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Citizens Against Casino Gambling in Erie County v. Hogen

July 8, 2008

CITIZENS AGAINST CASINO GAMBLING IN ERIE COUNTY (JOEL ROSE AND ROBERT HEFFERN, AS CO-CHAIRPERSONS, REV. G. STANFORD BRATTON, D. MIN., EXECUTIVE DIRECTOR OF THE NETWORK OF RELIGIOUS COMMUNITIES, NETWORK OF RELIGIOUS COMMUNITIES, NATIONAL COALITION AGAINST GAMBLING EXPANSION, PRESERVATION COALITION OF ERIE COUNTY, INC., COALITION AGAINST GAMBLING IN NEW YORK-ACTION, INC., THE CAMPAIGN FOR BUFFALO-HISTORY ARCHITECTURE AND CULTURE, ASSEMBLYMAN SAM HOYT, MARIA WHYTE, JOHN MCKENDRY, SHELLEY MCKENDRY, DOMINIC J. CARBONE, GEOFFREY D. BUTLER, ELIZABETH F. BARRETT, JULIE CLEARY, ERIN C. DAVISON, ALICE E. PATTON, MAUREEN C. SCHAEFFER, JOEL A. GIAMBRA, PASTOR KEITH H. SCOTT, SR., DORA RICHARDSON, AND JOSEPHINE RUSH, PLAINTIFFS,
v.
PHILIP N. HOGEN, IN HIS OFFICIAL CAPACITY AS CHAIRMAN OF THE NATIONAL INDIAN GAMING COMMISSION, THE NATIONAL INDIAN GAMING COMMISSION, THE UNITED STATES DEPARTMENT OF THE INTERIOR, AND DIRK KEMPTHORNE, IN HIS OFFICIAL CAPACITY AS THE SECRETARY OF THE INTERIOR, DEFENDANTS.



The opinion of the court was delivered by: William M. Skretny United States District Judge

DECISION AND ORDER

TABLE OF CONTENTS

I. INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

II. BACKGROUND.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

A. Aboriginal Tribes and their Territories. . . . . . . . . . . . . . . . . . . . . . . . . 4

B. British Dominance and Rights of Extinguishment and Preemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

C. The Revolutionary War and Articles of Confederation. . . . . . . . . . . . 5

D. The Treaties of Paris and Fort Stanwix. . . . . . . . . . . . . . . . . . . . . . . . . 7

E. The Indian Trade and Intercourse Act. . . . . . . . . . . . . . . . . . . . . . . . . . 9

F. The Treaty of Canandaigua. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

G. Subsequent Treaties and SNI Land Cessions. . . . . . . . . . . . . . . . . . 11

H. The Allegany Reservation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

I. The Indian Reorganization Act.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

J. The Indian Claims Commission and the SNI's Claims for Damages. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

K. The Salamanca Indian Lease Authority.. . . . . . . . . . . . . . . . . . . . . . . 21

L. The Seneca Nation Settlement Act of 1990.. . . . . . . . . . . . . . . . . . . . 22

M. The Indian Gaming Regulatory Act. . . . . . . . . . . . . . . . . . . . . . . . . . . 24

N. The SNI's Pursuit of Class III Gaming. . . . . . . . . . . . . . . . . . . . . . . . . 28

III. THE GOVERNMENT'S JURISDICTIONAL CHALLENGES. . . . . . . . . . . . . . . 32

A. Standard of Review.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

B. Plaintiffs' Standing to Sue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

1. Constitutional and Prudential Standing. . . . . . . . . . . . . . . . . . 33

2. The Individual Plaintiffs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

ii

3. The Remaining Plaintiffs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

C. The Quiet Title Act and Sovereign Immunity. . . . . . . . . . . . . . . . . . . 42

IV. DISCUSSION.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

A. Standards of Review.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

1. Defendants' Motion to Dismiss. . . . . . . . . . . . . . . . . . . . . . . . . 47

2. Plaintiffs' Motion for Summary Judgment. . . . . . . . . . . . . . . . 49

3. APA Review of Agency Action. . . . . . . . . . . . . . . . . . . . . . . . . 50

B. Plaintiffs' First Claim for Relief:

The "Indian Lands" Question.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

1. The Meaning of Indian Country. . . . . . . . . . . . . . . . . . . . . . . . . 54

a. Reservations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

b. Indian Allotments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

c. Dependent Indian Communities.. . . . . . . . . . . . . . . . . . . . 57

d. The Requirements for Finding a Dependent

Indian Community. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

2. Plaintiffs' Arguments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

a. Congressional Drafting and the Significance of Other Settlement Acts .. . . . . . . . . . . . . . . . . . . . . . . . . . . 61

