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Oneida Indian Nation of New York v. New York

decided: October 4, 1982.

ONEIDA INDIAN NATION OF NEW YORK, ET AL., PLAINTIFFS-APPELLANTS, CROSS-APPELLEES,
v.
STATE OF NEW YORK, COUNTIES OF BROOME, CHENANGO, CORTLAND, HERKIMER, JEFFERSON, LEWIS, MADISON, OSWEGO, ONEIDA, ONONDAGA, ST. LAWRENCE AND TIOGA, INDIVIDUALLY AND AS CLASS REPRESENTATIVES, DEFENDANTS-APPELLEES, CROSS-APPELLANTS; ONEIDA INDIAN NATION OF WISCONSIN AND ONEIDA OF THE THAMES BAND, PLAINTIFFS-APPELLANTS, CROSS-APPELLEES, V. STATE OF NEW YORK, COUNTIES OF BROOME, CHENANGO, CORTLAND, HERKIMER, JEFFERSON, LEWIS, MADISON, ONEIDA, ONONDAGA, OSWEGO, ST. LAWRENCE AND TIOGA, NEW YORK, AND VALENTINE RYAN, NEW YORK ELECTRIC & GAS CORP., ST. REGIS PAPER CO., AND GEORGIA PACIFIC CORP., INDIVIDUALLY AND AS CLASS REPRESENTATIVES, DEFENDANTS-APPELLEES, CROSS-APPELLANTS



Appeal by Indian tribes from an order of the Northern District of New York, Neal P. McCurn, Judge, dismissing without an evidentiary hearing their claims that the State of New York's acquisition of approximately 5 1/2 million acres of tribal land from them was invalid as violative of the Articles of Confederation and federal law. The complaint was dismissed as failing to state a claim upon which relief may be granted, F.R.Civ.P. 12(b) (6). Affirmed in part, reversed in part, and remanded.

Mansfield and Kearse, Circuit Judges, and Cabranes, District Judge.*fn**fn**

Author: Mansfield

MANSFIELD, Circuit Judge:

For the first time in Indian land claim litigation a federal court is asked to invalidate land purchases made by a state from Indian tribes prior to the adoption of the United States Constitution, allegedly in violation of the Articles of Confederation. The plaintiffs in this consolidated action are the direct successors in interest to the Oneida Indian Nation ("Oneida"), whose members since time immemorial had prior to the American Revolution occupied land in central New York State totalling approximately six million acres. They seek to invalidate two "state" treaties between New York and the Oneidas concluded in 1785 (Fort Herkimer Treaty) and 1788 (Fort Schuyler Treaty) which purported to transfer over five million acres of Oneida land to New York State.*fn1 The district court, Neal P. McCurn, Judge, dismissed the action for failure to state a claim upon which relief may be granted. We affirm in part, reverse in part, and remand for additional proceedings in order fully to develop the complex factual and legal issues underlying certain claims raised by the Oneidas.

The Oneidas raise two broad claims. First, they contend that their aboriginal title to their land, confirmed and guaranteed by federal treaties and pronouncements pursuant to powers delegated to the federal government under the Articles of Confederation, was never extinguished since the state treaties were improperly concluded without federal consent. Therefore, they claim, the state treaties are void and the Oneidas' original right of occupancy is intact. Alternatively, they maintain that even if valid the state treaties, either by their terms or by virtue of New York's fraudulent conduct during their negotiation, reserved to the Oneidas an interest in the subject lands which subsequently came under the protection of the Nonintercourse Act, 25 U.S.C. § 177,*fn2 enacted in 1790 pursuant to Congress' authority under Article I, § 8, clause 3 of the newly adopted Constitution of the United States.*fn3 They contend that their subsequent dispossession of the land occurred improperly without federal consent, and therefore their aboriginal title was never validly extinguished. For relief, they seek, inter alia, recovery of the subject land, fair rental value for the entire period of dispossession, damages for fraudulent misrepresentation, and a declaration of hunting and fishing rights.

