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State of New York, et al v. Kenneth Salazar

September 24, 2012

STATE OF NEW YORK, ET AL., PLAINTIFFS,
v.
KENNETH SALAZAR,*FN1 SECRETARY, UNITED STATES DEPARTMENT OF THE INTERIOR, ET AL., DEFENDANTS, AND ONEIDA NATION OF NEW YORK, DEFENDANT-INTERVENOR. CITY OF ONEIDA, NEW YORK,
PLAINTIFF,
v.
KENNETH L. SALAZAR, SECRETARY OF THE UNITED STATES DEPARTMENT OF INTERIOR, ET AL., DEFENDANTS. UPSTATE CITIZENS FOR EQUALITY, INC., ET AL., PLAINTIFFS,
v.
UNITED STATES OF AMERICA, ET AL., DEFENDANTS. TOWN OF VERONA, ET AL., PLAINTIFFS,
v.
KENNETH L. SALAZAR, IN HIS OFFICIAL CAPACITY AS UNITED STATES SECRETARY OF THE INTERIOR; ET AL., DEFENDANTS. CENTRAL NEW YORK FAIR BUSINESS ASSOCIATION, ET AL., PLAINTIFFS,
v.
KENNETH L. SALAZAR, ET AL., DEFENDANTS.



MEMORANDUM-DECISION and ORDER

I. INTRODUCTION

Presently before the Court are eleven Motions for summary judgment filed across five related cases:*fn2 State of New York, et al. v. Salazar, et al., No. 6:08-CV-00644; City of Oneida v. Salazar, et al., No. 5:08-CV-00648; Upstate Citizens for Equality, Inc., et al. v. United States of America, et al., No. 5:08-CV-00633; Town of Verona, et al. v. Salazar, et al., No. 6:08-CV-00647; and Central New York Fair Business Association, et. al. v. Salazar, et al., No. 6:08-CV-00660.*fn3 Plaintiffs in each of these related cases brought suit to challenge a May 20, 2008 Record of Decision issued by the Department of Interior that accepted over 13,000 acres of land in central New York into trust for the benefit of the Oneida Indian Nation of New York.

For the reasons stated below, the Court remands the Record of Decision to the Department of Interior to further develop the record on whether the Department of Interior has statutory authority to take this land into trust pursuant to the Indian Reorganization Act.

II. BACKGROUND

A. Factual Background

The Court presumes the parties' familiarity with the factual history underlying each of these related cases, but summarizes the basic history here for the sake of context and completeness.

On April 4, 2005, the Oneida Indian Nation of New York ("OIN") submitted a request to the Department of Interior ("DOI")'s Bureau of Indian Affairs ("BIA") requesting that the Secretary of the Interior (the "Secretary") take approximately 17,370 acres in trust for the OIN. Dkt. No. 238-12 ("ROD") at 2, 6.*fn4 The request included 330 parcels, or 440 tax lots, all owned by the OIN and located in Madison County and Oneida County, New York. Id. at 6. According to the ROD, the OIN "submitted its fee-to-trust request in response" to the Supreme Court's decision in City of Sherrill v. Oneida Indian Nation of New York, 544 U.S. 197 (2005) ("Sherrill III"). ROD at 6.

The OIN's fee-to-trust request categorized the 17,370 acres requested into three groups, as follows:

Group 1 lands comprise approximately 3,428 acres in Oneida County and are the location of the Nation's Turning Stone Resort & Casino, which includes a Class III casino under the Indian Gaming Regulatory Act ("IGRA"), 25 U.S.C. §§ 2701 et seq., gaming-related amenities, five neighboring golf courses, and one SavOn gas station and convenience store.

Group 2 lands comprise approximately 6,475 acres in Madison County and Oneida County and are the location of Nation government, health, education, and cultural facilities and activities; member housing; hunting lands; and numerous non-gaming Nation enterprises, including 12 SavOn gas stations and convenience stores, a newspaper operation, three marinas, and agricultural operations.

Group 3 lands comprise approximately 7,467 acres in Madison County and Oneida County and are generally undeveloped, active and inactive agricultural lands.

ROD at 6.

Pursuant to the National Environmental Policy Act ("NEPA"), 42 U.S.C. §§ 4321 et seq., DOI issued a draft Environmental Impact Statement ("EIS") regarding the proposed fee-to-trust request on November 24, 2006. ROD at 2, 6. Public comments were solicited until February 22, 2007, and public hearings were held on December 14, 2006 in Utica, New York and on February 6, 2008 in Verona, New York. Id. at 2, 6-7. DOI issued its final EIS on February 22, 2008. Id. at 2, 7.

