JURISDICTIONAL STATEMENTON CROSS AND INTERLOCUTORY APPEALS

(A) The District Court for the Northern District of New York has

jurisdiction, pursuant to 28 U.S.C. §§ 1331 and 1362, because the Cayugas' claims

are brought by a federally-recognized Indian Nation and Tribe, and arise under the

Constitution, laws, or treaties of the United States. SPA-570.

(B) This Court has jurisdiction over the Cayugas' cross-appeal, under 28

U.S.C. §1291, based upon an order of the district court, directing the entry of final

judgment against the State, pursuant to Rule 54(b), Fed. R. Civ. P. This Court has

jurisdiction over the Cayugas' interlocutory appeal, pursuant to 28 U.S.C.

§1292(b).

(C) An amended judgment was entered on March 20, 2002. The Cayugas

filed a timely notice of cross-appeal on May 10, 2002 from the award of

prejudgment interest and denial of the remedy of ejectment. A second amended

judgment was entered on June 17, 2002, and the Cayugas filed a timely notice of

cross-appeal from that judgment on August 6, 2002.

The district court denied motions by the Non-State Defendants to make the

judgment final as to all defendants, pursuant to Rule 54(b), Fed. R. Civ. P., but

granted their motion for interlocutory appeal of specified liability issues, identified

9874903v5

at SPA-2-3.1 The district court granted the Cayugas' cross-motion for interlocutory

appeal of the denial of the remedy of ejectment with respect to the Non-State

Defendants.

On December 11, 2002, this Court granted the Non-State Defendants' joint

motion for interlocutory appeal of the liability issues, and the Cayugas' conditional

motion for interlocutory appeal of the denial of the remedy of ejectment with

respect to the Non-State Defendants.

1 Although the Non-State Defendants' Rule 54(b) motion was denied, they filed Notices of Appeal and Additional Notices of Appeal, attempting to invoke this Court's "pendent appellate jurisdiction." AB-4. However, the Non-State Defendants' participation in this appeal is limited to the certified liability issues, which were already raised by the State. A-5428-30. They have not raised any orders that invoke appellate jurisdiction under the collateral order doctrine. Instead, they are attempting to invoke pendent party appellate jurisdiction, which is not recognized by this Court. Swint v. Chambers County Comm'n, 514 U.S. 35, 48-51 (1995); McEvoy v. Spencer, 124 F.3d 92, 97 n. 2 (2d Cir. 1997); 1B Martin A. Schwartz, Section 1983 Litigation: Claims and Defenses, §9.40 at 546 (1997). See also, Gubitosi v. Kapica, 154 F.3d 30, 32 (2d Cir. 1998).

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COUNTER STATEMENT OF THE ISSUES

A. Liability Issues

1. Did the district court correctly find that the Nation and the Tribe are

"tribes of Indians" within the meaning of the NIA?

2. Did the court correctly determine that abandonment was not a valid

defense to this action?

3. Did the court properly determine that the 1795 and 1807 Treaties had

never been approved by the United States?

4. Did the court correctly reject the affirmative defense of election of

remedies?

5. Did the court properly exercise its discretion in rejecting the affirmative

defense of laches?

6. Did the court properly determine that the NIA applied to the State of New

York?

7. Did the court correctly find that the Eleventh Amendment to the U.S.

Constitution did not bar the Cayugas’ claims against the State of New York?

8. Did the court correctly hold that the Cayugas had a private right of action

under the NIA?

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B. Remedy Issues (including cross-appeal issues)

1. Having determined liability in favor of the Cayugas and against the

defendants:

(a) Should the court have ordered the remedy of ejectment, without

considering equitable factors applicable only to an equitable action to enjoin a

trespass?

(b) Did the court erroneously weigh equitable factors in denying

ejectment with respect to (i) all land in the Claim Area? (ii) land owned by the

State?

2. Was it proper for the court to determine the equitable defense of laches,

rather than send it to the jury?

3. Did the court properly instruct the jury that the State, as the original

wrongdoer, could be held liable for all foreseeable damages suffered by the

Cayugas?

4. Did the court correctly reject the State's argument that because the

Cayugas suffered a total deprivation of property, their damages should have been

limited to fair market value at the time of the taking?

5. Did the court properly reject the State's attempts to alter and restructure

the jury verdict?

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6. Did the court correctly conclude that the State did not act in good faith

toward the Cayugas, and on that basis did the court correctly determine that the

judgment against the State should include prejudgment interest?

7. Did the court correctly compute prejudgment interest, and was it

appropriate to begin the calculation from the time of the State's wrongful taking of

the Cayuga's land?

8. Did the court abuse its discretion in awarding prejudgment interest

computed at the lowest rates rather than at "appropriate" rates, and then

discounting the resulting total by 60%?

9. Did the court properly exercise its discretion in refusing the State's

application that the judgment exclude the Cayugas and run only in favor of the

United States as trustee?

C. Conditional Cross-Appeal Issues (To be addressed only if the Court orders a new trial or substantially reduces the judgment)1. Did the court err in denying the Cayugas' motion for a change of venue in

order to avoid a large pool of potential jurors who were prejudiced against them?

2. Was it error for the court to refuse to ask potential jurors if they had any

interest in land which might be the subject of a well-publicized potential Indian

land claim covering virtually the entire city of Syracuse?

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3. Having determined that current fair market value of the Claim Area was

to be awarded to the Cayugas as a substitute for ejectment, was it error for the

court to direct that such value was to be limited to the value of the land without

improvements, but with infrastructure in place, allowing the State to argue to the

jury that it should be valued as a single parcel?

4. Was it error for the court to instruct the jury that the State was to be

credited with payments made to the Cayugas pursuant to a State treaty which the

court had determined was a nullity under the NIA?

5. Was it error for the court to have excluded the testimony of the Cayuga's

real estate expert who had used traditional appraisal methods to value the Claim

Area and determine fair rental values, and who was prepared to testify concerning

the value of minerals removed from the Claim Area?

6. Was it error for the court to have permitted the State's valuation expert to

offer a legal opinion as to how the Claim Area should be valued, base his opinions

on "special assumptions" of his own making, and give his opinion on rental values

based upon a curve on a graph which he drew arbitrarily?

7. Was it error for the court to preclude the testimony of individual Cayugas

as to the value in their culture of the land in the Claim Area?

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8. Was it error for the court to exclude testimony as to the Cayuga's loss of

federal benefits by virtue of being a landless people?

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COUNTER STATEMENT OF THE CASE

Long before the arrival of Europeans on the American continent, and until

1789, the domain of the Cayuga Indians consisted of more than three million acres.

It extended south from present-day Canada, crossed central New York into

Pennsylvania, and was centered around what is now known as Lake Cayuga. On

February 25, 1789, one week before the Constitution was declared effective, the

State of New York appropriated all but 64,015 acres of the Cayuga's land ("Claim

Area") for an insignificant amount. Quickly ignoring its treaty promise to forever

secure the Cayugas in their remaining acreage, in 1795 the State illegally

purchased from a faction of the Cayugas all but 3000 acres of the Claim Area for a

small annuity, immediately selling it and earning a nine-fold profit. In 1807, the

State illegally acquired all of the rest for a small sum, leaving the Cayugas a

landless people.

The 1795 and 1807 acquisitions are the subject of this litigation. In effecting

these transactions, the State ignored and violated a federal statute, the Non-

Intercourse Act, 25 U.S.C.§177 ("NIA"), enacted in 1790 and strengthened in

1793, and the 1794 Treaty of Canandaigua, in which the federal government

recognized the Cayuga's rights over their remaining lands.

During the next 190 years there was little the Cayugas could do to seek

redress. They could, and periodically did, petition the State for justice, or at least

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to pay the small promised annuities on a timely basis, but they had no access to the

courts. Until the Supreme Court's 1974 decision in Oneida II, an Indian nation

could not maintain a federal action for violation of the NIA, and Indian nations

have never been welcome to litigate in New York courts, at least without special

enabling legislation from the State legislature.

After Oneida II, the Nation hired counsel and negotiated a settlement of their

land claim with the State, but in 1980, Congress voted to withhold its requisite

approval. Shortly thereafter, the present case was filed in United States District

Court, Northern District of New York at Syracuse. The case was assigned to Hon.

Neal P. McCurn, U.S.D.J., who presided over it for 22 years, through entry of final

judgment against the State, and grants of permission to appeal with respect to other

parties under 28 U.S.C. §1292(b).

The complaint, seeking ejectment and damages, was originally filed by the

Cayuga Indian Nation of New York ("Nation") against the State and the occupants

of the Claim Area. The Seneca-Cayuga Tribe of Oklahoma ("Tribe") intervened as

a plaintiff in 1981, and the United States, acting in its trust capacity, intervened on

behalf of the plaintiffs in 1992.

In a series of decisions rendered over the first twelve years of litigation,

Judge McCurn disallowed every defense, and granted summary judgment to the

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plaintiffs on liability. The defendants appeal from almost all of these rulings,

although the law on these issues is now well settled.

A long hiatus followed during which the court appointed mediators and

encouraged settlement of the case, all to no avail, and between 1998 and 2002 the

court addressed the remedy issues. After conducting an evidentiary hearing in

1998 on the equities, it decided to deny actual ejectment, a legal remedy, to the

Cayugas, and instead to award them damages which they could, if they chose, use

to purchase land in the Claim Area from willing sellers, thus "accomplishing the

same goals which they hope to accomplish through ejectment." SPA-478.

After various pretrial rulings, including an evidentiary hearing on the

admissibility of expert testimony, in early 2000, the court conducted a six-week

jury trial to determine damages solely against the State, which it found was liable

for all damages suffered by the Cayugas. Thereafter, the court conducted a five-

week non-jury trial on the equities of allowing prejudgment interest, and the proper

calculation of such interest, after which it issued findings of fact, conclusions of

law, and a determination of the outstanding issues.