In an exhaustive opinion published at 520 F. Supp. 1278 (N.D.N.Y. 1981), Judge McCurn found that there was jurisdiction under 28 U.S.C. §§ 1331 and 1362, and held that the claims were not barred by either the nonjusticiability doctrine or by the Eleventh Amendment. He dismissed the suit, however, for failure to state a claim upon which relief might be granted, F.R.Civ.P. 12(b) (6), holding that internal inconsistencies and ambiguities within the Articles of Confederation, specifically Article IX, clause 4, preclude their being construed as delegating to the federal government the exclusive authority to extinguish aboriginal title to land within a state's borders and that federal consent therefore was not required to validate the New York treaties. He also rejected the alternative claims that the New York treaties reserved to the Oneidas an interest in the land that was subsequently extinguished in violation of the Nonintercourse Act.

BACKGROUND

In reviewing the background and history underlying these claims for purposes of determining whether the dismissal must be upheld, we accept as true all material factual allegations and construe the complaint in favor of the complaining party. Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90, 94 S. Ct. 1683 (1974); Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957). At the outset a brief explication of the legal concepts that govern title in Indian land is necessary to understand the nature of the claims and to place in proper perspective the contested historical facts advanced by the parties.

The rights of American Indians to the land they inhabited since time immemorial are governed by the doctrine of "discovery" and related legal principles first elaborated in a series of decisions by the Marshall Court. Mitchel v. United States, 34 U.S. (9 Pet.) 711, 9 L. Ed. 283 (1835); Worcester v. Georgia, 31 U.S. (6 Pet.) 515, 8 L. Ed. 483 (1832); Johnson v. McIntosh, 21 U.S. (8 Wheat.) 543, 5 L. Ed. 681 (1823); Fletcher v. Peck, 10 U.S. (6 Cranch) 87, 3 L. Ed. 162 (1810). Accord, Oneida Indian Nation v. County of Oneida, 414 U.S. 661, 39 L. Ed. 2d 73, 94 S. Ct. 772 (1974). The Supreme Court recently summarized these principles in Oneida Indian Nation, supra, 414 U.S. at 667:

"although fee title to the lands occupied by Indians when the colonists arrived became vested in the sovereign -- first the discovering European nation and later the original States and the United States -- a right of occupancy in the Indian tribes was nevertheless recognized. That right, sometimes called Indian title and good against all but the sovereign, could be terminated only by sovereign act."

This right of occupancy which the Indians retain until validly extinguished has been variously termed "aboriginal title, unrecognized title, original Indian title, or simply Indian title." Clinton & Hotopp, "Judicial Enforcement of the Federal Restraints on Alienation of Indian Land: The Origins of the Eastern Land Claims," 31 Me. L. Rev. 17, 20 (1979). It must be distinguished from the concept of fee title of the discoverer. The two types of interest -- fee title of the discoverer and Indian title of the native inhabitants -- relate to different concerns. The discovery doctrine, which vests fee title in the discovering sovereign, was designed to regulate the competing claims of European nations to the right to purchase Indian land: the discovering nation vested with fee title is given the exclusive right against all others to acquire the right to occupancy to a particular parcel of land from the inhabiting Indians. See Berman, "The Concept of Aboriginal Rights in the Early Legal History of the United States," 27 Buffalo L. Rev. 637, 655 (1978). Thus the concept of fee title in the context of Indian lands does not amount to absolute ownership, but rather is used interchangeably with "right of preemption," or the preemptive right over all others to purchase the Indian title or right of occupancy from the inhabitants. Oneida Indian Nation, supra, 414 U.S. at 670.

