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Counties turn to High Court in land dispute

By: Denise M. Champagne//August 11, 2010

Counties turn to High Court in land dispute

By: Denise M. Champagne//August 11, 2010

Leaders in Seneca and Cayuga counties are asking the U.S. Supreme Court to consider hearing a case involving the sovereignty of the Cayuga Indian Nation.

The nation’s highest court will be asked to rule on a decades-long dispute over whether land in the two counties, owned by the Cayuga Indian Nation, is a lawful reservation.

Philip G. Spellane, an attorney with the Pittsford-based law firm of Harris Beach PLLC is representing Seneca and Cayuga counties and filed the petition Monday to meet a 90-day deadline.

Spellane asked to be heard on the legality of a May 11 decision of the New York State Court of Appeals, which ruled the Cayugas have a qualified reservation according to state tax law, and that the state cannot prosecute them for selling untaxed cigarettes to non-Indians at their two stores, one in each county.

The state Court of Appeals, in a 4-3 decision, agreed sales of cigarettes to non-Indians should include collection of the state tax, then $2.75 per pack, but said Indian retailers cannot be criminally prosecuted for not collecting the tax, which was increased to $4.35 per pack on July 1.

Syracuse attorney Daniel J. French, whose French-Alcott PLLC firm represents the Cayuga Indian Nation, said he doubts the U.S. Supreme Court will grant certiorari. He said the case involves a state ruling on a state issue and called the counties’ attempts to take the matter to the nation’s highest court comical.

“It’s ridiculous,” French said. “They just can’t seem to help themselves.”

Spellane disagrees, and said the counties believe the state court erred in its interpretation and application of a federal analysis of what constitutes a reservation.

“The tax law is clear that this is not a reservation,” he said. “Even under federal law, it would not be considered a reservation.”

The Cayugas claim to have a reservation under the 1794 Treaty of Canandaigua, but Spellane said that at one point the state had reserved land to the Cayugas. It was not a federal reservation and the Cayugas later sold the land, Spellane said.

The Cayugas claim the land they own in the two counties is a lawful reservation, recognized by the federal government.

The Nation filed a claim in federal district court in 1980, seeking ownership of 64,015 acres in the two counties that wrap around the northern end of Cayuga Lake.

The Nation claimed the land was part of its “original reservation” and that its later sale was illegal because it was not approved by the federal government according to a 1793 law prohibiting the sale of Indian lands except by federal treaty.

U.S. District Judge Neil P. McCurn of the Northern District of New York agreed in 2001 and awarded the Cayugas $248 million for the land, rent for 204 years and interest, but that judgment was reversed on appeal in 2005 when a Second Circuit panel determined the tribe had waited too long to bring its claim.

According to that decision, handed down in 2005, the Cayugas sold the “original reservation” in separate sales to the state in 1795 and 1807, although neither were ratified by the federal government.

The Cayugas have purchased some 13,000 acres of land within the original claim region in the two counties in the last 10 years. They also have an application pending with the federal Bureau of Indian Affairs to place 125 acres into federal trust to be used as the Nation sees fit, free from taxation, under federal protection. French said the Cayugas plan to eventually file for federal trust on all of their holdings.

Local officials are not convinced: “The federal government has no right to take that land and give it to the natives or give it to anyone,” said Chuck Lafler, chairman of the Seneca County Board of Supervisors. “Whether it’s sovereign land or not, we don’t believe that it is. We don’t believe that this land ever was a federally recognized land.”

He said New York was one of the original 13 colonies, predating the federal government, and that the federal government has never had a right to the land.

The Cayugas opened two gas station/convenience stores in 2003, Lake Side Trading Co., one in each county, where cigarettes and gasoline have been sold without state or local taxation. Federal taxes are collected.

Under new state regulations, which raised the per-pack cigarette tax by $1.60, Indian retailers will be required to collect the tax on sales to non-Indians beginning Sept. 1, but French said he anticipates litigation will be filed before that time.

Spellane also represents the sheriffs and district attorneys of the two counties who authorized a 2008 raid on the stores, which confiscated 176,000 cartons of cigarettes and computers.

Seneca County, under court order, has since agreed not to prosecute the Cayugas for failure to collect the state sales taxes and has returned the cigarettes, although French said they’re now spoiled and the Nation also plans to sue the two counties for $500,000 in damages.

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