From the outset of this case, the State and the other defendants have pursued

a scorched-earth strategy. They have raised, and vigorously argued, every legal

and factual issue which they could conceive, no matter how frivolous. On this

appeal, they press legal arguments which have been determined against them by

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this Court, and even by the Supreme Court. In describing the relevant history, they

ignore Judge McCurn's findings of fact, made after trial, and they continue to argue

their version of the factual history, without bothering even to note the court's

findings, which concluded that the State did not act in good faith toward the

Cayugas. Those findings comport with the accepted history and the overwhelming

weight of evidence presented to the court.

After denying the Cayugas the remedy of ejectment, the district court

decided many important pre-trial issues in favor of the State, making it highly

unlikely that the jury would render a verdict sufficient to enable the Cayugas to

purchase significant land in the Claim Area. Thus, the court refused to move the

trial to a location where an unbiased jury could be found; refused to question

prospective jurors regarding their ownership of land in areas threatened with Indian

land claims; precluded the testimony of the Cayugas' valuation witness; refused to

allow the testimony of Cayugas concerning the value of their ancestral land in their

culture, leaving them with no witnesses; directed that the land be valued as

unimproved, but with infrastructure in place, and allowed the State to argue that it

should be valued as a single parcel; allowed the State's valuation expert to provide

opinion evidence that was lacking in reasoning, methodology, or a factual basis;

allowed the State to be credited with the payments it made under the illegal

agreements pursuant to which it acquired the Cayugas' land; and allowed the jury

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to determine the legal question of whether the Claim Area should be valued as a

single parcel owned by one party, or as the sum of separately owned parcels.

Prejudiced by these erroneous rulings, it was no surprise that the jury placed

the present value of the Claim Area at only $35 million, and that it fixed the lost

use and occupancy of the land for the entire period of over 204 years, at only one-

tenth this sum.

At the Phase II non-jury trial on pre-judgment interest, the court allowed the

State to attempt to prove the impossible proposition that it had acted in good faith

in acquiring the Cayugas' land, a finding which the State claimed would justify

denying or limiting prejudgment interest. In its evaluation of the evidence, the

court clearly drew every inference in favor of the State, making its historical

findings in favor of the Cayugas only when the documentary evidence was

irrefutable. The court, nevertheless, found that the State did not act in good faith in

its acquisition of the Cayugas' lands.

In determining the amount of prejudgment interest to award, the correct

calculation, using the "appropriate" interest rates, is $1.75 billion, according to the

testimony of the Cayugas' distinguished expert. The United States' expert agreed,

but reached a lower total of $527 million, because the government instructed him

to use the lowest possible interest rates, not the "appropriate" rates. Without

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explanation that withstands scrutiny, the court accepted the lower figure, and then

discounted it by 60%.

On their cross-appeal, the Cayugas ask that $1.75 billion, the full and correct

amount of pre-judgment interest on the small mesne profits allowed, be awarded.

In addition, they request actual ejectment, restoring them to their land. They only

conditionally ask for a new trial free from the prejudicial errors which led to the

small jury award. A generation of Cayugas has passed since they began to pursue

this claim, and they do not wish to prolong the day when this case is finally

concluded. Moreover, they recognize that if they were awarded an appropriate

jury verdict, they could not be awarded full pre-judgment interest on such an

amount because the resulting judgment would be far beyond any practical sum.

The Cayugas have, however, filed a conditional cross-appeal from the prejudicial

pretrial rulings. In the event that this Court were to order a new trial, or materially

reduce the present judgment, then the Cayugas request reversal of these rulings,

and a new trial under proper conditions.

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COUNTER STATEMENT OF THE FACTS 2

1. The Cayugas And The Revolutionary War

The Cayugas are founding members of the pre-Columbian Iroquois

Confederacy, which originally consisted of the Cayuga, the Seneca, the Onondaga,

the Oneida and the Mohawk Nations. SPA-133. The Confederacy unified

previously hostile nations under a single Great Law which established protocols for

treaty making and other customs.

The chiefs of the original five nations convened in a Grand Council.

T-4392, 4480-81. No decision or treaty could be made without a consensus.

T-3824-29, 4402-03, 4480-82. Delegates to council meetings were summoned by

runners bearing wampum, indicating that the bearer had the authority to treat on

behalf of a nation. Significantly, a minority of Cayugas could not cede their lands

without a Grand Council meeting of all the Nations (T-2901-02, 4482), in which

"all minds shall come together as one." T-4482.

Although disparagingly dismissed as "savages" by State representatives,

including Philip Schuyler, who negotiated the 1795 Treaty at the heart of this 2 The facts are derived primarily from the court's findings, pursuant to Rule 52, Fed. R. Civ. P., in its October 2, 2001 decision and order, SPA-68-255, and from uncontroverted historical documents. The court's findings are identified here by approximately 100 citations. Appellants' Statement of the Facts, by contrast, is not based upon, and does not contain a single citation to the district court's factual findings. Appellants simply ignore the district court's findings and recite their version of the "facts" as if no findings had been made. However, as discussed in Point I, infra, this Court is bound by the lower court's findings of fact.

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action (N-22 at 334; S-35 at 452), the Cayugas lived in a highly civilized pastoral

community around Cayuga Lake:

Vast fields of corn were . . . planted in the rich valleys, and immense quantities of melons, squashes, beans, potatoes, and other vegetables were raised, as was also a fine quality of tobacco. . . . This tendency to a higher civilization was also shown in their houses, many of which were more than mere wigwams . . . [The houses were] large and elegant, some beautifully painted.

G-264 at 19-20; T-4841-42. The Cayugas practiced a "mixed economy,"

consisting of "agriculture, hunting [,] .  . . gathering [,] . . . fishing, and a pastoral

economy." SPA-141; T-2860.

Before the Revolutionary War, Cayuga territory comprised approximately

1,700 square miles, spanning from lake Ontario southward into Pennsylvania.

SPA-134; G-463; T-2841, 2846-47. In 1768, the Chiefs of all of the Six Nations,

in accordance with Iroquois protocol, signed a treaty at Fort Stanwix with the

King's Superintendent of Indian Affairs, fixing the boundaries of Iroquois territory

and acknowledging the Iroquois as "the true and absolute [P]roprietors of the

[L]ands" in question. SPA-134; T-2843, 2847. Colonial New York ceased at the

eastern boundary of the Iroquois territory, approximately seventy-five miles east of

Cayuga Lake. G-435; T-2843-44.

At the outbreak of the Revolutionary War, the Iroquois Confederacy

resolved to remain neutral, but all of the Nations were eventually drawn into the

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controversy. SPA-135; T-2848. As a result of British pressure and "sheer

economic necessity," the Seneca, Cayuga, Onondaga and Mohawk largely sided

with the British, with whom they had historical alliances and treaties, while the

Oneidas took the revolutionaries' side. T-2849-50, 4484-85. The division within

the Iroquois Confederacy also existed within individual nations, including the

Cayugas, some of whom remained neutral, while others sided with the

revolutionaries. SPA-136; G-363 at 438-39; T-2850-51, 3143.

At the urging of New York Governor George Clinton, General Washington

launched a campaign in 1779 against the Cayugas and Senecas. SPA-139-40;

G-417 at 9; T-4846, declaring: "The immediate objects are the total destruction

and devastation of their settlements . . . It will be essential to ruin their crops now

in the ground and prevent their planting more[.]". SPA-141; S-725 at 460. The

Sullivan-Clinton3 campaign fielded approximately one-third of the patriot army,

G-488, who engaged in a pre-invasion toast: "Civilization or death to all American

savages." G-488 at 72; T-2853. The campaign drove the Cayugas from their

homeland and destroyed their homes, fields and orchards, thus denying them their

means of survival. AB-12.

The Sullivan-Clinton campaign was followed by a severe winter. Animals

died of starvation (T-2870), and the natives who returned to the burned Cayuga

3 Governor Clinton's brother, General James Clinton.

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villages lived on roots and were unable to keep their children from perishing from

hunger. G-362 at 13. The following year an outbreak of smallpox further

decimated the Iroquois and the Cayugas. Id. Most of the remaining Cayugas were

then constrained to leave their land, and they settled at Buffalo Creek; a small

group remained at Lake Cayuga.

The Cayugas were thus desperately impoverished and destitute, when the

State began its efforts to acquire their lands.

2. Post-Revolutionary War Policy Toward The Cayugas

In the wake of the Revolutionary War, New York, asserting its sovereignty,

sought to establish its boundaries over lands contested by other states, and to

acquire Iroquois land for economic expansion. SPA-146. In 1779, New York

Congressman John Jay, later Governor of New York at the time of the 1795 Treaty

(after having served as Chief Justice of the United States), was one of the first to

urge Governor Clinton to quickly assert New York's sovereignty over Iroquois

lands before the United States took action. N-61 at 28 n. 52.

General Philip Schuyler, in his "Thoughts Respecting Peace in the Indian

Country," established the blueprint in 1783 for the State's elimination of the

Iroquois:

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It will be no obstacle to our future . . . for as our settlements approach their country, they must from the scarcity of game, which that approach will induce to, retire further back, and dispose of their lands. . . . They [will] dwindle comparatively to nothing, as all savages have done, who reside in the vicinity of civilized people and leave us the country without the expense, trifling as it may be of a purchase.

N-22 at 334.

In 1784, Congress, then functioning under the Articles of Confederation,

sent representatives to treat with the Iroquois Nations at Fort Stanwix. Governor

Clinton wrote to the federal commissioners asserting that New York alone had the

right to enter into treaties with the Iroquois and "stipulating":

that no Agreement be entered into with Indians, residing within the Jurisdiction of this State (and with whom only I mean to treat) prejudicial to its Right. G-211 at 52. See also, G-218 at 609-10.

