Ninth Circuit Holds That Tribal Officials Cannot Claim Sovereign Immunity or Qualified Immunity Under the Prevent All Cigarette Trafficking Act

By Heidi McNeil Staudenmaier and Marsha Cotton

Recently, the Ninth Circuit Court of Appeals held that tribal officials could not claim sovereign immunity or qualified immunity from potential liability for failure to remit taxes on cigarette sales to the State of California under the Prevent All Cigarette Trafficking Act of 2009 (PACT Act), 15 U.S.C. §§ 376 – 376a. See State ex re. Bonta v. Del Rosa, 158 F.4th 1066 (9th Cir. 2025).

In 2023, California filed suit in federal court against Defendant Azuma Corporation, a manufacturer and distributor of cigarettes, for failure to pay state taxes.¹ Id. at 1069 – 71 (citing Cal. Rev. & Tax. Code §§ 30001 – 483). Azuma is owned and operated by the Alturas Indian Rancheria Tribe (the “Tribe”), a federally recognized Indian tribe located in northern California. Id. The State also filed suit against three individual officers for the Tribe (Individual Defendants) who were members of the Tribe’s “Business Committee.” Id. As part of their duties on the Business Committee, the Individual Defendants “manage[d] all economic affairs and enterprises of the Tribe,” including tobacco business operations. Id. All three officers were sued in their official capacity, and two of the officers were also sued in their personal capacity. Id. at 1070 n.1.

The purpose of the lawsuit was to mandate compliance with California’s cigarette tax laws and stop the sale and distribution of contraband cigarettes under the PACT Act. That law “federalizes some state cigarette taxes” and requires cigarette sellers to comply with “all [s]tate, local, tribal, and other laws generally applicable to the sales of cigarettes.” Id. (citing 15 U.S.C. § 376a(a)(3)(A) – (B)). The law further requires the U.S. Attorney General to keep a list of sellers who are not in compliance with the Act, and those sellers are prohibited from distributing cigarettes. Id. (citing § 376(a)(e)(2)(A)). If a seller violates the PACT Act, a state may bring suit to enforce the Act. Id. (citing § 378(c)(1)(A)).

California did just that, alleging that the Tribe was placed on the Act’s non-compliant list in 2019 and that the Tribe “sells contraband cigarettes at three of its own retail smoke shops directly to consumers” and “supplies contraband cigarettes directly to other retail smoke shops outside of Alturas Indian country.” Id. at 1072.

All the defendants moved to dismiss the case. Id. at 1073. Azuma argued that it is an “economic arm” of the Tribe and therefore has tribal sovereign immunity from suit. The district court agreed and dismissed the company based on sovereign immunity. Id. The State did not challenge that ruling on appeal. Id.

As to the Individual Defendants, they argued: (1) they shared the Tribe’s sovereign immunity for the official capacity claims against them, and (2) qualified immunity shields them from the personal capacity claims against them. Id. The district court disagreed and denied the motion. The district court found that the seminal United States Supreme Court case Ex parte Young, 209 U.S. 123 (1908), governed the claims for injunctive relief against the Individual Defendants in their official capacity and did not bar those claims.² Separately, the district court concluded that qualified immunity did not bar California’s suit against the Individual Defendants in their personal capacities because there was no “authority extending qualified immunity to tribal officers sued in their personal capacities for violating federal and state laws.” Id. at 1074.

The Individual Defendants filed an interlocutory appeal for review of the district court’s decision. On appeal, the Ninth Circuit addressed three issues and summarily affirmed the district court. First, the court affirmed its jurisdiction for the interlocutory appeal, finding that “the district court’s denials of qualified immunity and tribal sovereign immunity are immediately appealable under the collateral order doctrine.’” Id. at 1074 (cleaned up) (citing Burlington N. & Santa Fe Ry. Co. v. Vaughn, 509 F.3d 1085, 1091 (9th Cir. 2007)).

Next, the court concluded that the Individual Defendants did not waive their sovereign immunity arguments even though they did not raise the arguments when they first had the opportunity to do so. Id. Importantly, the court recognized that “State and tribal immunity, while providing similar protection against suit, differ in how they may be waived.” Id. at 1075. Though state sovereign immunity may be waived by implication, “waivers of tribal sovereign immunity may not be implied” and must always be express and unequivocal. Id. (citing Allen v. Gold Country Casino, 464 F.3d 1044, 1047 (9th Cir. 2006)).

As to the merits of the parties’ arguments, the court affirmed the district court’s determination that Ex parte Young governed the claims against the Individual Defendants in their official capacities. Specifically, the court concluded that the PACT Act did not fall within a limited carveout that makes Ex parte Young relief inapplicable to tribal officials. Id. at 1077-80. This carveout applies when Congress has created a detailed and exclusive “remedial scheme” for the enforcement of a particular federal law. Id.; see also Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 74 (1996).

The Ninth Circuit explained the district court correctly found that the PACT Act does not fit the mold for a detailed and exclusive remedial scheme because the Act “places no restriction on the relief a court can award” and “does not even say whom the suit is to be brought against.” Id. at 1077 – 78. The court further noted that the PACT Act has a definition of the persons who may be liable under the law, and that definition contemplates tribal officers such as the Individual Defendants. Id.

Finally, the court held that the district court properly denied the Individual Defendants’ claims for qualified immunity. Id. at 1080 – 81. The court made the distinction between a case where a plaintiff sues to vindicate the violation of their personal rights (when qualified immunity is applicable) versus a case where a plaintiff sues to generally enforce a state or federal law (when qualified immunity is inapplicable). Id. The court explained that California’s claims under the PACT Act fall into the latter category. Id.

This case serves as a timely reminder about the contours and limitations of sovereign immunity for tribes and tribal entities doing business on and off their tribal lands.