Amicus Curiae Brief — South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018) (No. 17-494)

No. 17-494

—_—_—— EE .- —

IN THE

Supreme Court of the Wnited States

SOUTH DAKOTA,

Petitioner,

Vv.

WAYFAIR, INC., OVERSTOCK.COM, INC.,

AND NEWEGG, INC.,

Respondents.

On Writ of Certiorari

to the South Dakota Supreme Court

BRIEF FOR AMICI CURIAE

WASHINGTON STATE TAX PRACTITIONERS

IN SUPPORT OF RESPONDENTS

DIRK GISEBURT

Counsel of Record

Davis Wright Tremaine LLP

1201 Third Avenue, Ste.2200

Seattle, WA 98101

dirkgiseburt@dwt.com

207-757-8049

April 4, 2018

TE

QUESTION PRESENTED

Should this Court abrogate Qui//’s sales-tax only,

physical-presence requirement?

TABLE OF CONTENTS

SFE Ee OT BINED vic osccsceeccesesevensenesinevonsexedonies i

ee ee i incesessniscenscersesenensescessssncvineseses ii

TABLE OF AUTHORITIES .............0.:0cccccccccsssssssesees iv

INTEREST OF THE AMICT CURIAE................0.000+- 1

SUMMARY OF ARGUMENT ...............:.cccssececeeseeseees 3

PTE eictecitcresetninninnapneinemnsiemnasinetnaneenicietnaeen 7

lL. Complete Auto's Background Shows That

Nexus With The Activity Is An

Individualized Assessment, And This

Case Is Not Properly Framed Upon

I i cresiacesnsnsssietedpronstaneatcinbedsuns 7

A. The entire body of law on which

Complete Auto based its nexus test

focused on whether the taxpayer

conducted the taxed activity in the

i ibaidcaetinintindninienicinnntniameidanmmessatugnasrmmmens 7

B. The Court’s use-tax collection cases

show the collection obligation is

dependent on the taxpayer's

carrying on a directly taxable

activity in the State; mere

advertising was not seen as a

substantial part of making sales. ....... 17

C. South Dakota’s conclusive nexus

presumption based on __ sales

volumes does not comport with

Complete Autos as-applied test; if

“delivery” is the targeted activity of

online retailers, the State needs to

show the particular’ delivery

mechanism can be attributed to the

I cccisieespcietsticiithi eaten tachinaiiabaienamnmenian 22

Il. Confusion About The Nature Of The Tax

In Question Should Be Avoided..................... 25

I i 29

APPENDIX: List of Amnici Curiae ...............ccccccces000 la

Cases

Allied-Signal, Inc. v. Dir., Div. of

Taxation,

Pe GA: FU CRUD sncscescvssvesosecescsssensonees

American Oil Co. v. Neill,

FO Was GBS (EDGED cscccevecnsosscccessesccevsveses

Boston Stock Exch. v. State Tax

Comm'n,

Ge Es I GIG ED viesdiccccccasctecseserevevecess

Bowman v. Continental Oil Co.,

Pe Us GE GRIER D cv erccvicocstcnsssscoscccscveses

Clark v. Paul Gray, Inc.,

Ne BPs COED vncvsnssscsessoscccrssanessseses

Cohens v. Virginia,

19 U.S. (6 Wheat.) 264 (1821)................

Colonial Pipeline Co. v. Traigle,

FS Sas Be OD tiivansseccassesesesessnsconcns

Complete Auto Transit, Inc. v. Brady,

SE GE PE COP TTD cscncnscisciassescevescsssevenie

Felt & Tarrant Mfg. Co. v. Gallagher,

Fs Es CD bccscesicceccsvsveccnsccecoversess

Freeman v. Hewit,

Os DP CRIED scroceccarsnsevseccnvececcosvens

Page(s)

aden passim

18, 19, 20

Gen. Motors Corp. v. Washington,

PT Cia, GI Ce vere ccsgcaccacstcieneiitashbicctisnessi 10, 11

Gen. Trading Co. v. State Tax Comm'n

of Iowa,

a Ne CI iicinccncessendedhpesvaerivnabedainabiceants 20

Henneford v. Silas Mason Co..,

canis 18, 25

Hinson v. Lott,

Se ees Ge NE, De 0 END sitisnostckinsnachevasesettescceoes 16

Illinois Cent. R. Co. v. Minnesota,

ee oo ocuanienncaneiaeanaes 10

Ingels v. Morr,

Rs Be CIE B vccchnisnitdnistechabaviindscesncnasessecaduiys 10

Irwin Naturals v. State,

382 P.3d 689 (Wash. Ct. App. 2016),

cert. denied, 138 S. Ct. 238 (2017).................064 26

McGoldrick v. Berwind-White Coal

Mining Co.,

ls leecounenaeeunle 15, 16

Memphis Natural Gas Co. v. Stone,

I ry Ba siidanateccnneninctacecseersessnatixaneies 12, 13

Miller Bros. Co. v. Maryland,

DOT UF. BED CIGD ovcsicicssccnsccepese 17, 21, 22, 23, 24

Monomator Oil Co. v. Johnson,

I ee nd no ai daceumesneuinel 18, 20

v1

Nat Bellas Hess, Inc. v. Dep't of

Revenue of Illinois,

as, CI CONE Darn svdernntasesssiccnccsscnss

Nat? Geographic Soc'v v. California Bd.

of Equalization,

Ge re Ge CE SP cenienecenssicviscicnrssorsces

Nelson v. Montgomery Ward & Co.,

Re Ge TO COED wieiccserccerstnsesseveocscens

Nelson v. Sears, Roebuck & Co..

BED UT GO URGED civciscscsscncoscosccesessoeee

Northwestern States Portland Cement

Co. v. Minnesota,

Be SFE CED vecenstirenntvccininttsccsazsem

Norton Co. v. Dep't of Revenue,

ee A ED Ses achaiesnesrenenieninsniossess

Oklahoma Tax Comm'n v. Jefferson

Lines, Inc..,

eS Bre CO CD cintasdnnccnsccsincsssennncees

Pike v. Bruce Church, Inc.,

gel | it Sea neneerere

Quill Corp. v. North Dakota,

a) reer

Scripto, Inc. v. Carson,

Be ek Ie CRD ccc csciressvisventsonsornasas

Sonneborn Bros. v. Cureton,

BE Fk Be I dcenensnesccsecsccceresessess

Spector Motor Serv., Inc. v. O'Connor,

yf ll eee 13, 16

Standard Pressed Steel Co. v.