On May 20, 2008, DOI, "based on the Department's review of the Draft EIS, the Final EIS, comments received from the public, Federal agencies, State agencies, local governmental entities, and potentially affected Indian tribes, and the applicable statutory and regulatory criteria for acquiring title to lands in trust status[,]" issued its decision to accept approximately 13,003.89 acres in trust for the OIN. Id. at 2. The land to be accepted into trust included all Group 1 lands, as well as some Group 2 and Group 3 lands neighboring the Nation's 32-acre territory in Madison County or neighboring the Turning Stone Resort & Casino in Oneida County. Id. at 7.

B. Procedural History

1. State of New York, et al. v. Salazar, et al.*fn5

Plaintiffs State of New York; Andrew M. Cuomo (substituted for David A. Paterson in his capacity as Governor of the State of New York); Madison County, New York; Oneida County, New York; and Eric T. Schneiderman (substituted for Andrew M. Cuomo in his capacity as Attorney General of the State of New York) (collectively, "Plaintiffs") filed this action on June 19, 2008, challenging the May 20, 2008 ROD. Dkt. No. 1 ("Complaint"). Plaintiffs later filed a Second Amended and Supplemental Complaint, which is the final pleading in this action. Dkt. No. 94 ("SASC").

By Memorandum-Decision and Order issued September 29, 2009, and pursuant to Motions filed by Defendants (Dkt. Nos. 36, 111) and Defendant-Intervenor OIN (Dkt. Nos. 51, 110), the Court dismissed Counts 1, 2, and 17 though 22 of Plaintiffs' Second Amended and Supplemental Complaint. Dkt. No. 132. The Court also denied Plaintiffs' Motion (Dkt. No. 57) for summary judgment on Count 3 of their Second Amended and Supplemental Complaint. Dkt. No. 132.

Plaintiffs' remaining claims are as follows: that DOI lacked jurisdiction to take the subject land into trust because 25 U.S.C. § 465 does not apply to the OIN (Count 3); that DOI's determination was not in accordance with law because it was made contrary to prior DOI policies (Count 4); that DOI's determination was biased in favor of the OIN in violation of both Plaintiffs' due process rights and the APA (Count 5); that DOI wrongly applied the on-reservation standard rather than the off-reservation standard to the OIN application (Count 6); that DOI's determination was made without regard to the OIN's need for the additional land (Count 7); that DOI's determination was made without regard to the impacts on the State and its subdivisions of the removal of the land from the tax rolls (Count 8); that DOI did not adequately consider potential land use and other jurisdictional problems (Count 9); that DOI did not adequately consider whether the BIA is equipped to take on the additional responsibilities of managing the subject land (Count 10); that DOI failed to take into account existing easements, leases, and rights of way (Count 11); that DOI did not ensure that the OIN had satisfied outstanding tax liens as required under the regulations (Count 12); that the requirements of the National Environmental Policy Act ("NEPA") were not followed (Counts 13 and 14); that DOI violated FOIA requirements (Count 15); and that DOI failed to disclose required documents underlying the environmental impact statement (Count 16).

Presently before the Court are Motions for summary judgment, each filed on November 15, 2011, by Plaintiffs, Defendants, and Defendant-Intervenor OIN. Dkt. Nos. 237 ("Plaintiffs' S.J. Motion"), 240 ("Defendants' S.J. Motion"), 236 ("OIN's S.J. Motion"). The parties each filed a Response in opposition to the respective Motions on January 30, 2012. Dkt. Nos. 259 ("Plaintiffs' Response"), 261 ("Defendants' Response"), 260 ("OIN's Response"). And, on March 15, 2012, each party filed a Reply. Dkt. Nos. 271 ("Plaintiffs' Reply"), 272 ("Defendants' Reply"), 270 ("OIN's Reply").

2. City of Oneida v. Salazar, et al.*fn6

Plaintiff City of Oneida, New York ("Plaintiff" or "City of Oneida") commenced this action against Defendants Kenneth L. Salazar, Secretary of the United States Department of Interior; P. Lynn Scarlett, Deputy Secretary of the United States Department of the Interior; James E. Cason, Associate Deputy Secretary of the Interior; and Franklin Keel, Regional Director of the Eastern Regional Office of the Bureau of Indian Affairs (collectively, "Defendants") by Complaint filed June 19, 2008. Dkt. No. 1 ("Complaint"). Plaintiff's Complaint sought declaratory and injunctive relief preventing DOI from accepting the subject lands in trust for the benefit of the OIN. Id. at 1.