In response to Governor Clinton's efforts to treat separately with the Iroquois

at Fort Stanwix, Joseph Brant, on behalf of the Iroquois, requested that the United

States Congress be informed and that Congressional representatives attend. G-218

at 610. Clinton responded that in treating with the Iroquois, New York had

paramount authority. Id. Notably, in treating with representatives of the Iroquois

at Fort Stanwix, Governor Clinton observed Iroquois treaty protocols (T-4959),

with which he had had familiarity since 1768. T-4947, 4959.

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Governor Clinton sent Peter Schuyler, a relative of Philip Schuyler (G-425

at 379; T-2884), and Peter Ryckman "to Counteract and frustrate" any federal

treaty with the Iroquois. Congress, however, posted sentinels to prevent them from

fulfilling their mission. SPA-147-48; G-218 at 616; T-2883-85, 3242, 4891.

In the federal treaty at Fort Stanwix, the United States obtained a cession of

Indian lands west of Lake Erie and south of Pennsylvania, but confirmed Iroquois

title to their remaining lands in New York. SPA-147; T-2871-72, 3238. By

securing the boundaries of Iroquois title in New York, the United States sought to

avoid forcing the Iroquois into British Canada where they might renew hostilities

or join forces with the Indians engaged in conflict with the United States in the

Ohio Valley. G-211 at 50-51.

3. The Livingston Lease

In 1787, a group of prominent New York land speculators, in an effort to

circumvent the State Constitution, manipulated the leaders of the Iroquois

Confederacy to sign what has become known as the Livingston lease.

SPA-150-52. Although the Cayugas living at Buffalo Creek agreed to the Lease,

those at Cayuga Lake, led by their Chief, Steel Trap, did not. SPA-151; T-

2909, 3358. The Iroquois believed they were transacting business with the State of

New York, but they actually signed a lease with the Genesee Company of

Adventurers. T-2887.

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The Iroquois, who were in "desperate straits" SPA-151; G-362 at 22;

T-2887, thought they had little choice in signing the lease and that if they did not,

the State would simply take their land. S-35 at 273, 416-17; T-5233. They were

clearly under the false impression that they were dealing with authorized

representatives of the State. SPA-151-52; T-2889-90, 4914-16.4 Notwithstanding

such deception, the Cayugas at Buffalo Creek considered the Livingston lease

sacred "because it was done in full Council and at proper Place." T-2901. The

lease embraced all of the Iroquois lands, but permitted the chiefs to reserve lands.

SPA-150; T-2888.

The State, however, perceiving the lease as a threat to its pre-emptive rights

and concerned that the Genesee Company included secessionists who planned to

form a new state, invalidated it. SPA-152; T-2890, 3255-56.

4. 1789 Treaty

Despite New York's ratification of the U.S. Constitution in July 1788, which

gave Congress the sole right to enter into treaties, SPA-154, in 1788 and 1789,

New York enacted legislation authorizing State commissioners to obtain land

cessions from the Oneidas, Onondagas and Cayugas.

4 This deception was easily accomplished because the Genesee Company included numerous past, present and future officials of the State government (SPA-150; S-35 at 120), including Peter Schuyler and Peter Ryckman, the agents Governor Clinton had instructed to obstruct the federal treaty at Fort Stanwix. T-2889.

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The resulting agreements with these Indian nations shared "striking

similarities." SPA-154. In each, the Nation ceded vast expanses of land, leaving

only a relatively small reservation. Disregarding Iroquois protocol, in each treaty

the State negotiated with minority factions, often acquiring land in which the

faction did not reside. Id. See also, Oneida III, 434 F. Supp. at 535. Thus, the

State negotiated the February 25, 1789 treaty with the Cayuga Lake faction (whose

then occupied land was reserved to the Cayugas in the treaty), led by Steel Trap, at

Denniston's Tavern in Albany (SPA-156; T-2892), although most of the Cayugas'

chiefs were at Buffalo Creek. SPA-156. 5 The State's expert admitted that the

Cayuga Lake faction was not authorized to deal on behalf of the entire Cayuga

Nation, and that Governor Clinton "erred" by entering into the treaty with them. T-

4688.

By dealing with the faction at Cayuga Lake, the State could move forward

with its plans to develop the New Military Tract,6 which provided lands as

compensation for veterans, and established its presence for westward expansion.

T-2898. Many of the soldiers compensated by the State with New Military Tract

lots were veterans of the Sullivan-Clinton campaign, adding to the Iroquois

5 As discussed, infra, the State subsequently reversed its approach and, in 1795, treated only with the faction from Buffalo Creek when securing a treaty to acquire lands occupied by the Cayuga Lake faction.

6 The New Military Tract surrounded the Iroquois reservations (G-423; T-5404).

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apprehensions about settlers (T-3008), as the State's expert confirmed. T-4864-66.

Indeed, prior to 1784, "New York State had already granted much of the Cayuga

and Onondaga country as bounty lands to its soldiers, without waiting for treaties

or boundary settlements." G-228 at 266; T-4858 . The Iroquois were the frequent

victims of crimes by white settlers. T-3405-07, 3410-11.

Although the Cayuga minority reminded Governor Clinton of his pledges to

increase their reservation and prevent encroachment by settlers, SPA-158; S-35 at

325, Clinton induced the Cayugas to take a smaller reservation than they desired.

S-35 at 296. He told them that a deal with the State would leave them no worse off

than the Livingston lease in which they "parted with all [their] lands." S-35 at 297.

The State practiced the same deception with the Oneidas, leading them to believe

that they had already parted with their lands in the same lease. Governor Clinton

"waved . . . aside" the Oneidas' confusion and omitted to tell the Indians "that the

state had repudiated the Livingston deal." G-211 at 59. The State's expert

conceded that Clinton was "disingenuous" in raising the lease without mentioning

that the State had declared it illegal. T-4941.

The net result of the 1789 Treaty was that New York obtained 1,600 square

miles of Cayuga territory in exchange for a payment of $2,125 and a $500 annuity,

SPA-155; S-728 at 216-17, leaving the Cayugas with the roughly 64,000 acres, or

100 square miles, that are the subject of this action (the "Claim Area"). SPA-155;

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T-2892-93. The annuity was payable in provisions or clothing, SPA-155; T-2893,

graphically underscoring the Cayugas' desperate straits and the absence of truly

arms-length negotiations.

The Steel Trap coterie at Cayuga Lake soon complained that the State had

defrauded them on the size of this reservation. SPA-158; G-298; T-2920, 4989.

The Buffalo Creek faction also felt they had been victimized and attempted to

drive the State surveyors from their lands. SPA-160; T-2916, 4967.

The Buffalo Creek Cayugas, joined by leaders of the Onondagas, Senecas

and Mohawks, wrote to Governor Clinton on June 2, 1789, to protest the Albany

Treaty. SPA-156-57. They complained that the cession did not have the consent

of their chiefs as required by their ancestral protocols. They accused Clinton of

deliberately pursuing divide and conquer negotiations. T-2912-13, 2916.7 These

Iroquois leaders asserted that the Albany Treaty had not been made by authorized

Iroquois:

We did not expect that [Gov. Clinton], after advising us to shun private Treaties with Individuals and avoid selling our Lands to your disobedient Children, that you would yourself purchase Lands from a few of our wrong headed young Men, without the Consent or even the Knowledge of the Chiefs.

7 Indeed, Governor Clinton subsequently criticized the United States for treating with the entire Six Nations who were "disunited by private animosities." Such "disunion produces impotency and secures inaction," and, in Clinton's view, was to be encouraged. G-203 at 167; T-3787-88.

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SPA-157; S-35 at 331. Although Governor Clinton was aware of the Great Law

and Iroquois protocols for treaty making, he chose to ignore them. T-2901-04.

On July 30, 1789, Joseph Brant, Fish Carrier and other Indian leaders wrote

another letter, protesting Governor Clinton's disregard of Iroquois protocol by

failing to treat with the Iroquois in full council. SPA-158-59; S-35 at 340-41; T-

2907-08, 2911-12.

The Buffalo Creek chiefs requested Congressional intervention, claiming

that the State was too conflicted by self-interest to act in good faith: "Perhaps self

interest throughout your State is too prevalent to admit of impartial Decision in a

Matter where they are so deeply interested." SPA-160; S-35 at 342. The Buffalo

Creek chiefs stated that they now "see more clearly the Attempt on our Disunion"

and requested that surveyors and settlers not proceed without some

accommodation to their interests. SPA-160; S-35 at 342. They also referred to

Steel Trap and the Cayuga Lake faction as being "overpowered by the strong

Waters," a likely reference to the pernicious effects of alcohol at the treaty site,

Denniston's Tavern. S-35 at 421.

Desperate for even small sums to feed their people, and resigned to the fact

that the State would not return their lands, the Buffalo Creek faction the following

year ratified the Albany land cession in exchange for a lump sum payment of

$1,000. SPA-166; S-35 at 429. The State's payment to the Buffalo Creek Cayugas

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was a tacit acknowledgement that it had not dealt with the entire Cayuga Nation

when it only negotiated with the Cayuga Lake faction.

Within months of the 1789 Treaty, which had guaranteed the Claim Area to

the Cayugas, State Surveyor, Captain Abraham Hardenbergh, on September 3,

1789 (S-35 at 449-53), recommended to Governor Clinton that the State purchase

it because its "pleasing and favorable Situation and goodness of the Soil," will be

"a continual Source of Trouble" between settlers and Indians, S-35 at 451,

aggravated "by the Depredations which it must be expected this wild and savage

Nation will daily commit." S-35 at 452; T-2928. Hardenbergh recommended that

Clinton deal with the Buffalo Creek faction who were "dissatisfied with the sale

made to the State." S-35 at 452; T-2929, 3382-83.

Governor Clinton felt that it would be imprudent to begin negotiations for

the reservation "at this time" because it would only make the Cayuga Lake faction

more resolved to stay on their lands. S-35 at 455; T-2930, 3389-90.