Washington Dep't of Revenue,

a, I TD eek cick backcnctekcpinonicbninsamvaanvanpueds 11

State v. Wayfair, Inc.,

901 N.W.2d 754, 766 (2O1G) ............ccccsveesceceees 6, 27

Trinova Corp. v. Michigan Dept of

Treasury,

es ED wis ccdetite tea stiscsiaciibcideadioacat 2, 25

Wisconsin v. J.C. Penney Co..,

ge a Ly re 6, 12, 19

Statutes

Cal. Civ. Code § 1656.1 (2016 and Supp.

Se iiasectiessiosdieitnsncducpsssanasiondinbbeaeciacsabeuasadoteunsdanuiieaeni 26

Cal. Rev. & Tax. Code § 6051 (2016 and

I MI ihc siascahascsecen rccceenvectapecegiacorvesiasbdictenslesnieaneatics 26

S.D. Codified Laws § 10-45-2 (Supp.

BF ihbicicapsetissicinniscmsennchapiocunisntéocennackinenmdenensisee 6, 26

S.D. Codified Laws § 10-45-22 (Supp.

BNE Da ciincasscecdicshaneciguiiepiniitedanineiaseniisiinsueoedstins 6, 26, 28

S.D. Codified Laws § 10-45-27.3...............000. 7, 27, 28

S.D. Codified Laws § 10-64-2 (Supp.

——

vill

Wash. Rev. Code § 82.08.020(1) (2016

I, Ie Pincecasantinsccscescinnsanscensecsvtessiacessicivacs 26

Wash. Rev. Code § 82.08.050(1) (2016

EE I TE Picts ecsepatennistsdiccsinisbehatelavestastortacinnds 26

Wash. Rev. Code § 82.08.120 (2016 and

I TID bictteench laces censnssenescieorsveininiconenanveniesnees 26

Other Authorities

S.B. 106, 91st Legis. Assemb. Session,

OE BEE), CPG, BO since inte ccnctcossneenvess 22, 23, 24

South Dakota Department of Revenue,

“Sales and Use Tax Guide” (July

2017), http://dor.sd.gov/Taxes/Busine

BRIEF OF AMICI CURIAE

WASHINGTON STATE TAX PRACTITIONERS

IN SUPPORT OF RESPONDENTS

INTEREST OF THE AMICI CURIAE

Amici curiae (“Practitioners”)' are lawyers

practicing state and local tax law in Washington State.

Practitioners spend parts of nearly every working day

appl: ing this Court’s Commerce Clause and Due

Process Clause precedents in the representation of

U.S. and foreign individuals, families, charities, and

business organizations of every kind.

Practitioners join this brief solely as individuals

and not as representatives of the law firms with which

they are affiliated. Each is currently in private

practice. Among their number are practitioners who

have served in the past as President of the

Washington State Bar Association or as chair of the

Association’s State and Local Taxes Committee. Their

experience is not limited to representing taxpayers,

some having worked in the past for the Washington

State Department of Revenue as a former Assistant

Director for Interpretation and Appeals, a second

former appeals officer, and a legislative affairs officer.

A full list of amici appears in Appendix A.

Part of the challenge and satisfaction of

' No counsel for a party authored this brief in whole or in part

nor made a monetary contribution intended to fund the

preparation or submission of this brief. No person other than

amici curiae or its counsel made a monetary contribution to its

preparation or submission. Petitioner and Respondents have

filed Blanket Consents to the filing of amicus curiae briefs with

the Clerk of the Court.

to

Practitioners’ job is explaining to clients and others

the not always scrutable ways in which this Court has

sought “to accommodate the necessary abstractions of

tax theory to the realities of the marketplace.”

Trinova Corp. v. Michigan Dept of Treasury, 498 U.S.

358, 372 (1991). As the Court itself repeatedly

acknowledges, clarity and consistency of doctrinal

statements in its opinions are sometimes wanting.

Legal advisors to the States, too, experience

uncertainty in applying the Court’s statements to

legislative proposals and legal strategy. See Br. of

Colorado, et al., at 17.

The Petitioner asks the Court to abrogate a long-

standing precedent, Quil/ Corp. v. North Dakota, 504

U.S. 298 (1992), but the Petitioner’s argument is based

on a shallow and inaccurate understanding of the

doctrinal framework for the case. In particular, while

the Petitioner and some supporting amici argue that

they are seeking a straightforward application of the

“substantial nexus” test of Complete Auto Transit, Inc.

v. Brady, 430 U.S. 274 (1977), in fact they ask the

Court to change the test fundamentally.

The new world of e-commerce clearly poses

challenges to public finance, but these challenges do

not excuse arguments that obscure the nature of the

tax in question or the content of applicable law.

Practitioners offer a review, not provided to the same

degree in the other briefing, of the development of this

Court’s relevant case law in order to show what is

more broadly at stake in this case.

SUMMARY OF ARGUMENT

1. The Petitioner presents the legal problem in this

case as a matter of simple inconsistency between the

rule in Quill Corp. v. North Dakota, 504 U.S. 298

(1992), and the fundamental nexus test of Complete

Auto Transit, Inc. v. Brady, 430 U.S. 274 (1977). Pet’r’s

Br. at 21-23. This argument is mistaken because it

obscures the fact that there are two separate nexus

tests at work.

The genealogy of Complete Autos nexus

formulation shows that the test should be read as

sustaining a tax “when the tax is applied to an activity

lof the taxpayer with a substantial nexus with the

taxing State.” /d. at 279. This test grew out a body of

law addressing when a State could impose a tax on a

taxpayer itself. By contrast, the core holdings on use-

tax collection in Qui// and Nat? Bellas Hess, Inc. v.

Dep't of Revenue of Illinois, 386 U.S. 753 (1967), are

no-nexus counterpoints to a distinct line of cases that

upheld a tax-collection obligation as ancillary to an

otherwise taxable activity the retailer was conducting

within the State. Without saying so expressly, Qui//

reaffirmed that a tax-collection obligation could not be

imposed unless the State could already impose a tax

on an activity conducted by the business in the State.

Practitioners agree with the Petitioner that the

Court should be mindful in this case of Chief Justice

Marshall’s counsel on how to read “general

expressions” in the Court’s opinions:

It is a maxim not to be disregarded, that

general expressions, in every opinion, are

to be taken in connection with the case in

which those expressions are used.