The discovery doctrine, however, does not determine the relationship between the holder of the fee title and the inhabiting Indians, since the mere possession of the fee title does not thereby entitle the holder to any possessory interest in the land vis-a-vis the Indians. Rather, possession is governed by the concept of Indian title, which recognizes the Indians as "the rightful occupants of the soil, with a legal as well as just claim to retain possession." Johnson v. McIntosh, supra, 21 U.S. (8 Wheat.) at 574. Until Indian title is extinguished by sovereign act, any holder of the fee title or right of preemption, either through discovery or a grant from or succession to the discovering sovereign, remains "subject . . . to the Indian right of occupancy," id., and the Indians may not be ejected. See, e.g., Clark v. Smith, 38 U.S. (13 Pet.) 195, 201, 10 L. Ed. 123 (1839); Beecher v. Wetherby, 95 U.S. 517, 525, 24 L. Ed. 440 (1877); Fletcher v. Peck, supra, 10 U.S. (6 Cranch) at 142-43; see also Newton, "At the Whim of the Sovereign: Aboriginal Title Reconsidered," 31 Hast. L.J. 1215, 1221 (1980). As the Court stated in Worcester v. Georgia, supra, 31 U.S. (6 Pet.) at 546, the fee title "asserted a title against Europeans only, and [was] considered as blank paper, so far as the rights of the natives were concerned." Thus discovery gave the sovereign only an "ultimate reversion in fee," Mitchel v. United States, supra, 345 U.S. (9 Pet.) at 756, subject to the tribe's "perpetual right of possession . . . considered as sacred as the fee-simple of the whites," id. at 745-46. Relative to the possessory rights of inhabiting Indians, therefore, the fee title represents merely a "perfectable entitlement," Henderson, "Unraveling the Riddle of Aboriginal Title," 5 Am. Indian L.J. 75, 90-91 (1977) (quoted in Berman, supra, 27 Buff. L. Rev. 637, 645), that remains encumbered by Indian title unless and until the latter is extinguished by sovereign act. Only then is the fee title freed of Indian rights of occupancy by virtue of aboriginal title. Johnson v. McIntosh, supra, 21 U.S. (8 Wheat.) at 588; see also id. at 573-74.

Prior to the American Revolution Great Britain as the discovering sovereign held exclusively both the right of preemption and the power to extinguish Indian title by conquest or such agreements as might be made with the aboriginal Indians. The Crown, having conveyed the fee title to land to the colonists by various charters and patents, initially permitted the colonists to purchase and extinguish Indian title, either individually or through the colonies. Many of the colonies, in order to minimize disputes with the Indians, enacted laws requiring colonial approval for individually negotiated land cessions. Unauthorized and unrestricted encroachments on Indian lands continued, however, and the Crown recognized the need to devise plans for a comprehensive and uniform Indian policy. In 1754, for example, the Lords of Trade in England prepared a Plan for General Consent of the colonies which provided that "the sole direction of Indian affairs be placed in the hands of some single person." Clinton & Hotopp, supra, 31 Me. L. Rev. at 21 (quoting VI Documents Relative to the Colonial History of the State of New York 903-95 (E.B. O'Callaghan ed. 1855)). The efforts of the Crown culminated in the issuance of the Royal Proclamation of 1763,*fn4 which forbade the purchase or settlement of Indian lands by anyone, including the colonial governors, without permission of the Crown. See Clinton & Hotopp, supra, 31 Me. L. Rev. at 22.

The perceived need for a national Indian policy was shared by the colonists, resulting in the creation of certain federal administrative mechanisms even prior to the adoption of the Articles of Confederation. Initially in 1774, for instance, Benjamin Franklin drafted a plan at the Albany Conference for a union of the colonies and for the exclusive regulation of Indian affairs by a "President General." Id. at 21. Subsequently in 1775 the Continental Congress during the Revolutionary War created a Department of Indian Affairs to secure the friendship of the tribes and to counter British-inspired hostilities. By the Resolution of July 12, 1775, the Continental Congress established three departments to manage Indian affairs and manage peaceful relations. II Journals of the Continental Congress 174-77 (Library of Cong. ed.). Each department was "to treat with the Indians . . . in order to preserve peace and friendship with the said Indians, and to prevent their taking any part in the present commotions." Id. at 175. In establishing these departments, the Continental Congress was "exercising definite governmental power for all the colonies [and] declared its jurisdiction over Indian tribes." F. Cohen, Handbook of Federal Indian Law 9 (1942).

Rather than create an entirely new policy, the Continental Congress continued the basic approach of the British Proclamation of 1763, which was to focus concern on those Indian tribes located in what was known as "Indian Country," i.e., those Indian lands lying west of the boundary line of the 1763 Proclamation separating the lands of the Indian tribes from colonial settlements. The subject lands of this action are located in this "Indian Country." Paterson & Roseman, "A Reexamination of Passamaquoddy v. Morton," 31 Me. L. Rev. 115, 126-27, 150 n.153 (1979). Two years later in 1777 the Continental Congress established an Eastern Indian Agency having jurisdiction over "the Indians in Nova Scotia and the Tribes to the Northward and Eastward thereof." Id. at 127 (citing 7 Jour. of the Cont. Cong. 34 (1777)).

