United States District Court, N.D. New York
May 20, 2004.
CAYUGA INDIAN NATION OF NEW YORK, Plaintiff,
VILLAGE OF UNION SPRINGS; TOWN OF SPRINGPORT; and COUNTY OF CAYUGA NEW YORK, Defendants
The opinion of the court was delivered by: DAVID HURD, District Judge
MEMORANDUM-DECISION AND ORDER
On April 27, 2004, the Village of Union Springs, Town of Springport,
and County of Cayuga, New York ("Defendants") filed a Notice of Appeal
regarding, among other things, the Memorandum-Decision and Order filed on
April 23, 2004, permanently enjoining them from enforcing local zoning and land use laws against the Cayuga Indian
Nation of New York ("the Nation)" regarding use of property it owns
within Defendants' municipal boundaries ("the Property"). Defendants now
move, pursuant to Fed.R.Civ.P. 62(c), for an injunction pending appeal
enjoining the Nation from further construction, demolition, and/or
renovation work at the Property. The Nation opposes. In the alternative,
the Nation requests that the Defendants be required to post a substantial
bond in the event a stay is granted.
Oral argument was heard on May 13, 2004 in Utica, New York. Decision
was reserved. Familiarity with the April 23, 2004 decision, as well as
the Memorandum-Decision and Order issued on November 28, 2003, is
assumed. See Cayuga Indian Nation of New York v. Village
of Union Springs, et al., __ F. Supp.2d __, No. 03-CV-1270, 2004 WL
884589 (N.D.N.Y. Apr. 23, 2004); Cayuga Indian Nation of New York v.
Village of Union Springs, etal., 293 F. Supp.2d 183 (N.D.N.Y. 2003).
Fed.R.Civ.P. 62(c) provides, in relevant part:
When an appeal is taken from an interlocutory or
final judgment granting, dissolving, or denying an
injunction, the court in its discretion may
suspend, modify, restore, or grant an injunction
during the pendency of the appeal upon such terms
as to bond or otherwise as it considers proper for
the security of the rights of the adverse party.
Although generally, "once a notice of appeal has been filed, `it
confers jurisdiction on the court of appeals and divests the district
court of its control over those aspects of the case involved in the
appeal,'" Kidder, Peabody & Company, Inc. v. Maxus Energy
Corp., 925 F.2d 556
, 564 (2d Cir. 1991), quoting Griggs v.
Provident Consumer Discount Co., 459 U.S. 56
, 58, 103 S.Ct. 400, 402
(1982), pursuant to Fed.R.Civ.P. 62(c), "a district court may grant injunctive relief after a proper notice of appeal has been filed,
but only when it is necessary to preserve the status quo pending appeal,"
id., citing International Ass'n of Machinists &
Aerospace Workers v. Eastern Air Lines, Inc., 847 F.2d 1014
(2d Cir. 1988).*fn1
Pursuant to Rule 62(c), in order "[t]o determine whether a stay of an
order pending appeal is appropriate, a court must evaluate the following
(1) whether the stay applicant has made a strong
showing that he is likely to succeed on the
merits; (2) whether the applicant will be
irreparably injured absent a stay; (3) whether
issuance of the stay will substantially injure the
other parties interested in the proceeding; and
(4) where the public interest lies."
Rodriauez v. DeBuono, 175 F.3d 227, 234 (2d Cir. 1999),
quoting Hilton v. Braunskill, 481 U.S. 770
107 S.Ct. 2113, 2119 (1987). Defendants, as movants, have the heavy burden of
establishing that the aforementioned factors weigh in favor of a stay.
See Handberry v. Thompson, No. 96 Civ. 6161, 2003 WL 1797850,
at *1 (S.D.N.Y. Apr. 4, 2003), citing Cooper v. Town of
East Hampton, 83 F.3d 31, 36 (2d Cir. 1996). See also Juan v.
Rowland, No. Civ. H-89-859, 2001 WL 263395 (D. Ct. Feb. 9, 2001);
Schwartz v. Dolan, 159 F.R.D. 380, 383 (N.D.N.Y. 1995), vacated in part on other
grounds, 86 F.3d 315 (2d Cir. 1996).