5. The Non-Intercourse Act

In response to New York's acquisition of Indian land from the Oneidas,

Onondagas and Cayugas by, in the words of one historian, "deceit, fraud and

threat," G-211 at 61; T-2953-55, Congress enacted the original version of the NIA

in July 1790. SPA-635-36. Colonel Timothy Pickering informed the Iroquois of

the protective purpose of the Act:

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Now, Brothers, to prevent these great evils in future, the Congress declare That no sale of lands made by any Indians, to any person or persons, or even to any state, shall be valid (or of force) unless the same be made at some public treaty held under the authority of the United States. For at such public treaty wise and good men will be appointed by the President to attend, to prevent all deception and fraud.

N-44 (emphasis in original); S-741; T-3932.

President Washington similarly explained the Act's intent to the Senecas:

I am not uninformed, that the Six Nations have been led into some difficulties, with respect to the sale of their lands, since the peace. But I must inform you that these evils arose before the present Government of the [U.S.] was established, when the separate States, and individuals under their authority, undertook to treat with the Indian tribes respecting the sale of their lands. But the case is now entirely altered; the General Government, only, has the power to treat with the Indian nations, and any treaty formed, and held without its authority, will not be binding.

Here, then, is the security for the remainder of your lands. No State, nor person, can purchase your lands, unless at some public treaty, held under the authority of the United States. The General Government will never consent to your being defrauded, but it will protect you in all your just rights.

SPA-167-68; S-741 at 142; N-44; T-3929-30.

Although appellants repeatedly assert that the Cayugas did not desire to

return to their homeland after its devastation by the Sullivan-Clinton campaign,

and that factions of the Cayugas were eager to sell or lease their land, AB-15-16,

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20-23, such ruminations are meaningless in light of the NIA's purpose to protect

Indians from improvident dispositions of their lands and sharp dealings by land

speculators.

Since Acts of Congress were routinely sent from the federal capitol, then

situated in New York City, to the Governor's office (SPA-189), Governor Clinton

was undoubtedly aware of the NIA at the time of its passage. T-2957-58. In any

event, Captain Hardenbergh expressly referred to the Act in a letter to Governor

Clinton, dated July 26, 1791, SPA-189; G-405; T-2957, and Secretary Knox

referred to the Act's requirement of United States' approval for land transactions

with Indians in a letter to the Governor dated August 17, 1791. SPA-190; N-9.8

On March 1, 1793, a strengthened NIA, with additional fines and penalties,

was enacted. SPA-637-40; T-2954.

6. The Richardson Lease

Despite the promises to the Buffalo Creek Cayugas in the 1790 treaty

ratifying the Albany Treaty, payments were not forthcoming and the Cayugas'

situation remained desperate. SPA-168; G-362 at-39; T-2938, 3460. In 1791, the

Cayugas at Buffalo Creek sought to enter into a 20-year lease of the Claim Area

8 The district court concluded that these two 1791 letters did not conclusively establish the State's awareness of the NIA when it entered into the 1795 Treaty because the letters were primarily concerned with private sales and were addressed to Clinton, and not John Jay who had just become the Governor at the time of the 1795 Treaty. SPA-190. Appellants ignore the 1791 letters entirely.

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with a prominent land speculator, John Richardson. SPA-168; G-404 at 4;

T-5202-03. Governor Clinton, however, rejected the Richardson lease and gave

orders which led to the burning of houses erected by settlers. SPA-171; T-

2949-50.

7. The State's Initial Efforts   To Acquire The Claim Area

On March 11, 1793, the State legislature passed a statute providing for the

quitclaim of the remaining Oneida, Onondaga and Cayuga reservations for $5.00

per square mile. SPA-172-73; G-498 at 880-81. The district court quoted the

conclusion of a leading historian, Barbara Graymont, that the 1793 State statute,

passed within days of the enactment of the strengthened federal NIA, SPA-173,

was in clear defiance of federal law:

It is clear from the terms of this act [1793] that New York State intended to maintain complete control over Indian affairs and transfers of Indian real property within its borders, without recourse to the federal government.

SPA-173-74; G-363 at 461.

The State attempted to negotiate separately with the Cayuga Lake and

Buffalo Creek factions. The Cayuga Lake group sought to retain the larger, eastern

side of the Claim Area. SPA-174. Governor Clinton falsely told this faction that

selling the reservation would somehow strengthen the 1789 Treaty, which had

actually guaranteed its preservation. G-362 at 43-44; T-2962.

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The Buffalo Creek faction, speaking through Clear Sky, requested that the

State bury all previous agreements and referred to Governor Clinton as "one who

wished to defraud us of our lands" because he had treated at Albany "with a few

who reside on the lands at Cayuga and Onondaga, without Consulting the principal

Chiefs." Clear Sky complained that "[f]ormer bargains have made much difficulty,

and has broke the Nations apart." SPA-179; G-280 at 33; T-2964.

The State was unable to obtain any additional lands at that time. T-2965. A

similar 1794 State Act also failed to lead to a treaty with the Cayugas. N-57.

8. The Treaty Of Canandaigua

In direct response to New York's acquisitive intentions, the United States

and the Chiefs of the Iroquois entered into a treaty on November 11, 1794, to

further guarantee the Iroquois' rights to their remaining lands (SPA-675-79),

including the Cayugas' remaining 64,000 acres, the Claim Area. SPA-180; G-214

at 59; T-4489. The treaty observed the proper solemnities of the Great Law,

including the presence of the leaders of the individual Nations who bore wampum

indicating they were authorized to treat with the United States. N-55; T-4330-32,

4422.

The Treaty provided at Article II as follows:

The United States acknowledge the lands reserved to the Oneida, Onondaga and Cayuga Nations, in their respective treaties with the state of New York, and called

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their reservations, to be their property; and the United States will never claim the same, nor disturb them or either of the Six Nations, nor their Indian friends residing thereon and united with them, in the free use and enjoyment thereof; but the said reservations shall remain theirs, until they choose to sell the same to the people of the United States, who have the right to purchase.

SPA-535, 677.9

At the treaty negotiations, Fish Carrier and other Cayuga leaders approached

Colonel Pickering to complain that the "York people . . . have got all our Country

and for a small trifle," SPA-181; S-72; G-290; T-5204-05 and made inquiries about

obtaining "annual rent" for the reservation. SPA-182; S-73 at 104; T-3464.

9. The 1795 Act And The Council Of Revision

A few months later, on April 9, 1795, the New York legislature enacted an

"Act for the Better Support of the Oneida, Onondaga, and Cayuga Indians. . . ."

SPA-680-86. It appointed Commissioners to treat with the Cayugas, Oneidas and

Onondagas and "to make such arrangements . . . relative to the lands appropriated

to their use as may tend to promote the interest of the said Indians and to preserve

in them that confidence in the justice of this State. . . ." SPA-680.

The Act empowered the Commissioners to acquire the remaining lands of

the Oneidas, Onondagas and Cayugas for not more than 4 shillings ($.50) per acre,

9 In accordance with the Treaty of Canandaigua, the United States has annually delivered a symbolic piece of cloth to the Cayuga Nation since 1794, confirming the continuity of the inter-governmental relationship between the United States and the Nation. A-595-96, 696-97; T-4427, Ejectment T-72. See, Point II, infra.

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and it provided that the land was to be sold by the State for not less than 16

shillings ($2.00) per acre. SPA-185, 681-82.

Under the State's Constitution, the veto power over legislation then resided

with the Council of Revision, the members of which were Governor Clinton, Chief

Justice Benson and Justice Robert Yates of the State Supreme Court. SPA-185;

T-2973-74. The Council vetoed the Act and issued a resolution citing the fact that

since the Indian land was to be bought for four shillings an acre and to be sold for

no less than sixteen shillings an acre, the Act was "not a disposition for the benefit

of the Indians but rather a disposition three fourths of which will be for the benefit

of the State," G-363 at 465; SPA-185; T-2975; G-375 at 141-42. As the district

court stated, "Based upon that statutorily anticipated minimum profit, the State's

lack of good faith is virtually self-evident. . . ." SPA-216.

The Council further reasoned that the 1795 Act "did not live up to the

promises made by both houses of the legislature in concurrent resolution the

previous year." SPA-222; G-363 at 464. That concurrent Resolution had provided

that the Governor was to confer with the Indians and give them the assurance

that the legislature would protect and secure them in the possession and enjoyment of their reservation, according to the agreements made with their several nations, and were ready to make any further disposition thereof for their sole benefit, when the wishes of their respective nations shall be made thereon for that purpose.

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SPA-222-23; G-363 at 464-65 (emphasis in original).

The New York State legislature overrode the Council's veto. SPA-186;

G-363 at 465; T-2975.

Based upon the factual record, including the text of the 1795 Act, the veto

by the Council of Revision, and the legislature's override of that veto, the district

court found the Act was cynically designed to obscure the State's motive in

promoting its financial interest above that of the Indians, who were disadvantaged

by the very terms of the Act. SPA-186-87.

10. The Commissioners And Conflicts Of Interest

The 1795 Act appointed four treaty commissioners, Philip Schuyler, John

Richardson, General John Cantine and Colonel David Brooks. SPA-185. Each of

them would personally gain from a land treaty with the Cayugas.

Schuyler had been an Indian commissioner and a general during the

Revolution, and was the Surveyor General of the State of New York. T-4078. He

was also one of the largest land holders and wealthiest people in the State.

SPA-210. According to Professor Graymont, Schuyler was "a member of a

notorious land company that sought to evade New York's constitutional provision

against private individuals conducting land transactions with the Indians. . . "

G-363 at 444. His sons-in-law were Alexander Hamilton and Stephen Van

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Rensselaer, the latter being the largest landowner in the State of New York and the

owner of large salt mining interests bordering Iroquois lands. T-3885, 4078.

