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Central New York Fair Business Association v. Salazar

March 1, 2010




Presently before the Court are Motions to dismiss certain claims (Dkt. No. 21), as they appear in this action's initial Complaint (Dkt. No. 1); to dismiss claims (Dkt. No. 67), as they appear in the Amended Complaint; and to dismiss the Complaints as against a particular Defendant (Dkt. Nos. 23, 63). The Court shall address these Motions in turn.


The instant action arises from a May 20, 2008 decision by the Department of Interior ("DOI") to accept into trust approximately 13,000 acres of land for the Oneida Indian Nation of New York ("OIN"). Following that final decision, Plaintiffs brought a variety of challenges to the DOI's decision. The Plaintiff group is comprised of several entities and persons: the Central New York Fair Business Association ("CNYFBA") and the Citizens Equal Rights Alliances ("CERA"), both concerned citizens groups; David Townsend, a New York State Assemblyman; Michael Hennessy and D. Chad Davis, both Oneida County Legislators; and Melvin Phillips. Plaintiffs Townsend, Davis and Hennessy purport to sue in both their individual and official capacities. Plaintiff Phillips purports to sue both in an individual capacity and as the "official spokesperson for the Orchard Party/Marble Hill Oneidas." Dkt. No. 40 at 8. The named Defendants are: Kenneth Salazar, Secretary of the Department of Interior; P. Lynn Scarlett, Deputy Secretary of the Department of Interior; James Cason, Deputy Secretary of the Interior; Franklin Keel, Regional Director for the Eastern Regional Office of the Bureau of Indian Affairs; James Kardatzke, an environmental scientist in the Eastern Region of the nited States; and Arthur Raymond Halbritter, as "a real party in interest as the Federally Recognized Leader of the Oneida Indian Nation."

Defendant Salazar is sued in both his individual and official capacity, while Defendants Scarlett and Cason are sued only in their official capacities.

Plaintiffs' Complaint was filed on June 21, 2008. Defendants moved for partial dismissal, arguing against the validity of seven claims. Dkt. No. 21. Additionally, Defendants sought the dismissal of Defendant Halbritter as a party to the case. Dkt. No. 23. Subsequent to a stipulation by the parties, and with the Court's approval, several Plaintiffs submitted an Amended Complaint on May 8, 2009, the thrust of which challenges a December 30, 2008 transfer of approximately 18 acres of land from the General Services Administration to the DOI to be held in trust for the OIN. Dkt. No. 58. Because not all Plaintiffs joined the Amended Complaint, it does not supercede the Complaint, and both filings are active before the Court. Accordingly, Defendants' Motions with respect to the Complaint shall be presently addressed, along with Defendants' more recent Motions for dismissal of claims in the Amended Complaint and for dismissal of Defendant Halbritter as a party named in the Amended Complaint.

A vast and complicated historical record informs the factual background of the instant action. As the Supreme Court stated, the "OIN is a federally recognized Indian Tribe and a direct descendant of the Oneida Indian Nation (Oneida Nation), 'one of the six nations of the Iroquois, the most powerful Indian Tribe in the Northeast at the time of the American Revolution'" City of Sherrill v. Oneida Indian Nation of New York, 544 U.S. 197, 203 (2005), though its population, land holdings and status have fluctuated significantly since that time. See id. at 203-210 (discussing the series of treaties and relations between Oneida Indians and federal and state governments from the Colonial Era until the present, including related litigation efforts).

In the context of Plaintiffs' action, it is unnecessary for this Court to broadly recount developments in federal policy towards the land and status of the Oneidas of New York, other than to note that Congress eventually, through enactment of the Indian Reorganization Act ("IRA") in 1934, "provided a mechanism for the acquisition of lands for tribal communities that takes account of the interests of others with stakes in the area's governance and well-being" Id. at 220; 25 U.S.C. § 465. With the objective of increasing the self-government of Indian tribes, both in political and economic affairs, the IRA authorized the Secretary of the Interior ("the Secretary"), following consideration of relevant interests, to take land into trust for Indian tribes, such that the land would become exempt from local and state taxation. See Morton v. Mancari, 417 U.S. 535, 542 (1942); Sherrill, 544 U.S. at 220-221. The land-into-trust action challenged by Plaintiffs' initial Complaint was undertaken on this basis, pursuant to § 465 of the IRA.

