King Mountain Tobacco Co. v. Robert McKenna ( 2014 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
KING MOUNTAIN TOBACCO No. 13-35360
COMPANY, INC.; CONFEDERATED
TRIBES AND BANDS OF THE YAKAMA D.C. No.
INDIAN NATION, 2:11-cv-03018-
Plaintiffs-Appellants, LRS
v.
OPINION
ROBERT MCKENNA, Attorney
General of the State of Washington,
Defendant-Appellee.
Appeal from the United States District Court
for the Eastern District of Washington
Lonny R. Suko, District Judge, Presiding
Argued and Submitted
August 27, 2014—Seattle, Washington
Filed September 26, 2014
Before: John T. Noonan, Susan P. Graber,
and Morgan Christen, Circuit Judges.
Opinion by Judge Christen
2 KING MOUNTAIN TOBACCO CO. V. MCKENNA
SUMMARY*
Indian Law
Affirming the district court’s summary judgment, the
panel held that the Yakama Treaty of 1855 did not preclude
enforcement of the State of Washington’s escrow statute,
which requires tobacco companies to place money from
cigarette sales into escrow to reimburse the State for health
care costs related to the use of tobacco products.
The panel held that Washington’s escrow statute was a
nondiscriminatory law and that the activities of King
Mountain Tobacco Co., a company owned and operated by an
enrolled member of the Yakama Indian Nation, were largely
off-reservation. Accordingly, absent express federal law to
the contrary, King Mountain was subject to the escrow
statute. The panel held that the plain text of the Yakama
Treaty did not create a federal exemption from the escrow
statute. Specifically, Article II of the Treaty, which
established the boundaries of the Yakama reservation and
reserved it for Yakama use and benefit, was not an express
federal law that exempted King Mountain from the escrow
statute. Nor was Article III, which reserved to the tribe the
right to travel on public highways and the right to hunt and
fish. The panel held that the district court did not err by
declining to make findings regarding the Treaty’s meaning to
the Yakama people at the time of its signing because the
meaning to the Yakama people could not overcome the clear
words of the Treaty.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
KING MOUNTAIN TOBACCO CO. V. MCKENNA 3
COUNSEL
Randolph H. Barnhouse (argued) and Justin J. Solimon,
Johnson Barnhouse & Keegan LLP, Los Ranchos de
Albuquerque, New Mexico, for Plaintiffs-Appellants.
David M. Hankins (argued), Senior Counsel; Joshua
Weissman, Assistant Attorney General; Robert W. Ferguson,
Attorney General of the State of Washington, Olympia,
Washington, for Defendant-Appellee.
OPINION
CHRISTEN, Circuit Judge:
King Mountain Tobacco Company and the Confederated
Tribes and Bands of the Yakama Indian Nation (collectively
“Appellants”) sued the Attorney General of the State of
Washington for declaratory and injunctive relief from
Washington’s escrow statute, Wash. Rev. Code
§§ 70.157.005–70.157.030 (2013). The escrow statute
requires King Mountain to place money into escrow to
reimburse the State for health care costs related to the use of
tobacco products. The amount placed in escrow is based on
the number of cigarette sales made that are subject to state
cigarette taxes. Appellants argue that the Yakama Treaty of
1855 is an “express federal law” that exempts the Yakama
people from Washington’s escrow statute. The State argues
that the Treaty does not preclude it from regulating tobacco
products sold nationally and that, as a nondiscriminatory state
law that is not expressly preempted by federal law, the
escrow statute applies to King Mountain. The district court
granted summary judgment in favor of the State, and
4 KING MOUNTAIN TOBACCO CO. V. MCKENNA
Appellants appeal. We have jurisdiction under 28 U.S.C.
§ 1291, and we affirm the judgment of the district court.
BACKGROUND
The Treaty between the Confederated Tribes and Bands
of the Yakama Indian Nation and the United States was
negotiated and signed in 1855. See Treaty with the Yakamas,
12 Stat. 951 (1855).1 Under the Treaty, the people of the
Yakama Nation agreed to cede a majority of their lands to the
United States in return for certain reserved rights. Id. The
Yakama Nation also agreed to live on reserved lands held in
trust by the United States. Id.
