881 F.2d 657
The HOOPA VALLEY TRIBE, a federally recognized Indian tribe on its own behalf
and on behalf of its enrolled members, and Hoopa Valley Timber Corporation, a
tribal enterprise of the Hoopa Valley Tribe, Plaintiffs/Appellees/Cross-
Richard NEVINS, Conway H. Collin, Ernest J. Dronenburg, William F. Bennett, and
Kenneth Cory, as members of the California State Board of Equalization;
California State Board of Equalization; and State of California,
Nos. 88-1560, 88-1662.
United States Court of Appeals,
Argued and Submitted June 8, 1989.
Decided July 28, 1989.
657 Julian O. Standen, Deputy Atty. Gen., State of Cal., Dept. of Justice,
San Francisco, Cal., for defendants/appellants/cross-appellees.
Terence L. Thatcher, Pirtle, Morisset, Schlosser & Ayer, Seattle, Wash., for
Appeal from the United States District Court for the Northern District of
Before FARRIS, THOMPSON and TROTT, Circuit Judges.
FARRIS, Circuit Judge:
The California State Board of Equalization appeals the district court's
grant of summary judgment in favor of the Hoopa Valley Tribe. The district
court held that federal law preempts the imposition of the California timber
yield tax, Cal.Rev. & Tax Code part 18.5, on the harvest by non-Indian
purchasers of timber owned by the tribe. The Hoopa Valley Tribe appeals the
district court's denial of its motion for attorney's fees. We affirm both
A. The Tribe
The Hoopa Valley Indian Reservation, the ancestral home of the Hoopa Valley
Tribe, was established in 1864 and is the *658 largest and most populous in
California. See 8 Smithsonian Institution, Handbook of North American Indians
164-76 (W. Sturtevant ed. 1978); 1 Kappler 815 (1904) (executive orders); 13
Stat. 39 (1864). The reservation is located in Humboldt County, approximately
60 miles northeast of Eureka between the Coast Ranges and the Salmon-Trinity
Alps Wilderness Area. This litigation concerns the portion of the reservation
known as "the Square," an area approximately 12 miles on a side containing
prime timber lands of pine, cedar, and Douglas fir. See Handbook, supra, at
176. Out of the 88,666 acres in the Square, title to 85,430 acres is held in
trust for the tribe by the United States. Virtually all of that land is
commercial timber land. An additional 600 acres of privately-owned land within
the Square contains commercial timber. Id.
The remoteness of the reservation and the destruction of fish resources in the
Klamath-Trinity River system limit tribal employment opportunities to the
timber industry. The tribe relies almost exclusively on timber-related
revenues for supporting the tribal budget. See id. The tribe established
the Hoopa Timber Corp. in 1976 to improve the tribe's economic return from
tribal timber resources. The corporation is neither a tribal nor a state
corporation. Instead, it is a wholly-owned subordinate organization of the
tribe, established under Art. IX, s 1(p) of the tribal constitution.
Management of tribal timber is provided by staff of the U.S. Bureau of Indian
Affairs. See 25 C.F.R. part 163. The BIA sells tribal timber by
competitive bidding to both the Hoopa Valley Timber Corp., which in turn
processes the timber and sells it to off-reservation companies, and to private
companies. Standard timber industry practice is for the timber owner to bear
the economic burden of timber taxes imposed on timber purchasers.
The population of the Hoopa Valley Reservation is approximately 60% Indian and
40% non-Indian. The tribe has approximately 1,650 members. The tribe, county,
state, and federal government all fund public services for the reservation.
The state maintains State Highway No. 96, the principal route to and through
the reservation, which also serves several towns to the north of the
reservation. The tribe and the Bureau of Indian Affairs fund fire protection,
education, public utilities, subsidized housing, recreational, and economic
development programs and maintain 427 miles of local roads. The state and the
tribe share the costs of local law enforcement. Welfare and health care costs
are shared by the state, the federal government, and the tribe.