In 1792, Schuyler and Elkanah Watson had formed the Western Inland Lock

Navigation Company to open navigable waters from Albany to Seneca Lake and

then the West. N-40; T-3873, 3877-79, 4338. Schuyler's plan was to develop a

canal system as far as Seneca Lake to increase settlement and to enhance land

values in the surrounding areas, including lands owned by him and his fellow

investors, many of whom were members of the State Legislature. T-3876-79,

4087-88, 4335-36. Schuyler had learned the strategic waterways of New York

during his years living and working among the Iroquois. T-3872.

The company attracted investors, including the Holland Land Company

(T-3879), Governor Clinton's nephew, DeWitt Clinton (T-3883), and John Jay's

son-in-law, Goldsbrow Banyar (T-3908), all of whom were interested in the

financial rewards to be reaped from opening the Iroquois land to development:

These were speculators to whom the broad, unsettled stretches of land in western New York seemed like an untapped gold mine whose productivity would expand in proportion to the improvements wrought in transportation and communication linking the east and the west. Fifteen of the thirty-six known directors held lands which were likely to increase in value as a result of the canal company's improvements.

N-51 at 403, N-22 at 339; T-5183.

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Governor Clinton urged the New York legislature to extend "every fostering

aid and patronage" to Schuyler's company. N-51 at 405. Furthermore, as a New

York State Senator, Schuyler headed the appropriations committee which enacted

legislation for the State to become a 25% investor in his company only days before

his appointment as commissioner for the 1795 Treaty. N-51 at 405; T-4339,

5186-87.

The principal qualification of John Richardson appears to have been his

long-standing interest in the Cayuga lands. SPA-214. He was a Livingston lessee,

had pursued his own 20-year lease with the Cayuga majority, and maintained a

continuing interest in the lands. Tr.-2979. Richardson subsequently submitted to

himself his own preemption request as well as those of his father and brother to

obtain Cayuga lands. SPA-211-12.10 N-58-60; T-5142-45.

General John Cantine had been a surveyor and ally of Schuyler. SPA-211;

T-2979. As a surveyor, Cantine had inside knowledge of the choice lots in the

reservation, including lots with water access, which he promptly used in acquiring

ten lots at the 1796 State auction of the reservation. S-115-A; T-5434-36. As State

witness, Dr. Scott W. Anderson, testified, surveyors such as Cantine selected the

10 Article Ten of the 1795 Act provided that settlers residing on Cayuga land, such as Richardson, could claim preemption rights which otherwise belonged to the State. SPA-683, 211.

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best lots for themselves. S-115-A; T-5405. Commissioner Brooks also obtained

six choice lots at the auction. SPA-212; T-5434.

11. The 1795 Treaty At Cayuga Ferry

While the State's efforts to acquire the Claim Area from the Cayugas were

underway, John Jay,11 the first Chief Justice of the United States, was elected to

succeed Clinton as New York's Governor. T-3893. New York Supreme Court

Justice Egbert Benson wrote to Governor-Elect Jay on June 13, 1795, reminding

him of the requirements of the NIA and stating that he "would not trust" Jay's

predecessor, Governor Clinton, to comply with the statutory requirements.

SPA-196; G-376; T-2966-67. In the same vein, Secretary of War Pickering also

expressed hope that Governor Jay would be more respectful of Indian rights than

his predecessor. N-10.

The newly-appointed federal Superintendent to the Iroquois, Israel Chapin,

Jr., wrote to Secretary Pickering, regarding the State's intentions to treat with the

Cayugas, Oneidas and Onondagas. Upon being informed of the State's actions,

Pickering requested the opinion of the Attorney General of the United States,

William Bradford, on the proposed treaty. Bradford responded on June 16, 1795,

11 Appellants repeatedly refer to Jay as a federalist, AB-28, 108, 240, apparently to imply that he would be more solicitous of the primacy of federal law with respect to Indian claims than Governor Clinton. Jay, however, had been among the first to urge Clinton to assert New York's "claim" to Indian land over federal interests. N-61 at 28 n. 52.

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concluding that the proposed treaties would not be valid or legal under the NIA

and that "[T]he language of this act is too express to admit of any doubt upon the

question. . . ." SPA-191-92; G-267 at 1. Appellants, nevertheless, repeatedly

contend that the scope and meaning of the NIA was disputed then and now, AB-8,

9, 67, 166, 239-40, despite Attorney General Bradford's unequivocal opinion that

the 1795 Treaty was illegal under the NIA, and that it applied to the State.

Bradford explained that, as a result of its earlier acquisitions before the

adoption of the Constitution, New York held a preemptive right, which remained

subject to the strictures of the NIA. Unless the State acquired the Indian land in

accordance with the treaty-making powers of the United States, title remained with

the Indians:

It is true, that by treaties made by the State of New York with the Oneidas, Onondagas, and Cayugas, previous to the present Constitution of the United States, those nations ceded all their lands to the people of New York, but reserved to themselves and their posterity forever for their own use and cultivation, not to be sold, leased, or in any other manner disposed of to others, certain tracts of their said lands . . . So far therefore as respects the lands thus reserved, the treaties do not operate further than to secure to the State of New York the right of preemption: but subject to this right they are still the lands of those nations, and their claims to them, it is conceived cannot be extinguished but by a treaty holden under the authority of the United States, and in the manner prescribed by the laws of Congress.

G-267 at 1-2.

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In a June 29, 1795 letter, Pickering wrote that New York's proposed treaties

were "repugnant" to the NIA. SPA-192; G-277 at 1. Pickering advised Israel

Chapin that according to Attorney General Bradford, New York tribes such as the

Cayuga were not exempt from the NIA, and that, when purchasing Indian lands,

"the bargain must be made at a treaty held under the authority of the [U.S.]." Id.

To reinforce this view, Pickering enclosed a copy of the Attorney General's

opinion letter and indicated that a copy of the opinion had also been provided to

Governor Clinton. SPA-192; G-277.

Characterizing the State's proposed treaties as an "unlawful design[ation] of

the New York Commissioner[,]" Pickering commanded Chapin "as the guardian of

[the Indians'] rights[,]" to "advise them not to listen to the invitation of any [State]

Commissioners unless they have authority from the [U.S.] to call a treaty." Id. In

what the district court considered a telling postscript, Pickering added: "All

difficulties on this subject I expect will cease as soon as Mr. Jay's administration

commences." SPA-192-93; G-277 at 2. Despite the efforts of the United States to

block the State Treaty from proceeding in violation of federal law, appellants claim

that the United States encouraged the Treaty. AB-2.

Immediately after Jay became Governor, Secretary Pickering sent him a

copy of Bradford's opinion on July 3, 1795, and warned Jay that any sale of Indian

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land without the participation and approval of the federal government would be

illegal. SPA-196, 201; G-238, G-289 at 1.

On July 13, 1795, Governor Jay responded to Pickering, questioning

whether the NIA was consistent with the "business" the State was negotiating with

the tribes of Indians. Although Jay had been Chief Justice when the NIA was

passed in 1790 and re-enacted in 1793, Jay stated that the applicability of federal

law was a matter upon which he would "forbear officially to consider and decide."

G-238. Jay did not state that he would forbear deciding whether the NIA was

constitutional, as Appellants claim. AB-28. Appellants also state that Jay

remarkably anticipated their arguments and, in their words, "raised legitimate

questions regarding whether the NIA could be applied to override New York's

authority to enter into a Treaty for lands that had been ceded to the State and then

set aside under a limited use and occupancy." AB-197. Jay did no such thing. He

merely observed that the State's Act of April 9, 1795 appointing the

Commissioners, made no mention of the federal law, which is not surprising since

it was enacted in disregard of such law, and that the arrangements for the treaties

had been made before he took office. SPA-196-97; G-238 at 1-2. Most clearly,

Governor Jay was well aware of the strictures of the NIA because, several days

later, he solicited federal commissioners for a treaty with the St. Regis Indians --

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even while New York State-appointed commissioners proceeded in defiance of

federal law at Cayuga Ferry. SPA-197, 201; S-740 at 1-2; T-3920-22.12

In the 1795 negotiations, the State chose to ignore the Cayuga Lake faction

-- the Cayugas actually residing on the Claim Area -- and treated with the Buffalo

Creek Cayugas, T-2994-96, despite the State's promise to the Cayuga Lake faction

that they would keep their lands in "peaceable possession" and that their lands

would not be sold without their permission. SPA-203; G-298 at 2; T-5073. As the

State's expert admitted, the State treated "with whoever showed up." T-4959.

At the Cayuga Ferry treaty site, Chapin requested that the commissioners

provide him with a copy of the State law authorizing them to hold the treaty, but no

copy was given to him. Chapin proceeded to ask Schuyler whether he considered

the treaty in compliance with the NIA. Schuyler's response revealed that he

continued to consider State law preeminent: "He made very little reply by saying it

was well where it would correspond with that of an Individual state." SPA-194-95;

G-269 at 1-2, G-363 at 469; T-5219-22. Chapin advised Pickering that because he

had no special directions from the federal government, he attended the treaty as a

12 It is remarkable that appellants readily assume that the Cayugas received word of President Washington's explanation of the NIA to the Senecas in 1790 because some Cayugas lived among the Senecas, AB-19-20, but are prepared to doubt that Governor Clinton and former Chief Justice Jay were aware of the Act and its requirements. AB-24, 28.

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"private individual" and had been "cautious" in leaving no impression he was

attending on behalf of the United States. SPA-195, G-269 at 203.13

The Buffalo Creek Cayugas proposed granting the State a twenty-two year

lease, rather then ceding all of their land forever. S-106; T-4724. General

Schuyler responded falsely that the commissioners did not have the authority to

enter into a lease. T-2992, 4104. However, the Act broadly authorized the

commissioners "To make such arrangements . . . relative to the lands appropriated

to their use as may tend to promote the interest of the said Indians. . ." and

expressly arranged for leases to certain settlers. G-25 at 614; T-3911, 3950. In

this respect, the language of the 1795 Act differed sharply from the 1793 and 1794

Acts (G-498 and N-57) which only permitted an outright purchase of the Claim

Area by quitclaim or "in fee." Not surprisingly, Appellants make no mention of

the 1793 and 1794 Acts.