b. The Treatment of Trust and Restricted Fee Lands. . . . . . 64

i. The Trust Acquisition Statute and

Related Cases. . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

ii. Restricted Fee Land Cases.. . . . . . . . . . . . . . . . . . 67

iii. Congressional and Agency Treatment of

Trust and Restricted Fee Land .. . . . . . . . . . . . . . . 69

c. The Buffalo Parcel and the Dependent Indian

Community Requirements. . . . . . . . . . . . . . . . . . . . . . . . . 72

i. The Set-Aside Requirement. . . . . . . . . . . . . . . . . . 72

iii

A. The SNSA's Text and Structure. . . . . . . . . . 73

B. The Judicial Decisions. . . . . . . . . . . . . . . . . 75

ii. Federal Superintendence. . . . . . . . . . . . . . . . . . . . 80

A. The SNSA's Text. . . . . . . . . . . . . . . . . . . . . 81

1. The restricted fee process. . . . . . . . . 81

2. The reservation process. . . . . . . . . . 85

B. The Judicial Decisions. . . . . . . . . . . . . . . . . 89

d. The Import of the Term "Dependent". . . . . . . . . . . . . . . . . 95

3. The Agency Action and APA Review. . . . . . . . . . . . . . . . . . . . 97

C. Plaintiffs' Second Claim for Relief: Settlement of a Land Claim The Section 20 Gaming Prohibition and its Exceptions. . . . . . . . . . 98

1. Land Taken Into Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

2. The Settlement of a Land Claim Exception. . . . . . . . . . . . . . 103

a. The Significance of Titles and Headings. . . . . . . . . . . . . 103

b. The Text of the SNSA. . . . . . . . . . . . . . . . . . . . . . . . . . . 105

c. The Nature and Existence of an Enforceable Claim. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

i. The Right to Eject Lessees. . . . . . . . . . . . . . . . . . 108

ii. The Right to Damages for Inadequate Rental Rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

3. The Agency Action and APA Review. . . . . . . . . . . . . . . . . . . 117

D. Defendants Motion to Dismiss all Claims against the DOI and its Secretary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119

E. Plaintiffs' Motion to Supplement the Record. . . . . . . . . . . . . . . . . . 120

V. CONCLUSION.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121

VI. ORDERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122

iv.

ABBREVIATIONS AND ACRONYMS

The following abbreviations and acronyms are used in this Decision: STATUTES APA Administrative Procedure Act, 5 U.S.C. §§ 701 et seq. DJA Declaratory Judgments Act, 28 U.S.C. §§ 2201 et seq. IGRA Indian Gaming Regulatory Act, 25 U.S.C. §§ 2701 et seq. IRA Indian Reorganization Act, 25 U.S.C. §§ 461 et seq. Nonintercourse Act Indian Trade and Intercourse Act, 25 U.S.C. § 177 QTA Quiet Title Act, 28 U.S.C. § 2409a SNSA Seneca Nation Settlement Act of 1990, 25 U.S.C. §§ 1774 et seq.

AGENCIES AND ENTITIES

CACGEC Citizens Against Casino Gambling in Erie County Chairman Chairman of the National Indian Gaming Commission Commission Indian Claims Commission Committee Select Committee on Indian Affairs DOI United States Department of the Interior NIGC National Indian Gaming Commission Secretary Secretary of the United States Department of the Interior SILA Salamanca Indian Lease Authority SNI Seneca Nation of Indians

DOCUMENTS

Compact "Nation-State Gaming Compact between the Seneca Nation of Indians and the State of New York," deemed approved by the Secretary as of October 25, 2002

Ordinance "Seneca Nation of Indians Class III Gaming Ordinance," approved by the Chairman on July 2, 2007

I. INTRODUCTION

Plaintiffs Citizens Against Casino Gambling in Erie County, et al. (collectively, "Plaintiffs" or "CACGEC"), commenced this action on July 12, 2007, and filed a First Amended Complaint on November 28, 2007. (Docket No. 49, hereafter "Am. Compl.") Plaintiffs challenge the National Indian Gaming Commission's ("NIGC") decision to approve a Class III Gaming Ordinance that was enacted by the Seneca Nation of Indians ("SNI") on June 9, 2007. The NIGC's approval permits the SNI to operate a gambling casino in the City of Buffalo on land the tribe purchased in 2005. Plaintiffs allege that certain determinations on which the NIGC based its approval are arbitrary, capricious, an abuse of discretion and not in accordance with law. They seek declaratory and injunctive relief, and an award of costs and fees, under the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701-706; the Declaratory Judgments Act ("DJA"), 28 U.S.C. §§ 2201 and 2202; Rule 57 of the Federal Rules of Civil Procedure; and the Indian Gaming Regulatory Act ("IGRA"), 25 U.S.C. §§ 2701 - 2721.

Plaintiffs' Amended Complaint asserts two claims against NIGC Chairman Hogen, the NIGC, the United States Department of the Interior ("DOI"), and DOI Secretary Kempthorne (collectively, "Defendants" or "the Government"). In the first, Plaintiffs challenge the NIGC's conclusion that certain SNI-owned land in the City of Buffalo (the "Buffalo Parcel" or "Parcel") is "Indian lands," as that term is defined in the IGRA. In the second, they challenge the NIGC's determination that the Buffalo Parcel was acquired "as part of the settlement of a land claim," and is thereby excepted from the IGRA's general prohibition on gaming on lands acquired after October 17, 1988.