B. The Tax
In California, all real property, with certain exceptions, is subject to
an ad valorem property tax. Cal. Const. art. XIII, s 1; see also
Cal.Rev. P Tax Code s 104. To promote sound timber management,
conservation, and production, in 1976 the state modified the ad valorem tax as
it applied to timber and replaced it with a yield and reserves tax,
collectively known as the timber yield tax. Cal.Rev. & Tax Code ss 38101-
38908 (timber reserves tax repealed by 1982 Cal.Stat., Ch. 1058); see
generally W. Unkel & D. Cromwell, California's Timber Yield Tax, 6
Ecology L.Q. 831 (1978). The yield tax is assessed at the time of harvest on
the value of timber at the time of harvest and is imposed on the first entity
to acquire ownership of felled timber. Cal.Rev. & Tax Code s 38104-
38110. If the first owner is exempt from taxation, the timber yield tax is
due from the first non-exempt person to acquire legal or beneficial title to
the timber. s 38104; Cal.Adm.Code Pub.Rev.R. 1026.
C. Procedural History
The tribe filed suit in October 1982, challenging the application of the tax
both to private companies who purchase tribal timber directly from the BIA and
to private companies who buy from Hoopa Timber Corp. or other Indian-owned
firms. The district court granted partial summary judgment to the tribe on the
grounds of *659 federal preemption. [FN1] Hoopa Valley Tribe v. Nevins,
590 F.Supp. 198, 199 (N.D.Cal.1984). The court did not address the tribe's
alternative argument, that the tax was invalid because it infringed tribal
sovereignty. Id. On December 30, 1987, the district court entered final
judgment, awarding the tribe $368,659.15 in damages, the stipulated total of
timber taxes on tribal timber collected by the state from 1977-82, and
$249,016.32 in pre-judgment interest.
FN1. The tribe moved for partial summary judgment on its preemption and
tribal sovereignty claims.
The district court had jurisdiction under 28 U.S.C. ss 1331 and 1362.
We have jurisdiction under 28 U.S.C. s 1291. The federal jurisdictional
barrier to suits challenging state taxes imposed by 28 U.S.C. s 1341 does
not bar such suits by Indian tribes. Moe v. Salish and Kootenai Tribes, 425
U.S. 463, 470-75, 96 S.Ct. 1634, 1639-42, 48 L.Ed.2d 96 (1976).
We review de novo the district court's grant of summary judgment. Harkins
Amusement Enter v. General Cinema Corp., 850 F.2d 477, 482 (9th Cir.1988),
cert. denied, 488 U.S. 1019, 109 S.Ct. 817, 102 L.Ed.2d 806 (1989). We
review the district court's denial of attorney's fees under s 1988 for abuse
of discretion; however, we review de novo the legal principles the district
court relied upon for its decision. Lewis v. Anderson, 692 F.2d 1267, 1269
A. Validity of the Tax
 The district court found "that the exercise of state authority in
assessing the timber yield tax against companies which purchase Tribal timber
from BIA or from HTC or other Indian-owned firms is preempted by the pervasive
federal regulation of Indian timber and is thus in violation of federal law."
Hoopa Valley, 590 F.Supp. at 203. On appeal, California argues that its
interest in imposing the tax outweighs the federal and tribal interests at
Preemption analysis in Indian tribal cases "requires a particularized
examination of the relevant state, federal, and tribal interests." Cotton
Petroleum Corp. v. New Mexico, 490 U.S. 163, 109 S.Ct. 1698, 1707, 104 L.Ed.2d
209 (1989) (quoting Ramah Navajo School Board v. Bureau of Revenue, 458 U.S.
