Every so often a seemingly mundane United States Supreme Court case comes along to provide valuable lessons for those of us who perform the normal day-to-day tasks of a civil law practice, like trying to write clear and unambiguous contracts. Case in point, Washington State v. Cougar Den, Inc, decided March 19, 2019.
Let’s say you sell a large tract of land to the Government, reserving to yourself a portion of the land to live on. You know the Government is going to build roads on the land, so you also reserve by contract the right “in common with” everyone else, to travel on these roads. After having built the roads, the Government, many years later decides to make one of them a toll road. Does the contract mean: (a) that you can use the road and pay the same toll as everyone else in a non-discriminatory manner; or (b) you can use the road toll-free?
A similar question was at the heart of the Cougar Den case. The contract in issue was actually a treaty signed in 1855 between the United States and the Yakama Nation of Indians. Under the treaty the Yakamas granted the United States a huge area of land east of the Cascades in what is now Washington State (about one quarter of the area of the state, according to the Court). In return they retained a smaller area as a reservation and various privileges and rights including the continued use of ancestral hunting and fishing sites and “the right in common with the citizens of the United States, to travel upon all public highways.”
The State of Washington passed a tax that applied to imports of fuel by tanker truck from outside the State. The defendant, Cougar Den, was a company that would buy gas in Oregon, truck it to the reservation in Washington, and sell it to gas stations located on the reservation. They claimed the right to do so free of the Washington State tax, so at issue was the proper interpretation of the treaty.
The Court ultimately split 5-4. The dissenters in two opinions written by Chief Justice Roberts and Justice Kavanaugh, focused on the words of the treaty. They emphasized that a plain reading of the words “in common with” doesn’t imply any special treatment and simply seems to indicate that as long as any laws or regulations are applied in a non-discriminatory manner to the Yakamas, they would have to comply.
Seems pretty straightforward, doesn’t it? Well, the other five Justices disagreed and explained their reasoning in two opinions written by Justices Breyer and Gorsuch (in the interest of simplicity, collectively called the Majority in this article). They point out that treaties should be interpreted like contracts, so their task was to divine the intent of the parties.
In this case, specifically, the question was: what did the Yakamas understand the treaty to mean in 1855? The task was not, as Justice Gorsuch cautioned, to answer that question “in light of new lawyerly glosses conjured up for litigation a continent away and more than 150 years after the fact.”
The Majority Justices treated the problem using some of the normal techniques of contract interpretation. For example, the treaty was written by the United States, so under normal contract interpretation principles, ambiguity should be interpreted against the drafters. And the drafters wrote it in English, which none of the Yakamas spoke, wrote or read. It had apparently been negotiated in Chinook, a very limited trading jargon, which also was not the Yakamas’ native language. Furthermore, although the Court does not use the word “duress,” the Yakamas were under enormous pressure to give away this land because the Government wanted it badly in order to build roads to connect the settlements on the Coast to the rest of the country.
The Majority was aided by considerable extrinsic evidence as to the background and meaning of the treaty. Thus, in several previous cases factual findings had been made of the parties’ intent at the time. In fact, the U.S. Supreme Court in 1905 had interpreted similar “in common with” language relating to the Yakamas’ traditional fishing rights to give them special privileges that other persons did not have. Specifically, that case ruled that the Yakamas were not subject to anti-trespassing laws in their attempts to reach their traditional fishing grounds, although such laws would have applied to other persons seeking to fish in the same areas.
In addition, there was evidence that the Yakamas were a trading nation, and that trade with other groups in the Pacific Northwest and to the east was essential to their culture and way of life at the time of the treaty. Thus, preserving access over the land that they were giving away was vitally important to them
So, rather than simply accepting the “plain meaning” of the English words in the contract, the Justices in the Majority concluded that the Yakamas actually bargained to have no burden on their right to travel off the reservation with trade goods, and that’s what the words “in common with” actually meant to them at the time. Thus, the Washington State tax could not be applied to them.
Even a casual reader can infer differing degrees of compassion for the plight of the Yakamas in 1855 from the Majority and the Dissenters. This is shown clearly in their contrasting interpretations of whether it would have been reasonable for the Yakamas simply to have accepted access to the new off-reservation roads on the same basis as everyone else. Justice Gorsuch noted that the Yakamas would not have been expected to give away a huge tract of land in return merely for the right not “to be made prisoners on their reservation.” Justice Kavanaugh, however, had much less sympathy for them, stating “[t]o be sure, the treaty as negotiated and written may not have turned out to be a particularly good deal for the Yakamas.”
The Majority and Dissent also have some debates about how a decision that the tax would be an invalid burden upon the Yakamas’ right to travel would apply to other laws, like health and safety laws. Neither side wanted to exempt the Yakamas from all highway regulations, and this posed a doctrinal difficulty for the Majority. Without explaining exactly why, the Majority concluded the Yakamas would be subject to normal laws relating to vehicle safety, speeding, etc., and noted, in any event, these issues had actually not come up in the century and a half of the lifetime of the treaty.
So, the lesson from this case is that although normally the plain language of a contract will prevail, there are other occasions when, though seemingly unambiguous, the words of a contract do not capture the true intent of the parties. Although the Supreme Court routinely applies exhaustive textual analysis to the words of a statute or regulation, it is rare for them to get into the nitty-gritty of contract interpretation. In this case, the 5-4 split illustrates their contrasting views on how much context should be implied into the wording of a contract.