NI XON PEABODYLLP

A T T 0 NEYS A

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January 26, 2011

VIA E-MAIL AND HAND DELIVERY

Clerk of the Court
United States Court of Appeals
for the Second Circuit
United States Court House
40 Foley Square
New York, New York 10007

Re: Oneida Indian Nation of New York v. Madison County and Oneida County, New
York, et al., No. 05-6408-CV(L), 06-5168-CV(CON), 06-5515-CV(CON)

Dear Madam Clerk:

This letter brief is submitted on behalf of Madison County and Oneida County, New

York ("the Counties") pursuant to the January 18, 2011 Order of the Court.

Preliminary Statement

The Oneida Indian Nation ("OIN") enacted an ordinance on November 29, 2010 (JAL 5),

purporting to waive the tribe's "sovereign immunity to enforcement of real property taxation

through foreclosure." This development came after more than ten years of litigation in which the

OIN aggressively asserted that: (1) the lands the OIN recently purchased in Madison County and

Oneida County are sovereign Indian lands over which the State and Counties have no taxing

authority (see City of Sherrill v. Oneida Indian Nation of New York, 544 U.S. 197 (2005)

("Sherrill")); and (2) the OIN's immunity from suit prevents any and all attempts by the

Counties, following Sherrill, to collect lawfully-imposed real property taxes' – including

vigorously opposing the Counties' petition for a writ of certiorari seeking to have the Supreme

None of OIN's fee-owned properties have been taken into trust. The Secretary of the Interior's decision to take
approximately 13,000 acres into trust is being challenged in New York State v. Salazar, No. 6:08-cv-00644
(LEK-DEP) (N.D.N.Y.).
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Court review this Court's April 27, 2010 decision. (Copies of the Counties' Petition, and OIN's

opposition, are available on line; courtesy copies of both are being submitted as PDFs along

with this letter.)

The Supreme Court granted certiorari. The first question presented asked:

Whether tribal sovereign immunity from suit, to the extent it should continue to
be recognized, bars taxing authorities from foreclosing to collect lawfully
imposed property taxes.

Commentators in Indian Country recognized "this case posed a significant risk that [the

Supreme Court] would carve out a significant exception to the doctrine of tribal sovereign

immunity"3 particularly since this Court had invited reversal because the result — deciding the

Counties could tax the property but not collect the taxes — "defies common sense." Oneida

Indian Nation of New York v. Madison County, 606 F.3d 149, 163 (2d Cir. 2010) (concurring).

While the Counties' Supreme Court merits brief was at the printer, OIN purported to

waive its sovereign immunity "to enforcement of real property taxation through foreclosure."

(JA5).

This dramatic reversal in its litigation position can only be understood as a forced

concession on the courthouse steps, wrought by the prospect of unfavorable Supreme Court

review. 4

2`
3
http://www.mtwyt lc .org/component/content/artic le/1 I 3-indian-organizations/763-supreme-court-vacates-and-
remands-madison-county-v-oneida-nation.html (noting OIN recognized danger of Supreme Court review).
4
See, fn 3, supra. Counsel for OIN suggested the ordinance was passed "to clarify that, as contemplated by its
prior posting of letters of credit . . . it is prepared to make payment on all taxes that are lawfully due." (JAI;
see JA4). This explanation ignores the fact that from 2000 until November 28, 2010, OIN asserted tribal
sovereign immunity from suit as a core defense to the City of Sherrill's and the Counties' tax enforcement
proceedings. With respect to the "letters of credit" themselves, the Counties identified numerous deficiencies
that rendered the letters unacceptable. See Counties' August 7, 2008 Letter Brief to this Court at 4-9.
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1. The Ordinance Does Not Eliminate The Issue Of Sovereign Immunity From Suit.

A. OIN Cannot Waive A Right It Does Not Possess

OIN wrongly assumes it has a right to sovereign immunity from foreclosure that it can

waive. The tribe's assertion ignores Sherrill and Yakima (see below) both of which make clear

that the tribe has no right to immunity from collection of ad valorem property taxes through

foreclosure. This Court should reject OIN's self-serving arrogation of a right of sovereign

immunity from foreclosure and deteimine whether the ordinance has any legal effect under

Sherrill and Yakima. OIN's claim to immunity rests on an inherently disruptive assertion of

tribal "super-sovereignty" that no other sovereign (fifty States or foreign nations) enjoys. (See

"Petitioners' Brief' filed in the Supreme Court ("Merits Br.") at 25-30; Town of Lenox Amicus

Brief ("Lenox Br.") at 5-16, both of which are available on line (see fn 2); courtesy copies of

each are submitted as PDFs with this letter.) OIN has consistently and repeatedly claimed

sovereignty over lands that are not within its jurisdiction, contrary to Supreme Court precedent

and in derogation of State sovereignty. OIN believes its sovereignty is intact because of its

strategic "waiver," and will be emboldened to assert super-sovereign power if this Court

uncritically gives effect to its purported waiver without first inquiring if it has a right to waive

under Sherrill and Yakima. This Court should determine whether or not OIN has the claimed

sovereign immunity from suit to waive.