There are now three motions before the Court. On September 10, 2007, Defendants moved to Dismiss the Complaint or in the alternative for Summary Judgment, pursuant to Rules 12(b)(1), 12(b)(6) and 56 of the Federal Rules of Civil Procedure.*fn1 Defendants urge that Plaintiffs lack Article III and prudential standing to sue, the Court lacks jurisdiction over this suit because the United States has not waived its sovereign immunity, and Defendants are entitled to judgment as a matter of law. Defendants alternatively seek summary judgment, but only if the Court does not agree with their contention that the Amended Complaint presents solely legal questions that can be resolved on a motion to dismiss. Docket No. 28-2 at 8-9.

Plaintiffs responded to Defendants' motion to dismiss, and also affirmatively moved, on October 10, 2007, for summary judgment on the merits of their claims that Defendants' actions were arbitrary, capricious, an abuse of discretion, and not in accordance with law.*fn2 Plaintiffs later moved, on January 10, 2008, for Leave to Supplement the Record.*fn3

All motions were fully briefed as of January 25, 2008,*fn4 and are now ready for disposition. The Court heard extensive oral argument on essentially the same questions in a previous action by Plaintiffs, and recently found that no additional argument is necessary. For the reasons set forth below, the Court finds that one or more plaintiffs has standing to sue and the Court has subject matter jurisdiction over this dispute. On the substantive disputes, the Court finds that, as a matter of law, the Buffalo Parcel is "Indian lands" within the meaning of the IGRA. However, the Parcel was not acquired "as part of the settlement of a land claim," and this exception to the IGRA's general prohibition against gaming on land acquired after October 17, 1988, does not apply to make the Parcel gaming-eligible.

II. BACKGROUND

An understanding of the parties' respective arguments and the context in which they arise requires more than a passing familiarity with the SNI's historical relationship to land in western New York and its prior dealings with the federal government.*fn5 In addition, resolution of the pending motions requires an understanding of the IGRA, 25 U.S.C. §§ 2701 - 2721, and other relevant statutes such as the Seneca Nation Settlement Act of 1990 ("SNSA"), 25 U.S.C. §§ 1774-1774h, and the Indian Trade and Intercourse Act (the "Nonintercourse Act"), 25 U.S.C. § 177. Accordingly, the Court begins with a discussion of the historical, legal, and procedural background of this case and these statutes.*fn6

A. The Aboriginal Tribes and their Territories

In aboriginal times, the SNI was one of five nations comprising the Iroquois Confederacy, or Haudenosaunee ("People of the Longhouse"), believed to have been formed in the fifteenth century.*fn7 Seneca Nation of Indians v. New York, 206 F. Supp. 2d 448, 458 n.12 (W.D.N.Y. 2002), aff'd, 382 F.3d 245 (2d Cir. 2004), cert. denied, 547 U.S. 1178, 126 S.Ct. 2351, 165 L.Ed. 2d 278 (2006) (citation omitted). The SNI was the westernmost tribe of the Confederacy and, at the time of the first European contact, its villages were all east of the Genesee River, extending from the Genesee Valley eastward to the watershed between Seneca and Cayuga Lakes. Id. at 458. The area to the west of the SNI's villages was occupied by three separate but allied groups-the Neutral Nation of Indians (territory encompassing both sides of the Niagara River), the Wenros (east along the south shore of Lake Ontario), and the Eries (south of present-day Buffalo and along the southeast shore of Lake Erie into Ohio). Id. at 457-58.

Between 1638 and 1680, the SNI engaged in warfare with, and defeated, first the Wenros, then the Neutrals, and finally, the Eries. Id. at 458-59. After driving these groups from the region, the SNI did not permanently occupy land west of the Genesee River, but apparently did use the area for hunting and fishing. Id. at 459. For the most part, the SNI continued to permanently reside between the Genesee River and Seneca Lake until the Revolutionary War. Id. The Senecas who moved west to the Niagara region in the early 1700s did so to work for the French, carrying goods over the escarpment portage there. Id. at 463.

B. British Dominance and Rights of Extinguishment and Preemption

Through the mid-1700s, both the French and the British sought to claim land in present-day New York State. In 1763, following several British military victories, France and Great Britain entered into the Treaty of Paris, whereby France ceded to Great Britain all its claims to territories east of the Mississippi River. Id. at 464-65. On October 7, 1763, King George III issued a Royal Proclamation prohibiting the purchase or settlement of Indian lands west of the crest of the Appalachian Mountains by anyone, including the colonial governors, without permission of the Crown. Id. at 465. The Crown held the right to extinguish Indian title to land and the right of preemption-i.e., the right to acquire Indian land once Indian title had been extinguished.*fn8 Oneida Indian Nation v. New York, 649 F. Supp. 420, 425 (N.D.N.Y. 1986), aff'd, 860 F.2d 1145, 1167 (2d Cir. 1988), cert. denied, 493 U.S. 871, 110 S.Ct. 200, 107 L.Ed. 2d 154 (1989). Great Britain's centralization of Indian affairs by the Proclamation of 1763 eventually became one of the grievances leading to the American Revolution. Id.

