author: VERON, District Judge.

text:
    Bertney LANGLEY, et al v. Alfred R. RYDER, District Attorney of 33rd Judicial District, Allen Parish, Louisiana; et al.
    Civ. A. No. 85-0030.
    United States District Court, W.D. Louisiana, Lake Charles Division.
    Feb. 12, 1985.
    As Amended March 15, 1985.

      Carroll L. Spell, Lafayette, La., for plaintiffs.
    Alfred R. Ryder, Dist. Atty., 33rd Judicial Dist., Oberlin, La., for defendants.
    Henry J. Sockbeson, Native American Rights Fund, Washington, D.C., for intervenor.
   OPINION

VERON, District Judge.

The plaintiffs in this suit are certain members of the Coushatta Tribe of Louisiana who have been charged with state law offenses allegedly committed on federal land held in trust for the Tribe. The plaintiffs seek an injunction restraining Allen Parish officials from proceeding with these charges in state court. They contend that Louisiana lacks jurisdiction to apply state criminal law to offenses committed by Indians on Indian territory. This matter came before the Court on January 18, 1985 on the plaintiffs’ petition for a preliminary injunction. This narrative opinion will serve as the Findings of Fact and Conclusions of Law required by Federal Rule of Civil Procedure 52(a).

BACKGROUND

On August 30, 1984, a group claiming to be the Coushatta Tribe of Louisiana initiated a civil action seeking declaratory and injunctive relief from this Court. See Coushatta Tribe of Louisiana v. State of Louisiana, et al., Civil Action No. 84-2371-LC, Western District of Louisiana, Lake Charles Division. The plaintiffs in that suit prayed for an injunction restraining state officials from applying state licensing and taxation laws to the Tribe’s business operations, such as bingo, gaming and sales of gasoline, cigarettes, alcoholic beverages and food. The Tribe also sought a declaratory judgment delineating the scope of permissible' state regulation of Indian activity on tribal territory. A hearing was held on August 30, 1984 but no ruling was made at that time because the plaintiff withdrew its application for temporary and preliminary injunctive relief. The application for a permanent injunction and for declaratory relief was referred to a trial on the merits, to be held at a later unspecified date. Subsequently, on January 16, 1985, the case was dismissed by the Clerk pursuant to Rule 14 of the Local Rules of the Western District of Louisiana, which provides for dismissal of actions for lack of prosecution. Thus, the claims for relief asserted in that suit are no longer before the Court.

In the meantime, plaintiffs Bértney Langley, Jack LeBlanc, Sharon Doise, Leonard Battise, Michael Pierotti, Patrick LeBlanc, Burl Sonnier, Wayne Doise and Debra Sonnier were arrested by Allen Parish Sheriff’s Deputies and charged with conducting gambling operations as a business in violation of La.R.S. 14:90. These plaintiffs had allegedly been operating blackjack, pull-tab, roulette wheels and similar gambling games and had also been conducting a bingo game on tribal territory without obtaining a license under the Louisiana Charitable Raffles, Bingo and Keno Licensing Law, La.R.S. 33:4861.1, et seq. Bingo constitutes gambling under state criminal law but the licensing law grants immunity from prosecution to those who obtain a lawful license. See La.R.S. 33:4861.15(3). Plaintiff Lee David Poncho was arrested and charged with aggravated battery. Plaintiff Hilton Langley was arrested and charged with attempted second degree murder. As of January 18,1985, no indictments had been returned nor had any bills of information been filed on any of these charges. The plaintiffs arrested on gambling charges have moved to quash the arrest warrants in state court.

On January 4, 1985, all of the aforementioned plaintiffs filed a petition for injunctive relief in this Court, seeking to restrain Allen Parish officials from prosecuting the criminal charges. On that same date, the Court issued a temporary restraining order and set the matter for hearing. On January 16, 1985 an entity claiming to be the Coushatta Tribe of Louisiana moved to intervene in the action in order to protect the Tribe’s interests in the bingo operations. Shortly thereafter, several members of the Tribe filed an opposition to the petition for intervention, challenging the right of the intervenor to represent the Tribe and contending that the bingo operations were not officially authorized by the Tribe. A hearing was held on the petitions for preliminary injunctive relief and for intervention on January 18, 1985. The plaintiffs orally requested declaratory relief at this time. After hearing the arguments and evidence, the Court dissolved the temporary restraining order and took the matter under advisement to study the law and evidence.

ISSUES

Basically, this suit presents four issues:

(1) Whether the Anti-Injunction Act, 28 U.S.C. § 2283, and the doctrine of equitable restraint mandate dismissal of this suit for injunctive and declaratory relief restraining state criminal proceedings;
(2) Whether the State of Louisiana has jurisdiction to apply its criminal law against conducting gambling, operations as a business La.R.S. 14:90, to gambling operations conducted by Indians on the land currently occupied by the Coushattas;
(3) Whether the State of Louisiana has jurisdiction to apply its criminal laws against aggravated battery, La.R.S. 14:34, and attempted second degree murder, La.R.S. 14:27 & 14:30.1, to offenses committed by Indians on the land currently occupied by the Coushattas; and
(4) Whether the “Coushatta Tribe of Louisiana” should be permitted to intervene in this action.

The Propriety of Injunctive and Declaratory Relief

Prior to the hearing on this matter, the Court requested the parties to address the question of whether the Anti-Injunction Act, codified as amended at 28 U.S.C. § 2283, and the doctrine of equitable restraint enunciated in Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971), should apply here. Section 2283 provides that a federal court may not enjoin a pending state judicial proceeding except where expressly authorized by Congress, where necessary in aid of the federal court’s jurisdiction or in order to protect or effectuate a federal court order or judgment. If the barrier posed by section 2283 is cleared in regard to a pending state criminal proceeding, then Younger nonetheless mandates dismissal of the federal suit for injunctive relief unless the federal plaintiff demonstrates that his state-court defense will not adequately protect his federal rights because of bad faith, harassment, or other unusual circumstances. Younger, 401 U.S. at 53-54, 91 S.Ct. at 754-55; see generally Comment, Federal Injunctive Relief Against Pending State Civil Proceedings: Younger Days are Here Again, 44 La.L.Rev. 967 (1984). The Younger doctrine also bars declaratory relief when the federal plaintiff is raising issues that are intertwined with a pending state criminal proceeding brought against him. Samuels v. Mackell, 401 U.S. 66, 91 S.Ct. 764, 27 L.Ed.2d 688 (1971).

After a review of the evidence and the applicable law, the Court concludes that section 2283 does not apply here because state criminal proceedings were not in fact pending at the time the federal complaint was filed. In Dombrowski v. Pfister, 380 U.S. 479, 85 S.Ct. 1116, 14 L.Ed.2d 22 (1965), the Supreme Court held that state criminal proceedings were not pending within the intendment of section 2283 because the Louisiana grand jury had not been convened and indictments had not been obtained until after the filing of the federal complaint. 380 U.S. at 484 n. 2, 85 S.Ct. at 1119 n. 2. Here, arrest warrants had been issued and arrests made at the time of the filing of the federal complaint, but no bill of information or indictment had been filed in state court. State criminal proceedings therefore were not pending and section 2283 does not bar the injunctive relief sought here. See also La.Code Crim. Pro. art. 382 (criminal prosecution instituted by way of indictment, information, or affidavit); cf. Barancik v. Investors Funding Corp., 489 F.2d 933 (7th Cir.1973) (section 2283 does not bar issuance of the injunction if the state action was not pending when the federal injunction is sought, even though the state action commenced prior to federal action on the request; but cf. Roth v. Bank of the Commonwealth, 583 F.2d 527 (6th Cir.1978), cert. dismissed, 442 U.S. 925, 99 S.Ct. 2852, 61 L.Ed.2d 292 (1979) (contrary view).

The Younger doctrine also does not apply here, although for a slightly different reason. In contrast to section 2283, the fact that state court proceedings were not pending at the filing of the federal complaint is not controlling under the Younger doctrine; the federal court must dismiss the complaint if state court proceedings commence before “any proceedings of substance on the merits” take place in the federal court. Hicks v. Miranda, 422 U.S. 332, 349, 95 S.Ct, 2281, 2291, 45 L.Ed.2d 223 (1975). The meaning of the phrase “any proceedings of substance on the merits” may be “a good deal less than apparent,” 422 U.S. at 353 n. 1, 95 S.Ct. at 2294 n. 1 (Stewart, J., dissenting), but here there can be no question that Younger does not apply, as the District Attorney still has not commenced state criminal proceedings. And, in any event, the defendant Allen Parish officials have waived any objections that they might have under Younger. They would rather have this Court decide the jurisdictional issue as promptly as possible. Cf. Sosna v. Iowa, 419 U.S. 393, 396 n. 3, 95 S.Ct. 553, 556 n. 3, 42 L.Ed.2d 532 (1975) (the Court requested that the parties address the Younger issue but proceeded to the merits at the urging of both parties).

THE MERITS

THE AGGRAVATED BATTERY CHARGE AGAINST LEE DAVID PONCHO

The jurisdictional dispute over this offense is governed by 18 U.S.C. § 1153. Section 1153 provides in pertinent part that “[a]ny Indian who commits against the person ... of another Indian or other person ... assault with a dangerous weapon ... within the Indian country, shall be subject to the same laws and penalties as all other persons committing [the offense], within the exclusive jurisdiction of the United States.” An assault with a dangerous weapon charge under section 1153 is defined and punished in accordance with 18 U.S.C. § 113(c). United States v. Addison, 633 F.2d 861 (10th Cir.1981); 18 U.S.C. § 1153. In United States v. John, 437 U.S. 634, 98 S.Ct. 2541, 57 L.Ed.2d 489 (1978), the Supreme Court held that a state does not have jurisdiction over an offense that is subject to federal prosecution under section 1153. 437 U.S. at 651-54, 98 S.Ct. at 2550-51; see also Solem v. Bartlett, _ U.S. _, 104 S.Ct. 1161, 79 L.Ed.2d 443 (1984) (same rule); Seymour v. Superintendent, 368 U.S. 351, 359, 82 S.Ct. 424, 429, 7 L.Ed.2d 346 (1962) (same). As there is no substantive difference between an aggravated battery charge under La.R.S. 14:34 and an assault with a dangerous weapon charge under 18 U.S.C. § 113(c), the sole remaining question in regard to state jurisdiction over the charge against Poncho is whether the alleged offense was committed “within the Indian country” under section 1153.