B. A Party Seeking To Avoid Judicial Review By Voluntary Cession Faces A Heavy

Burden

Because OIN has "not changed] 'its substantive stance' as to the validity of its

sovereign immunity from suit "but merely terminate[d] it for . . . purely practical reasons (such

as avoiding litigation) the termination . . . does not render the case moot." United States v.
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Gov't of the Virgin Islands, 363 F.3d 276, 286 (3d Cir. 2004). Indeed, "a party alleging

mootness bears the 'heavy,' even 'formidable' burden of persuading the court that the challenged

conduct cannot reasonably be expected to resume." Id. at 285. Here, the tribe's substantive

stance has not changed; it continues to believe it possesses super-sovereign immunity with

respect to tax collection, but has purported to elect not to assert that immunity with respect to the

Counties' tax collection efforts "through foreclosure." That carefully circumscribed "waiver" to

avoid Supreme Court review, combined with a continuing claim to undiminished sovereign

immunity, falls short of meeting OIN's heavy burden. 5 See Lenox Br. at 19-23.

C. The Ordinance Fails To Clear The Way For Tax Enforcement

As the record in Sherrill makes clear, OIN asserted tribal sovereignty and immunity from

suit as a bar not only to the City's foreclosure procedures but also to an eviction action after the

City took title (through administrative foreclosure) to the tax delinquent parcels. If OIN can

resist eviction based on sovereign immunity from suit, the transfer of title "through foreclosure"

is not a compete remedy to enforce property taxes. The ordinance says nothing about waiving

tribal immunity with respect to eviction, and all waivers of sovereign immunity are generally

construed narrowly in favor of the tribal sovereign. See World Wide Minerals, Ltd. v. Republic

of Kazakhstan, 296 F.3d 1154, 1162 (D.C. Cir. 2002) ("In general, explicit waivers of sovereign

immunity are narrowly construed 'in favor of the sovereign' and are not enlarged 'beyond what

the language requires.") (quoting Library of Cong. v. Shaw, 478 U.S. 310, 318 (1986)). The

5 The Tribe's history of claiming super-sovereignty ensures future jurisdictional conflict. These prospects alone
should overcome OIN's strategic litigation "waiver" and suggestion of mootness. See Honig v. Doe, 484 U.S.
305, 318-320 (1988).
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tribal ordinance does not eliminate all barriers to the Counties' tax collection authority, and

therefore does not moot the issue of sovereign immunity from tax collection.

For these and the other reasons set forth in the Counties' letters to the Supreme Court

(JA6-9, JA14-15) and in the Lenox Brief at 19-30, the first Question Presented on which the

Supreme Court granted certiorari is not moot.

2. This Court Should Reconsider Its Prior Ruling On Sovereign Immunity In Light Of
The Supreme Court's Grant Of Certiorari.

The Supreme Court granted certiorari to review this Court's conclusion that Kiowa and

Potawatomi bar in rem tax foreclosure even though Sherrill and Yakima specifically upheld the

authority of local taxing authorities to impose and collect unpaid taxes through forced tax sale.

The Counties' Petition noted that this Court's April 27, 2010 decision did not address footnote 7

in Sherrill, which expressly rejected tribal immunity as a defense to eviction following

foreclosure. Petition at 3-6, 10. The Counties likewise noted this Court's decision did not

address the core distinction between in rem and in personam jurisdiction, drawn by the Supreme

Court in Yakima in upholding Yakima County's authority to collect ad valorem taxes through a

forced tax sale if the tribe refused to pay the lawfully-imposed taxes. Id. at 8, 10-12.

Given that the Supreme Court granted certiorari in response to these specific claims of

error, the Counties respectfully ask this Court to reconsider its ruling on sovereign immunity

from suit, and hold that OIN's immunity from suit does not bar an in rem foreclosure proceeding

or a related eviction action. The Counties respectfully refer the Court to their Merits Brief at 15-

30, to the State of New York Amicus Brief at 6-17, and to the Town of Lenox Amicus Brief at 5-

16 for the full argument on this point.

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3. If The OIN Ordinance Removes The Issue of Sovereign Immunity From Suit, This
Court Should Clarify The Scope of The Tribe's Waiver of Immunity.

