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Case Notes

Washington State Department of Licensing v. Cougar Den, Inc.

Author: Micah McNeil

Introduction

In Washington State Department of Licensing v. Cougar Den, Inc., the state of Washington sought to tax Cougar Den, a wholesale fuel importer owned by a member of the Yakima Nation which brought fuel from Oregon for sale to tribal members.[1] The case demonstrates how the Yakima Nation Treaty of 1855 pre-empts state law through its right-to-travel provision. 

Significantly, the Supreme Court used the Indian canons of construction[1]  to interpret the Treaty in terms how the Yakima would have understood it in 1855.[2] Cougar Den—along with Herrera v. Wyoming[3] and McGirt v. Oklahoma[4]—represents a shift in the Supreme Court towards the affirmation of Indian Treaty rights. This case has potential implications for lawyers representing treaty-based, federally-recognized tribes in terms of crafting effective legal arguments and strategies for argument before the US Supreme Court. It also has research implications for tribes, researchers and lawyers, as it may motivate them to do in-depth studies of their own treaties in order to understand how their tribe or tribal client understood the language and provisions of these sacred documents at the time they were signed.

Summary of Relevant Facts & Procedural History

Cougar Den, Inc. was a wholesale fuel importer, owned by a member of the Yakima Nation which bought fuel for members of the Tribe.[5] Cougar Den purchased fuel in Oregon, trucked the fuel to the Yakima reservation on the public highway, and then sold the fuel to Yakima-owned gas stations on the reservation.[6] In December 2013, the Washington State Department of Licensing assessed that Cougar Den owed $3.6 million in taxes, licensing fees, and penalties.[7]  This assessment was the result of a state tax on the importation of fuel on a public highway.[8] This tax applied to all motor vehicle fuel importers who bring large quantities of fuel into the state by ground transportation.[9]

However, the Yakima Nation Treaty of 1855 has a right-to-travel provision which includes “the right, in common with citizens of the United States, to travel upon all public highways.”[10] Cougar Den believed that the right-to-travel provision in the Treaty pre-empted the State tax levied against their company.[11] An Administrative Law Judge (ALJ) in the Office of Administrative Hearings Department of Licensing agreed that the state tax was pre-empted by the Treaty.[12]  However, the Department Director overruled the ALJ’s order.[13] Cougar Den appealed to the Washington Superior Court.[14] The Washington State Superior Court held that the Treaty pre-empted the tax and overturned the Director.[15] The Department Director appealed to the Washington Supreme Court, who upheld the Superior Court’s decision.[16] As a result, the Department of Licensing filed a petition to the United States Supreme Court for review of the Washington Supreme Court decision.[17] The issue on appeal was whether the Yakima 1855 Treaty pre-empted the Washington state tax on Cougar Den’s importation of fuel.[18]


Holding

The U.S. Supreme Court held that the 1855 Yakima Treaty provision of “the right, in common with citizens of the United States, to travel upon all public highways” pre-empted the Washington State tax on Courage Den’s importation of fuel.[19]

Summary of Analysis

Justice Breyer, joined by Justice Sotomayor and Justice Kagan, gave three reasons why the state’s tax on Cougar Den’s importation of fuel was pre-empted by the 1855 Yakima right-to-travel provision.[20]

First, the Court noted that it had already considered the 1855 Yakima Treaty in four separate cases.[21] In each case, the language of the Yakima Treaty was very similar to the Treaty language in this case and each time it analyzed the language of the Treaty through the Indian canons of construction.[22] The Indian canons of construction require that the language of the Treaty      is construed in terms of how the Yakima at the time would have understood it.[23] Therefore, although the words “in common” in the right-to-travel provision of the Treaty could be  interpreted as the Yakima’s common freedom to travel on the highway with all other citizens, the court reasoned that this was not how the Yakima understood the word “in common” at the time of the signing of the 1855 Treaty.[24] For instance, in Tulee[25]the Court held that the term “in common” in the fishing provision of the 1855 Yakima Treaty reserved for the Yakima greater rights than other citizens.[26] The Court held that the term “in common” in the Treaty was referring to the Yakima right to fish in their “usual and accustomed places,” rather than simply being a right against discrimination to fish in Washington State.[27] In a similar manner, the words “in common” in the right-to-travel provision of the Treaty would on its face appear to mean the state tax would apply to the Yakima in the same way it applies to other citizens.[28] However, like Tulee, the court declined to read the word “in common” outside of its historical context.[29] The court instead interpreted the phrase “in common” in terms of how the Yakima understood it at the time of the 1855 Treaty.[30]

