Indian Law – New York Appellate Digest

THE OPENING OF A CARTON OF CIGARETTES AS PART OF A SEARCH OF THE CARGO IN PETITIONER’S TRUCK WAS NOT SUPPORTED BY PROBABLE CAUSE; THE TAX TRIBUNAL’S ASSESSMENT OF A $1,259,250 PENALTY FOR POSSESSION OF CIGARETTES WITHOUT TAX STAMPS ANNULLED (THIRD DEPT).

The Third Department, reversing the Tax Appeals Tribunal, determined the search of petitioner’s truck which led to the discovery of cigarettes with no tax stamp was not supported by probable cause. Therefore the determination that petitioner owed a $1,259, 250 penalty was annulled:

Petitioner is a member of the Seneca Nation of Indians, a Native American tribe recognized by the US Bureau of Indian Affairs. ERW Wholesale is petitioner’s tobacco wholesale business, licensed by the Seneca Nation of Indians operating on the Cattaraugus Reservation. In December 2012, ERW sold 150 cases (9,000 cartons) of Native American brand cigarettes to Oien’Kwa Trading, a Native American-owned business located on the St. Regis Mohawk Reservation. Oien’Kwa Trading immediately sold the cigarettes to Saihwahenteh, a Native American-owned business located on the Ganienkeh territory. Oien’Kwa Trading hired ERW to deliver the cigarettes directly to Saihwahenteh. Sean Snyder, an ERW employee, was employed as the truck driver. * * *

… [T]he validity of a search is subject to a two-prong test — arrest and probable cause — neither of which is satisfied here. As to the first prong, the record reveals that Snyder, the driver and sole occupant of the truck that was searched, was never arrested. With respect to probable cause, the record demonstrates a complete lack thereof. When Snyder was stopped, he was completely cooperative with the trooper and forthrightly explained that he was transporting cigarettes from a Native American reservation to a Native American territory, and he immediately gave the trooper an envelope containing the pertinent documents, namely the registration, invoices and bill of lading. Although the trooper testified that Snyder appeared nervous when he was initially pulled over, this conduct in and of itself is insufficient to justify a search … . Once back at the vehicle inspection checkpoint, Snyder readily exited his vehicle and turned his keys over to the trooper; he was never asked if the cigarettes were stamped. When the trooper employed the bolt cutters and the investigator entered the cargo area, the investigator found that the cargo was exactly as Snyder had told them — cases of cigarettes. The investigator’s search of the cargo area, including opening a case and then a carton, in order to inspect a single pack of cigarettes for a tax stamp was not precipitated by a complaint, tip, investigation or statements from Snyder, any of which might have provided probable cause. On the contrary, the investigator testified that the search proceeded only after he conferred with the trooper who believed that the cigarettes were Native American brand and, as such, were not stamped. The transportation of cigarettes from a Native American reservation to a Native American territory does not, in and of itself, give rise to a reasonable inference of criminality … . Matter of White v State of N.Y. Tax Appeals Trib., 2021 NY Slip Op 04394, Third Dept 7-15-21

July 15, 2021

Civil Procedure, Immunity, Indian Law, Real Property Law

SUPREME COURT DID NOT HAVE SUBJECT MATTER JURISDICTION OVER AN ACTION TAKEN BY THE UNKECHAUG INDIAN NATION TO EXCLUDE A MEMBER OF THE NATION FROM A PARCEL OF NATION LAND (SECOND DEPT).

