No. 00-507 

In the Supreme Court of the United States 

THE CHICKASAW NATION AND 

THE CHOCTAW NATION OF OKLAHOMA, PETITIONERS 

v. 

UNITED STATES OF AMERICA 

ON PETITION FOR A WRIT OF CERTIORARI 
TO THE UNITED STATES COURT OF APPEALS 
FOR THE TENTH CIRCUIT 

BRIEF FOR THE UNITED STATES 

SETH P. WAXMAN 

Solicitor General 

Counsel of Record 
PAULA M. JUNGHANS 

Acting Assistant Attorney 

General 
LAWRENCE G. WALLACE 

Deputy Solicitor General 

DAVID C. FREDERICK 

Assistant to the Solicitor 

General 
DAVID ENGLISH CARMACK 
CHARLES F. MARSHALL 

Attorneys 
Department of Justice 
Washington, DC 20530-0001 
(202) 514-2217 

QUESTION PRESENTED 

Whether Section 20(d) of the Indian Gaming Regu- 
latory Act, 25 U.S.C. 2719(d), exempts Native Ameri- 
can Tribes from the wagering excise and occupational 
taxes imposed by Sections 4401 and 4411 of the Internal 
Revenue Code. 

(I) 

TABLE OF CONTENTS 

Page 

Opinions below ............................................................................... 
1 

Jurisdiction ...................................................................................... 1 

Statement ........................................................................................ 2 

Discussion ........................................................................................ 5 

Conclusion ....................................................................................... 14 

Appendix ......................................................................................... 1a 

TABLE OF AUTHORITIES 

Cases: 

Blackbird v. Commissioner, 38 F.2d 976 (10th 

Cir.), cert. granted, 281 U.S. 714 (1930) ............................ 
12 

Cherokee Tobacco, 78 U.S. (11 Wall.) 616 (1870) ................ 
10, 12 

Choate v. Trapp, 224 U.S. 665 (1912) ................................. 
12 

Choteau v. Burnet, 283 U.S. 691 (1931) .................. 
10, 11, 12 

Confederated Tribes of the Warm Springs Reserva- 
tion v. Kurtz, 691 F.2d 878 (9th Cir. 1982), 
cert denied, 460 U.S. 1040 (1983) ........................................ 
10 

Cotton Petroleum Corp. v. New Mexico, 490 U.S. 
163 (1989) ................................................................................. 
13 

County of Oneida v. Oneida Indian Nation, 470 U.S. 
226 (1985) ................................................................................. 
11 

DeCoteau v. District County Court, 420 U.S. 425 
(1975) ........................................................................................ 12 

Gulf Oil Corp. v. Copp Paving Co., 419 U.S. 186 
(1974) ........................................................................................ 8 

Hagen v. Utah, 510 U.S. 399 (1994) .................................... 

13 

INS v. Cardozo-Fonseca, 480 U.S. 421 (1987) .................. 
8 

Little Six, Inc. v. United States, 210 F.3d 1361, 
reh’g denied, 229 F.3d 1383 (2000) ............................ 
5, 7, 9, 14 

Mescalero Apache Tribe v. Jones, 411 U.S. 145 
(1973) ........................................................................................ 8 

Montana v. Blackfeet Tribe, 471 U.S. 759 (1985) ............. 11, 12 

(III) 

IV 

Cases—Continued: Page 

Morton v. Mancari, 417 U.S. 535 (1974) ............................ 
11 

Oklahoma Tax Comm’n v. Chickasaw Nation, 515 

U.S. 450 (1995) ........................................................................ 

11 

Oregon Dep’t of Fish & Wildlife v. Klamath 

Indian Tribe, 473 U.S. 753 (1985) ...................................... 

13 

Solem v. Bartlett, 465 U.S. 463 (1984) ................................ 
11 

South Carolina v. Catawba Indian Tribe, 476 U.S. 
498 (1986) ................................................................................. 
8, 12 

Squire v. Capoeman, 351 U.S. 1 (1956) .............................. 
12, 13 

Superintendent of Five Civilized Tribes v. 

Commissioner, 295 U.S. 418 (1935) ................................... 

10, 12 

United States v. Anderson, 625 F.2d 910 (9th Cir. 
1980), cert. denied, 450 U.S. 920 (1981) ............................. 
9 

United States v. Santa Fe Pacific R.R., 314 U.S. 
339 (1941) ................................................................................. 
11 

United States v. Wells Fargo Bank, 485 U.S. 351 
(1988) ........................................................................................ 10 

United States Trust Co. v. Helvering, 307 U.S. 
57 (1939) ................................................................................... 

10 

Washington v. Washington State Commercial 

Passenger Fishing Vessel Ass’n, 443 U.S. 658 
(1939) ........................................................................................ 11 

White Mountain Apache Tribe v. Bracker, 448 

U.S. 136 (1980) ........................................................................ 
11 

Constitution and statutes: 

U.S. Const.: 

Art. I, § 8, Cl. 3 ....................................................................... 

11 

Art. II, § 2, Cl. 2 ..................................................................... 
11 

Amend. V ................................................................................ 
12 

Curtis Act, 30 Stat. 505 ............................................................ 
12 

Indian Gaming Regulatory Act, § 20(d), Pub. L. No. 
100-497, 102 Stat. 2485 (25 U.S.C. 2719(d)) ................... 
3, 4, 6, 

7, 8, 10, 14 
§ 20(d)(1), 25 U.S.C. 2719(d)(1) ....................................... 

