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Wednesday, May 29, 2024 | Back issues
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Tribe Staves Off Land Foreclosure in Tax Case

(CN) - Tribal sovereign immunity bars two counties from foreclosing on property owned by the Oneida Indian Nation of New York for not paying state and local taxes, the 2nd Circuit ruled.

The tribe "is immune from the counties' foreclosure actions under the principle that, "[a]s a matter of federal law, an Indian tribe is subject to suit only where Congress has authorized the suit or the tribe has waived its immunity," the Manhattan-based court wrote, citing Supreme Court precedent.

But the Supreme Court has also ruled that the Oneidas must pay taxes on land they sold to non-Indians in the early 19th century and bought back in the 1990s.

Madison and Oneida counties claimed it was inconsistent and contradictory to allow them to tax but not foreclose, as the district court ruled.

The 2nd Circuit acknowledged the dilemma.

"To be sure, the result is reminiscent of words of the nursery rhyme:

Mother, may I go out to swim?

Yes, my darling daughter;

Hang your clothes on a hickory limb,

And don't go near the water"

But the court pointed to another Supreme Court ruling that a tribe's immunity barred Oklahoma from suing to collect taxes on cigarettes.

The counties can still sue individual tribal members and officers, the 2nd Circuit ruled, and if that fails, "the counties' ultimate recourse will be to Congress."

"We affirm on the ground that the (tribe) is immune from suit under the long-standing doctrine of tribal sovereign immunity," Judge Robert Sack wrote. "The remedy of foreclosure is therefore not available to the counties."

The Oneidas' once lived on 6 million acres in central New York. In 1788, they handed over all but 300,000 acres to the state in the Treaty of Fort Schuyler. Although the tribe was barred by law from selling the remaining land without federal government acquiescence, it sold all but 32 acres to private parties in the late 18th and early 19th centuries.

The tribe later fought to get its reservation back, through open-market deals and lawsuits claiming the original sales had violated federal law.

The tribe refused to pay taxes on the land in Madison and Oneida counties, claiming the property was once part of its reservation under the Fort Schuyler treaty.

Separately, the court upheld a decision barring the Stockbridge-Munsee Community Band of Mohican Indians from intervening in the case. Stockbridge had claimed that 52 parcels of land were part of its reservation, not the Oneidas', but the court called its interest in the case "remote at best."

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