The Second Department determined Supreme Court properly ruled it did not have subject matter jurisdiction over a land-possession dispute within the Unkechaug Indian Nation. The Nation first sought a Supreme Court ruling on the rightful possessor of the land (claimed to be Curtis Treadwell), thereby waiving sovereign immunity on that issue. Then the Nation, pursuant to its own internal Tribal Rules, determined Danielle Treadwell, who occupied a portion of the land, was an “undisirable person” and, based on that finding, could no longer occupy the property. The Supreme Court did not have subject matter jurisdiction over the “undesirable person” action taken by the Nation:

… [B]y bringing the April 2018 determination that Curtis was the rightful possessor of the subject property before the state Supreme Court, and seeking a declaration and enforcement, the Nation waived its sovereign immunity, though only as to that determination and its enforcement … . Accordingly, so long as the Nation relied on the April 2018 determination as its basis for excluding Danielle from the disputed portion of the subject property, the defendants’ counterclaims seeking inverse declarations could proceed along with the Nation’s action for declaratory relief. However, once the Nation proceeded to take the undesirability vote in September 2019 and issue the tribal resolution and directives based upon the membership’s vote, the Nation, pursuant to its own Tribal Rules, created a new and independent basis, under its sovereign authority, for excluding Danielle from the disputed portion of the subject property. The Supreme Court properly recognized that once it was informed of the 2019 undesirability determination, it could not take any action with respect thereto, as this was a sovereign act of the Nation outside the court’s subject matter jurisdiction … . Unkechaug Indian Nation v Treadwell, 2021 NY Slip Op 01286, Second Dept 3-3-21

March 3, 2021

Indian Law

DISPUTE BETWEEN RIVAL FACTIONS OF THE CAYUGA NATION INVOLVES TRIBAL LAW AND IS NOT THEREFORE WITHIN THE JURISDICTION OF NEW YORK COURTS (CT APP).

The Court of Appeals, in a lengthy, comprehensive opinion by Judge Feinman, over two dissenting opinions, determined the dispute between two factions of the Cayuga Nation involved tribal law and therefore was not within the jurisdiction of New York courts. The opinion is too detailed to fairly summarize here:

Members of the Cayuga Nation, a federally-recognized Indian tribe, have been embroiled in a leadership dispute for more than a decade. One faction commenced this action, purportedly on behalf of the Nation, against individuals comprising the rival faction, asserting tort claims that are premised solely on defendants’ alleged lack of authority to act on behalf of the Nation. To resolve these claims, New York courts would have to decide whether defendants were, at various times, or remain legitimate leaders of the tribe, a question that turns on disputed issues of tribal law that are not cognizable in the courts of this state given the Nation’s exclusive authority over its internal affairs. Contrary to plaintiff’s contentions, we cannot avoid this fundamental jurisdictional problem by decontextualizing a limited recognition determination issued by the Federal Bureau of Indian Affairs (BIA) that recognized the plaintiff faction as the tribal government for the purpose of distributing federal funds. We therefore hold that New York courts lack subject matter jurisdiction to consider this dispute. Cayuga Nation v Campbell, 2019 NY Slip Op 07711, CtApp 10-29-19

October 29, 2019

Family Law, Indian Law

MOTHER DID NOT HAVE STANDING TO BRING AN ACTION TO VACATE THE ADOPTION OF HER CHILD BY HER FORMER HUSBAND PURSUANT TO THE INDIAN CHILD WELFARE ACT (ICWA) BECAUSE THE ACT ONLY APPLIES TO CHILDREN REMOVED FROM A PARENT’S CUSTODY (SECOND DEPT).

The Second Department determined mother did not have standing to bring an action pursuant to the Indian Child Welfare Act (ICWA) to vacate an order of adoption in favor of her former husband. Mother alleged the adoption was not accomplished in compliance with the ICWA. The ICWA only applies to a parent from whose custody the child was removed and the child had not been removed from mother’s custody:

… [A]lthough the adoption proceeding involved the voluntary termination of the birth father’s parental rights to the subject child, the plain language of both 25 USC § 1914 and 25 CFR 23.137(a) is clear that only the child, the parent or Indian custodian from whose custody the child has been removed, and the Indian child’s tribe have standing to allege a violation of sections 1911, 1912, or 1913 of the ICWA . Since the mother does not fall in… to any of those categories, she lacked standing to allege a violation of sections 1911, 1912, or 1913 of the ICWA … . “[T]he language of [section] 1914 … limits standing to challenge state-law terminations of parental right to parents from whose custody such child was removed'” … . Matter of Connor (Mariann D.–Jacob D.), 2019 NY Slip Op 05979, Second Dept 7-31-19

July 31, 2019

Family Law, Indian Law

FAMILY COURT PROPERLY TRANSFERRED THIS DERIVATIVE NEGLECT PROCEEDING TO THE UNKECHAUG INDIAN NATION PURSUANT TO THE INDIAN CHILD WELFARE ACT (ICWA) (SECOND DEPT).