The land on which the offense allegedly occurred is a tract of approximately twenty acres situated in Allen Parish. The parcel was donated to the United States of America, in trust for the Coushatta Indian Tribe of Louisiana, by David L. Garrison, Jr. on July 2,1976. The Secretary of the Interior, acting through the Bureau of Indian Affairs, accepted this donation and thereby acquired the property for the United States in trust for the Tribe. The acquisition of the land by donation is clearly authorized by section 5 of the Indian Reorganization Act of 1934, 48 Stat. 985, codified at 25 U.S.C. § 465. There is no indication in. the record, however, that the Secretary proclaimed the land to be a reservation under section 7 of the Act, 48 Stat. 986, codified at 25 U.S.C. § 467. Thus, the specific question presented here is whether land held in trust by the United States for a recognized Indian tribe but not proclaimed to be a reservation by the Secretary of the Interior constitutes “Indian country” for purposes of criminal jurisdiction under section 1153.

One statutory definition of “Indian country” under section 1153 includes “all land within the limits of any Indian reservation under the jurisdiction of the United States Government, notwithstanding the issuance of any patent, and including rights-of-way running through the reservation....” 18 U.S.C. § 1151(a). Although this Coushatta land has not been proclaimed to be a reservation pursuant to 25 U.S.C. § 467, existing jurisprudence indicates that the land should nonetheless be considered as a “reservation” for the purposes of federal criminal jurisdiction. In United States v. John, supra, Congress had directed several federal purchases of land for the Mississippi Choctaw Indians between 1918 and 1932. In 1939, Congress passed an Act providing that these lands would be held by the United States in trust for the Mississippi Choctaw. The Secretary of the Interior officially proclaimed these lands to be a reservation in 1944. In holding that the Choctaw land was Indian country, the John Court gave a strong indication that the act of holding the land in trust for the Indians, rather than the official proclamation of reservation status by the Secretary, was the critical fact for achieving reservation status under section 1151(a):

The Mississippi lands in question here were declared by Congress to be held in trust by the Federal Government for the benefit of the Mississippi Choctaw Indians who were at that time under federal supervision. There is no apparent reason why these lands, which had been purchased in previous years for the aid of those Indians, did not become a “reservation,” at least for the purposes of federal criminal jurisdiction at that particular time. See United States v. Celestine, 215 U.S. 278, 285 [30 S.Ct. 93, 94, 54 L.Ed. 195] (1909). But if there were any doubt about the matter in 1939 when, as hereinabove described, Congress declared that title to lands previously purchased for the Mississippi Choctaws would be held in trust, the situation was completely clarified by the proclamation in 1944 of a reservation and the subsequent approval of the constitution and bylaws adopted by the Mississippi Band.

437 U.S. at 649, 98 S.Ct. at 2549. The quoted passage is undeniably dicta on the question presented here, yet it is also undeniably powerful in its suggestion that the Coushatta land should be considered Indian country. Such a holding would accord with earlier case law, as well with the “principal test” of whether the land “had been validly set apart for the use of Indians as such, under the superintendance of the Government.” The Court therefore holds that the Coushatta land is “Indian country” under section 1151, for purposes of federal criminal jurisdiction under section 1153.

As the alleged offense falls exclusively within federal jurisdiction, thé State of Louisiana has no jurisdiction to prosecute Lee David Poncho for the aggravated battery allegedly committed on the land held in trust by the United States for the Coushatta Tribe of Louisiana.*

THE ATTEMPTED SECOND DEGREE MURDER CHARGE AGAINST HILTON LANGLEY

Jurisdiction over this charge is also governed by section 1153. The section lists “assault with intent to commit murder” as another of the fourteen major offenses subject to exclusive federal jurisdiction when committed by an Indian in Indian country. This offense is defined and punished under 18 U.S.C. § 113(a). The affidavit that accompanied the warrant for the arrest of Hilton Langley for attempted second degree murder alleged that he shot at one Rodrigue John with a rifle with the intent to murder John. This allegation states an offense under 18 U.S.C. § 113(a). Compare United States v. Guilbert, 692 F.2d 1340, 1343 (11th Cir.1982) (“assault” under the section encompasses both battery and attempted battery) with Nixon v. United States, 352 F.2d 601 (5th Cir.1965) (a deck hand who shot and wounded another deck hand was guilty of assault with intent to commit murder). Thus, in line with the foregoing discussion, this offense allegedly committed in Indian country, falls exclusively within federal jurisdiction under section 1153.

THE GAMBLING CHARGES

The affidavits that accompany the state warrants for arrest on gambling operations charges allege that the plaintiffs had been operating blackjack, pull-tabs, roulette wheels and similar games and that they had been conducting unlicensed bingo games in which non-Indians were allowed to participate. The offenses were allegedly committed by members of the Coushatta Tribe on the land held in trust for the Tribe. The Court would have preferred to approach the question of state criminal jurisdiction over these activities in terms of federal legislative pre-emption as was done with section 1153 and United States v. John. Yet it is not entirely clear whether the alleged activities involved here are subject to federal prosecution; nor is it clear which federal statute might provide the appropriate basis for prosecution. These questions need not be resolved here, however, and the Court specifically declines to express an opinion as to whether the alleged gambling activities and bingo operations in the instant case would be subject to federal prosecution if conducted in Indian country or in federal enclaves. The question that remains is whether principles that operate without resort to federal statutes or treaties concerning Indian affairs preempt state criminal jurisdiction over these alleged gambling and bingo activities.

As the matter stands, it must be assumed that the gambling offenses are not subject to prosecution under a statute vesting jurisdiction exclusively with the federal sovereign and that the Coushatta Tribe does not have a treaty with the United States which specifically reserves the right to be free of state criminal jurisdiction in the trust territory. The Court has not found a Supreme Court or Circuit level opinion on point, such as on direct review of a state court conviction or on a writ of habeas corpus, that holds that states have no criminal jurisdiction over an Indian offense committed in Indian country in this situation. The holding in United States v. John regarding crimes subject to prosecution under section 1153 stands as a strong suggestion that states have no jurisdiction over other crimes committed by Indians in Indian country, but that holding is based in part on the legislative history pertaining specifically to section 1153. See 437 U.S. at 651 n. 22, 98 S.Ct. at 2250 n. 22. Yet the issue raised here does not arise on an entirely empty slate, for the John holding is undoubtedly supported as well by a longstanding doctrine in federal Indian law, the doctrine of Indian sovereignty. A brief examination of the contours of this doctrine will indicate whether the activities alleged here are subject to state criminal jurisdiction.

In its most extreme formulation, the Indian sovereignty doctrine provided that state laws are not applicable to tribal Indians in Indian country except to the extent that Congress has expressly provided that state law shall apply. This absolute principle has been traditionally based on notions of inherent Indian sovereignty and the apparent assumption that the Indian commerce clause, U.S. Const, art. I, § 8, cl. 3, operating in its dormant state, pre-empted all state regulation that affected tribal Indians in Indian country. The doctrine has undergone considerable evolution however, and recent decisions suggest a shift away from a rigid bar to state jurisdiction based on inherent Indian sovereignty toward flexible standards derived from general federal pre-emption law. In light of these developments, the doctrine is perhaps best reflected in' the statement that state laws are not applicable in Indian country where those laws infringe on the right of tribal Indians to make their own laws and be ruled by them, unless Congress has expressly provided that state law shall apply. That is, Indian tribes retain those attributes of their original sovereignty which are not inconsistent with their dependent status and which have not been divested by federal treaty or statute.

Although recent decisions may raise doubt as to the ultimate extent of inherent Indian sovereignty in other contexts, it nonetheless has been considered as axiomatic that the right of tribal Indians to make and enforce their own laws includes the power to exercise jurisdiction over offenses committed by Indians in Indian territory. Indeed, Congress, in enacting legislation either asserting federal jurisdiction over Indian crimes or permitting the exercise of state jurisdiction over Indian crimes, has acted consistently on the express assumption that states have no criminal jurisdiction over offenses committed by Indians in Indian country absent a Congressional grant of such power. This assumption has been just as consistently echoed in Supreme Court jurisprudence. This prevailing legislative and judicial presumption can only reflect a mutual understanding that a tribe’s “right of internal self-government includes the right to prescribe laws applicable to tribe members and to enforce those laws by criminal sanctions,” and that this retained sovereignty, by virtue of the negative implications of the Indian commerce clause, pre-empts state jurisdiction over offenses committed by tribal Indians in Indian country. The Court therefore holds that Louisiana cannot assert criminal jurisdiction over the alleged gambling activities involved here.

During the course of this litigation, the defendants have distinguished between unlicensed bingo and other forms of gambling, practically conceding a lack of jurisdiction over the unlicensed bingo but urging that state jurisdiction exists over the other gambling offenses. The defendants find support for this position in Seminole Tribe of Florida v. Butterworth, 658 F.2d 310 (5th Cir.1981), cert. denied, 455 U.S. 1020, 102 S.Ct. 1717, 72 L.Ed.2d 138 (1982). Butterworth held that Florida could not apply its law against gambling operations to unlicensed bingo by Indians in Indian country because the state licensing scheme rendered the law “eivil/regulatory” rather than “criminal/prohibitory.” The defendants argue that Louisiana has jurisdiction over the other gambling offenses here because Louisiana does not license these forms of gambling and that La.R.S. 14:90 is therefore a permissible “criminal/prohibitory” regulation in regard to these particular offenses.

Butterworth is distinguished from the instant case in a quite fundamental respect, however. In Public Law 280, Congress granted states the right to legislatively assume criminal and limited civil jurisdiction over Indian tribes. Florida “opted in” to Public Law 280. In Bryan v. Itasca County, 426 U.S. 373, 96 S.Ct. 2102, 48 L.Ed.2d 710 (1976), the Supreme Court held that Public Law 280 extended civil jurisdiction only to the extent necessary to resolve civil disputes concerning Indians and that the act therefore did not confer civil regulatory power - upon the states. The distinction relied upon in Butterworth was therefore quite pertinent there. Louisiana, on the other hand, has never elected to assume jurisdiction under Public Law 280. The distinction between “civil/regulatory” and “criminal/prohibitory” law, and its application in Butterworth, is accordingly wholly irrelevant in the instant suit. Absent a timely assumption of jurisdiction under Public Law 280, Louisiana jurisdiction over all of these gambling offenses allegedly committed by Indians in Indian country is pre-empted under the Indian sovereignty doctrine and the negative implications of the Indian commerce clause.

