May it please the court. Thank you, Your Honor. I'm Randolph Barnhouse here from New Mexico on behalf of the Accommonation and the King Mountain Tobacco Company. And this argument gives me an opportunity today to fix a gaff a few years ago, Judge Graber, and an argument to San Francisco. You were kind enough to point out your connections to New Mexico. And I should have been thanking you for that for your comments. So thank you today. And now my mind can rest. I'll come to Seattle. Follow us all around the circuit. Your Honor, this is a Yakima treaty case decided on summary judgment. That's the posture
. Summary judgment against the Accommonation and the tribal corporation on a state economic regulation, notwithstanding the protections of the Yakima Treaty of 1855. We identified three issues in briefing. The first issue I want to talk about is that is there expressed federal law in this case? The District Court held the treaty is not expressed federal law, although over about a hundred years of precedent from this Court in the Supreme Court says that it is expressed federal law that limits the state of Washington's ability to regulate activity off the reservation. The second issue was whether the District Court failed when it made no factual findings regarding the Yakima Treaty and its meaning, both at the time and its meeting to the Yakima people, the kind of factual findings, 90 of which were made in Creole, hundreds of which were made in the USP Washington. The third issue is whether the treaty is limited to trade goods principally generated from reservation land and resources. The state did not address and is conceded this third issue, but we felt the District Court aired when it made that holding. The first two issues, as to those first two issues, a host of cases in this Court in the US Supreme Court have confirmed that Washington's regulatory authority is limited by the Yakima Treaty. What specifically in the Yakima Treaty relates to the particular law that we're looking at here? Those would be both Article 2 of the Treaty, which guarantees exclusive use and benefit. What about this denies them the use of benefit of the land? Nobody else is growing these products. Nobody else is selling these products. Nobody is trampling on their crops
. They're using and benefiting from whatever is grown. They are and they're also manufacturing products on these trust-allotted lands using local labor and local resources, and they can't take those then to market to trade. And in many respects, the article says they can't take them to market to trade. I don't understand that. It's a state of Washington at all. I'm sorry, the state of Washington says, unless you comply with our regulations. Which apply to everybody who does this type of business? No other participating manufacturer, non-participating manufacturer has to forego treaty rights to do that. So there's a discriminatory authority. But that assumes the answer that there is a treaty right that pertains to this. Exactly, you're right. That's where I have difficulty
. I don't see that the treaty has anything to do with what's going on here. The treaty talks about a physical location, a geography that is for the exclusive use and benefit of the Accommodation, and nobody's interfered with that. They're using it. They're benefiting from it. But in terms of general laws of application to other people doing the same thing, I mean, let's suppose they were manufacturing aspirin and there were safety regulations that said aspirin have to be of a certain purity. It's a general regulation. There's nothing about the treaty that has anything to do with it. That's how I see it. Where are we wrong? That's the way lawyers would read this. What this court has said is it's not the words to learn it lawyers. It's not the words to even to the US negotiators
. It's what those words meant to the Accommod people at the time and now. The problem here, I'm not saying. I mean, you're factoring cigarettes then, sending them out to North Carolina and everywhere and bring. So this whole scenario was never imagined in 18, whatever it was. 1855, you're on it. That's right. But what was imagined is that the Accommod were going to be, they gained an economic benefit here. They gained a competitive advantage through this treaty. Not just for what they were doing then. No court has helped into that. Smithkin addresses that exactly
. In Smithkin, the cigarettes weren't even made on the reservation. They were brought in from Idaho and the court held there that the traveling trade provisions of the treaty. That had to do with transportation. This doesn't have anything to do with transportation. So the whole transportation segment of the treaty seems beside the point. I'm only speaking for myself here. But you're not alleging that there's any interference with transportation. You're alleging that the escrow money shouldn't be withheld. No, you're on it. We are alleging an infringement of transportation because there's the course of health. It's an article two first
. I think that's what Dr. Draper trying to get you to do. Article three is a different matter. So let's keep your argument corralled because I'm having a hard time getting there as well. I read article two. It sounds like the way Judge Graber is just speaking for myself. I read that article to talk about a geographic description of what was going to be negotiated. So where do you find support in article two, please? If you look at just at the words on the face of the treaty or the use and benefit of exclusive exclusive use. Right. So is your argument that because it says for the exclusive use and benefit of the nation that they shouldn't have to fork over any part of the sales proceeds from what they generate on the land. Is that it? Your honor
. That's what's missing. Hell. But I guess my argument is we don't even get there because the district court didn't get there. The district court didn't say, okay, you've got a state regulation and you've got a treaty that's expressed federal law. I district court need to make findings of fact along the lines of what you all are. Only if there's an ambiguity. If there's no ambiguity, there's no place for findings. I mean, is your argument that in every case the district court has to make, has to have an evidentiary hearing and make findings of fact? I believe based on the 100 years of precedent in every every Yakima treaty case. And this is a separate. This isn't any treaty or a tree. This is the Yakima treaty
. In every Yakima treaty case, the court would need to look at the court meets. It meets the first requirement. My question is quite specific. Yes. Do you think you needed to have any district court judge would need to have an evidentiary hearing every time there's an issue about the applicability of a state law to activities involving the Yakima treaty? Every district court would have to make evidentiary findings, Your Honor. I don't know that an evidentiary hearing is necessary. Okay. So that's helpful and I appreciate that. I don't mean to cut you off with your time sticking out. I want to try to help get get there. So in this case, what the judge did, he said, I'm paraphrasing, there is no set of facts that would change this legal ruling
. So why was that wrong? Because as Judge Graber said in 1855, they weren't manufacturing cigarettes on this reservation. But under this court's precedent, it wouldn't matter what they were doing at that time. And it had the court looked at the facts, what the facts show is that the negotiators contemplated future. The whole idea here was to help the Yakima Indians through having market advantages that they'd always enjoyed. Keep those advantages. They give up seven. I disagree with the proposition that a general law of a state can apply to goods and sales of goods that come from the Yakima nation. No. I do disagree. I do disagree. All right