A. King Mountain Tobacco Company
King Mountain Tobacco Company is owned and operated
by Delbert Wheeler, an enrolled member of the Yakama
Nation. King Mountain initially obtained all of its tobacco
from an entity in North Carolina. Today, King Mountain
grows some of its tobacco and manufactures its tobacco
products, in part, on trust lands within the boundaries of the
Yakama Nation. In 2009, approximately 3.1% of the tobacco
used in King Mountain’s products was grown on trust lands.
By 2010, that amount had risen to 9.5%. In 2011, it rose
again, to 37.9%.
King Mountain ships its tobacco crop to Tennessee where
it is threshed. From there, the tobacco is sent to a factory in
North Carolina where more tobacco is added to the
reservation tobacco. This process is called “blending.” After
1
The Treaty refers to the tribe as the “Yakamas” but the parties use
“Yakama,” so we adopt that convention.
KING MOUNTAIN TOBACCO CO. V. MCKENNA 5
blending is complete, the tobacco is sent back to the
reservation. King Mountain sells cigarettes and other tobacco
products on the reservation, throughout Washington, and in
about sixteen other states.
B. Washington’s Escrow Statute
In 1998, forty-six states, the District of Columbia, and
five United States territories settled a lawsuit against four
major cigarette manufacturers, creating a Master Settlement
Agreement (MSA). The MSA requires the manufacturers to
make substantial annual cash payments to the settling states
and territories, in perpetuity, to offset the increased cost to the
health care system created by smoking. In return, the
manufacturers obtained a release of specified past and future
tobacco-related claims against them.
Not all cigarette manufacturers joined the MSA, either
initially or later. The states feared that these non-
participating manufacturers (NPMs) would become insolvent
against future liability for smoking-related health care costs.
Because of this concern, many states adopted escrow statutes.
The escrow statutes require NPMs to either join the MSA or
pay into a qualified escrow fund. See, e.g., Wash. Rev. Code
§ 70.157.020(b) (2013).
Washington adopted an escrow statute to offset smoking-
related health care costs caused by NPMs. Id. § 70.157.005.
For each qualifying unit of tobacco sold, NPMs must make a
flat-fee payment into an escrow fund. Id. § 70.157.020(b)(1).
The NPMs earn interest on the escrow account balances. Id.
§ 70.157.020(b)(2). The money in the escrow account may
be released only: (1) to pay a judgment or settlement; (2) as
a refund to the NPM for overpayment to the account; or (3)
6 KING MOUNTAIN TOBACCO CO. V. MCKENNA
as a refund to the NPM after the funds have been in the
account for 25 years. Id.
King Mountain initially complied with Washington’s
escrow statute; but in 2011, it filed this lawsuit to contest its
obligation to comply.
C. The District Court’s Order
Appellants and the State filed cross-motions for summary
judgment in district court. Appellants offered evidence of the
Yakama people’s understanding of the 1855 Treaty to support
their claim that the Treaty is an express federal law that
exempts King Mountain’s activities from state economic
regulation. The district court made findings regarding how
Washington’s escrow statute operates and regarding King
Mountain’s business.
The district court began its analysis by observing: “It is
well-settled that a state can regulate (i) off-reservation
transactions conducted by Native Americans; (ii) on-
reservation sales to persons other than Native Americans; and
(iii) impose certain requirements upon Native Americans in
regulating those sales.” It also explained, quoting Mescalero
Apache Tribe v. Jones, 411 U.S. 145, 148–49 (1973):
“Absent express federal law to the contrary, Indians going
beyond reservation boundaries have generally been held
subject to nondiscriminatory state law otherwise applicable
to all citizens of the State.”