One last point remains for discussion. The parties have asked the Court to address the specific question of whether Louisiana can apply La.R.S. 14:90 to Indians conducting an unlicensed bingo game in Indian country to the extent that they allow non-Indians to participate. Butter-worth is controlling on this particular point and mandates the conclusion that the state cannot apply the statute to even this limited extent. The Florida statute involved in Butterworth, like the Louisiana statute involved here, proscribed the operation of a gambling enterprise, not the playing of the game by a customer at the enterprise. In this circumstance, where the criminal law is directed at the Indian operator rather than the non-Indian player, the Fifth Circuit held that the state could not apply its law to the activity merely because non-Indians were involved. 658 F.2d at 316-17. The state presently has no more basis for preventing non-Indians from playing bingo on the Coushatta trust territory than it does for prohibiting non-Indians from playing at any bingo hall that is immune from criminal prosecution under the state licensing law.

Accordingly, the Court having concluded that the defendant Allen Parish officials do not have jurisdiction to prosecute these offenses, the plaintiffs’ petition for preliminary injunctive relief is hereby GRANTED.

THE INTERVENTION

In granting the plaintiffs petition for preliminary injunctive relief, the Court has indirectly afforded the party seeking intervention, the “Coushatta Tribe of Louisiana,” the substance of the relief it seeks. Under the Court’s ruling, entry of a declaratory judgment and a permanent injunction await only a formal motion and the provision of proper notice to the defendants. No issues of material fact remain in this regard. There is therefore no need for this Court to resolve the controversies surrounding the attempt by this entity to intervene in this action. Accordingly, the petition for intervention is DISMISSED as moot.

POSTSCRIPT

The members of the Coushatta tribe opposing the intervention have expressed a concern that the injunction issued here will effectively deprive them of police protection heretofore provided by state officials. The Court is not unmindful that its application today of abstract notions of Indian sovereignty, which are intended to be for the benefit of Indians, in practical effect harms the Tribe by depriving its members of this protection on the trust territory. This gap in protection will have to be filled by the creation of a tribal police force or by assignment of additional federal law enforcement officials to this area. There is another solution to this problem, however. Under 25 U.S.C. § 1321(a), a state may assume jurisdiction over offenses committed by or against Indians in Indian country with the consent of the tribe occupying the Indian country. Of course, in dealing with the State, the Coushatta Indians may have to take the bitter, state jurisdiction over “victimless” crimes, with the sweet, state protection from crimes against persons and property, but that is a matter to be worked out between the Coushattas and the State of Louisiana. The Court merely suggests this procedure as an alternative solution to the law enforcement problem on the trust territory.

      . This Court is aware that, as an alternative ground, it could rely on a line of cases that might suggest that section 2283 does not bar injunctions of pending state court proceedings where Indian affairs are involved. The Court does not find that the cases are persuasive on this point, however, at least with respect to the individual plaintiffs. In several of the cases, the United States was the party seeking injunctive relief on behalf of the Indians. See Alonzo v. United States, 249 F.2d 189 (10th Cir.1957), cert. denied, 355 U.S. 940, 78 S.Ct. 429, 2 L.Ed.2d 421 (1958); United States v. Dowden, 194 F. 475 (C.C.E.D.Okla.1911); United States v. Washington; 459 F.Supp. 1020 (W.D.Wash.1978), aff'd, 645 F.2d 749 (9th Cir.1981). That section 2283 does not bar a suit for injunctive relief by the United States or one of its agencies in asserting a superior federal interest is well-established. NLRB v. Nash-Finch Co., 404 U.S. 138, 92 S.Ct. 373, 30 L.Ed.2d 328 (1971); Leiter Minerals v. United States, 352 U.S. 220, 77 S.Ct. 287, 1 L.Ed.2d 267 (1957). Thus, these cases already had a sound basis for entertaining the request for injunctive relief without the necessity of resorting to a blanket exception to section 2283 for cases concerning Indian rights. Other decisions turn on grounds unrelated to the Indian affairs issues in the case. See, e.g., Armstrong v. Maple Leaf Apartments, Ltd., 508 F.2d 518 (10th Cir.1974) (pending state proceedings were administrative rather than judicial in nature). Some Ninth Circuit authority suggests that an Indian tribe asserting jurisdiction under 28 U.S.C. § 1362 possesses the same right to pursue injunctive relief against state action as does the United States. See Moses v. Kinnear, 490 F.2d 21 (9th Cir.1973) (the Puyallup Tribe was not barred from injunctive relief by the Tax Injunction Act). See also Cayuga Indian Nation of New York v. Fox, 544 F.Supp. 542 (N.D.N.Y.1982). Assuming the validity of this construction of section 1362, injunctive relief against pending state criminal proceedings would have been appropriate here only upon the successful intervention of the rightful Coushatta Tribe of Louisiana. But, absent intervention by the United States or a duly-recognized tribe, the Court feels that the better rule is that section 2283 bars an injunction of pending state court proceedings where only individual tribe members raise an Indian affairs question. Cf. Amalgamated Clothing Workers v. Richman Bros., 348 U.S. 511, 516, 75 S.Ct. 452, 455, 99 L.Ed. 600 (1955) (section 2283 constitutes a "clear-cut prohibition qualified only by specifically defined exceptions”).

      . Compare United States v. Guilbert, 692 F.2d 1340 (11th Cir.1982), cert. denied, 460 U.S. 1016, 103 S.Ct. 1260, 75 L.Ed.2d 487 (1983), with State v. Trahan, 416 So.2d 65 (La.1982).

      . Cf. United States v. McGowan, 302 U.S. 535, 58 S.Ct. 286, 82 L.Ed. 410 (1938) (land purchased by the United States to provide for needy Indians in Nevada and to assist them in establishing a permanent settlement was “Indian country” within the meaning of 25 U.S.C. § 247, which permits forfeiture of automobiles used to carry intoxicants into Indian country).

      . United States v. John, 437 U.S. at 648, 98 S.Ct. at 2548.

      . United States v. Pelican, 232 U.S. 442, 449 34 S.Ct. 396, 399, 58 L.Ed. 676 (1914).

      . The decision in Cheyenne-Arapaho Tribes v. Oklahoma, 618 F.2d 665 (10th Cir.1980) also supports the holding here. That case is distinguishable, however, because an Act of Congress declared that the Cheyenne-Arapaho trust lands were "subject to all provisions of existing law applicable generally to Indian reservations.” 618 F.2d at 668.
      A second statutory definition of "Indian country” could conceivably apply in this case. Section 1151(b) alternatively defines “Indian country” as "all dependent Indian communities within the borders of the United States whether within the original or subsequently acquired territory thereof, and whether within or without the limits of a state____” This definition is relied upon in United States v. McGowan, 302 U.S. 535, 538, 58 S.Ct. 286, 287, 82 L.Ed. 410 (1938), and United States v. Sandoval, 231 U.S. 28, 46, 34 S.Ct. 1, 5, 58 L.Ed. 107 (1913). The Court is unable to determine from the cited cases and the record in this case whether this second definition of "Indian country” is satisfied here.
      * Subsequent to rendering the written opinion in this matter, the Court obtained a copy of the official proclamation of the Secretary of the Interior establishing the Coushatta land as a reservation pursuant to 25 U.S.C. § 467. See Proclamation of May 27, 1975, 40 Fed.Reg. 24220 (1975). Under section 1151(a) and the John case, the land is therefore “Indian country” for all purposes, including those concerning federal criminal jurisdiction, without regard to the analysis in the text. The statements in the text, to the effect that land held in trust by the Government for a recognized Indian tribe constitutes “Indian country" for purposes of federal criminal jurisdiction regardless of whether the land is officially proclaimed to be a reservation by the Secretary, are no longer necessary to this decision and therefore must be considered as dicta.

      . Cf. DeCanas v. Bica, 424 U.S. 351, 356-57, 96 S.Ct. 933, 936-37, 47 L.Ed.2d 43 (1976) (federal legislation pre-empts even harmonious state regulation when either (1) the nature of the subject matter permits no other conclusion, or (2) Congress has unmistakably manifested an intent to “occupy the field”).

      . Compare 18 U.S.C. § 13 (state criminal law applies as surrogate federal law in federal enclaves for offenses that are not otherwise punishable under federal law) and 18 U.S.C. § 1152 (federal enclave laws apply in Indian country to offenses committed by Indians) and United States v. Sosseur, 181 F.2d 873 (7th Cir.1950) (Wisconsin criminal law against conducting gambling operations applied as surrogate federal law in Wisconsin Indian country through sections 13 and 1152) with 18 U.S.C. § 1955 (operation of a gambling enterprise that violates the law of the state in which it is conducted constitutes a federal offense) and United States v. Farris, 624 F.2d 890 (9th Cir.1980), cert. denied, 449 U.S. 1111, 101 S.Ct. 919, 66 L.Ed.2d 839 (1981) (section 1955 applied to Indian operators of Indian country casinos) (one judge dissenting and one judge concurring on limited grounds) and with 15 U.S.C. § 1175 (operation or use of gambling devices in Indian country constitutes a federal offense) and United States v. Blackfeet Indian Reservation, 369 F.Supp. 562 (D.Mont.1973) (applying section 1175 to Indian gambling operations). The brief explanatory parentheticals to the foregoing citations of course gloss over the numerous questions of interpretation that arise in the application of each of the statutes cited.

      . Technically, the definition of "Indian country” in 18 U.S.C. § 1151 is made applicable only in regard to its uses in Chapter 53 of Title 28 and in those statutes, such as 15 U.S.C. § 1175, that refer specifically to the section 1151 definition. Yet the Court proceeds on the fairly secure premise that no significant distinction exists between “Indian country" for purposes of federal criminal jurisdiction under section 1151 and “Indian country” for purposes of determining whether a state has jurisdiction over a crime that is not subject to prosecution under a federal statute that incorporates the section 1151 definition. The statutory definition is based on several Supreme Court decisions that interpreted the term as a matter of federal common law. See United States v. John, 437 U.S. at 648 and 649 n. 18, 98 S.Ct. at 2548 and 2549 n. 18. These decisions often assumed that, in defining the extent of Indian country for purposes of federal criminal jurisdiction, they were also defining the limits on state jurisdiction. See, e.g., Donnelly v. United States, 228 U.S. 243, 33 S.Ct. 449, 458-59, 57 L.Ed. 820 (1913). Moreover, use of the section 1151 definition has not been restricted to questions concerning jurisdiction under the various federal criminal statutes referred to earlier; the Supreme Court has recognized that the definition generally applies to questions of civil jurisdiction as well. See, e.g., DeCoteau v. District County Court, 420 U.S. 425, 427 n. 2, 95 S.Ct. 1082, 1084 n. 2, 43 L.Ed.2d 300 (1975). Finally, the Court can see no reason to apply a different definition in resolving the question presented here and further finds that no benefit would follow from doing so. Use of a different definition of "Indian country" to resolve the issue raised here would only complicate the law in this area unnecessarily.

