Alcohol Problem – Native American Nations Should Set Their Own Liquor-Licensing Rules

Los Angeles Daily Journal, Wednesday, June 18, 2004 pg. 6
By Ralph Barat Saltsman, Stephen Warren Solomon and Stephen Allen Jamieson

The French determine rules for wine in France. The United Kingdom defines how much beer really is in a pint. Individual provinces decide whether to allow sales of alcoholic beverages to 19-year-old Canadians. Each of the 50 states in America may enact their own liquor regulations.

Native American tribes in the United States are sovereign nations – or so we are told. In California, however, these nations cannot define their own rules for alcoholic beverage license applications and sales. The state Department of Alcoholic Beverage Control regulates alcohol sales on Native American lands. Why does this state agency have jurisdiction over sovereign nations within its boundaries?

The Constitution authorizes Congress to regulate commerce “with the Indian tribes.” Article 1, Section 8, Clause 3. The relationship between the U.S. government and the tribal nations is “sovereign to sovereign.” Philip P. Frickey, “Marshalling Past and Present: Colonialism, Constitutionalism, and Interpretation in Federal Indian Law,” 107 Harv.L.Rev. 381 (Dec. 1993).

While a tribe in this state may, with little or no local intervention, build a casino of unlimited size and expense or construct and staff a fire department, police department, medical facility, library or school system, that tribe cannot sell alcoholic beverages unless the department has granted it a license, following the same application process as other licensees.

In many municipalities, the city must grant a conditional-use permit before the department can issue that license. On the reservation, with exceptions set by compact, the tribe dictates exclusively what will be built, how and where it will be built, and what the site’s uses will be.
However, before alcohol is sold, a license is required. Native American tribe license applicants frequently find themselves faced with angry protesters. The protesters don’t want the reservation adjacent to their land, don’t want the tribe in the neighborhood, don’t want the Las Vegas-style casino within view and don’t want casino guests driving on “their” streets to and from the reservation.

Because the tribe has the exclusive authority to dictate what will be built on reservation land, protesting neighbors have no realistic forum in which to complain. Thus, when they want to halt construction of a casino, they protest the liquor license application – sometimes in a coordinated fashion. The tribes frequently try appeasement.

A May 7 Press-Democrat article described a recent clash in Sonoma County: “An overflow crowd packed a town hall meeting Tuesday to hear how they can stop or contain a casino proposed at Sonoma’s doorstep.
“With more than 400 people in attendance, Sonoma’s community center was so jammed that some stood outside and listened through open windows. The overriding sentiment was made apparent when county Supervisor Valerie Brown, who organized the meeting, asked for a show of hands as to how many would join a new organization called ‘No Las Vegas in Sonoma.’ Nearly everyone raised their hands.”

Meanwhile, a May 7 Riverside Press-Enterprise article described a similar scene in San Bernardino: “Neighbors of the San Manuel Band of Mission Indians asked San Bernardino leaders at Monday’s City Council meeting for an opportunity to observe talks between the city and the tribe about its casino expansion.

“San Bernardino Mayor Judith Valles told neighbors she’s confident the tribe will address many of their concerns, based on a two-hour meeting Friday with tribal leaders. Both she and City Attorney James Penman noted, however, that they’re not sure whether the tribe’s council will approve the measures when it meets Wednesday.”

The 18th and 19th century treaties that the Native American nations entered into with the United States were contracts dictated by a conquering power, negotiated and written in a language foreign to them. But in Worcester v. Georgia, 31 U.S. 515 (1832), Chief Justice John Marshall held that the treaties were not acts of surrender but were reservations by the tribes of all rights not clearly granted to the United States. Hence, the term “reservation” for retained tribal lands. Frickey, at 402.

The divisions between state or federal law and tribal authority are not always easy to discern. In Fair Political Practices Commission v. Agua Band of Cahuilla Indians, 02-A54545 (Sacramento County Super. Ct. Feb. 27, 2003), the court found that California has jurisdiction to pursue a tribe for state election-campaign disclosure violations.

Flynt v. California, 104 Cal.App.4th 1125 (2002), upheld the state-tribal gambling compacts as constitutional. Tribes thus continue casino gambling under the compact.

About 150 years after Worcester, the Supreme Court in Rice v. Rehner, 463 U.S. 713 (1983), upheld California’s right to require an alcoholic beverage control license before alcohol could be sold on an Indian reservation.

Eva Rehner was a federally licensed trader, operating a general store on the Pala Indian reservation. The 9th U.S. Circuit Court of Appeals held that Rehner did not need a license to purchase alcohol from wholesalers and sell alcohol from her store on the reservation.

Justice Sandra Day O’Connor, writing for the majority, disagreed. The court based its decision on three factors: First, tradition “has not recognized a sovereign immunity or inherent authority in favor of liquor regulation by Indians.” Second, the courts have found concurrent jurisdiction at state and federal levels for “the use and distribution of alcoholic beverages in Indian country.” Finally, “Congress has authorized state regulation over Indian liquor transactions by enacting” certain federal statutes.

The majority held that history, tradition and federal law all lined up in favor of state regulation of alcohol sales on Indian reservations; therefore, California could require a license before alcohol sales could occur on tribal territory.

Justice Harry A. Blackmun’s dissent noted that a “State could not require” a cigarette sales-permit on an Indian reservation and “could not impose a use tax on personally installed ski lifts at a tribal resort.” The dissent pointed to historical and pervasive federal regulation of alcohol matters pertaining to tribes.
Blacken argued, “Because nothing in the language or legislative history of [federal law] indicates any intent to confer licensing authority on the States, I would hold that California’s attempt to require Indian traders to obtain state liquor licenses is pre-empted by federal law.”

More recently, in Fort Balkan Indian Community v. Mazurka, 43 F.3d 428 (1994), the 9th Circuit cited Rice and upheld Montana’s authority to prosecute criminal violations of state liquor law: “[T]he Rice court found that it was not necessary that Congress expressly indicate that the State had jurisdiction to regulate liquor … The same reasoning applies here. Given the unique context of liquor regulation and enforcement, it would not be a severe erosion of tribal sovereignty to interpret [the federal statute] as authorizing the prosecution of Indians in state court for liquor violations on reservations.”

States derive their independent power to regulate alcohol from the Constitution. But the Constitution grants no authority to states with respect to sovereign nations sited within state boundaries. The 21st Amendment reads: “Section 2. The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.”

Native American tribes are neither states, nor territories nor possessions of the United States. The 21st Amendment could have, but does not, make reference to Indian reservations. Until 1983 and Rice, nothing authorized this state to intrude into Native American sales of alcohol on reservations.

If the federal treaties are really grants of authority from tribes to the United States, with all rights not granted being reserved to the tribes, then Rice is wrong. The tribes clearly did not give government power over alcoholic sales and dispensation on reservations. None of the bases for imposing state jurisdiction over alcohol sales in Rice can stand up under honest scrutiny.

If tribes in California are sovereign nations, state agencies should not be involved in tribal affairs unless the tribes clearly authorize that intrusion. Someone just might convince a court of that injustice one day.
Perhaps the key resides in Sacramento, with an initiative or legislation. There is precedent for Native Americans ejecting the government from places that the government doesn’t belong – so don’t bet against the tribes.

Solomon, Saltsman & Jamieson are attorneys practicing in the areas of ABC law, ABC Appeals Board cases, and all related Land Use Matters such as City and County Conditional Use Permits, Variances, Police and Fire permits, Entertainment law, and Gambling Law; as well as Business and Personal Injury litigation. Solomon, Saltsman & Jamieson can be reached at 800 405 4222.”