These federal mechanisms were continued under the Articles of Confederation, which were approved in 1777 and became effective in 1781. Article IX, clause 1, granted Congress the "sole and exclusive right and power of determining on peace and war . . . [and] entering into treaties and alliances. . . ." All powers not "expressly delegated" are retained by each State. Art. II. Article IX, clause 4, specifically referring to Indian affairs, provided that:

"The United States in Congress assembled shall also have the sole and exclusive right and power of . . . regulating the trade and managing all affairs with the Indians, not members of any of the States, provided that the legislative right of any State within its own limits be not infringed or violated."

In carrying out its Article IX responsibilities the Congress of the Confederation created an administrative framework that "followed the colonial precedent." Cohen, supra, at 9. The Congress had charged a committee to draft a document "for the complete arrangement and government of the Indian Department." 30 Jour. of the Cont. Cong. 332 (1786) (cited in Paterson & Roseman, supra, 31 Me. L. Rev. at 128). The result was the 1786 Ordinance for the Regulation of Indian Affairs, 31 Jour. of the Cont. Cong. 491 (cited in Cohen, supra, at 9 n.7), which established two departments -- northern and southern -- the northern of which encompassed the subject lands claimed by the Oneidas. The superintendent of each department had power to grant licenses to trade and live with the Indians and was duty bound to execute "such regulations, as Congress shall, from time to time, establish respecting Indian Affairs." 31 Jour. of the Cont. Cong. 491.

Two such Congressional enactments are central to this case. One, the Proclamation of September 22, 1783, affirmed the principal policy of the Royal Proclamation of 1763 by requiring federal consent for all purchases to which the 1783 Proclamation applied. See Mohegan Tribe v. Connecticut, 638 F.2d 612, 616 (2d Cir.), cert. denied, 452 U.S. 968, 69 L. Ed. 2d 981, 101 S. Ct. 3124 (1981). The 1783 Proclamation recited the Congress' power under Article IX clause 4, stressed the needs to remove and prevent "all cause of quarrel or complaint between [the Indians] and the United States and declared that:

"The United States in Congress assembled . . . do hereby prohibit and forbid all persons from making settlements on lands inhabited or claimed by Indians, without the limits or jurisdiction of any particular State, and from purchasing or receiving any gift or cession of such lands or claims without the express authority and directions of the United States in Congress assembled.

"And it is moreover declared, that every such purchase or settlement, gift or cession, not having the authority aforesaid, is null and void, and that no right or title will accrue in consequence of any such purchase, gift, cession, or settlement," 25 Jour. of the Cont. Cong. 602 (1783), quoted in Clinton & Hotopp, supra, 31 Me. L. Rev. at 25-26.

The 1783 Proclamation represented an effort by Congress to clarify the authority of the federal government vis-a-vis the states and to avoid a costly Indian war. Clinton & Hotopp, supra, 31 Me. L.Rev. at 25.

The other enactment was the Treaty of Fort Stanwix, 7 Stat. 15, concluded in October 1784 between the federal commissioners and the Six Nation Iroquois Indian Confederacy ("Six Nations"), which consisted of the Seneca, Cayuga, Onondaga, Oneida, Mohawk, and Tuscarora tribes. Of these, the Oneida and Tuscarora tribes had sided with the states in the American Revolution; the remaining four were hostile tribes who had sided with the British. The central government attached considerable importance to the need for a federal treaty with the Six Nations, since it feared that any attempted expulsion of the Indians would produce a prolonged and costly war. Cohen, supra, at 418. New York State, however, considering itself to have authority over Indians located on their own tribal lands within the borders of New York, "stopped at nothing," id., to obstruct the federal efforts, including arresting federal agents negotiating the treaties. Id. The Fort Stanwix treaty made special provisions in Article II for the two friendly tribes, stating:

"The Oneida and Tuscarora Nations shall be secured in the possession of the lands on which they are settled." 7 Stat. 15.