5, 8 

Indian Reorganization Act, 25 U.S.C. 461 et seq. .............. 8 

V 

Statutes—Continued: Page 

Internal Revenue Code (26 U.S.C.): 

Ch. 35 ............................................................................... 
3, 6, 7, 8 

§ 4401 ................................................................................... 
5 

§ 4401(a) .............................................................................. 
2 

§ 4401(c) .............................................................................. 
10 

§ 4402 ................................................................................... 
6, 9 

§ 4402(3) ............................................................................. 2, 3, 6-7 

§ 4403 ................................................................................... 

7 

§ 4411 ................................................................................... 
2, 5 

§ 4412 ................................................................................... 
7 

§ 4421 ................................................................................... 
2, 3, 6 

§ 7701(a) ...................................................................................... 
3 

§ 7871(a) ...................................................................................... 
2, 9 

§ 7871(a)(2) ................................................................................. 
9 

§ 7871(b) ...................................................................................... 
9 

Miscellaneous: 

Rev. Rul. 57-258, 1957-1 C.B. 418 .......................................... 

2 

Rev. Rul. 94-81, 1994-2 C.B. 412 ............................................ 
9, 10 

S. 555, 100th Cong., 1st Sess. (1987) ...................................... 
7 

S. Rep. No. 646, 97th Cong., 2d Sess. (1982) ........................ 
9 

S. Rep. No. 446, 100th Cong., 2d Sess. (1988) ...................... 8 

In the Supreme Court of the United States 

No. 00-507 

THE CHICKASAW NATION AND 

THE CHOCTAW NATION OF OKLAHOMA, PETITIONERS 

v. 

UNITED STATES OF AMERICA 

ON PETITION FOR A WRIT OF CERTIORARI 
TO THE UNITED STATES COURT OF APPEALS 
FOR THE TENTH CIRCUIT 

BRIEF FOR THE UNITED STATES 

OPINIONS BELOW 

The opinion of the court of appeals in Chickasaw 
Nation v. United States (Pet. App. 1a-28a) is reported 
at 208 F.3d 871. The order of the court of appeals in 
Choctaw Nation v. United States (Pet. App. 29a-32a) is 
unpublished, but the decision is noted at 210 F.3d 389 
(Table). The opinions of the district court in Chickasaw 
Nation v. United States (Pet. App. 47a-65a), and 
Choctaw Nation v. United States (Pet. App. 33a-46a), 
are unreported. 

JURISDICTION 

The judgment of the court of appeals in each of these 
cases was entered on April 5, 2000. The petitions for 
rehearing were denied on July 5, 2000 (Pet. App. 66a- 

(1) 

2 

67a). The petition for a writ of certiorari was filed on 
October 3, 2000. The jurisdiction of this Court is 
invoked under 28 U.S.C. 1254(1). 

STATEMENT 

1. Petitioners are Native American Tribes in 
Oklahoma who operate gaming activities, including the 
sale of pull-tabs. Pet. App. 2a, 30a. Pull-tab cards are 
manufactured in sets of 24,000, and each set has a 
predetermined number of cash prize winners. Id. at 3a, 
31a. A player peels back the tabs on a pull-tab card to 
see whether he has won a prize. Id. at 2a, 30a. 

Section 4401(a) of the Internal Revenue Code (I.R.C. 
or Code) imposes an excise tax on all wagers, and 
Section 4411 imposes an occupational tax on each 
person liable for the wagering excise tax (hereinafter 
referred to jointly as “wagering taxes”). 26 U.S.C. 
4401(a), 4411. The term “wager” includes any lottery 
that involves pull-tabs. I.R.C. § 4421; Rev. Rul. 57-258, 
1957-1 C.B. 418. Section 4402(3) of the Code grants a 
wagering excise tax exemption for state-conducted 
lotteries, but there is no such exemption for tribe- 
conducted lotteries. There is also no exemption for 
tribe-conducted lotteries in I.R.C. § 7871(a), 26 U.S.C. 
7871(a), a provision that treats Tribes as States for 
purposes of certain excise tax exemptions, but does not 
include wagering excise taxes. 

Petitioners filed refund suits in the district court to 
recover wagering excise taxes paid for July 1993 and 
occupational taxes paid for 1993, and the government 
counterclaimed for unpaid wagering taxes from Janu- 
ary 1993 through September 1994. Pet. App. 4a, 31a. 
Petitioners advanced the following arguments to 
support their claim that they were not liable for the 
taxes: (1) pull-tabs are not taxable “wagers” as defined 

3 

by I.R.C. § 4421; (2) petitioners are not “persons” as 
defined by I.R.C. § 7701(a); and (3) Section 20(d) of the 
Indian Gaming Regulatory Act (IGRA), Pub. L. No. 
100-497, 102 Stat. 2485 (25 U.S.C. 2719(d)) (IGRA 
§ 2719(d)) indicates that Congress did not intend to tax 
gaming governed by that Act. The district court re- 
jected each of those claims, and granted summary judg- 
ment for the government. Pet. App. 33a-46a, 47a-65a. 

2. The court of appeals affirmed. Pet. App. 1a-28a, 
29a-32a. The court directly addressed and rejected pe- 
titioners’ contention that IGRA § 2719(d) grants tribes 
the same exemption from the wagering taxes afforded 
States under I.R.C. § 4402(3). IGRA § 2719(d), in perti- 
nent part, provides as follows: 

The provisions of the Internal Revenue Code of 1986 
(including sections 1441, 3402(q), 6041, and 6050I, 
and chapter 35 of such Code) concerning the 
reporting and withholding of taxes with respect to 
the winnings from gaming or wagering operations 
shall apply to Indian gaming operations conducted 
pursuant to this chapter, or under a Tribal-State 
compact entered into under section 2710(d)(3) of this 
title that is in effect, in the same manner as such 
provisions apply to State gaming and wagering 
operations. 