. So in my example about the manufacture of Asperin, there's no requirement to have a certain purity level. If they can get an economic advantage by making it cheaper and it doesn't. So that kind of law wouldn't apply either. No, because that kind of law would be purely regulatory. And is the court again in Smithskin noted one, this one isn't purely regulatory. In Smithskin, those kind of health and safety regulations would apply. And two, the Yakima nations not selling marijuana. They're not selling narcotics. They are selling a legal product here. It's legal in Washington. The so marijuana too now. That's easy for us to point the finger at Asperin, but the fact is the Yakima nation, as noted in Smithskin, is a good neighbor and they've not engaged in that. But no, if it was purely regulatory and that's what the court to leave it to you. Where do you draw the line? This is not a tax. It is a type of, it's somewhere between the pure health and safety and the tax. It's somewhere in that other world. So where do you draw the line? If it, if it helps the state raise money, it's not purely regulatory. And nothing about this, nothing about the scheme that the state has set up impacts the content, the nicotine level. Any of the thing about that pack of cigarettes, that pack of king-mounted cigarettes is absolutely legal. Other than it, but not if they don't comply with the financial requirements, the listing requirements that make the state of Washington billions of dollars. I'd like to reserve five minutes of my time. Well, now for for rebuttal
. That's easy for us to point the finger at Asperin, but the fact is the Yakima nation, as noted in Smithskin, is a good neighbor and they've not engaged in that. But no, if it was purely regulatory and that's what the court to leave it to you. Where do you draw the line? This is not a tax. It is a type of, it's somewhere between the pure health and safety and the tax. It's somewhere in that other world. So where do you draw the line? If it, if it helps the state raise money, it's not purely regulatory. And nothing about this, nothing about the scheme that the state has set up impacts the content, the nicotine level. Any of the thing about that pack of cigarettes, that pack of king-mounted cigarettes is absolutely legal. Other than it, but not if they don't comply with the financial requirements, the listing requirements that make the state of Washington billions of dollars. I'd like to reserve five minutes of my time. Well, now for for rebuttal. So let me move quickly to the traveling trade provision of Article 3. Article 2 really benefits from Article 3 and they should be read together. But Article 3, it seems clear under Cree and under Smyskin that the district court needed to make factual findings or adopt the Cree factual findings. But it had to get, it had to get past that first step. In other words, the district court said laws of general applicant, non-discriminatory laws of general applicability can be used to regulate Indians off reservation, absent expressed federal law. And why not? What specifically in Article 3, are you relying on? The language that says that as a result of trading 17,000 square miles of land, the U.S. would have the right to build roads and the Acre would have the right to travel those roads along with other citizens. But that's the difficulty I have to again to help preserve time on the clock. This case isn't about travel. Your Honor, but Smyskin makes clear it's about bringing your goods to market
. So let me move quickly to the traveling trade provision of Article 3. Article 2 really benefits from Article 3 and they should be read together. But Article 3, it seems clear under Cree and under Smyskin that the district court needed to make factual findings or adopt the Cree factual findings. But it had to get, it had to get past that first step. In other words, the district court said laws of general applicant, non-discriminatory laws of general applicability can be used to regulate Indians off reservation, absent expressed federal law. And why not? What specifically in Article 3, are you relying on? The language that says that as a result of trading 17,000 square miles of land, the U.S. would have the right to build roads and the Acre would have the right to travel those roads along with other citizens. But that's the difficulty I have to again to help preserve time on the clock. This case isn't about travel. Your Honor, but Smyskin makes clear it's about bringing your goods to market. They can't, if once they can manufacture suppress all day long. So Council, this doesn't seem to prevent them while I've interrupted you actually, but this doesn't seem to prevent them from bringing goods to market. So can you go to that? They cannot bring their, they cannot bring their goods to Seattle and sell them unless they get on the state directory. They cannot bring them here and sell them. So they could bring them here and take them home. But they otherwise they have to- So it isn't about transportation. It's about the money. Absolutely. This is a- It's not about transportation. It's about money. No, it's about trade
. They can't, if once they can manufacture suppress all day long. So Council, this doesn't seem to prevent them while I've interrupted you actually, but this doesn't seem to prevent them from bringing goods to market. So can you go to that? They cannot bring their, they cannot bring their goods to Seattle and sell them unless they get on the state directory. They cannot bring them here and sell them. So they could bring them here and take them home. But they otherwise they have to- So it isn't about transportation. It's about the money. Absolutely. This is a- It's not about transportation. It's about money. No, it's about trade. The Acamer traders, it's money for this. Here we're talking about money for the state and money in our free enterprise system. The Acamer have always been in veteran traders, trading not only their own goods, but goods from all over. And this was recognized of the 11 treaties that were in- The argument is correct. How could Washington tax any of their goods, any other activities off off-reservation, impose any true tax? Washington can- It could- Could- Can't. Off-reservation. Off-reservation on the Acamer. Now that doesn't mean they can't have a gross receipts. They can't have a gross receipts. They can't have a gross receipts. They can't have a gross receipts
. The Acamer traders, it's money for this. Here we're talking about money for the state and money in our free enterprise system. The Acamer have always been in veteran traders, trading not only their own goods, but goods from all over. And this was recognized of the 11 treaties that were in- The argument is correct. How could Washington tax any of their goods, any other activities off off-reservation, impose any true tax? Washington can- It could- Could- Can't. Off-reservation. Off-reservation on the Acamer. Now that doesn't mean they can't have a gross receipts. They can't have a gross receipts. They can't have a gross receipts. They can't have a gross receipts. They can't have a gross receipts. They can't have a gross receipts. The U.S. Supreme Court said you can't stop the Indians from selling the cigarettes, but you can- But the tax had not been the Indians. The taxes on the people who buy the Indians products. And the Indians can- The Colville says this. The U.S. says this. The Indians can be required to do minimal non-intrusive record keeping