      . See McClanahan v. Arizona State Tax Commission, 411 U.S. 164, 170-71, 93 S.Ct. 1257, 1261, 36 L.Ed.2d 129 (1973); Worcester v. Georgia, 31 U.S. (6 Pet.) 515, 561-62, 8 L.Ed. 483 (1832).

      . See generally Clinton, State Power over Indian Reservations: A Critical Comment on Burger Court Doctrine, 26 S.D.L.Rev. 434 (1981).

      . See McClanahan, 411 U.S. at 171-72, 93 S.Ct. at 1261; see also Washington v. Confederated Tribes of the Colville Indian Reservation, 447 U.S. 134, 165-66 n. 1, 100 S.Ct. 2069, 2087-88 n. 1, 65 L.Ed.2d 10 (1980) (Brennan, J., concurring in part and dissenting in part).

      . See, e.g., Mescalero Apache Tribe v. Jones, 411 U.S. 145, 148, 93 S.Ct. 1267, 1270, 36 L.Ed.2d 114 (1973); Williams v. Lee, 358 U.S. 217, 220, 79 S.Ct. 269, 270, 3 L.Ed.2d 251 (1959).

      . Washington v. Confederated Tribes, 447 U.S. at 152, 100 S.Ct. at 2080; United States v. Wheeler, 435 U.S. 313, 323, 98 S.Ct. 1079, 1086, 55 L.Ed.2d 303 (1978); Oliphant v. Suquamish Indian Tribe, 435 U.S. 191, 208, 98 S.Ct. 1011, 1020, 55 L.Ed.2d 209 (1978). The absence of a specific reservation of a sovereign power in a treaty should not be a material fact under the Indian sovereignty doctrine. As the doctrine is framed in the jurisprudence, the critical question is whether a treaty has divested, as opposed to granted or reserved, an inherent sovereign right that is not otherwise inconsistent with the tribe’s dependent status.

      . See Clinton, supra note 11, at 439-46; Note, Rethinking the Trust Doctrine in Federal Indian Law, 98 Harv.L.Rev. 422, 438-39 (1984).

      . Eg., 18 U.S.C. §§ 1152, 1153.

      . See Act of Aug. 15, 1953, Pub.L. No. 83-280, 67 Stat. 588 (codified as amended at 18 U.S. § 1162, 25 U.S.C. §§ 1321-1326, 28 U.S.C. § 1360) [hereinafter "Public Law 280”]. Public Law 280 extends criminal and limited civil jurisdiction to certain listed states over certain specified areas of Indian country. The original act allowed other states to assume this jurisdiction by state legislative action, see Act of Aug. 15, 1953, ch. 505, § 7, 67 Stat. 590, but this particular provision was repealed in 1968. See Act of Apr. 11, 1968, Pub.L. No. 90-284, § 403(b), 82 Stat. 79. Louisiana did not elect to assume jurisdiction under Public Law 280 as there was no Indian country in the state during the time that it could have made a viable election.

      . See, e.g., H.R.Rep. No. 848, 83d Cong., 1st Sess., 5-6 (1953) (pertaining to Public Law 280), quoted in Bryan v. Itasca County, 426 U.S. 373, 379-80, 96 S.Ct. 2102, 2106-07, 48 L.Ed.2d 710 (1976).

      . See, e.g., Solem v. Bartlett, _ U.S. _, _ n. 2, 104 S.Ct. 1161, 1163 n. 2, 79 L.Ed.2d 443 (1984) (in dicta, the Court stated that state jurisdiction is limited in Indian country to crimes by non-Indians against non-Indians and victimless crimes by non-Indians, absent an assumption of jurisdiction under Public Law 280); Washington v. Yakima Indian Nation, 439 U.S. 463, 470-71, 99 S.Ct. 740, 746, 58 L.Ed.2d 740 (1979) (similar dicta); Williams v. Lee, 358 U.S. 217, 220, 79 S.Ct. 269, 270, 3 L.Ed.2d 251 (1959) (same); Donnelly v. United States, 228 U.S. 243, 33 S.Ct. 449, 458-59, 57 L.Ed. 820 (1913) (same); United States v. Kagama, 118 U.S. 375, 6 S.Ct. 1109, 1113-14, 30 L.Ed. 228 (1886) (same).

      . United States v. Wheeler, 435 U.S. 313, 322, 98 S.Ct. 1079, 1085, 55 L.Ed.2d 303 (1978). Significantly, Wheeler recognizes tribal sovereignty as a matter of inherent retained powers rather than as merely an aspect of federal sovereignty that has been delegated to the tribes by Congress. See 435 U.S. at 322-23, 98 S.Ct. at 1085-86. Wheeler therefore lends support to the view that residual Indian sovereignty, operating through the Indian commerce clause, can preempt certain elements of state jurisdiction even in the absence of federal treaty obligations or legislation. See also McClanahan, 411 U.S. at 172, 93 S.Ct. at 1262 n. 8.

      . Cf. Oliphant, 435 U.S. at 206, 98 S.Ct. at 1019 (in holding that Indian tribal courts do not have jurisdiction to try non-Indians for offenses committed in Indian country, the Court placed considerable reliance on the commonly shared presumption to this effect by all three of the branches of government).

      . The fact that the Coushatta Tribe of Louisiana has not enjoyed continuous federal recognition and supervision from the present back into the 1800's and the fact that the Coushattas have only recently acquired their "Indian country" do not appear to be material ones here. Cf. United States v. John, 437 U.S. at 652-53, 98 S.Ct. at 2550-51 (gaps in federal recognition and supervision of the Mississippi Choctaws did not destroy federal power to oust state jurisdiction over the affairs of the Choctaws in Indian country acquired in the twentieth century).

      . See note 17, supra.


source: Caselaw Access Project

author: ALAIMO, Chief Judge.

license: Public Domain

text:
    GLYNN LAND COMPANY, Plaintiff, v. UNITED STATES of America, Defendant.
    Civ. A. No. 284-05.
    United States District Court, S.D. Georgia, Brunswick Division.
    Feb. 12, 1985.

      Randolph W. Thrower, William H. Bradley, Atlanta, Ga., Ralph T. Skelton, Jr., Brunswick, Ga., for plaintiff.
    Elizabeth Sullivan, Trial Atty., Tax Div., Dept, of Justice, Washington, D.C., Lawrence Lee, Asst. U.S. Atty., Savannah, Ga., for defendant.
   ORDER

ALAIMO, Chief Judge.

Taxpayer Glynn Land Company (“Glynn”) seeks a refund of taxes allegedly overpaid the United States as a result of the mischaracterization of certain income to Glynn as ordinary income rather than capital gain. The dispute requires the Court to construe § 631(b) of the Internal Revenue Code, 26 U.S.C. § 631(b) (1982), which provides capital gain treatment under certain circumstances for profit from the sale of timber. The parties have cross-moved for summary judgment. Having considered the parties’ briefs and had the benefit of oral argument on the motions, the Court concludes that Glynn was entitied to report the disputed income as capital gain under § 631(b). Accordingly, the Court shall grant plaintiffs motion,

FACTS

The facts of this case are not in dispute. The Court’s factual summary is an abbreviation of the Stipulated Statement of Material Facts which the parties submitted on November 29, 1984 (cited hereinafter as “Stipulation”). On July 13, 1964, a timber-cutting contract was closed between landowner Glynn Farms, Inc., and cutter Brunswick Pulp and Paper Company (“Brunswick”). The contract granted Brunswick timber-cutting rights on a 23,-000-acre tract known as “Paulk’s Pasture,” located in Glynn County, Georgia. In 1980, Glynn Farms transferred the land and the contract to its subsidiary, Glynn Land Company. Brunswick has assigned undivided one-half interests in the contract to Scott Timber Company and Mead Timber Company, but continues to administer the contract for its assignees.

The contract provided that, from its inception until December 31,1972, Brunswick would cut and remove all merchantable timber then growing on the land which good forest management prescribed. This obligation has been satisfied and receipts from this cutting are not at issue in this case.

The balance of the contract grants Brunswick a series of three-year cutting options. For the three-year period beginning on January 1, 1973, and for each three-year period thereafter until December 31, 2042, Brunswick has and has had the option to contract with Glynn to cut and remove all merchantable timber then growing on the land which good forest management requires be cut. Glynn has no right to cut or to permit another to cut during any period as to which Brunswick has expressly exercised its option. Further, if Glynn fails to notify Brunswick of the exercise date for any option period, only Brunswick and not Glynn may cut during the unnoticed period. However, if, as to any period, Glynn timely notifies Brunswick of the option exercise date and Brunswick fails to timely exercise its option for the noticed period, Glynn may itself cut or contract with another to cut during that period.

Under the contract, Glynn agrees to employ Brunswick as its forest manager for the contract term. As forest manager, Brunswick’s duties include cutting, replanting and recutting the land, ever employing standard forest management practices. Brunswick pays all costs and expenses of forest management, including the cost of seedlings, labor and equipment. As a management fee, Brunswick receives 25% of the agreed price for all timber removed from the land, whether by Brunswick or by another cutter.

The contract provides that the price which Glynn receives for its timber will be negotiated anew at the beginning of each option period for which Brunswick expressly exercises its option to cut.

The timber is paid for, at least in part, out of advance payments which Brunswick makes to Glynn. Brunswick must advance to Glynn $25,000 interest free each quarter-year for the first twenty years of the contract (1963-1982). The advance payment is excused during any quarter when the balance of advances exceeds $500,000 and during any three-year period for which Brunswick does not exercise its option to cut. Interest on the outstanding advances will begin to accrue on January 1, 1988.

Each year that Brunswick cuts, 75% of the agreed price for the timber is applied against the balance of advances for that year. If the advances for a year are less than the price of timber cut, Brunswick must pay Glynn the difference.

Glynn retains title to Paulk’s Pasture and retains all of the responsibilities of an owner. It keeps possession and control of the land and has the obligation to police and protect it. It bears all risks of damage to the trees and is charged with insuring the land against calamity. Glynn is liable for all the land’s real estate taxes.

