Cayuga Indian Nation of N.Y. v. Seneca Cnty.

• Decision Date: 30 April 2017
• Docket Number: 11–CV–6004 CJS
• Citation: 260 F.Supp.3d 290
• Parties: CAYUGA INDIAN NATION OF NEW YORK, Plaintiff, v. SENECA COUNTY, NEW YORK, Defendant.
• Court: U.S. District Court — Western District of New York

260 F.Supp.3d 290

CAYUGA INDIAN NATION OF NEW YORK, Plaintiff,

v.SENECA COUNTY, NEW YORK, Defendant.

11–CV–6004 CJS

United States District Court, W.D. New York.

Signed April 30, 2017

Filed May 2, 2017

For Plaintiff: Daniel J. French, Esq., Lee Alcott, Esq., French–Alcott, PLLC, 300 South State Street, Syracuse, New York 13202.

For Defendant: Brian Laudadio, Esq., Louis P. DiLorenzo, Esq., Mary P. Moore, Esq., Bond Schoeneck & King PLLC, 530 Linden Oaks, Suite 310, Rochester, New York 14625.

DECISION AND ORDER

CHARLES J. SIRAGUSA, United States District Judge

INTRODUCTION

This action challenges Seneca County's ability to impose and collect ad valorem property taxes on parcels of real estate owned by the Cayuga Indian Nation of New York. The Cayuga Nation contends both that Seneca County cannot impose the property taxes, because the subject properties are "located within an Indian reservation,"¹ and cannot sue to collect the taxes, because the Cayuga Indian Nation enjoys sovereign immunity from suit.² Now before the Court is the Cayuga Nation's motion (Docket No. [# 39] ) to dismiss Seneca County's counterclaim, which seeks a declaratory judgment that the subject properties, which the Cayugas ostensibly sold two centuries ago and then recently re-purchased, "are not now an Indian reservation for purposes of New York Real Property Tax Law § 454 or Indian Law § 6 or [‘]Indian Country[’] for purposes of 18 U.S.C. § 1151." The application is granted.

BACKGROUND

Unless otherwise indicated, the following facts are taken from Seneca County's "Answer to Amended Complaint and Counterclaim,"³ and are presumed to be true for purposes of this Decision and Order. In February 1789, the Cayuga Nation and the State of New York signed a treaty, which, among other things, established a 64,000–acre Cayuga Indian Reservation. Between 1795 and 1807, the Cayuga Nation sold all of the Cayuga Indian Reservation lands to the State of New York. The State of New York subsequently sold those lands to private third parties. In 1838, the United States and the Cayuga Indians entered into the Treaty of Buffalo Creek, which, Seneca County maintains, disestablished any remaining Cayuga Reservation in New York. In recent years, the Cayuga Nation purchased at least five parcels of land in Seneca County, within the same geographic area as the Cayuga Indian Reservation that was established in 1789. Seneca County imposed property taxes on the Cayuga-owned properties, but the Cayuga Nation refused to pay the taxes. Thereafter, Seneca County initiated tax foreclosure proceedings against the Cayuga Nation.

In response to those foreclosure lawsuits, the Cayuga Nation commenced this lawsuit. The Cayugas' Amended Complaint purports to assert two causes of action. The first cause of action alleges that the County's attempts to foreclose on the Cayugas' properties violate federal law, and specifically, the Treaty of Canandaigua, the U.S. Constitution Article I, § 8, and the "Non–Intercourse Act," 25 U.S.C. § 177. On this point, the Cayugas' pleading alleges that any properties which the Cayugas own in Seneca County are within the geographic boundary of the 64,000–acre Cayuga Indian Reservation that was "acknowledged [by the United States of America] in the Treaty of Canandaigua, November 11, 1794."⁴ The Amended Complaint contends that, while the Cayuga Nation purportedly sold all of that 64,000–acre reservation to the State of New York, such sales were void ab initio , since they were never approved by Congress as required by the Non–Intercourse Act.⁵ Consequently, the pleading asserts, "the Nation's 64,000–acre reservation continues to exist to this day," and the subject properties are " ‘Indian Country’ within the meaning of 18 U.S.C. § 1151."⁶ Alternatively, the Cayugas contend that regardless of the reservation status of the subject land, the Cayuga Nation possesses "tribal sovereign immunity, which bars administrative and judicial proceedings against the Nation and bars Seneca County from taking any assets of the Nation."⁷

In sum, the Cayugas' first cause of action is twofold: 1) the subject properties are part of the federally-recognized Cayuga Indian Reservation, and the County therefore cannot foreclose on the properties, because it lacks the authority to interfere with the ownership or possession of federal Indian reservation lands; and 2) the "Cayuga Indian Nation of New York" is a "sovereign Indian nation," which is protected from foreclosure lawsuits by the federal doctrine of sovereign immunity from suit.⁸

