Foreclosure: Oneida Indian Nation of New York v. Madison County and Oneida County

U.S. Court of Appeals for the Second Circuit

Foreclosure

Sovereign Immunity — Notice

Oneida Indian Nation of New York v. Madison County and Oneida County
05-6408-cv
Judges Cabranes, Sack and Hall

Background: In separate actions, the Oneida Indian Nation brought suit against Madison and Oneida counties to enjoin them from assessing property tax on property owned by the Nation. The property had been acquired on the open market in the 1990s. The Nation also sought to enjoin the counties from enforcing the assessed property tax through tax sales and foreclosures. 
On cross-motions for summary judgment in each action, the district court entered judgment in favor of the Nation on the grounds of tribal sovereign immunity from suit, the Nonintercourse Act, due process, and property tax exemptions under New York state law. The counties appealed and the Second Circuit affirmed the decision solely on the basis that the Nation’s tribal sovereign immunity barred the counties from undertaking foreclosure proceedings against it.
Upon a petition to the U.S. Supreme Court by the counties, the Nation declared that it had waived its tribal sovereign immunity from suit. The Supreme Court vacated the Second Circuit’s prior decision and remanded to the Second Circuit for further review.

Ruling: The Second Circuit held that the Nation had abandoned its claims premised on tribal sovereign immunity, as well as its claims based upon the Nonintercourse Act. The Second Circuit also held that the district court erred in ruling that the counties’ redemption-notice procedures failed to comport with due process and that the court should not have exercised supplemental jurisdiction over the Nation’s state law claims.
The Nation had argued that it was denied due process as the counties’ failed to provide adequate notice to the Nation of the expiration of the redemption periods applicable to each county’s respective tax-enforcement proceedings. Specifically, the Nation argued that notice ought to have been given on the beginning date of the redemption period by way of personal notice. The court found that such a requirement was overly rigid and based upon a misinterpretation of precedent. Moreover, the court found that the owners of the parcels at issue received actual notice by a mass mailing conducted by the counties.
Also, the Second Circuit concluded that, because the Nation’s federal claims had been dismissed, the district court should not exercise supplemental jurisdiction over the New York state tax law claim. The court suggested that a direct appeal to the New York State Court of Appeals would be more appropriate given the particularities of New York law.

David M. Schraver, David H. Tennant and John J. Field of Nixon Peabody LLP for the defendants Madison County and Oneida County; Michael R. Smith and David A. Reiser of Zuckerman Spaeder LLP for the plaintiff Oneida Indian Nation; Don B. Miller for the putative intervenor Stockbridge-Munsee Community, Band of Mohican Indians