Pet. App. 90a. The court rejected petitioners’ argu- 
ment that the parenthetical reference in IGRA 
§ 2719(d) to Chapter 35 meant that Congress specifi- 
cally intended to provide Indian Tribes with the same 
exemption specified for States from the wagering 
excise tax (found in IRC § 4402(3) in Chapter 35). Pet. 
App. 19a-26a. The court of appeals observed that “it is 
clear that [IGRA] § 2719(d) does not expressly prohibit 
the imposition of federal wagering excise or federal 

4 

occupational taxes on Indian gaming activities.” Id. at 
22a. Rather, that Section “provides that Indian gaming 
operations, like state gaming operations, must report 
certain player winnings to the federal government, and 
must likewise withhold federal taxes if players’ 
winnings exceed a certain level.” Ibid. The court of 
appeals further observed that the original version of 
the bill that became IGRA § 2719(d) had an explicit 
exemption for Indian gaming from the federal wagering 
excise tax, but that exemption had been deleted prior 
to passage. Id. at 23a. 

The court found unpersuasive petitioners’ reliance on 
a letter from Senator Daniel Inouye to the Com- 
missioner of Internal Revenue, written three years 
after IGRA was enacted, in which Senator Inouye 
maintained that “it was the intention of Congress that 
the tax treatment of wagers conducted by Tribal 
governments be the same as that for wagers conducted 
by state governments under Chapter 35 of the Internal 
Revenue Code.” Pet. App. 25a. The court stated that: 
(1) “the comments of a single senator, made years after 
the statute at issue was enacted, are of little value in 
interpreting [IGRA § 2719(d)]”; and (2) in all events, 
the Senator’s interpretation “is inconsistent with both 
the language and the legislative history of the statute.” 
Ibid. The court of appeals concluded: 

Although it is true that [IGRA] § 2719(d)’s reference 
to Chapter 35 is somewhat cryptic (since Chapter 35 
pertains solely to wagering excise taxes and has 
nothing to do with the reporting and withholding of 
taxes on wagering winnings), we believe the most 
reasonable conclusion is that the reference was 
included in order to incorporate Chapter 35’s defini- 
tions of the terms “wager” and “lottery.” In any 

5 

event, we are unwilling to assume, based solely 
upon the inclusion of this parenthetical reference to 
Chapter 35, that Congress intended to provide 
tribes with the exemption from federal wagering 
excise taxes enjoyed by the states. Such an assump- 
tion would fly directly in the face of § 2719(d)’s 
express reference to “the reporting and withholding 
of taxes with respect to the winnings from gaming 
or wagering operations.” Had Congress intended to 
provide tribes with an exemption from the federal 
wagering excise taxes, it clearly knew how to draft 
such an exemption. 

Id. at 25a-26a. The court of appeals subsequently de- 
nied petitioners’ request for rehearing and for rehear- 
ing en banc. Id. at 66a-67a. 

DISCUSSION 

The court of appeals correctly held that IGRA 
§ 2719(d)(1) does not grant Indian Tribes an exemption 
from the federal wagering taxes imposed by I.R.C. 
§§ 4401 and 4411. That holding, however, directly 
conflicts with the Federal Circuit’s decision in Little 
Six, Inc. v. United States, 210 F.3d 1361, petition for 
rehearing denied, 229 F.3d 1383 (2000) (three judges 
dissenting).1 The taxability of tribal gaming operations 
is an important federal issue that is likely to recur as 
the Indian gaming industry continues to expand. 
Resolution by this Court of the conflict in the circuits on 
the taxability of tribe-operated lotteries is appropriate 
to enable the United States to administer the tax laws 
consistently to all Indian gaming operators. We 

1 A copy of the order denying rehearing en banc, with a 
dissenting opinion by Judge Dyk, is in App., infra, 1a-9a. 

6 

therefore agree that the petition for a writ of certiorari 
should be granted. 

1. a. The text, structure, legislative history, and 
purpose of IGRA § 2719(d) establish that it does not 
exempt petitioners from federal wagering taxes. 
Section 2719(d) states that all provisions of the Internal 
Revenue Code—including (but not limited to) several 
specified Internal Revenue Code provisions (including 
Chapter 35)—apply to tribes in the same manner as 
States with respect to the reporting and withholding of 
winnings from gaming and wagering operations. The 
court of appeals properly observed that, in context, “the 
most reasonable conclusion is that the reference [to 
Chapter 35] was included in order to incorporate Chap- 
ter 35’s definitions of the terms ‘wager’ and ‘lottery.’ ” 
Pet. App. 25a. Because Chapter 35 (in I.R.C. § 4421) 
provides definitions of “wager” and “lottery,” the 
reference to Chapter 35 insures that all forms of wagers 
and lotteries falling within those terms are within the 
scope of the “gaming and wagering operations” from 
which winnings are to be reported and withheld under 
IGRA § 2719(d), just as winnings from more traditional, 
well-known gaming operations would be subject to 
these reporting and withholding requirements. Prop- 
erly understood, the reference to Chapter 35, which 
occurs only in parentheses, thus harmonizes with the 
overall text of IGRA § 2719(d). 

