Washington State Dep’t of Licensing v. Cougar Den, Inc.

The 1855 treaty between the United State and Yakama Nation forbids the State of Washington from imposing statutory taxes upon fuel importers of the Yakama Nation.

Respondent imported fuel at wholesale as an agent designated by the Yakama Nation to obtain fuel for members of the Tribe. Petitioner challenged Respondent’s importation of fuel under a state statute taxing the importation of fuel by public highway, and assessed Respondent $3.6 million in taxes, penalties, and licensing fees. Respondent argued that the “right to travel” provision in a treaty between the U.S. and the Yakama Nation preempted the state tax. An administrative law judge held that the right to travel provision preempted the tax. However, the director of the state department of licensing reversed. Ultimately, a Washington Superior Court determined that the treaty preempted the tax and the Washington Supreme Court upheld the determination. On review, the Supreme Court adopted the reading employed by the Washington Supreme Court, which identified the relevant state statute as a tax on travel. The Court then cited its prior interpretation of the treaty between the U.S. and Yakama Nation and its protection of the right to travel on public highways as encompassing traveling with goods for the purpose of trade, which the state statute burdened under the employed interpretation. Consequently, the Court reasoned that precedent necessitated the treaty preempting the tax on travel. AFFIRMED.