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Mashantucket Pequot Tribe v. Town of Ledyard

United States Court of Appeals for the Second Circuit

March 18, 2013, Argued; July 15, 2013, Decided

Docket Nos. 12-1727-cv(L), 12-1735-cv(CON)

Opinion

 [*459]  Wesley, Circuit Judge:

The Mashantucket Pequot Tribe (the "Tribe") challenges the Town of Ledyard's (the "Town") imposition of the State of Connecticut's (the "State") personal property tax on the lessors of slot machines used by the Tribe at Foxwoods Resort Casino and MGM Grand at Foxwoods (collectively "Foxwoods"), located in Ledyard, Connecticut. See Conn. Gen. Stat. §§ 12-40 et seq. (the "tax"). The Tribe filed complaints in August 2006 and September 2008 on behalf of two vendors who lease slot machines to the Tribe for use at Foxwoods. The Town and the State appeal  [*460]  from a ruling of the United States District Court for the District of Connecticut (Warren W. Eginton, Judge) denying their motions for summary judgment, granting summary judgment to the Tribe, and affording the Tribe injunctive and declaratory relief.

As a threshold matter, the Town and State assert that (1) the Tribe lacks standing; (2) the Tax Injunction Act, 28 U.S.C. § 1341, strips federal courts of jurisdiction over this action; and (3) principles of comity bar federal courts from deciding  [**3] this action. On the merits, the Tribe defends the district court's order to invalidate the State's personal property tax as applied to the vendors, asserting that the tax is preempted (1) by the Indian Trader Statutes, 25 U.S.C. §§ 261-64; (2) by the Indian Gaming Regulatory Act ("IGRA"), 25 U.S.C. §§ 2701 et seq.; and (3) pursuant to the balancing test enunciated in White Mountain Apache Tribe v. Bracker, 448 U.S. 136, 100 S. Ct. 2578, 65 L. Ed. 2d 665 (1980).

We hold that: the district court properly exercised jurisdiction, and the Tribe has standing to pursue this claim; neither IGRA nor the Indian Trader Statutes expressly bar the tax; and, under the Bracker test, federal law does not implicitly bar the tax because State and Town interests in the integrity and uniform application of their tax system outweigh the federal and tribal interests reflected in IGRA. The district court erred in granting summary judgment for the Tribe and in denying summary judgment for the Town and State.

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722 F.3d 457 *; 2013 U.S. App. LEXIS 14196 **; 2013 WL 3491285

MASHANTUCKET PEQUOT TRIBE, Plaintiff-Appellee, -v.- TOWN OF LEDYARD; PAUL HOPKINS, Tax Assessor, Town of Ledyard; JOAN CARROLL, Tax Collector, Town of Ledyard, Defendants-Appellants, STATE OF CONNECTICUT, Intervenor-Defendant-Appellant.1

Prior History:  [**1] The Town of Ledyard and State of Connecticut appeal from the judgment of the United States District Court for the District of Connecticut (Warren W. Eginton, Judge), holding that (1) nothing barred the court from exercising jurisdiction and (2) Connecticut's personal property tax, as applied to vendors leasing slot machines to the Mashantucket Pequot Tribe for use at Foxwoods casino, was barred by the Indian Trader Statutes, Indian Gaming and Regulatory Act, and pursuant to the balancing test enunciated in White Mountain Apache Tribe v. Bracker, 448 U.S. 136, 100 S. Ct. 2578, 65 L. Ed. 2d 665 (1980). We hold that the district court (1) appropriately reached the merits of the case but (2) erred by finding the tax to be preempted.

Mashantucket Pequot Tribe v. Town of Ledyard, 2012 U.S. Dist. LEXIS 43910 (D. Conn., Mar. 27, 2012)

Disposition: REVERSED and REMANDED.

CORE TERMS

Tribe, gaming, tribal, lease, reservation, preempted, state tax, non-Indian, Trader, district court, vendors, taxes, personal property tax, on-reservation, slot machine, comity, tribal sovereignty, cases, generally-applicable, sovereignty, Enterprise, preemption, casino, courts, federal interest, state taxation, federal court, state law, parties, summary judgment

Tax Law, State & Local Taxes, Personal Property Taxes, General Overview, Business & Corporate Compliance, Governments, Native Americans, Indian Gaming Regulatory Act, Constitutional Law, Case or Controversy, Standing, Elements, Particular Parties, Governments, Taxation, Tribal Sovereign Immunity, Civil Procedure, Federal & State Interrelationships, Anti-Injunction Act, Tax Anti-Injunction Act, Authority & Jurisdiction, Sales Taxes, Exempt Sales, Exceptions, Legislation, Interpretation, Preliminary Considerations, Abstention, International Law, Comity Doctrine, Comity Doctrine Procedures, Discretion Regarding Procedures, Appeals, Standards of Review, Abuse of Discretion, Removal, Postremoval Remands, Appellate Review, Reviewability of Lower Court Decisions, Administration & Procedure, Judicial Review, Federal Common Law, Preemption, Federal Preemption, Justiciability, Injury in Fact, Police Powers