United States District Court, S.D. Alabama, Southern Division
CALLIE V. S. GRANADE, District Judge.
This case arises from a complaint filed by the Poarch Band of Creek Indians ("the Tribe") against in James H. Hildreth, Jr. ("Hildreth"), in his official capacity as the Tax Assessor of Escambia County. In the complaint, the Tribe sought relief to prevent Hildreth from levying property taxes against United States trust property held for the benefit of the Poarch Band of Creek Indians. Before the Court is the Tribe's motion for a preliminary injunction (Doc. 12) against James Hildreth, the Tax Assessor of Escambia Co., Alabama; Hildreth's corrected response in opposition (Doc. 16); the Tribe's reply (Doc. 25); and Hildreth's sur-reply (Doc 29). For the reasons stated below, the Court finds the Tribe is entitled to preliminary injunctive relief.
In 1984, the Secretary of the Interior formally recognized the Poarch Band of Creek Indians as an Indian tribe. (Doc. 16, Exh. A). Soon after federal recognition, the United States took roughly 229.5 acres of land ("Trust land") in Escambia County into trust for the exclusive use and benefit of the Tribe. (Trust Deeds, Doc. 13, Exhs. A-J). The United States took the land into trust for the benefit of the Tribe pursuant to the Indian Reorganization Act ("IRA"), 25 U.S.C.A. § 465. Today, the Tribe occupies the Trust lands, has its own system of government and exercises jurisdiction. (Doc. 1, p.3, ¶ 9). The Trust land includes permanent improvements (collectively, "Trust Property"), most notably the structures that house the Tribe's gaming enterprise. (Doc. 1, p.3, ¶¶ 10-11).
In 1986, the Tax Assessor of Escambia County, James Hildreth, wrote the Alabama Attorney General and requested an opinion whether the Tribe's Trust property was subject to state and local taxes. (Doc. 1, Exh. B). In a letter dated August 18, 1986 to Hildreth, the Attorney General's office stated that the Tribe's Trust Lands "will be exempt from taxation in the future" and that "there is no authority for state taxation." (Ala. Atty. Gen. Op. 86-00327 (August 18, 1986); Doc. 1, Exh. B.) Hildreth then refrained from assessing taxes on the Trust land for over twenty-five years.
On April 17, 2012, the Escambia County Commission sent an inquiry to the Secretary of the Department of the Interior requesting information on the status of the Trust lands in light of the Supreme Court's decision in Carcieri v. Salazar, 555 U.S. 379 (2009). (Doc. 16-3). On June 4, 2012, the Office of the Secretary of the Interior responded, stating that the Tribe's land is held in trust by the United States government and as such, the Tribe "enjoys all rights and privileges associated with having its Reservation held in trust by the United States under Federal Law." (Doc. 1, Exh. C).
On January 7, 2014, Hildreth informed the Tribe that "certain real and personal property of the Poarch Band of Creek Indians has escaped taxation." (Doc. 1, Exh. D). Hildreth stated that his office was initiating an audit "for the purpose of valuing and assessing for taxation all property of the Poarch Band, both real and personal, which is situated in Escambia County." (Doc. 1, Exh. D). The letter also stated that "any property which is claimed to be exempt from taxation must also be listed, and the burden is on the taxpayer to clearly establish its right to an exemption." (Id.).
In a letter dated February 28, 2014, the Tribe responded to Hildreth's request and provided a list of property, exclusive of the Trust property. Hildreth answered and stated that the Tribe's property listing was "incomplete and non-responsive." Hildreth informed the Tribe of his intention to proceed with an audit of " all property of which the Poarch Band is the owner or holder within Escambia County, regardless of whether the Poarch Band considers to be "Trust Property."" (Doc. 1, Exh. F) (emphasis in the original).
On April 10, 2014, in a lawsuit brought by the State of Alabama against the commercial entity through which the Tribe conducts its gaming activities, the United States District Court for the Middle District of Alabama issued an opinion affirming that the Tribe's Trust lands in Escambia County are held in trust by the United States for the benefit of the Tribe. (Doc. 1, p. 6; See Alabama v. PCI Gaming Auth., 15 F.Supp.3d 1161, 1182 and 1184 (M.D. Ala. 2014)(Watkins, C.J.)(appeal pending, 11th Cir. Case No. 14-12004). The Tribe informed Hildreth of this decision in a letter dated April 22, 2014. (Doc. 1, Exh. H).
After the Alabama v. PCI Gaming Auth. decision, the Tribe did not hear back from Hildreth for several months. Then, in a letter dated February 26, 2015, Hildreth informed the Tribe that his office completed its appraisal of all of the Tribe's property, including land held in trust, and he requested a meeting. (Doc. 1, Exh. I). In April, the Tribe met with Hildreth and his legal counsel to discuss the assessment. (Doc. 1, p. 6, ¶26; Doc. 24 p. 6, ¶26).
On May 22, 2015, counsel for Hildreth sent an e-mail to Lori Stinson, the Attorney General for the Tribe, stating that Hildreth was available for a meeting on May 26, 2015 to discuss the tax matter. (Doc. 25, Exh. A). Hildreth's counsel also advised that "[w]e are hopeful that the parties can reach an amicable agreement very soon, but please know that Mr. Hildreth otherwise intends to formalize a tax assessment (including escaped taxes) by mid-June." (Doc. 25, Exh. A).
On May 26, 2015, the Tribe filed suit against Hildreth. (Doc. 1). In the complaint, the Tribe alleged that Hildreth intends to violate federal law by levying taxes on lands held in trust by the United States government for the benefit of the Tribe. Hildreth denies these allegations and states that under the Supreme Court's decision in Carcieri v. Salazar, the Tribe is not an Indian Tribe at all and that the Secretary of the Interior wrongful took the Trust lands into trust under 25 U.S.C.A. §465. (Doc. 24). On June 4, 2015, the Tribe filed a motion for a preliminary injunction to stop Hildreth from assessing the taxes on the Trust land. The Court now considers that motion.