After Sherrill, in which the Court held that § 465 "provides the proper avenue for OIN to re-establish sovereign authority over territory last held by the Oneidas 200 years ago," the OIN sought to have the Secretary of the Interior take approximately 17,300 acres of land in New York State into trust under that section. Sherrill, 544 U.S. at 221. Pursuant to the National Environmental Policy Act ("NEPA"), 42 U.S.C. §§ 4321 et seq., the DOI issued a draft Environmental Impact Statement ("EIS") regarding the proposed fee-to-trust request on November 24, 2006. Public comments were solicited until February 22, 2007, and the DOI issued its final EIS on February 22, 2008. Finally, on May 20, 2008, the DOI accepted approximately 13,000 acres into trust for the OIN. Plaintiffs' suit was filed a month later, on June 21, 2008.

In a separate action, and under a separate provision of the United States Code, 40 U.S.C. § 523(b)(1), the DOI acknowledged custody of an approximately 18 acre parcel of land in trust for the use and benefit of the OIN, which was transferred by the General Services Administration in a May 28, 2002 letter after having been classified as excess federal land within the boundaries of an Indian reservation. By § 523, Congress directed that "[t]he Administrator of General Services shall prescribe procedures necessary to transfer to the Secretary of the Interior, without compensation, excess real property located within the reservation of any group, band, or tribe of Indians that is recognized as eligible for services by the Bureau of Indian Affairs" and that "the Secretary shall hold excess real property transferred under this section in trust for the benefit and use of the group, band, or tribe of Indians, within whose reservation the excess real property is located." 40 U.S.C. § 523(a), (b). The 18 acre parcel was used by the United States as part of the Verona Test Site, an annex to the Griffiss Air Force Base. The Air Force vacated the Verona Test Site in 1996 and, on January 23, 2001, issued a Report of Excess Real Property for the parcel contained on the Site. After receiving notice from the DOI that the parcel lay within the boundaries the OIN's reservation circa 1794, set by the Treaty of Canandaigua, the GSA made the transfer, which the DOI formally acknowledged on December 30, 2008. Plaintiffs' Amended Complaint, filed on May 8, 2009, challenges this action.


A. Standard of Review

To survive a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). When considering a motion to dismiss pursuant to Rule 12(b)(6), a district court must accept the allegations made by the non-moving party as true and "draw all inferences in the light most favorable" to the non-moving party. In re NYSE Specialists Sec, Litig,, 503 F.3d 89, 95 (2d Cir. 2007). "The movant's burden is very substantial, as '[t]he issue is not whether a plaintiff is likely to prevail ultimately, but whether the claimant is entitled to offer evidence to support the claims.'" Log On America, Inc. v. Promethean Asset Mgmt. L.L.C., 223 F. Supp. 2d 435, 441 (S.D.N.Y. 2001) (quoting Gant v. Wallingford Bd. of Educ., 69 F.3d 669, 673 (2d Cir. 1995) (internal quotation and citations omitted)). Pursuant to Federal Rule of Civil Procedure 12(b)(1), "[a] case is properly dismissed for lack of subject matter jurisdiction... when the district court lacks the statutory or constitutional power to adjudicate it." Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000) (citing FED. R. CIV. P. 12(b)(1)). "A plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists." Makarova, 201 F.3d at 113 (citing Malik v. Meissner, 82 F.3d 560, 562 (2d Cir. 1996)). In reviewing a motion to dismiss for lack of subject matter jurisdiction, a court "'must accept as true all material facts alleged in the complaint and draw all reasonable inferences in the plaintiff's favor.'" Sharkey v. Quarantillo, 541 F.3d 75, 83 (2d Cir. 2008) (quoting Merritt v. Shuttle, Inc., 245 F.3d 182, 186 (2d Cir. 2001)). A defendant's challenge to a plaintiff's constitutional standing to sue is properly brought under Rule 12(b)(1). See Alliance for Environmental Renewal, Inc. v. Pyramid Crossgates Co., 436 F.3d 82, 89 n.6 (2d Cir. 2006) ("Although we have noted that standing challenges have sometimes been brought under Rule 12(b)(6), as well as Rule 12(b)(1)... the proper procedural route is a motion under Rule 12(b)(1).") (internal citations omitted).