Alternatively, if this Court is inclined to find the issue of sovereign immunity is moot, it

should find that the "new factual development" that led the Supreme Court to vacate the

April 27, 2010 decision – i.e., OIN's adoption of a new tribal ordinance (assuming it has not

been rescinded and is valid) – forever waives the defense of sovereign immunity from in rem

foreclosure proceedings and all related tax collection proceedings. The related tax proceedings

would include eviction / dispossession and liability for deficiencies upon the tax sale to satisfy

the tax obligation. The additional aspects of tax collection would need to be spelled out in an

order to cut off tribal arguments that only the act of foreclosure was the subject of the waiver. In

that case – with a comprehensive order in place – the Court need not reach the issue of whether

OIN has any right to claim sovereign immunity from suit in the context of the Counties' ad

valorem tax collection efforts. The Court should then proceed to vacate the district court's

decisions as to sovereign immunity which are premised on a now-withdrawn defense that

avoided a reversal of those rulings in the Supreme Court. If OIN opposes vacating the district

court's sovereign immunity rulings, that would indicate the tribe is seeking to benefit (in zoning,

cigarette taxation, and other areas of disputed jurisdiction) from rulings it strategically insulated

from review. In that case, this Court should reject the waiver as mooting the defense, and instead

reconsider the availability of the defense for the reasons set forth in Sections 1 and 2, above.

4. This Court Should Reconsider Its Pre-Sherrill Ruling on Disestablishment In Light of

the Supreme Court's Grant of Certiorari on The Second Question: Whether the
Ancient Oneida Reservation in New York Has Been Disestablished or Diminished.

The disestablishment / diminishment analysis requires consideration of the treaty history

of the Oneidas beginning with the 1788 pre-Constitution treaty between New York and the
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ancient Oneida Indians (the Treaty of Fort Schuyler); the United States' involvement in

subsequent treaties between 1795 and 1846 (including the 1838 Treaty of Buffalo Creek) 6 ; the

historical facts over a period of more than 200 years; and the practical consequences of finding

that the ancient Oneida reservation of 300,000 acres still exists in an area of central New York

which has been settled, developed, governed and populated almost exclusively by non-Indians

since the 1840s. See Sherrill, 544 U.S. at 203-207, 210-211, 214-220.

There has not been an Oneida reservation in New York for generations (except possibly

the 32-acre Oneida territory). The Supreme Court recognized the overwhelming non-Indian

ownership of, and exclusive State sovereignty over, the area in Sherrill. Specifically, the Court

observed that by 1838 the Oneidas had sold all but 5,000 acres of their original reservation; by

1843, they retained less than 1,000 acres. And by 1920, only 32 acres continued to be held by

the Oneidas. Id. at 206-207. The Supreme Court also noted the long history of State sovereign

control from the early 1800s, and that for the past two centuries New York and its county and

municipal units have continuously governed the territory. Id. at 214-217.

When read in historical context, the 1838 Treaty of Buffalo Creek represents a further

step in implementing the longstanding federal (and state) policy to remove Indians from New

York, with federal agents negotiating the Treaty with the New York Indians, including the

Oneidas. The language of that treaty is clear. Article 2 states that "[i]t is understood and

agreed that the [Indian country in the West] is intended as a future home for the [New York]

tribes," including the Oneidas. (Emphasis added.) This is a clear statement of the intention of

6
The 1978 decision of the Indian Claims Commission (The Oneida Indian Nation of New York v. United States,
43 Ind. Cl. Comm. 373) found that the federal government, implementing the federal government's "removal
policy," actively worked to remove the Oneidas, and other New York Indians, from New York State,
beginning in the early 1800s. See Merits Br. at 31-32, 39-41.
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the federal government. Article 5 says "[t]he Oneidas are to have their lands in the Indian

Territory. . ." And Article 4 provides that that is where the New York Indians will have their

new homes and establish their government. In Article 13, the Oneidas "agree to remove to their

new homes in the Indian territory, as soon as they can make satisfactory arrangements with the

Governor of the State of New York for the purchase of their lands at Oneida." The words

"diminishment" and "disestablishment" are not used, but these words were not terms of art in

Indian law in 1838. See Solem v. Bartlett, 465 U.S. 463, 476 n.17 (1984) ("In 1908,

`diminished' was not yet a teini of art in Indian law."). The fact the federal government knew it

had no right to buy the Oneida lands which were in New York, under New York's jurisdiction,

and subject to New York's right of preemption, explains why the Treaty does not include words

of cession or a specific price to be paid for the Oneida lands. The federal government intended

the remaining Oneidas to remove from New York, to sell their remaining lands to New York,

and to establish their reservation in the Indian territory. The Oneidas agreed to do so, and did.