Cohens v. Virginia, 19 U.S. (6 Wheat.) 264, 399 (1821),

quoted in Pet’r’s Br. at 41. Just so in the case of

Complete Auto. The Petitioner, unfortunately, betrays

that very maxim by omitting discussion of the Court’s

application of the nexus rule in Complete Auto itself as

well as the rule’s antecedents.

The “general expression” of the Commerce Clause

nexus standard in Complete Auto is this: a tax will be

sustained “when the tax is applied to an activity with

a substantial nexus with the taxing State.” /d. at 279.

How did this Court apply the “general expression” of

its nexus test in Complete Auto itself?

First, the Court identified the tax in question in its

own words as a “sales tax” imposed, as a statutory

matter, as “privilege taxes for the privilege of engaging

. in business . . . within this state” measured by

gross income from the operation of a “transportation

business for the transportation of persons or property.”

/d. at 275 (quoting Miss. Code Ann., 1942 § 10105

(1972 Supp.)) (quotation marks omitted). Then the

Court observed that the company “did not allege that

its activity which Mississippi taxes does not have a

sufficient nexus with the State.” 430 U.S. at 277-78

(emphasis added). And indeed the company did

engage in transporting property within the State.

Hence there was no basis for invalidating the

assessment on the nexus ground.

Moreover, every precedent cited in Complete Auto

as sources for its synthesis of the Commerce Clause

tests — every one — concerned a tax on the activity of

the taxpayer in the State.

By contrast, the Court was quite clear in the

opinions upholding tax-collection obligations that it

distinguished in Nat? Bellas Hess, Inc. v. Dept of

Revenue of I/linois, 386 U.S. 753 (1967), that the Court

was not evaluating a tax imposed on the business

itself. Instead, that line of cases established that, if a

use-tax collection obligation could be imposed, it was

because the State a/ready had a predicate right to

impose a tax on an activity of the business in that

State. In other words, if the Complete Auto standard

is satisfied, then it follows that a use-tax collection

obligation can be imposed. This analytical template

was followed by the Court in Nat? Geographic Soc’y v.

California Bd. of Equalization, 430 U.S. 551 (1977).

Complete Auto does not authorize imposing a tax

on a business because of someone else’s activity in the

State. Because Complete Auto nexus is properly

understood as an individualized question based on the

taxpayer's activities, as to South Dakota’s sales tax —

the only tax in question in this case — the issue under

Complete Auto is whether a specific remote retailer's

activity, in selling at retail, has a “substantial nexus

with the taxing State.” Does a sufficient part of the

retailer's activity occur in the State? It appears the

record is insufficient to resolve that issue.

Given that the Petitioner acknowledges the Court

can retain the specific holdings of Bellas Hess and

Quill, Pet’r’s Br. at 42, what is really at stake (though

not acknowledged by the Petitioner) is whether the

nexus test of Complete Auto should be revised.

Because the Petitioner has not come to grips with the

real import of Complete Auto, and because South

Dakota’s conclusive presumption of in-state activity

based on transaction volumes is inconsistent with

Complete Auto, the Petitioner's argument should be

rejected.

6

2. Deciding this case requires first deciding

whether the Complete Auto test or the Bellas

Hess/National Geographic framework applies. For

this purpose, the Court should exercise skepticism

about the ways Petitioner, its supporting amici, and

the South Dakota Supreme Court have characterized

the tax in question. See Wisconsin v. J.C. Penney Co.,

311 U.S. 435, 443 (1940) (“[T)|he descriptive pigeon-

hole into which a state court puts a tax is of no

moment in determining the constitutional significance

of the exaction.”).

Here, the concept of “sales tax” propounded by the

Petitioner is any “tax collected or remitted by the

seller,” regardless whether the legislature imposed the

tax on sellers or consumers or on sales or use. Pet’r’s

Br. at 3 n.1. This abstracted approach is not faithful

to South Dakota’s own sales tax enactment, let alone

the diverse transactional and consumption taxes

enacted by the various States. South Dakota’s tax is

imposed “upon the privilege of engaging in business as

a retailer . . . upon the gross receipts from all sales.”

S.D. Codified Laws § 10-45-2 (Supp. 2017). Seeking

reimbursement from the customer is optional at the

discretion of the retailer. /d. § 10-45-22. The tax is

imposed on the seller and is paid by the seller,

whether or not the tax amount is added to the selling

price. This means Complete Autos nexus formula

applies, and this formula asks whether a particular

taxpayer is engaged in retailing activity in South

Dakota.

Notwithstanding the text of South Dakota's

statute, the South Dakota Supreme Court said below,

“Generally, sellers selling merchandise in South

Dakota have an obligation to collect and remit sales

tax on each transaction.” State v. Wayfair, Inc., 901

~l

N.W.2d 754, 756 (2016) (citing S.D. Codified Laws §

10-45-27.3). However, this statute does not require

tax collection by the retailer. Instead, it says any

“person whose receipts are subject to the tax .. . shall .

. file a return, and pay any tax due... .” Nothing in

the opinion suggests that the Court was intentionally

construing the statutory text rather than simply

misunderstanding it.

Having reached this critical pivot-point’§ in

Commerce Clause jurisprudence, when the Petitioner

asks the Court to abrogate a long-standing precedent

affecting billions of dollars, the Court should take even

more than ordinary care in describing what the object

of South Dakota’s sales tax is and which taxes are

governed by the Court’s resolution of this case.

ARGUMENT

I. Complete Autos Background Shows That Nexus

With The Activity Is An _ Individualized

Assessment, And This Case Is Not Properly

Framed Upon Individualized Facts.

A. The entire body of law on which Complete Auto

based its nexus test focused on whether the

taxpayer conducted the taxed activity in the

State.

1. When a petitioner asks the Court to abrogate one

of its decisions, consideration of the deeper background

of that decision in the Court’s precedents is essential.

Complete Auto Transit, Inc. v. Brady, 430 U.S. 274

(1977), is an excellent example of such a historical

review. See id. at 279-87. The Petitioner in this case

obscures the background of both Qui// and Complete

Auto by taking the Comp/ete Auto formula as a simple

and encompassing doctrinal starting point.