832, 838, 102 S.Ct. 3394, 3398, 73 L.Ed.2d 1174 (1982)). The question of
whether federal law, which reflects related federal and tribal interests,
preempts state activity is not controlled by the standards of preemption
developed in other areas. Id. Ambiguities in federal law are to be
construed generously in favor of the tribe; no specific congressional
intention to preempt state activity is required. Id.; White Mountain
Apache Tribe v. Bracker, 448 U.S. 136, 142-43, 100 S.Ct. 2578, 2583, 65 L.Ed.2d
665 (1980); accord Crow Tribe of Indians v. Montana, 819 F.2d 895, 898 (9th
Cir.1987), aff'd, 484 U.S. 997, 108 S.Ct. 685, 98 L.Ed.2d 638 (1988). If
the state law interferes with the purpose or operation of a federal policy
regarding tribal interests, it is preempted. Crow Tribe, 819 F.2d at 898.
Indian lands are exempt from state real property taxes. The Kansas
Indians, 72 U.S. (5 Wall.) 737, 18 L.Ed. 667 (1866); see McClanahan v.
Arizona State Tax Comm'n, 411 U.S. 164, 169-71, 93 S.Ct. 1257, 1260-62, 36
L.Ed.2d 129 (1973). Federal policy encourages the economic development of
tribal lands. White Mountain, 448 U.S. at 143, 100 S.Ct. at 2583. Federal
laws and policies comprehensively support and regulate the harvest of timber on
tribal lands. Id. at 145-49, 100 S.Ct. at 2584-87.
State taxes or regulations that interfere with tribal activities may be
preempted if the tribal activity the state seeks to affect involves goods
produced on the reservation. Compare Washington v. Confederated Tribes of
Colville Indian Reservation, 447 U.S. 134, 155, 100 S.Ct. 2069, 2082, 65
L.Ed.2d 10 (1980) (upholding state tax on on-reservation sales of cigarettes to
non-Indians because product obtained off-reservation) *660 with
California v. Cabazon Band of Mission Indians, 480 U.S. 202, 107 S.Ct. 1083,
94 L.Ed.2d 244 (1987) (state regulation of bingo games preempted because tribe
was generating value on reservation through activities in which tribe had
strong interest). In White Mountain, Arizona applied its motor carrier
license and fuel taxes to the equipment and activities of a private contractor
hired by the tribe to assist in harvesting timber on reservation lands. 448
U.S. at 139-40, 100 S.Ct. at 2581. The Court found those taxes preempted
because they undermined the federal policy of assuring that timber sale profits
inure to the tribe. Id. at 148-49, 100 S.Ct. at 2586. In Ramah, New
Mexico imposed a tax on the gross receipts that a non-Indian construction
company received from a tribal school board for the construction of a school
for Indian children on the reservation. 458 U.S. at 834, 102 S.Ct. at
3396. Although the tax was paid by a private company, the Court found the tax
preempted because it burdened the comprehensive federal scheme regulating
education for Indian children. Id. at 845, 102 S.Ct. at 3402.
In Crow Tribe, we invalidated Montana's coal severance tax as applied to
coal mined from tribal lands because the tax had a financial impact on tribal
resource development activities. 819 F.2d at 899-900. Montana argued that
its severance tax on coal did not burden the tribe's economic interests because
the tax was imposed on the tribe's lessee, a private company, and not the
tribe. 819 F.2d at 899. We rejected the argument because the taxes
ultimately reduced the royalty received by the tribe. [FN2] Id.
FN2. Crow Tribe supports one of the key underpinnings of the district
court's decision in this case. California argued that the tax should not
be preeempted because it did not affect activity conducted on the
reservation, but instead fell on ownership of cut timber once title
transfered to a non-Indian. The district court noted that this is "a
distinction without a difference." Hoopa Valley, 590 F.Supp. at 201.
