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Wash. Supreme Court Ruling Clears Way For Lawsuit Over Tribal Gas Stations

Austin Jenkins


OLYMPIA, Wash. – Gas station owners in Washington have won the right to proceed with a lawsuit against the state. They’re challenging the policy of gas tax refunds to Native American tribes who operate their own gas stations.

Non-tribal gas station owners in Washington are on edge. They’ve witnessed a sharp growth in the number of tribally-owned gas stations in the state. There are now more than 50.

Like this one near the Little Creek Casino in Mason County.Tom Thorogood of British Columbia says he fuels up here because it’s close to the casino. But he figures there’s a bit of savings to be had too.

“Ah yes, we presume the prices are a little cheaper here on Indian land,” Thorogood says.

The pump price here is actually only two-cents cheaper than Safeway fuel in nearby Olympia. But non-tribal gas station owners say the tax refund the state gives tribal gas stations gives the tribes a competitive advantage.

Former Supreme Court Justice Phil Talmadge represents the gas station owners behind the lawsuit. He argues refunding gas tax collections in this manner violates the state constitution.

“These monies go straight out of the state Motor Vehicle Fund to the tribal governments," Talmadge says. "There’s no legislative appropriation. The state constitution requires that any money coming out of the state treasury has to be appropriated by the state legislature. These monies are not.”

Instead they’re the result of compacts the governor signed with the tribes. Talmadge also questions whether the tribes are in fact spending the refund money, $105 million since 2008, only on transportation projects -- something the compacts mandate. The audit reports on how the money is spent are not public.

House Transportation Chair Judy Clibborn, a Democrat, agrees that’s a problem.

“We know anecdotally that they are spending money here and there on really good transportation projects," she says. "But not everybody will disclose that and it’s very un-transparent.”

Tribal representatives respond that those audits contain proprietary information.

Clearly the tribes have a major stake in the outcome of this lawsuit. But they’re not a party to it. They have sovereign immunity and can’t be named as a defendant. That was the sticking point and why the Washington Supreme Court has now ruled the case can proceed without them.

A tribal law expert at the University of Washington says the question now becomes very simply: can the state enter into compacts with tribes regarding gas taxes.

Copyright 2012 Northwest News Network