The Petitioner asks the Court to reject the rule in

Quill Corp. v. North Dakota, 504 U.S. 298 (1992),

simply by applying the nexus test of Complete Auto as

written. If “an activity” has substantial nexus with

the taxing State, as the Petitioner alleges a sale

consummated by delivery to the purchaser in the State

does, it supposedly does not matter whether the

taxpayer has a substantial nexus with the taxing

State. See Pet’r’s Br. at 22-23 (quoting Quill, 504 U.S.

at 311 (quoting Complete Auto, 430 U.S. at 279))

(emphasis altered). Certain supporting amici curiae

follow this line of argument. ?

This position does not accurately reflect the

substance of the Complete Auto test in light of either

the Court’s analysis in that case or the legacy of case

law on which the test was based. The Petitioner, in

other words, betrays Chief Justice Marshall’s counsel

to take the “general expression” of the Complete Auto

nexus test “in connection with the case in which |that!

expression| is} used.” Cohens v. Virginia, 19 U.S. (6

Wheat.) 264, 399 (1821).

* See Br. of National Governors’ Association, et al., at 20

(Court should “simply apply the Complete Auto test as it was

originally articulated”). See also Br. for Colorado, et al., at 1

(urging Court to adhere to Complete Auto); Br. of Brill, et al., at

17 (agreeing with Petitioner that the tax satisfies nexus test of

Complete Auto). Contra Br. of Retail Litigation Center, et al., at

28 (“South Dakota’s law focuses on a retailer's sales activity.”)

‘emphasis altered)

9

In Complete Auto, the tax was imposed on the

privilege of doing business measured by gross income,

specifically under a subsection applicable to providing

transportation of persons or property between points

within the State. 430 U.S. at 275. The taxpayer

admitted providing such transportation but claimed it

could not be taxed because it “was but one part of an

interstate movement.” /d. at 277. Before getting to

Complete Autdés oft-cited four-prong test, the Court

articulated how che test applied to the taxpayer in

question. The taxpayer—

did not allege that its activity which

Mississippi taxes does not have a

sufficient nexus with the State; or that

the tax discriminates against interstate

commerce; or that the tax is unfairly

apportioned; or that it is unrelated to

services provided by the State.

/d. at 277-78 (emphasis added) (footnote omitted). In

other words, in this sentence the Court articulated

what the taxpayer must allege in order to plead a

Commerce Clause violation. As to nexus, it must

allege and then show that its own activity, being the

object of the tax, is not conducted in the State. This is

an “as-applied” test.

Then, having recited the gaps in the taxpayer's

pleading, the Court proceeded to synthesize the

relevant precedents relied upon by Mississippi in

almost exactly the same terms. This synthesis has

become the foundational “general expression” of

Commerce Clause requirements:

These decisions have considered not the

formal language of the tax statute but

10

rather its practical effect, and have

sustained a tax against Commerce Clause

challenge when the tax is applied to an

activity with a substantial nexus with the

taxing State, is fairly apportioned, does

not discriminate against interstate

commerce, and is fairly related to the

services provided by the State.

/d. at 279 (emphasis added; footnote omitted).

In this way, the “general expression” of Commerce

Clause requirements was explicitly grounded on the

decisions of the Court that had been brought to the

argument by the State of Mississippi, cited in footnote

8 of the Complete Auto opinion. So, too, did the Court

ground its description of what Complete Auto Transit

failed to plead to show a Commerce Clause violation in

specific prior opinions, cited in footnote 6 of the

opinion. These prior decisions show that the “general

expression” of the nexus test focuses not on a

disembodied “activity” without an actor, but on

whether the taxpayer's activity, to which the tax is

applied, is conducted in a substantial way within the

State.

Taking the nexus decisions in footnote 6 first:*

¢ Gen. Motors Corp. v. Washington, 377 U.S.

436 (1964), involved a gross receipts tax on

* In footnote 6, the Court also cited two discrimination cases,

Boston Stock Exch. v. State Tax Comm'n, 429 U.S. 318 (1977);

Clark v. Paul Gray, Inc., 306 US. 583 (1939), and two “fair

relationship” cases, ///inois Cent. R. Co. v. Minnesota, 309 U.S.

157 (1940); Ingels v. Morf, 300 U.S. 290 (1937). Each of these

taxes or fees was imposed on in-state activities or property of the

burdened taxpayer.

1]

wholesaling. The Court held there was a

sufficient “local incident” to support the tax,

because General Motors had “employees who

were residents of the State and who

performed substantial services in relation to

General Motors’ functions therein,

particularly with relation to the

establishment and maintenance of sales,

upon which the tax was based.” /d. at 477

(emphasis added).

Standard Pressed Steel Co. v. Washington

Dept of Revenue, 419 U.S. 560 (1975),

involved the same gross receipts tax. In its

due process analysis, the Court held the

taxpayer's “in-state activities’ were sufficient

to uphold nexus to tax, “(flor appellant’s

employee, Martinson, with a full-time job

within the State, made _ possible’ the

realization and continuance of valuable

contractual relations between appellant and

Boeing.” /d. at 562 (emphasis added).

Taking next the nexus cases cited in footnote 8:

General Motors (see above).

Northwestern States Portland Cement Co. v.

Minnesota, 358 U.S. 50 (1959), involved the

State’s corporate net income tax. The Court

hela that such a tax is generally permissible

if, among other things, it “is properly

apportioned to local activities within the

taxing State forming sufficient nexus to

support the same.” /d. at 452 (emphasis

added). The Court then found the imposition

in question permissible because the taxpayer

had “activities in Minnesota consist|ing] of a

12

regular and systematic course of solicitation

of orders for the sale of its products” through

four employed salespersons. /d. at 454.

e Memphis Natural Gas Co. v. Stone, 335 U.S.

80 (1948), involved a franchise or excise tax

on doing business in the State levied on

capital employed within the State. /d. at 81-

82. The taxpayer operated a gas pipeline

running through Mississippi. The Court

relied on the _ state supreme _ court’s

interpretation that the local incidents of the

tax were maintaining, keeping in repair, and

otherwise attending to the pipeline facilities

in the State and held these local activities

validated the tax because they could not

form the basis for taxation by another State.

Id. at 86, 88.

e Wisconsin v. J.C. Penney Co., 311 U.S. 435

(1940), involved a due process challenge to a

tax on the privilege of declaring dividends

out of income derived from property located

and business transacted in Wisconsin. /d. at

439 & n.1. Notwithstanding the fact that the

tax was formally triggered by an action

(declaring dividends) that, in this case,

occurred outside Wisconsin, the Court

upheld the tax because the “substantial

privilege of carrying on business _ in

Wisconsin,” id. at 444-45 — “within its

borders,” jd. at 442 — supported it.