Second, the historical record acknowledged by the courts indicated that the right-to-travel provision of the Treaty included a right to travel with “goods for sale or distribution.”[31] During the negotiation of the Treaty, both the United States representatives and the Yakima gave special attention to the Yakima’s need to protect their right to travel for the purpose of continuing to hunt, fish, gather food, and trade.[32] Travel for the purpose of trade was central to Yakima’s economy and their spiritual and cultural lifeways.[33] In the historical context, the right-to-travel provision was essential for the Tribe to be able to “travel along the roads for trading purposes.”[34] The Court reasoned that during the Treaty negotiations, statements made by United States representatives “led the Yakima to understand” that the provision of the right to travel on public highways included the right to travel with goods for the purpose of trade.[35]

Third, the court reasoned that the state tax on traveling with certain goods—in this case, fuel—burdens the traveler.[36] The right to travel without the burden of being taxed is what the right-to-travel provision in the Treaty protects.[37] The Court relied on Tulee, which held that the Yakima Treaty right to fish pre-empted the state law applied to the Yakima Nation which required fishermen to purchase a license.[38] The Court in Tulee held that the fee for the license as a prerequisite to the enjoyment of the reserved right to fish could not be reconciled with the Treaty’s construction.[39] The U.S. Supreme Court in this case concluded that as the fee for the fishing license interfered with the Treaty right to fish so too does the state tax imposed on traveling with goods—like fuel—interfere with the Yakima’s right to travel.[40]

In his concurring opinion, Justice [U2] Gorsuch (joined by Justice Ginsburg) put the 1855 Yakima Treaty in historical context. Through the Treaty, the Yakima ceded 10 million acres of land to the United States, which today makes up one quarter of the State of Washington.[41]  In consideration for the 10 million acres of land, the Yakima received a reservation and tribal guarantees including the right to travel for the purpose of trade.[42] The Treaty was negotiated during a time when the US was under tremendous pressure to obtain title to Indian lands in Eastern Washington to settle the Washington territories while a flood of settlers were coming in.[43] The Yakima, aware that their land was going to be taken by the US, managed to negotiate the right to “take their goods freely to and from market on the public highway.”[44] This was a right the US was eager to bargain for.[45] Justice Gorsuch noted that compared to the 10 million acres the US received in exchange for the Yakima’s right-to-travel provision, it was a “bargain basement deal” for the US.[46]

Justice Gorsuch in his concurrence also stated that Court was not only charged with interpreting the Treaty “consistent[ly] with the Treaty’s original meaning,” but also applying the Indian canons of construction, giving “effect to the terms as the Indians themselves would have understood it.” [47] Justice Gorsuch reasoned that the US drew up the contract and as a general rule the Court construes “ambiguities against the drafterwho  enjoys the power of the pen.”[48] Justice Gorsuch noted the US used the power of the pen to its advantage against the Yakima, as the Treaty provisions in the negotiations were ambiguously translated from English to Chinook jargon, which was not the primary language of the Yakima.[49] Also, the Treaty was written in English, a language the Yakima could neither read nor write at the time.[50] The Yakima were also under great pressure by the US government during the negotiations and were essentially forced to sign the Treaty.[51] As a result of ambiguities in the Treaty and the US using the “the power of the pen,” Justice Gorsuch concluded the Court would have to rely on the historical record to understand how the Yakima interpreted the Treaty.[52] 

Justice Gorsuch noted the Court had the benefit of “unchallenged factual finding[s]” provided in Yakima Nation v. Flores[53]to determine the historical record.[54] Flores was a separate federal case where the Yakima challenged state restrictions on their logging operation using its right-to-travel Treaty provision.[55] Justice Gorsuch concluded that these factual findings were binding on the Supreme Court under the doctrine of collateral estoppel.[56] Justice Gorsuch reasoned that the uncontested factual findings of Flores showed that the Yakima understood the Treaty would provide the “right to move their goods to and from the market freely” using the highway.[57] Before the Treaty negotiations, the Yakima were engaged in a vast system of trade and exchange with tribes from the Northwest coast, Montana, and Wyoming, and reached as far as Oregon and California.[58]

Since trade was central to the Yakima culture, economics, and religion, a primary concern of the Yakima during the Treaty negotiations was they have the freedom of movement and trade.[59] It was also common knowledge to the US Treaty negotiators that the Treaty would protect the Yakima’s preexisting right to take goods to and from the market in their traditional trading area.[60] Justice Gorsuch noted that before the Treaty, the Yakima brought goods to and from  market without being taxed, and the historical record suggested that the Yakima would have understand that this liberty would be preserved.[61]  

Justice Gorsuch also concluded that Washington State failed to give full effect to the Treaty’s terms as the Yakima originally understood them.[62] The State argued that the Tribe had the right to travel freely on the highway without restrictions, but the state tax was not on travel, but the “possession of fuel.”[63] The State argued that its tax on Cougar Den’s fuel was a tax on its possession of fuel and the fact that it was being transported on the highway was “neither here nor there.”[64]  However, Justice Gorsuch reasoned that the Treaty did not just guarantee “travel” on the highway free of restriction, but it guaranteed tribal members the right to “move goods” freely to and from the market using the highway.[65]  Justice Gorsuch reasoned that, in the context of this case, it was impossible to transport goods without possessing them.[66] Therefore, this state tax on the Yakimas’ possession of goods as they traveled to and from the market on the highway violated the Yakima Treaty and was thus pre-empted by the Treaty.[67]