In Cotton Petroleum the Court reaffirmed the basic principles of
White Mountain and Ramah while holding that New Mexico could impose its
oil and gas severance tax on the production of oil and gas by non-Indians from
tribal lands. 109 S.Ct. at 1711-13. The Court distinguished White
Mountain and Ramah by recognizing that New Mexico regulated the oil and gas
activities affected by the tax. Cotton, 109 S.Ct. at 1712. Additionally,
the Court noted that the New Mexico tax primarily burdened non-Indian
taxpayers. Cotton, 109 S.Ct. at 1712-13 & n. 18. "This is not a case in
which the State has had nothing to do with the on-reservation activity, save
tax it. Nor is this a case in which an unusually large state tax has imposed a
substantial burden on the tribe." Cotton, 109 S.Ct. at 1713. The Court
also noted that it had no reason to reexamine its summary affirmance of our
decision in Crow Tribe, because the Montana tax "had a negative effect on
the marketability of coal produced in Montana." 109 S.Ct. at 1713 n. 17.
In contrast to New Mexico's regulation of oil and gas in Cotton, California
plays no role in the Hoopa Valley Tribe's timber activities. Hoopa, 590
F.Supp. at 201-02. Also unlike Cotton, the burden of the tax concededly
falls on the tribe. Hoopa, 590 F.Supp. at 201 n. 2.
The state argues that the district court erred because its interest in
imposing the tax is much stronger than Arizona's interest in White
Mountain. The state points out that in White Mountain, Arizona imposed
motor vehicle taxes on entities that used reservation roads maintained by the
BIA and not the state. Here, California notes that the timber tax helps fund
various services used by tribal members, and that the services provided by the
state to tribal members far exceed the income from the timber tax.
The district court correctly determined that the state's interest was not
strong enough to outweigh the substantial federal and tribal interests in
timber harvesting on the reservation. The Supreme Court rejected a parallel
argument in Ramah: "We are similarly unpersuaded by the State's argument
that the significant services it provides to the Ramah Navajo Indians
justify *661 the imposition of this tax. The State does not suggest these
benefits are in any way related to the construction of schools on Indian
land." 458 U.S. at 845 n. 10, 102 S.Ct. at 3402 n. 10; see also White
Mountain, 448 U.S. at 150, 100 S.Ct. at 2587. ("We do not believe that
respondents' generalized interest in raising revenue is in this context
sufficient to permit its proposed intrusion into the federal regulatory scheme
with respect to the harvesting and sale of tribal timber."). Although
California points to a variety of services that it provides to residents of the
reservation and the surrounding area, none of those services is connected with
the timber activities directly affected by the tax. To be valid, the
California tax must bear some relationship to the activity being taxed. See
Crow Tribe, 819 F.2d at 900. Showing that the tax serves legitimate state
interests, such as raising revenues for services used by tribal residents and
others, is not enough. Id. at 901. "To the extent that this [coal
severance] tax is not related to the actual governmental costs associated with
the mining of the Indian coal ... the state's interest in acquiring revenues is
weak in comparison with the Tribe's right to the bounty from its own land."
Crow Tribe v. Montana, 650 F.2d at 1117 (citations omitted).
The state's general interest in revenue collection is insufficient to
outweigh the specific federal and tribal interests with which the timber yield
tax interferes. The services provided by the state and county are provided to
all residents. The road, law enforcement, welfare, and health care services
provided by the state and county benefit both tribal and non-tribal members.
California admits that there is no direct connection between revenues from the
timber yield tax and the provision of services to tribal members or area
The purpose of the timber yield tax bears no relationship to tribal timber.
Prior to enactment of the timber yield tax, the state imposed an ad valorem tax
on timber. Tribal timber was not subject to the tax. Recognition of the
disincentives to proper timber management created by the ad valorem tax led to
the enactment of the timber yield tax. See Unkel & Cromwell, supra, at 832-
38. Those concerns were not relevant to tribal timber, because that timber was
not subject to the ad valorem tax and was managed under detailed guidelines by
the BIA. See Comment, Challenging the Assessment of the California's Timber
Yield Tax Against Purchasers of Indian Timber, 13 Pac.L.J. 1325, 1327-30
Because the timber yield tax does not fund services that directly relate to
the harvesting of tribal timber and is otherwise unconnected with tribal timber
activities, the timber yield tax should be preempted.
