{ "id": 725499, "name": "NEW MEXICO TAXATION AND REVENUE DEPARTMENT, Defendant-Petitioner, v. LAGUNA INDUSTRIES, INC., and Raytheon Service Company, Plaintiffs-Respondents", "name_abbreviation": "New Mexico Taxation & Revenue Department v. Laguna Industries, Inc.", "decision_date": "1993-06-08", "docket_number": "No. 20855", "first_page": "553", "last_page": "556", "citations": [ { "type": "official", "cite": "115 N.M. 553" }, { "type": "parallel", "cite": "855 P.2d 127" } ], "court": { "name_abbreviation": "N.M.", "id": 8835, "name": "Supreme Court of New Mexico" }, "jurisdiction": { "id": 52, "name_long": "New Mexico", "name": "N.M." }, "cites_to": [ { "cite": "2 Stat. 139", "category": "laws:leg_session", "reporter": "Stat.", "opinion_index": 0 }, { "cite": "1 Stat. 743", "category": "laws:leg_session", "reporter": "Stat.", "opinion_index": 0 }, { "cite": "1 Stat. 469", "category": "laws:leg_session", "reporter": "Stat.", "opinion_index": 0 }, { "cite": "1 Stat. 329", "category": "laws:leg_session", "reporter": "Stat.", "opinion_index": 0 }, { "cite": "25 U.S.C. \u00a7 262", "category": "laws:leg_statute", "reporter": "U.S.C.", "opinion_index": 0 }, { "cite": "714 F.Supp. 1546", "category": "reporters:federal", "reporter": "F. 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Ed.", "case_ids": [ 1439675 ], "year": 1832, "opinion_index": 0, "case_paths": [ "/us/31/0515-01" ] }, { "cite": "448 U.S. 160", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 1787663 ], "weight": 7, "year": 1980, "pin_cites": [ { "page": "166" }, { "page": "2596", "parenthetical": "citations omitted" }, { "page": "163" }, { "page": "2595" } ], "opinion_index": 0, "case_paths": [ "/us/448/0160-01" ] }, { "cite": "380 U.S. 685", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 1524780 ], "weight": 5, "year": 1965, "pin_cites": [ { "page": "687" }, { "page": "1244" } ], "opinion_index": 0, "case_paths": [ "/us/380/0685-01" ] }, { "cite": "114 N.M. 644", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 731644 ], "weight": 8, "year": 1992, "pin_cites": [ { "page": "654" }, { "page": "177" }, { "page": "646-47" }, { "page": "168-69" }, { "page": "649-50" }, { "page": "172-75" } ], "opinion_index": 0, "case_paths": [ "/nm/114/0644-01" ] } ], "analysis": { "cardinality": 683, "char_count": 11778, "ocr_confidence": 0.773, "pagerank": { "raw": 9.356698607941946e-08, "percentile": 0.5141073861835188 }, "sha256": "4ed67251d4a63560c1aed389e0c68bd92b74ff3164319ed1fffa1cab6493641d", "simhash": "1:3c79fa75f70a6435", "word_count": 1903 }, "last_updated": "2023-07-14T14:46:31.960097+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "RANSOM, C.J., and BACA, J., concur." ], "parties": [ "NEW MEXICO TAXATION AND REVENUE DEPARTMENT, Defendant-Petitioner, v. LAGUNA INDUSTRIES, INC., and Raytheon Service Company, Plaintiffs-Respondents." ], "opinions": [ { "text": "OPINION\nFRANCHINI, Justice.\nBy opinion dated October 5, 1992, the Court of Appeals affirmed the trial court\u2019s summary judgment in .favor of Laguna Industries, Inc. (Laguna) and against the New Mexico Taxation and Revenue Department (Department). See Laguna Indus., Inc. v. New Mexico Taxation & Revenue Deft, 114 N.M. 644, 845 P.2d 167 (Ct.App. 1992). On November 19, 1992, we granted certiorari to determine whether the Indian trader statutes preempt the imposition of gross receipts tax on receipts for non-Indian services rendered to an Indian tribal entity on the reservation.