Even apart from the court of appeals’ explanation of 
the parenthetical reference to Chapter 35, the statutory 
text and structure would not support reading that 
reference as constituting a conferral of a tax exemption 
merely because Chapter 35 contains a single provision 
dealing with exemptions. See I.R.C. § 4402. Nothing in 
the text of IGRA § 2719(d) suggests that the reference 
was intended to refer to the exemptions in I.R.C. 

7 

§ 4402(3), rather than to other provisions in that 
Chapter that deal with matters of tax administration 
akin to reporting and withholding. See I.R.C. § 4403 
(requiring a taxpayer to keep record of gross amount of 
all wagers); I.R.C. § 4412 (registration provision for 
occupational tax). Further, reading the parenthetical 
reference to Chapter 35 as a tax exemption would 
contradict the statute’s express limitation to provisions 
“concerning the reporting and withholding of taxes.” 
See Little Six, 229 F.3d at 1385 (Dyk, J., dissenting) (“It 
is far easier to make sense out of the statute if the in- 
consistent specific examples are read out of the statute 
because they conflict with the limitation.”). 

b. The drafting history also establishes that Con- 
gress did not intend for IGRA § 2719(d) to confer on 
Indian Tribes an exemption from wagering excise 
taxes. Congress deleted language contained in the 
originally proposed version of S. 555 (the bill that 
ultimately was enacted as IGRA), that would have ex- 
empted tribes from the wagering excise tax. The 
Senate Bill, as originally proposed (S. 555, 100th Cong., 
1st Sess. (1987)), provided that: 

Provisions of the Internal Revenue Code of 1986, 
concerning the taxation and the reporting and 
withholding of taxes with respect to gambling or 
wagering operations shall apply to Indian gaming 
operations conducted pursuant to this Act the same 
as they apply to State operations. 

S. 555, supra, at 37 (emphasis added). That language 
would have expressly extended to Tribes the same 
exemptions allowed to States with respect to any and 
all taxes related to “gambling or wagering.” But the 
version of S. 555, as reported by the Senate Committee, 
and ultimately enacted, omitted the word “taxation,” 

8 

and instead provided that Tribes would be treated as 
States only for purposes of the Internal Revenue Code 
provisions dealing with the “reporting and withholding 
of taxes with respect to the winnings from gaming or 
wagering operations.” 25 U.S.C. 2719(d)(1). 

Consistent with the language of IGRA § 2719(d) as 
enacted, the Senate Report indicates that this provision 
“applies the Internal Revenue Code to winnings from 
Indian gaming operations.” S. Rep. No. 446, 100th 
Cong., 2d Sess. 20 (1988). There is no suggestion in that 
report that the inclusion of the parenthetical language 
in the revised provision was intended to exempt Tribes 
from excise taxes otherwise applicable to such opera- 
tions. The deletion of the express exemption in the 
original proposal is strong evidence of Congress’s intent 
not to provide such an exemption. See, e.g., INS v. 
Cardozo-Fonseca, 480 U.S. 421, 442-443 (1987); Gulf Oil 
Corp. v. Copp Paving Co., 419 U.S. 186, 200 (1974); see 
also Mescalero Apache Tribe v. Jones, 411 U.S. 145, 157 
(1973) (noting tax immunity provisions were dropped 
from bills preceding enactment of Indian Reorganiza- 
tion Act (25 U.S.C. 461 et seq.)). Because petitioners’ 
interpretation of the reference to “Chapter 35” in IGRA 
§ 2719(d) would give effect to a statutory result that 
Congress explicitly declined to enact when it deleted 
the language expressly exempting tribes from the 
wagering tax, the court below was correct to reject it. 
See South Carolina v. Catawba Indian Tribe, 476 U.S. 
498, 506 (1986). 

c. The purposes and policies of IGRA do not 
evidence congressional intent to create an implicit tax 
exemption outside of the Internal Revenue Code, and 
certainly not in a parenthetical reference without any 
substantive discussion in the legislative history. In 
Little Six, the Federal Circuit erred in concluding that 

9 

it should treat Tribes as States for tax exemption 
purposes in reliance on IGRA’s overall goal of fostering 
tribal economic development and self-sufficiency. Pet. 
App. 110a-111a. That court read the general policy of 
IGRA too broadly to create an implied exemption from 
taxation. See United States v. Anderson, 625 F.2d 910, 
917 (9th Cir. 1980) (“[i]f federal courts were free to 
create federal tax exemptions for Indians based on 
policy alone, the federal policy of Indian economic 
advancement, implicit in almost all of the many federal 
enactments regarding Indians, would soon have the 
unintended effect of exempting all Indians from all 
federal taxation”), cert. denied, 450 U.S. 920 (1981); 
Little Six, 229 F.3d at 1385-1386 (Dyk, J., dissenting) 
(“[t]he fact that a statute confers a set of benefits on 
tribes cannot mean that the statute should be extended 
beyond its terms to grant additional benefits to the 
tribes”). 