B. Attorney's Fees
 A more difficult question is posed by the tribe's request for attorney's
fees under 42 U.S.C. s 1988. The district court's decision was based on a
preemption analysis, which this court has held is outside the scope of 42
U.S.C. s 1983 and therefore incapable of supporting an award of attorney's fees
under s 1988. See White Mountain Apache Tribe v. Williams, 810 F.2d 844,
848-52 (9th Cir.), cert. denied, 479 U.S. 1060, 107 S.Ct. 940, 93 L.Ed.2d
990 (1987); accord Central Machinery v. Arizona, 152 Ariz. 134, 730 P.2d
843, 853-54 (1986), cert. denied, 481 U.S. 1042, 107 S.Ct. 1984, 95 L.Ed.2d
823 (1987). Section 1988 fees may be awarded to a prevailing party if that
party presented a substantial unadjudicated claim within the scope of s 1983
that was not alleged solely to support the fee award. Maher v. Gagne, 448
U.S. 122, 130-33, 100 S.Ct. 2570, 2575-77, 65 L.Ed.2d 653 (1980). The tribe
argues that its claim for infringement of its right to tribal self-government
is within the scope of s 1983 and therefore entitles it to attorney's fees.
[FN3] The right to *662 self-government qualifies as a substantial claim,
because this court has recognized the right of tribal self-government as an
independent basis for finding a state tax invalid. Crow Tribe, 819 F.2d at
902-03. The district court held that the tribe's right to self-government
"preceded, and therefore is not secured by, any federal statute or the
Constitution ... and therefore is not cognizable under section 1983."
FN3. The right to tribal self-government claim was included in the
complaint and briefed for the summary judgment motion. The tribe raises an
additional claim, of tax immunity, that it argues is within the scope of
s 1983. This claim fails because the tribe admits it was not even
briefed. Nor is the immunity claim distinct from preemption. See
Mescalero Apache Tribe v. Jones, 411 U.S. 145, 149-55, 93 S.Ct. 1267,
1270-74, 36 L.Ed.2d 114 (1973).
No reported decision settles the issue by determining whether the alleged
infringement of the right to tribal self-government is a "deprivation of any
rights, privileges or immunities secured by the Constitution or laws." 42
U.S.C. s 1983. Instead, we must analyze whether the right to tribal self-
government is within the scope of s 1983. Some federal statutes, as well as
constitutional provisions, create rights enforceable by s 1983. See
Maine v. Thiboutot, 448 U.S. 1, 4-8, 100 S.Ct. 2502, 2504-06, 65 L.Ed.2d
555 (1980) (scope of s 1983 encompasses violations of federal statutes);
Ramah Navajo School Board v. Bureau of Revenue, 104 N.M. 302, 720 P.2d 1243
(App.), cert. denied, 479 U.S. 940, 107 S.Ct. 423, 93 L.Ed.2d 373
(1986) (Indian Self-Determination and Educational Assistance Act created right
cognizable under s 1983).
The tribal right of self-government is not grounded specifically in the
Constitution or federal statutes. See E. Mettler, A Unified Theory of Indian
Tribal Sovereignty, 30 Hastings L.J. 189, 90-93 "The tribes do not have a
constitutional right to maintain this [sovereign] status, nor do they have a
constitutional right to exercise any powers or attributes of sovereignty."
Id. at 135. Instead, the right to tribal self-government is protected by
treaty and federal judicial decisions. Id. at 91-93. "[T]he Constitution
does not require continuing recognition of tribes as governmental entities
[and] the treaty clause has come to be the source of federal legislative power
over Indian affairs." Id. at 93; see also F. Cohen, Handbook of Federal
Indian Law 231-35 (1982).