. They can't have a gross receipts. They can't have a gross receipts. The U.S. Supreme Court said you can't stop the Indians from selling the cigarettes, but you can- But the tax had not been the Indians. The taxes on the people who buy the Indians products. And the Indians can- The Colville says this. The U.S. says this. The Indians can be required to do minimal non-intrusive record keeping. But also that the tax and those circumstances under Colville for example is much more burdensome than what we're talking about here, right? Not at all, Your Honor. There are millions and millions of dollars in S. Pro- The State makes billions of dollars here. The tax in Colville was at the retail level. This is at the manufacturing level. I'd like to reserve the rest of my- You may do that. Councilor Mike Correct- Oh, do you want to have an opportunity to state your appearance first? Yes, Your Honor. May please the court. My name is David Hankins. I'm Senior Council and the attorney is Josh Weissman and we represent the Attorney General Robert Ferguson in this case. Thank you
. But also that the tax and those circumstances under Colville for example is much more burdensome than what we're talking about here, right? Not at all, Your Honor. There are millions and millions of dollars in S. Pro- The State makes billions of dollars here. The tax in Colville was at the retail level. This is at the manufacturing level. I'd like to reserve the rest of my- You may do that. Councilor Mike Correct- Oh, do you want to have an opportunity to state your appearance first? Yes, Your Honor. May please the court. My name is David Hankins. I'm Senior Council and the attorney is Josh Weissman and we represent the Attorney General Robert Ferguson in this case. Thank you. Am I correct that this money that goes into S. Pro- is then- I want to know what happens to the interest. My understanding is that it doesn't go to the State of Washington while it's in S. Pro- is that right? That's correct, Your Honor. Let me go right into that because that is absolutely incorrect. What Council says that this money goes to the State. This money is based on unit sold and in order to get a unit sold on a cigarette, it has to have a state cigarette tax stamp on that. And then what a Rahul Saeller reports that to the Department of Revenue and from that report they deposit money into an escrow account. They who's the- The cigarette excuse me right? The cigarette manufacturer. Soking Mountain. So then- I'm not participating
. Am I correct that this money that goes into S. Pro- is then- I want to know what happens to the interest. My understanding is that it doesn't go to the State of Washington while it's in S. Pro- is that right? That's correct, Your Honor. Let me go right into that because that is absolutely incorrect. What Council says that this money goes to the State. This money is based on unit sold and in order to get a unit sold on a cigarette, it has to have a state cigarette tax stamp on that. And then what a Rahul Saeller reports that to the Department of Revenue and from that report they deposit money into an escrow account. They who's the- The cigarette excuse me right? The cigarette manufacturer. Soking Mountain. So then- I'm not participating. A non-participating manufacturer. That non-participating manufacturer then gets the interest every year from that. Right and if the money is not spent as I understand it for either for a refund or because there's been a- an event- a liability imposed pursuant to some of their litigation related to the sale of the product or the use of the product I should say. It's refund, isn't it? It's held for 25 years, Your Honor, and the purpose for holding it for 25 years is so that these states they continue to incur significant tobacco-related health issues. So what part of this money ever winds up in the state of Washington's coffers? The only way it will end up in the state's coffers is if the state sews King Mountain for the sale of its cigarettes down the road so that we can show that King Mountain cigarettes caused health care related issues. Right so it'd be liability associated with use of the product which may or may not ever happen? Yes that is that is very possible. All right. Thank you. You're welcome. I want to address a couple of items first if I can and that is that Washington and 45 other states require cigarette manufacturers to share responsibility for health costs associated with the sale of their products to the public. King Mountain seeks to avoid non-discriminatory state laws even though its cigarettes are sold beyond reservation boundaries to consumers and close the same health risks as other manufacturers cigarettes
. A non-participating manufacturer. That non-participating manufacturer then gets the interest every year from that. Right and if the money is not spent as I understand it for either for a refund or because there's been a- an event- a liability imposed pursuant to some of their litigation related to the sale of the product or the use of the product I should say. It's refund, isn't it? It's held for 25 years, Your Honor, and the purpose for holding it for 25 years is so that these states they continue to incur significant tobacco-related health issues. So what part of this money ever winds up in the state of Washington's coffers? The only way it will end up in the state's coffers is if the state sews King Mountain for the sale of its cigarettes down the road so that we can show that King Mountain cigarettes caused health care related issues. Right so it'd be liability associated with use of the product which may or may not ever happen? Yes that is that is very possible. All right. Thank you. You're welcome. I want to address a couple of items first if I can and that is that Washington and 45 other states require cigarette manufacturers to share responsibility for health costs associated with the sale of their products to the public. King Mountain seeks to avoid non-discriminatory state laws even though its cigarettes are sold beyond reservation boundaries to consumers and close the same health risks as other manufacturers cigarettes. Nothing in the treaty suggests that cigarettes can be sold coast to coast free from any regulation and this court should affirm the district court's judgment for two principal reasons. First the district court applied the mezcalar standard correctly. Absent express federal law to the contrary King Mountain is subject to Washington's non-discriminatory laws. No language in either of the articles of the treaty expressly preemps the state statutes regulating cigarette manufacturers and secondly I disagree with my opponent that the this would be a pure regulatory exception and that is the second element because they're required to deposit escrow's for the sales of their cigarettes. So let's go specifically to the Askee one sort of prefootary question and that is is it the state's position that this escrow deposit would apply only off reservation that is if King Mountain sells on reservation to its own to other Yakima people does that apply? And the hypothetical you described your honor? No because we have a moe and call bill we cannot impose either a fee or a tax on a Yakima member on the reservation. But normal tribal members who purchase on the reservation could be subject to this yes? Yes and that's what I was going to get to next. The only difficulty I would suggest to you in that particular instance is that King Mountain would have a difficult time in the record keeping because how would King Mountain know that it was sold because as a manufacturer