Congress can, and has, passed legislation that seeks 
to encourage tribal economic development, while 
retaining certain aspects of tax liability. In I.R.C. 
§ 7871(a)(2), 26 U.S.C. 7871(a)(2), Congress expressed 
an intent to promote tribal economic development by 
granting certain excise tax exemptions enjoyed by 
States, but extended to Tribes only specific exemptions 
that involved “the exercise of an essential govern- 
mental function.” See 26 U.S.C. 7871(b); S. Rep. No. 
646, 97th Cong., 2d Sess. 11-13 (1982); Rev. Rul. 94-81, 
1994-2 C.B. 412. If Congress had intended to create an 
excise tax exemption for Tribes, it could easily have 
done so within two existing statutory frameworks. Sec- 
tion 4402 of the Internal Revenue Code provides 
explicit wagering excise tax exemptions (but not to 
Tribes), and I.R.C. § 7871(a), 26 U.S.C. 7871(a), treats 
Tribes as States for purposes of specified excise tax 

10 

exemptions (but not the wagering excise tax). See Rev. 
Rul. 94-81, supra, at 413 (“The taxes imposed under 
chapter 35 are not included under § 7871(a)(2) and, 
therefore, Indian tribal governments are not treated as 
states under § 7871 with respect to wagering taxes.”). 

2. Petitioner contends that the court below erred in 
not applying the canon of construction that statutes are 
to be construed liberally in favor of Indians to recognize 
an exemption from the federal wagering taxes. That 
contention is incorrect. It is well settled that “exemp- 
tions from taxation are not to be implied; they must be 
unambiguously proved.” United States v. Wells Fargo 
Bank, 485 U.S. 351, 354-355 (1988). See also United 
States Trust Co. v. Helvering, 307 U.S. 57, 60 (1939). 
This Court has applied that rule to deny Indians im- 
plied exemptions from both federal income taxes, 
Superintendent of Five Civilized Tribes v. Commis- 
sioner, 295 U.S. 418, 419-420 (1935); Choteau v. Burnet, 
283 U.S. 691, 696-697 (1931), and federal excise taxes, 
Cherokee Tobacco, 78 U.S. (11 Wall.) 616, 620 (1870); see 
also Confederated Tribes of the Warm Springs 
Reservation v. Kurtz, 691 F.2d 878, 883 (9th Cir. 1982), 
cert. denied, 460 U.S. 1040 (1983). Section 4401(c) of the 
Internal Revenue Code, 26 U.S.C. 4401(c), imposes a 
wagering excise tax on “[e]ach person who is engaged 
in the business of accepting wagers.” There is no 
express language in IGRA § 2719(d) that exempts 
Tribes from that tax. Indeed, on its face, that Section 
says nothing about either liability for wagering taxes or 
exemptions therefrom. Nor is there any indication in 
the legislative history of an intent to confer such an 
exemption. 

Where a taxing authority of a State or one of its sub- 
divisions seeks to impose a tax on Indians, this Court 
has regularly applied two related canons of construction 

11 

that are “rooted in the unique trust relationship be- 
tween the United States and the Indians.” County of 
Oneida v. Oneida Indian Nation, 470 U.S. 226, 247 
(1985). “[F]irst, the States may tax Indians only when 
Congress has manifested clearly its consent to such 
taxation; second, statutes are to be construed liberally 
in favor of the Indians, with ambiguous provisions 
interpreted to their benefit.” Montana v. Blackfeet 
Tribe, 471 U.S. 759, 766 (1985) (citation omitted); see 
also Oklahoma Tax Comm’n v. Chickasaw Nation, 515 
U.S. 450, 455, 458 (1995). 

The situation is much different, however, in federal 
taxation cases such as this one. Unlike state govern- 
ments, Congress has plenary authority to legislate over 
Indian affairs,2 and such authority unquestionably 
includes the power to impose federal taxes. See 
Choteau, 283 U.S. at 697. Although this Court has 
relied on the United States’ special relationship with 
Indians to require that Congress use explicit statutory 
language when abrogating Indian treaty rights,3 this 
Court does not require that Congress use explicit 
language to extend general federal tax statutes to 

2 U.S. Const. Art. I, § 8, Cl. 3; Art. II, § 2, Cl. 2; Montana, 471 
U.S. at 764-765; County of Oneida, 470 U.S. at 234; White 
Mountain Apache Tribe v. Bracker, 448 U.S. 136, 142 (1980); 
Morton v. Mancari, 417 U.S. 535, 551-552 (1974). 

3 See, e.g., County of Oneida, 470 U.S. at 247 (“ ‘Absent explicit 
statutory language,’ this Court accordingly has refused to find that 
Congress has abrogated Indian treaty rights.”) (quoting Washing- 
ton v. Washington State Commercial Passenger Fishing Vessel 
Ass’n, 443 U.S. 658, 690 (1979)); Solem v. Bartlett, 465 U.S. 463, 470 
(1984) (Congress must “clearly evince” an intent to diminish 
reservation boundaries); United States v. Santa Fe Pacific R.R., 
314 U.S. 339, 346 (1941) (congressional intent to extinguish Indian 
land title must be “plain and unambiguous”). 