C. The Revolutionary War and Articles of Confederation

In 1776, the year after the Revolutionary War began, the colonies formally declared their independence as a new nation. In 1777, the Delegates of the thirteen states agreed to Articles of Confederation providing for perpetual union between the states. Provisions relative to land and Indian affairs in clauses 2 and 4 of Article IX state, in pertinent part, that:

[N]o State shall be deprived of territory for the benefit of the United States. . . . .

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 . . . .

U.S.C.A. Art of Confed. art. IX, cls, 2 and 4. So, while control over Indian affairs was centralized in the new government, as it had been under the British, the thirteen states won two important guarantees. First, clause 2 protected their territories from encroachment by the national government and, second, clause 4 confirmed their right to purchase Indian lands within their borders without the consent of Congress. Oneida Indian Nation v. New York, 860 F.2d 1145, 1155-58 (2d Cir. 1988).

Ratification of the Articles of Confederation was delayed for several years, until 1781. This was due in part to a controversy over "western lands" to which seven of the thirteen states, including New York and Massachusetts, laid claim. Seneca Nation of Indians, 206 F. Supp. 2d at 472. States without such claims and the national government wanted to limit states' boundaries to their traditional borders. Id. In particular, the national government wanted to secure the western lands to finance the war debt. Id. A compromise was finally reached whereby the landed states ceded their western land claims to the United States in exchange for the recognition of favorable state boundaries. Id. at 472-73. In 1781 and 1785, respectively, New York and Massachusetts ceded their claims to lands north and west of the Ohio River. Seneca Nation of Indians v. United States, 12 Ind. Cl. Comm. 755, 757 (1963). This "Northwest Territory" (present-day Ohio) comprised the first land of the federal public domain. Id. at 758. Lands to the east remained the property of the states, individually,*fn9 and land retained by New York never became part of the federal public domain. Id. Thus, legal title to lands occupied by the SNI in New York has never been in the United States. Seneca Nation of Indians v. United States, 12 Ind. Cl. Comm. 552, 561 (1963).

During the Revolutionary War, the SNI allied with the British. United States v. Oneida Nation of New York, 576 Ct. Cl. 870, 876 (1978). In 1779, the Continental Army retaliated for that allegiance by invading the SNI's Genesee Valley villages and destroying homes and crops. Seneca Nation of Indians, 206 F. Supp. 2d at 470. The Senecas were dispersed and many fled to Fort Niagara seeking British protection. Id. at 470-71. They did not return to the Genesee Valley, and settled instead along the banks of Buffalo Creek (formerly Neutral Nation territory, now known as the Buffalo River). Id. at 471.

D. The Treaties of Paris and Fort Stanwix

The 1783 Treaty of Paris between the United States and Great Britain ended the Revolutionary War. It confirmed the sovereignty of the United States and established boundaries between the United States and British North America, but did not include any reservation of Indian rights. Id. at 474. With no peace treaty in place between the United States and Britain's wartime Indian allies, the threat of hostilities continued. Of particular concern were the possibilities that the Indians would again ally with the British (who had refused to vacate some of their forts in the United States), various tribes would unite to mount a war against the United States, and hostilities would delay the settlement of western lands. Id.; Oneida Indian Nation, 649 F. Supp. at 443.

George Washington urged that the United States negotiate a peace treaty with the Six Nations and establish boundary lines for their lands. Seneca Nation of Indians, 206 F. Supp. 2d at 475. The Continental Congress's Committee for Indian Affairs made a similar recommendation. Id. Shortly thereafter, the Congress adopted the Commitee's report and elected commissioners to negotiate with the Six Nations. Id. at 475-476. Formal treaty sessions began on October 12, 1784, at Fort Stanwix (now Rome, New York). The Six Nations ultimately relinquished claims to the Northwest Territory, to a four-mile-wide strip of land running from Johnston's Landing Place on Lake Ontario southward along the Niagara River to Buffalo Creek on Lake Erie, and to a six-mile-square area around Fort Oswego in exchange for goods and the peaceful possession of the lands they retained. Treaty with the Six Nations, art. III, Oct. 22 1784, 7 Stat. 15.

Of the Six Nations, the SNI lost the most land at Fort Stanwix, resulting in tribal dissatisfaction and potential unrest. Seneca Nation of Indians, 206 F. Supp. 2d at 480-81, 487. In 1789, the government attempted to quell possible instability by compensating the Six Nations for the land they had relinquished. Id. at 481; Treaty with the Six Nations, Jan. 9, 1789, 7 Stat. 33. This approach was largely ineffective and the SNI's dissatisfaction was exacerbated by an unfavorable geographical error in a survey later done in connection with the Fort Stanwix treaty. Seneca Nation of Indians, 206 F. Supp. 2d at 483-84. The 1784 Treaty described the western boundary of the Six Nations as running from the mouth of Buffalo Creek to the northern border of Pennsylvania. It was thought that this line was coterminous with the western boundary of New York State. Id. at 483. However, when New York ceded to the United States its claim to land in the Northwest Territory in 1781, the state's actual boundary was established much farther west. Id. The boundary line described in the 1784 Treaty cut off all of present-day Chautauqua County and parts of Erie and Cattaraugus Counties, greatly diminishing the land base retained by the Six Nations, and particularly the SNI. Id.