This was pursuant to Congress' instructions to the commissioners negotiating the treaty, to

"reassure the said tribes of the friendship of the United States and that they may rely that the lands which they claim as their inheritance will be reserved for their sole use and benefit until they may think it for their own advantage to dispose of the same." 25 Jour. of the Cont. Cong. 687.*fn5

Subsequently, New York State entered into the 1785 and 1788 "state" treaties with the Oneidas, purportedly purchasing Indian title to over 5 1/2 million acres of their aboriginal land. The details of the allegations concerning the conduct of New York's officials during the negotiations are set forth in full at 520 F. Supp. at 1287-88 and Oneida Indian Nation v. United States, 37 Ind. Cl. Com. 522 (1976), aff'd, 217 Ct. Cl. 45, 576 F.2d 870 (Ct. Cl. 1978), and need only be summarized briefly. In essence, plaintiffs allege that the negotiations were conducted in an atmosphere of deceit, threats and coercion. In particular, the 1785 treaty involving approximately 300,000 acres was concluded only after then-Governor Clinton had threatened to withhold state protection against trespasses on Indian lands if the Oneidas persisted in refusing an outright sale of their land. In negotiating the 1788 treaty involving nearly 5 million acres state officials induced the Oneidas to negotiate by suggesting that certain leases which the Oneidas had granted to a private speculator could jeopardize all their lands as well as their friendship with New York State, without informing the Oneidas that the State had earlier declared those private leases to be void. Governor Clinton apparently gave repeated assurances that New York's aim was only to protect the Indian land and not to purchase it, and the Oneidas believed that the treaty restored their lands to them and only leased or entrusted certain portions to the State for their own protection. See generally United States v. Oneida Nation of New York, 217 Ct. Cl. 45, 576 F.2d 870, 874-75 (Ct. Cl. 1978) (summarizing findings of Indian Claims Commission that New York treated the Oneidas unfairly and that they therefore did not voluntarily sell their lands at that time). Under the 1788 state treaty, New York was obligated to pay the Oneidas a yearly rent. The Oneidas claim that the rent was to be increased as the lands became gradually settled. These rent increases did not occur and in 1839 the payments were terminated altogether by a state statute capitalizing future payments and extinguishing the obligation through a lump sum payment. Both New York "treaties" were concluded without federal government consent or even participation.

The Oneidas claim first that the New York State treaties failed to extinguish their right of occupancy since they were concluded without the required federal consent. They read both the Proclamation of 1783 and the Treaty of Fort Stanwix as requiring such consent, and further contend that Congress had the authority under Article IX of the Articles of Confederation to require such consent both because clause 1 of that Article separately empowered the federal government to protect Indian lands as part of its war and peace and treaty-making powers and because clause 4 delegated to the federal government the exclusive right to extinguish Indian title. Second, they claim that the 1788 state treaty violated Article I, § 10, clause 1, of the U.S. Constitution prohibiting states from "enter[ing] into any Treaty," and Article I, § 8, clause 3 and Article II, § 2, granting the Congress and the President, respectively, the exclusive authority to regulate commerce and enter into treaties with the Indians. This claim is premised on the Oneidas' contention that the Constitution went into effect upon its ratification by the ninth state on June 21, 1788, which pre-dated the conclusion of the 1788 treaty.

Third, they claim that even assuming that the New York treaties did not violate pre-Constitution federal law, the treaties reserved to them an interest in the land that subsequently came under the protection of the Nonintercourse Act upon its enactment in 1790, and that the subsequent dispossession of them from the land without federal consent violated the Act. They claim they retained an interest in the land because New York's fraudulent and deceitful conduct gives rise to a constructive trust on their behalf, or because the 1788 treaty constituted an express or implied trust or a perpetual lease. Fourth, they claim that the state is liable for fraudulent misrepresentation and for violating its trust obligations under Article 37 of the New York Constitution. Fifth, they claim that the 1788 treaty is fatally vague since it fails to specify the rate at which the increases in the rent would occur.

The court below found that it had jurisdiction under both 28 U.S.C. §§ 1331 and 1362. It then rejected the defendants' contention that the suit was barred by the non-justiciability doctrine and that the claims against the state defendants were barred by the Eleventh Amendment. The court, however, granted the defendants' motion pursuant to F.R.Civ.P. 12(b)(6), to dismiss for failure to state a claim. While we agree with the district court's disposition of some of the issues,*fn6 we reverse and remand for further proceedings to provide the parties an opportunity to introduce relevant evidence concerning the complex legal and factual issues raised in this action, in particular the division of federal and state authority over Indian affairs under the Articles of Confederation and the Oneidas' understanding of the various treaties and documents involved.

Discussion

Defenses Based on Eleventh Amendment, ...


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