February 2, 2011

Hon. Catherine O’Hagan Wolfe

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

Re: Oneida Indian Nation v. Madison County,

Docket Nos. 05-6408-cv(L), 06-5168-cv(CON), 06-5515-cv(CON)

Dear Ms. Wolfe:

The Oneida Indian Nation of New York (Nation) submits this letter-brief pursuant to the

Court’s orders of January 11 and January 18, 2011, to address: (1) the effect of the Nation’s

waiver of sovereign immunity; and (2) its position on “whatever further action by this Court or

the District Court may be appropriate.”

The Nation respectfully submits that the issue of sovereign immunity is now moot and

that the Court should proceed to address the remaining grounds for the district court’s

injunctions. The Nation suggests that, in doing so, the Court should begin with the question of

whether the Nation’s land is tax-exempt under New York law. Affirming the district court’s

ruling on that issue would make it unnecessary to address any of the other issues on appeal. The

Court may do so by following the guidance of the New York Court of Appeals’ intervening

decision in Cayuga Indian Nation v. Gould, 930 N.E.2d 233, 251 (N.Y.), cert. denied, 131 S. Ct.

353 (2010), which addresses a parallel state tax exemption for cigarette sales on federal

reservation lands, or it may certify the issue for that court to resolve as a controlling question of

New York law. As explained below, this Court may affirm on other grounds as well.
February 2, 2011
Page 2

BACKGROUND

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

Supreme Court held that lands the Nation reacquired on the open market after a long period of

dispossession were not immune from state and local taxation as a matter of federal law. The

Court instructed that the Secretary of the Interior’s authority to hold land in trust for Indians

“provides the proper avenue for [the Nation] to reestablish sovereign authority” over the

reacquired lands, rendering them “‘exempt from State and local taxation.’” Id. at 220-221

(quoting 25 U.S.C. § 465).

Within a week of the Supreme Court’s decision, the Nation applied to have its lands

taken into trust. As part of the trust process, the Nation committed to pay Madison and Oneida

Counties any and all property taxes, penalties, and interest that are held to be lawfully due on the

properties at issue here, and it posted irrevocable letters of credit to secure that commitment.1 In

May 2008, the Secretary of the Interior, exercising his statutory trust authority over lands within

the boundaries of an Indian reservation, granted the Nation’s request as to approximately 13,000

acres. The State and Counties promptly sued on a multitude of grounds. As a result of that

litigation, the Nation has been unable to finalize the transfer of its lands to the United States,

resulting in escalating taxes, penalties, and interest on land that the federal government has

approved for trust status.

Despite the letters of credit securing tax payments (including penalties and interest),

Madison and Oneida Counties remain steadfast in their efforts to foreclose on the Nation’s

1
Separately, the Nation and the City of Sherrill signed a compact that settles prior tax disputes,
commits the Nation to pay future City tax bills, allows enforcement of municipal regulations, and waives
the Nation’s sovereign immunity to enforcement. The Nation signed a similar agreement with the City of
Oneida. There has been no post-Sherrill litigation with either city.
February 2, 2011
Page 3

property. In the proceedings below, the district court enjoined the foreclosures on four separate

grounds: (i) the Nation has sovereign immunity from suit; (ii) foreclosure would violate the

Nonintercourse Act’s restrictions on alienation of Indian land; (iii) the Counties failed to give the

notice required under New York law in violation of due process; and, critically, (iv) the land in

question falls within New York’s statutory tax exemptions for tribally owned land within an

Indian reservation. 401 F. Supp. 2d 219 (N.D.N.Y. 2005); 432 F. Supp. 2d 285 (N.D.N.Y.

2006).2 This Court affirmed on the sole ground that the Nation is immune from suit; the Court

did not address the other bases for the district court’s injunctions. Oneida Indian Nation of New

York v. Madison County, Oneida County, N.Y., 605 F.3d 149, 159-160 (2d Cir. 2010). The

Supreme Court granted certiorari. 131 S. Ct. 459 (2010).

On November 29, 2010, the Nation’s lawmaking body duly enacted a tribal declaration

and ordinance “waiv[ing], irrevocably and perpetually, its sovereign immunity to enforcement of

real property taxation through foreclosure by state, county and local governments within and

throughout the United States.” JA5. The Nation notified the Supreme Court of this development

by letter dated November 30. JA1-4. The Counties, in turn, questioned the validity, scope, and

permanence of the waiver. JA6-9. The Nation responded to each of the Counties’ concerns

(JA10-13), unequivocally representing to the Supreme Court that: (1) the waiver guaranteed

payment of any taxes, interest, and penalties that were held to be lawfully due; (2) the waiver

2
The district court also ruled that the Counties could not impose penalties and interest on taxes
accruing prior to the Supreme Court’s decision in Sherrill, because the law prior to Sherrill fully
supported the Nation’s immunity to the Counties’ taxes. See 401 F. Supp. 2d at 230; 432 F. Supp. 2d at
290-291. The Counties did not challenge the district court’s orders in that regard on appeal; those rulings
are therefore final and binding.
February 2, 2011
Page 4

was perpetual and irrevocable; and (3) the waiver was duly enacted by the tribal council and was

not subject to invalidation.