E. The Indian Trade and Intercourse Act

The United States Constitution, which became effective on March 4, 1789, granted the federal government authority over Indian affairs. Its adoption removed any doubt as to whether, under the Articles of Confederation, certain rights over Indians continued to be reserved to the states. United States v. City of Salamanca, 27 F. Supp. 541, 543 (W.D.N.Y. 1939). The new federal government initially pursued a policy protective of Indians and sought to secure tribal rights to reserved lands. City of Sherrill v. Oneida Indian Nation of N.Y., 544 U.S. 197, 204, 125 S.Ct. 1478, 161 L.Ed. 2d 386 (2005). In furtherance of that policy, Congress passed the first Indian Trade and Intercourse Act ("Nonintercourse Act"), which declared, in relevant part:

That no sale of lands made by any Indians, or any nation or tribe of Indians within the United States shall be valid to any person or persons, or to any state, whether having the right of preemption to such lands or not, unless the same shall be made and duly executed at some public treaty, held under the authority of the United States.

Act of July 22, 1790, ch. 33, 1 Stat. 137. In passing the Nonintercourse Act, Congress exercised its authority under the Indian Commerce Clause, U.S. CONST., art. I, § 8, cl. 3, to ban the states from purchasing or acquiring Indian lands without the federal government's approval. Federal Power Comm'n v. Tuscarora Indian Nation, 362 U.S. 99, 119, 80 S.Ct. 543, 4 L.Ed. 2d 584 (1960) ("The obvious purpose of the Nonintercourse Act is to prevent unfair, improvident, or improper disposition by Indians of lands owned or possessed by them to other parties . . . [by enabling the federal government] to vacate any disposition of their lands made without its consent.") (citations omitted) (alteration added).

The Nonintercourse Act was renewed periodically and remains substantially in force today. Last modified in 1834, the Act is currently codified in 25 U.S.C. § 177. Seneca Nation of Indians v. United States, 173 Ct. Cl. 917, 924 n.6 (1965) (tracing amendments). The current version provides, in pertinent part, that:

No purchase, grant, lease or other conveyance of lands, or of any title or claim thereto, from any Indian nation or tribe of Indians, shall be of any validity in law or equity, unless the same be made by treaty or convention entered into pursuant to the Constitution.

25 U.S.C. § 177.

F. The Treaty of Canandaigua

Hostilities between the United States and Indian tribes located west of New York and Pennsylvania continued well after the Revolutionary War. Seneca Nation of Indians, 206 F. Supp. 2d at 486. Attempts to treat with the western tribes ultimately failed and, in 1794, rumors began to circulate that the Six Nations, or at least the SNI, might join with the western tribes against the United States. Id. Largely due to concerns over the likelihood that the SNI would go to war, the United States again sought a treaty with the Six Nations. Id. at 486-87. In the 1794 Treaty of Canandaigua, the United States described and acknowledged a vast tract of land in western New York as belonging to the "Senekas" (the SNI),*fn10 and the Six Nations, in turn, each agreed never to claim "any other lands within the boundaries of the United States." Treaty of Canandaigua, art. III and IV, Nov. 11, 1794, 7 Stat. 44. However, it was not long before land recognized by the Treaty of Canandaigua as belonging to the SNI was largely lost due to the government's shift away from a policy protective of Indian land rights.

G. Subsequent Treaties and SNI Land Cessions

Prior to 1786, sovereignty over most of what is now western and central New York was claimed by both New York and Massachusetts under conflicting grants from the Crown. Seneca Nation of Indians, 12 Ind. Cl. Comm. at 759. In 1786, New York entered into a convention agreement with Massachusetts (the Hartford Compact) by which it proposed to grant that state the preemption rights to some 6,000,000 acres in western New York,*fn11 in exchange for which Massachusetts relinquished its claim to sovereignty over the land. Id. at 759-60; City of Salamanca, 27 F. Supp. at 544; Seneca Nation of Indians, 206 F. Supp. 2d at 481. In 1796, Robert Morris, American statesman and "financier of our Revolution,"*fn12 acquired from Massachusetts the preemption rights to the westerly portion of that land.*fn13 City of Salamanca, 27 F. Supp. at 544. On September 15, 1797, by the Treaty of Big Tree, the federal government approved Morris' purchase of the bulk of the SNI's land holdings.*fn14 7 Stat. 601. Morris, in turn, conveyed the land and his remaining rights to the Holland Land Company. Federal Power Comm'n, 362 U.S. at 123 n.18. In 1810, the Holland Land Company sold all right, title and interest in the SNI's remaining land to David A. Ogden for the Ogden Land Company, subject only to the rights of the SNI. Seneca Nation of Indians, 12 Ind. Cl. Comm. at 766. The SNI thereafter ceded most of its reserved land to the Ogden Land Company. Seneca Nation of Indians v. United States, 28 Ind. Cl. Comm. 12, 29 (May 3, 1972).

