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Supreme Court Dismisses Oneida Foreclosure Case

WASHINGTON—The U.S. Supreme Court has dismissed a property tax dispute case involving the Oneida Indian Nation and two New York counties and has sent it back to an appeals court for review.

The long-running tax dispute involves efforts by Madison and Oneida counties in New York State to force the Oneida Indian Nation to pay property taxes on lands that had been purchased illegally from the nation in the 19th century in violation of the 1790 Non-Intercourse Act. The act prohibits the sale of tribal lands without the permission of the federal government. The nation reacquired the land in the late 20th century.

When the nation declined to pay property taxes, arguing that the lands were part of its sovereign territory, and that Congress had never authorized their taxation, the counties began foreclosure proceedings. The case involves around 17,000 acres.

The issue before the Supreme Court centered on whether the nation’s sovereign immunity from lawsuits prevents Madison and Oneida counties from foreclosing on tribal land. The counties had petitioned the high court to review the 2nd Circuit Court of Appeals’ ruling that upheld the nation’s sovereign immunity.

The high court had agreed to review the case in October and was scheduled to hear oral arguments in February. But in an unsigned opinion on Jan. 20, it vacated that decision and remanded the case to the 2nd Circuit Court in New York City.

The ruling noted that the nation had advised the court through a letter on November, 30, 2010 that it had passed a tribal ordinance a day earlier waiving “its sovereign immunity to enforcement of real property taxes through foreclosure by state, county and local government within and throughout the United States."

With the nation’s claim of sovereign immunity from taxation removed, the high court’s role in the case ended.

The Oneida Nation welcomed the opinion.

“While the Oneida Indian Nation would prefer to reach resolution through a negotiated settlement, in the absence of that we are pleased with the latest development,” said Mark Emery, director of media relations, Oneida Indian Nation.

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Madison County officials could not be reached for comment.

When the counties began the foreclosure proceedings a decade ago, the nation filed a federal action to stop them. The case led to the Supreme Court’s controversial 2005 ruling in City of Sherrill v. Oneida Indian Nation of New York. In that ruling, the high court acknowledged the 1794 Treaty of Canandaigua and its guarantee that the Oneidas’ would have “free use and enjoyment” of their 250,000-acre reservation.

But in a majority decision the court used the Doctrine of Laches to conclude that—treaty or no treaty—too much time had passed and the lands were taxable.

On remand, a federal court stopped the foreclosure anyway. It ruled that the nation’s reservation had never been disestablished by Congress—an issue that the Supreme Court had declined to address—and that the nation was immune from lawsuit and foreclosure was barred. The counties appealed to the 2nd Circuit, which agreed with the federal court only on the issue of sovereign immunity.

In remanding the case to the 2nd Circuit, the Supreme Court directed the lower court to address “whether to revisit its ruling on sovereign immunity in light of this new factual development and—if necessary—proceed to address other questions in the case consistent with its sovereign immunity ruling.” Other questions include “whether the ancient Oneida reservation in New York was disestablished or diminished."

“The federal district court hearing the case has ruled that the counties’ taxes and attempts to foreclose on the Nation’s lands are improper on a number of grounds. Those issues remain to be resolved,” Emery said. “We are very pleased that the Supreme Court recognized the Nation’s solemn decision to waive its immunity with respect to tax foreclosures, and we look forward to resolving this long-running dispute with the counties.”

Emery said the nation’s “strong preference” is to resolve differences out of court through negotiation.

“The Nation has entered into government-to-government compacts with the cities of Sherrill and Oneida to govern tax and regulatory issues, and it stands ready, as it has always stood ready, to do the same with the counties,” he said.

The case marks the fourth time in the past 36 years that the Oneida Nation’s land issue has been before the Supreme Court. In 1974 and 1985, the court ruled that the nation could pursue a land claim to 250,000 acres in upstate New York.

A week after the City of Sherrill decision in 2005, the nation asked the federal government to take into trust around 17,000 acres the nation had purchased in Madison and Oneida counties. The Interior Department agreed in 2008 to take into trust around 13,000 of the 17,000 acres, which would place the land completely beyond the counties’ control. New York state and local governments are challenging Interior’s decision.