When deciding whether a stay is warranted, it is important to keep in
mind that "[t]he necessary `level' or `degree' of possibility of success
will vary according to the court's assessment of the other [stay]
factors." Mohammed v. Reno, 309 F.3d 95, 101 (2d Cir. 2002),
quoting Washington Metropolitan Area Transit Commission v. Holiday
Tours, Inc., 559 F.2d 841, 843 (D.C. Cir. 1977). That is to say,
where, for example, the stay applicant's showing of a likelihood of
success is not very strong, a higher quantum of irreparable injury is
required, and conversely, a strong showing of a likelihood of success is
required where irreparable injury is not very evident. See
Id. For this reason, the likelihood of success factor will be
1. Irreparable Injury to Defendants
Defendants must establish that, in the absence of a stay pending
appeal, they will be irreparably injured. Here, Defendants argue, citing
New York v. Shinnecock Indian Nation, 280 F. Supp.2d 1 (E.D.N.Y.
2003), that the Nation's construction and operation of a gaming facility
on the Property will have a substantial impact on the quality of life in
the Village of Union Springs (the Village) and that such harm is
imminent. Defendants also argue, citing Kansas v. United
States, 249 F.3d 1213 (10th Cir. 2001), that they will be irreparably harmed by the prospect of losing sovereignty over the
Property.*fn2 Both of these cases, however, are distinguishable.
In Shinnecock, the court enjoined a non-federally recognized
Indian tribe from construction of a Class III gaming facility on a parcel
of land it owned in the Town of Southampton that was not within the
tribe's reservation and was not taken into trust by the United States.
See 280 F. Supp.2d at 3. In finding that the plaintiff there
established irreparable harm, the court recognized that the "likely harm
to the pristine community of Southampton could be devastating" if the
tribe were not required to adhere to state and local environmental laws,
specifically noting plaintiffs' argument that the tribe may need to
install a waste water treatment facility on the property. See
Id. at 5. No such concern has been raised here. In fact,
Defendants only argue that increased traffic congestion threatens to harm
the quality of life in the Village, and refer to arguments advanced in a
previous motion regarding the "possible problems with utility
services and the possible adverse effect that the location of
the gaming facility, 300 yards from the high school, would have on the
Village." See Mem. of Law in Supp. of Defs.' Mot. for an Inj.
Pending Appeal, at 2-3, citing Aff. of Edward A. Trufant, Oct.
29, 2003, at ¶ 21 (emphasis added). Moreover, the court in
Shinnecock expressed concern regarding the tribe's intent to
conduct class III gambling on the property when to do so without a
tribal-state compact would be a violation of state law as well as the
Indian Gaming Regulatory Act (IGRA). See Id. Here,
the Nation plans to operate a class II gaming facility, which, unlike a
class III facility, will not require such a compact. See
25 U.S.C. § 2710(d)(1)(C). Also, the Nation, unlike the tribe in
Shinnecock, is a federally recognized tribe and is in
possession of a gaming ordinance issued by the National Indian Gaming
Commission (NIGC) pursuant to IGRA. See § 2710(b)(2). It is
also important to note that, unlike the proposed facility at issue in
Shinnecock, which included plans for a casino with, at the very
least, 900 to 1000 gaming machines and 60 table games,*fn3 here, the
Nation plans to operate only 100 electronic bingo machines in its
facility. See Shinnecock, 280 F. Supp. at 3 n.1.
Moreover, Defendants fail to adequately explain how the Nation's facility
will generate more traffic than any other business in the Village.
The Tenth Circuit's holding in Kansas v. United States is
likewise distinguishable. There, the court affirmed a district court's
order granting a motion for a preliminary injunction to stay all
activities by an Indian tribe relating to gaming on the property at
issue. See Kansas, 249 F.3d at 1221. The underlying lawsuit
arose after the NIGC determined that said property was "Indian land"
within the meaning of IGRA. See id. at 1220. In
deciding the motion for a preliminary injunction, the district court
found that plaintiff met the "likelihood of success on the merits" element, ostensibly because it concluded
that the NIGC's determination was "arbitrary and frivolous."
Id., at 1221. Before reaching that element of plaintiff's
motion, the Tenth Circuit found that plaintiff there made the required
showing of irreparable harm, stating that "because the State of Kansas
claims the NIGC's decision places its sovereign interests and public
policies at stake, we deem the harm the State stands to suffer as
irreparable if deprived of those interests without first having a full
and fair opportunity to be heard on the merits." Id. at 1227.