In 1823, the SNI ceded 16,720 acres of its Gardeau Reservation. Id. at 30. Three years later, in 1826, the SNI relinquished a total of 87,526 acres from eight reserves, including portions of its Cattaraugus (5,120 acres), Tonawanda (33,409 acres), and Buffalo Creek Reservations (33,637 acres). Id. at 32-36. In 1838, certain chiefs of the Six Nations, including chiefs from the SNI, entered into a treaty at Buffalo Creek that provided for the sale of all remaining tribal lands to the Ogden Land Company and the withdrawal of the Iroquois Confederacy tribes to land in Kansas. Treaty with the New York Indians, Jan. 15, 1838, 7 Stat. 550. Serious differences arose among the SNI leadership regarding the circumstances and terms of the 1838 treaty, and that dissension led to a "compromise" treaty with the SNI only, in 1842. Treaty with the Senecas, May 20, 1842, 7 Stat. 586. Under the 1842 treaty, the SNI confirmed the cession of its Tonawanda and Buffalo Creek reservations, but retained title to the Allegany (30,469 acres) and Cattaraugus (21,680 acres) Reservations.*fn15 The SNI also retained title to a one-mile square tract (640 acres) of land at Oil Spring, straddling Allegany and Cattauraugus counties, on which no Senecas resided but which encompasses a spring the SNI valued for its purported medicinal qualities.

The SNI's treaty cessions to Morris and Ogden reflect the changes then taking place in federal Indian policy. First, the nation's rapid growth in the late eighteenth and early nineteenth centuries created a demand for westward expansion and a corresponding pressure on the government to extinguish Indian title by treaty. Later, as Indian tribes became increasingly resistant to requests that they cede their territories, the government moved toward a policy of removing Indians to lands in the western states in exchange for their existing lands. See, e.g., Banner v. United States, 238 F.3d 1348, 1351 (Fed. Cir. 2001) ("Banner II").

In 1871, the federal government abandoned formal treaty-making with Indian tribes altogether, Act of March 3, 1871, § 1, 16 Stat. 544 (codified in 25 U.S.C. § 71), and moved toward a policy of allotment*fn16 and assimilation.

H. The Allegany Reservation

Early on, the SNI's Allegany Reservation was considered of little value. City of Salamanca, 27 F. Supp. at 544. That assessment changed when railroads extended through it to the west. Railroad construction purportedly was authorized by an Act of Legislature of the State of New York, May 12, 1836, Laws 1836, c. 316. This Act permitted the use of certain reservation land for railroad purposes only, but provided that fee should not vest in the railroads. City of Salamanca, 27 F. Supp. at 544. Inevitably, along with railroads came the growth of settlements, and settlers residing on the Allegany Reservation leased land from the SNI. Id.

Sometime prior to 1875, the Supreme Court of New York found that these leases had been taken without federal authority and declared them invalid based on the Nonintercourse Act, 25 U.S.C. § 177. City of Salamanca, 27 F. Supp. at 544; Banner v. United States, 44 Fed. Cl. 568, 570 (1991) ("Banner I"). New York State petitioned Congress to ratify the leases, and Congress responded by enacting the Act of February 19, 1875, ch. 90, 18 Stat. 330. City of Salamanca, 27 F. Supp. at 544. That Act provided that existing leases would be valid and binding for a period of five years from its date of passage (to February 19, 1880), after which the SNI: through its councillors shall be entitled to the possession of the said lands, and shall have the power to lease the same: Provided, however, That at the expiration of said period, or the termination of said leases, as hereinbefore provided, said leases shall be renewable for periods not exceeding twelve years, and the persons who may be at such time the owner or owners of improvements erected upon such lands, shall be entitled to such renewed leases and to continue in possession of such lands, on such conditions as may be agreed upon by him or them and such councillors; and in case they cannot agree upon the conditions of such leases, or the amount of annual rents to be paid, then the said councillors shall appoint one person, and the other party or parties shall choose one person, as referees to fix and determine the terms of said lease and the amount of annual rent to be paid; and if the two so appointed and chosen cannot agree, they shall choose a third person to act with them, the award of whom, or the major part of whom, shall be final or binding upon the parties . . . .

18 Stat. 330, § 3 (12 year leases to expire February 19, 1892). Congress later passed the Act of September 30, 1890, ch. 1132, 26 Stat. 558, which extended the lease renewal period from twelve years to "a term not exceeding ninety-nine years" (to February 19, 1991), and incorporated "all other terms and conditions of the [Act of 1875]." (alteration added). Throughout these leasing periods, the SNI's ownership of the leased land was not disputed.

