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Seneca County can’t foreclose on tribal lands

By: Denise M. Champagne//August 3, 2014

Seneca County can’t foreclose on tribal lands

By: Denise M. Champagne//August 3, 2014//

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Seneca County can levy property taxes on land owned by the Cayuga Indian Nation, but has no legal means of collecting them.

The U.S. Court of Appeals for the Second Circuit on Thursday agreed the tribe has federal sovereign immunity from suit and upheld a preliminary injunction preventing the county from foreclosing on Nation-owned lands with delinquent back taxes of more than $1 million, Cayuga Indian Nation of New York v. Seneca County (12-3723).

Daniel J. French
Daniel J. French

“The Cayuga Nation is pleased with the decision and continues in its belief that it’s time for Seneca County and the Cayuga Nation to sit down and work out a solution to these issues,” said Daniel J. French, a partner in the Syracuse law firm French & Alcott PLLC, who, with his partner Lee Alcott, represents the Cayuga Indian Nation.

French said the dispute is identical to one the Oneida Indian Nation had with Madison County and just as the Oneidas have settled all of the their legal issues with their respective county, the Cayugas would like to do the same with Seneca County.

The county is represented by attorney Philip G. Spellane, managing partner of the Rochester office of Harris Beach PLLC, who said the decision is disappointing.

He said municipalities are providing services such as use of roads and snow plowing, but are not being compensated.

Spellane said no decision has been made yet on whether or not to seek a review by the U.S. Supreme Court.

“I think there’s always the possibility of making application for certiorari, but that’s a steep hill,” he said.

Philip G. Spellane
Philip G. Spellane

Spellane noted the Second Circuit relied heavily on the U.S. Supreme Court’s May decision in Michigan v. Bay Mills Indian Community, 572 US __, in which it ruled sovereign immunity barred a Michigan town’s suit against the Bay Mills Indian Community to have it close a gaming facility it operated, even though it was on non-Indian lands and in violation of state gaming laws.

The only issue before the Second Circuit was whether the District Court properly determined the Cayuga Nation was likely to succeed on the merits that foreclosure actions against the tribe are barred by its sovereign immunity.

French said the nation owns between 1,200 and 1,500 acres in Seneca and Cayuga counties where its ancestral reservation, as recognized in the 1794 Treaty of Canandaigua, is more than 62,000 acres.

A spokeswoman in the Seneca County Treasurer’s Office said the Cayugas owe the county more than $1.4 million in back property taxes through May.

The Nation has been buying properties in its aboriginal homelands around the Northern half of Cayuga Lake in Seneca and Cayuga counties since the mid-1990s.

When Seneca County was unable to collect property taxes on the Cayuga-owned lands within its boundaries, it eventually brought suit in January 2011 on properties in arrears for three or more years.

U.S. District Court Judge Charles J. Siragusa, sitting in Rochester for the Western District of New York, preliminarily enjoined the county’s foreclosure proceedings in his Aug. 20, 2012 decision, saying the Nation had demonstrated foreclosure actions were barred by the tribe’s sovereign immunity.

Seneca County appealed, claiming the court should limit the doctrine of tribal immunity from suit so states can bring foreclosure actions to recover uncollected taxes levied against the property of Indian tribes.

The issue of tribal immunity was addressed in the Second Circuit’s 2010 decision in Oneida Indian Nation of N.Y. v. Madison County, 605 F.3d 149, which was vacated by the U.S. Supreme Court and remanded after the Oneidas notified the high court it was waiving immunity against tax enforcement.

Seneca County argued the vacatur left the Second Circuit panel free from otherwise binding precedent and urged the court to conclude the Madison County decision misconstrued Supreme Court precedent regarding the doctrine of tribal sovereign immunity.

New York state, in a friend-of-the-court brief, argued the prior opinion cast doubt on whether the reasoning in Madison County was correct.

The state, represented by the attorney general’s office, declined to comment.

“We need not attempt to discern the implied message communicated by the vacatur of our prior opinion because the Supreme Court has since issued further guidance regarding both the continuing vitality of the doctrine of tribal sovereign immunity for suit and the propriety of drawing distinctions that might constrain the broad sweep of that immunity in the absence of express action by Congress,” the Second Circuit panel wrote, citing Michigan v. Bay Mills Indian Community.

The panel noted the Supreme Court has upheld Indian sovereignty as holding a common law immunity from suit and that it agrees with the high court not to start carving out exceptions, but to leave it to Congress to define or otherwise repeal tribal sovereign immunity from suit.

“Therefore, we decline, as has the Supreme Court, to read a ‘commercial activity’ exception into the doctrine of tribal sovereign immunity from suit …,” the panel wrote, citing Kiowa Tribe of Oklahoma v. Manufacturing Technologies Inc., 523 U.S. 751 (1998).

It also declined to make the distinction offered by Seneca County between in rem and in personam proceedings; that the suit was against the property, not the tribe.

The panel, quoting  from The Siren, 74 U.S. 152, noted “[T]here is no distinction between suits against the government directly and suits against its property.”

In addition, the county contended the Cayuga Nation had waived its sovereign immunity or should not be allowed to assert it, based on arguments it made for the state Court of Appeals in Cayuga Indian Nation of New York v. Gould, 930 N.E. 2d 233, but the Second Circuit found none of the cited statements represented an unequivocal immunity waiver.

The panel consisted of Chief Judge Robert A. Katzmann and Circuit Judges Dennis Jacobs and Susan L. Carney.

Also working on the case for the Cayuga Indian Nation were David W. DeBruin and Joshua M. Segal of the Washington, D.C. office of Jenner & Block.

Spellane was assisted by Daniel J. Moore and James P. Nonkes, members of his firm.

Attorneys for the U.S. Department of Justice also filed an amicus curiae brief, arguing “it is well established that a sovereign’s immunity from suit extends to land in the sovereign’s possession,” and that no exception to the principle has been carved out.

“The Supreme Court has long distinguished between immunity from substantive law, including taxation or regulation, and immunity from enforcement actions and suits,” wrote acting Assistant Attorney General Robert G. Dreher. “It has held that an Indian tribe, like any other sovereign, may be subject to a state’s substantive law, yet immune from suit to enforce that law,” something the Second Circuit previously said defied common sense.

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