B. Motion to Dismiss Claims in Initial Complaint

i. Tenth Amendment Claim

Plaintiffs' second claim for relief in their initial Complaint asserts that the fee-into-trust action of the DOI violates the Tenth Amendment of the United States Constitution. Specifically, Plaintiffs contend that application of the IRA's provisions to land in New York State, and with respect to the OIN, unconstitutionally encroaches on state sovereignty and is not a proper exercise of authority under the Indian Commere Clause. Plaintiffs' Tenth Amendment claim must be dismissed, however, as there is no question that Section 465 represents a valid exercise of congressional authority pursuant to the Indian Commerce Clause, and as such there is no possibility of a Tenth Amendment violation.

The Tenth Amendment provides that "[t]he powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." U.S. CONST. amend. X. "If a power is delegated to Congress in the Constitution, the Tenth Amendment expressly disclaims any reservation of that power to the States; if a power is an attribute of state sovereignty reserved by the Tenth Amendment, it is necessarily a power the Constitution has not conferred on Congress." New York v. United States, 505 U.S. 144, 156 (1992) (citations omitted). The Indian Commerce Clause expressly gives to Congress the power "[t]o regulate commerce... with the Indian tribes[.]" U.S. CONST. art. I, § 8, cl. 3. It is well-settled that this power affords plenary legislative authority in Indian affairs. See, e.g., United States v. Lara, 541 U.S. 193, 200 (2004) (describing Congress' powers to legislate in respect to Indian matters as "plenary and exclusive"); South Dakota v. Yankton Sioux Tribe, 522 U.S. 329, 343 (1998) ("Congress possesses plenary power over Indian affairs, including the power to modify or eliminate tribal rights."); Cotton Petroleum Corp. v. New Mexico, 490 U.S. 163, 192 (1989) ("[T]he central function of the Indian Commerce Clause is to provide Congress with plenary power to legislate in the field of Indian affairs[.]") (citing Morton, 417 U.S. at 551-52). "With the adoption of the Constitution, Indian relations became the exclusive province of federal law." County of Oneida v. Oneida Indian Nation of New York, 470 U.S. 226, 234 (1985).

It is incontrovertible, then, that the Indian Commerce Clause has received an expansive interpretation by the Supreme Court. The Secretary of the Interior's determination to take the contested land into trust for the OIN pursuant to Section 465 clearly fits within the broad scope of authority provided by the Clause. The Tenth Amendment is simply not implicated by the DOI's action under that section of the IRA because the Secretary's authority to take the land into trust for Indians is derived from powers delegated to Congress in Article I. See New York, 505 U.S. at 156. Accordingly, Plaintiffs' second claim for relief is dismissed.