In sum, all of the cases relied on by the Court in

Complete Auto as the sources of its Commerce Clause

template rested their nexus holdings on the local

activities ofthe taxpayer in the State.

13

The balance of the Complete Auto opinion traced

the themes of practicality and realism evoked in the

Court’s prior opinions in order, ultimately, to justify

overruling Spector Motor Serv., Inc. v. O'Connor, 340

U.S. 602 (1951). These opinions, too, focused on/y on

situations where the tax was imposed on activities of

the taxpayer in the State.

In Freeman v. Hewit, 329 U.S. 249 (1946), the tax

was imposed on the gross income of residents and

domiciliaries. In this case it was imposed on the sale

of stock by an estate trustee domiciled in Indiana. /d.

at 250. Justice Rutledge’s concurrence, discussed in

Complete Auto, 430 U.S. at 280-81, highlighted that

the Indiana domiciliary’s activity in selling the stock

had sufficient factual connections to Indiana to satisfy

due process. 329 U.S. at 271.

The Court then rehearsed the facts and analysis of

Memphis Natural Gas, which it had already cited as a

source of its Commerce Clause synthesis in footnote 8

of the Complete Auto opinion. 430 U.S. at 281-82. The

Court reiterated that it had found reasonable the state

court’s position that Mississippi had not sought to

“secure anything from the corporation by this statute

except compensation for the protection of” the

taxpayers “enumerated local activities." Memphis

Natural Gas, 33 U.S. at 93.

The Court in Complete Auto then identified the

significant nexus factor in Northwestern States as the

fact that the tax was properly apportioned “to local

activities within the taxing State” (i.e., the taxpayer's

systematic solicitation of sales) that formed the basis

for nexus to support the tax. 430 U.S. at 285 (citing

Northwestern States, 358 U.S. at 464).

ae |

ll .

14

Finally, the Court recited a prior summary of its

own cases in the opinion in Colonial Pipeline Co. v.

Traigle, 421 U.S. 100 (1975), where it said its decisions

had “sustained . . . state corporate taxes upon foreign

corporations doing an exclusively interstate business

when the tax is related to a corporation's \ocal

activities,” among other criteria. Complete Auto, 430

U.S. at 287 (quoting Colonial Pipeline, 421 U.S. at 108)

(quotation marks omitted) (emphasis added).

To repeat, all the decisions on which Complete Auto

relied for the oft-cited nexus formulation, in finding a

sufficient nexus, rested on the fact that the tax was

justified by a consequential, local activity of the

taxpayer in the State. None of them said or even

implied that the Court would uphold a tax in the

absence of a “local” activity of the taxpayer. In light of

how Complete Auto applied its “general expression” of

the nexus prong in Complete Auto itself, and in light of

the entire history behind it, the “general expression”

necessarily implies that a tax will be sustained “when

the tax is applied to an activity |of the taxpayer] with

a substantial nexus with the taxing State,” and this

“substantial nexus” rests on the fact that a

consequential element of the taxpayer's activity occurs

in the State.‘

4 See also Allied-Signal, Inc. v. Dir., Div. of Taxation, 504 U.S.

768 (1992). In that case, the Court observed that the Commerce

Clause nexus limitation is grounded in part on the understanding

that “to permit each State to tax activities outside its borders

would have drastic consequences for the national economy.” /d.

at 777-78 (emphasis added). This concern is allied, said the

Court, to Due Process Clause jurisdictional limitations, and “we

have not abandoned the requirement that, in the case of a tax on

an activity, there must be a connection to the activity itself,

15

2. The Petitioner's claim that Complete Auto is

satisfied in this case appears based on the idea that

the “sale” itself is the activity taxed by South Dakota’s

statute, and the “sale” itself has the necessary nexus

with the State. The Petitioner’s brief draws support

from another “general expression,” this one in

Oklahoma Tax Comm'n v. Jefferson Lines, Inc., 514

U.S. 175 (1995): “a sale of tangible goods has a

sufficient nexus to the State in which the sale is

consummated to be treated as a local transaction

taxable by that State.” /d. at 184, quoted in Pet’r’s Br.

at 22. However, the Court in Jefferson Lines obviously

did not mean by this statement to undermine Qui//, as

the Jefferson Lines opinion itself cited @Qui// as

representing its dormant Commerce Clause

jurisprudence. See 514 U.S. at 179.

The facts in Jefferson Lines and in the lineage of

cases that lay behind the Petitioner's quotation are

entirely consistent with reading Complete Auto as

allowing a tax on a seller only when the seller is

conducting at least some portion of the taxable activity

in the State. As the Court said, the facts justifying

nexus in Jefferson Lines were that Oklahoma was the

State where Jefferson Lines originated service to

customers who bought tickets there. 514 U.S. at 184.

The Petitioner’s brief does not identify the case

Jefferson Lines cited in support of its general

expression, McGoldrick v. Berwind-White Coal Mining

Co., 309 U.S. 33 (1940). That case involved a New

York City sales tax, and the Court noted, Berwind-

White maintained a sales office in New York City, and

rather than a connection only to the actor the State seeks to tax.”

Id. at 778 (citing Quil/, 504 U.S. at 306-08) (emphasis added).

16

“lajll the sales contracts with the New York customers

in question were entered into in New York City.” /d.

at 44. But in that case, the tax was imposed expressly

upon the purchaser, 4 at 42, and not on the activity of

the seller.

The Court in Berwind-White cited a number of

prior decisions in support of the principle that a sale is

a local event notwithstanding that the goods had an

out-of-state origin. See id. at 50. For example, Hinson

v. Lott, 75 U.S. (8 Wall.) 148 (1868), involved an

Alabama tax imposed on an Alabama merchant with

respect to liquors brought into the State for sale from

elsewhere. Sonneborn Bros. v. Cureton, 262 U.S. 506

(1923), involved a Texas tax on wholesale dealers in oil

measured by sales within the State. It was upheld

against a New York corporation, having an office in

Dallas and warehouses elsewhere in Texas, on oil

imported from outside the State for sale and delivery

in Texas. See id. at 507-08.

In most if not all of these cases, the Court upheld

the tax, in the face of arguments that the tax was

imposed unlawfully upon interstate commerce,

because the sales were sufficiently “local” events.

