Legal Docket: Violating a Native American treaty

MARY REICHARD, HOST: It’s Monday morning, start of a new work week for The World and Everything in It. Today is the 12th of November, 2018. Good morning to you, I’m Mary Reichard.

NICK EICHER, HOST: And I’m Nick Eicher. The Supreme Court handed down its first ruling of the term last week. A unanimous bench ruled in favor of Arizona firefighters who want to sue for age discrimination under federal law. The two oldest men in the fire department were let go after a budget shortfall and replaced with younger, less expensive, people.

REICHARD: The ruling ran counter to most circuits that sought to shield small public organizations from potentially ruinous discrimination lawsuits. But the justices stuck with the plain reading of the law, even though more litigation is the likely result. Now, any state or political subdivision, regardless of how many employees they have, must comply with the law that protects workers over the age of 40.

EICHER: Well, this worker is over the age of 80: Justice Ruth Bader Ginsburg. She’s recovering from a bad fall, frightening fall, in her office last week.

Justice Ginsburg is renowned for her fierce work ethic.

Listen to this, Mary: two battles with cancer, two cracked ribs in 2012, implantation of a heart stent, and now three cracked ribs. Despite all that, Justice Ginsburg’s never missed an oral argument in her 25 years on the bench.

REICHARD: That is really amazing! That’s a high standard to meet!

EICHER: OK, so we have no excuses when we get the sniffles this winter.

REICHARD: And now on to two oral arguments the justices heard in October.

My first case today involves one of several organizations set up after World War II. Their purpose was to advance development in nations that had been ravaged by war.

EICHER: The United States and its allies created the World Bank, the United Nations, and the IFC, the International Finance Corporation.

These days, the IFC concentrates its efforts on poorer countries or those in crisis.

Now, IFC is facing a legal crisis. And it stems from a loan it made back in 2008.

IFC lent $450 million to a company to build a power plant in India, and agreed to oversee the project. Included in the terms of the loan was a provision that no environmental harm would come to the communities around the plant.

REICHARD: But a group of six farmers and fishermen said environmental harm did occur. They want compensation for it and sued the IFC.

But here’s the rub. Back when the postwar allies created IFC, Congress passed laws to grant these organizations immunity from lawsuits. The intention was to encourage development and not get hung up in court.

Donald Verrilli was solicitor general for President Obama, and he’s now the lawyer for IFC. Verrilli pointed to that legal immunity and warned the justices of what will happen if they rule against IFC.

VERRILLI: And, conversely, you know, we’re a big, fat target here. These organizations have lots of money. And of course foreign plaintiffs want to sue here. They can bring a class action. They get liberal discovery. They can get punitive damages. They get all of these advantages by suing here. So instead of suing the person that actually injured them, the power plant in India, they come here and sue us.

REICHARD: IFC is actually owned jointly by the governments of 184 nations. It’s only based in the United States.

Lawyer for the fishermen and farmers, Jeffrey Fisher, argued a different law applies here, and it’s one that was in force when his clients filed this lawsuit. It does not grant 100 percent immunity to international organizations.

Justice Breyer ruminated on that “big, fat target” idea in this question.

BREYER: So what is the assurance that the government can give us that this isn’t going to lead to a lot of lawsuits and this isn’t going to interfere with perhaps activity that the U.S. traditionally has been very much in favor of?

REICHARD: Floodgates won’t open, came the answer, because not that many organizations like this set up headquarters in the United States.

But Verrilli recalled what was going on in the world in 1945, the year World War II ended, with so much work to do. Think of the purpose and history of the original framework, he urged.

You’ll hear him mention “Bretton Woods.” That refers to the 1944 conference in New Hampshire that led to the creation of these institutions that helped rebuild after World War II.

VERRILLI: We have Bretton Woods. We set up all these organizations. They have a desperate mission in front of them to try to rebuild the world—the world after the carnage of World War II. There’s a lot of pressure on Congress to get these organizations up and going and give them the immunity we promised them so they can go out and do their work… I really think if you look at the historical materials. The gloss that my friends on the other side are trying to put on it is completely anachronistic. They’re taking a different concept that they’ve come up with now and trying to retrofit the historical facts to match it, and it just isn’t right.

REICHARD: Justice Kavanaugh recused from this case, probably given his lower-court involvement.

If these lawsuits are allowed to proceed, then it stands to reason organizations like this one will have billions of dollars of reasons to set up shop somewhere other than the United States.

If you listen regularly, you know disputes over Native American rights come before the court nearly every term.

The first such oral argument this term followed a small kerfuffle outside the courtroom.

The chairman of the Yakama Nation, JoDe Goudy, arrived wearing traditional dress that included a feathered headdress. A security guard told him to remove it because it would be a distraction. Goudy refused, as distraction was precisely the point. The confrontation made headline news in Native American media.