Acting upon the Nation’s waiver, the Supreme Court vacated and remanded this Court’s

judgment. 2011 WL 55360 (U.S. Jan. 10, 2011) (per curiam). In doing so, the Court declined

the Counties’ requests to refashion federal Indian law in a case where the Nation has removed

tribal sovereign immunity as an obstacle to foreclosure. There is no reason for this Court to

adopt a different approach; instead, the Court should resolve this tax dispute by applying New

York’s statutory exemptions for reservation land in tribal possession.

I. The Issue Of Sovereign Immunity Is Moot

The issue of sovereign immunity is now moot in light of the Nation’s waiver. That

waiver is expressly perpetual and irrevocable; covers all taxes, interest, and penalties held to be

lawfully due; and was relied upon by the Supreme Court in its disposition of the case. The

Nation represented to the Supreme Court that “it will not raise its sovereign immunity as a

barrier to … enforcement through foreclosure,” and that it “consider[s] itself judicially estopped

from raising sovereign immunity as a defense to foreclosure actions to enforce state, county, or

local real property taxes.” JA11-12. Accordingly, sovereign immunity is no longer an

impediment to the Counties’ enforcement of taxes through foreclosure. The issue is therefore

moot. Jennifer Matthew Nursing & Rehab. Ctr. v. U.S. Dep’t of Health & Hum. Servs., 607 F.3d

951, 956 (2d Cir. 2010) (question on appeal “becomes moot when the issues presented are no

longer live or the parties lack a legally cognizable interest in the outcome” (internal quotation

marks omitted)). If there had been any doubt about the validity, scope, or irrevocability of the

waiver before the Supreme Court’s decision, there can be none now, as the Nation is judicially
February 2, 2011
Page 5

estopped from invoking sovereign immunity as a defense to tax foreclosure, because the

Supreme Court has “relied on [the Nation’s] factual representations and rendered a favorable

decision.” Adler v. Pataki, 185 F.3d 35, 41 n.3 (2d Cir. 1999).3

II. The District Court’s Injunction Should Be Affirmed On Other Grounds

There remain three independent bases for the district court’s injunctions: the taxability of

the Nation’s land under New York law, due process, and the Nonintercourse Act. The Nation

respectfully suggests that this Court address the taxability issue first, as it has the potential fully

and finally to dispose of the case, either through payment under the Nation’s letters of credit or

by confirming the district court’s ruling that no taxes are, in fact, due.4

A. This Court Should Address The Taxability Of The Nation’s Land Under
New York Law, In Light Of The New York Court Of Appeals’ Decision In
Cayuga

The district court held that the Nation’s lands are exempt under state law from ad

valorem property taxes under statutes exempting tribally owned reservation lands from such

taxation. N.Y. Real Prop. Tax Law § 454, N.Y. Indian Law § 6; see 401 F. Supp. 2d at 231; 432

3
The fact that the Nation’s waiver is expressly irrevocable and the application of judicial estoppel
distinguish the present case from the voluntary-cessation line of authority upon which the Counties rely.
The Counties’ hypothetical suggestions as to why sovereign immunity remains a live issue are also
without merit. First, the Nation has committed to pay any taxes that are determined to be due on the
properties at issue and posted letters of credit to secure that commitment; those letters obviate the need for
foreclosure, much less eviction. In any event, there is no basis to distinguish tax eviction actions from tax
foreclosure actions; the Nation’s representation (JA11) that its waiver provides the Counties with the
assurance of payment under penalty of foreclosure necessarily includes any eviction required to effectuate
such foreclosure. Second, whether the Nation might retain sovereign immunity in contexts other than tax
foreclosures is not even remotely presented by the injunctions before the Court.
4
Upon invitation of this Court, the United States has previously suggested the same course of
action. See U.S. Amicus Br., No. 05-6408-cv, 3-9 (2d Cir. July 25, 2008).
February 2, 2011
Page 6

F. Supp. 2d at 290.5 This issue was fully briefed before this Court, but the Court declined to

reach it in its April 2010 decision. The Nation respectfully suggests that the Court decide this

issue on the briefs previously submitted, or that it invite further briefing in light of the New York

Court of Appeals’ decision in Cayuga. That decision was issued two weeks after this Court

ruled in this case, and—by addressing a parallel tax exemption under New York cigarette law—

provides recent, intervening authority that should guide any future ruling on the Nation’s claim.