\nAfter a careful review of the majority and dissenting opinions, briefs, and all other pertinent material, we affirm the Court of Appeals. The majority determined that \u201ctrade\u201d as used in the Indian trader statutes includes trade in services and therefore, the preemption analysis of Warren Trading Post Co. v. Arizona Tax Comm\u2019n, 380 U.S. 685, 85 S.Ct. 1242, 14 L.Ed.2d 165 (1965), and Central Machinery Co. v. Arizona State Tax Comm\u2019n, 448 U.S. 160, 100 S.Ct. 2592, 65 L.Ed.2d 684 (1980), applied to the transaction at issue. See Laguna Industries, 114 N.M. at 654, 845 P.2d at 177. We adopt the majority opinion and comment only to emphasize what we consider an important consideration in the majority\u2019s analysis: that the purpose of the Indian trader statutes supports the interpretation that \u201ctrade\u201d includes trade in services.\nThe facts are set forth in detail by the Court of Appeals. See Laguna Industries, 114 N.M. at 646-47, 845 P.2d at 168-69. We briefly summarize. Raytheon Service Company (Raytheon) contracted with Laguna, a wholly owned corporation of the Pueblo of Laguna, to perform technical, training, and management assistance to enable Laguna to obtain federal contracts from the Department of Defense (DOD). The underlying case is a claim for refund of state gross receipts tax paid by Raytheon on income received for training and other services it performed at Laguna Pueblo for Laguna. See NMSA 1978, \u00a7 7-1-26 (Repl.Pamp.1990). Raytheon passed the cost of the gross receipts tax on to Laguna and assigned its right to any tax refund to Laguna.\nThe Department throughout the litigation has conceded that transactions which come within the scope of the Indian trader statutes are not taxable by the State based on Warren Trading Post and Central Machinery. The question presented to the Court of Appeals was whether \u201ctrade\u201d as used in the statutes includes trade in services. The Department contends that it applies only to trade in goods. In a well reasoned, carefully thought out opinion, the majority rejected the Department\u2019s narrow interpretation of \u201ctrade\u201d on several interrelated grounds: (1) The Indian trader statutes must be construed broadly and liberally in favor of the Indians; (2) Excluding service transactions from the statutes would not be consistent with the purposes of statutes to protect Indians from fraud and imposition; (3) Service transactions were a significant part of the American economy when the first Indian trader statutes were enacted; (4) The term \u201ctrade\u201d in other similar contexts has not been interpreted as limited to goods; (5) The seminal Indian law decision of Worcester v. Georgia, 31 U.S. (6 Pet.) 515, 556-57, 8 L.Ed. 483 (1832) interpreted the Indian Trade and Intercourse Acts as regulating all intercourse with the Indians in their territory; (6) The 1834 version included express references to regulation of \u201cboatmen\u201d and \u201cinterpreters\u201d who dealt in services; and (7) Department of Interior regulations have expressly interpreted the Indian trader statutes and related acts to include trade in services. See Laguna Industries, 114 N.M. at 649-50, 845 P.2d at 172-75.\nTo the majority opinion we would only emphasize the following on the purpose of the Indian trader statutes. The Indian trader statutes were passed for the benefit of the dependent Indian tribes and must be liberally construed with doubtful expressions being resolved in favor of the Indians. Ashcroft v. United States Dept, of the Interior, 679 F.2d 196, 198 (9th Cir.1982). Until they are repealed or amended, \u201cwe must give them \u2018a sweep as broad as [their] language,\u2019 and interpret them in light of the intent of the Congress that enacted them.\u201d Central Machinery, 448 U.S. at 166, 100 S.Ct. at 2596 (citations omitted). Thus, we look to the object sought to be accomplished by the legislatures. See Lopez v. Employment Sec. Div., 111 N.M. 104, 105, 802 P.2d 9, 10 (1990).\nOne noted scholar has described the trader statutes as shaping, through a series of laws, our government\u2019s Indian policy. Francis P. Prucha, American Indian Policy in the Formative Years: The Indian Trade and Intercourse Acts, 1790-1834, 2 (Bison Book ed. 1970) (1962). A major aspect of that policy was controlling the problem resulting from the presence of Indians in the \u201cpath of aggressive and land-hungry whites.