The procedural posture of this case is very different. On a motion for
summary judgment, the Property here was declared Indian Country pursuant
to 18 U.S.C. § 1151(a) and Defendants were enjoined from enforcing
their zoning laws or ordinances to regulate the Nation's activities
thereon. See Village of Union Springs, 2004 WL 884589 at *18.
Unlike in Kansas, where the court was concerned about a
deprivation of the state's sovereignty interests without affording it a
full and fair opportunity to be heard on the merits of its claim, here,
defendants had such an opportunity when they opposed the Nation's motion
for summary judgment.
Most importantly, twice previously in this litigation Defendants failed
to make the requisite showing of irreparable harm in order to prevail on
their separate motions for a preliminary injunction. See Village of
Union Springs, 2004 WL 884589, at *16; Village of Union
Springs, 293 F. Supp.2d at 195-198. Where, as here, the order stayed
involves an "injunction, a principal element of which is a finding of
irreparable harm that is imminent, it is logically inconsistent, and in
fact a fatal flaw, to subsequently find no irreparable nor even serious
harm to the [p]laintiff pending appeal." Rodriguez, 175 F.3d
For the foregoing reasons, Defendants have failed to show that they
will be irreparably injured absent a stay. 2. Substantial Injury to the Nation
Defendants must also establish that, in the event of a stay pending
appeal, the Nation will not be substantially injured. Defendants aim to
meet this burden by arguing merely that the Nation will suffer "minimal
economic loss" since construction activities have only recently
restarted. Not surprisingly, the Nation claims it will suffer "enormous"
injury in the event of a stay, via economic loss as well as the loss of
its sovereignty rights relating to their use of the Property.
In a letter submission regarding the Nation's previous motion for a
preliminary injunction, counsel for the Nation indicated that gaming
activities to be conducted on the Property would net the Nation a minimum
daily profit of $14,000 to $17,000. See Aff. of Alan Peterman,
Jan. 20, 2004, Ex. U. Defendants cited this letter, without disputing the
accuracy of its contents, in support of one of their arguments against
the Nation's motion for summary judgment. See Village of Union
Springs, 2004 WL 884589, at *14.
It is important to keep in mind that Defendants, as the movants, bear
the burden of establishing that the Nation will not be substantially
injured in the event of a stay. Defendants sole argument in this regard
is refuted by their own prior submissions in this matter. Moreover,
Defendants have not addressed the issue of the effect a stay would have
on the Nation's sovereignty over the Property.
Under these circumstances, Defendants have not made the requisite
showing of a lack of substantial injury to the Nation in the event of a
stay. 3. The Public Interest
Defendants argue the public interest here weighs in favor of a stay,
citing the policy of the State of New York to prohibit gambling except in
certain circumstances, the need to preserve the quality of life in the
Village, and the prevention of an increase in public expenditures which
will result if the Nation is allowed to operate a gaming facility on the
The Nation, on the other hand, cites the federal policy of encouraging
tribal self governance and economic development through gaming. Moreover,
the Nation disputes the relevance of the state's policy regarding
gambling since federal, not state law, clearly applies to govern its
gaming activities on the Property.
Finally, the Nation argues that Defendants' contentions regarding
increased public expenditures are irrelevant, citing Schwartz,
supra. Schwartz and the cases it follows found that economic loss
was insufficient evidence of irreparable harm, not that economic loss was
not to be considered when weighing the public interest.*fn4
Nonetheless, it is clear that the public interest here lies with the
Nation. As a federally recognized tribe, the Nation's gambling activities
will be governed by federal law, and thus, the "overriding goals" of the
United States government to further tribal self sufficiency and economic
development should control. See New Mexico v. Mescalero Apache
Tribe, 462 U.S. 324, 335, 103 S.Ct. 2378, 2386-87 (1983). See
also California v. Cabazon Band of Mission Indians, 480 U.S. 202, 216,
107 S.Ct. 1083, 1092 (1987). Defendants have not established that the quality
of life in the Village will be significantly harmed by the Nation's
activities to warrant setting aside the overriding federal goal of
encouraging tribal economic development, albeit temporarily, to enjoin it
from continuing activities on the Property.
Likewise, Defendants' reference to the public's interest in preventing
an expenditure increase does not overcome the federal interest in
encouraging tribal economic development. Defendants have not identified
with any specificity the amount of the anticipated increase in
expenditures, and only define such expenditures as those which relate to
policing the traffic that will allegedly be generated by the Nation's
facility. As previously noted, Defendants do not adequately explain how
the facility will generate more traffic than any other business in the
Village, see supra at 6, further weakening their current
Therefore, the public interest here weighs in favor of denying
Defendants' motion for a stay.