Thus, the “general expression” in Jefferson Lines arose

directly from the now-obsolete concern to distinguish

taxes on local events from taxes on “interstate

commerce” itself, which had animated the position of

the Court in Freeman v. Hewitt and Spector Motor

Service. Neither the “general expression” in Jefferson

Lines nor its origins in prior opinions impeach the

understanding of Complete Auto discussed above

17

B. The Court’s use-tax collection cases show the

collection obligation is dependent on the

taxpayer’s carrying on a directly taxable activity

in the State; mere advertising was not seen as a

substantial part of making sales.

In Quill, this Court said that “Bellas Hess is not

inconsistent with Complete Auto and our recent

cases.” 504 U.S. at 311. Further, as to Complete

Autos nexus test, the Court said Nat? Bellas Hess,

Inc. v. Dep't of Revenue of Illinois, 386 U.S. 753

(1967)—

stands for the proposition that a vendor

whose only contacts with the taxing State

are by mail or common carrier lacks the

“substantial nexus” required by the

Commerce Clause.

Id. A look “under the hood” at the case law

distinguished by Bellas Hess shows what this meant.

The Illinois tax at issue in Bellas Hess was a use

tax. The State sought to enforce the use-tax collection

obligation against National Bellas Hess because it fit

the statutory definition of a “retailer doing business in

this State” by virtue of “|e|ngaging in soliciting orders

within this State from users by means of catalogues or

other advertising.” 386 U.S. at 754, 755 (quoting III.

Rev. Stat. c. 120, § 439.2 (1965)) (quotation marks

omitted).

The Court in Bellas Hess ultimately rejected what

it called “advertising nexus,” id. at 758 n. 11, partly in

reliance on the facts and holding of Miller Bros. Co. v.

Maryland, 347 U.S. 340 (1954). See id. at 758-59. In

doing so, the Court distinguished five other

precedents, making clear that use-tax collection

18

obligations were not considered “direct” taxes on the

seller and that the power of the State to enforce such

an obligation had to be based on some activity of the

seller in the State — not consumption by the customer

~— that established a baseline nexus.

In Felt & Tarrant Mfg. Co. v. Gallagher, 306

U.S. 62 (1939), the Court addressed whether

California could compel a retailer “to serve

as an agent for collecting the [use| tax.” /d.

at 64. The seller hired two “general agents”

to solicit sales and leased an office in the

State for their use in the business. The

Court did not rely expressly on the seller's

activities in the State in upholding the

obligation, but rather upon a prior decision

having the same flavor, see id. at 66-68:

o In Monomator Oil Co. v. Johnson, 292

U.S. 86 (1934), lowa imposed a use tax

on motor fuel. The corporation in

question bought and sold, manufactured

and blended gasoline and _ similar

products, including at a refinery in

lowa. Id. at 90-91. “Instead of

collecting the tax from the user through

its own officers, the state makes the

distributor its agent for that purpose.

This is a common and entirely lawful

arrangement.” /d. at 93 (citations

omitted). The Court concluded that “the

statutes properly construed lay no tax

whatever upon distributors.” /d. at 95.°

* The Court in Fe/t & Tarrant also relied, in points not

germane to the argument, on Henneford v. Silas Mason Co., 300

19

e In Nelson v. Sears, Roebuck & Co., 312 U.S.

359 (1941), the taxpayer had retail stores in

lowa and also conducted mail-order sales by

use of a catalogue. Like California’s statute

in Felt & Tarrant, lowa imposed a use-tax

collection obligation on retailers that

maintained a place of business in the State.

Id. at 361. Per the Court, “the nub of the

controversy centers on the use of respondent

as the collection agent of lowa.” On the

facts, the Court held that the mail orders

“are still part of respondent's lowa

business,” and because lowa had extended

Sears the privilege of conducting business

within the State, “Iowa can exact this

burden as a price of enjoying the full

benefits flowing from its lowa business.” /d.

at 364 (citing Wisconsin v. J.C. Penney Co.,

311 U.S. 435 (1940)). The Court

distinguished pure mail-order houses as “not

doing business in the state as foreign

corporations.” /d. at 365.

e Nelson v. Montgomery Ward & Co., 312 U.S.

373 (1941), was a companion case to Sears,

Roebuck and involved the same lowa tax.

Given that employees at local stores

conducted activities in lowa “pursuant to its

permit to do business in that state,” the fact

that other employees outside lowa handled

mail-order sales did “not permit respondent

to escape the burden which lowa has

exacted as a price of enjoying the full

U.S. 577 (1937), and Bowman v. Continental Oil Co., 256 U.S. 642

(1921).

20

benefits flowing from its aggregate lowa

business.” Id. at 375 (citing Sears,

Roebuck). An additional factor was present

~ the placement of advertisements by the

local stores regarding mail-order products as

well as in-store merchandise. To the Court,

this fact meant that Montgomery Ward

solicited mail-order sales “in lowa” through

“local advertising” that was no different, in

constitutional terms, from _local-agent

solicitations as in Fe/t & Tarrant. Td. at

376.

Gen. Trading Co. v. State Tax Commn of

Jowa, 322 U.S. 335 (1944), involved the

same use-tax collection statute as in Sears,

Roebuck and Montgomery Ward, but in this

case the corporation had not qualified to do

business in lowa and solicited orders via

traveling “salesmen.” /d. at 337. The Court

observed that the Fe/t & Tarrant case was

“indistinguishable” — “nothing [could] turn

on” variation in the means of soliciting

orders within the State. /d. at 337. “To

make the distributor the tax collector for the

State is a familiar and sanctioned device.”

Id. at 338 (citing Monamotor and Felt &

Tarrant).

Finally, in Seripto, Inc. v. Carson, 362 U.S.

207 (1960), Florida imposed the use-tax

collection duty on dealers who solicited

business either by representatives or by the

distribution of advertising matter. /d. at

207 & n.1 (citing and quoting Fla. Stat. §

212.06). Scripto solicited sales through 10

broker/salespersons operating in the State

21

designated as independent contractors. /d.

at 209. Noting that the company “is charged

with no tax—save when, as here, [it] fails or

refuses to collect it from the Florida

customer,” id. at 211, the Court held that

the test for compelling use-tax collection “is

simply the nature and extent of the

activities of the appellant in Florida.” /d. at

211-12 (emphasis added). The Court

distinguished Miller Bros. on this fact:

“Marylanders went to Delaware to make

purchases—AMiller did not go to Maryland

for sales.” /d. at 212.