12 

Indians. Superintendent of Five Civilized Tribes, 295 
U.S. at 419-420 (rejecting rule in Blackbird v. Com- 
missioner, 38 F.2d 976, 977 (10th Cir.), cert. granted, 
281 U.S. 714 (1930), that federal income tax laws must 
manifest a specific intent to apply to Indians). Instead, 
where a federal tax statute is broad enough to cover the 
subject matter, any exemption for Indians “must be 
definitely expressed.” Superintendent of Five Civilized 
Tribes, 295 U.S. at 419-420 (quoting Choteau, 283 U.S. 
at 696-697); accord Squire v. Capoeman, 351 U.S. 1, 6 
(1956) (“should be clearly expressed”); Cherokee To- 
bacco, 78 U.S. (11 Wall.) at 620.4 

3. In addition, courts must insure that application of 
the canon of construction that ambiguities in federal 
statutes are to be resolved in favor of Indians does not 
violate Congress’s intent. See, e.g., South Carolina, 476 
U.S. at 506 & n.16; DeCoteau v. District County Court, 
420 U.S. 425, 447 (1975). Like other canons of statutory 
construction, the Indian canon should be used to re- 
solve, rather than to create, doubt. This Court regu- 
larly consults the structure, history, and purpose of the 

4 Petitioners rely (Pet. 4 n.2, 23) on this Court’s statement that 
“although tax exemptions generally are to be construed narrowly, 
in ‘the Government’s dealings with the Indians the rule is exactly 
the contrary. The construction, instead of being strict, is liberal.’ ” 
Montana v. Blackfeet Tribe, 471 U.S. at 766 n.4 (quoting Choate v. 
Trapp, 224 U.S. 665, 675 (1912)). But both Montana and Choate 
concerned whether Congress had authorized state taxation of 
Indians, and, therefore, this Court had no occasion to consider, 
much less overrule, its prior precedents requiring that, in federal 
tax cases, Indians must show that a federal statute or treaty 
expressly exempts them from the tax. Further, in Choate, unlike 
in this case, there was no dispute that an exemption existed on the 
face of the statute (Curtis Act, 30 Stat. 505); rather, that case 
concerned whether the exemption conferred a property right 
protected by the Fifth Amendment. 225 U.S. at 671. 

13 

statute to decipher congressional intent, and has 
refused to apply the Indian canon where it would yield 
a contrary interpretation. See, e.g., Hagen v. Utah, 510 
U.S. 399, 412-422 (1994); Cotton Petroleum Corp. v. 
New Mexico, 490 U.S. 163, 177-178 (1989); Oregon Dep’t 
of Fish & Wildlife v. Klamath Indian Tribe, 473 U.S. 
753, 774 (1985). 

By contrast, the Court has concluded in one case that 
other statutory indicators of congressional intent sup- 
port an exemption for Indians from a federal tax. See 
Squire v. Capoeman, 351 U.S. at 3-10. In that case, the 
Court analyzed the structure and purposes of the 
Indian General Allotment Act, a proviso in the 1906 
amendment to the Act, legislative history, and a series 
of “relatively contemporaneous official and unofficial 
writings” to conclude that Congress intended to exempt 
certain Indians from a capital gains tax on the sale of 
timber from a restricted allotment of land (i.e., land 
allotted to an Indian, but whose fee title was held in 
trust by the United States for a specified period in 
which the land was subject to restrictions on alienation 
and encumbrance). After reiterating the general, if not 
competing, principles that “exemptions to tax laws 
should be clearly expressed,” and that ambiguities are 
construed liberally in favor of Indians, this Court found 
that the “literal language” of a proviso in a 1906 amend- 
ment to the Act “evince[d] a congressional intent” that 
the income would not be taxable until the government 
removed the restrictions from the land. Id. at 6-8. 
Squire reflects this Court’s practice of using traditional 
tools of statutory construction to insure that it reaches 
a result consistent with congressional intent, as 
opposed to reflexively resorting to the Indian canon of 
construction in interpreting federal tax statutes to 
reach a result contrary to congressional intent. See 

14 

Little Six, 229 F.3d at 1384 (Dyk, J., dissenting) (con- 
tending that panel had applied the Indian canon too 
“quickly” in interpreting IGRA § 2719(d)). 

CONCLUSION 

The petition for certiorari should be granted. 

Respectfully submitted. 

SETH P. WAXMAN 

Solicitor General 
PAULA M. JUNGHANS 

Acting Assistant Attorney 

General 
LAWRENCE G. WALLACE 

Deputy Solicitor General 
DAVID C. FREDERICK 

Assistant to the Solicitor 

General 
DAVID ENGLISH CARMACK 
CHARLES F. MARSHALL 

Attorneys 

DECEMBER 2000 

APPENDIX A 

UNITED STATES COURT OF APPEALS 
FOR THE FEDERAL CIRCUIT 

No. 99-5083 

LITTLE SIX, INC. AND SHAKOPEE MDEWAKANTON 
SIOUX (DAKOTA) COMMUNITY, PLAINTIFFS- 
APPELLANTS 

v. 

UNITED STATES, DEFENDANT-APPELLEE 

Oct. 12, 2000 

ORDER 

Circuit Judge DYK, with whom Circuit Judges 
NEWMAN and PLAGER join, dissents in a separate 
opinion. 

A petition for rehearing en banc having been filed by 
the Appellee, and a response thereto having been 
invited by the Court and filed by the Appellants, and 
the matter having first been referred as a petition for 
rehearing to the panel that heard the appeal, and 
thereafter the petition for rehearing en banc and 
response having been referred to the circuit judges 
authorized to request a poll whether to rehear the 
appeal en banc, and a poll having been requested, 
taken, and failed, 

(1a) 

2a 

IT IS ORDERED THAT: 

(1) The petition for rehearing is denied. 

(2) The petition for rehearing en banc is denied. 

The mandate of the Court will issue on October 19, 
2000. 

DYK, Circuit Judge, with whom Circuit Judges 
NEWMAN and PLAGER join, dissenting from the Order 
denying the petition for rehearing en banc. 

This case raises important questions concerning the 
use and effect of the “Indian canon” of construction in 
interpreting a significant federal statute. The panel 
decision conflicts with a recent decision of the United 
States Court of Appeals for the Tenth Circuit. See 
Chickasaw Nation v. United States, 208 F.3d 871 (10th 
Cir. 2000). 