\u201d Id. at 3.\nThe goal of American statesmen was the orderly advance of the frontier. To maintain the desired order and tranquility it was necessary to place restrictions on the contacts between the whites and the Indians. The intercourse acts were thus restrictive and prohibitory in nature \u2014 aimed largely at restraining the actions of the whites and providing justice to the Indians as the means of preventing hostility.\nId.\nThe United States addressed the question of trade with the surrounding Indian nations in the very first Congress. See Act of July 22, 1790, ch. 33, 1 Stat. 137 (1856). That statute required a federal license before any person could be \u201cpermitted to carry on any trade or intercourse with the Indian tribes.\u201d Section 1. From the very beginning, Congress asserted the power to control through licensing all trade and other contacts with the Indians.\nThe 1790 act had a two-year \u201csunset\u201d provision, and Congress adopted similar acts again in 1793, 1796, 1799 and 1802. These acts became more detailed as years passed, until Congress adopted the final enactment in the series of Acts \u201cto regulate trade and intercourse with the Indian tribes.\u201d Indian Trade and Intercourse Act of June 30, 1834, ch. 161, 4 Stat. 729 (1850). The 1834 Act demonstrates an attempt by Congress to control every aspect of contact between the United States and the Indian nations. Its detailed and comprehensive provisions manifested the intent of the Federal Government to assert \u201cthrough statutes and treaties a sweeping and dominant control over persons who wished to trade with Indians and Indian tribes.\u201d Warren Trading Post, 380 U.S. at 687, 85 S.Ct. at 1244. The objectives of the statutes were \u201cto prevent \u2018fraud and imposition\u2019 upon [the Indians],\u201d Central Machinery, 448 U.S. at 163,100 S.Ct. at 2595. These objectives support the majority opinion\u2019s holding that the Indian trader statutes apply to the sale of services as well as the sale of goods. The narrow interpretation of \u201ctrade\u201d urged by the Department would tend to defeat these objectives. Thus, for example, under Section 3 of the 1834 Act (25 U.S.C. \u00a7 263), if the President declares an embargo on certain goods, no trader to any other tribe \u201cshall, so long as such prohibition may continue, trade with any Indians\u201d of the embargoed tribe. Under the Department\u2019s interpretation, both licensed traders and unlicensed individuals would be free to sell \u201cservices\u201d to the tribe during the embargo, presumably including gunsmith services. It is more reasonable to conclude that Congress intended to allow the President to cut off all trade with the tribe, including service transactions, in order to enforce an embargo on specified goods.\nThe Department\u2019s narrow reading of Section 4 of the 1834 Act (25 U.S.C. \u00a7 264) also would defeat the efforts of Congress to monopolize all contacts with the Indians. Under the Department\u2019s interpretation, any person would be free to go into Indian country and engage in business transactions with the Indians without a license as long as those transactions did not involve the sale of goods. Those individuals would not be violating Section 4 because, according to the Department, their activity does not amount to \u201ctrade.\u201d We disagree because we do not believe Congress intended to leave this category of intercourse with the Indians wholly unregulated.