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

In 1855, the Yakama Nation (Yakama) entered into a treaty with the United States (1855 treaty) under which the Yakama ceded 10 million acres of land in what would eventually become Washington State. In exchange, the Yakama received payment and certain treaty-reserved rights, including the right to travel freely on all public highways. The Yakama’s way of life involved extensive trading throughout the region. At the treaty negotiations, United States representatives explicitly promised the Yakama that their treaty-reserved right to free travel on public highways included the right to transport goods without restriction. The treaty was negotiated in Chinook jargon, which was not a language the Yakama spoke fluently, and it was memorialized in English, a language that the Yakama neither spoke nor read. Washington state law levied a tax (the fuel-import tax) on all motor-vehicle fuel imported from out of state using ground transportation, including public highways. Cougar Den, Inc. (defendant), a Yakama-owned wholesale fuel importer incorporated under Yakama law, was the primary importer of motor-vehicle fuel sold on the Yakama Reservation. The Washington State Department of Licensing (department) (plaintiff) assessed Cougar Den $3.6 million in taxes, fees, and penalties pursuant to Washington’s fuel import tax. Cougar Den appealed the assessment, arguing that the fuel import tax was preempted by the Yakama’s treaty-reserved right to unrestricted use of public highways for transporting goods. After exhausting the administrative appeals process, the department affirmed its decision to enforce the assessment. Cougar Den appealed to the state trial court. The trial court reversed, holding that the fuel import tax was preempted by the 1855 treaty. On appeal, the Washington Supreme Court affirmed. The department appealed to the United States Supreme Court.