they may not necessarily know that it was sold from a retailer or tribal retailer to a non-member but does that cause you problems with the application of the law? No you're not no it doesn't and the reason why your honor is because most of the sales where they're going to make their money it's not on the reservation it's getting access to the state certification and selling to Safeway in 7-11 and that's why at the time this lawsuit was filed they were certified in 16 other states so that they could sell their product that's why they could make over $130 million so that's not that there's sales that they that we will have that problem on the reservation we may have to address that but it's right now if it's going beyond the reservation boundaries then those sales have got to be escrowed so even in Washington your honor if they sell to any of the other tribes in the state that have a compact with the state of Washington those cigarettes are also not required to be escrowed because there's no state cigarette tax stamp on those cigarettes so they can sell to any tribe in the state of Washington that has a compact and they don't have to escrow why is that that gives them an economic advantage they don't have to escrow for approximately $5.65 per carton so they're not prejudice they're not in any disadvantage and as in any other cigarette manufacturers selling off the reservation council could I get a focus on opposing council's point about the failure to make findings a fact here where do you draw the line in response to the question I asked earlier about it what point does a district court have to make finding a fact perhaps even have an evidentiary hearing we did remand and Cree yes you did and the the reason you don't have to go there today is because Cree has already established what article three definitely means and this is a question of law and I would point out to the court that King Mountain moved for summary judgment as well so they cross moved for summary judgment and they told the district court judge there is no facts that are in dispute so just a court judge was at the same position saying well if there's no facts and general issues of material fact and dispute then why would I have to issue any findings of fact because ultimately this becomes a question of law so that's why I don't think you have to have a factual finding or remand this back for a factual finding because this is a pure question of law as to what article two and article three me and let's talk about article two the court has already pointed this out but I want to follow up that they're you're absolutely right this language just refers to the physical boundaries of the reservation the the language of the use and occupation and for the exclusive use and benefit even if you were to look at it and construe it from the tribe's perspective that was saying this land is reserved for you and you can grow what you want to on that and then to point out to this court I'm not so sure today that they have the exclusive use if this court is aware the Yakima reservation also has fieland that it's a checkerboard reservation so they don't necessarily if they said that they get that planned and they get the exclusive use that's not true anymore but it doesn't matter for today's argument doesn't it doesn't but I want to point out to the court that if their if King Mountain relies on and says see we have the exclusive use and benefit that's not true and the court congress is already if you will amended that or overruled and this court and Bryndell recognize that as well I don't understand where this argument end that's that's my problem with it that and Your Honor absolutely this argument is councils already said to you this morning that there would be no tax no regular there would only be health care regulations well let me put it is not called bill directly directly contrary to this argument absolutely call bill is directly against this as well as two other United States Supreme Court decisions mescalaryl and cotton petroleum anytime a tribal member goes beyond the reservation boundaries they are subject to all state non-discriminatory laws I want to follow up with Judge Graber's point about manufacturing aspirin and give you a more realistic hypothetical in this case if you were to say that they would not a King Mountain would not be subject to state regulations off the reservation there is nothing to prohibit King Mountain from going to the state fair and handing out packs of cigarettes and giving them to my because none those restrictions and regulations would not apply because they have this treaty where does it end it it ends on the boundaries of the reservation and the states regulations whether they consider them economic or public health if for pure regulatory restrictions those should apply council isn't article three a slightly stickier wicket for you there is this language from smithskin that is emphasized in the briefing the right to transport good to market without restriction yes let's talk about article three smithskin is I think they all have a you can be distinguished and secondly they read to smithskin too broadly smithskin talked about well first let me back up first of all article three just says that you have the right the tribal members have the right to travel on the public highways in common with other citizens both legally and factually that's distinguished here the tribal members can go on and off the reservation and there is no restriction on them what smithskin was talking about is that you have to provide notice to the liquor control board before they could transport their cigarettes it was about transporting and it was about transport there's no there's no restriction here on transporting king mountain can take those cigarettes that they put together on the reservation haul them off the reservation go to yakama and they can sell those to the safeway store there's there's no there's no regulation that's imposed but but my point really is just and I don't make too much of this except that article three talks about transportation and I think you know I've indicated that that's my read in the questions and I think Judge Grieber has spelled although I don't want to speak for her but that's how I read it and yet smithskin does talk about trade the right to transport without restriction to market I mean it's a it's a this is a different shade of gray there there there are there's there's two responses I'd have for you first let me get to the the broad reading it does say that because it wouldn't make sense to transport without having the ability to do something with that transportation and that is where the court looked back and said well obviously you've got to have an ability to trade or exchange in your goods well that doesn't mean I don't think you can read smithskin to say that that then means that you're not subject to any regulation so for example if it did wouldn't that also defeat coldel if it did it would be in conflict with the decisions of the spring courts decision in mescalary and cotton petroleum and it wouldn't be right because no tax could be levied right no not only a tax but no regulation and that gives me to the second point that I want to point out to you is that I believe you can distinguish smithskin in this case because it's transportation but even if you don't I think the court can look at and consider this miskin is wrongly decided if that is going to be their interpretation of smithskin that you can you can cart blanche go off the reservation and you can trade and be free from any restriction that's why I think that this court although cannot over rule