In keeping with the Oneidas' agreement to remove from New York after executing the

Treaty of Buffalo Creek, the vast majority of Oneidas sold their lands and removed from New

York (contrary to this Court's 2003 decision in Oneida Indian Nation v. City of Sherrill, 337 F.3d

139, 162 (2d Cir. 2003) rev 'd on other grounds by the Supreme Court in Sherrill), resettling in

Wisconsin and Canada and establishing new homes and governments there. The record shows in

the first five years after the Treaty, the Oneidas sold 80% of their remaining lands to New York

and by 1845, two-thirds of the Oneidas in New York removed from New York. The rest of their

lands were sold during the 1800's (except possibly the 32 acres), and the former reservation was

further settled and developed by non-Indians. By the late 19 th or early 20th Century, the federal

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government stated that the Oneidas were known no more as a tribe in the State of New York.

The Department of the Interior's Cohen treatise on Federal Indian Law makes this clear in the

1942 and 1958 editions. See F. Cohen, Handbook of Federal Indian Law, 416 nl, 417 (1942);

966 nl, 967 (1958).

To say now that the ancient reservation of approximately 300,000 acres (450 square

miles) still exists in central New York and encompasses two cities and over twenty municipal

governments and school districts ignores these historical facts and compounds the disruption to

state and local government that concerned the Supreme Court in Sherrill] To apply Judge
Cabranes' phrase (concurring) to the reservation issue, this result defies common sense; and it is

wrong legally and factually.

5. Other Issues Not Reached in This Court's April 27, 2010 Decision

OIN continues to refuse to pay badly needed taxes, now delinquent up to 15-20 years.

To avoid further expense and delay from piecemeal appeals, the Counties seek a prompt,

complete and final resolution, and accordingly, ask the Court to decide the remaining issues:

1. Does the Indian Trade and Intercourse Act bar transfer of title through in rem
foreclosure to collect lawfully imposed taxes on OIN-owned fee property? See
Counties' Brief at 52-55, Reply Brief at 18; New York State Amicus Brief at 11-
14.

7
OIN recently persuaded the Census Bureau to amend Census maps for Madison and Oneida Counties to show
an approximately 308,000-acre extant OIN reservation instead of the tribe's actual 32-acre territory which
had been noted on prior Census maps. See 2010 Census Map (attached and available at
http://www2.census.gov/geo/pvs/bas/bas11/aia/r2555 oneida nation/BA Sl1R49901692555 000.pdf)
The expanded reservation map "swallows half of Madison County," as reported on the front page of the
Syracuse Post Standard on January 20, 2011. (A copy of the article is attached.) OIN's claim to an existing
300,000-acre reservation cannot be reconciled with Sherrill's holding that OIN exercises no sovereignty over
this land, or this Court's holding in Oneida Indian Nation of New York v County of Oneida, 617 F.3d 114, 125-
131 (2d Cir. 2010), that OIN has no possessory right to this land. OIN's claim to a "not-disestablished"
reservation rests on a legal fiction that is profoundly at odds with both historical fact and long-settled
expectations.
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2. Did OIN, a tax protester, receive constitutionally adequate notice of the tax
delinquency and foreclosure proceedings and a reasonable opportunity to redeem
the property? See Counties' Brief at 68-85, Reply Brief at 26-34; New York State
Amicus Brief at 17-21.

3. If this Court adheres to the conclusion that the ancient Oneida Reservation is not
"disestablished or diminished," are the OIN's fee-owned parcels a "reservation"
within the meaning of New York's Real Property and Tax Law and Indian Law?
See Counties' Brief at 85-93, Reply Brief at 20-23; New York State Amicus Brief
at 15-17.

These issues were fully briefed by the parties and amicus State of New York in 2007.

The Counties are prepared to submit supplemental briefs, and offer oral argument, on these three

un-decided issues, if that would assist the Court.

Conclusion

The Counties respectfully ask the Court to reconsider the issues of sovereign immunity

and disestablishment / diminishment in light of the Supreme Court granting certiorari as to those

issues, and address the other remaining issues.

Respectfully submitted,

David M. Schraver
DMS/nab
Enclosures
cc: (all with enclosures via Email and U.S. Mail)
Seth Waxman, Esq.
Kathryn E. Kovacs, Esq.
Michael R. Smith, Esq.
Peter D. Carmen, Esq.
Andrew D. Bing, Esq.
Dwight Healy, Esq.
Don B. Miller, Esq.

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