Schuyler also falsely advised the Cayugas that no one would be willing to

enter into a lease of twenty-two years because they would not want to invest the

time and resources in developing land only to have it revert at the end of the term.

T-3950, 4340. Significantly, Schuyler, at the time, was leasing his own lands near 13 The district court assumed, for purposes of summary judgment, that Chapin and Joseph Parrish, a federally-employed interpreter, attended as federal treaty commissioners. Their presence, however, was insufficient as a matter of law to constitute federal ratification of the treaty under the NIA which required the consent of the United States by way of a "treaty or convention entered into pursuant to the Constitution." SPA-544.

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Saratoga for twenty-one year leases, N-52 at 479; T-4104-05, 4340-41, 4344 and

Richardson had attempted to enter into a twenty-year lease with the Cayugas for

the very land at issue. T-5209.

Schuyler also saw to it that alcohol was provided to the Cayugas at this

treaty, as it had been at the Albany treaty. T-3950-51, 4293. He suggested that

alcohol should be dispensed with moderation, but added that it would be available

when they were in council and for the Cayugas "to take to [their] encampment."

SPA-208; S-80 at 5-6; T-4376.

As reflected in his journal and account book, Schuyler made gratuitous cash

payments of $10.0014 to each of four Cayugas, including Fish Carrier, paid the

translator and interpreter and purchased various items from the impoverished

Cayugas. N-46, S-472; T-3951, 4302-05.

Schuyler also invited William Weston, a British engineer and one of the

world's experts on canal building, to attend the treaty. T-3886-87, 3910. Weston

played no role at the treaty, but was apparently present because of Schuyler's canal

scheme. In fact, the State had already trespassed on Oneida lands to start digging

the canal even before the 1795 treaties were completed. N-22 at 343; T-5188.

14 Utilizing the Cayugas' economic expert's present worth factor, each of the payments is equivalent to approximately $60,000 in today's dollars, justifying the conclusion of the Cayugas' historian that these payments were bribes. N-46; S-472; T-3951, 4302-05.

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Several of the Cayugas and their allies spoke against the State's sharp

practices and use of liquor. Captain Key accused the State of stealing their lands at

the Treaty of Albany, calling Governor Clinton "a great cheat":

The Reser[vation] was too small. You thought it enough for us being children -- you cheated us in the survey -- the surveyor thinks he is a great man, but he is a great cheat.

G-298 at 1; T-4995. Captain Key complained that Schuyler had bought a keg of

rum to the treaty: "We have Water enough in the Lake -- Let us have clear spirits."

G-298 at 3; T-4388.

A Seneca leader, Red Jacket, complained that the negotiations were not

being conducted in accordance with the Great Law:

[Y]ou did not do right in not directing the treaty to be held with the [Iroquois] Confederacy. . . .

S-106 at 7.

Significantly, the Cayugas' speeches indicate they did not understand that

they were selling their lands. Thus, Hanging Face referred to the Treaty as giving

the State "a lease for ever." SPA-209; S-106 at 4. Indeed, as the contemporary

representatives of the Cayugas testified, the Cayugas had no concept of land

ownership comparable to that of European legalities. Rather, the Cayugas believed

that all land is borrowed from Mother Earth for the purpose of preserving it for

future generations. T-4415, 4483. The State's historian similarly testified that the

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Cayugas had no concept of title ownership because they believe all lands are

temporarily borrowed from the Creator. T-5228.

Although Governor Jay complied with the NIA in subsequent treaties with

other Indian Nations, SPA-224-25; N-16 at 249-51, N-61 at 24; T-3923-24, there

was no authorized federal authority present at the 1795 Treaty, and the treaty was

never ratified by Congress. SPA-195, 197; T-3479. It was signed by only one

representative of one faction of the Cayugas, who signed with an "X". SPA-689;

G-427.

Several weeks after the treaty, on September 7, 1795, there was

correspondence between Chapin, Jr. and Secretary Pickering, relating that a group

of Cayugas complained that their lands had been sold out from under them by

unauthorized Indians, despite the fact that their lands had been confirmed to them

by "treaty after treaty." N-14; A-1027; T-3899-3900, 4027, 4322-23. The

complaining Cayugas asserted that they were the principal chiefs of the Cayuga

Nation and carried four strips of black and white wampum, confirming their status.

T-3897, 3902-03.

In November 1796, the State sold the Cayuga reservation lands at auction for

approximately $300,000. S-113, 114, N-47, 48. Numerous Schuyler investors,

land speculators and surveyors profited from the sale of the reservation and the

economic development of the surrounding lands. T-3913-14. State Indian

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Commissioner Richardson bid for and received three lots in addition to his 200

acre preemption. His lakefront lots had access to water transportation. T-5439.

Commissioner Brooks obtained six lots, or 1464 acres, and Commissioner Cantine

received ten lots, or 2400 acres. In addition, Jasper Parrish, the interpreter at

Cayuga Ferry purchased lots at the auction (T-3915), as did the engineers who had

surveyed the land for the State. T-3000.

The lots sold at auction for an average of $4.50 (36 shillings) per acre --

more than double the anticipated profit built into the statute, and nine times the

$.50/acre paid to the Cayugas. SPA-218.

By 1801, lands from the former reservation sold for $6.25 per acre. T-3952.

The State was well aware of the potential value of the Claim Area as early as 1794,

when it evaluated the adjacent areas of the New Military Tract and noted the

particularly high value of the lands at Cayuga Lake. T-2999.

In addition to the treaty with the St. Regis in 1795, while Jay was Governor,

the State entered into treaties with the Oneida Nation in 1798 (under Jay) and 1802

(after Clinton was re-elected Governor). The court found that these treaties

demonstrated the State's awareness of the requirements of the NIA. SPA-224-25;

N-16 at 249-51; N-61 at 24; N-17 at 256-57; T-3923.

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12. The 1807 Treaty

The NIA was re-enacted in 1796, SPA-641-47, in 1799, SPA-648-55, and in

1802, SPA-656-65. On February 26, 1807, while the 1802 Act was in effect,

SPA-569, New York purchased two of the three small lots remaining to the

Cayugas after the 1795 Treaty for a payment of $4,800, representing $1.50 per

acre, SPA-227; S-50 at 1-3, although nearby lands had sold for $6.25 per acre six

years earlier. N-24; T-3009, 3952, 4145.15 The lots were appraised the same year

at $14,899.41. SPA-227; G-374 at 19. The Cayugas were now "landless" and

"dispersed from their homeland." T-3009-10.

As with the 1795 Cayuga Ferry treaty, no federal commissioners were

present in an official capacity, and the treaty was never ratified or approved by

Congress. SPA-227-28.

13. The Cayugas' Efforts To Seek Redress

As previously set forth, the Cayuga chiefs complained to federal authorities

within weeks of the 1795 Treaty that their lands had been sold out from them by

Indians unauthorized to treat on behalf of the Nation and in disregard of the

guarantee of a homeland in "treaty after treaty." N-14; T-3899-3900, 4027,

4322-23.

15 In 1841, the State purchased the square mile lot which had been reserved for Fish Carrier in the 1789 Treaty. G-362 at 66.

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In 1831, the Cayugas entered into one of several agreements with the State

attempting to secure continued payment of the annuities due them under the 1789

and 1795 "treaties." T-3014-18.

As a result of the Cayugas' homeless condition, in 1847, Dr. Peter Wilson, "a

well-educated Grand Sachem of the Six Nations," G-600 at 6, sought creation of a

Cayuga reservation at an old Cayuga hill-top fortress in Auburn, N.Y. This effort

was rebuffed, and the site was turned into a non-Indian cemetery, due in part to

"much popular prejudice against the Cayuga." G-369 at 87-88; T-3023-25.

In 1853, Dr. Wilson presented a memorial to the New York Legislature

seeking the $247,000 difference between the amount the State received for the sale

of Cayuga lands in 1795 and the amount paid the Cayugas by the State. SPA-230;

S-631. Although the Legislature accepted the memorial, it failed to appropriate

any funds or to provide the Cayugas with any land. T-3037-39.

Dr. Wilson presented a nearly identical memorial to the State Legislature in

1861. SPA-230; G-460. In response, the Legislature acknowledged that New

York had realized "a large profit from the [1795] transaction" and had

"encourag[ed] the Indians to emigrate to the then far west." Without financial

resources, the State report continued, "it may well be feared that the [Cayuga]

nation will ere long become extinct." G-464 at 2-3. Despite the recommendation

of the State Senate's Committee on Indian Affairs that the Cayugas should be

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further compensated for the sale of their lands because, in part, the State had

appropriated large sums to other Indian tribes "upon precisely similar grounds,"

G-464 at 3; G-445, Ex. 5 at 2, the State Legislature provided the Cayugas with no

relief. SPA-230-31; G-464 at 3.

Between 1906 and 1910, the Cayugas advanced several more memorials and

petitions, seeking additional compensation from the State in the approximate

amount of $247,000, representing the profit that the State had realized from the

1795 transaction. SPA-231; G-445. The State Attorney General issued an opinion

concluding that the Cayugas' claim "surviv[ed] any lapse of time," but was a claim

over "which no court had jurisdiction." SPA-231; S-635 at 2. The State Board of

Land Commissioners appointed a special investigator, Joseph Lawson, who

recommended a settlement and concluded "that the annuity now received by . . .

[the] Cayuga nation . . . is not an equitable, just and fair annuity, in view of the

large profits made by the State . . . on the purchase and sale of lands formerly

belonging to [the] Cayuga Nation." SPA-219; G-374 at 77. Through a variety of

procedural mechanisms, the Governor, the Attorney General and the

Commissioners of the Land Office effectively stymied the Cayugas' efforts.