smithskin this panel well you gave it a good shot and you're briefing it like the plug there it's interesting hold anyway I think you're under what you can say is that at a minimum that king mountain reads this too broadly that you can take goods and you can trade those goods off the market but what you can't do is be free from any regulation or restriction and that's exactly what this is designed to do is so that the state doesn't bear the financial burden imposed by cigarette manufacturers selling their product to consumers in the state of Washington but there's no further questions I'd ask you to uphold the district courts judgment I think there are no further questions thank you thank you mr. Barnhouse you have some rebuttal time or me I do have a few seconds your honor we cannot take these cigarettes the act in the settlement the safe way that's the problem the the safe way won't buy them because they're not on the directory list and the reason the state makes money on that is it has a contract with east tobacco companies that says if the big tobacco companies lose market share they reduce their payments to the state of Washington the state of Washington makes billions of dollars off of this setup and and an only way they can make that money is by making sure king mountain doesn't take big tobacco's market share through cheaper cigarettes and in smisken the problem wasn't the state wasn't making money the question was did he have to call up and say we're bringing our cigarettes in there wouldn't any money changing hands but by but it was the notice because then the state contacts here it's getting on the list so that we can't compete again we can't compete price wise with the major tobacco I'm not saying we went on article three at a trial before the district court or even on the facts necessarily I think we should but the problem here is you don't have those factual findings what what what what is your response to uh mr. Hankins uh argument that both sides moved for summary judgment and both sides represented to the district court that there were no issues of material fact there were no issues of material fact because they didn't introduce any material facts you also accepted our facts sorry did you or did you not also move for summary judgment we did your honor and in doing so did you not say to the district court from your perspective there were no issues of material fact to be resolved there were no issues of fact had the court accepted our facts they he courted accepted our facts without contributing facts from the state then we would have but the court didn't take that next step it didn't say the treaty is expressed federal law so now I have to take the next step and find the facts as to see about this treaty with the acrimus it's a very unique treaty uh this right these two rights and how does how does the how did the acrimus see this exclusive use and benefit as a judge or lawyer I I don't think I think it's just geographic but but I have to move beyond that under the presence of this court the Supreme Court thank you thank you very much we appreciate the arguments uh that both of you have given today they've been very interesting and helpful the case is submitted and we will be adjourned for this morning session
May it please the court. Thank you, Your Honor. I'm Randolph Barnhouse here from New Mexico on behalf of the Accommonation and the King Mountain Tobacco Company. And this argument gives me an opportunity today to fix a gaff a few years ago, Judge Graber, and an argument to San Francisco. You were kind enough to point out your connections to New Mexico. And I should have been thanking you for that for your comments. So thank you today. And now my mind can rest. I'll come to Seattle. Follow us all around the circuit. Your Honor, this is a Yakima treaty case decided on summary judgment. That's the posture. Summary judgment against the Accommonation and the tribal corporation on a state economic regulation, notwithstanding the protections of the Yakima Treaty of 1855. We identified three issues in briefing. The first issue I want to talk about is that is there expressed federal law in this case? The District Court held the treaty is not expressed federal law, although over about a hundred years of precedent from this Court in the Supreme Court says that it is expressed federal law that limits the state of Washington's ability to regulate activity off the reservation. The second issue was whether the District Court failed when it made no factual findings regarding the Yakima Treaty and its meaning, both at the time and its meeting to the Yakima people, the kind of factual findings, 90 of which were made in Creole, hundreds of which were made in the USP Washington. The third issue is whether the treaty is limited to trade goods principally generated from reservation land and resources. The state did not address and is conceded this third issue, but we felt the District Court aired when it made that holding. The first two issues, as to those first two issues, a host of cases in this Court in the US Supreme Court have confirmed that Washington's regulatory authority is limited by the Yakima Treaty. What specifically in the Yakima Treaty relates to the particular law that we're looking at here? Those would be both Article 2 of the Treaty, which guarantees exclusive use and benefit. What about this denies them the use of benefit of the land? Nobody else is growing these products. Nobody else is selling these products. Nobody is trampling on their crops. They're using and benefiting from whatever is grown. They are and they're also manufacturing products on these trust-allotted lands using local labor and local resources, and they can't take those then to market to trade. And in many respects, the article says they can't take them to market to trade. I don't understand that. It's a state of Washington at all. I'm sorry, the state of Washington says, unless you comply with our regulations. Which apply to everybody who does this type of business? No other participating manufacturer, non-participating manufacturer has to forego treaty rights to do that. So there's a discriminatory authority. But that assumes the answer that there is a treaty right that pertains to this. Exactly, you're right. That's where I have difficulty. I don't see that the treaty has anything to do with what's going on here. The treaty talks about a physical location, a geography that is for the exclusive use and benefit of the Accommodation, and nobody's interfered with that. They're using it. They're benefiting from it. But in terms of general laws of application to other people doing the same thing, I mean, let's suppose they were manufacturing aspirin and there were safety regulations that said aspirin have to be of a certain purity. It's a general regulation. There's nothing about the treaty that has anything to do with it. That's how I see it. Where are we wrong? That's the way lawyers would read this. What this court has said is it's not the words to learn it lawyers. It's not the words to even to the US negotiators. It's what those words meant to the Accommod people at the time and now. The problem here, I'm not saying. I mean, you're factoring cigarettes then, sending them out to North Carolina and everywhere and bring. So this whole scenario was never imagined in 18, whatever it was. 1855, you're on it. That's right. But what was imagined is that the Accommod were going to be, they gained an economic benefit here. They gained a competitive advantage through this treaty. Not just for what they were doing then. No court has helped into that. Smithkin addresses that exactly. In