Tuesday, April 24, 2012

DISH network VS the Hopi Tribe

The suit: DISH claims that the Hopi tribe does not have legal jurisdiction to charge it an annual $500 fee based on USC 47 U.S.C. § 303(v); 47 U.S.C. § 152 note and section 602 of the communications act. They claim only states can charge fees (or collect/levy taxes) on satellite services. DISH also wants a judge to find that they do not have to consent to Tribal jurisdiction (Section 17 of the Hopi code)

Relevant Information:
Section 303(v) of the Communications Act preempts non-federal regulation of DBS (Direct Broadcast Satellite) service, and Section 602 of the Communications Act explicitly bars local governments from taxing or imposing any fee on the right of DBS providers to do business within their jurisdictions.

DISH contends that the Tribe can not legally enforce either the fee or tribal rulings in relation to the matter. (source: PDF of the court filing, see link to suit below)

The tribe first charged the fee in 2009, then sued Dish Network in Tribal Court in December 2011, seeking an injunction ordering Dish to get a business license and pay an annual fee, plus "a $500 a day penalty for failure to obtain a license and pay the annual fee in the past," according to the complaint. (source: Courthouse News Service).

The suit:

Hopi Code (Section 17):


a. The Hopi Tribal Court shall have jurisdiction over all civil actions where there are sufficient contacts with the Hopi Indian Reservation upon which to base the exercise of jurisdiction, consistent with the constitution and laws of the Hopi Tribe and the United States. It is the intent of this section to authorize the broadest exercise of jurisdiction consistent with these limitations.

b. The Hopi Tribal Court shall have all powers and may issue all writs, judgements or any ether order necessary to the complete and effective exercise of its jurisdiction.

c. In the exercise of its civil jurisdiction, the acts of the Hopi Tribal Court shall be construed as being remedial and for the purpose of obtaining complete and effective compliance with ail applicable laws for the peace, health, safety and welfare of all residents and other persons having contacts with the Hopi Reservation.

d. Any person, whether or not a member of the Hopi Indian Tribe or a resident of the Hopi Indian Reservation, or other legal entity who in person or through an agent commits any of the acts hereinafter enumerated, thereby submits to the civil jurisdiction of the Hopi Tribal Court as to any cause of action relating to such act:

-The transaction or doing of any business within the Reservation;

-The commission of a torturous act within the Reservation;

-The ownership, use or possession of any real or personal property within the Reservation;

-Contracting to insure any person, property or risk residing or located within the Reservation at the time of contracting or at the time the acts occur which are the basis of the civil action;

-Contracting with the Hopi Tribe, a member of the Hopi Tribe, or any other person-or other legal entity for the sale or purchase of any goods or services knowing or under circumstances where it reasonably should have known that such contract is to be performed or is in fact performed on or from within the Hopi Reservation; and

-Any other acts or conduct which establish such minimal contacts with the Hopi Indian Reservation or with the Hopi Tribe so that the exercise of civil jurisdiction by the Hopi Tribal Court would not be contrary to traditional notions of fair play and substantial justice. (Revised H-92-91)

US Communications act of 1996 code:

(a) DBS SIGNAL SECURITY- Section 705(e)(4) (47 U.S.C. 605(e)(4))
is amended by inserting `or direct-to-home satellite services,' after `programming,'.

Section 303 (47 U.S.C. 303) is amended by adding at the end thereof
the following new subsection:

`(v) Have exclusive jurisdiction to regulate the provision of
direct-to-home satellite services. As used in this subsection, the
term `direct-to-home satellite services' means the distribution or
broadcasting of programming or services by satellite directly to
the subscriber's premises without the use of ground receiving or
distribution equipment, except at the subscriber's premises or in
the uplink process to the satellite.'.

Section 602:



(a) PREEMPTION- A provider of direct-to-home satellite service
shall be exempt from the collection or remittance, or both, of any
tax or fee imposed by any local taxing jurisdiction on
direct-to-home satellite service.

(b) DEFINITIONS- For the purposes of this section--

`direct-to-home satellite service' means only programming
transmitted or broadcast by satellite directly to the
subscribers' premises without the use of ground receiving or
distribution equipment, except at the subscribers' premises or
in the uplink process to the satellite.

purposes of this section, a `provider of direct-to-home
satellite service' means a person who transmits, broadcasts,
sells, or distributes direct-to-home satellite service.

(3) LOCAL TAXING JURISDICTION- The term `local taxing
jurisdiction' means any municipality, city, county, township,
parish, transportation district, or assessment jurisdiction, or
any other local jurisdiction in the territorial jurisdiction of
the United States with the authority to impose a tax or fee,
but does not include a State.

(4) STATE- The term `State' means any of the several States,
the District of Columbia, or any territory or possession of the
United States.

(5) TAX OR FEE- The terms `tax' and `fee' mean any local
sales tax, local use tax, local intangible tax, local income
tax, business license tax, utility tax, privilege tax, gross
receipts tax, excise tax, franchise fees, local
telecommunications tax, or any other tax, license, or fee that
is imposed for the privilege of doing business, regulating, or
raising revenue for a local taxing jurisdiction.

(c) PRESERVATION OF STATE AUTHORITY- This section shall not be
construed to prevent taxation of a provider of direct-to-home
satellite service by a State or to prevent a local taxing
jurisdiction from receiving revenue derived from a tax or fee
imposed and collected by a State.

Snippets from the suit brought by DISH:

Section 15: ...Subscribers enter into a subscription agreement with DISH

Section 16: DISH Service provides installation service for DISH. DISH Service
enters the reservation to install the satellite dish receiver and the decoder box on the
subscriber’s residence. DISH Service has no independent relationship or agreements,
express or implied, with the subscriber.

Some thoughts on it:
This is a bit larger than just one small lawsuit over $500. One thing which caught my eye was this:

142 Cong. Rec. (statement of Rep.Hyde) “Section 602 reflects a legislative determination that the provision of direct-to home satellite service is national, not local in nature. . . . To permit thousands of local taxing jurisdictions to tax such a national service would create an unnecessary and undue burden on the providers of such services.”.

This has broad implications as can be seen in a lawsuit from Kentucky. Basically, school districts were imposing a tax on DBS's and claiming that since they were also state entities (ie, school taxes in Kentucky are considered state taxes) and states were exempted from the 1996 Communications Act they could levy the tax.

The court found this was not the case since the taxes were set up on a district by district basis.

This was noted in the Kentucky case (and I find this important to the case at hand):

In adopting the House version, the
Conference Committee explained that
[t]he conference agreement adopts the House
provisions with modifications. This section exempts
DTH [direct-to-home] satellite service providers from
collecting and remitting local taxes and fees on DTH
satellite services . DTH satellite service is programming
delivered directly to subscribers equipped with satellite
receivers at their premises ; it does not require the use
of public rights-of-way or the physical facilities or
services of a community. The conferees adopt the
House language, but narrow the language to ensure
that the exemption is only provided for the actual sale
of the programming delivered by the direct-to-home
satellite service. . . . The intent of these amendments is
to clarify that the exemption applies only to the
programming provided by the direct-to-home satellite
service. To give two illustrative examples, the
exemption does not apply to the sale of equipment; . . .
In addition, the exemption does not apply to real estate
taxes that are otherwise applicable when the provider
owns or leases real estate in a jurisdiction . Also,
States are free to tax the sale of the service and they
may rebate some or all of those monies to localities if
they so desire .

I am still researching this case and will comment on it later in the day.

Edited to add link:

Office of Revenue Commission

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