Indian land disputes could return to fed court

By Denise M. Champagne
Posted: 4:40 pm Wed, January 5, 2011

A new legal battle between two Finger Lakes counties and the Cayuga Indian Nation appears headed to federal court.

Attorney Daniel J. French, who represents the Nation, said if the counties proceed with threatened foreclosures on Nation-owned property, he will seek an injunction in federal court.

French, of the Syracuse law firm French-Alcott PLLC, said the case is similar to one the Oneida Indian Nation brought in federal court that blocked foreclosure on its properties in Madison and Oneida counties.

The Oneidas, like the Cayugas, claim they are a sovereign nation immune from any type of tax enforcement proceeding.

A federal district court agreed with the tribe in a 2006 decision that was affirmed in April by the U.S. Court of Appeals for the Second Circuit, which noted the law defies common sense in that it allows for the collection of taxes, but prevents taxing authorities from suing to collect them.

The matter, Madison County, NY v. Oneida Indian Nation of NY, is pending before the U.S. Supreme Court. French said he has suggested Seneca and Cayuga counties wait to see what the high court decides before proceeding.

“They’ve indicated their intentions to go ahead with their foreclosures,” he said. “We tried to talk to them. They don’t seem inclined to do that so we’ll take them to court.”

French said Seneca County is moving ahead and he may file in federal court by the end of the week.

“We’re just doing our routine tax foreclosures,” said Seneca County Attorney Frank R. Fisher. “There is nothing unusual about it.”

Fisher said five parcels, three in Seneca Falls and two in Varick, have been in arrears for three years and are being foreclosed upon with other delinquent properties in the county. Taxes for at least 2008, the first delinquent year, must be paid by Jan. 14 to prevent foreclosure. The total for that year on the five parcels is $5,526.70.

County Treasurer Nicholas A. Sciotti said the Cayuga Nation owes a total of about $32,000 for the five properties and about $127,000 on more than 40 parcels it owns.

Foreclosed properties are sold at an annual tax sale auction in March.

James Bastian, director of the county’s Real Property Tax Services, said the Cayuga Indian Nation has purchased 43 parcels, totaling 1,100.41 acres. The five properties under foreclosure make up nearly 330 total acres. The Nation also owns 200-plus acres in Cayuga County.

“This is the first time that the Cayuga Indian Nation has been listed in our tax foreclosure,” Fisher said. “There is nothing in law that exempts these properties from taxation.”

He noted the Nation has paid taxes on the properties it wants taken into federal trust which mainly consist of parcels in the two counties where the Nation operates commercial businesses.

“The Bureau of Indian Affairs requires them to do that to take this property into trust,” Fisher said.

The Cayugas own and operate LakeSide Trading Co. gas station/convenience stores in Seneca Falls and Union Springs. They are on properties included in the trust applications which, if granted, will allow them to use the land as they see fit, exempt from taxation by the state and its subdivisions.

Fisher acknowledged having discussions with French’s firm, particularly his partner Lee Alcott.

“Yes, we have heard from them,” Fisher said. “The intent of the Board of Supervisors is to proceed ahead regardless of race or affiliation. We intend to enforce our tax bills fairly and equally across the board. We believe we are doing the fair, just and legal thing. We intend to proceed ahead until some lawful authority directs us to do something different.”

Multiple land-claim disputes between the Nation and counties date back to 1980 when the Cayugas filed a claim for some 64,000 acres that wrap around the northern part of Cayuga Lake. The Cayugas claimed the land, their original homeland, was illegally sold to New York without approval of the federal government more than 200 years ago.

The U.S. Supreme Court refused to hear the matter after it was dismissed by the Court of Appeals for the Second Circuit within months of a 2005 landmark decision in Sherrill v. Oneida Indian Nation of New York 544 U.S. 197, 214 (2005).

Oral arguments in the Oneida case, Madison County, are scheduled to be heard by the U.S. Supreme Court starting Feb. 23. Representing Madison and Oneida counties in that matter are David M. Schraver, a partner in the Rochester office of Nixon Peabody LLP, assisted by fellow Nixon Peabody partner David H. Tennant and associate Erik A. Goergen.

The Oneida Indian Nation is represented by Seth P. Waxman of the Washington, D.C. firm Wilmer Cutler Pickering Hale and Dorr LLP, and Michael R. Smith, Zuckerman Spaeder LLP, Washington, D.C.

The high court has agreed to consider two basic elements of a long-term dispute between the Oneida Indian Nation and Madison and Oneida counties.

The questions presented are whether tribal sovereign immunity from suit bars taxing authorities from foreclosing to collect lawfully imposed property taxes and whether the ancient Oneida reservation in New York was disestablished or diminished.

In Sherrill, the Supreme Court held that standards of federal Indian law and federal equity practice precluded the Oneidas from unilaterally reviving its ancient sovereignty over some 17,000 acres in Madison and Oneida counties that were part of the Oneida Nation reservation established under the 1788 Treaty of Fort Schuyler. The lands were later sold to non Indians and had been occupied and governed by non Indians for more than 200 years.

“In so holding, this court expressly rejected the tribe’s claim that its sovereign immunity prevented the city of Sherrill … from collecting unpaid property taxes through foreclosure and eviction,” according to the Supreme Court order in Madison. “Despite Sherrill, in these two related cases involving attempts by Madison County and Oneida County to foreclose on OIN-owned fee parcels for nonpayment of lawfully imposed taxes, the lower court held that the remedy of foreclosure is barred by tribal sovereign immunity from suit — a decision which two courts of appeals judges expressly implored this court to review.”

Certiorari was granted Oct. 12, 2010. Since then, amicus curiae briefs have been submitted by several parties including the state and Seneca and Cayuga counties. Another local attorney involved in the matter is Philip G. Spellane of Harris Beach PLLC, representing Seneca and Cayuga counties.

Louis Benjamin Carroll of the Syracuse firm Carroll & Carroll Lawyers PC is representing Oneida Landowners Inc.