The district court found that “King Mountain’s operations
involve extensive off-reservation activity” and that “the
cigarettes and roll-your-own tobacco products produced by
King Mountain are not principally generated from the use of
KING MOUNTAIN TOBACCO CO. V. MCKENNA 7
reservation land and resources.” Rejecting King Mountain’s
argument to the contrary, the district court concluded:
“Washington[’s] escrow statutes are non-discriminatory state
laws of general application.” Applying Mescalero, the court
ruled that “King Mountain ha[d] not met its burden of
showing express federal law exempting its business from
state regulation nor [did] it offer case authority invalidating
application of any state’s escrow statute based on an Indian
Treaty or any other federal law.” The district court granted
the State’s motion for summary judgment and denied
Appellants’ motion.
STANDARD OF REVIEW
This court reviews a district court’s order granting
summary judgment de novo. Ramsey v. United States,
302 F.3d 1074, 1077 (9th Cir. 2002). Viewing the evidence
in the light most favorable to the nonmoving party, we
determine “whether there are any genuine issues of material
fact and whether the district court correctly applied the
relevant substantive law.” Id. We also review de novo the
interpretation and application of treaty text. Cree v. Flores,
157 F.3d 762, 768 (9th Cir. 1998) (Cree II). “Underlying
factual findings, including findings of historical fact, are
reviewed for clear error.” Id.
DISCUSSION
Appellants argue that summary judgment in favor of the
State was improper because the district court failed to
consider evidence showing how the Yakama people
understood the Treaty in 1855. They also argue that the
Yakama Treaty is express federal law exempting the Yakama
people from the Washington escrow statute. In response, the
8 KING MOUNTAIN TOBACCO CO. V. MCKENNA
State counters that its escrow statute is a nondiscriminatory
law that applies to the Yakama people’s off-reservation
activities because there is no express federal law that prevents
its application.
The Supreme Court has explained: “Absent express
federal law to the contrary, Indians going beyond reservation
boundaries have generally been held subject to
nondiscriminatory state law otherwise applicable to all
citizens of the State.” Mescalero, 411 U.S. at 148–49.
Accordingly, our court has explained: “[A] state’s authority
to tax tribal members is limited depending on the subject and
location of the tax.” Ramsey, 302 F.3d at 1078. We also
have explained that federal laws, such as treaties, ordinarily
must be interpreted in the light most favorable to Indians:
When a court interprets a state’s taxation of
Indians’ off-reservation activities, the court
determines if there is an express federal law
prohibiting the tax. The federal law must be
interpreted in the light most favorable to the
Indians, and extrinsic evidence may be used to
show the federal government’s and Indians’
intent. Unlike the federal standard, there is no
requirement to find express exemptive
language before employing the canon of
construction favoring Indians.
Id. at 1079. But “even though legal ambiguities are resolved
to the benefit of the Indians, courts cannot ignore plain
language that, viewed in historical context and given a fair
appraisal, clearly runs counter to a tribe’s later claims.” Or.
Dep’t of Fish & Wildlife v. Klamath Indian Tribe, 473 U.S.
KING MOUNTAIN TOBACCO CO. V. MCKENNA 9
753, 774 (1985) (citations and internal quotation marks
omitted).
A. Washington’s escrow statute is a nondiscriminatory
law and King Mountain’s activities are largely off-
reservation.
As an initial matter, Mescalero requires that we determine
whether Washington’s escrow statute is discriminatory and
whether King Mountain’s activities go beyond the boundaries
of the reservation. See 411 U.S. at 148–49. Appellants argue
that Washington’s escrow statute is discriminatory, without
explaining what the statute discriminates against.2 Their
citation to Hunt v. Washington State Apple Advertising
Commission, 432 U.S. 333, 335 (1977), is inapposite because
they provide no evidence to suggest that the Washington
escrow statute treats in-state cigarette manufacturers
differently than out-of-state manufacturers. We conclude the
district court correctly determined that Washington’s escrow
statute is nondiscriminatory.