T-3041-51, 3970-85.

The Cayugas filed suit against the Commissioners of the Land Office in

1911, and eventually obtained an order of mandamus directing the commissioners

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to negotiate a settlement. SPA-232; G-445 at Ex. 35 at 4-5; T-3051-53. The

Commissioners made interest payments to the Cayugas for approximately five

years, SPA-232, until the New York Attorney General directed that payments be

stopped on his determination they were not properly authorized. T-3054.

In 1930, the Cayugas reluctantly agreed to a settlement proposal that

allocated some of the Cayuga settlement funds to the Seneca Nation. Although

Governor Roosevelt signed such an agreement in 1931, the Senecas refused to

accept it, and it was not until April 22, 1958 that another settlement agreement

between the New York Cayugas and the State was executed. SPA-232; A-1966;

G-445 at Ex. 5; T-3054-55.

In 1951, the Tribe brought an action before the ICC, seeking additional

compensation against the United States based upon its failure to protect the

Cayugas' interests with respect to the 1795 and 1807 transactions with the State of

New York. Because the Commission never had jurisdiction to hear claims against

any party other than the U.S. Government, no relief was sought against the State or

any other party. SPA-558. The Tribe and the federal government settled the case

for $70,000 in 1978. A-916-32, 1004. The Nation did not participate in the

settlement.

Until the Supreme Court's 1974 landmark decision in Oneida II, Indian land

claims could not be brought in federal courts. SPA-232. They have never been

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permitted in New York State courts, absent specific legislative authorization,

which was rarely, if ever, granted. Johnson v. Long Island Railroad Co., 162 N.Y.

462, 467-68 (1900).

Immediately after the Supreme Court's 1974 Oneida decision, the Nation

retained counsel to pursue its claim. During the next few years, they researched

the case and negotiated with the State, and in 1979 they entered into a formal

settlement agreement. Any such settlement in which an Indian tribe agrees to

relinquish any part of a land claim requires Congressional approval under the NIA.

Here, the settlement was derailed by a local Congressman, through whose efforts

in 1980, the House of Representatives defeated H.R. 6631 (A-318-32), the bill

authorizing the settlement, by 23 votes. This case was filed by the Nation a few

months later.

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SUMMARY OF ARGUMENT

A. Court Findings

After the Phase II non-jury trial, the district court made findings: (1) that the

State did not act in good faith in its acquisition of the Cayugas' land; and (2) that

the Cayugas did not unreasonably delay in bringing this action and are thus not

guilty of laches. The underlying facts justifying these findings are based upon

substantial evidence, but are largely ignored and not contested by appellants. They

may not be set aside under Rule 52, F. R. Civ. P., unless clearly erroneous, which

they clearly are not.

B. Liability Issues

For almost thirty years, since Oneida II was decided by the Supreme Court

in 1974, the State of New York has been seeking to convince a court -- any court --

that its land transactions with the Oneida, Cayuga and other member Nations of the

Iroquois Confederacy, made during the early years of our history, did not violate

the requirements of the NIA. To date, these efforts have been wholly unsuccessful.

No court, ever, has accepted any one of New York’s legal theories excusing its

unlawful conduct.

But the State is nothing if not persistent. After each defeat, the State brushes

itself off, repackages its arguments in a slightly different format, and goes forward

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to present those arguments, now slightly modified, to the next court. That is

precisely what is happening in this appeal.

Appellants assert eight points in which the trial court allegedly made legal

errors justifying either summary judgment in their favor or, alternatively, remand

to the district court on the liability phase of the case. The applicable law fails to

support any of these contentions.

Without conducting an evidentiary hearing, the trial court correctly found

that the Cayugas are "tribes of Indians" within the meaning of the NIA, and the

descendants of the historical Cayugas. In so ruling, the court properly gave weight

to the fact that, as a matter of law, the Cayugas are "federally recognized Indian

tribes" for all federal purposes. Uncontestable evidence to confirm this

determination was introduced at subsequent proceedings, including documentation

introduced by the State at the jury trial that the Nation and the Tribe have

continuously been paid annuities by the State as the same Cayugas who ceded their

lands to the State.

Appellants argue that the district court improperly rejected their affirmative

defense of abandonment. However, the law is clear that the "recognized title" held

by the Cayugas under the Treaty of Canandaigua creates a federally-protected

interest in the land that can only be terminated by Congress, and cannot, as a

matter of law, be voluntarily abandoned.

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Appellants argue that the lower court failed to find that the United States

ratified the 1789 and 1807 Treaties. The district court, however, was correct in

concluding that these Treaties were not made in compliance with the NIA and that

the federal government has never ratified them.

Appellants argue that Cayugas’ NIA claim should have been barred under

the affirmative defense of election of remedies. However, the law is clear that

(a) there is no contemporary federal doctrine of election of remedies absent express

federal authorization, and there is no such authorization here; and, (b) in any event,

the Cayugas did not have any remedy and therefore could not exercise an election

of valid remedies.

Appellants argue that the district court incorrectly rejected their affirmative

defense of laches. However, (a) laches does not bar an Indian land claim case filed

within the applicable federal statute of limitations; and, (b) in any event, after a

lengthy trial of the applicable facts, the court made findings that the Cayugas were

not guilty of laches, and these findings are not clearly erroneous under Rule 52,

F. R. Civ. P.

Appellants argue that the district court erred in finding that the NIA applied

to the State. However, the plain language of the NIA and this Court’s prior

analysis of the issue demonstrate with absolute clarity that the NIA applies to the

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original thirteen states, and prohibited the State’s acquisition of Cayuga land unless

done in compliance with that statute.

Appellants argue that the trial court incorrectly failed to find that the

Eleventh Amendment completely barred the Cayugas’ claims against the State.

However, this Court has already determined that the Eleventh Amendment does

not constitute such a bar.

Appellants argue that the lower court improperly held that the Cayugas had a

private right of action under the NIA. However, this Court has already determined

that the NIA does, as a matter of law, provide a private right of action and

appellants’ alleged "intervening Supreme Court precedent" requires no different

result.

The district court devoted more than eleven years to a thoughtful and

comprehensive analysis of these issues before granting the Cayugas’ motion for

summary judgment and finding that the 1795 and 1807 Treaties were made in

violation of the NIA. Appellants have offered no persuasive argument that would

warrant this Court’s reversal of any of those decisions.

C. Remedy Issues

Having determined that the State's acquisition of the Claim Area in 1795 and

1807 was illegal and a nullity, the law is clear that the remedy which must be

awarded is actual ejectment, restoring the Cayugas to their land. In addition, the

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Cayugas must be awarded mesne profits, the value of the fair use and occupancy of

the Claim Area for each of the 204 years of dispossession, plus prejudgment

interest, compounded at the risk-free interest rate applicable for each year.

The Cayugas cross-appeal against the State, and appeal by permission

pursuant to 28 USC §1292(b) against the non-state defendants, from the district

court's denial of ejectment as against all defendants. It was erroneous for the court

to have undertaken a weighing of equities to determine if ejectment should be

granted because such an analysis is applicable only to an equitable action to enjoin

a trespass, not to a legal action for ejectment. Even if a balancing of equities were

required, the court's analysis of the pertinent factors was erroneous and should still

have resulted in an order of ejectment, most emphatically with respect to State

lands.

The court correctly determined that the State, as the original wrongdoer,

must be held responsible for all use and occupancy damages. Accordingly, it was

appropriate for the court to conduct a trial solely against the State.

In its decision denying ejectment, the court ruled that as a substitute for

ejectment the Cayugas would be awarded the fair market value of the Claim Area.

This, the court stated, would provide them with the means to repurchase their

homeland from willing sellers and reestablish their culture. In addition, they were

to be awarded mesne profits.

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The State, however, promoted numerous arguments to prevent the jury from

awarding complete relief to the Cayugas. The court properly rejected some of

these arguments, but adopted others which made it impossible for the jury to return

an award even remotely large enough to act as a fair substitute for ejectment, or to

provide appropriate mesne profits. In addition, the court erroneously denied the

Cayugas' motion to move the trial to a venue where an unbiased jury, untainted by

pre-trial publicity, could be empanelled.

Thus, the court correctly denied the State's argument that the court's denial

of ejectment somehow implied that value was to be determined as at the time of

taking. Similarly, the court denied the State's attempt to limit use and occupancy

damages under a New York statute to six years before the case was filed -- as if the

State can limit its damages in a federal court by its own legislative act. In

addition, the State was correctly not permitted to attempt to diminish its damages

by attempting to prove equitable defenses to the jury, such as good faith and

laches.

The court erroneously required that the Claim Area be valued as

unimproved, but with infrastructure in place, and it was improper to allow the jury

to determine the legal issue of whether the land should be valued as one single

parcel of largely vacant land as it existed in 1795, or as the sum of subdivided

parcels as it exists today (still without improvements). The State effectively

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argued the former to the jury, which returned an award for the value of the land

which bears little relationship to its actual value, and would clearly not enable the

Cayugas to purchase much land in the Claim Area. In addition, the Cayugas were

prejudiced by the court's erroneous rulings: excluding their real estate expert who

utilized traditional appraisal methods of valuation, and who was prepared to testify

concerning the value of minerals and natural resources removed from Cayuga land;

allowing completely baseless valuation testimony from the State's expert;

excluding members of the Nation and Tribe from testifying to the value and

importance of their land in their culture; excluding the testimony of an Assistant

Secretary of the Interior as to the Cayugas loss of federal benefits; and instructing

the jury to credit the State with the value of payments made to the Cayugas under

the illegal agreements.

The Cayugas' cross-appeal from these erroneous rulings, however, is

conditional, to be considered only in the event the court orders a new trial, or

materially reduces the judgment. Otherwise, the Cayugas prefer to hasten the day

when this litigation finally ends, than to prosecute a new trial.