Specifically, the Court of Appeals held that the New York tax exemption for on-reservation

cigarette sales applied to two parcels of land situated in the Cayuga reservation, even though the

land had been alienated from the tribe for roughly two hundred years and recently reacquired by

the Cayugas in open-market transactions. 930 N.E.2d at 247. Although the Court declined to

decide the scope of New York’s parallel property-tax exemptions, id. at 251-252, its reasoning

supports a similar conclusion regarding their application to lands the Nation reacquired within its

federally recognized reservation.

1. The Oneida Reservation Was Not Disestablished Or Diminished

The Nation contends that the parcels at issue in this case are not taxable under State law

because (a) State law exempts “reservation” lands from taxation, and (b) the Nation’s property is

part of the federally recognized Oneida reservation. See N.Y. Real Prop. Tax Law § 454

(exempting tribally owned “reservation” lands); N.Y. Indian Law § 6 (same). This Court has

already held that “the Oneidas’ reservation was not disestablished.” Oneida Indian Nation of

5
New York Real Property Tax Law § 454 states that “[t]he real property in any Indian reservation
owned by the Indian nation, tribe or band occupying them shall be exempt from taxation[.]” New York
Indian Law § 6 provides that “[n]o taxes shall be assessed, for any purpose whatever, upon any Indian
reservation in this state, so long as the land of such reservation shall remain the property of the nation,
tribe, or band occupying the same.”
February 2, 2011
Page 7

N.Y. v. City of Sherrill, 337 F.3d 139, 167 (2d Cir. 2003). The Counties seek to relitigate that

question (see Ltr. 6-9), but in its April 2010 decision, this Court expressly rejected the Counties’

contention that the Supreme Court’s decision in Sherrill required (or even permitted) this Court

to revisit its 2003 resolution of the issue. This Court observed that “the Supreme Court in

Sherrill explicitly declined to resolve the question of whether the Oneida reservation had been

‘disestablished,’” and, accordingly, its “prior holding on this question—that ‘the Oneidas’

reservation was not disestablished’—therefore remains the controlling law of this Circuit.”

Oneida Indian Nation of New York, 605 F.3d at 158 n.6 (quoting City of Sherrill, 337 F.3d at

167). That conclusion was not altered by the Supreme Court’s order remanding the case, and,

contrary to the Counties’ position (Ltr. 6), “the grant of certiorari alone is not enough to change

the law of this circuit.” Robinson v. Crosby, 358 F.3d 1281, 1284 (11th Cir. 2004); see also

Wicker v. McCotter, 798 F.2d 155, 157-158 (5th Cir. 1986) (same). Moreover, the law-of-the-

case doctrine precludes the Counties from relitigating this Court’s prior holding on the issue;

whether Sherrill might have supported a different result is now settled. See Johnson v. Holder,

564 F.3d 95, 101 (2d Cir. 2009) (The “doctrine commands that when a court has ruled on an

issue, that decision should generally be adhered to by that court in subsequent stages in the same

case unless cogent and compelling reasons militate otherwise.” (internal quotation marks

omitted)).6

6
It also bears noting that the United States has repeatedly affirmed the existence of the Oneida
reservation in New York. See, e.g., U.S. Amicus Br., City of Sherrill v. Oneida Indian Nation of New
York, 2004 WL 2246334, at *13-24 (U.S. Sept. 30, 2004); Department of the Interior, Record of Decision,
Oneida Indian Nation of New York Fee-to-Trust Request 32-33 (May 2008), available at
http://www.oneidanationlegal.com/images/news/7.pdf. Although the Interior Department noted that it
would acquire the subject lands into trust even under its off-reservation criteria, a conclusion by this
Court that the reservation had been disestablished would re-open an entirely new set of litigation on
matters relating to the reservation status which already have been resolved by the courts, further delay the
February 2, 2011
Page 8

2. Under Cayuga, The Nation’s Reacquired Lands Are Not Taxable

In Cayuga, the New York Court of Appeals held that New York’s cigarette-tax

exemption for sales on “reservation” land applied to lands that—like the lands at issue here—

were reacquired on the open market within the boundaries of a federally recognized reservation

after a long period of dispossession, despite the tribe’s lack of sovereign authority over the land

under Sherrill. 930 N.E.2d at 245, 248-250. The Court reserved whether it would reach the

same conclusion under the statutory provisions applicable to real property taxes. Id. at 251-252.

Nonetheless, Cayuga’s analysis of provisions of state law that parallel the property-tax statutes

provides a clear basis for this Court to conclude, as a matter of New York law, that the Nation’s

property is exempt from such taxation within its federal reservation. Moreover, the plain

language of N.Y. Real Property Tax Law § 454 and N.Y. Indian Law § 6 fully support that

conclusion, and the New York legislature has not acted to amend either statute in the five years

since the district court’s rulings on their application here.