Appellants also argue that the district court erred by
creating a new rule requiring courts to determine whether a
product is principally generated from reservation land before
extending the Treaty protections. The district court found
that “King Mountain’s operations involve extensive off-
reservation activity.” It also found that “the cigarettes and
roll-your-own tobacco products produced by King Mountain
are not principally generated from the use of reservation land
2
At oral argument, Appellants took the position that the statute
discriminates against the Yakama because it requires the Tribe to waive
its treaty rights. This argument is circular; it presupposes that the Treaty
exempts the Yakama from Washington’s escrow statute.
10 KING MOUNTAIN TOBACCO CO. V. MCKENNA
and resources.” This was a proper application of Mescalero
by the district court, not a new test. It was appropriate for the
court to make a preliminary determination about whether
King Mountain’s activities were “off-reservation” for
purposes of applying the test from Mescalero. See Ramsey,
302 F.3d at 1079.
The district court found that King Mountain ships its
tobacco crop to Tennessee where it is threshed. Then the
tobacco is sent to a factory in North Carolina where more
tobacco is purchased and blended with reservation tobacco.
In 2011, less than half of the tobacco in King Mountain’s
products was grown on the reservation. After the blending
process, the tobacco is sent back to the reservation, where
much of it is made into cigarettes. King Mountain sells its
tobacco products throughout Washington and in about sixteen
other states. Appellants do not argue that any of the district
court’s factual findings were clearly erroneous, see Cree II,
157 F.3d at 768, and we find no support for Appellants’
implied argument that the district court clearly erred by
finding that King Mountain’s tobacco-related activities were
largely “off-reservation.”
Having concluded that Washington’s escrow statute is
nondiscriminatory and that King Mountain’s tobacco related
activities take place largely off-reservation, Mescalero
requires that we decide whether there is an express federal
law that exempts King Mountain’s activities from state
economic regulation. See Mescalero, 411 U.S. at 148–49; see
also Ramsey, 302 F.3d at 1077, 1079; Cree v. Waterbury,
78 F.3d 1400, 1403 (9th Cir. 1996) (Cree I).
KING MOUNTAIN TOBACCO CO. V. MCKENNA 11
B. The plain text of the Yakama Treaty does not create
a federal exemption from Washington’s escrow
statute.
Appellants argue that the district court erroneously
applied the standard for determining whether a federal law,
rather than a state law, applies to an Indian tribe. They also
argue that the Yakama Treaty is express federal law that
exempts King Mountain from Washington’s escrow statute.
The State responds that the district court correctly applied the
Mescalero test and concluded that the Treaty is not an express
federal law that exempts King Mountain from state economic
regulations. We agree with the State.
Contrary to King Mountain’s position, the district court
did not apply the “express exemptive language” test for
determining whether a federal law applies to the tribe. See
Ramsey, 302 F.3d at 1078–79 (explaining the differences
between the “express exemptive language” test, which applies
to federal laws, and the “express federal law” test, which
applies to state laws). The district court applied the test from
Mescalero to determine whether there was an “express
federal law exempting [King Mountain’s] business from state
regulation.” The district court did not engage in an
exhaustive review of the meaning the Yakama would have
given to the Treaty as of 1855 because it reasoned that “King
Mountain can prove no set of facts in support of the claim
that Washington’s escrow statutes are in conflict with the
Treaty or federal law which would entitle Plaintiffs to
relief.”3
3
The State argues that Appellants did not preserve their factual inquiry
argument regarding the meaning of the Yakama Treaty to the Yakama
people. In its motion for summary judgment, King Mountain repeatedly
12 KING MOUNTAIN TOBACCO CO. V. MCKENNA
Because the Washington escrow statute is a
nondiscriminatory law, Appellants bear the burden of proving
that the Yakama Treaty is an express federal law that exempts
it from Washington’s escrow statute. See, e.g., Washington
v. Confederated Tribes of Colville Indian Reservation,
447 U.S. 134, 160 (1980) (“The Tribes, and not the State as
the District Court supposed, bear the burden of showing that
the [state] recordkeeping requirements which they are
challenging are invalid.”). “A treaty can constitute such an
express federal law.” Cree I, 78 F.3d at 1403. As we have
noted, there is no requirement to find express exemptive
language before employing the canon of construction
favoring Indians under the state standard. Ramsey, 302 F.3d
at 1079. But “[t]he canon of construction regarding the
resolution of ambiguities in favor of Indians . . . does not
permit reliance on ambiguities that do not exist; nor does it
permit disregard of the clearly expressed intent of Congress.”