Brunswick exercised its right to cut timber for the three-year period beginning January 1, 1979. The income involved in this suit resulted from payments made by Brunswick to Glynn for timber cut during the January, 1979, to December, 1981, option period.

It was during this option that Brunswick began harvesting “aftergrowth” — cordage that was not in existence at the contract’s inception in 1964. The volume of merchantable timber on the land was approximately 201,000 cords in 1964; as of January 1,1980, Brunswick had cut and paid for 227,000 cords of Glynn’s timber. The issue before this Court is whether § 631(b) provides capital gain treatment for Glynn’s 1980 receipts from sale of aftergrowth.

The Internal Revenue Service (“IRS”) first examined the tax consequences of the Glynn-Brunswick contract in an examination of Glynn’s 1967-68 taxable years. As this Order will later discuss, to qualify for capital gain treatment under § 631(b), a taxpayer must (1) retain an economic interest in the timber covered by the cutting contract, and (2) have a qualified ownership interest in the timber. The author of a General Counsel Memorandum issued within the IRS in June, 1974, concluded that Glynn had no “ownership” interest in the aftergrowth and, thus, could not report gain from its sale under § 631(b). Yet, in a Technical Advice Memorandum subsequently issued to Glynn, the IRS avoided the ownership question and concluded that Glynn was ineligible for § 631(b) benefits because it had not retained an economic interest in the timber.

Excepting 1980, Glynn consistently has reported profits received under the contract as capital gain under § 631(b). In keeping with Glynn’s characterization of receipts, Brunswick and its successors have treated payments to Glynn as expenditures for the acquisition of timber. The IRS has regularly audited the cutters’ returns, yet never indicated to them that their payments under the contract might have been reported incorrectly.

For tax year 1980, Glynn followed the IRS’s directive, filing a return which claimed receipts from sale of aftergrowth as ordinary income. On March 23, 1982, Glynn filed a Form 1120X amended corporate income tax return, in which it reported these receipts as capital gain. Glynn claimed a refund in the amount of $766, resulting from its recharacterization of the 1980 income. The IRS did not act upon Glynn’s refund claim within six months, so Glynn filed suit pursuant to this Court’s jurisdiction under 26 U.S.C. § 7422 (1982), 28 U.S.C. § 1346 (1982).

DISCUSSION

A. Statutory Construction

Plaintiff seeks to report its gain from sale of aftergrowth to Brunswick as capital gain pursuant to 26 U.S.C. § 631(b). Section 631(b) states:

(b) Disposal of timber with a retained economic interest. — In the case of the disposal of timber held for more than 1 year before such disposal, by the owner thereof under any form or type of contract by virtue of which such owner retains an economic interest in such timber, the difference between the amount realized from the disposal of such timber and the adjusted depletion basis thereof, shall be considered as though it were a gain or loss, as the case may be, on the sale of such timber. In determining the gross income, the adjusted gross income, or the taxable income of the lessee, the deductions allowable with respect to rents and royalties shall be determined without regard to the provisions of this subsection. The date of disposal of such timber shall be deemed to be the date such timber is cut, but if payment is made to the owner under the contract before such timber is cut the owner may elect to treat the date of such payment as the date of disposal of such timber. For purposes of this subsection, the term “owner” means any person who owns an interest in such timber, including a sublessor and a holder of a contract to cut timber.

§ 631(b) Internal Revenue Code, 26 U.S.C. § 631(b) (1982). The statute establishes essentially three prerequisites for capital gain benefits:

(1) a disposal of timber held for more than one year before disposal,
(2) by an owner of the timber,
(3) under a contract by virtue of which the owner retained an economic interest in the timber.

An owner selling pursuant to a cutting contract retains an economic interest in the timber where payments to him under the contract are dependent on severance of timber. See 26 C.F.R. § 1.611-l(b)(l) (1984). No economic interest is retained where the timber owner receives payments from the cutter, analogous to rent, regardless of the amount of timber cut. Dyal v. United States, 342 F.2d 248, 252 (5th Cir.1965) (buyer was required to make nonrefundable annual payments regardless of whether it cut timber; seller held to have retained no economic interest in timber).

The Government does not contend that Glynn’s receipts under the contract were independent of Brunswick’s severance of timber. Rather, the Government asserts that Glynn failed to qualify as an “owner” of the . aftergrowth for the purposes of § 631(b).

The ownership requirement of § 631(b) is discussed in 26 C.F.R. § 1.631-2(e)(2), which states:

(e) Other rules for application of section.
(2) The provisions of section 631(b) apply only to an owner of timber. An owner of timber means any person who owns an interest in timber, including a sublessor and a holder of a contract to cut timber. Such owner of timber must have a right to cut timber for sale on his own account or for use in his trade or business in order to own an interest in timber within the meaning of section 631(b).

26 C.F.R. § 1.631-2(e) (1984). The Government urges that the “right to cut” requirement stated in this regulation’s final sentence applies to anyone who seeks to qualify as an “owner” for purposes of § 631(b), including title holders of timberland such as plaintiff. Because Glynn has never had a right to cut the aftergrowth, the Government contends that Glynn is not its owner for purposes of § 631(b). The taxpayer responds that “such owners” as used in the “right to cut” sentence refers only to contract holders and sublessors, the class of owners described in the phrase immediately preceding the “right to cut” requirement. Glynn asserts that, as an actual owner of the aftergrowth rather than a mere contractor, it need not have had a right to cut the aftergrowth to be considered its owner for purposes of § 631(b).

The statutory language of § 631(b), which refers merely to “owners” plainly favors plaintiff’s assertions. The potential for diverse constructions arises from an ambiguity in Reg. § 1.631-2(e)(2). The narrow task of this Court is to decide whether the “right to cut” requirement of Reg. § 1.631-2(e)(2) applies to all would-be owners or only to sublessors and contract .holders. The Court is persuaded by a variety of considerations that the ambiguity should be resolved in favor of the construction proposed by the taxpayer, Glynn.

(1) Legislative History and Statutory Context

As the Supreme Court has counseled, in construing an unclear statute, it is the Court’s duty “to find that interpretation which can most fairly be said to be imbedded in the statute, in the sense of being most harmonious with its scheme and with the general purposes that Congress manifested.” Commissioner v. Engle, 464 U.S. 206, _, 104 S.Ct. 597, 604, 78 L.Ed.2d 420, 429 (1984) (citations omitted). The legislative history and statutory context of § 631(b), while not conclusive, support plaintiff’s construction of the statute.

(a) Legislative History

It has long been established that, under appropriate circumstances, standing timber can qualify as a capital asset and gain from its sale as capital gain. See Estate of M. Stark, 45 B.T.A. 882, 887 (1941), nonacq., 1942-1 C.B. 29. With § 631(b), Congress blocked an attempt by the IRS to limit the benefits to timber owners of capital gain reporting.

In the 1941 opinion in Estate of M. Stark, the Board of Tax Appeals considered the tax characterization of receipts from timber sold under long-term cutting contracts. From 1917-1938, the purchaser in Stark, acting pursuant to a contract, had cut the seller’s timber and made monthly payments to the seller for timber cut the preceding month. The IRS denied capital gain benefits for the seller’s profit. It took the position that, by having committed his timber to a long-term cutting contract, the owner transformed the timber from property held for investment purposes to property held for sale to customers. The Board rejected the Government’s argument and held that the taxpayer’s receipts under the cutting contract were reportable as capital gain. 45 B.T.A. at 88. By refusing to acquiesce in the Stark decision, the IRS indicated its intention to continue taxing gain received under cutting contracts as ordinary income.

The IRS position on the taxation of cutting contract receipts apparently caused consternation among timber owners. Forestry industry representatives complained to a congressional committee in 1943 that the IRS’s position unreasonably preferred the timber owner who sold his timber outright, receiving the entire purchase price at once, over the owner who contracted to sell his timber over time, receiving payment as the timber was cut. See Revenue Revision of 1943: Hearings Before the House Comm, on Ways and Means, 78th Cong., 1st Sess., 734. This discriminatory treatment, industry spokespersons asserted, dissuaded forest owners from entering into long-term cutting contracts, even though sale over time was often preferable to outright sale from the stance of forest managment. Id.

As one industry representative’s statement pointed out:

The outstanding tax problem of the operating forest landowner is the tax treatment of the gain in value which appears when timber is cut. This gain is of two distinct kinds. The first and more important kind is the gain resulting from the physical process by which over the years trees grow in size and volume, at the same time usually improving in quality. The second kind is that resulting over the years from economic changes which cause trees of any given species, age, or quality to become more valuable as measured in dollars.

Supplemental Statement of Forest Industries Committee on Timber Valuation and Taxation, id. at 742. The foresters did not suggest that Congress distinguish between these two sources of gain in granting capital gain benefits. Nor did § 117(k)(2), the statute which resulted from the 1943 hearings, indicate that Congress intended to exclude gain from physical growth from capital gain benefits.

The legislative history of § 117(k)(2) reveals that the statute’s purpose was to give the timber industry additional flexibility in qualifying timber transactions for capital gain treatment. Dyalwood v. United States, 588 F.2d 467, 469 (5th Cir.1979). This purpose is plainly inconsistent with the restrictive construction of the statute which the Government now suggests.

Moreover, the Government’s position ignores common sense assumptions regarding Congress’ intention in passing § 117(k)(2). The IRS’s nonacquiescence in Stark put the tax treatment of long-term contracts squarely before Congress. Presumably Congress knew that trees grow, so that the cordage of a stand would increase over the course of a long-term contract. Had Congress intended that the benefits of § 117(k)(2) not extend to gain from sale of aftergrowth certain to be produced over the term of a long-term contract, it would have devised more straightforward language to achieve this result.

(b) Statutory Context

Section 631(b)’s statutory context further indicates that its capital gain benefits should be accorded sellers of aftergrowth. The Court considers, first, the interplay between § 631(b) and the capital gain provisions at §§ 1221 and 1231 of the IRC. These general statutes provide capital gain treatment for gain from sale under a cutting contract of the timber volume that was standing on the contract date. See Dyal v. United States, supra, at 253. Section 631 is superfluous if it provides only what is already available under §§ 1221 and 1231.

The Government insists that § 631(b) does not merely provide benefits which are coextensive with §§ 1221 and 1231. It argues, rather, that this is the peculiar result in plaintiff’s case because plaintiff has failed to qualify as an owner of the after-growth. The implication is that § 631(b) treatment would be available for receipts from aftergrowth if Glynn had retained a right to cut the aftergrowth. The Government, however, has not shown that Congress sought to select such a contract for special consideration. It has further failed to show that a contract under which the seller retains cutting rights as to after-growth would ever exist. It seems unlikely that a cutter would agree to a contract under which he and the seller shared cutting rights as to aftergrowth, or any other portion of the timber. The Court hesitates to ascribe to Congress an intent for the statute to have its special effect only in mythical cases.