Smithkin, the cigarettes weren't even made on the reservation. They were brought in from Idaho and the court held there that the traveling trade provisions of the treaty. That had to do with transportation. This doesn't have anything to do with transportation. So the whole transportation segment of the treaty seems beside the point. I'm only speaking for myself here. But you're not alleging that there's any interference with transportation. You're alleging that the escrow money shouldn't be withheld. No, you're on it. We are alleging an infringement of transportation because there's the course of health. It's an article two first. I think that's what Dr. Draper trying to get you to do. Article three is a different matter. So let's keep your argument corralled because I'm having a hard time getting there as well. I read article two. It sounds like the way Judge Graber is just speaking for myself. I read that article to talk about a geographic description of what was going to be negotiated. So where do you find support in article two, please? If you look at just at the words on the face of the treaty or the use and benefit of exclusive exclusive use. Right. So is your argument that because it says for the exclusive use and benefit of the nation that they shouldn't have to fork over any part of the sales proceeds from what they generate on the land. Is that it? Your honor. That's what's missing. Hell. But I guess my argument is we don't even get there because the district court didn't get there. The district court didn't say, okay, you've got a state regulation and you've got a treaty that's expressed federal law. I district court need to make findings of fact along the lines of what you all are. Only if there's an ambiguity. If there's no ambiguity, there's no place for findings. I mean, is your argument that in every case the district court has to make, has to have an evidentiary hearing and make findings of fact? I believe based on the 100 years of precedent in every every Yakima treaty case. And this is a separate. This isn't any treaty or a tree. This is the Yakima treaty. In every Yakima treaty case, the court would need to look at the court meets. It meets the first requirement. My question is quite specific. Yes. Do you think you needed to have any district court judge would need to have an evidentiary hearing every time there's an issue about the applicability of a state law to activities involving the Yakima treaty? Every district court would have to make evidentiary findings, Your Honor. I don't know that an evidentiary hearing is necessary. Okay. So that's helpful and I appreciate that. I don't mean to cut you off with your time sticking out. I want to try to help get get there. So in this case, what the judge did, he said, I'm paraphrasing, there is no set of facts that would change this legal ruling. So why was that wrong? Because as Judge Graber said in 1855, they weren't manufacturing cigarettes on this reservation. But under this court's precedent, it wouldn't matter what they were doing at that time. And it had the court looked at the facts, what the facts show is that the negotiators contemplated future. The whole idea here was to help the Yakima Indians through having market advantages that they'd always enjoyed. Keep those advantages. They give up seven. I disagree with the proposition that a general law of a state can apply to goods and sales of goods that come from the Yakima nation. No. I do disagree. I do disagree. All right. So in my example about the manufacture of Asperin, there's no requirement to have a certain purity level. If they can get an economic advantage by making it cheaper and it doesn't. So that kind of law wouldn't apply either. No, because that kind of law would be purely regulatory. And is the court again in Smithskin noted one, this one isn't purely regulatory. In Smithskin, those kind of health and safety regulations would apply. And two, the Yakima nations not selling marijuana. They're not selling narcotics. They are selling a legal product here. It's legal in Washington. The so marijuana too now. That's easy for us to point the finger at Asperin, but the fact is the Yakima nation, as noted in Smithskin, is a good neighbor and they've not engaged in that. But no, if it was purely regulatory and that's what the court to leave it to you. Where do you draw the line? This is not a tax. It is a type of, it's somewhere between the pure health and safety and the tax. It's somewhere in that other world. So where do you draw the line? If it, if it helps the state raise money, it's not purely regulatory. And nothing about this, nothing about the scheme that the state has set up impacts the content, the nicotine level. Any of the thing about that pack of cigarettes, that pack of king-mounted cigarettes is absolutely legal. Other than it, but not if they don't comply with the financial requirements, the listing requirements that make the state of Washington billions of dollars. I'd like to reserve five minutes of my time. Well, now for for rebuttal. So let me move quickly to the traveling trade provision of Article 3. Article 2 really benefits from Article 3 and they should be read together. But Article 3, it seems clear under Cree and under Smyskin that the district court needed to make factual findings or adopt the Cree factual findings. But it had to get, it had to get past that first step. In other words, the district court said laws of general applicant, non-discriminatory laws of general applicability can be used to regulate Indians off reservation, absent expressed federal law. And why not? What specifically in Article 3, are you relying on? The language that says that as a result of trading 17,000 square miles of land, the U.S. would have the right to build roads and the Acre would have the right to travel those roads along with other citizens. But that's the difficulty I have to again to help preserve time on the clock. This case isn't about travel. Your Honor, but Smyskin makes clear it's about bringing your goods to market. They can't, if once they can manufacture suppress all day long. So Council, this doesn't seem to prevent them while I've interrupted you actually, but this doesn't seem to prevent them from bringing goods to market. So can you go to that? They cannot bring their, they cannot bring their goods to Seattle and sell them unless they get on the state directory. They cannot bring them here and sell them. So they could bring them here and take them home. But they otherwise they have to- So it isn't about transportation. It's about the money. Absolutely. This is a- It's not about transportation. It's about money. No, it's about trade. The Acamer traders, it's money for this. Here we're talking about money for the state and money in our free enterprise system. The Acamer have always been in veteran traders, trading not only their own goods, but goods from all over. And this was recognized of the 11 treaties that were in- The argument is correct. How could Washington tax any of their goods, any other activities off off-reservation, impose any true tax? Washington can- It could- Could- Can't. Off-reservation. Off-reservation on the Acamer. Now that doesn't mean they can't have a gross receipts. They can't have a gross receipts. They can't have a gross receipts. They can't have a gross receipts. They can't have a gross receipts. They can't have a gross receipts. The U.S. Supreme Court said you can't stop the Indians from selling the cigarettes, but you can- But the tax had not been the Indians. The taxes on the people who buy the Indians products. And the Indians can- The Colville says this. The U.S. says this. The