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New York Tax Foreclosures Revive Painful Memories

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  • New York Tax Foreclosures Revive Painful Memories

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    New York Tax Foreclosures Revive Painful Memories

    (javascript:PrintWindow();) Posted: September 12, 2005 by: _Jim Adams_
    ( / Indian Country Today

    ONEIDA NATION HOMELANDS, N.Y. - Foreclosure stirs up a long, dark history
    for New York state American Indians.

    These memories shadow the Oneida Indian Nation's decision to contest tax
    bills in 22 localities that have issued them in the aftermath of the U.S.
    Supreme Court's City of Sherrill v. Oneida Indian Nation of New York decision.
    Although local officials have derided the legal strategy as a rear-guard action,
    it can also be seen as the reaction to a long history in which state and
    county governments tried to use foreclosure actions to drive Indians from tribal

    This history goes back to the early 19th century. Although the state
    Legislature received a sound rebuff from the U.S. Supreme Court, county officials
    tried the same tactic in the early 20th century. They succeeded for a time in
    evicting Oneidas from their land, until federal courts intervened.

    With this background, it should be no wonder that the Sherrill case is being
    fought so tenaciously. In the original suit, the city of Sherrill tried to
    collect taxes on several Oneida properties. The nation refused to pay, saying
    that the land was part of its treaty reservation and had reverted to
    sovereign tribal status when it was repurchased. In an 8 - 1 decision on March 29,
    the Supreme Court rejected this ''unilateral'' assertion of sovereignty.

    The Sherrill case was remanded to federal District Court for a final order,
    which is still pending. In the meantime, the federal judge issued an
    injunction against further collection efforts by the city. But Oneida County filed
    its own foreclosure action June 1 over 59 parcels. The nation filed a federal
    lawsuit July 27 to stop the action and in early August paid $650,000 against
    the estimated $5 million due.

    Oneida spokesman Mark Emery said the contribution was not a tax payment, but
    ''a good faith payment to resolve the tax dispute.'' The county reciprocated
    by suspending the foreclosure action.

    At the same time, the nation filed suit in state Supreme Court (the lower
    rung of the state court system) against 22 school districts and local
    governments to block tax bills. The suits argue that under federal and state laws not
    at issue in the Sherrill case, the land cannot be assessed or should be
    assessed at zero value because it can't be sold. Said Emery, ''The nation has
    filed these suits in state court to prove that under state law, no taxes are

    The Sherrill decision also opened a round of mechanic's lien suits arising
    from a dispute with the lead contractor in the Turning Stone Resort and Casino
    expansion project. Although the Oneidas, owners of Turning Stone, can still
    assert sovereign immunity against lawsuit, the property itself is not on
    sovereign territory, according to the Sherrill decision. (The Oneidas have since
    filed applications with the Department of Interior to put their 17,000 acres
    of reacquired land into trust or restricted fee status.)

    The Oneida County clerk's office has recorded 10 mechanic's liens totaling
    more than $7 million from subcontractors of Hunt Construction Groups of
    Arizona, one of two main contractors on the $350 million expansion project. The
    Oneida Nation refuses to pay Hunt in a dispute over its work on the project.
    Said Emery, ''The subcontractors' issues are between the subcontractors and
    Hunt per their contracts. As for the nation's relationship with Hunt, the nation
    has issues with Hunt regarding the completion of the project and is doing
    the best it can to resolve the issues.''

    (The Oneida Indian Nation is also owner of Four Directions Media, the
    publisher of Indian Country Today.)

    Although New York tribes are more legally sophisticated than in the past,
    the foreclosure cases resonate with a similar round of suits in the 1840s.

    In 1840, the state Legislature passed a highway tax on the Seneca Nation's
    Allegany and Cattaraugus reservations and the following year authorized the
    counties of Erie and Cattaraugus to do the same. When the Senecas refused to
    pay by 1848, the state comptroller advertised the land for sale and by 1859
    conveyed nearly 34,000 reservation acres to a private buyer.

    New York state courts upheld the sale, and the state even refused a payment
    of taxes by a previous owner, but the U.S. Supreme Court thought otherwise.
    In 1867 it ruled, in the famous New York Indians case, that the taxes were
    ''illegal and void.''

    ''We must say,'' wrote Justice Samuel Nelson, ''regarding these reservations
    as wholly exempt from taxation ... the exercise of this authority over them
    is an unwarrantable interference, inconsistent with the original title of the
    Indians, and offensive to their tribal relations.''

    He hinted archly that these actions, and the original state legislation,
    were meant to help ''unworthy persons'' harass the Senecas off their land,
    ''secured by the most sacred of obligations of the Federal government.''

    Although the Supreme Court, at least that of the 1860s, made clear it
    disapproved of New York state's ''illegal'' actions, the scolding didn't stop the
    issue from coming up again. In 1907, the state's courts used another
    foreclosure action to evict Oneida families from the last 32 acres in tribal hands.
    The emotion of the eviction at county hands is still a powerful tribal memory.

    The foreclosure involved non-payment of a mortgage instead of taxes, but
    when the federal court stepped in, it found it was just as illegal. The United
    States sued Julia Boylan, holder of the mortgage, and the 2nd Circuit Court of
    Appeals ruled that the sale of tribal land was null and void.

    Finding that the Oneidas were ''a distinct people, tribe, or band,'' the
    three-judge panel wrote: ''The right of self-government has never been taken
    from them. It has never been questioned, and no attempt made at subjecting them
    as a people, and it has always been considered and recognized by the states
    as a right of the federal government to make provisions for the dispositions
    of their lands, and until such was made by the federal government the right of
    occupancy remained in the Indians.''

    Even the Sherrill decision recognized Oneida sovereignty over the 32 acres
    in the Boylan case. Justice Ruth Bader Ginsburg offered the presumably
    ''multilateral'' Interior land-into-trust process as an alternate means of extending
    tribal sovereignty over reacquired reservation territory. Although local
    officials might be disappointed, the foreclosure ploy might be no more
    successful at dispossessing Indians than it was in the last two centuries.
    Don't worry that it's not good enough for anyone else to hear... just sing, sing a song.sigpic

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