In all these situations, this Court said in Bellas

Hess, “the out-of-state seller was plainly accorded the

protection and services of the taxing State.” 386 U.S.

at 757.® In other words, had the State framed a tax

imposed directly on the out-of-state sellers in these

cases on account of their own activities in the State (as

it had done in some of the cases), it could have

enforced that tax, too — so the potentiality of a State

tax consistent with Complete Auto existed. The

absence of such a potentiality in Bellas Hess — given

that the Court did not accept the validity of an

“advertising nexus,” id. at 758 n.11 — defeated Illinois’s

attempt to enforce the use-tax collection obligation.

* See also Nat? Geographic Soc'y v. California Bd. of

Equalization, 430 U.S. 551, 556 (1977) (advertising sales activity

at two offices in the State established “a relationship or ‘nexus’

between the Society and the State,” which rendered derivative

use-tax collection obligations constitutional).

C. South Dakota’s conclusive nexus presumption

based on sales volumes does not comport with

Complete Autos as-applied test; if “delivery” is

the targeted activity of online retailers, the State

needs to show the particular delivery mechanism

can be attributed to the retailer.

1. South Dakota enacted a conclusive presumption

of a “substantial nexus” between the State and the

selling activities of remote retailers based on sales

volumes — either an annual level of gross revenue from

sales “delivered into” the State of $100,000 or more, or

an annual number of taxable transactions “for delivery

into” the State of 200 or more. S.B. 106, 91* Legis.

Assemb. Session, §§ 1(1), (2) (S.D. 2016). This

“economic nexus” approach may have an attractive

simplicity, but it does not comport with the

requirement of Complete Auto, properly understood,

that the tax be applied to an activity of the taxpayer

conducted in consequential part in the State.

The reason the nexus prong of Complete Auto is

properly conceived as an as-applied test is that, if the

State is not taxing an activity of the taxpayer in the

State, it is improperly taxing an activity occurring

somewhere else. See Allied-Signal, Inc. v. Dir., Div. of

Taxation, 504 U.S. 768, 777-78 (1992).

South Dakota’s approach attempts to avoid the

fundamental factual question underlying this Court’s

cases about nexus over selling activities. The opinion

in Scripto captured the issue most clearly in

distinguishing that case from Miller Bros. In Miller

Bros., the Court said, “Marylanders went to Delaware

to make purchases—Miller did not go to Maryland for

sales.” Scripto, 362 U.S. at 212. The same question

obtains for sales on the Web: did the South Dakotan

23

go to the retailer to make a purchase, or did the

retailer go to South Dakota to make the sale? This

question is not answered by arbitrary volume

thresholds.

What is at stake in adopting a conclusive economic

nexus presumption is therefore not only overthrowing

Quill but also whether the Court will discard the

meaning of the “activity” test of Complete Auto and

push aside the underlying concern of the Commerce

Clause about the consequences of allowing one State to

tax activities that take place in other States, as

exemplified by Miller Bros. and Allied-Signal.

2. The South Dakota statute might be interpreted

as trying to meet the Complete Auto test by

attributing the activity of “delivery” of tangible

personal property, electronically transferred property,

and services “into South Dakota” to the seller. See

S.B. 106, §§ 1(1), (2) (Pet’r’s Br. App.la) (limiting the

gross receipts or transactions counting toward the

conclusive-presumption thresholds to products

delivered into South Dakota). That is, should the

statute be understood as ascribing the delivery process

to the remote seller and treating the delivery process,

part of which necessarily occurs in South Dakota, as

an integral component of making sales at retail?

Treating a remote seller's management of delivery

mechanisms in a State as a “local incident” of

retailing, sufficient to serve as a “substantial nexus”

with the retailing activity, would not be consistent

with this Court’s tradition, as shown by Bellas Hess

and such cases as American Oil Co. v. Neill, 380 U.S.

451 (1965), and Norton Co. v. Dept of Revenue, 340

U.S. 534 (1951). Regardless whether it might be a

legitimately debatable question within the Complete

24

Auto framework, the text of the statute does not

support a finding that South Dakota’s legislature

intended to base its taxing authority on a “delivery

nexus” apart from sales volumes, and the issue was

not argued or decided below.’

Moreover, delivery methods for tangible personal

property, electronically transferred property, and

services are diverse. The latter two classes, in

particular, raise the Miller Bros. question whether

South Dakotans went “to” the seller to make their

purchases. In any event, Practitioners are not aware

of adequate data in the record about Respondents’

delivery methods that could support a conclusion at

this stage that they are engaged “in business as a

retailer” in South Dakota.

3. The question presented by the Petitioner is not

well framed. Rather than “abrogate” Qui//, the

Petitioner now tells this Court that it can retain

Quills holding as far as it goes. Instead, the

Petitioner asks the Court to validate a conclusive

nexus presumption for e-commerce based on sales

volumes. This request actually asks the Court to

abrogate the more fundamental, as-applied nexus test

of Complete Auto. To be faithful to Complete Auto and

the body of law it represents, the Court should reject

the Petitioner's argument and affirm the decision

below.

? Also, nothing in S.B. 106 indicates any intent by South

Dakota to rely on an “advertising nexus,” cf Bellas Hess, 386 U.S.

at 758 n.11, by treating advertising in the State as an integral

component of making sales at retail. The South Dakota Supreme

Court also said nothing about considerin: advertising or delivery

as in-state components of the retail business in the decision

below.

II. Confusion About The Nature Of The Tax In

Question Should Be Avoided.

The Petitioner asks the Court to rest its decision in

this case on a new, nationwide abstraction of the

diverse taxes that may be implicated by conclusive

economic nexus presumptions. Ostensibly “(flor

clarity,” the Petitioner uses “sales tax” to mean “a tax

collected and remitted by the seller” and “use tax” to

mean “a tax remitted by the consumer.” Pet’r’s Br. at

3n.1.

Reimagining state taxes with this typology

undermines the “substantial nexus” test of Complete

Auto Transit, Inc. v. Brady, 430 U.S. 274 (1977),

because it necessarily confuses the issue whether “the

tax is applied to an activity” of the taxpayer. /d. at

279 (emphasis added). Each tax, whether well framed

by the legislature or not, has an object or incident. It

is “applied” to an object or incident. Fashioning a

constitutional rule based on abstracted mechanisms of

collection and remittance rather than concrete state

legislative enactments would step away from the

“realities” the Court is trying to reflect. See Trinova

Corp. v. Michigan Dept of Treasury, 498 U.S. 358, 372

(1991). A use tax, even if collected by a retailer, is

typically applied to “the privilege of use after

commerce is at an end.” Henneford v. Silas Mason Co.,

300 U.S. 577, 582 (1937). What good would it

accomplish suddenly to call use taxes “sales taxes,”

when the Court has been clear for many decades that

it is not the case?