\nNothing in the legislative history of the 1834 Act supports the Department\u2019s attempt to interpret \u201ctrade\u201d narrowly. The House Report states the relationship between the United States and the tribes \u201cis now that of the strong to the weak, and demands at our hands a more liberal policy, as well directed to promote their welfare as our political interests.\u201d H.R.Rep. No. 474, 23rd Cong., 1st Sess., at 11 (1834). The Report noted that if a United States citizen desires \u201cto trade or to reside in the Indian country for any purpose whatever, a license for that particular purpose is required.\u201d Id. (Emphasis in original.) The Report further explained that the Indians had been the victims of \u201cfraud and imposition\u201d by licensed traders, and that additional regulations were necessary for the protection of the Indians. Id. The proposed bill therefore expanded on the government\u2019s power to refuse licenses to persons of bad character or those who should not be permitted to reside in Indian country for any other reason. Id. In Section 2 of the 1834 Act, Congress intended to strengthen the regulation of \u201ctrade with any of the Indians.\u201d The Department has suggested no policy reason to leave all service transactions unregulated in that Act.\nThe other two existing Indian trader statutes, 25 U.S.C. \u00a7\u00a7 261 and 262, were adopted in 1876 and 1901, respectively. Neither section reveals an attempt by Congress to narrow the scope of the trader statutes. \u201cCourts that have reviewed \u00a7 261 confirm that the thrust of the section is to protect Indians from unethical business practices.\u201d Rosebud Sioux Tribe v. United States Bur. of Indian Affairs, 714 F.Supp. 1546, 1557 (D.S.D.1989). There is virtually no legislative history for the 1901 Act. It is, however, the most recent statement of Congress on the question of Indian trading, and is phrased in the most general and sweeping language. Congress referred broadly to \u201ctrade with the Indians,\u201d not to \u201cgoods,\u201d and authorized the Commissioner to adopt regulations limited only by the requirement they be \u201cfor the protection of said Indians.\u201d 25 U.S.C. \u00a7 262.\nIn light of our comments on the purpose of the trader statutes and the Court of Appeal\u2019s exhaustive examination of the text of those statutes, their historical development, the legislative history of amendments and related legislation, Interior Department regulation interpreting those statutes, and judicial opinions establishing the appropriate rules for construing them, we adopt and affirm the district court and the Court of Appeals majority\u2019s holding that \u201ctrade\u201d as used in the Indian trader statutes includes trade in services. Therefore, the Department\u2019s taxation of income received from services rendered to the tribal enterprise on the reservation was preempted by federal law. Affirmed.\nIT IS SO ORDERED.\nRANSOM, C.J., and BACA, J., concur.\n. 25 U.S.C. \u00a7\u00a7 261 to 264 (1988).\n. NMSA 1978, \u00a7\u00a7 7-9-1 to -82 (Repl.Pamp.1990 & Cum.Supp.1992).\n. Act of March 1, 1793, ch. 19, 1 Stat. 329; Act of May 19, 1796, ch. 30, 1 Stat. 469; Act of March 3, 1799, ch. 46, 1 Stat. 743; Act of March 30, 1802, ch. 13, 2 Stat. 139.", "type": "majority", "author": "FRANCHINI, Justice." } ], "attorneys": [ "Tom Udall, Atty. Gen., Frank D. Katz, Sp. Asst. Atty. Gen., Santa Fe, for petitioner.", "Nordhaus, Haltom, Taylor, Taradash & Frye, Wayne Bladh, Santa Fe, for respondents." ], "corrections": "", "head_matter": "855 P.2d 127\nNEW MEXICO TAXATION AND REVENUE DEPARTMENT, Defendant-Petitioner, v. LAGUNA INDUSTRIES, INC., and Raytheon Service Company, Plaintiffs-Respondents.\nNo. 20855.\nSupreme Court of New Mexico.\nJune 8, 1993.\nTom Udall, Atty. Gen., Frank D. Katz, Sp. Asst. Atty. Gen., Santa Fe, for petitioner.\nNordhaus, Haltom, Taylor, Taradash & Frye, Wayne Bladh, Santa Fe, for respondents." }, "file_name": "0553-01", "first_page_order": 593, "last_page_order": 596 }