Following its final treaty cession in 1842, the SNI's Allegany land base remained intact until 1963. Then, the United States, by condemnation, acquired flowage rights and other easements on some 10,000 acres in the Allegheny Reservation (approximately one-third of the reserved land), as part of the Allegheny River Reservoir (Kinzua Dam) Project in southwestern New York State and Pennsylvania. United States v. 1132.5 Acres of Land, 441 F.2d 356, 357 (2d Cir.), cert. denied, 404 U.S. 850, 92 S.Ct. 86, 30 L.Ed. 2d 89 (1971). Because of its recognized title to the land, the SNI was entitled to receive, and did receive, compensation for the taking. Id.

I. The Indian Reorganization Act

In 1934, yet another shift in federal Indian policy was evidenced by Congress's enactment of the Indian Reorganization Act ("IRA"), 48 Stat. 984-88, codified as amended in 25 U.S.C. §§ 461 et seq. The government was moving from a policy of assimilation to one of Indian self-determination and the reinvigoration of tribal governments. To that end, the IRA encouraged tribes to adopt constitutions and authorized the Secretary to issue charters of incorporation as means by which tribes could govern their internal affairs and engage in economic development. 48 Stat. at 987-88, 25 U.S.C. §§ 469, 476-477. The IRA was also directed toward stemming the loss of Indian land. It did not reactivate the federal restrictions on alienation that had been removed by fee transfers. However, the IRA did put an end to the granting of allotments, extended indefinitely the trust or restriction periods on remaining allotments, and authorized the Secretary of the Interior to restore surplus lands (reservation land previously opened up for sale) to tribal ownership, acquire land in trust in the name of the United States to provide land for Indians, and proclaim new reservations on lands acquired pursuant to the IRA. 48 Stat. at 984-86, 25 U.S.C. §§ 461-465, 467. Consistent with the IRA's goal of self-governance, Congress did not impose its provisions on Indian tribes:

This Act shall not apply to any reservation wherein a majority of the adult Indians, voting at a special election duly called by the Secretary of the Interior, shall vote against its application. It shall be the duty of the Secretary of the Interior, within one year after the passage and approval of this Act, to call such an election, which election shall be held by secret ballot upon thirty days' notice.

48 Stat. at 988, 25 U.S.C. § 478.

Voting was held among the Iroquois nations in June 1935, and the nations, including the SNI, overwhelmingly rejected the IRA due to concerns over maintaining their sovereignty and their remaining land base. LAURENCE M. HAUPTMAN, THE IROQUOIS AND THE NEW DEAL 56-59 (1981). The SNI, who alone among the Six Nations already had an elective system of government, saw the IRA as superfluous. Wilcomb E. Washburn, A Fifty-Year Perspective on the Indian Reorganization Act, 86 AMERICAN ANTHROPOLOGIST 279, 286 (June 1984).

J. The Indian Claims Commission and the SNI's Claims for Damages

It was not long before federal policy once again did an about face and turned to tribal termination and the relocation of individual Indians. COHEN'S at 89-92 (period lasting 1943-1961). Advocates of termination sought to, among other things, bring finality to tribal complaints about the erosion of their land bases. Id. at 92. In 1946, Congress passed the Indian Claims Commission Act, which established the Indian Claims Commission (the "Commission") to hear and resolve certain claims by Indian tribes against the federal government. Act of August 13, 1946, ch. 959, 60 Stat. 1049. Specifically, the Commission was given jurisdiction over:

(1) claims in law or equity arising under the Constitution, laws, treaties of the United States and Executive orders of the President; (2) all other claims in law or equity, including those sounding in tort, with respect to which the claimant would have been entitled to sue in a court of the United States if the United States was subject to suit; (3) claims which would result if the treaties, contracts, and agreements between the claimant and the United States were revised on the ground of fraud, duress, unconscionable consideration, mutual or unilateral mistake, whether of law or fact, or any other ground cognizable by a court of equity; (4) claims arising from the taking by the United States, whether as the result of a treaty of cession or otherwise, of lands owned or occupied by the claimant without payment for such lands of compensation agreed to by the claimant; and (5) claims based upon fair and honorable dealings that are not recognized by any existing rule of law or equity.

60 Stat 1049, 1050, § 2. The Commission was authorized to hear only claims that accrued prior to enactment of the statute and were filed within five years thereafter-no later than August 13, 1951. Id. at § 12 (claims falling outside those parameters could not "thereafter be submitted to any court or administrative agency for consideration, nor will such claim thereafter be entertained by the Congress"). The only redress available in a Commission proceeding was a monetary award, and the Commission's orders were appealable to the Court of Claims.*fn17 Seneca Nation of Indians, 206 F. Supp. 2d at 499. The Commission was originally intended to exist for ten years, but Congress authorized extensions until September 30, 1978. Id. At that time, all remaining cases were transferred to the Court of Claims. Id.; Act of July 20, 1977, Pub. L. No. 95-69, 91 Stat. 273.

