Fluent v. Salamanca Indian Lease Authority

Decision Date14 March 1994
Docket NumberNo. 90-CV-1229A.,90-CV-1229A.
Citation847 F. Supp. 1046
PartiesJoseph FLUENT, et al., Plaintiffs, v. SALAMANCA INDIAN LEASE AUTHORITY, et al., Defendants.
CourtU.S. District Court — Western District of New York

COPYRIGHT MATERIAL OMITTED

Jennifer A. Coleman, Buffalo, for plaintiffs.

R. William Stephens, Raichle, Banning, Weiss & Stephens, Buffalo, for defendants.

ORDER

ARCARA, District Judge.

This case was referred to Magistrate Judge Heckman on February 10, 1993, pursuant to 28 U.S.C. § 636(b)(1). On July 27, 1993, Magistrate Judge Heckman filed a Report and Recommendation recommending that the District Court grant defendants' motion for summary judgment, dismiss the second, third, fifth, seventh, ninth, eleventh and twelfth causes of action, and enter judgment on the complaint in favor of defendants as a matter of law.

Plaintiffs filed objections to the Report and Recommendation on September 10, 1993. Defendants filed a response to plaintiffs' objections on October 22, 1993. Oral argument on plaintiffs' objections was heard on November 10, 1993.

At oral argument, plaintiffs argued that numerous issues of fact exist which prevent the Court from granting defendants' summary judgment motion. As evidence of the factual issues in dispute, plaintiff referenced transcripts of negotiations between the Salamanca Indian Lease Authority and the Seneca Nation. Item No. 75. The Court directed plaintiffs to submit a copy of the transcripts with the material plaintiffs wished to emphasize highlighted for easier reference by the Court.

Plaintiff submitted the highlighted material on November 29, 1993. Defendants submitted a response to the submission on December 8, 1993. Upon review, the Court finds that the supplemental material fails to demonstrate that any material issue of fact exists such that defendant's summary judgment motion should be denied.

Pursuant to 28 U.S.C. § 636(b)(1), the Court must make a de novo determination of those portions of the Report and Recommendation to which objections have been made. Upon a de novo review of the Report and Recommendation, and after reviewing the submissions and hearing argument from the parties, the Court adopts the proposed findings of the Report and Recommendation.

Accordingly, for the reasons set forth in Magistrate Judge Heckman's Report and Recommendation, defendants' motion for summary judgment is granted. Plaintiffs' second, third, fifth, seventh, ninth, eleventh and twelfth causes of action are dismissed. The Clerk is directed to enter judgment for defendants as a matter of law.

IT IS SO ORDERED.

REPORT AND RECOMMENDATION

HECKMAN, United States Magistrate Judge.

Pending before the court is Defendants' motion to dismiss and/or for summary judgment. Pursuant to 28 U.S.C. 636(b)(1)(B), this motion was referred to the undersigned to hear and report. For the reasons set forth below, Defendants' motion should be granted.

PROCEDURAL HISTORY

Plaintiffs Salamanca Coalition of United Taxpayers, Inc. ("SCOUT"), representing nearly 600 lessees, and five individual lessees, commenced this action in November of 1990 against the Seneca Nation of Indians ("Nation"), and against the Salamanca Indian Lease Authority ("SILA"), the City of Salamanca and various City officials to compel the Nation to renew their leases for up to 99 years. Other relief was sought, including a declaration that the agreement negotiated by SILA, the City and the Nation for renewal of the leases was null and void.

Plaintiffs moved for a temporary restraining order and preliminary injunction against SILA and its members seeking to prevent SILA's future operation and any future use by SILA of City funds and resources. On January 8, 1991, this motion was denied by the District Court. On January 25, 1991, the District Court dismissed all claims against the Nation, finding that the Nation was immune from suit. It also dismissed the first, eighth and tenth causes of action against the remaining Defendants on the ground that an adjudication of those claims in the absence of the Nation would impede the Nation's ability to protect its interest in the subject of those claims. On March 18, 1991, the District Court's decision was upheld by the Second Circuit. Fluent v. Salamanca Indian Lease Authority, 928 F.2d 542 (2d Cir.), cert. denied, ___ U.S. ___, 112 S.Ct. 74, 116 L.Ed.2d 48 (1991).

