N.Y. Appellate Division Concludes Tribal Enterprise Formed under Tribal Law Not Immune From Suit

Here is the opinion in Sue/Perior Concrete and Paving Co. v. Lewiston Golf Course Corp.:

Sue Perior v Lewiston Golf

An excerpt:

Other factors, however, including what the Court of Appeals has characterized as the “[m]ore important[]” financial factors, weigh in favor of a determination that LGCC does not share in the Nation’s sovereign immunity (id.). With respect to whether LGCC’s “purposes are similar to or serve those of the tribal government” (id.), we conclude that this factor supports the denial of sovereign immunity to LGCC. In minutes from its August 2002 meeting approving the creation of SGC, the Council declared that “it is . . . the policy of the Nation to promote the welfare and prosperity of its members and to actively promote, attract, encourage and develop economically sound commerce and industry through governmental action for the purpose of preventing unemployment and economic stagnation,” and that “the Gaming industry is vitally important to the economy of the Nation and the general welfare of its members.” To that end, the Council created SNFGC for the purpose of “developing, financing, operating and conducting the Nation’s gaming operations on its Niagara Falls Territory at the Niagara Falls Gaming Facility.” In creating the LGCC, the Council declared that, “in furtherance of the economic success of the Nation’s gaming operations, [SNFGC] has commenced development of a . . . golf course located in the Town of Lewiston, New York[, which] will be developed and operated as an amenity to . . . SNFGC’s casino operations, . . . the purpose of which amenities is to enhance the overall success and profitability of the casino’s operations” (emphasis added). In that manner, the Council believed that the golf course project “may reasonably be expected to benefit, directly or indirectly, the Nation” (emphasis added). Thus, the Council’s own statements reflect that the purpose of LGCC – to develop a golf course as an “amenity” to the Nation’s gaming operations – is several steps removed from the purposes of tribal government, e.g., “promoting tribal welfare, alleviating unemployment, [and] providing money for tribal programs” (Gristede’s Foods, Inc., 660 F Supp 2d at 477; cf. Ransom, 86 NY2d at 560).

These common law tests to decide whether a tribal enterprise is under the cloak of tribal immunity are baffling, generating far too many unpredictable results like this one. It’s fairly clear to me that the wide majority of courts would conclude a tribally-owned enterprise chartered under tribal law is immune without looking toward subjective factors such as what the purpose of the corporation is — tribes just aren’t for-profit entities. They’re governments.

Marshall Investments Corp. v. Harrah’s — N.Y. Courts Strike Tortious Interference with Contract Claim on Void Gaming Management Contract

Here is the opinion in Marshall Investments Corp. v. Harrah’s Operating Company, Inc. (N.Y. A.D.) (unpublished), pages 6-7 of the pdf.

An excerpt:

The subject pledge agreement did not constitute a management contract which required the approval of the National Indian Gaming Commission (25 CFR 502.15; cf. Machal, Inc. v Jena Band of Choctaw Indians, 387 F Supp 2d 659, 666-667 [2005]). However, because it changes the Tribe’s obligations, requiring them to make payments into escrow, and alters their liabilities, giving the right to sue and a veto over certain modifications of a separate management agreement to plaintiffs, the pledge agreement is a modification or assignment of rights under the management agreement. As such, it is void because it was never approved by the commission (25 CFR 533.7). Since the underlying contract is void, plaintiffs cannot recover for tortious interference with that contract (see Lama Holding Co. v Smith Barney, 88 NY2d 413, 424 [1996]).

N.Y. Appellate Court Reverses Eminent Domain Acquisition of Land that Includes “Historic Indian Remains”

Here is the opinion in In re Courtland County.

An excerpt:

Petitioner argues that the taking should nevertheless be upheld on the alternative ground that it was exempt from the hearing requirements of EDPL article 2 because the taking was de minimis ( see EDPL 206[D] ). The fact that the amount of land is not substantial does not necessarily render a taking de minimis ( see Matter of Marshall v. Town of Pittsford, 105 A.D.2d 1140, 1140-1141 [1984], lv denied 64 N.Y.2d 606 [1985] ). Initially, we are reluctant to retroactively find compliance with the EDPL under the facts of this case where petitioner opted to attempt to pursue condemnation under a separate statute with different procedures. In any event, we are unpersuaded that this record supports a de minimis determination in light of the close proximity of the project to land with significant historic remains (there are two letters in the record from Native American groups articulating concerns), together with the fact that petitioner expanded the scope of the project from what was originally proposed and such expansion resulted in the State Office of Historic Preservation suspending its earlier approval.

N.Y. Appellate Division Dismisses Contract Counterclaims against Oneida

Here is the opinion in Oneida Indian Nation of N.Y. v. Hunt Construction Group, reversing a trial court order that accepted jurisdiction over four counterclaims against the Nation — Oneida Indian Nation v. Hunt Constr Group

An excerpt:

Plaintiff, the owner of the Turning Stone Casino & Resort, commenced this action seeking damages resulting from the alleged breach by defendant of its construction contract with plaintiff. Plaintiff moved to dismiss the second through fifth counterclaims on the ground that it had waived sovereign immunity only with respect to counterclaims seeking to enforce the terms of the contract and thus that Supreme Court lacked subject matter jurisdiction over the second through fifth counterclaims. We agree with plaintiff that the court erred in denying those parts of the motion seeking to dismiss the second counterclaim to the extent it alleges the breach of implied warranties; the fourth counterclaim, for quantum meruit and unjust enrichment; and the fifth counterclaim, for an account stated. We therefore modify the order accordingly.

Cayuga Indian Nation Wins Important Tax Case

The New York Appellate Division has reversed a N.Y. Supreme Court decision denying a request for a declaratory judgment against county impoundment of tobacco products intended for sale on-reservation to tribal members. The case is Cayuga Indian Nation v. Gould.

NY Supreme Court Slip Opinion

NY Appellate Division Opinion

News coverage here.

Federally Licensed Indian Trader Assessed State Tobacco and Income Taxes in New York State

Here is the opinion in Attea v. State Tax Tribunal. An excerpt:

As noted by respondent Commissioner of Taxation and Finance, petitioner’s licenses authorized him to sell cigarettes and tobacco products only to Native Americans at the St. Regis and Tuscarora Indian Reservations. Nevertheless, while petitioner produced documents indicating that he imported and shipped tobacco products to Indian reservations, these records included no books of original entry for his business, such as sales journals, general ledgers, balance sheets, expense receipts, income statements or bank statements. In light of these deficiencies, the Tribunal was again unable to substantiate that the sales made by petitioner actually took place on reservations and were made to qualified tribal members-as required by petitioner’s Indian trader licenses-or to formulate any allocation of what percentage of petitioner’s sales might be tax exempt. Accordingly, as in the prior proceeding, we conclude that petitioner failed to meet his “heavy burden of demonstrating by clear and convincing evidence that [his] business traded exclusively with Native Americans and maintained no presence in this State,” and we will not disturb the Tribunal’s determination….

County of Seneca v. Eristoff — NY State Tax Enforcement in Indian Country

The New York Appellate Division (3rd Dept.) held in this case that the county did not have standing to sue to force the New York finance department to collect taxes in Indian Country.

Here’s the short opinion.