Rice v. Rehner, 463 U.S. 713 (1983)

Rice v. Rehner

No. 82-401

Argued March 21, 1983
Decided July 1, 1983
463 U.S. 713

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Syllabus

Respondent is a federally licensed Indian trader who operates a general store on an Indian reservation in California. When she was refused an exemption from California’s law requiring a state license in order to sell liquor for off-premises consumption, respondent filed suit in Federal District Court seeking a declaratory judgment that she did not need a state license. The District Court dismissed the suit, holding that respondent was required to have a state license under 18 U.S.C. § 1161, which provides that liquor transactions in Indian country are not subject to prohibition under federal law if such transactions are

in conformity both with the laws of the State in which [they] occu[r] and with an ordinance duly adopted by the tribe having jurisdiction over such area of Indian country.

The Court of Appeals reversed, holding that § 1161 preempts state licensing and distribution jurisdiction over tribal liquor sales in Indian country.

Held: California may properly require respondent to obtain a state license in order to sell liquor for off-premises consumption. Pp. 718-735.

(a) There is no tradition of tribal sovereign immunity or inherent self-government in favor of liquor regulation by Indians. Although, in Indian matters, Congress usually acts "upon the assumption that the States have no power to regulate the affairs of Indians on a reservation," Williams v. Lee, 358 U.S. 217, 220, that assumption is unwarranted in the narrow context of liquor regulation. In addition to the congressional divestment of tribal self-government in this area, the States have also been permitted, and even required, to impose liquor regulations. The tradition of concurrent state and federal jurisdiction over the use and distribution of alcoholic beverages in Indian country is justified by the relevant state interests. Here, respondent’s distribution of liquor has a significant impact beyond the limits of the reservation, and the State, independent of the Twenty-first Amendment, has an interest in the liquor traffic within its borders. Pp. 720-725.

(b) Title 18 U.S.C. § 1161 authorized, rather than preempted, state regulation of Indian liquor transactions. It is clear from the face of the statute and its legislative history both that Congress intended to remove federal prohibition on the sale and use of liquor imposed on Indians and that Congress intended state laws would apply of their own force to govern tribal liquor transactions as long as the tribe itself approved these transactions by enacting an ordinance. Congress contemplated that its absolute, but not exclusive, power to regulate Indian liquor transactions would be delegated to the tribes themselves, and to the States, which historically shared concurrent jurisdiction with the Federal Government. Because of the lack of tradition of tribal self-government in the area of liquor regulation, it is not necessary that Congress indicate expressly that the State has jurisdiction to license and distribute liquor. This Court will not apply the canon of construction that state laws generally are not applicable to Indians on a reservation except where Congress has expressly provided that state laws shall apply when application would be tantamount to a formalistic disregard of congressional intent. Thus, application of the state licensing scheme here does not impair a right granted or reserved by federal law, but, on the contrary, is specifically authorized by Congress, and does not interfere with federal policies concerning the reservation. Pp. 725-735.

678 F.2d 1340, reversed and remanded.

O’CONNOR, J., delivered the opinion of the Court, in which BURGER, C.J., and WHITE, POWELL, REHNQUIST, and STEVENS, JJ., joined. BLACKMUN, J., filed a dissenting opinion, in which BRENNAN and MARSHALL, JJ., joined, post, p. 735.