In refusing to award s 1988 fees for the preemption claim in White
Mountain, this circuit stated that "s 1983 was not intended to encompass
those Constitutional provisions which allocate power between the state and
federal government." White Mountain, 810 F.2d at 848. The question is
whether the right to tribal self-government is one "that protects the
individual against government intrusion." Id. In White Mountain, we
distinguished power conferring provisions, such as the Supremacy Clause, from
rights conferring provisions that protect the individual from government
Like the right to be free from state taxes preempted by federal law, the right
to self-government is best characterized as a power, rather than a right. It
enables a tribe to exercise powers as a sovereign, within the limitations
provided by federal law. For example, tribes may determine their own form of
government and membership, regulate hunting and fishing on reservations,
regulate and tax resource development activities on tribal lands, decide
criminal and civil disputes involving tribal members and civil disputes between
tribal and non-tribal members. See Cohen, supra, at 246-57; L. Tribe,
American Constitutional Law 1471 n. 29 (1988) (citing cases). The tribe is
asserting its right to exercise sovereignty, as opposed to protecting the
personal liberty of its members. See White Mountain, 810 F.2d at 848.
Because the right to tribal government protects the powers conferred upon the
tribe, and not individual rights, it falls outside the scope of s 1983.
FN4. The Supreme Court has characterized the right of tribal self-
government as independent of but related to preeemption analysis. White
Mountain, 448 U.S. at 143, 100 S.Ct. at 2583. The right of self-government
also provides "an important 'backdrop' " to preeemption analysis. Id.
(quoting McClanahan, 411 U.S. at 172, 93 S.Ct. at 1262). The Court has
chosen not to ground its analyses of conflicts between state laws and
tribal activities in the Constitution's Indian Commerce Clause, prefering
to rely on the preeemption approach described above. Ramah, 458 U.S. at
845-46, 102 S.Ct. at 3402.
The right to tribal self-government is protected in part by federal judicial
decisions. The tribe argues that because the *663 right to tribal self-
government is found within federal common law it is within the scope of
s 1983. In support of that proposition, the tribe cites cases holding that
28 U.S.C. s 1331, the federal jurisdiction statute, encompasses federal
common law. The scope of s 1983 does not parallel that of 28 U.S.C. s
1331. See, e.g., Middlesex County Sewerage Authority v. National Sea
Clammers Ass'n, 453 U.S. 1, 101 S.Ct. 2615, 69 L.Ed.2d 435 (1981) (s 1983
claim precluded if Congress includes within statutory scheme comprehensive
remedial procedures); Pennhurst State School and Hospital v. Halderman, 451
U.S. 1, 101 S.Ct. 1531, 67 L.Ed.2d 694 (1981) ("bill of rights" provision of
Developmentally Disabled Assistance and Bill of Rights Act essentially
precatory and therefore unenforceable under s 1983). Although s 1983 is
to be construed liberally, the tribe can point to no cases that support
incorporating federal common law into its scope.
We understand, but reject, the tribe's argument that the Act of April 8,
1864, 13 Stat. 39, is a federal law within the scope of s 1983. The Act
merely authorized the creation of reservations in California and did not
address the sovereignty or rights of Indians. [FN5]
FN5. In White Mountain, we held that the statutes regulating the
harvest of tribal timber and federal policies concerning tribal timber
development were not within the scope of s 1983. 810 F.2d at 852.
The right to tribal self-government also is based on treaty. We previously
have held that a suit based on the interpretation of treaty rights to take fish
is not cognizable under s 1983. United States v. Washington, 813 F.2d
1020 (9th Cir.1987), cert. denied, 485 U.S. 1034, 108 S.Ct. 1593, 99 L.Ed.2d
908 (1988). The right to self-government may appear more akin to a s 1983-
type civil right than the right to take fish. Nonetheless, both rights are
grounded in treaties, as opposed to specific federal statutes or the
We affirm the district court's determination that the assessment of the
California timber yield tax against purchasers of tribal timber is preempted by
federal law. We also affirm the district court's denial of s 1988
attorney's fees to the tribe on the grounds that the tribe's claims were not
cognizable under s 1983.
AFFIRMED. Each party shall bear its own costs of appeal.