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Upstate Citizens for Equality, Inc. v. Salazar

March 4, 2010




Presently before the Court are Motions to dismiss certain claims (Dkt. No. 23) in Plaintiffs' initial Complaint (Dkt. No. 1), and to dismiss (Dkt No. 45) Plaintiffs' Supplemental Claim (Dkt. No. 35). The Court shall address these Motions in turn.


The instant action, composed of a variety of challenges to government conduct as well as the operation of gambling facilities in Verona, New York, arises primarily 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 number of legal challenges on June 16, 2008. Defendants moved for partial dismissal on October 24, 2008. Subsequently, on January 29, 2009, Plaintiffs filed a Supplemental Claim raising a separate challenge to the DOI's acceptance of custody of 18 acres of excess federal land in trust for the OIN pursuant to a mandatory transfer from the General Services Administration ("GSA"). Defendants moved to dismiss this claim on April 13, 2009.

The Plaintiff group is comprised of: Upstate Citizens for Equality, Inc. ("UCE"), a citizens group, David Vickers, Richard Tallcot, Scott Peterman, and Daniel T. Warren. The named Defendants are: Kenneth Salazar, Secretary of the Department of Interior;*fn2 P. Lynn Scarlett, Deputy Secretary of the Department of Interior; James Cason, Deputy Secretary of the Interior; Philip N. Hogen, Chairman of the National Indian Gaming Commission; Eric H. Holder, Attorney General of the United States;*fn3 the National Indian Gaming Commission, the United States Department of the Interior; and the United States of America.

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. On May 20, 2008, after the necessary procedural steps and consideration of alternatives, the DOI accepted approximately 13,000 acres into trust for the OIN. Plaintiffs' suit followed.

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 of 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' Supplemental Claim followed.

Defendants move to dismiss Plaintiffs' attacks on the constitutionality of the DOI's trust determination as to the approximately 13,000 acres on behalf of the OIN and on the validity of the § 523 transfer of the 18 acres from the GSA. Additionally, Defendants move to dismiss assorted challenges by Plaintiffs relating to the operation of the Turning Stone Casino in Verona, NY by the OIN that appear in Plaintiffs' Complaint. Based on their contestation of the DOI's land into trust determination, as well as based on allegedly independent grounds, Plaintiffs raise challenges to the Casino's compliance with the Indian Gaming Regulatory Act ("IGRA") and to what they argue is a final agency action by the DOI in the form of a letter by Defendant Cason stating that the DOI was declining to further reconsider the DOI's 1993 approval of a gaming compact between the OIN and New York State. Further, Plaintiffs assert a challenge to the National Indian Gaming Commission's 1994 approval of the OIN's gaming ordinance. Plaintiffs also bring a claim which seeks to require the government to implement and enforce IGRA as to the United States generally or the OIN's facility in particular. 25 U.S.C. §§ 2701-2721. Defendants seek to dismiss each of these claims.


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. First and Second Claims

Defendants seek to dismiss those portions of Plaintiffs' Complaint, located in Plaintiffs' First and Second Claims, that challenge § 465 of the IRA, and the Secretary's land into 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. The thrust of Plaintiffs' argument is that the statute either has no intelligible standards by which the Secretary's action can be held to the will of Congress, or 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. 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.

Essentially every court to consider a non-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");*fn4 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. § 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 omitted). Therefore, this Court, consistent with those federal courts to have considered the question, finds no impermissible delegation of legislative authority within the statute.

Plaintiffs contend, nonetheless, that an unconstitutional delegation occurs because the statute permits the Secretary to take land into trust that was not strictly purchased with the two million dollars in federal funds allocated for precisely that purpose. The relevant portion of the statute provides:

The Secretary of the Interior is authorized, in his discretion, to acquire, through purchase, relinquishment, gift, exchange, or assignment, any interest in lands, water rights, or surface rights to lands, within or without existing reservations, including trust or otherwise restricted allotments, whether the allottee be living or deceased, for the purpose of providing land for Indians.

For the acquisition of such lands, interests in lands, water rights, and surface rights, and for expenses incident to such acquisition, there is authorized to be appropriated, out of any funds in the Treasury not otherwise appropriated, a sum not to exceed $2,000,000 in any one fiscal year: Provided, That no part of such funds shall be used to acquire additional land outside of the exterior boundaries of Navajo Indian Reservation for the Navajo Indians in Arizona, nor in New Mexico, in the event that legislation to define the exterior boundaries of the Navajo Indian Reservation in New Mexico, and for other purposes, or similar legislation, becomes law.

25 U.S.C. § 465.

In essence, Plaintiffs argue that the intelligible principle that guides the Secretary's authority to take land into trust is Congress' allotment of the two million dollar amount. Such a view is inconsistent with the statute and, implicitly, the views of the federal courts that have examined the statute. First, the statute provides for means other than the allotment of federal funds to take land into trust. Second, as discussed above, the IRA's intelligible principle, which has been found sufficient to pass constitutional muster, is that of providing Indians with lands to enable self-support and mitigate the harms of past policies. The Congressional allotment simply does not, and need not, impose the element of guidance that prevents § 465 from allowing unlimited discretion on the part of the Secretary, for that element is found elsewhere in the statute. As the Eighth Circuit wrote in response to similar assertions:

The State argues that these claimed textual limitations are artificial because any acquisition could be seen as "for Indians," regardless of who else it harms. Likewise, because most of the land currently taken into trust has been previously purchased by a tribe, the limit on appropriated funds for purchasing land is irrelevant. We disagree that these limitations were meaningless when the IRA was enacted, and we conclude that the context of the entire ...

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