Goudy has been an outspoken critic of how the United States government treats native people. Listen to him in a speech last year in front of the White House:

GOUDY: We understand that the inaccurate concept of discovery, formerly referred to as the Doctrine of Discovery, utilized by the monarchies of Spain and England have unjustly manifested the idea of domination and dehumanization against our original free peoples and nations.

REICHARD: Today’s offense involves one common to us all: taxes. The question presented in this case asks whether a tribal member has to pay state fuel taxes.

Here are the facts.

Kip Ramsey is a member of the Yakama Nation. He owns a gas station on a reservation inside Washington state. He imports fuel from Oregon—and this is the important part: he does that importing via the public highway system.

The state of Washington wants to tax that import of fuel from Oregon, under a law it passed in 2006.

When the state sent Ramsey a bill for $3.6 million for unpaid taxes plus penalties, he wasn’t having it.

He points to the Yakama Nation Treaty signed with the United States in 1855.

It says tribal members have—quoting now—“the right in common with citizens of the United States to travel upon all public highways.”

To Washington state, that means the state can still tax fuel, because it’s not taxing travel, as the treaty mentions. It taxes goods.

To Justice Elena Kagan, that seemed a contrived argument.

KAGAN: They’re doing exactly what this treaty protects, which is transporting goods to and from market. But what the state has done is to tax exactly the activity that’s protected under the treaty… which is the transportation of goods to and from market.

Lawyer for the gas station owner, Adam Unikowsky, extended Justice Kagan’s comment by pointing out there is a difference between acquiring a thing and moving that thing. That caused Justice Samuel Alito to get philosophical:

ALITO: Then that’s very artificial and you get into this metaphysical question of what they’re doing. They’re doing many things when they’re—you know, when the farmer is bringing his pigs to market, he’s doing many things. He’s traveling with the pigs. He’s possessing the pigs. He’s breathing. He may be doing all kinds of other things.

Unikowsky, for the gas station owner, argued the right to travel along the highway is inextricably linked to the right to trade. Not only that, but the courts have interpreted Native American treaties from the perspective of the tribal negotiators at the time they signed the treaties. Ergo, the gas station owner wins.

But Justice Stephen Breyer wanted to dissect the actual words of that state tax statute. You can sense the bob-and-weave going on in this exchange with Unikowsky and Justice Kagan, too:

BREYER: What do you mean, “the transportation?” Does it say it taxes “the transportation?”

UNIKOWSKY: I think it does. I mean, it talks about —

BREYER: It does? You know the statute better than I. Does the statute say we impose a tax on the transportation of gasoline?

UNIKOWSKY: Your Honor, I’ll tell you the words of the statute and then what the state court said.

BREYER: What’s the answer, yes or no?  

UNIKOWSKY: It doesn’t use the word transport, but the state court said it taxes transportation, and the state court authoritatively construes state statutes.

KAGAN: Well, it uses the word…

BREYER: What is the word?

KAGAN: Enter is a -­

UNIKOWSKY: Yeah, it uses enter. It says entry of fuel.

KAGAN: It’s a movement. 

REICHARD: Both sides agree the treaty guarantees travel for trading purposes. The fight is over whether a tax puts an unacceptable burden on the right to travel.

The federal government argued in support of Washington state. Assistant to the Solicitor General Anne O’Connell underscored that if the justices let this gas station owner avoid taxes here, then what’s to stop everybody from trying to get out of regulations, like ones banning fireworks or diseased apples from coming into the state, too?

Not so fast. Justice Brett Kavanaugh had this to say to the lawyer for Washington state, Noah Purcell:

KAVANAUGH: The effect was that, in taking your goods to market, which was the promise, in exchange for a huge area of land—an area of land the size of the state of Maryland that was given up by the tribe—that you could take your goods to market. And this burdens, as Justice Kagan said, this burdens substantially their ability to take goods to market.

PURCELL: Your Honor, the Yakama remain entirely free to take goods to market.

REICHARD: Then, this zinger from Justice Sonia Sotomayor after the assistant to the solicitor general tried to pick apart different meanings within the treaty.

SOTOMAYOR: Well, the one difference that you can’t get around is they didn’t sign a treaty and give away that much real estate to get nothing in return, to be treated exactly like every other citizen in traveling the highway.

REICHARD: Back in June, the Supreme Court handed a win to another Washington state tribe that prevented the state from imposing fees on Native Americans to fish. Hard to know how this one will come down, but the inclination of the younger justices, at least, seems to favor the Native American gas station owner.

However the court decides, it’ll have repercussions for the taxman across the United States wherever tribal lands are located that use the common highways.

And that’s this week’s Legal Docket.

(AP Photo/Manuel Balce Ceneta) In this Oct. 4, 2018 photo, the U.S. Supreme Court is seen at sunset in Washington. 

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