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

Background

The dispute involves the State of Washington and Cougar Den, a wholesale fuel importer owned by a member of the Yakama Nation. Cougar Den buys fuel in Oregon and trucks it across Washington public highways to the Yakama Reservation, where it sells to Yakama-owned stations. In 2013 the State assessed Cougar Den about $3.6 million in taxes, penalties, and fees under a statute that taxes motor vehicle fuel imported by ground transportation. Cougar Den argued the tax is pre-empted by an 1855 treaty that reserves the Yakamas’ “right, in common with citizens of the United States, to travel upon all public highways.”

Reasoning

The Court asked whether the treaty forbids Washington from applying its fuel import tax to tribal travel with goods. The majority accepted the Washington Supreme Court’s reading that the statute specifically taxes importation by ground transportation and therefore falls on highway travel with fuel. Relying on earlier cases and historical evidence, the Court concluded the treaty must be read as the Yakamas would have understood it in 1855 to include traveling with goods for trade. Because the tax operates as a charge on that travel, the treaty pre-empts the State’s application of the tax to Cougar Den in these facts. The Court noted States retain some regulatory power for conservation, health, and safety.

Real world impact

The decision prevents Washington from collecting this fuel import tax from Cougar Den on these facts and protects the Tribe’s ability to move goods to market along public highways without that particular state tax. States may need alternate revenue approaches where they previously taxed similar highway imports, but the opinion affirms that some nondiscriminatory safety and conservation regulations remain permissible.

Dissents or concurrances

Justice Gorsuch (joined by Justice Ginsburg) agreed in the judgment, emphasizing binding historical findings that tribal members understood the treaty to protect moving goods for trade. Chief Justice Roberts and Justices Kavanaugh, Thomas, and Alito dissented, arguing the tax targets possession of fuel, not travel, or that “in common with” permits nondiscriminatory regulation including the tax.