ii. Non-delegation Claim

Defendants seek to dismiss those portions of Plaintiffs' Complaint that challenge § 465 of the IRA, and the Secretary's trust determination pursuant to that section, as an unconstitutional delegation of legislative authority. Plaintiffs argue that the Secretary's fee-into-trust land determination was made in excess of the authority actually delegated in the statute. It appears that Plaintiffs' first claim for relief contains this argument, among others. The thrust of Plaintiffs' argument is that the text of the statute, by authorizing an annual federal expenditure of two million dollars to purchase land to be taken in trust, expressed the intent that only lands obtained through that limited expenditure, as opposed to lands owned in fee or land available through any other means, could become trust lands under the statute. Based on this premise, Plaintiffs conclude that § 465 has no limiting principle. Complaint at 17 ("Without the appropriative restriction of Section 5 of the IRA, the asserted authority of the Secretary of the Interior to accept lands into federal trust status as currently defined in 25 C.F.R. § 151.3 is unlimited."). Such a challenge to the Secretary's trust determination under the provisions of the IRA must be rejected as contrary to the text of IRA and without a basis in law.

Article I, § 1, of the Constitution vests "all legislative powers herein granted... in a Congress of the United States." U.S. CONST. art. I, § 1. Accordingly, Congress "is not permitted to abdicate, or to transfer to others, the essential legislative functions with which it is vested." Panama Refining Co. v. Ryan, 293 U.S. 388, 421 (1935); see also Whitman v. Am. Trucking Ass'ns, 531 U.S. 457, 472 (2001); Mistretta v. United States, 488 U.S. 361, 371 (1989) ("The non-delegation doctrine is rooted in the principle of separation of powers that underlies our tripartite system of government."). However, the Supreme Court has recognized that "Congress simply cannot do its job absent an ability to delegate power under broad general directives" and therefore Congress may confer decision making authority on agencies. Mistretta, 488 U.S. at 372. "[W]hen Congress confers decision-making authority upon agencies, Congress must 'lay down by legislative act an intelligible principle to which the person or body authorized to [act] is directed to perform.'" Whitman, 531 U.S. at 472 (quoting J.W. Hampton, Jr. & Co. v. United States, 276 U.S. 394, 409 (1928)). The Supreme Court "has deemed it 'constitutionally sufficient if Congress clearly delineates the general policy, the public agency which is to apply it, and the boundaries of this delegated authority.'" Mistretta, 488 U.S. at 372-73 (quoting Am. Power & Light Co. v. SEC, 328 U.S. 90, 105 (1946)). Indeed, the Court has stated that it has "almost never felt qualified to second-guess Congress regarding permissible degrees of policy judgment that can be left to those executing or applying the law." Whitman, 531 U.S. at 474-75.

Every court to consider a delegation challenge to § 465 has rejected it and found that agency regulations sufficiently limit the Secretary of the Interior's discretion. See, e.g., Michigan Gaming Opposition v. Kempthorne, 525 F.3d 23, 33 (D.C. Cir. 2008); Carcieri v. Norton, 497 F.3d 15, 43 (1st Cir. 2007) (en banc), rev'd on other grounds sub nom. Carcieri v. Salazar, ___ U.S. ___, 129 S.Ct. 1058 (2009); South Dakota v. United States Dep't of Interior, 423 F.3d 790, 799 (8th Cir. 2005) ("South Dakota II");*fn2 United States v. Roberts, 185 F.3d 1125, 1137 (10th Cir. 1999); Shivwitz Band v. Utah, 428 F.3d 966, 972-74 (10th Cir. 2005); Nevada v. United States, 221 F. Supp. 2d 1241, 1250-51 (D. Nev. 2002).

Review of the IRA makes clear why it does not involve an unconstitutional delegation of legislative authority. The statutory preamble describes the IRA as "[a]n Act to conserve and develop Indian lands and resources." 48 Stat. 984 (1934). Thus, "an intelligible principle exists in the statutory phrase 'for the purpose of providing land for Indians' when it is viewed in the statutory and historical context of the IRA." Michigan Gaming Opposition, 525 F.3d at 31 (quoting 25 U.S.C. ยง 465). "This principle involves providing lands sufficient to enable Indians to achieve self-support and ameliorating the damage resulting from... prior federal policy." Id. (internal citations and quotations ...

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