According to the statutory text, South Dakota

“applies” its sales tax to the retailer alone. The tax is

imposed “upon the privilege of engaging in business as

a retailer ... upon the gross receipts from all sales.”

26

S.D. Codified Laws § 10-45-2 (Supp. 2017). Seeking

reimbursement from the customer is optional at the

discretion of the retailer. /d. § 10-45-22. This means

Complete Autos nexus formula asks whether the

particular person is engaging in retailing activity in

South Dakota.

A different model is exemplified by Washington

State, where the “sales tax” is imposed “on each retail

sale in this state” of specified goods and services,

Wash. Rev. Code § 82.08.020(1), and the statute

requires the tax “must be paid by the buyer to the

seller.” /d. § 82.08.050(1). Indeed, in contrast to South

Dakota, Washington generally prohibits sellers from

directly or indirectly paying the tax owed by the buyer,

on pain of a misdemeanor. /d. § 82.08.120.°

The Court does not need to treat these different

models the same way in order to sustain a coherent

Commerce Clause framework. Complete Auto controls

the one (South Dakota) and the seller’s obligation to

collect the tax in the other (Washington) is not treated

as a direct tax but instead can be triggered by non-

retailing activities of the seller in the State. See /rwin

Naturals v. State, 382 P.3d 689, 695-96 (Wash. Ct.

App. 2016) (relying on Nat? Geographic Soc’y v.

®* The differences in how these state legislatures have selected

the object of taxation are not merely a matter of “formal

language,” cf Complete Auto, 430 U.S. at 279, but instead they

have real-life consequences. For example, California’s sales tax is

generally in the South Dakota model — a tax imposed on a

retailer's gross receipts for the privilege of selling tangible

personal property, Cal. Rev. & Tax. Code § 6051 (2016 and Supp.

2018) — except that a California retailer’s right to obtain

reimbursement of the sales tax from a customer depends on the

customer's express or implied consent as a matter of contract.

See Cal. Civ. Code § 1656.1 (2016 and Supp. 2018).

California Bd. of Equalization, 430 U.S. 551 (1977)),

cert. denied, 138 S. Ct. 238 (2017).

The South Dakota situation is confused, however,

by the South Dakota Supreme Court’s apparent error

in stating that state law requires the retailer to collect

sales tax from the purchaser. See State v. Wayfair,

Inc., 901 N.W.2d 754, 756 (2016) (citing S.D. Codified

Laws § 10-45-27.3). However, this section does not

require tax collection by the retailer. Instead, it says

any “person whose receipts are subject to the tax...

shall ... file a return, and pay any tax due... .”

Nothing in the opinion suggests that the Court was

construing the statutory text rather than simply

misunderstanding it.

The website of the State’s Department of Revenue

contains statements also indicating the Court’s

statement was a casual error. Per the Department of

Revenue’s Sales and Use Tax Guide, “South Dakota

law allows the seller to add the tax to the price of the

product or service. However, the seller is liable for the

sales tax due, whether or not it is collected.” “Sales

and Use Tax Guide” at 3 (July 2017) (emphasis

added), A blic

atione/Males Taxa ( we visited April 3, 2018).

These facts are inconvenient also for the argument

of the United States as amicus curiae supporting the

Petitioner. It argues that Complete Auto does not

control this case, but instead the Court should apply

the Commerce Clause balancing framework of Pike v.

Bruce Church, Inc., 397 U.S. 137 (1970). Br. of United

States at 8. It claims that “|t|his case concerns the

application of the dormant Commerce Clause to a state

tax-collection requirement.” /d. at 1. Perhaps based

on the section title of S.D. Codified Laws § 10-64-2

28

(Supp. 2017), it argues that remote sellers are

required “to collect taxes on the sales of goods or

services into the State.” /d. at 6. In fact, the cited

statutory text does not impose this requirement, but

instead requires remote sellers to “remit the sales tax

and |[to! follow all applicable procedures and

requirements of law as if the seller had a physical

presence in the state.” S.D. Codified Laws § 10-64-2

(Supp. 2017) (emphasis added). This remittance

requirement, as noted above, is in fact a payment

requirement, with no obligation to seek any kind of

reimbursement from the customer. /d. §§ 10-45-22,

10-45-27.3.

It may be tempting to say South Dakota’s sales tax

is a sales tax like any other (according to the

Petitioner) or is a tax-collection obligation like any

other (according to the United States), but these

positions are rather like calling an apple a banana.

Unless the Court wants to fundamentally alter the

scope and meaning of the nexus text of Complete Auto,

it should treat the tax as imposed on the retailer's

retailing activity, just exactly as the statute says.

South Dakota’s conclusive nexus presumptions do not

establish the fact of an in-state activity of the retailer,

as required by Complete Auto, and should be rejected

by this Court.

* The brief for the United States does not cite to the South

Dakota Supreme Court decision.

29

CONCLUSION

For the foregoing reasons, Amici Curiae

Washington State Tax Practitioners respectfully

request that the Court affirm the decision below.

Respectfully submitted,

DIRK GISEBURT*

Counsel of Record

Davis Wright Tremaine LLP

1201 Third Avenue, Suite 2200

Seattle, WA 98101

206-757-8049

* Counsel of Record

April 4, 2018

APPENDIX

la

APPENDIX A

LIST OF AMICI CURIAE

WASHINGTON STATE TAX PRACTITIONERS

Norman J. Bruns, Garvey Schubert Barer P.C.,

Seattle, Washington

Michelle DeLappe, Garvey Schubert Barer P.C.,

Seattle, Washington

Garry G. Fujita, Eisenhower Carlson PLLC,

Tacoma, Washington

Dirk Giseburt, Davis Wright Tremaine LLP,

Seattle, Washington

David Maas, Davis Wright Tremaine LLP, Seattle,

Washington

George C. Mastrodonato, Carney Badley Spellman,

P.S., Seattle, Washington

Michele G. Radosevich, Davis Wright Tremaine

LLP, Seattle, Washington