South Carolina v. Catawba Indian Tribe, Inc., 476 U.S. 498,
506 (1986); see also Klamath Indian Tribe, 473 U.S. at 774
(“[E]ven though legal ambiguities are resolved to the benefit
of the Indians, courts cannot ignore plain language that,
viewed in historical context and given a fair appraisal, clearly
runs counter to a tribe’s later claims.” (citations and internal
quotation marks omitted)).
stated that an Indian Treaty must be construed in favor of the Indians, and
it summarized the evidence that it submitted in support of this argument.
After reviewing the record, we conclude that the State’s waiver claim is
not supported. Appellants continually argued that the district court had to
consider the meaning of the Treaty to the Yakama people, and that it
believed there were no disputed facts about how the Yakama people
understood the Treaty in 1855. These arguments are not inconsistent and
they were preserved.
KING MOUNTAIN TOBACCO CO. V. MCKENNA 13
The Indian canon of construction does not alter the
outcome in this case because the relevant text of the Yakama
Treaty is not ambiguous and the plain language of the Treaty
does not provide a federal exemption from the Washington
escrow statute.
1. Article II of the Yakama Treaty does not
constitute an express federal law that exempts
King Mountain from Washington’s escrow statute.
Article II of the Yakama Treaty establishes the physical
boundaries of the Yakama reservation and prohibits non-
Indians from inhabiting reservation land unless an exception
applies. Article II of the Treaty reads in relevant part:
There is, however, reserved, from the lands
above ceded for the use and occupation of the
aforesaid confederated tribes and bands of
Indians, the tract of land included within the
following boundaries, to wit: [Description of
the physical boundaries of the reservation]
All which tract shall be set apart and, so far as
necessary, surveyed and marked out, for the
exclusive use and benefit of said confederated
tribes and bands of Indians, as an Indian
reservation; nor shall any white man,
excepting those in the employment of the
Indian Department, be permitted to reside
upon the said reservation without permission
of the tribe and the superintendent and agent.
And the said confederated tribes and bands
agree to remove to, and settle upon, the same,
within one year after the ratification of this
14 KING MOUNTAIN TOBACCO CO. V. MCKENNA
treaty. In the mean time it shall be lawful for
them to reside upon any ground not in the
actual claim and occupation of citizens of the
United States; and upon any ground claimed
or occupied, if with the permission of the
owner or claimant.
Treaty with the Yakamas, art. II, 12 Stat. 951 (1855).
Appellants argue that, under the Treaty “the Yakama
people were to be the sole residents of the reserved lands
(‘use and occupation’) and were to be the sole beneficiaries
of the resources cultivated on the reserved lands (‘exclusive
use and benefit’).” They conclude that as understood by the
Yakama, the Treaty “would preserve [the tribe’s] traditional
practices of using their lands for growing tobacco and trading
that product with other Yakama and non-Yakama alike,
without economic restrictions.”
Article II defines the geographic boundaries of the
Yakama reservation, and reserves it for Yakama use and
benefit, while prohibiting non-Indians from living on the
reserved land. The “use and occupation” phrase describes the
agreement that the reserved land would be dedicated for the
Yakama to live on and work on: “There is, however,
reserved, from the lands above ceded for the use and
occupation of the aforesaid confederated tribes and bands of
Indians, the tract of land included within the following
boundaries.” Id. (emphasis added). The “exclusive use and
benefit” language concerns who may live on reservation land:
“All which tract shall be set apart and, so far as necessary,
surveyed and marked out, for the exclusive use and benefit of
said confederated tribes and bands of Indians, as an Indian
reservation; nor shall any white man . . . be permitted to
KING MOUNTAIN TOBACCO CO. V. MCKENNA 15
reside upon the said reservation without permission . . . .” Id.
