Skip to main content

Mashantucket Pequot challenge to state tax builds on Sherrill Case

  • Author:
  • Updated:

NEW LONDON, Conn. - As a path-breaking tribal tax case from New York state sits on the U.S. Supreme Court docket, a former Mashantucket Pequot council member is trying to apply its principles in Connecticut, in a move that could make it easier to restore reservation rights.

The judges of the nation's highest court are scheduled to hold a conference Feb. 20 to decide whether to accept an appeal from the City of Sherrill in Upstate New York against the Oneida Indian Nation. Sherrill is trying to collect property taxes on several buildings owned by the Oneidas. But the U.S. 2nd Circuit Court of Appeals ruled two-to-one that because the land was illegally taken from the original Oneida reservation, it automatically reverted to sovereign tribal status when the Nation bought it back. If the Supreme Court declines to review the case, by denying cert (a writ of certiorari), it will define the law for the entire 2nd Circuit, which includes Connecticut.

In the Connecticut case, still in state courts, Jo-Ann Isaac Dark Eyes is suing for a refund of state income taxes she paid on three years of income from the Mashantucket Pequot Tribal Council. The income totaled more than $3.5 million for 1996, 1997 and 1998. The tax bill in question is about $150,000, plus interest.

According to the case, for most of those years she lived on land owned by the tribe in fee simple, meaning as a private landowner. On Aug. 25, 1998, the tribe conveyed the land to the U.S. to be held in trust as part of its reservation. But because up to that point the land was part of the tribe's settlement of its land claims, she argued that it was still "Indian country" and not subject to state taxation.

Her case relies on the analogy to the Sherrill decision. In New York, according to a series of federal cases, including two U.S. Supreme Court decisions, the state illegally arranged the sale of almost all of the 300,000-acre reservation guaranteed to the Oneida by the 1794 Treaty of Canandaigua. As in the other eastern Indian land claims suit, federal courts agreed that the sales violated the 1790 Non-Intercourse Act, passed by the First U.S. Congress, which required federal government approval for all Indian land transfers. The 2nd Circuit ruled further in the Sherrill case that since Congress never acquiesced in extinguishing the Oneida reservation, when parcels of that land returned to tribal ownership, it also reverted to Indian country.

Scroll to Continue

Read More

The Mashantucket Pequots, then called the Western Pequots, filed a similar land claim suit in 1976. But they agreed to a settlement in a 1983 act of Congress, which also gave them federal recognition. The act delineated 800 acres as settlement lands and provided a $900,000 fund for tribal land purchases in that area. The question in the Dark Eyes case is what it takes to turn the settlement land into Indian country.

In the first round, State Judge Arnold W. Aronson set a very high hurdle and said that Dark Eyes' residence didn't pass it. He ruled that the land had to be within the settlement area and purchased with settlement funds. But Dark Eyes' lawyers weren't surprised and quickly prepared an appeal they say will ultimately wind up in federal court. By state procedure, the case had its first hearing in the special tax division of State Superior Court, which is usually considered sympathetic to the state tax collector, the Department of Revenue Services.

But the initial decision, in October 2003, inspired a triumphant press release from state Attorney General Richard Blumenthal, who represented the DRS. "This ruling is an important victory for state's rights," he said. "The impact of this ruling has far-reaching implications for non-reservation lands - beyond the state's taxing authority - for issues such as law enforcement, property taxes and local land-use laws."

The case will also impact the two state tribes now waiting out appeals against their federal recognition. The freshly recognized Schaghticoke Tribal nation is suing for return of 2,150 acres in the town of Kent that is says were illegally sliced from its now 400-acre reservation. The Eastern Pequot Tribal Nation has refrained from making land claims, but it has maps showing the steady reduction of the boundaries of its Lantern Hill reservation in North Stonington.

If the 2nd Circuit decision stands in the Sherrill case, it could become easier to re-establish tribal sovereignty over these other territories. But if the Supreme Court justices decide to accept the case in their Feb. 20 conference, they could once more re-open the question of defining "Indian country."