Stiffed Upstate NY Tax Collectors, Indian Nations Continue Lower Court Litigation Over Unpaid Real Estate Taxes, Despite Pending Supreme Court Ruling

In Rochester, New York, The Syracuse Post Standard reports:

• The Cayuga Indian Nation has asked a federal court in Rochester to stop Seneca County from foreclosing on five nation properties for unpaid back taxes, a lawyer for the Cayugas said [last week].(1)

• The nation [last week] requested a temporary restraining order and preliminary injunction to halt the county’s foreclosure attempt, attorney Daniel French said. A date for arguments had yet to be scheduled. “This is all litigation folly, a waste of taxpayers’ money,’’ French said.

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• The Cayugas claim they have sovereign nation rights to not have to pay taxes on any of the 1,100-plus acres they own in both counties. The counties disagree and the two sides have clashed over the tax issue in court many times.

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• French said he does not understand why the counties are taking the foreclosure action now since the U.S. Supreme Court is expected to rule this summer on a similar case involving Madison County’s attempt to foreclose on Oneida Indian Nation properties that are in tax arrears. “This is all rather silly since the Supreme Court is going to decide on this in a couple months,’’ French said.(2)

For more, see Cayuga, Seneca counties start foreclosure action against Cayuga Nation; tribe seeks injunction.

See also The Oneida Daily Dispatch: Madison County, Oneida County, Oneida Indian Nation prepare for Supreme Court land foreclosure case.

(1) According to the story, the Cayugas owe $5,506.70 for unpaid 2008 taxes on the five properties, three of which are in the town of Seneca Falls and two in the town of Varick, county attorney Frank Fisher said. In addition, neighboring Cayuga County has started foreclosing on five nation properties where the nation owes $124,131.08 in back taxes on three properties in the village of Union Springs and two in the town of Springport, county attorney Fred Westphal said.

(2) The ruling currently on appeal to the U.S. Supreme Court is Oneida Indian Nation of N.Y. v. Madison County, 605 F.3d 149 (2d Cir. 2010). Noteworthy in the 2nd Circuit ruling are the words of Circuit Judge Jose A. Cabranes who, in a concurring opinion with whom Circuit Judge Peter W. Hall joined, stated (bold text is my emphasis, not in the original text):

• The holding in this case comes down to this: an Indian tribe can purchase land (including land that was never part of a reservation); refuse to pay lawfully-owed taxes; and suffer no consequences because the taxing authority cannot sue to collect the taxes owed.
  
  This rule of decision defies common sense. But absent action by our highest Court, or by Congress, it is the law. In the last twenty years, the Supreme Court has twice held that, although states may have a right to demand compliance with state laws by Indian tribes, they lack the legal means to enforce that right. See Kiowa Tribe of Okla. v. Mfg. Tech., Inc., 523 U.S. 751, 755 (1998) (“There is a difference between the right to demand compliance with state laws and the means available to enforce them.”); Okla. Tax Comm’n v. Citizen Band Potawatomi Indian Tribe of Okla., 498 U.S. 505, 514 (1991) (holding that states have a right to collect taxes on certain cigarette sales on an Indian reservation, but the tribe is immune from suit seeking to enforce that right). In light of this unambiguous guidance from the Supreme Court, I am bound to concur with the conclusion that, although the Counties may tax the property at issue here, see City of Sherrill, N.Y. v. Oneida Indian Nation of N.Y., 544 U.S. 197 (2005), they may not foreclose on those properties because the tribe is immune from suit.
  
  This result, however, is so anomalous that it calls out for the Supreme Court to revisit Kiowa and Potawatomi. I wish that we were empowered to revisit those decisions, but, alas, that is not a privilege extended to intermediate appellate courts. If law and logic are to be reunited in this area of the law, it will have to be done by our highest Court, or by Congress. Accordingly, I concur in the judgment of the Court and in the careful and comprehensive opinion of Judge Sack.