On October 2, 2008, Defendants filed a Motion to dismiss Plaintiff's first and second causes of action which alleged that § 465 of the Indian Reorganization Act ("IRA") represented an unconstitutional delegation of legislative authority on its face and as applied to this trust application. Dkt. No. 14. The Court granted this Motion by Memorandum-Decision and Order issued September 21, 2009. Dkt. No. 37.

Plaintiff's remaining claims are as follows: that the IRA does not apply to the OIN because the parcels were not covered by the General Allotment Act (Count 3); that DOI erred by treating the parcels of land as "on-reservation" under the relevant regulations (Count 4); that DOI did not properly consider the impact of its trust decision on local governments pursuant to its regulations (Counts 5, 6, and 7); that DOI did not properly consider the City of Oneida's concerns regarding potential impacts on the City's water and sewer systems (Count 8); that DOI did not properly consider easements and/or rights of way held by the City of Oneida to access a water transmission main (Count 9); that DOI's decision to take the parcels of land into trust without adequately protecting the City of Oneida's easements and/or rights away constituted an uncompensated taking in violation of the Fifth Amendment of the United States Constitution (Count 10); and that DOI did not properly consider various regulatory and jurisdictional problems that may result from taking the subject land into trust (Count 11). See generally Compl.

Presently before the Court is Defendants' Motion, filed November 15, 2011, which seeks summary judgment on all of Plaintiff's remaining claims. Dkt. No. 45. Plaintiff has filed a Response in Opposition, and Defendants have filed a Reply. Dkt. Nos. 49, 50.

3. Upstate Citizens for Equality, Inc., et al. v. United States of America, et al.*fn7 On June 16, 2008, Upstate Citizens for Equality, Inc., a non-profit corporation comprised of central New York residents, and a number of UCE's members, David Vickers, Richard Tallcot, Scott Peterman, Daniel T. Warren (collectively "Plaintiffs") brought suit against the United States of America, and governmental entities and officials Kenneth A. Salazar; P. Lynn Scarlett; James Cason; United States Department of the Interior; Philip N. Hogen; National Indian Gaming Commission; and Michael B. Mukasey (collectively "Defendants"), challenging the decision of DOI to put thirteen thousand acres into trust for the OIN. See generally Dkt. No. 1 ("Complaint"). Plaintiffs argued, inter alia: that Defendants acted in excess of their statutory authority in taking any land into trust under the IRA (Count 1); that the IRA is unconstitutional on its face and as applied (Count 2); that Defendants acted arbitrarily and capriciously, contrary to law, or without observance of proper procedure in reaching their decision and putting the land into trust (Count 3); that Defendants' decision to take land into trust without ensuring that there will never be illegal gambling at the site violates the IGRA and was arbitrary and capricious in violation of the APA (Count 4); that Defendants violated the statutory procedures mandated by IGRA §§ 2710 and 2719 (Count 5); that a 2007 Agency letter relating to the IGRA was arbitrary and capricious in violation of the APA (Count 6); and that the Court should issues a writ of mandamus "compelling Defendants to carry out their statutory duties" based on general allegations of non-compliance with various laws (Count 7). See generally Compl.

Subsequently, on January 29, 2009, Plaintiffs filed a Supplemental Claim raising a separate challenge to DOI's acceptance of custody of eighteen acres of excess federal land in trust for the OIN pursuant to a mandatory transfer from the General Services Administration ("GSA"). Dkt. No. 35.

Defendants moved to dismiss Plaintiffs' attacks on the constitutionality of 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 eighteen acres from the GSA. Additionally, Defendants moved to dismiss assorted challenges by Plaintiffs relating to the operation of the Turning Stone Casino in Verona, New York by the OIN. See generally Dkt. Nos. 23, 45.*fn8

On March 4, 2010, the Court granted Defendants' Motion in its entirety. Dkt. No. 49. In so doing, the Court dismissed Plaintiffs': "(a) non-delegation claim, (b) IGRA compliance claim,

(c) gaming compact claim challenging Defendant Cason's June 13, 2007 letter, (d) claim challenging the NIGC's 1994 approval of the gaming compact, and (e) claim seeking to enjoin Defendant officials to take enforcement actions pursuant to IGRA." Id. at 30-31. The Court also dismissed Plaintiffs' supplemental claim. Id. at 31.