(emphasis added).
There is no ambiguity in Article II requiring us to decide
how the Treaty would be interpreted with regard to the rights
of the Yakama to trade outside the reservation. Washington’s
escrow statute does not interfere with King Mountain’s ability
to grow tobacco on reservation lands and benefit from the
sale of its tobacco products. Further, Supreme Court
authority precludes interpreting the Yakama Treaty in the
manner urged by Appellants; “exclusive benefit” cannot
mean that King Mountain is free to sell cigarettes to non-
Indians and nonmembers without any regulation by the state.
See Confederated Tribes of Colville Indian Reservation,
447 U.S. at 151.
In Confederated Tribes of Colville Indian Reservation, the
Supreme Court explained that a “State may sometimes
impose a nondiscriminatory tax on non-Indian customers of
Indian retailers doing business on the reservation.” Id. In
that case, the Court held that cigarette sales by a tribe to non-
Indians and nonmember Indians were taxable by the state,
even though sales to tribal members were not taxable by the
state and the tribe imposed its own tax. Id. at 155–56,
160–61. The Court explained that state taxes were not
preempted by federal law and did not interfere with tribal
self-government. Id. at 155–56. In Colville, the Supreme
Court specifically addressed the same treaty at issue here, the
Yakama Treaty of 1855. Id. at 156.
The Washington escrow statute is not a tax. King
Mountain earns interest on the money held in escrow and may
receive a refund after 25 years. Wash. Rev. Code
§ 70.157.020(b)(2) (2013). This provision is significant
16 KING MOUNTAIN TOBACCO CO. V. MCKENNA
because the escrow scheme imposes a less significant burden
on trade than the tax approved by the Supreme Court in
Colville. Further, Colville involved activity by the Yakama
tribe, 447 U.S. at 139–40, whereas the activity here is by a
private company owned by one Yakama tribal member. We
fail to see how a cigarette tax on tribal activity would not be
preempted by the Yakama Treaty, but a less intrusive escrow
requirement on a private business owned by one tribal
member would be preempted.
Although a treaty may constitute an express federal law
that could exempt tribal activity from state economic
regulation, Cree I, 78 F.3d at 1403, Article II of the Yakama
Treaty does not provide such an exemption in this case.
Article II does not address trade, and there is no ambiguity
that required the district court to conduct an exhaustive
review to discern the meaning the Yakama people would
have given to the Treaty at the time of its signing. We agree
with the district court that Article II does not provide an
express federal exemption from Washington’s escrow statute.
2. Article III of the Yakama Treaty does not
constitute an express federal law that exempts
King Mountain from Washington’s escrow statute.
Article III of the Yakama Treaty reserves to the tribe the
right to travel on public highways and the right to fish and
hunt. Appellants claim that “[t]his Court’s controlling case
law has interpreted Article III as unequivocally prohibiting
imposition of economic restrictions or pre-conditions on the
Yakama people’s Treaty right to engage in the trade of
tobacco products.” The language of Article III and our
precedent do not support this claim. The relevant part of
Article III reads:
KING MOUNTAIN TOBACCO CO. V. MCKENNA 17
And provided, That, if necessary for the public
convenience, roads may be run through the
said reservation; and on the other hand, the
right of way, with free access from the same
to the nearest public highway, is secured to
them; as also the right, in common with
citizens of the United States, to travel upon all
public highways.
Treaty with the Yakamas, art. III, 12 Stat. 951 (1855). As
shown by the plain text of Article III, the Treaty reserved to
the Yakama the right “to travel upon all public highways.”
Nowhere in Article III is the right to trade discussed.