The Second Department determined Family Court properly transferred the derivative neglect proceeding to the Unkechaug Indian Nation pursuant to the Indian Child Welfare Act (ICWA):

The ICWA provides that “the Indian custodian of the child and the Indian child’s tribe shall have a right to intervene at any point” in a proceeding to which the ICWA applies … . Congress authorized the Department of the Interior, Bureau of Interior Indian Affairs (hereinafter the DOI), to promulgate rules and regulations “as may be necessary to carry out the provisions of [ICWA]” … . The current regulations define the term “child-custody proceeding” as “any action, other than an emergency proceeding, that may culminate in” foster-care placement, termination of parental rights, preadoptive placement, and adoptive placement … . “An action that may culminate in one of these four outcomes is considered a separate child-custody proceeding from an action that may culminate in a different one of these four outcomes” … . The DOI explained that “[t]he final rule uses the phrase may culminate in one of the following outcomes,’ rather than the less precise phrase involves,’ used in the draft rule, in order to make clear that ICWA requirements would apply to an action that may result in one of the placement outcomes, even if it ultimately does not. For example, ICWA would apply to an action where a court was considering a foster-care placement of a child, but ultimately decided to return the child to his parents. Thus, even though the action did not result in a foster-care placement, it may have culminated in such a placement and, therefore, should be considered a child-custody proceeding’ under the statute” … . Matter of Dupree M. (Samantha Q.), 2019 NY Slip Op 02523, Second Dept 4-3-19

April 3, 2019

Civil Procedure, Indian Law, Trespass

SUPREME COURT PROPERLY REFUSED TO DISMISS A COMPLAINT CONCERNING CONTROL OF CERTAIN CAYUGA NATION PROPERTY ON SUBJECT MATTER JURISDICTION GROUNDS, TWO JUSTICE DISSENT (FOURTH DEPT).

The Fourth Department, over a two-justice dissent, determined that Supreme Court properly refused to dismiss the complaint on subject matter jurisdiction grounds. The complaint asserts one faction of the Cayuga Nation, defendants, are improperly in control of and trespassing on certain Nation property. Supreme Court granted to plaintiffs a preliminary injunction based upon a ruling by the Bureau of Indian Affairs (BIA). The dissenting justices argued that the New York courts do not have jurisdiction over tribal affairs and the complaint should have been dismissed on that ground:

Defendants contend that the court erred in denying their motion because the courts of New York have no power to determine who controls the Nation. Although we agree with defendants that we may not resolve the Nation’s leadership dispute, we are not required to do so in this appeal. Rather, we accord due deference to the BIA’s conclusion that the Nation, at least with respect to that issue, has resolved the dispute in favor of plaintiff. * * *

We caution that we do not determine which party is the proper governing body of the Nation, nor does our determination prevent the Nation from resolving that dispute differently according to its law in the future. The Nation, as a sovereign body, retains full authority to reconcile its own internal governance disputes according to its laws. Until such action occurs, however, we accord deference to the BIA’s determination that plaintiff is the proper body to enforce the Nation’s rights, including its rights to control the property at issue in this action. Cayuga Nation v Campbell, 2018 NY Slip Op 05427, Fourth Dept 7-25-18