On November 15, 2011, Defendants filed a Motion for summary judgment. Dkt. No. 57. On the same date, Plaintiffs filed a Letter Motion for summary judgment. Dkt. No. 58. In January of 2012, Plaintiffs and Defendants each filed Responses in opposition to the respective Motions. Dkt. Nos. 59, 60. They also each, in turn, filed Replies to the Responses in March of 2012. Dkt. Nos. 62, 63. Presently before the Court are the parties' dueling Motions for summary judgment.

4. Town of Verona, et al. v. Salazar, et al.*fn9

Plaintiffs Town of Verona, Town of Vernon, Abraham Acee, and Arthur Strife (collectively, "Plaintiffs") commenced this action against Defendants Kenneth L. Salazar, United States Secretary of the Interior; the United States Department of the Interior; and Mark Filip, in his official capacity as Attorney General of the United States (collectively, "Defendants") by Complaint filed June 19, 2008. Dkt. No. 1 ("Complaint"). Plaintiffs' Complaint raised the following claims: that the IRA, as applied, violated the Tenth Amendment (Claim 1); that the IRA does not apply to the OIN because the parcels were not covered by the General Allotment Act and because the OIN was not federally recognized and under Federal jurisdiction at the time of the IRA's enactment in 1934 (Claim 2); that the OIN's gaming facility violates IGRA, and that DOI failed to properly consider various factors under the relevant statutes such that their determinations were illegal, arbitrary and capricious, an abuse of discretion, and otherwise not in accordance with law (Claim 3). See generally Compl.

On September 22, 2008, Defendants filed a Motion seeking partial dismissal of Plaintiffs' Complaint. Dkt. No. 10. On November 18, 2008, Plaintiffs filed a Motion seeking summary judgment with respect to their second claim. Dkt. No. 18. By Memorandum-Decision and Order issued September 29, 2009, the Court granted Defendants' Motion -- dismissing Plaintiffs' claim under the Tenth Amendment, Plaintiffs' claims relating to IGRA, and any claims against the Attorney General of the United States -- and denied Plaintiffs' Motion. Dkt. No. 38.

Presently before the Court are Plaintiffs' Motion for summary judgment and Defendants' Motion for summary judgment, both filed on November 15, 2011. Dkt. Nos. 46, 47. On January 30, 2012, both parties filed Responses in opposition to the respective Motions. Dkt. Nos. 49, 50. On March 15, 2012, the parties each filed a Reply. Dkt. Nos. 100, 101.

5. Central New York Fair Business Association, et. al. v. Salazar, et al.*fn10

On June 21, 2008, citizens groups Central NY Fair Business Association, Citizens Equal Rights Alliance, New York State Assemblyman David R. Townsend, Oneida County Legislators Michael J. Hennessy and D. Chad Davis, and Melvin L. Phillips (collectively "Plaintiffs") brought suit against federal officials Kenneth L. Salazar, P. Lynn Scarlett, James E. Cason, Franklin Keel, and James T. Kardatzke, as well as Arthur Raymond Halbritter, "the Federally Recognized Leader of the Oneida Indian Nation", challenging the ROD. See generally Dkt. No. 1. Plaintiffs allege, inter alia: that the IRA as applied in New York is a violation of 5 U.S.C. § 706 (Count 1); that DOI's application of 25 U.S.C. § 465 in New York violates the Tenth Amendment to the United States Constitution (Count 2); that DOI's determination was made without proper compliance under 25 CFR Part 151 (Count 3); that the ROD was arbitrary and capricious, an abuse of discretion, and otherwise not in accordance with law because it failed to adequately assess the environmental impacts in accordance with NEPA (Count 4); that the ROD would interfere with the civil and citizenship rights of Oneida in violation of 42 U.S.C. § 1981 (Count 5); that "Defendants, by asserting solely the interests of persons of Oneida descent to re-establish their long extinguished claims of tribal sovereignty . . . racially discriminat[ed] against every other resident of Madison and Oneida Counties in violation of 42 U.S.C. § 1983" (Count 6); and that the regulatory scheme violates the rights of non-Indian citizens under 42 U.S.C. § 1985 (Count 7). See generally id.

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, which challenges a December 30, 2008 transfer of ...


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