Turning to § 631(b)’s more immediate setting, § 631(a) provides additional methods for an “owner” to dispose of his timber and report receipts as capital gain. Like § 631(b), § 631(a) considers holders of contract rights to cut as “owners.” Interestingly, § 631(a)’s accompanying regulation makes a clear distinction, with regard to the “right to cut” requirement between actual owners and holders of contract rights to cut. Under § 631(a), only contract holders, not actual owners, need have had a right to cut to be considered owners. See 26 C.F.R. § 1.631-l(b)(1) (1984); Weyerhaeuser Co. v. United States, 402 F.2d 620, 626 (9th Cir.1968). As the Court must read § 631(b) in light of its statutory context, the meaning given “owner” in § 631(a) becomes a strong candidate for application under § 631(b). Contra Schnitzer v. United States, 69-1 Stand. Fed.Tax Rep. (CCH) 119160 (D.Ore.1968) (stating that Reg. § 1.631-2(e)(2) “plainly rejects” the distinction between actual owners and contract holders made in Reg. § 1.631-1(b)(1).

(2) Rules of Construction

The legislative history and statutory context of § 631(b) indicate that the right-to-cut requirement should not apply to actual owners. To the extent that doubt remains regarding the meaning of “owner” under the subsection, the Court is inclined to resolve that doubt in the taxpayer’s favor. See Citizens National Bank of Waco v. United States, 551 F.2d 832, 843, 213 Ct.Cl. 236 (1977) (stating that a taxing statute generally should be construed more strictly against the Government); cf. Groves v. United States, 533 F.2d 1376, 1383 (5th Cir.1976), cert. denied, 429 U.S. 1000, 97 5. Ct. 529, 50 L.Ed.2d 611 (1976) (stating that statutes exempting income from taxation are construed strictly against the taxpayer). See also Masonite Corporation v. Fly, 194 F.2d 257, 260-61 (5th Cir.1952) (“the literal meaning of the words employed in tax statutes is most important, and the general rule requiring adherence to the letter in construing statutes applies with peculiar strictness to tax laws”).

(3) Case Law and IRS Enforcement History

The Court’s research has revealed only one case adopting the Government’s limited construction of § 631(b) “ownership.” The taxpayer insists that the dearth of authority shows the novelty of the Government’s position; the implication is that in novelty lies error. The Government concedes that the economic interest requirement of § 631(b) is generally the stumbling block for timber owners seeking § 631(b) benefits for contract receipts. However, the IRS insists that the few courts which have considered the issue at bar have found that the right-to-cut requirement applies to contract holders and actual owners alike.

To establish the history of its present position, the Government refers the Court to Carlen v. Commissioner of Internal Revenue, 20 T.C. 573 (1953), aff'd, 220 F.2d 338 (9th Cir.1955), and Indian Creek Lumber Company v. Commissioner, T.C.M. 1982-146, 43 T.C.M. (CCH) 841 (1982). The taxpayers seeking § 631(b) benefits in these cases were holders of contract rights to cut, rather than actual owners. Even under plaintiff’s construction of § 631(b), such taxpayers would be denied capital gain benefits if they had no right to cut the timber under contract on their own account.

Schnitzer v. United States, 69-1 Stand.Fed.Tax Rep. (CCH) 119160 (D.Ore.1968), appears to be the sole case in which a court has squarely held that the right-to-cut requirement applies to actual owners. Schnitzer involved the tax consequences of a “timber production indenture” between Georgia Mills and the taxpayer, Schnitzer. Under the indenture, the taxpayer acquired title to certain timber owned by Georgia Mills for the price of $2,000,000. The taxpayer borrowed $1,900,000 of the purchase amount from the Bank of America. Contemporaneous with the sale, the taxpayer granted Georgia Mills the right to cut and purchase the timber. Payments from Georgia Mills under the cutting contract were made not to the “owner” but to the Bank of America in payment of the taxpayer’s loan. The indenture provided for its own termination when the taxpayer/Bank of America had received from sale of timber to Georgia Mills $2,000,000 plus yearly amounts equal to &k% of the unliquidated portion of the principal amount for each year. Upon the indenture’s termination, title to any remaining timber would revert to Georgia Mills.

The taxpayer, claiming to own the timber covered by the indenture, reported his gain from its sale as capital gain under § 631(b). The Government responded that the taxpayer was not in fact an owner, but a secured lender, and as such ineligible for § 631(b) benefits. Alternatively, the Government took its present position, arguing that the taxpayer was not an owner for § 631(b) purposes because he at no time had the right to cut the timber. The Oregon district court reasoned that § 631(b) and Reg. § 1.631-2(e)(2) “plainly” require all would-be owners to satisfy the right-to-cut requirement prior to reporting timber income as capital gain. As Schnitzer had never had the right to cut his timber, he was denied the benefit of reporting gain from its sale under § 631(b).

This Court must disagree with the Schnitzer court’s facile conclusion that Reg. § 1.631-2(e)(2) “plainly” requires actual owners to have had a right to cut timber before reporting gain from its sale as capital gain. This issue was, moreover, not before the Schnitzer court because Schnitzer was not an actual owner of the timber referred to in the timber indenture. Although in form a sale, the transaction in Schnitzer was in substance a secured loan from the taxpayer to Georgia Mills. Payments to the taxpayer carried an interest element; title to the “security” — the standing timber — reverted to Georgia Mills upon its repayment of the taxpayer’s purchase price. The taxpayer held legal title to the timber as security for his investment, but had no other indicia of ownership. See Barclay v. United States, 333 F.2d 847, 852-855, 166 Ct.Cl. 421 (1964) (denying § 117(k)(2) benefits where “owner” held bare title to timber). Unlike the current plaintiff, the taxpayer in Schnitzer was not an actual owner but a secured lender. Accordingly, this Court is inclined to give little weight to the Schnitzer holding on the application of § 631(b) to owners. See Commissioner v. Court Holding Co., 324 U.S. 331, 332, 65 S.Ct. 707, 89 L.Ed. 981, 982 (1945) (“[t]ax consequences flow from the substance of a transaction, not the form in which it is cast”).

The paucity of authority supporting the Government’s position may explain the IRS’s hesitant pursuit of the ownership issue in this case. An internal General Counsel Memorandum regarding the Glynn contract followed the Government’s current theory. G.C.M. 35883, June 28, 1974. Yet, the Technical Advice Memorandum subsequently issued to Glynn ignored the ownership argument and denied benefits for other reasons. Tech.Adv.Memo., August 23, 1974.

The IRS further failed to follow through on its present theory in calculating the cutters’ taxes in this case. Consistent with Glynn’s characterization of its income as capital gain, Brunswick and its assignees have reported their payments to Glynn as payments for the acquisition of timber. Stipulation at 1118. Under the Government’s current theory, these payments apparently should have been deducted by the cutters as rental expenses to the extent that the payments were made for purchase of aftergrowth. Although the IRS has regularly audited the cutters’ returns, it has never brought this potential error to their attention. Stipulation at 1118. Perhaps the Government has changed its enforcement position with regard to § 631(b). While this is its prerogative, so may this Court assume that the Government’s previous understanding of the statute, rather than its current one, is correct.

The Government asks this Court to derive from Reg. § 1.631-2(e)(2) a limitation on the benefits which § 631(b) affords owners of timber. Yet, it offers no persuasive case authority for its restrictive statutory construction. Nor does the legislative history contain any indication that Congress intended to create a more demanding standard for determining ownership under § 631(b) than under § 631(a). To the contrary, the legislative history of § 631(b) bespeaks Congress’ desire to provide timber owners with flexibility in qualifying timber transactions for capital gain treatment. The Court would ill-serve this goal if it limited the statute’s benefits in a fashion not clearly prescribed by the language of the statute or of its regulations. Accordingly, the Court rejects the Government’s argument and holds that actual owners of timber need not satisfy Reg. § 1.631-2(e)(2)’s right-to-cut requirement to report gain from the sale of their timber as capital gain under § 631(b).

B. Application to the Case at Bar

The Court has concluded that Glynn may qualify under § 631(b) as an owner of the aftergrowth on its land without having had a right to cut it. The Court must now consider whether Glynn in fact owned the aftergrowth.

Generally speaking, state law is determinative of property rights, while the manner and extent to which the rights are taxed is controlled by federal law. Murray v. United States, 687 F.2d 386, 392 n. 3, 231 Ct.Cl. 481 (1982). Pursuant to this principal, courts have relied on the law of the state in which timber is located in determining whether a taxpayer “owns” the timber for § 631(b) purposes. See Barclay, supra, 333 F.2d at 853; Jantzer v. United States, 284 F.2d 348, 355 (9th Cir.1960).

Glynn held the title to the land covered by the cutting contract both before and after the cutting contract closed. It retains the right to possess and control the land throughout the contract term, subject to Brunswick’s cutting rights. Under Georgia law, the owner of land also owns all things permanently attached to it, including standing timber. See O.C.G.A. § 44-1-2 (1982). Thus, as Glynn continues to own the land, it continues to own the timber growing upon it.

Glynn did not relinquish its legal or beneficial ownership of the timber on its land by granting Brunswick an option to purchase it. See Mattox v. West, 194 Ga. 310, 315, 21 S.E.2d 428 (1942) (an option to purchase land does not, before acceptance, vest in the option holder any interest in the land itself). To the contrary, Glynn retains the responsibilities and risks which flow from timber ownership for the contract period. It remains responsible for tax assessments against the land. It bears the risk of damage to the timber and is charged with protecting the land against trespassers. Glynn has seen to the land’s productivity by hiring Brunswick as forest manager. In that the price which Glynn receives is renegotiated every option period, Glynn bears the risk of market failure.

Glynn’s rights and responsibilities under the Glynn-Brunswick contract are plainly inconsistent with any inference that ownership of standing aftergrowth rests with Brunswick. The contract rather provides that Glynn “owns” the timber — original growth and aftergrowth — until it is cut and paid for by Brunswick. As an owner of the aftergrowth, Glynn is entitled to report gain from its sale under I.R.C. § 631(b).