INDIAN LAW (SUPREME COURT PROPERLY REFUSED TO DISMISS A COMPLAINT CONCERNING CONTROL OF CERTAIN CAYUGA NATION PROPERTY ON SUBJECT MATTER JURISDICTION GROUNDS, TWO JUSTICE DISSENT (FOURTH DEPT))/CIVIL PROCEDURE (INDIAN LAW, SUPREME COURT PROPERLY REFUSED TO DISMISS A COMPLAINT CONCERNING CONTROL OF CERTAIN CAYUGA NATION PROPERTY ON SUBJECT MATTER JURISDICTION GROUNDS, TWO JUSTICE DISSENT (FOURTH DEPT))/CAYUGA NATION (CIVIL PROCEDURE, SUPREME COURT PROPERLY REFUSED TO DISMISS A COMPLAINT CONCERNING CONTROL OF CERTAIN CAYUGA NATION PROPERTY ON SUBJECT MATTER JURISDICTION GROUNDS, TWO JUSTICE DISSENT (FOURTH DEPT)

July 25, 2018

Indian Law, Tax Law

REQUIREMENT THAT INDIAN RETAILERS COLLECT AND REMIT TAXES ON CIGARETTES SOLD TO NON-INDIAN CONSUMERS DOES NOT VIOLATE INDIAN LAW OR THE BUFFALO CREEK TREATY OF 1842 (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Garcia, determined the requirement that retailers on Indian lands collect and remit taxes on cigarettes sold to non-Indian consumers did not violate the Indian Law or the Buffalo Creek Treaty of 1842:

Plaintiffs commenced this action seeking (1) a declaration that Tax Law § 471 is unconstitutional and invalid and (2) a permanent injunction enjoining defendants from enforcing the law against them. The complaint alleged that the tax law conflicts with the Buffalo Creek Treaty of 1842 and Indian Law § 6. * * *

… “[I]t is the legal burden of a tax—as opposed to its practical economic burden—that a state is categorically barred by federal law from imposing on tribes or tribal members” … . The express language of New York’s tax law provides that “the ultimate incidence of and liability for the tax shall be upon the consumer,” and mandates that the tax money advanced by any “agent or dealer” be paid back by the consumer … . * * *

Tax Law § 471 does not constitute a tax on an Indian retailer, and therefore it does not run afoul of the plain language of the Treaty or Indian Law § 6. White v Schneiderman, 2018 NY Slip Op 04028, CtApp 6-7-18

TAX LAW (CIGARETTES, REQUIREMENT THAT INDIAN RETAILERS COLLECT AND REMIT TAXES ON CIGARETTES SOLD TO NON-INDIAN CONSUMERS DOES NOT VIOLATE INDIAN LAW OR THE BUFFALO CREEK TREATY OF 1842 (CT APP))/INDIAN LAW CIGARETTES, REQUIREMENT THAT INDIAN RETAILERS COLLECT AND REMIT TAXES ON CIGARETTES SOLD TO NON-INDIAN CONSUMERS DOES NOT VIOLATE INDIAN LAW OR THE BUFFALO CREEK TREATY OF 1842 (CT APP))/TREATIES (INDIAN LAW, CIGARETTES, REQUIREMENT THAT INDIAN RETAILERS COLLECT AND REMIT TAXES ON CIGARETTES SOLD TO NON-INDIAN CONSUMERS DOES NOT VIOLATE INDIAN LAW OR THE BUFFALO CREEK TREATY OF 1842 (CT APP))/CIGARETTES (INDIAN LAW, REQUIREMENT THAT INDIAN RETAILERS COLLECT AND REMIT TAXES ON CIGARETTES SOLD TO NON-INDIAN CONSUMERS DOES NOT VIOLATE INDIAN LAW OR THE BUFFALO CREEK TREATY OF 1842 (CT APP))

June 7, 2018

Contract Law, Immunity, Indian Law

CHOICE OF LAW PROVISIONS OF CONTRACT DID NOT CONSTITUTE AN UNAMBIGUOUS WAIVER OF SOVEREIGN IMMUNITY, THE INDIAN NATION WAS IMMUNE FROM SUIT IN THIS BREACH OF CONTRACT ACTION.