Indians can be required to do minimal non-intrusive record keeping. But also that the tax and those circumstances under Colville for example is much more burdensome than what we're talking about here, right? Not at all, Your Honor. There are millions and millions of dollars in S. Pro- The State makes billions of dollars here. The tax in Colville was at the retail level. This is at the manufacturing level. I'd like to reserve the rest of my- You may do that. Councilor Mike Correct- Oh, do you want to have an opportunity to state your appearance first? Yes, Your Honor. May please the court. My name is David Hankins. I'm Senior Council and the attorney is Josh Weissman and we represent the Attorney General Robert Ferguson in this case. Thank you. Am I correct that this money that goes into S. Pro- is then- I want to know what happens to the interest. My understanding is that it doesn't go to the State of Washington while it's in S. Pro- is that right? That's correct, Your Honor. Let me go right into that because that is absolutely incorrect. What Council says that this money goes to the State. This money is based on unit sold and in order to get a unit sold on a cigarette, it has to have a state cigarette tax stamp on that. And then what a Rahul Saeller reports that to the Department of Revenue and from that report they deposit money into an escrow account. They who's the- The cigarette excuse me right? The cigarette manufacturer. Soking Mountain. So then- I'm not participating. A non-participating manufacturer. That non-participating manufacturer then gets the interest every year from that. Right and if the money is not spent as I understand it for either for a refund or because there's been a- an event- a liability imposed pursuant to some of their litigation related to the sale of the product or the use of the product I should say. It's refund, isn't it? It's held for 25 years, Your Honor, and the purpose for holding it for 25 years is so that these states they continue to incur significant tobacco-related health issues. So what part of this money ever winds up in the state of Washington's coffers? The only way it will end up in the state's coffers is if the state sews King Mountain for the sale of its cigarettes down the road so that we can show that King Mountain cigarettes caused health care related issues. Right so it'd be liability associated with use of the product which may or may not ever happen? Yes that is that is very possible. All right. Thank you. You're welcome. I want to address a couple of items first if I can and that is that Washington and 45 other states require cigarette manufacturers to share responsibility for health costs associated with the sale of their products to the public. King Mountain seeks to avoid non-discriminatory state laws even though its cigarettes are sold beyond reservation boundaries to consumers and close the same health risks as other manufacturers cigarettes. Nothing in the treaty suggests that cigarettes can be sold coast to coast free from any regulation and this court should affirm the district court's judgment for two principal reasons. First the district court applied the mezcalar standard correctly. Absent express federal law to the contrary King Mountain is subject to Washington's non-discriminatory laws. No language in either of the articles of the treaty expressly preemps the state statutes regulating cigarette manufacturers and secondly I disagree with my opponent that the this would be a pure regulatory exception and that is the second element because they're required to deposit escrow's for the sales of their cigarettes. So let's go specifically to the Askee one sort of prefootary question and that is is it the state's position that this escrow deposit would apply only off reservation that is if King Mountain sells on reservation to its own to other Yakima people does that apply? And the hypothetical you described your honor? No because we have a moe and call bill we cannot impose either a fee or a tax on a Yakima member on the reservation. But normal tribal members who purchase on the reservation could be subject to this yes? Yes and that's what I was going to get to next. The only difficulty I would suggest to you in that particular instance is that King Mountain would have a difficult time in the record keeping because how would King Mountain know that it was sold because as a manufacturer they may not necessarily know that it was sold from a retailer or tribal retailer to a non-member but does that cause you problems with the application of the law? No you're not no it doesn't and the reason why your honor is because most of the sales where they're going to make their money it's not on the reservation it's getting access to the state certification and selling to Safeway in 7-11 and that's why at the time this lawsuit was filed they were certified in 16 other states so that they could sell their product that's why they could make over $130 million so that's not that there's sales that they that we will have that problem on the reservation we may have to address that but it's right now if it's going beyond the reservation boundaries then those sales have got to be escrowed so even in Washington your honor if they sell to any of the other tribes in the state that have a compact with the state of Washington those cigarettes are also not required to be escrowed because there's no state cigarette tax stamp on those cigarettes so they can sell to any tribe in the state of Washington that has a compact and they don't have to escrow why is that that gives them an economic advantage they don't have to escrow for approximately $5.65 per carton so they're not prejudice they're not in any disadvantage and as in any other cigarette manufacturers selling off the reservation council could I get a focus on opposing council's point about the failure to make findings a fact here where do you draw the line in response to the question I asked earlier about it what point does a district court have to make finding a fact perhaps even have an evidentiary hearing we did remand and Cree yes you did and the the reason you don't have to go there today is because Cree has already established what article three definitely means and this is a question of law and I would point out to the court that King Mountain moved for summary judgment as well so they cross moved for summary judgment and they told the district court judge there is no facts that are in dispute so just a court judge was at the same position saying well if there's no facts and general issues of material fact and dispute then why would I have to issue any findings of fact because ultimately this becomes a question of law so that's why I don't think you have to have a factual finding or remand this back for a factual finding because this is a pure question of law as to what article two and article three me and let's talk about article two the court has already pointed this out but I want to follow up that they're you're absolutely right this language just refers to the physical boundaries of the reservation the the language of the use and occupation and for the exclusive use and benefit even if you were to look at it and construe it from the tribe's perspective that was saying this land is reserved for you and you can grow what you want to on that and then to point out to this court I'm not so sure today that they have the exclusive use if this court is aware the Yakima reservation also has fieland that it's a checkerboard reservation so they don't necessarily if they said that they get that planned and they get the exclusive use that's not true anymore but it doesn't