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Cougar Den Fuels a Fractured Supreme Court

New Jersey Lawyer

A recent United States Supreme Court tax case is a lesson in United States history, American Indian law, federal preemption and, of course, tax law. A Washington State statute taxes “motor vehicle fuel importer[s]” who use “ground transportation” to bring fuel into the state. An 1855 treaty between the United States and the Yakama Nation guarantees the tribe “the right, in common with citizens of the United States, to travel upon all public highways.” A member of the Yakama Nation and principal of a Yakama-incorporated fuel distribution business challenged the state’s assessment of a $3.6 million tax on its operations.

In Washington State Department of Licensing v. Cougar Den, Inc., the Court addressed the issue of whether the 1855 treaty preempts the state tax. In a fractured decision with unconventional judicial alliances, the Court held that the treaty preempts the state tax law because the tax impermissibly burdens rights under the treaty. The four separate opinions (including a plurality, a concurrence, and two dissenting opinions) show the justices diverging on several issues, including: 1) whether the tax is on travel with, or possession of, fuel on state highways; 2) the nature of the right reserved in the treaty; and 3) the value of the Court’s precedents.

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"Cougar Den Fuels a Fractured Supreme Court," by Adrienne C. Rogove and Michael R. Darbee was published in the December 2019 edition of New Jersey Lawyer, a publication of the New Jersey State Bar Association