The statute at issue here states: “The provisions of 
the Internal Revenue Code of 1986 (including sections 
1441, 3402(q), 6041, and 6050I, and chapter 35 of such 
Code) concerning the reporting and withholding of 
taxes with respect to the winnings from gaming or 
wagering operations shall apply to Indian gaming 
operations conducted pursuant to this chapter . . . 
in the same manner as such provisions apply to 
State gaming and wagering operations.” 25 U.S.C. 
§ 2719(d)(1) (West Supp. 2000). The panel held that the 
parenthetical reference to chapter 35—the chapter of 
the Internal Revenue Code that imposes a tax on 
wagers—exempts Indian pull-tab games from taxation. 
See Little Six, Inc. v. United States, 210 F.3d 1361, 1366 
(Fed. Cir. 2000). However, this construction cannot be 

3a 

reconciled with the other language of the statute, which 
applies only to provisions “concerning the reporting and 
withholding of taxes with respect to the winnings.” 
Chapter 35 is not such a provision. 

As I read the panel opinion, it finds a facial ambiguity 
in the statute because of the conflict and resorts im- 
mediately to the Indian canon to resolve that ambiguity 
in favor of the tribe. However, in my view, the panel 
should not have invoked the Indian canon of con- 
struction so quickly. Instead, it should have utilized all 
available tools of statutory construction before declar- 
ing the statute ambiguous and resorting to a default 
rule designed for exceptional cases where, despite the 
court’s best efforts, an ambiguity in the statute 
remains. 

I agree that making sense of 25 U.S.C. § 2719(d) here 
is not an easy task. Despite the government’s efforts, 
there is no way to reconcile § 2719(d)’s literal limitation 
to provisions of the Internal Revenue Code “concerning 
the reporting and withholding of taxes with respect to 
the winnings from gaming or wagering operations” 
with its parenthetical reference to chapter 35. I do not 
find persuasive the government’s argument (adopted 
by the United States Court of Appeals for the Tenth 
Circuit) that the reference to chapter 35 was designed 
to incorporate § 4421’s definitions of wagers and lotter- 
ies. See Chickasaw Nation, 208 F.3d at 883; 26 U.S.C. 
§ 4421. For example, chapter 35 itself explicitly states 
that its definitions of wagers and lotteries apply only 
“for purposes of [chapter 35],” 26 U.S.C. § 4421, and its 
definitions are thus irrelevant for purposes of the other 
sections of the Code referenced by § 2719(d). I thus 
agree with the panel that confining § 2719(d)(1) to 

4a 

provisions “concerning the reporting and withholding of 
taxes” does in fact render the statute’s reference to 
chapter 35 superfluous. See Little Six, Inc., 210 F.3d at 
1365. 

In my view, we are confronted with a situation in 
which it is impossible to give effect to all the language 
of the statute without rendering the statute self- 
contradictory. However, this does not create an 
ambiguity in the statute that justifies immediate resort 
to a canon designed to resolve ambiguities. Rather, a 
court under such circumstances should examine the 
statute’s structure, purpose, and history in order to 
produce an interpretation that makes the statute 
coherent. The choice here is to accept the statute’s 
limitation to provisions “concerning the reporting and 
withholding of taxes with respect to . . . winnings,” 
thereby rendering superfluous the parenthetical refer- 
ence to chapter 35, or to accept that the reference to 
chapter 35 exempts Indian gaming from taxation, 
thereby contradicting the statute’s limitation to provi- 
sions “concerning the reporting and withholding of 
taxes with respect to . . . winnings.” 

While the general rule is that meaning should be 
afforded to all language in a statute, statutory language 
inadvertently included can be disregarded if it is found 
to be contrary to legislative intent. See United States v. 
Colon-Ortiz, 866 F.2d 6, 10 (1st Cir. 1989); American 
Radio Relay League, Inc. v. FCC, 617 F.2d 875, 879 
(D.C. Cir. 1980); 2A Norman J. Singer, Statutes and 
Statutory Construction § 46.06, pp. 192-93 (6th ed. 2000) 
(stating that “words and clauses which are present in a 
statute only through inadvertence can be disregarded if 
they are repugnant to what is found, on the basis of 

5a 

other indicia, to be the legislative intent”). Further- 
more, the rule against superfluity has limited force 
when the alternative is to create even greater prob- 
lems. In Church of Scientology v. IRS, 792 F.2d 153, 
163 (D.C. Cir. 1986) (en banc), aff ’d 484 U.S. 9, 108 
S. Ct. 271, 98 L. Ed.2d 228 (1987), Judge (now Justice) 
Scalia noted that the court’s interpretation of the 
Haskel Amendment, which caused two statutory provi- 
sions to become superfluous, was “nothing beside the 
textual and policy absurdities produced” by a contrary 
interpretation. That situation seems similar to the case 
here. 

First, I cannot see how an erroneous parenthetical 
reference to a supposed example can trump the clear 
limiting language adjacent to the parenthetical. More- 
over, as the government points out, it is unlikely that 
Congress would create a significant tax exemption 
through a parenthetical reference, and it seems exceed- 
ingly unlikely that Congress would do so in a sentence 
which by its terms is restricted to reporting and 
withholding of taxes on winnings. 

