924 F.2d 899, 901 (9th Cir. 1991), overruled on other grounds by Big Horn County Electric Cooperative Inc. v. Adams, 219 F.3d 944 (9th Cir. 2000). In cases seeking merely prospective relief, sovereign immunity does not extend to tribal officials acting pursuant to an unconstitutional statute. Burlington N. R.R., 924 F.2d at 901; see also Dawavendewa v. Salt River Project Agric. Improvement & Power Dist., 276 F.3d 1150, 1159 (9th Cir. 2002). However, tribal sovereign immunity continues to protect individual tribal officials acting in their representative capacity and within the scope of their authority. See Wright, ¶21 Here, Matheson named Chad Wright individually in his official capacity as the Tribe's cigarette tax director. Still, no exception applies because Matheson seeks damages and equitable relief, not merely prospective relief. Therefore, both the Tribe and Wright are protected by sovereign immunity; the trial court did not err in dismissing them, and we affirm. II. DISMISSAL OF STATE DEFENDANTS—NECESSARY/INDISPENSABLE PARTY ¶22 Matheson argues that the trial court erred by dismissing the State defendants after it determined that the Tribe was an indispensable party. Specifically, he argues that (1) the trial court erred in holding that the Tribe was an indispensable party and (2) the State defendants should not have been dismissed. ¶26 The CR 19 factors to be considered include: (1) the extent a judgment rendered in the party's absence might be prejudicial to him or those already parties; (2) if there is prejudice, the extent to which, by protective provisions in the judgment, by shaping of relief, or other measures, the prejudice can be lessened or avoided; (3) whether a judgment rendered in the party's absence will be adequate; (4) whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder. CR 19(b); e.g., Crosby, 137 Wn.2d at 306-07. In analyzing whether a party is a necessary and indispensable party, CR 19 " 'calls for determinations that are heavily influenced by the facts and circumstances of individual cases.' " Gildon, ¶28 Because the Tribe is necessary but it is not possible to join it, we review the trial court's determination, keeping in mind the four CR 19 factors. Here, the first three factors weigh in the Tribe's favor, but the final factor favors Matheson. ¶29 First, a judgment rendered in the Tribe's absence would greatly prejudice the Tribe. If a court were to grant Matheson the relief he requests, the Agreement would essentially disintegrate. The Tribe has a substantial interest in the continued existence of the Agreement; any change to the Agreement would inherently prejudice the Tribe. ¶30 Furthermore, it is not apparent how the remedy could be shaped to lessen the prejudice to the Tribe. Proceeding on the antitrust claims alone, as Matheson seems to suggest, would still jeopardize the Agreement if Matheson were to succeed. If the trial court allows him to serve a second supplemental complaint (this issue is examined below), Matheson may suggest a remedy that will not prejudice the Tribe, but evidence of such a remedy is not before us. ¶31 Third, it is difficult to imagine how a remedy fashioned without the presence of the Tribe would be adequate to address Matheson's concerns. Each of Matheson's arguments center around the Agreement's dissolution, and any lesser remedy (as would be required in the absence of the Tribe) will not likely be adequate to address his concerns. III. SECOND SUPPLEMENTAL COMPLAINT ¶34 Matheson claims that the trial court also erred by not allowing him to file his second supplemental complaint. The State responds that Matheson's notice of appeal precluded the trial court from ruling on his motion to serve the second complaint. IV. VALIDITY OF CIGARETTE TAX AGREEMENT STATUTORY REQUIREMENTS (5) Cigarette tax contracts shall provide that retailers shall purchase cigarettes only from: . . . . (b) Out-of-state wholesalers or manufacturers who, although not licensed to do business in the state of Washington, agree to comply with the terms of the cigarette tax contract, are certified to the state as having so agreed, and who do in fact so comply. However, the state may in its sole discretion exercise its administrative and enforcement powers over such wholesalers or manufacturers to the extent permitted by law. . . . . (8) Tax revenue retained by a tribe must be used for essential government services. Use of tax revenue for subsidization of cigarette and food retailers is prohibited. V. MOTION FOR RECONSIDERATION ¶39 Matheson's notice of appeal specifically sought review of the trial court's decision denying his motion for reconsideration. However, he fails to either assign error or put forth any argument regarding the trial court's denial of his motion. Therefore, we need not consider whether the trial court's denial of Matheson's motion for reconsideration was proper. See RAP 10.3(a)(3). VI. FAILURE TO STATE A CLAIM ¶40 Matheson repeatedly asserts the merits of his case regarding possible violations of the Medicine Creek Treaty (10 Stat. 1132-1137 (1854)), the privileges and immunities clause (CONST. art. I, § 12), and federal antitrust law. The merits of his case were not decided by the trial court and are not properly before us. As we stated above, we review a CR 19 dismissal for abuse of discretion, not de novo. ¶41 Finally, Matheson argues that the order dismissing the case was "cursory and incomplete" because it did not address all material issues. Appellant's Br. at 10. He fails to specify what the trial court omitted from its order and cites only one out-of-state case to support his claim. ATTORNEY FEES ¶43 This appeal was not frivolous; Matheson did raise debatable issues on which reasonable minds would differ. We therefore decline to grant the Tribe's request. ¶44 We affirm. HOUGHTON, C.J., and VAN DEREN, J., concur.