New York v. Shinnecock Indian Nation

• Citation: 686 F.3d 133
• Decision Date: 25 June 2012
• Docket Number: Docket Nos. 08–1194–cv(L), 08–1195–cv(CON).
• Parties: State of NEW YORK, New York State Racing and Wagering Board, and New York State Department of Environmental Conservation, Plaintiffs–Appellees, Town of Southampton, Consolidated–Plaintiff–Appellee, v. SHINNECOCK INDIAN NATION, Lance A. Gumbs, Randall King, Karen Hunter, and Frederick C. Bess, Defendants–Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

686 F.3d 133

State of NEW YORK, New York State Racing and Wagering Board, and New York State Department of Environmental Conservation, Plaintiffs–Appellees,Town of Southampton, Consolidated–Plaintiff–Appellee,

v.SHINNECOCK INDIAN NATION, Lance A. Gumbs, Randall King, Karen Hunter, and Frederick C. Bess, Defendants–Appellants.^*

Docket Nos. 08–1194–cv(L), 08–1195–cv(CON).

United States Court of Appeals, Second Circuit.

Argued: March 7, 2011.

Decided: June 25, 2012.

Christopher H. Lunding (Evan A. Davis, Ashika Singh, on the brief), Cleary Gottlieb Steen & Hamilton LLP, New York, NY, for Defendants–Appellants.

Denise A. Hartman, Assistant Solicitor General (Eric T. Schneiderman, Attorney General of the State of the New York, Barbara D. Underwood, Solicitor General, Andrew D. Bing, Deputy Solicitor General, on the brief), Albany, NY, for State Plaintiffs–Appellees.

Michael S. Cohen (David M. Schraver, David H. Tennant, on the brief), Nixon Peabody LLP, Jericho, NY, for Consolidated Plaintiff–Appellee Town of Southampton.

Before: JOHN M. WALKER, JR., B.D. PARKER, and HALL, Circuit Judges.

Judge HALL dissents in a separate opinion.

JOHN M. WALKER, JR., Circuit Judge:

The Shinnecock Indian Nation and its tribal officials (collectively, the “Shinnecock” or the “Tribe”) appeal from a judgment of the United States District Court for the Eastern District of New York (Joseph F. Bianco, Judge ). After a bench trial, the district court granted a permanent injunction prohibiting the Tribe from developing a casino on a plot of land known as Westwoods without complying with the laws of New York State and the Town of Southampton. The Shinnecock object to a number of the district court's factual and legal conclusions, including its findings: (1) that tribal sovereign immunity from suit does not bar this action; (2) that the Shinnecock's aboriginal title to the land at Westwoods was extinguished in the seventeenth century; (3) that even if aboriginal title had not been extinguished, equitable principles would prevent the Shinnecock's development of a casino in violation of state and local law; and (4) that the federal Indian Gaming Regulatory Act (“IGRA”) supplanted any federal common law right the Tribe may have had to operate the casino. They also argue that the Bureau of Indian Affairs's recent recognition of the Shinnecock Indian Nation moots the injunction.

We conclude that the district court lacked subject matter jurisdiction over this action, and thus do not reach the merits of this appeal.

BACKGROUND

In 2003, the Shinnecock entered into a contract for the construction of a 61,000–square–foot casino on 80 acres of land it owned, known as Westwoods, in the town of Southampton, New York. The Tribe did not obtain permits from the State of New York or the Town of Southampton. In July 2003, the Shinnecock began bulldozing trees and brush to begin construction.

On or about June 29, 2003, the State of New York, the New York State Racing

and Wagering Board, and the New York State Department Of Environmental Conservation (collectively, “the State”) sued the Tribe in New York State Supreme Court, seeking to prevent it from going forward with the casino without complying with state law. The State asserted five claims. The first alleges that the planned casino violates state law, and is outside the scope of the IGRA—a federal act that authorizes tribal gaming under certain conditions—because the Tribe is not federally recognized and Westwoods is not “Indian lands.” The remaining claims allege that construction of the casino would violate state environmental laws because the Tribe did not obtain required permits or conduct a required environmental review.¹ The State sought an injunction preventing the Tribe from constructing and operating a gaming facility at Westwoods. It also sought a declaration that, among other things, the Tribe may not pursue gambling activities at the site until it complies with state law or the IGRA.

The Shinnecock removed the case to federal court on the basis that the State's complaint pleaded issues of federal law. The removal notice identified four “conclusions about federal law” alleged in the complaint, all of which relate to the complaint's assertion that federal law does not authorize the Shinnecock to construct a casino at Westwoods in violation of state and local law. In its answer to the complaint, the Tribe admitted that it had not obtained any permit from the State of New York or the Town of Southampton. It asserted, however, that on the basis of federal Indian law, neither the State nor the Town has the power to regulate activities at Westwoods because the Tribe has aboriginal title to the land.