The Second Department, reversing Supreme Court, determined the choice law provisions in a contract between plaintiff and defendant Unkechaug Indian Nation did not include a clear-cut waiver of sovereign immunity and must be construed against the drafter, the plaintiff here. Therefore the defendant was immune from suit for breach of contract:

Here, the plaintiff contends that the defendant waived its sovereign immunity by virtue of a choice-of-law provision stating that the contract would be governed by the laws of New York, and by the following provision of the contract:

“[The] parties agree that any claim or controversy regarding this Contract shall be most conveniently and economically resolved in Suffolk County, New York, and therefore, the parties agree that any claim or action brought for enforcement, interpretation or damages under this Contract shall be brought only in Suffolk County and the parties agree to forebear from filing a claim in any other jurisdiction.”

Although this clause requires “any claim or controversy” regarding the contract to be resolved in Suffolk County, it does not require that such claim or controversy be resolved by a state court. Rather, under the clause, a party could bring a claim before a mediator, an arbitrator, a tribal court, a state court, or a federal court, as long as the selected forum was located in Suffolk County. Thus, unlike the cases involving arbitration clauses, this clause does not unequivocally express the defendant’s agreement to be sued in a state court. …

The fact that the contract also includes a choice-of-law provision does not resolve the ambiguity in the subject clause, since the law of the State of New York could be applied in other forums besides a state or federal court to interpret the contract … . Aron Sec., Inc. v Unkechaug Indian Nation, 2017 NY Slip Op 04413, 2nd Dept 6-7-17

INDIAN LAW (SOVEREIGN IMMUNITY, CHOICE OF LAW PROVISIONS OF CONTRACT DID NOT CONSTITUTE AN UNAMBIGUOUS WAIVER OF SOVEREIGN IMMUNITY, THE INDIAN NATION WAS IMMUNE FROM SUIT IN THIS BREACH OF CONTRACT ACTION)/CONTRACT LAW (SOVEREIGN IMMUNITY, CHOICE OF LAW PROVISIONS OF CONTRACT DID NOT CONSTITUTE AN UNAMBIGUOUS WAIVER OF SOVEREIGN IMMUNITY, THE INDIAN NATION WAS IMMUNE FROM SUIT IN THIS BREACH OF CONTRACT ACTION)/IMMUNITY (INDIAN NATION, SOVEREIGN IMMUNITY, CHOICE OF LAW PROVISIONS OF CONTRACT DID NOT CONSTITUTE AN UNAMBIGUOUS WAIVER OF SOVEREIGN IMMUNITY, THE INDIAN NATION WAS IMMUNE FROM SUIT IN THIS BREACH OF CONTRACT ACTION)/SOVEREIGN IMMUNITY (INDIAN NATION, CHOICE OF LAW PROVISIONS OF CONTRACT DID NOT CONSTITUTE AN UNAMBIGUOUS WAIVER OF SOVEREIGN IMMUNITY, THE INDIAN NATION WAS IMMUNE FROM SUIT IN THIS BREACH OF CONTRACT ACTION)

June 7, 2017

Civil Procedure, Constitutional Law, Indian Law

TRANSFER OF LAND TO A TRUST PURSUANT TO THE ONEIDA SETTLEMENT AGREEMENT DID NOT CEDE THE STATE’S TAXATION AUTHORITY; MOTION TO DISMISS A DECLARATORY JUDGMENT ACTION WILL BE TREATED AS A MOTION FOR A DECLARATION IN DEFENDANT’S FAVOR.