On August 11, 1951, the SNI filed a petition with the Commission seeking an award for damages for the United States' alleged failure to ensure that the SNI received conscionable consideration in the sale and leasing of its land under various treaties, agreements and statutes. See Seneca Nation of Indians v. United States, 39 Ind. Cl. Comm. 355, 355 (1977). The SNI sought redress for, among other things, the 1788 Phelps Gorham purchase, the 1797 Morris purchase, the cessions to the Ogden Land Company in 1823, 1826 and 1838, and the Allegany Reservation land leases validated by the Act of 1875 and extended pursuant to the Act of 1890. On January 20, 1958, the Commission directed the SNI to file separate petitions for a number of their claims. Id. at 355.

In Seneca Nation of Indians v. United States, 12 Ind. Cl. Comm. 780 (1963), the Commission considered several of the SNI's land cession claims and determined that the United States was not liable for injuries the SNI purportedly suffered from the sales to Phelps and Gorham in 1788, Morris in 1797, and the Ogden Land Company in 1826 and 1838. In the Commission's view, the United States could not be responsible for the allegedly unlawful taking of SNI land because it has never held title to Indian land in New York State. Id. at 782. The Commission found that no treaty imposed a duty on the United States that would render it liable for the alleged injuries, nor did the Nonintercourse Act. Id. 783-93. The SNI appealed.

The Court of Claims affirmed the Commission as to the Phelps Gorham purchase, but reversed as to all others. Seneca Nation of Indians, 173 Ct. Cl. 917. With respect to the Phelps Gorham purchase, the Court of Claims agreed that the Continental Congress had not assumed any fiduciary role toward the SNI under the Articles of Confederation, which then controlled. Id. at 920-21. However, the Court found a compelling distinction between the sale of land to Phelps and Gorham and all later sales-to wit, Congress's adoption of the Nonintercourse Act in 1790. Id. at 922. By that Act, the United States assumed a special fiduciary responsibility to protect and guard Indians against unfair treatment in transactions with respect to the disposition of their lands. Id. at 925. The Court held that wherever the Nonintercourse Act applies, it necessarily follows that "the United States is liable, under the Indian Claims Commission Act, for the receipt by the Indians of an unconscionably low consideration." Id. at 925-26. On remand, the Commission awarded the SNI $5,649,585.04 for various claims relating to its post-1790 land cessions. Seneca Nation of Indians, 28 Ind. Cl. Comm. at 41 (Docket Nos. 342-A, B, C, E, F, I, 368 and 368-A).

On November 20, 1958, the SNI refiled its claim relating to the Allegany leases (which had been the Tenth Claim of its original petition) as Docket No. 342-G. Seneca Nation of Indians, 39 Ind. Cl. Comm. at 356. The Commission did not make a determination on liability with respect to the SNI's claim for damages from its leases to non-Indians during the period 1870 to 1951. Id. at 358 (Docket No. 342-G). Instead, that claim was settled in 1977 by stipulation for entry of final judgment in the amount of $600,000. Id. at 358, 360, 364. The stipulation was "by way of compromise and settlement," and the United States did not admit liability. Id. at 357, 364. The final judgment disposed of all claims the SNI "asserted, or could have asserted in Docket No. 342-G, including, but not limited to, all claims for the leasing of [its] reservation lands for any purpose." Id. at 364.

In the 1960s, during the pendency of the SNI's claims, national Indian policy was once again in the process of reversal-this time returning to the goals of tribal self-determination, self-governance, and the federal-Indian trust relationship that are hallmarks of the IRA. This policy era continues to date. COHEN'S at 97-113.

K. The Salamanca Indian Lease Authority ("SILA")

The SNI's 99-year land leases to non-Indians, which were the subject of Commission Docket No. 342-G, were set to expire on February 19, 1991. In 1969, while the SNI's claim was still pending, the New York State legislature created the Salamanca Indian Lease Authority ("SILA") as a public benefit corporation authorized to negotiate and enter into a new "master lease" with the SNI for all reservation lands underlying the city of Salamanca ("the city"). N.Y. PUB. AUTH. LAW §§ 1790-99. Nearly twenty years of lease negotiations ensued, and during the latter course of negotiations, the "master lease" concept was rejected. Fluent v. Salamanca Indian Lease Authority, 847 F. Supp. 1046, 1049 (W.D.N.Y. 1994). SILA then received authorization from an overwhelming majority of lessees to negotiate for the terms and provisions of a renewal of their individual leases. Id. SILA explained to the lessees, in September 1987, that individual lessees were each required to affirmatively renew their "99-year leases;" SILA would negotiate the renewal terms and each lessee would then decide whether to sign the lease. Id.

By letter dated May 21, 1990, SILA notified lessees that lease negotiations had concluded. Id. at 1050. The renewal agreement between the city of Salamanca and the SNI offered new leases for a term of 40 years, with the right to renew for an additional 40 years. Annual rents would be based on the fair market value of the land, without improvements. Id. A total of $800,000 was to be collected by the city from lessees and paid to the SNI, subject to adjustment based on yearly reappraisal. Id. One of the conditions of the renewal agreement was that the federal and state governments agree to pay to the SNI a total of $60 million, an amount believed to approximate the difference between the rents the SNI had actually received over the previous 99 years and the fair ...


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