matter for today's argument doesn't it doesn't but I want to point out to the court that if their if King Mountain relies on and says see we have the exclusive use and benefit that's not true and the court congress is already if you will amended that or overruled and this court and Bryndell recognize that as well I don't understand where this argument end that's that's my problem with it that and Your Honor absolutely this argument is councils already said to you this morning that there would be no tax no regular there would only be health care regulations well let me put it is not called bill directly directly contrary to this argument absolutely call bill is directly against this as well as two other United States Supreme Court decisions mescalaryl and cotton petroleum anytime a tribal member goes beyond the reservation boundaries they are subject to all state non-discriminatory laws I want to follow up with Judge Graber's point about manufacturing aspirin and give you a more realistic hypothetical in this case if you were to say that they would not a King Mountain would not be subject to state regulations off the reservation there is nothing to prohibit King Mountain from going to the state fair and handing out packs of cigarettes and giving them to my because none those restrictions and regulations would not apply because they have this treaty where does it end it it ends on the boundaries of the reservation and the states regulations whether they consider them economic or public health if for pure regulatory restrictions those should apply council isn't article three a slightly stickier wicket for you there is this language from smithskin that is emphasized in the briefing the right to transport good to market without restriction yes let's talk about article three smithskin is I think they all have a you can be distinguished and secondly they read to smithskin too broadly smithskin talked about well first let me back up first of all article three just says that you have the right the tribal members have the right to travel on the public highways in common with other citizens both legally and factually that's distinguished here the tribal members can go on and off the reservation and there is no restriction on them what smithskin was talking about is that you have to provide notice to the liquor control board before they could transport their cigarettes it was about transporting and it was about transport there's no there's no restriction here on transporting king mountain can take those cigarettes that they put together on the reservation haul them off the reservation go to yakama and they can sell those to the safeway store there's there's no there's no regulation that's imposed but but my point really is just and I don't make too much of this except that article three talks about transportation and I think you know I've indicated that that's my read in the questions and I think Judge Grieber has spelled although I don't want to speak for her but that's how I read it and yet smithskin does talk about trade the right to transport without restriction to market I mean it's a it's a this is a different shade of gray there there there are there's there's two responses I'd have for you first let me get to the the broad reading it does say that because it wouldn't make sense to transport without having the ability to do something with that transportation and that is where the court looked back and said well obviously you've got to have an ability to trade or exchange in your goods well that doesn't mean I don't think you can read smithskin to say that that then means that you're not subject to any regulation so for example if it did wouldn't that also defeat coldel if it did it would be in conflict with the decisions of the spring courts decision in mescalary and cotton petroleum and it wouldn't be right because no tax could be levied right no not only a tax but no regulation and that gives me to the second point that I want to point out to you is that I believe you can distinguish smithskin in this case because it's transportation but even if you don't I think the court can look at and consider this miskin is wrongly decided if that is going to be their interpretation of smithskin that you can you can cart blanche go off the reservation and you can trade and be free from any restriction that's why I think that this court although cannot over rule smithskin this panel well you gave it a good shot and you're briefing it like the plug there it's interesting hold anyway I think you're under what you can say is that at a minimum that king mountain reads this too broadly that you can take goods and you can trade those goods off the market but what you can't do is be free from any regulation or restriction and that's exactly what this is designed to do is so that the state doesn't bear the financial burden imposed by cigarette manufacturers selling their product to consumers in the state of Washington but there's no further questions I'd ask you to uphold the district courts judgment I think there are no further questions thank you thank you mr. Barnhouse you have some rebuttal time or me I do have a few seconds your honor we cannot take these cigarettes the act in the settlement the safe way that's the problem the the safe way won't buy them because they're not on the directory list and the reason the state makes money on that is it has a contract with east tobacco companies that says if the big tobacco companies lose market share they reduce their payments to the state of Washington the state of Washington makes billions of dollars off of this setup and and an only way they can make that money is by making sure king mountain doesn't take big tobacco's market share through cheaper cigarettes and in smisken the problem wasn't the state wasn't making money the question was did he have to call up and say we're bringing our cigarettes in there wouldn't any money changing hands but by but it was the notice because then the state contacts here it's getting on the list so that we can't compete again we can't compete price wise with the major tobacco I'm not saying we went on article three at a trial before the district court or even on the facts necessarily I think we should but the problem here is you don't have those factual findings what what what what is your response to uh mr. Hankins uh argument that both sides moved for summary judgment and both sides represented to the district court that there were no issues of material fact there were no issues of material fact because they didn't introduce any material facts you also accepted our facts sorry did you or did you not also move for summary judgment we did your honor and in doing so did you not say to the district court from your perspective there were no issues of material fact to be resolved there were no issues of fact had the court accepted our facts they he courted accepted our facts without contributing facts from the state then we would have but the court didn't take that next step it didn't say the treaty is expressed federal law so now I have to take the next step and find the facts as to see about this treaty with the acrimus it's a very unique treaty uh this right these two rights and how does how does the how did the acrimus see this exclusive use and benefit as a judge or lawyer I I don't think I think it's just geographic but but I have to move beyond that under the presence of this court the Supreme Court thank you thank you very much we appreciate the arguments uh that both of you have given today they've been very interesting and helpful the case is submitted and we will be adjourned for this morning sessio