Because the plain language of §§ 454 and 6 and the Cayuga decision provide this Court

with ample bases to “predict how” the Court of Appeals would resolve the taxability of the

Nation’s reacquired reservation lands, this Court can and should resolve the issue. See Runner v.

New York Stock Exch., Inc., 568 F.3d 383, 388 (2d Cir. 2009) (noting that this Court “resort[s] to

certification sparingly, mindful that it is our job to predict how the New York Court of Appeals

would decide the issues before us” (internal quotation marks omitted)). But if this Court

concludes otherwise, certification would be warranted. See 22 N.Y.C.R.R. § 500.27(a); 2d Cir.

trust process which the Supreme Court instructed is the proper avenue for resolving all of these disputes,
544 U.S. at 220-221, and, in doing so, create enormous uncertainty and instability for the Nation, the
community and the thousands of employees whose livelihoods depend on the continuity of its casino
operations.
February 2, 2011
Page 9

R. 27.2(a); see also Penguin Grp. (USA) Inc. v. American Buddha, 609 F.3d 30, 42 (2d Cir.

2010) (“[C]ertification may be appropriate if the New York Court of Appeals has not squarely

addressed an issue and other decisions by New York courts are insufficient to predict how the

Court of Appeals would resolve it.”).7

B. This Court Need Not Address The Due Process And Nonintercourse Act
Issues

Affirming the district court’s ruling on the taxability of the Nation’s land under New

York law would finally and fully resolve this dispute and would obviate the need to address the

two remaining bases for the injunctions. Should the Court consider these issues, the Nation

respectfully submits as follows:

The district court properly held that the Counties failed to give the Nation adequate notice

of the foreclosure redemption period and thereby violated the Nation’s due process rights.

Relying on the New York Court of Appeals’ decision in McCann v. Scaduto, 519 N.E.2d 309

(N.Y. 1987), the district court held that due process requires adequate notice of the statutory

redemption period provided by State or local law, and that no such notice was provided in this

case. See 432 F. Supp. 2d at 289-290; 401 F. Supp. 2d at 230-231. The State’s and the

Counties’ contrary argument is unavailing, because it erroneously focuses on whether the Nation

received adequate notice that the Counties intended to foreclose, not on the Nation’s affirmative

right of redemption. See Oneida Indian Nation of New York Br. 90-101, Oneida Indian Nation

of New York v. Madison County and Oneida County, No. 05-6408(L) (2d Cir. Mar. 30, 2007).

7
Should this Court seek guidance from the New York Court of Appeals, the Nation respectfully
suggests the following question for certification: Whether land owned by the Oneida Nation of New
York within its federally recognized reservation is exempt from taxation under New York’s statutory
exemptions for tribally owned “reservation” lands, N.Y. Real Property Tax Law § 454 and N.Y. Indian
Law § 6.
February 2, 2011
Page 10

The State’s arguments asserting the sufficiency of notice provided only at the end of a statutory

redemption period fail for the reasons the Nation set forth in its prior briefing on the issue. Id.

Likewise, the district court properly held that the Counties’ foreclosures would violate

the Nonintercourse Act, 25 U.S.C. § 177. The Nation, however, represented to the Supreme

Court that its waiver of sovereign immunity “assure[d] the Counties payment of any taxes that

are lawfully due, under penalty of foreclosure.” JA11. In light of that representation, the Nation

no longer invokes the Nonintercourse Act’s statutory restrictions on the alienation of Indian land

as a defense to tax foreclosures.8

8
New York suggests (Ltr. 3) that this Court remand the case to the district court to vacate its
judgments to the extent they are based on tribal sovereign immunity. The Nation does not object to such
a remand and limited vacatur at the appropriate time, but respectfully suggests that this Court should
resolve the remaining issues now before it to avoid any unnecessary delay.
New York also argues that, if the due process and Nonintercourse Act claims are dismissed, the
state tax-law question should also be dismissed because the district court ought not to exercise pendent
jurisdiction over that state-law claim. But the Nation’s state-law contention that its lands are not taxable
is intertwined with the federal question (previously resolved by this Court) of reservation
disestablishment, over which this Court has federal-question jurisdiction under 28 U.S.C. § 1331 and
§ 1362. See D’Alessio v. N.Y. Stock Exchange, Inc., 258 F.3d 93, 100-102 (2d Cir. 2001) (federal
jurisdiction exists over state-law claims that depend on questions of federal law). Moreover, the Nation’s
federal due process claims remain live, and the Counties point to no basis to dismiss them. And even if
the Nation’s federal claims were dismissed, the Court should continue to exercise pendent jurisdiction, as
this Court has long recognized that the exercise of pendent jurisdiction is proper where state-law claims
implicate important federal issues, or where the action has proceeded through significant motion practice
in federal court. See Valencia v. Lee, 316 F.3d 299, 305-306 (2d Cir. 2003) (collecting cases).