The Cayugas' second cause of action alleges that Seneca County violated two New York statutes—New York State Property Tax Law § 454 and New York Indian Law § 6 —by assessing property taxes on their properties. On this point, the pleading contends that both of those statutes forbid the imposition of taxes on "Indian reservation" lands. See , Amended Complaint [# 9] at ¶¶ 21–22 (" New York [Real Property Tax Law § 454 ] provides that ‘real property in any Indian reservation owned by the Indian nation, tribe or band occupying them shall be exempt from taxation[, while] New York Indian Law § 6 directs that no taxes shall be established upon Indian Reservation lands.... Pursuant to the aforesaid provision[ ] of state law, taxes should not have been assessed against the Nation-owned properties[.]").

As for relief, the Cayugas' pleading seeks two types. First, the Amended Complaint seeks a declaration that the County cannot foreclose on, or otherwise "acquire, convey, sell or transfer title" to, "Nation-owned properties" within Seneca County. Second, the Amended Complaint seeks an injunction, prohibiting the County from making "any further efforts" to foreclose on, acquire, convey or otherwise sell "Nation-owned properties in Seneca County;" prohibiting the County from "interfering in any way with the Nation's ownership, possession, and occupancy of such lands;" and requiring the County to "rescind all acts taken to acquire, convey, foreclose, sell or transfer title to Nation-owned properties within Seneca County to date."

When the Cayugas commenced this action, they also filed a motion for preliminary injunctive relief, barring Seneca County from proceeding with pending foreclosure actions, affecting the five parcels identified in the Amended Complaint, on the basis of sovereign immunity. On August 20, 2012, the Court granted such preliminary injunctive relief. Cayuga Indian Nation of New York v. Seneca County, New York , 890 F.Supp.2d 240 (W.D.N.Y. 2012). Seneca County appealed, but on July 31, 2014, the United States Court of Appeals for the Second Circuit affirmed this Court's ruling, agreeing that the Cayuga Indian Nation has sovereign immunity from suit. Cayuga Indian Nation of New York v. Seneca County, New York , 761 F.3d 218 (2d Cir. 2014).

On August 31, 2015, Seneca County filed its Answer to Amended Complaint and Counterclaim [# 37]. The counterclaim seeks a declaratory judgment "that the Subject Properties are not now an Indian reservation for purposes of New York Real Property Tax Law § 454 or Indian Law § 6 or Indian country for purposes of 18 U.S.C. § 1151." The pertinent factual allegations supporting the counterclaim are as follows:

On or about July 27, 1795, the Nation entered into a treaty with the State of New York under which New York acquired the entire "Original Reservation," except for a three-square mile parcel. In 1807, the State of New York purchased the remaining three-square mile parcel ... from the Nation. The Treaty of Buffalo Creek of 1838 was ratified by the Senate and proclaimed by the President of the United States. The Treaty of Buffalo Creek of 1838 disestablished any Nation reservation in New York. As a result of the foregoing, any and all right, title, and interest of the Nation to the "Original Reservation" had lawfully extinguished and the State of New York held full title to these lands[, which they later sold to] private successors in interest.... The subsequent history and treatment of the land located within what had been the "Original Reservation" demonstrate and confirm that the former Nation reservation was disestablished long ago.

Answer to Amended Complaint with Counterclaim [# 37] at ¶¶ 32–37, 39 (emphasis added; paragraph numbers omitted). Thus, Seneca County's contention that the Cayuga Indian Reservation does not presently exist has two primary components: First, that the reservation was disestablished by the Treaty of Buffalo Creek; and second, that such disestablishment has been "demonstrated and confirmed" by the "subsequent history and treatment of the land."⁹ The counterclaim seeks the dismissal of the Amended Complaint, and a declaration that "the former Nation reservation has been disestablished as to the subject lands and that the lands that were formerly the "Original Reservation" are neither "Indian country" nor part of an "Indian reservation[.]"

On October 8, 2015, the Cayuga Nation filed the subject motion [# 39] to dismiss the counterclaim. The Nation first contends that the counterclaim is "non-justiciable" because it is barred by sovereign immunity. In particular, the Nation asserts that by bringing this action, it "did not expressly or impliedly consent to an adjudication of its reservation status in the abstract."¹⁰ The Nation admits that there is an exception to sovereign immunity, which permits a counterclaim that "mirrors" the sovereign's claim, but contends that Seneca County's counterclaim does not mirror the Nation's claim. Further, the Nation contends that to the extent that the counterclaim mirrors the Nation's claim, it is still non-justiciable because the counterclaim is redundant of the Nation's claim, and does not present an independent case or controversy.

As a second basis for dismissal, the Nation contends that the counterclaim is barred by collateral estoppel. In particular, the Nation contends that the Seneca County Sheriff and Seneca County District Attorney unsuccessfully...