On October 25, 1991, Defendants moved to dismiss or for summary judgment as to the remaining claims in the complaint. This motion was referred to the undersigned to hear and report on February 10, 1993. Argument on the motion was scheduled for April 27, 1993 but was subsequently adjourned with the consent of counsel until May 13, 1993. On May 13, oral argument was held and the parties were requested to file supplemental papers addressing certain issues which came up during oral argument. This supplemental briefing was completed by June 15, 1993.1

FACTUAL BACKGROUND

The dispute giving rise to this action has been thoroughly described in the Second Circuit's opinion of March 15, 1991, as well as in the District Court's orders of January 8 and January 25, 1991.

During the mid-nineteenth century, the Nation leased tribal lands within the City and outlying villages, known as the Congressional Villages, to settlers and railroads. These leases were validated by Congress in the Act of February 19, 1875, ch. 90, 18 Stat. 330 ("1875 Act"). The leases were renewed in 1880 for a 12-year term, and again in 1892 for a 99-year term under the Act of September 30, 1890, ch. 1132, 26 Stat. 558 ("1890 Act"). This action arises from the dispute which has developed concerning the renewal of these 99-year leases, all of which expired on February 19, 1991.2

In 1969, the New York State legislature enacted sections 1790-99 of the Public Authorities Law. This statute created SILA as a public benefit corporation authorized to negotiate and enter into a "master lease" with the Nation for all reservation lands underlying the City. N.Y.Pub.Auth.Law §§ 1791(e), 1794. During the latter course of nearly twenty years of lease negotiations between SILA and the Nation, the "master lease" concept was rejected (Item 1, ¶¶ 62-63 & Exh. F, p. 2).

SILA then sought and received authorization from an overwhelming majority of lessees "to negotiate with the Nation and its legally authorized representatives for the terms and provisions of a renewal of" their leases (Item 1, Exh. G). By letter dated September 3, 1987 (Item 1, Exh. 1), SILA notified the lessees as follows:

By virtue of an Act of Congress in 1875, all so-called "99-year leases" are renewable at the option of the lessee. The key word here is "option." The lease is not automatically renewable — you must exercise the option or right to renew and you must negotiate for the terms of such renewal.... It is not the intention of the SILA to sign or execute a renewal lease on your behalf, but merely to negotiate such lease. It will be your decision to either sign or not sign the leases so negotiated for you by the SILA.

The authorization form contained an express provision that SILA "shall have no authority to execute or accept such a renewal lease for the lessee without the lessee's specific written authority" (Item 1, Exh. G).

By letter dated May 21, 1990, SILA notified lessees that the lease negotiations had concluded, and enclosed a "Question and Answer" fact sheet in an attempt to address "many anticipated questions of lessees" (Item 1, Exh. F). Among the questions and answers was the following:

Q. If I do not like the negotiated terms, what can I do?
A. The SILA has no legal ability to bind the lessees to any term, condition or amount of annual lease rental payment. The SILA is only capable of negotiating for all the provisions to be contained in a new lease for the lessees. As an individual lessee you do have the right to accept or reject the new lease or to negotiate your own terms with the Seneca Nation.

In mid-July of 1990, the City and the Nation signed a renewal agreement (the "Agreement"), which offered lessees new leases for a term of 40 years, with the right to renew for an additional 40 years ("40/40 leases") (Item 1, Exh. G). Annual rents were based on the fair market value of the land, without improvements.

The Agreement established the total annual rental at $800,000.00, to be collected and paid by the City, subject to adjustment based on yearly reappraisal of land values (id.). One of the conditions of the Agreement was payment by the federal and state governments of sums approximating the difference between the fair market rental value of the land and the rents actually received by the Nation over the past 99 years. Congress subsequently enacted the Seneca Nation Settlement Act of 1990, 25 U.S.C. §§ 1774-1774h (the "1990 Act"), in which it validated the Agreement between the Nation and the City and agreed to pay the Nation approximately $35 million. In July, 1991, New York passed legislation in which it agreed to pay $25 million. 1991 N.Y.Laws ch. 528.

On September 4, 1990, the Nation sent a copy of the 40/40 lease to each lessee, with instructions on how to verify a claim to a leasehold interest and other information (Item 1, Exh. N). In that letter, the Nation stated that "the terms of the new lease have been agreed upon by the Nation and the City.... They will not be altered" (id.).

On November 2, 1990, approximately 350-400 lessees notified the Nation that they were electing to renew their leases for an additional 99-year term, purportedly relying on provisions in the 1875 and 1890 Acts (Item 1, Exh. C). The form notification letter used by these lessees stated: "This letter constitutes neither an acceptance nor rejection of the proposed 40/40 lease agreement and it is my understanding that my option to execute that lease agreement continues through and including February 19, 1991" (id.).

On the same day, approximately 300-350 lessees notified SILA that they each were cancelling their...

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