The State moved to remand the action to state court, disputing the presence of a federal question on the face of its complaint. It argued that its complaint is based entirely on violations of New York state law, that the Shinnecock's removal is based on the complaint's anticipation of the Shinnecock's defenses, and that the complaint's reference to the IGRA asserts only that the IGRA does not apply, whereas only state law does.

Judge Platt, to whom this case was initially assigned, denied the State's motion. He found that the State's complaint asserts a violation of the IGRA and raises federal questions about the possessory rights of Indian tribes. New York v. Shinnecock Indian Nation, 274 F.Supp.2d 268 (E.D.N.Y.2003).

Shortly before Judge Platt's decision on the remand motion, the Town of Southampton (the “Town”) filed a separate suit alleging that the Shinnecock's construction of a casino would violate the Town's zoning, land use, and wetlands protection ordinances, and seeking injunctive and declaratory relief.² The Shinnecock removed the Town's action to federal court. The Town moved to remand, but the district court suspended decision on the motion and the Town eventually withdrew it when the district court consolidated the Town's suit with the State's.

After additional rounds of motion practice, the district court conducted a bench trial.³ The parties introduced evidence of the history of the Shinnecock and their aboriginal title to the land at Westwoods, and of the casino's potential impact on neighboring landowners and the Town of Southampton.

At the close of trial, the district court ruled in favor of the State and the Town and granted a permanent injunction prohibiting the Shinnecock from building a casino on Westwoods without complying with state and local law. New York v. Shinnecock Indian Nation, 523 F.Supp.2d 185 (E.D.N.Y.2007); see also New York v. Shinnecock Indian Nation, 560 F.Supp.2d 186 (E.D.N.Y.2008) (modifying injunction). The district court found (1) that tribal sovereign immunity from suit does not bar this action; (2) that the Shinnecock's aboriginal title to the land at Westwoods was extinguished in the seventeenth century; (3) that even if the Shinnecock had unextinguished aboriginal title, equitable considerations would, under City of Sherrill v. Oneida Indian Nation, 544 U.S. 197, 125 S.Ct. 1478, 161 L.Ed.2d 386 (2005), bar their development of a casino at Westwoods because of the disruption it would cause to the Town and the long-standing expectations of its residents; and (4) that the IGRA, which did not apply to the Shinnecock because they were not a federally-recognized tribe, supplanted any federal common law right Indian tribes might have had to operate casinos. See Shinnecock Indian Nation, 523 F.Supp.2d at 249–302.

The Shinnecock appealed. They challenge the district court's legal and factual conclusions and argue that the federal government's recent recognition of the Tribe has mooted the injunction.

DISCUSSION

Before we can address the merits of the Shinnecock's appeal, we must determine whether the district court had subject matter jurisdiction over the case. In re Methyl Tertiary Butyl Ether (“MTBE”) Prods. Liab. Litig., 488 F.3d 112, 121 (2d Cir.2007). Although the plaintiffs argued below that federal jurisdiction was absent, on appeal all parties take the position that subject matter jurisdiction exists based on the federal questions the case raises. Nevertheless, we must conduct an independent inquiry. Jurisdiction cannot be created by the consent of the parties. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 95, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) (“[E]very federal appellate court has a special obligation to satisfy itself not only of its own jurisdiction, but also that of the lower courts in a cause under review, even though the parties are prepared to concede it.” (internal quotation marks omitted)); City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 125–26 (2d Cir.2011).

I. The Well–Pleaded Complaint Rule

Under 28 U.S.C. § 1331, federal district courts have jurisdiction over cases “arising under the Constitution, laws, or treaties of the United States.” A cause of action arises under federal law only when the plaintiff's “well-pleaded complaint” raises an issue of federal law. Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 63, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987). “The ‘well-pleaded complaint rule’ is the basic principle marking the boundaries of the federal question jurisdiction of the federal district courts.” Id. (quoting Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 9–12, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983)).

A cause of action raises an issue of federal law only when “a right or immunity created by the Constitution or laws of the United States ... [is an] essential [element] of the ... cause of action.” Gully v. First Nat'l Bank, 299 U.S. 109, 112, 57 S.Ct. 96, 81 L.Ed. 70 (1936). It is not enough that the complaint anticipates a potential federal defense. Caterpillar Inc. v. Williams, 482 U.S. 386, 393, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987); Franchise Tax Bd., 463 U.S. at 12, 103 S.Ct. 2841;Gully, 299 U.S. at 116, 57 S.Ct. 96;Taylor v. Anderson, 234 U.S. 74, 75–76, 34 S.Ct. 724, 58 L.Ed. 1218 (...