The Fourth Department determined a citizen taxpayer’s declaratory judgment action against the state, claiming that the transfer of land to a trust pursuant to the Oneida Settlement Agreement ceded the state’s taxation authority, was properly rejected. The court noted that when a motion to dismiss a declaratory judgment action is made, the court will treat it as a motion for a declaration in the defendant’s favor:

Plaintiff alleges that Section VI B (1-5) of the Agreement violates article XVI of the State Constitution, which prohibits the State from surrendering, suspending or contracting away its power of taxation. Section VI B (1-5) provides that the State will not oppose a future application by the Oneida Indian Nation (Nation) to transfer to the United States up to 12,366 acres of land to be held in trust pursuant to 25 USC § 5108 (formerly § 465). The land at issue was formerly part of the 300,000-acre reservation, which was established in the 1788 Treaty of Fort Schuyler (see City of Sherrill, N.Y. v Oneida Indian Nation of N.Y., 544 US 197, 203), and which the Nation has reacquired through open-market transactions (see id. at 211). In 2008, the United States Secretary of the Interior accepted the transfer into trust of 13,004 acres of reacquired land owned by the Nation, over defendant’s objection. We conclude that the court properly declared that Section VI B (1-5) does not violate the State constitutional provision prohibiting defendant from surrendering or contracting away its power of taxation. * * *

To the extent that plaintiff contends that Executive Law § 11 and Indian Law § 16 violate article XVI of the State Constitution, we reject that contention. Kaplan v State of New York. 2017 NY Slip Op 00766, 4th Dept 2-3-17

CONSTITUTIONAL LAW (STATE) (TRANSFER OF LAND TO A TRUST PURSUANT TO THE ONEIDA SETTLEMENT AGREEMENT DID NOT CEDE THE STATE’S TAXATION AUTHORITY, MOTION TO DISMISS A DECLARATORY JUDGMENT ACTION WILL BE TREATED AS A MOTION FOR A DECLARATION IN DEFENDANT’S FAVOR)/INDIAN LAW (TRANSFER OF LAND TO A TRUST PURSUANT TO THE ONEIDA SETTLEMENT AGREEMENT DID NOT CEDE THE STATE’S TAXATION AUTHORITY, MOTION TO DISMISS A DECLARATORY JUDGMENT ACTION WILL BE TREATED AS A MOTION FOR A DECLARATION IN DEFENDANT’S FAVOR)/CIVIL PROCEDURE (DECLARATORY JUDGMENT, (TRANSFER OF LAND TO A TRUST PURSUANT TO THE ONEIDA SETTLEMENT AGREEMENT DID NOT CEDE THE STATE’S TAXATION AUTHORITY, MOTION TO DISMISS A DECLARATORY JUDGMENT ACTION WILL BE TREATED AS A MOTION FOR A DECLARATION IN DEFENDANT’S FAVOR)/DECLARATORY JUDGMENT (TRANSFER OF LAND TO A TRUST PURSUANT TO THE ONEIDA SETTLEMENT AGREEMENT DID NOT CEDE THE STATE’S TAXATION AUTHORITY, MOTION TO DISMISS A DECLARATORY JUDGMENT ACTION WILL BE TREATED AS A MOTION FOR A DECLARATION IN DEFENDANT’S FAVOR)

February 3, 2017

Indian Law, Tax Law

TAX ON CIGARETTE SALES TO NON-INDIANS UPHELD.

The Fourth Department upheld the state's ability to impose a tax on the sale of cigarettes to non-Indians and non-members of the Seneca Nation:

It is well established that “the States have a valid interest in ensuring compliance with lawful taxes that might easily be evaded through purchases of tax-exempt cigarettes on reservations . . . States may impose on reservation retailers minimal burdens reasonably tailored to the collection of valid taxes from non-Indians” … . Although plaintiffs are obligated to pay the amount due as tax from non-Indians who have the tax liability, and from whom the amount is collected at the time of the sale, “this burden is not, strictly speaking, a tax at all” … . White v Schneiderman, 2016 NY Slip Op 04533, 4th Dept 6-18-16

TAX LAW (TAX ON CIGARETTE SALES TO NON-INDIANS UPHELD)/INDIAN LAW (TAX ON CIGARETTE SALES TO NON-INDIANS UPHELD)/CIGARETTES (TAX ON CIGARETTE SALES TO NON-INDIANS UPHELD)

June 18, 2016