4. Likelihood of Success on the Merits
A brief discussion of the arguments regarding the appropriate standard
for evaluating this last factor is in order, as the parties have placed a
great deal of emphasis on same in their written submissions and at the
hearing regarding the pending motion.
Citing Washington Metropolitan Area Transit Commission v. Holiday
Tours, Inc., 559 F.2d 841 (D.C. Cir. 1977), Defendants argue that
they do not need to demonstrate the likelihood that their appeal will be
successful, only that the determination being appealed involves
substantial and novel legal questions. See also Hamilton Watch Co.
v. Benrus Watch Co., 206 F.2d 738, 740 (2d Cir. 1953) (footnote
omitted). In Holiday Tours, the D.C. Circuit Court of Appeals
recognized that "tribunals may properly stay their own orders when they
have ruled on an admittedly difficult legal question and when the
equities of the case suggest that the status quo be maintained."
Id. at 844-845.
Defendants argue that, in particular, the issue of whether exceptional
circumstances exist to warrant imposition of their local zoning and land
use laws to regulate the Nations' activities on the Property, decided
against them in the April 23, 2004 order, is one of first impression.
See Village of Union Springs, 2004 WL 884589 at *12-15.
Moreover, defendants correctly note that the City of Sherrill
decision, upon which determinations at issue in the April 23, 2004 order
were based, is presently pending before the Supreme Court on a petition
for certiorari. See Oneida Indian Nation of New York v.
City of Sherrill, 337 F.3d 139 (2d Cir. 2003). Moreover, many
rulings in the Cayuga Land Claim, also relied on in the April
23, 2004 order, are currently pending an appeal before the Court of
Appeals for the Second Circuit. See Cayuga Indian Nation of New York
v. Pataki, 188 F. Supp.2d 223 (N.D.N.Y. 2002).
However, the Nation argues that the appropriate standard, set forth by
the Supreme Court in Hilton and followed overwhelmingly by
courts in this circuit, is a strong likelihood of success on appeal, and
not, as Defendants contend, substantial and novel legal questions
presented on appeal. See Hilton, 481 U.S. at 776, 107
S.Ct. at 2119: Mohammed, 309 F.3d at 100-102; Spargo, 2003 WL
2002762 at*1. But see Cayuga Indian Nation of New York v.
Pataki, 188 F. Supp.2d 223, 253 (N.D.N.Y. 2002), quoting
Holiday Tours, 559 F.2d at 844-845. The Nation also contends
that since Defendants have not advanced any new arguments for injunctive relief in support of the present motion,
they cannot establish a strong showing of a likelihood of success on
appeal. See Schwartz, 159 F.R.D. at 383.
Nonetheless, whatever the appropriate standard is under this prong of
the four factor analysis, it is not to be considered in a vacuum. An
order maintaining the status quo is only appropriate when, in addition to
a likelihood of success on appeal, "when little if any harm will befall
other interested persons or the public and when denial of the order would
inflict irreparable injury on the movant." Holiday Tours, 559
F.2d at 844 (emphasis added). See also Mohammed, 309 F.3d at
101. Despite Defendants' argument that the determinations being appealed
present significant and novel legal questions, they are unable to
establish that they will be irreparably harmed unless their motion for a
stay is granted, nor have they established that the Nation would not be
substantially injured in the event of a stay. Finally, the public
interest here weighs in favor of denying a stay.
Regardless of the significance of the legal questions presented on
appeal, or the likelihood of success on the merits, consideration of all
four factors in deciding whether to grant a stay overwhelmingly requires
rejection of same.
Defendants' motion for an order staying the underlying injunction
pending the outcome of an appeal will be denied. The Nation's request for
a bond is moot.
Therefore, it is
ORDERED that Defendants, the Village of Union Springs, Town of
Springport, and County of Cayuga, New York's motion pursuant to
Fed.R.Civ.P. 62(c) for an order enjoining plaintiff, the Cayuga Indian Nation
of New York, from performing any additional construction work and/or
construction related work on the Property pending a determination of Defendants' appeal regarding this matter to the United States
Court of Appeals for the Second Circuit is DENIED.
IT IS SO ORDERED.