Second, a court should adopt a construction of the 
statute that makes it coherent. The panel’s inter- 
pretation of the statute here may resolve this particular 
case, but it leaves the interpretation of the limitation 
(“provisions . . . concerning the reporting and with- 
holding of taxes with respect to . . . winnings”) 
unresolved. Is the effect of the panel decision somehow 
to modify the limitation to make it consistent with the 
specific examples? If so, what does the limitation now 
mean? Or does the panel’s opinion eliminate the 
limitation because it is inconsistent with the specific 
examples? If so, not only would the panel be rendering 

6a 

the limitation superfluous, but also it would have the 
effect of making all provisions of the Internal Revenue 
Code “apply to Indian gaming operations . . . in the 
same manner as such provisions apply to State gaming 
and wagering operations.” There is no claim that 
Congress intended this result. It is far easier to make 
sense out of the statute if the inconsistent specific 
examples are read out of the statute because they 
conflict with the limitation. 

Third, the legislative history does not support the 
result rendered by the panel. Early versions of the bill 
that ultimately became the Indian Gaming Regulatory 
Act (“IGRA”) (of which § 2719(d) is a part) would have 
exempted tribes from the wagering tax. H.R. 1920, 
passed by the House in 1986, provided: “Provisions of 
the Internal Revenue Code of 1954, as amended, con- 
cerning the taxation and the reporting and withholding 
of taxes pursuant to the operation of a gambling or 
wagering operation shall apply to the operations in 
accord with the Indian Gaming Regulatory Act the 
same as they apply to State operations.” H.R. 1920, 
99th Cong. § 4 (1986) (emphasis added). The accom- 
panying House report explicitly linked chapter 35 with 
the bill’s reference to taxation. It noted that “Section 4 
provides that relevant provisions of the Internal 
Revenue Code, such as section 3402(q) and chapter 35, 
26 U.S.C., concerning taxation and the reporting and 
withholding of taxes relating to the operation of gaming 
activities shall apply to tribal gaming activities as they 
apply to State operated gaming activities.” H.R. Rep. 
No. 99-488, at 13 (1986). 

The Senate bill as originally proposed continued to 
include the reference to “taxation.” S. 555, 100th Cong. 

7a 

§ 20(D) (Feb. 19, 1987). However, in the version of the 
bill reported out of Committee and ultimately enacted, 
the reference to “taxation” was removed. The fact that 
the committee at the same time added a parenthetical 
including examples of both “reporting and withholding” 
provisions and “taxation” provisions hardly evidences a 
decision to have the specific taxation examples sub- 
stitute for the general “taxation” exclusion. If the 
specific examples were a substitute for the general 
exclusions, how can the retention of the “reporting and 
withholding” language be explained? The legislative 
history here provides no clear guidance. The language 
of the provision has all the earmarks of a simple 
mistake in legislative drafting. The better explanation 
for the reference to chapter 35 is therefore that it was 
included inadvertently after Congress had decided to 
eliminate the reference to “taxation.” 

Fourth, I disagree with the panel’s analysis of the 
purpose of § 2719(d). The panel seeks further support 
from the stated purposes of the IGRA, noting that the 
IGRA was intended “to promote tribal economic de- 
velopment and self-sufficiency.” Little Six, Inc., 210 
F.3d at 1366; 25 U.S.C. § 2702. This policy strikes me as 
too open-ended to support the result here. The fact 
that a statute confers a set of benefits on tribes cannot 
mean that the statute should be extended beyond its 
terms to grant additional benefits to the tribes. 

I find that the statute’s structure, purpose, and 
history all support the conclusion that the statute’s 
reference to chapter 35 is superfluous. Thus, I think 
the panel here places more weight on the canon of 
construction regarding resolving ambiguities in favor of 
the Native Americans than that canon can bear. The 

8a 

Supreme Court has stated that the canon is not a 
license to adopt a “contorted construction” of a statute. 
South Carolina v. Catawba Indian Tribe, Inc., 476 U.S. 
498, 506, 106 S. Ct. 2039, 90 L. Ed.2d 490 (1986) (citing 
various cases noting that the canon is not license to 
disregard congressional intent). Nor can the canon 
properly be invoked to avoid the traditional analysis 
required for statutory construction. For example, in 
Hagen v. Utah, 510 U.S. 399, 114 S. Ct. 958, 127 L.Ed. 
2d 252 (1994), the Supreme Court analyzed whether 
Congress had diminished a reservation. Although the 
Court recognized that it must “resolve any ambiguities 
in favor of the Indians,” id. at 411, 114 S. Ct. 958, it did 
not shrink from applying the usual tools of statutory 
construction: the Court considered the language of the 
relevant Acts, their legislative history, contemporary 
historical evidence, and the Court’s past precedents. 
See id. at 412-21, 114 S. Ct. 958. Despite the existence 
of the Indian canon, the Court concluded that the 
evidence demonstrated that the reservation had in fact 
been diminished by Congress, a result which led the 
dissent to complain that the Court was purporting to 
apply the Indian canon but “ignores [it] in practice.” 
Hagen, 510 U.S. at 424, 114 S. Ct. 958 (Blackmun, J., 
dissenting). The panel’s approach here appears to be 
inconsistent with the Supreme Court’s approach in 
Hagen. 

To be sure, fairness to our Native American popula- 
tion has been a quality in very short supply during 
much of our history. But we have not been assigned the 
task of redressing past wrongs by expanding the scope 
of federal statutes. 

9a 

For the above stated reasons, I respectfully dissent 
from this Court’s refusal to grant the United States’ 
petition for rehearing en banc.