Cree I and Cree II involved the same Article III provision
of the Yakama Treaty. Cree II, 157 F.3d at 764; Cree I,
78 F.3d at 1402. In Cree I, our court explained that the
Yakama Nation brought suit to prevent the State of
Washington “from applying state truck license and permit
fees to members of the Yakama tribe.” 78 F.3d at 1401. The
district court granted summary judgment in favor of the
Yakama Nation “on the ground that the phrase ‘in common
with,’ as used in the Treaty in reference to the highway right”
precluded imposition of those fees. Id. at 1401–02. Our
court reversed the district court’s ruling and remanded for
fact-finding regarding the meaning the parties would have
given to the highway right at the time the Treaty was
executed. Id. at 1404.
On remand, the district court conducted an extensive
review of the facts and made several findings. Cree II,
157 F.3d at 766. It granted summary judgment in favor of the
Yakama Nation after concluding that the Treaty provided an
exemption for the Yakama people from the Washington truck
18 KING MOUNTAIN TOBACCO CO. V. MCKENNA
license and permit fees. Id. at 764. We affirmed the district
court’s decision. Id. at 774. We reasoned that the Treaty was
evidence of the importance of the right to travel to the
Yakama, id. at 772, and concluded that “the Treaty clause
must be interpreted to guarantee the Yakamas the right to
transport goods to market over public highways without
payment of fees for that use,” id. at 769.
This right was reaffirmed in United States v. Smiskin,
487 F.3d 1260 (9th Cir. 2007). Smiskin involved Yakama
members who were criminally indicted for trafficking in
contraband cigarettes. Id. at 1262. The federal statute
criminalizing this conduct incorporated state law definitions
and notice requirements. Id. at 1263. We affirmed a district
court order dismissing the indictment because the Yakama
Treaty exempted the Yakama people from complying with
state law notice requirements. Id. at 1272. We concluded
that “[a]pplying [that] type of requirement to the Yakamas
imposes a condition on travel that violates their treaty right
to transport goods to market without restriction.” Id. at 1266
(emphasis added).
We had previously found ambiguity in Article III’s right
to travel, and required application of the Indian canon of
construction to clarify the extent of that right. See Cree I,
78 F.3d at 1404. But the right to travel is express in Article
III of the Yakama Treaty, and the Cree cases involved the
right to travel (driving trucks on public roads) for the purpose
of transporting goods to market. In Smiskin, we rejected the
government’s argument that the right to travel did not apply
when the Yakama were engaged in commerce. 487 F.3d at
1266–67 (“[T]he right to travel overlaps with the right to
trade under the Yakama Treaty such that excluding
commercial exchanges from its purview would effectively
KING MOUNTAIN TOBACCO CO. V. MCKENNA 19
abrogate our decision in Cree II and render the Right to
Travel provision truly impotent.”). These cases clarified the
extent of the right to travel found in Article III of the Yakama
Treaty.
But there is no right to trade in the Yakama Treaty. The
Indian canon of construction “does not permit reliance on
ambiguities that do not exist; nor does it permit disregard of
the clearly expressed intent of Congress.” Catawba Indian
Tribe, 476 U.S. at 506. The district court did not err by
granting summary judgment to the State without making
findings about the historic meaning of the Treaty to the
Yakama people, because the Treaty’s meaning to the Yakama
people cannot overcome the plain and unambiguous text of
the Treaty. See Klamath Indian Tribe, 473 U.S. at 774.
Article III does not provide an express federal exemption
from Washington’s escrow statute.
CONCLUSION
Washington’s escrow statute is a nondiscriminatory law
that applies to off-reservation activity. Appellants failed to
prove that the Yakama Treaty is an express federal law that
exempts King Mountain from Washington’s escrow statute.
The plain language of the Yakama Treaty does not provide an
express federal exemption from the escrow statute. And the
district court did not err by declining to make findings
regarding the Treaty’s meaning to the Yakama people at the
time of its signing, because the meaning to the Yakama
people cannot overcome the clear words of the Treaty. We
affirm the district court’s order granting summary judgment
20 KING MOUNTAIN TOBACCO CO. V. MCKENNA
in favor of the State and dismissing Appellants’ motion for
summary judgment.
AFFIRMED.