Justice Gorsuch summed up his concurrence by noting that the facts of this case represented an “old and familiar” pattern in US history.[68] In this case, Washington State received millions of acres of land that the Yakima ceded to the Federal Government in exchange for “modest promises.”[69]  The state had now grown discontented with the consequences of those promises by not being able to tax Cougar Den in its importation of fuel on the highway.[70] The State of Washington viewed this as a new time and the state now “wanted more,” regardless of promises to the Yakima.[71] To its credit, instead of allowing the state to violate these promises, the Court instead held the parties to the terms of the Treaty.[72] Justice Gorsuch concluded that this upholding of the Yakima Treaty was “the least” the Supreme Court could do.[73]

Research and Expert Testimony Implications from Cougar Den

This case has research and expert witness implications for federally-recognized tribes with treaty protections. Justice Gorsuch used the factual finding in Flores for much of his analysis and holding.[74] The Court in Flores in turnrelied heavily on the expert testimony of William Yallup, a full-blooded Yakima Indian and a highly-respected Yakima Nation historian, as well as the testimony of  Dr. Deward Walk, a Ph. D. in anthropology who is also an expert in ethnology.[75] Dr. Walk is considered to be a “premier expert” on Yakima Indians with an extensive history with the Tribe going back to the 1950’s.[76]  

In Flores, the court recognized Mr. Yallup as the “ultimate expert” in proceedings.[77] Prior to the case, Mr. Yallup was entrusted by the Tribe with the role of preserving the Yakima’s cultural history.[78] Mr. Yallup was taught at an early age the meaning of the 1855 Yakima Treaty from his grandparents.[79] Two of his ancestors were part of the signing of the Treaty.[80] From an early age he was taught the meaning of the Treaty as understood by the Yakima through their oral history passed down through the generations.[81] In Flores, Mr. Yallup testified that the members of the Yakima Nation view the Treaty as a “sacred document” and his initial training of for understanding the Treaty involved how the provisions applied to the Tribes religious conduct.[82] Dr. Walk confirmed that, to the Yakima, the “Treaty embodies spiritual as well as legal meaning” to the Tribe, and each provision of the Treaty has special meaning.[83] In Flores, both Mr. Yallup and Dr. Walk gave expert testimony in areas that covered the Yakima’s history of travel for the purpose of trade, pre-Treaty contacts with the Whites, as well as the Walla Walla Treaty negotiations where the Yakima 1855 Treaty was signed.[84] 

The use of Mr. Yallup and Dr. Walker as experts suggests the Court’s willingness to accept evidence by expert witnesses from multiple disciplines, both tribal and non-tribal, to determine how the tribes understood their treaties at the time they were signed. As noted earlier, Justice Gorsuch made the factual findings in Flores binding for the Cougar Den analysis and holding.[85]  Tribes might consider using expert witness from similar backgrounds for their treaty-based court cases to determine how the tribes understood their treaties at the time they were signed.

Mr. Yallup’s testimony also represents the great value the Yakima Nation places on its 1855 Treaty: it is a “sacred document” worthy of being carefully studied for its meaning at the time it was signed.[86] The concept of the Treaty being a “sacred document” also comports with the Supremacy Clause of the Constitution, which holds treaties as the “supreme law of the land” with binding authority[87] which pre-empts state law.[88]

Similar to the Yakima’s study and application of their Treaties, tribes might consider a cross-disciplinary approach of qualified tribal historians, researchers, legal scholars and lawyers to do in-depth studies of how their tribe understood their treaty provisions at the time they were signed and how the provisions and agreement could benefit their tribe. Out of this process, legal and scholarly recommendations could advise tribal leaders on how treaty provisions and agreements could be applied for their tribe in such diverse areas as economic development, jurisdiction, state taxes, or sacred sites, for example.[89] This could be done not once, but as an ongoing process.

One approach might be the establishment of an “Office of Treaty Protection” within the tribe to help facilitate and institutionalize this process. Whatever method a tribe might use, the model employed by the Yakima to determine the meaning of their Treaty as they understood it—and finding ways to apply the provisions for the benefit of the Tribe—is instructive for treaty-based, federally-recognized tribes seeking to make the most of their treaty rights.