CONCLUSION

The Court adopts plaintiff’s construction of § 631(b) and finds that plaintiff, as an owner of the aftergrowth, may claim the benefits of § 631(b) for its gain from the aftergrowth’s sale to Brunswick. The Court thus GRANTS plaintiff’s motion for summary judgment against the Government in the amount of $766, the amount which plaintiff overpaid in taxes. The Clerk of Court is directed to enter judgment consistent with this Order.

      . The remaining 25% is retained by Brunswick as its management fee.

      . As the Government has not denied Glynn § 631 benefits for this reason, the Court considers the Government as having admitted that this requirement is satisfied.

      . Recodified in 1954 as § 631(b).

      . Brunswick’s records reveal that growth on existing stems in Glynn County averages approximately 15% per year, from the time the sapling begins to grow to age 25, standard harvest age. Affidavit of Edwin L. Douglass, Jr., President of Glynn Land and Glynn Farms, at ¶ 27.

      . It is not clear that § 631(b) benefits would even be available to a timber owner who sold aftergrowth pursuant to a nonexclusive cutting contract. See Joe S. Ray, 32 T.C. 1244, 1250 (1959), aff’d., 283 F.2d 337 (5th Cir.1960) ("analysis of the legislative history and the language of subsection [117](k)(l) and (2) indicates that Congress intended to limit the benefits of section 117(k)(2) to those transactions where the timber owner surrendered to another his cutting rights to the timber involved, retaining an economic interest usually in the nature of a lease or royalty interest"). Moreover, a nonexclusive cutting contract might be illusory, therefore unenforceable, if it gave a cutter only the right to cut whatever timber the owner did not cut.

      . As plaintiff must realize, the IRS is free to change its interpretation of a statute, as long as its interpretation is consistent with that statute. However, the IRS’s previous interpretations of a statute are indicative of the statute’s proper meaning. State of Washington v. Commissioner, 692 F.2d 128, 136 n. 19 (D.C.Cir.1982).

      . This discussion is included for the sake of logical completeness. The Government has limited its argument to the scope of the right-to-cut requirement and does not dispute that Glynn may claim § 631(b) owner’s benefits if the right-to-cut requirement is not applicable to actual owners.


author: JOSEPH H. YOUNG, District Judge.

text:
    Mary Ellen DAVIS v. UNITED STATES of America DEPARTMENT OF the ARMY.
    Civ. No. Y-84-462.
    United States District Court, D. Maryland.
    Feb. 13, 1985.

      Charles E. Wood, Laurel, Md., for plaintiff.
    Elizabeth H. Trimble, Asst. U.S. Atty., Baltimore, Md., for defendant.
   MEMORANDUM

JOSEPH H. YOUNG, District Judge.

I. BACKGROUND

This action involves a claim for damages against the United States Department of the Army under the Federal Tort Claims Act (FTCA or the Act), 28 U.S.C. § 1346(b). The complaint alleges that the plaintiff, a Maryland resident, was admitted to the Walter Reed Army Medical Center on or about August 5, 1981. She was approximately 24 weeks pregnant at the time of her admission, and on that day gave birth to a female fetus weighing about 650 grams. The fetus was unable to breathe at birth and was pronounced dead after repeated attempts at resuscitation failed. Shortly thereafter, the plaintiff requested that the remains of the fetus be turned over to her for final disposition. She was informed subsequently that her request would not be granted as the remains of the fetus purportedly had not been preserved but instead had been disposed of pursuant to a hospital policy which called for the classification of a fetus under the uterogestational age of six months as a surgical specimen and also called for the disposal of such specimens. The plaintiff alleges that this conduct by employees of the defendant deprived the plaintiff of her right to provide her child with a proper burial and as a result she has suffered “great mental anguish and emotional distress” and has had to seek “psychological aid and attention.”

On or about October 12, 1982, plaintiff filed a claim for administrative settlement with the Department of the Army as required by 28 U.S.C. § 2675(a) for one hundred thousand dollars ($100,000.00) in damages. This claim was denied in writing by the Department of the Army on August 8, 1983, and the plaintiff then brought this action. The defendant now seeks dismissal of the plaintiff’s claim for want of jurisdiction and failure to state a claim upon which relief may be granted pursuant to Rule 12(b) of the Federal Rules of Civil Procedure. In the alternative, defendant requests summary judgment in its favor in accordance with Rule 56 of the Federal Rules of Civil Procedure.

II. THE FEDERAL TORT CLAIMS ACT

In enacting the Federal Tort Claims Act in 1946, Congress waived the sovereign immunity of the United States and subjected it to suit:

for money damages ... for injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the Act or omission occurred.

28 U.S.C. § 1346(b) (1976).

The FTCA provides that members of the armed forces of the ■ United States are deemed to be employees of the federal government. 28 U.S.C. § 2671. There are 12 statutory exceptions to the FTCA’s waiver of immunity; however, none absolutely bars suits by members of the armed forces against the federal government although one of the Act’s exceptions exempts the federal government from liability on any claim arising out of the combat activities of military forces in time of war. 28 U.S.C. § 2680®.

Nonetheless, the question of the liability of the United States to members of its armed forces has perplexed courts and resulted in divergent lines of decision which have been, at best, difficult to reconcile, ever since the FTCA was enacted. See Johnson v. United States, 704 F.2d 1431 (9th Cir.1983) (Tuttle, S.J. (11th Cir.), sitting by designation). Although it was originally maintained that the FTCA did not permit suits against the United States by members of the military, this argument was rejected by the Supreme Court in Brooks v. United States, 337 U.S. 49, 69 S.Ct. 918, 93 L.Ed. 1200 (1949), when it held that servicemen could recover under the Act for injuries resulting from the negligence of an employee of the government when the accident did not occur “incident to the plaintiffs military service.” Johnson, 704 F.2d at 1435, citing Brooks, 337 U.S. at 52, 69 S.Ct. at 920. However, in Feres v. United States, 340 U.S. 135, 71 S.Ct. 153, 95 L.Ed. 152 (1950), the Court explicitly enunciated the judicially created “incident to military service” exception to the FTCA in holding that “the Government is not liable under the ... Act for injuries to servicemen where the injuries arise out of or are in the course of activity incident to service.” Id. at 146, 71 S.Ct. at 159. Consequently, the Feres court precluded three suits brought by military personnel while on active duty and not on furlough who allegedly were injured due to the negligence of armed forces personnel. Id. at 138, 71 S.Ct. at 155.

The Feres court offered three basic rationales for its “incident to military service” exception to the FTCA; it recognized the distinctly federal relationship between the United States and its armed service personnel, the presence of an alternative military compensation system, and the need to protect the military disciplinary system. See generally Stencel Aero Engineering Corp. v. United States, 431 U.S. 666, 671-72, 97 S.Ct. 2054, 2057-58, 52 L.Ed.2d 665 (1977) (summarizing the reasons for the Feres court’s “incident to service” exception). Decisions subsequent to Feres have substantially weakened the first rationale as it applies with equal force to other federal agencies that are liable for the tortious conduct of their employees under the FTCA. Johnson, 704 F.2d at 1435. “The second rationale — the existence of an alternative compensation system has been applied [with some apparent] inconsistency ...” Id.; compare Feres, 340 U.S. at 140, 71 S.Ct. at 156 and Stencel, 431 U.S. at 671-72, 97 S.Ct. at 2057-58 (both cases mention the availability of an alternative compensation scheme to justify the “incident to service” exception to the FTCA) with United States v. Brown, 348 U.S. 110, 113, 75 S.Ct. 141, 143, 99 L.Ed. 139 (1954), and Brooks, 337 U.S. at 53, 69 S.Ct. at 920 (both of these cases seemingly reject this rationale for upholding governmental immunity). Thus, some federal courts have suggested that the most persuasive justification for the Feres doctrine is the potential impact of civil suits on military discipline and interests, e.g., Johnson, 704 F.2d at 1436, 1440, quoting United States v. Muniz, 374 U.S. 150, 159-62, 83 S.Ct. 1850, 1856-58, 10 L.Ed.2d 805 (1963) (incident to service exception “best explained” by disciplinary rationale), and they have accordingly tailored their inquiry to determine “whether or not a service member’s activities at the time of injury are of the sort that could harm the disciplinary system if litigated in a civil action.” Johnson, 704 F.2d at 1439; but see Hall v. United States, 451 F.2d 353, 354 (1st Cir.1971). These courts have held that the Feres bar should apply only where there is a “relevant relationship between the service member’s behavior and the military interests that might be jeopardized by civil suits,” Johnson, 704 F.2d at 1440, and where there is a “causal connection between the injury occurrence and the injured person’s military service,” Camassar v. United States, 400 F.Supp. 894, 897 (D.Conn.1975), to the extent that a civil suit would “undermine the traditional concepts of military discipline.” Downes v. United States, 249 F.Supp. 626, 628 (E.D.N.C.1965).

While this Court finds the reasoning of these courts to be persuasive, it is nonetheless compelled to apply the Fourth Circuit’s strict interpretation of the Feres doctrine. The Fourth Circuit has had several opportunities to consider Feres and has closely adhered to the Supreme Court’s original formulation of the doctrine rather than narrowly construing the “incident to service” exception so that the application of Feres may be limited to those cases in which a claimant’s injury is directly related to his or her military duties. This close adherence to Feres has resulted in the Court’s persistent preclusion of suits brought by military personnel “while on active duty and not on furlough, who are injured due to the negligence of others in the armed forces,” regardless • of whether or not the injury to the claimant arises out of activities related specifically to military duty. Hass v. United States, 518 F.2d 1138 (4th Cir.1975), quoting Feres, 340 U.S. at 138, 71 S.Ct. at 155; see Yolken v. United States, 590 F.2d 1303 (4th Cir.1979); Buckingham v. United States, 394 F.2d 483 (4th Cir.1968). Most recently in Brodine v. United States, 735 F.2d 1353 (4th Cir.1984) (unpublished), the Fourth Circuit reiterated its strict adherence to Feres in noting that “ ‘[ijncident to service’ is not a narrow term, and it is sufficient that the claimant, while on active duty and not on furlough, sustained injury due to the negligence of others in the armed forces.” Id., slip op. at 2 quoting Feres, 340 U.S. at 138, 71 S.Ct. at 155.