Conclusion

This case is significant as it shows a majority of the United States Supreme Court adhere to the Indian canons of construction. Along with Herrera[90]and McGirt,[91] the case also represents a shift in focus by the Court towards enforcing Indian treaty rights. Lawyers representing federally-recognized tribes with treaty protections might be advised to tailor their legal strategies and arguments to include the Indian canons of construction, as well as research how their tribe understood the terms of their treaties at the time they were established. By discovering how the tribe understood their treaties at the time they were signed, rights and agreements that may have been overlooked and lain dormant could be revived for the benefit of the tribe.


[1] 139 S. Ct. 1000 (2019).

[2] The Court uses four basic canons of construction to interpret Indian treaty language and agreements. One of the foundational canons is that Indian treaty language should be interpreted as the Indians would have understood it at the time the treaty was signed; See Minnesota v. Mille Lacs Band of Chippewa Indians, 119 S.Ct. 1187, 1201 (1999).

[3] Herrera v. Wyoming, 139 S. Ct. 1686 (2019).

[4] McGirt v. Oklahoma, 140 S. Ct. 2452 (2020).

[5] Cougar Den, Inc., 139 S. Ct. 1000, 1007 (2019).

[6] Id.

[7] Id.

[8] Id. at 1008.

[9] Id. at 1006.

[10] Id. at 1007.

[11] Id.

[12] Id. at 1008.

[13] Id.

[14] Id.

[15] Id.

[16] Id.

[17] Id.

[18] Id. at 1006.

[19] Id. at 1011.

[20] Id.

[21] Id. at 1011.

See United States v. Winans, 198 U.S. 371, 380-381 (1905); Seufert Bros. Co. v. United States, 249 U.S. 194, 196-198 (1919); Tulee v. State of Washington, 315 U.S. 681, 683-685 (1942); Washington v. Washington State Commercial Passenger Fishing Vessel Ass’n, 443 U.S. 658, 677-678 (1979).

[22] Cougar Den, Inc., 139 S. Ct. 1000, 1011 (2019).

[23] Id.

[24] Id.

[25] Tulee v. State of Washington, 315 U.S. at 684 (citing Winans, 198 U.S. 371).

[26] Cougar Den, Inc., 139 S. Ct. 1000, 1012 (2019).

[27]  Id.

[28] Id. at 1011.

[29] Tulee, 315 U.S. at 684 (citing Winans, 198 U.S. 371).

[30] Cougar Den, Inc., 139 S. Ct. 1000, 1011 (2019).

[31] Id. at 1012.

[32] Id. at 1013.

[33] Id.

[34] Id.

[35] Id.

[36] Id.

[37] Id.

[38] Cougar Den, Inc., 139 S. Ct. 1000, 1013 (2019).

[39] Cougar Den, Inc., 139 S. Ct. 1000, 1013 (2019).

[40] Id.

[41] Id. at 1016.

[42] Id.

[43] Id. at 1018.

[44] Id.

[45] Id.

[46] Id.

[47] Id. at 1016.

[48] Id.

[49] Id.

[50] Id.

[51] Id.

[52] Id.

[53] Justice Gorsuch reasoned that the Washington State Superior Court relied on the findings of Flores and collaterally estopped Washington state from challenging them. Because the State did not challenge the Superior Courts estoppel ruling in either the Washington Supreme Court case or this case, the finding from Flores are binding in this case. See Yakama Indian Nation v. Flores, 955 F. Supp. 1229 (9th Cir. 1998).

[54] Cougar Den, Inc., 139 S. Ct. 1000, 1016 (2019).

[55] Flores, 955 F. Supp. 1229, 1232 (9th Cir. 1998).

[56] Cougar Den, Inc., 139 S. Ct. 1000, 1019 (2019).

[57] Id.

[58] Id. at 1017.

[59] Id.

[60] Id.

[61] Id. at 1018.

[62] Id. at 1019.

[63] Id.

[64] Id.

[65] Id.

[66] Id.

[67] Id.

[68] Id. at 1021.

[69] Id.

[70]Id.

[71] Id.

[72] Id.

[73] Id.

[74] Id.

[75] Flores, 955 F. Supp. 1229, 1236 (9th Cir. 1998).

[76] Id.

[77] Id. at 1237.

[78] Id.

[79] Id. at 1236.

[80] Id.

[81] Id. at 1237.

[82] Id. at 1236.

[83] Id. at 1238.

[84] Id. at 1236-1245

[85] Cougar Den, Inc., 139 S. Ct. 1000, 1019 (2019).

[86] Flores, 955 F. Supp. 1229, 1236 (9th Cir. 1998).

[87] U.S. Const. art. IV, cl. 2.

[88] Maryland v. Louisiana, 451 U.S. 725, 728 (1981).

[89] This would be on a case-by-case basis for the tribes, depending on the treaty provisions in the agreement.

[90] Herrera v. Wyoming, 139 S. Ct. 1686 (2019).

[91] McGirt v. Oklahoma, 140 S. Ct. 2452 (2020).


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