In Feres itself, the Supreme Court considered three eases, two of which involved incidents of military physicians’ malpractice in which claimants’ medical operations bore no relationship to their military duties whatsoever. Jefferson, 178 F.2d at 519; Griggs, 178 F.2d at 2-3. The application of the “incident to service” exception to the two cases in Feres which involved medical malpractice unrelated to the military duties of the claimants has provided the impetus in some circuits for broad denials of recovery for active duty tort claimants. E.g., Yolken, 590 F.2d at 1303 (4th Cir.); Hass, 518 F.2d at 1138 (4th Cir.); Brodine, 735 F.2d 1353, slip op. at 5 (4th Cir.); Labash v. United States Dept. of the Army, 668 F.2d 1153, 1155 (10th Cir.1982); Collins v. United States, 642 F.2d 217, 220 (7th Cir.1981), cert. denied, 452 U.S. 964, 101 S.Ct. 3115, 69 L.Ed.2d 975. Even without a nexus between a claimant’s injury and his other military duties, such doctor-patient relationships have been held to be incident to military service, thus requiring recourse to Feres “because the serviceman is taking advantage of medical privileges granted only to military personnel.” Harten v. Coons, 502 F.2d 1363, 1365 (10th Cir.1974), cert. denied, 420 U.S. 963, 95 S.Ct. 1354, 43 L.Ed.2d 441 (1975); Lowe v. United States, 440 F.2d 452, 453 (5th Cir.1971), cert. denied, 404 U.S. 833, 92 S.Ct. 83, 30 L.Ed.2d 64 (1971).

Indeed, it is precisely this factor which distinguishes the instant case from Johnson, 704 F.2d 1431, and renders the plaintiff’s reliance thereon legally unavailing, especially in light of this circuit’s well settled law precluding recovery in such cases. In Johnson, a serviceman who held an off-duty job as a bartender at an NCO club and who was returning from an after-hours party at the club was injured in an automobile accident on a military base. In a well reasoned opinion, the Johnson court recognized that active duty service members injured by the medical malpractice of military doctors usually have been barred from suing under the FTCA because their injuries have been considered to be “incident to service;” the plaintiffs would not have been privileged to take advantage of the [medical] benefits but for their military status.” Id. at 1438-39 (citation omitted). The court distinguished the case before it from those cases in which recovery had been denied because the alleged injury arose out of the enjoyment of those benefits accruing from the plaintiffs military status. It determined that the dispositive factor in the military medical malpractice cases did not preclude recovery in the case because:

Johnson’s employment at the NCO Club during his off-duty hours can hardly be characterized as a privilege or benefit incident to his military service. Unlike the soldiers using military medical facilities or participating in recreational activities sponsored by the military, Johnson held a paying job at the NCO Club. The job is identical with those routinely performed by civilian bartenders. Indeed, Johnson’s after-hours employment at the NCO Club cannot logically be distinguished from second jobs held by other off-duty military personnel. See, e.g., Mills v. Tucker, 499 F.2d 866 (9th Cir.1974) (Navy petty officer can sue government under FTCA for injuries sustained on military road while returning to base from his off-duty job as a cook). Thus, to characterize Johnson’s moonlighting during his off-duty hours as a benefit incident to military service would distort both precedent and the rationale underlying Feres.

Johnson, 704 F.2d at 1439.

In contrast, the instant case involves a benefit and privilege incident to the plaintiff’s military service and thus falls squarely within the category of cases to which the Fourth Circuit has applied the Feres doctrine. E.g., Yolken, 590 F.2d 1303; Haas, 518 F.2d 1138; Buckingham, 394 F.2d 483; Brodine, 735 F.2d 1353. Moreover, this is an action, where the defendants’ alleged wrongful conduct occurred as a result of a “decision requiring military expertise or judgment” and thereby implicates a concern for military discipline, the most persuasive rationale for applying the Feres doctrine to suits against the various branches of the armed services. See Johnson, 704 F.2d at 1438, 39. Therefore, the case now before the Court is certainly one to which the Feres doctrine should be applied according to controlling Fourth Circuit precedent. Furthermore, the reasoning of the Ninth Circuit in Johnson does not suggest a contrary result.

Although this Court must accept the allegations in the complaint as true for the purpose of resolving a motion to dismiss, 5 Wright and Miller, Federal Practice and Procedure: Civil § 1357 at 594 (1969) (numerous citations omitted), the plaintiff’s claims against the United States Department of the Army nonetheless must be dismissed because this defendant is not subject to suit under the FTCA. Feres, 340 U.S. 135, 71 S.Ct. 153; see, e.g., Yolken, 590 F.2d 1303. Consequently, the plaintiff has failed to state a claim upon which relief may be granted and dismissal pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure is appropriate.

III. PLAINTIFF’S CLAIMS UNDER THE LAW OF THE DISTRICT OF COLUMBIA

In addition to the Feres bar against the plaintiff’s claims, these claims also are not actionable under the law of the District of Columbia. Many jurisdictions do not recognize any property rights in a corpse although some common law jurisdictions do recognize the rights which vest in the spouse' or next of kin of the deceased to inter the deceased’s body. See 48 A.L.R.3d 240 (1973).

In support of her claim for damages, the plaintiff relies on Steagall v. Doctor’s Hospital, 171 F.2d 352 (D.C.Cir.1948), to establish the right to bury, dispose of, or otherwise possess the body of a deceased relative in the District of Columbia. However, in a later case, the Court of Appeals for the District of Columbia commented that Steagall should not be interpreted so broadly as to establish a right to possess, preserve, or bury a dead body with the violation of that right being an actionable tort. District of Columbia v. Smith, 436 A.2d 1294, 1298 (D.C.Ct.App.1981). Because “Steagall simply decided that a surviving spouse has the primary right of action, [ajnything pertaining to the scope or definition of the tort involved must necessarily be dicta.” Id. at 1298.

Generally, the withholding of a corpse may be actionable and lead to recovery for emotional distress, without physical effects, where there has been willful, malicious, or outrageous conduct in withholding the corpse. Id. at 1297 note 2, citing Liability for Withholding A Corpse, 48 A.L.R.3d 240 (1973); Chisum v. Behrens, 283 N.W.2d 235 (S.D.1979). In Waldon v. Covington, 415 A.2d 1070 (D.C.App.1980), the Appeals Court noted the inherent difficulty in proving subjective intent with any certainty and recognized that such intent must be inferred from the flagrant nature of the conduct of the accused. Id. at 1070. The Waldon court then noted that to prove intentional infliction of emotional harm in the District of Columbia, the conduct of the defendant must be beyond all bounds of decency and without just cause or excuse. Id. at 1076-77, citing Clark v. Associated Retail Credit Men, 105 F.2d 62, 66-67 (D.C.Cir.1939) (and characterizing Clark as a landmark case in the District). Intentional and outrageous withholding has been established in other jurisdictions where, for example, a motorist struck and killed the plaintiff’s son and then hid the body, and later buried it in a field. Papieves v. Lawrence, 437 Pa. 373, 263 A.2d 118, 119 (1970).

Here, there is no allegation in the complaint that the hospital committed a malicious or outrageous act in disposing of the fetus in a manner stated to be in accordance with its established hospital policy. The conduct of the defendant’s employees was not inconsistent with the District of Columbia Code Ann. Section 6-201(a)(1) (1976), which did not require the preparation of a birth certificate for any stillborn fetus delivered before the sixth month of pregnancy. Thus, the plaintiff has failed to allege in her complaint or in her subsequent submissions to the Court that the defendant or its employees committed an act that was beyond all bounds of decency and without just cause or excuse. Waldon, 415 A.2d at 1076-77.

Finally, recovery for negligent, as opposed to intentional infliction of emotional harm must be accompanied by a physical invasion. Garber v. United States, 578 F.2d 414 (D.C.Cir.1978). Originally, a substantial injury was required for a plaintiff to recover in an action for negligent infliction of emotional harm. However, the “substantialness” requirement has been abandoned and an accompanying physical injury of any magnitude will suffice. Id. at 415 n. 2. Here, no physical injury has been alleged.

Because an intentional tort cannot be established under the law of the District of Columbia by the facts in this complaint, and a negligence action is precluded because no accompanying physical injury has been alleged, the plaintiff’s claim must be dismissed pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.

Additionally, the grant of immunity to the United States Department of Army resulting from the Feres doctrine also requires that the plaintiff’s claim be dismissed.

      . Complaint, ¶ 11.

      . This section provides that:
      ”[a]n action not be instituted upon a claim against the United States for money damages for injury ... or personal injury or death caused by any employee of the Government while acting within the scope of his office or employment, unless the claimant shall have first presented the claim to the appropriate federal agency and his claim shall have been finally denied by the agency in writing...”

      . Pub.L. No. 79-601, tit. IV, § 401, 60 Stat. 812 (1946) (codified in various sections of 28 U.S. C.).

      . The case of Feres v. United States, 177 F.2d 535 (2d Cir.1949), was considered together with Jefferson v. United States, 74 F.Supp. 209, (D.Md.1947), aff’d, 178 F.2d 518 (4th Cir.1949), and Griggs v. United States, 178 F.2d 1 (10th Cir.1949), reh’g denied, 178 F.2d 1 (1950). Feres v. United States, 340 U.S. 135, 71 S.Ct. 153, 95 L.Ed. 152 (1950).

      . See supra note 4.

      . In determining whether to grant a motion to dismiss, a court primarily considers the allegations in the complaint. However, matters of public record, orders, items appearing in the record of the case, and exhibits attached to the complaint may also be taken into account. Wright and Miller, 5 Federal Practice and Procedure: Civil § 1357, at 593 (1969). Accordingly, in resolving this motion to dismiss, the Court notes, but does not rely on, the uncontroverted contention in the defendant’s memorandum of law in support of its motion to dismiss, that the conduct of its employees (in disposing of the fetus) was in accordance with the established policies and practices of the Walter Reed Army Medical Center. Defendant’s memorandum, at 4-5.
      Under the reasoning expressed in Johnson, this contention, if true, would further justify the application of Feres in the case now before the Court because the policy with which the defendant’s employees acted in accordance reflects precisely the kind of judgment utilized by military authorities in formulating rules, practices, and procedures, which Feres was designed to insulate from judicial review. Johnson, 704 F.2d at 1440.

      . The FTCA makes the United States liable in the appropriate circumstances "in accordance with the law of the place where the [tortious] act or omission occurred." 28 U.S.C. § 1346(b) (1976).

      . Steagall was a case which involved a civil action brought by a widow and her two sons against a hospital for performing an unauthorized autopsy. The trial court dismissed the claims for the two sons on the ground that the widow had the sole right of action. On review, the Court of Appeals affirmed, stating that the spouse had the “right to possess, preserve, and bury or otherwise dispose of [the] dead body" and if no spouse survived then that right vested in the next of kin. Steagall, 171 F.2d at 353.

      . Plaintiffs memorandum, at 2.