At the Phase II non-jury trial, the court was clearly correct in determining

that the State had failed to prove that it had acted in good faith in acquiring the

Cayugas' Claim Area, and thus denying the State's effort to avoid prejudgment

interest. Indeed, the evidence of the State's bad faith was overwhelming--as all

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respected historians have concluded. Similarly, the court correctly determined that

the Cayugas were not guilty of laches in failing to file this case at an earlier time --

no such case could have been filed until the Supreme Court's decision in Oneida

VI, after which the Cayugas acted diligently. In addition, the court properly

rejected the State's frivolous effort to restructure the jury verdict so that the

Cayugas would owe the State money, which the State would magnanimously

forgive.

The court was clearly correct in adopting the method for calculating

prejudgment interest utilized by both the Cayugas' and the United States' experts.

The State offered no real alternative, merely specious objections to the starting

date, and meaningless calculations not based on any theory whatsoever except that

they resulted in practically no award of prejudgment interest.

The Cayugas, however, cross-appeal from the court's adoption of the interest

rates selected by the United States' expert, rather than those utilized by the

Cayugas' distinguished expert. The United States' expert conceded that the

Cayugas' expert utilized the "appropriate" rates, while he followed counsel's

instructions and used the lowest rate found during each year. In addition, the

Cayugas cross-appeal from the court's arbitrary reduction of the United States'

prejudgment calculation by 60%. None of the reasons given by the court justifies

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any reduction. These rulings were an abuse of the court's discretion. Accordingly,

full prejudgment interest in the amount of $1.75 billion should have been awarded.

Finally, it was error for the court to arbitrarily deny prejudgment interest on

the value of the land from the date of the jury verdict to the date of the entry of

judgment, almost two years later, and to similarly deny prejudgment interest from

the date of the expert witness' calculation through the entry of judgment.

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ARGUMENT: COURT FINDINGS

POINT I

THE DISTRICT COURT'S FACTUAL FINDINGS -- (1) THAT THE STATE DID NOT ACT IN GOOD FAITH AND

(2) THE CAYUGAS DID NOT UNREASONABLY DELAY BRINGING THIS ACTION -- ARE NOT CLEARLY ERRONEOUS

A. Rule 52 And Standard Of Review

The State's reference to the standards governing the trial court's findings of

fact is contained in a single clause buried deep in its brief: "The court's findings of

fact are reviewed for clear error. . . ." AB-180. The State discusses neither the

court's factual findings under the standards governing Rule 52, Fed. R. Civ. P., nor

the deference this Court gives to such findings. Most significantly, the State fails

to address the significance of the court's factual findings on all of their arguments

based upon their contentions that the State acted in good faith and that the Cayugas

unreasonably delayed commencing this action. In addition, the district court's

findings also fully apply to the Cayugas' cross-appeal from the denial of the

remedy of ejectment, particularly with respect to State-owned lands. See, Point X,

infra.

Pursuant to the express terms of Rule 52(a), findings of fact by a trial court,

"whether based on oral or documentary evidence, shall not be set aside unless

clearly erroneous, and due regard shall be given to the opportunity of the trial court

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to judge of the credibility of the witnesses." As stated in Zenith Radio Corp. v.

Hazeltine Research, Inc., 395 U.S. 100, 123 (1969): "appellate courts must

constantly have in mind that their function is not to decide factual issues de novo."

Accord: Davis v. New York City Housing Authority, 278 F.3d 64, 78-79 (2d Cir.),

cert. denied, 536 U.S. 904 (2002).

This standard applies to all factual determinations made by a trial court after

an evidentiary hearing. Marine Transport Lines, Inc. v. International Organization

of Masters, Mates & Pilots, 878 F.2d 41, 44-45 (2d Cir. 1989), cert. denied, 493

U.S. 1022 (1990) (applying clearly erroneous standard under Rule 52(a) to issue

initially raised on summary judgment); Waganer v. Sea-Land Service, Inc., 486

F.2d 955, 960 (5th Cir. 1973). It thus applies to the determination of facts

consistent with an earlier grant of summary judgment on other theories, as in this

case. In Boulé v. Hutton, 328 F.3d 84 (2d Cir. 2003), this Court recently affirmed

the grant of summary judgment on the issue of falsity of statements in a letter

based on the district court's subsequent factual finding at a bench trial that the

plaintiffs had failed to carry their burden of proving falsity.

A trial court's findings of fact after a bench trial are uniformly afforded a

high degree of deference and will not be reversed unless clearly erroneous. Boulé

v. Hutton, supra; Hirschfeld v. Spanakos, 104 F.3d 16, 19 (2d Cir. 1997); McNeil-

P.C.C. Inc. v. Bristol-Myers Squibb Co., 938 F.2d 1544, 1550 (2d Cir. 1991); Avis

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Rent A Car Sys. Inc. v. Hertz Corp., 782 F.2d 381, 384 (2d Cir. 1986). See also,

S.C. Johnson & Son, Inc. v. Clorox Co., 241 F.3d 232, 238 (2d Cir. 2001).

As the Supreme Court explained in Anderson v. Bessemer City:

[i]f the district court's account of the evidence is plausible in light of the record viewed in its entirety, the court of appeals may not reverse it even though convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently. Where there are two permissible views of the evidence, the factfinder's choice between them cannot be clearly erroneous.

470 U.S. 564, 573-74 (1985). Accord: Metzen v. U.S., 19 F.3d 795, 798 (2d Cir.

1994); McNeil-P.C.C., Inc. v. Bristol-Myers Squibb Co., 938 F.2d at 1550.

B. The Court's Factual FindingsWhich The State Ignores

1. The Court's Finding That The State Did Not Act In Good Faith

The State's efforts to avoid and ignore the district court's Rule 52 factual

findings are particularly remarkable because the court decided practically every

controversial fact in its favor, SPA-149, 163-64, 172, 175-77, 189-90, 200-02,

210-15. Only when confronted with crystal-clear evidence of the State's lack of

good faith did it fail to side with the State. The court even omitted from its lengthy

discussion of the historical facts uncontroverted historical documentary evidence

of the State's motive and intent to obtain Indian land for a fraction of its value to

further the State's economic expansion. E.g., N-22 at 334; N-51 at 403-05; G-211

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at 52; G-228 at 266; G-203 at 167. Nevertheless, the court concluded that there

was "more than enough proof in the record, however, to support a finding that in

several critical ways the State of New York did exhibit a lack of good faith in its

dealings with the Cayuga[s]. . . ." SPA-221.

Such proof included: (a) the State's "brazen disregard" of the U.S.

Constitution when it entered into a treaty with the Cayugas in 1789 (SPA-221);

(b) the State's proceeding with the 1795 Treaty despite the fact that the State

Council of Revision had vetoed the Act authorizing the purchase because it was

not in the best interests of the Indians as it purported to be (SPA-221-23); (c) the

State's built-in profit and the inadequate consideration to the Cayugas inherent in

the authorizing Act and the Treaty (SPA-223); and, (d) the State's awareness and

"calculated disregard" of the NIA, when it entered into the Treaty. SPA-224.

Similarly, the State was clearly aware of the NIA when it entered into the 1807

Treaty, again for inadequate consideration. SPA-228-29. This Court issued a

similar summary of the State's abuse of the Oneidas during a 1795 transaction

conducted under the same authorizing State Act that led to the 1795 Treaty with

the Cayugas. Oneida V, 719 F.2d at 529.

Despite these findings, the State continues to assert that it acted in good faith

before, during and after the 1795 and 1807 Treaties, AB-2, 11, 172, 175, 178, 185,

188, 191-200, 229, 237, 238, and that because of its good faith the Cayugas'

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damages and interest should have been reduced and subject to an offset for public

infrastructure improvements. AB-188, 205, 233-34, 237-38. The district court's

specific factual findings negate these claims.

With respect to the 1795 Act, the district court unequivocally found that the

State did not act in good faith:

[O]ne of the most flagrant examples of the State's failure to act in good faith arises in connection with the 1795 Treaty itself; that was the State's passage in the first place of the 1795 Act, which authorized it to proceed with treaty making to obtain lands from three member Nations of the Iroquois Confederacy, including the Cayuga. As should be readily apparent by now, in this court's opinion, that Act was nothing more than a transparent attempt on the State's part to generate revenue at the expense, both economically and otherwise, of the Cayuga. The State's passage of this Act is all the more disconcerting given that the Council of Revision, of which Governor Clinton was a member, vetoed this Act because, among other reasons, "it was improper to become a law since it was not in the best interest of the Indians[.]" See Gov. exh. 363 at 464 (internal quotation marks and footnote omitted)(emphasis added). The Council further reasoned that the 1795 Act "did not live up to the promises made by both houses of the legislature in concurrent resolution" the preceding year. See id.

SPA-222.

* * *

Given that the terms of the 1795 Act were so patently disadvantageous to the Indian's best interests, the Act's title, 'for the better support' of the Indians is clearly a misnomer. The terms of the Act itself demonstrate the State's obvious profit motive -- a profit which was to be

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had at the expense of the Indians. Thus, if the State did not exhibit bad faith in overriding the Council's veto of the 1795 Act, the State's motives were highly questionable. As Dr. Graymont put it so well, '[t]he members of the [State] [L]egislature thus proved themselves to be even more covetous of securing Indian lands at bargain rates than was Governor Clinton.' See Gov. exh. 363 at 465 (footnote omitted); and T-At 2977. It appears that the State, if not through Governor Clinton, then surely through the Legislature, was more interested in its own monetary gain than it was in providing 'better support' to the Cayuga and other Iroquois Nations. Bluntly put, the State cannot be said to have acted in good faith with respect to the Cayuga when it forged ahead with the 1795 Act, putting its own financial gain above all else.

SPA-186-87.

* * *

The fact that the 1795 Act authorized the State to purchase the Cayuga lands at a profit, coupled with the fact that the State realized even a greater profit than anticipated under that Act, readily convinces this court that the State did not act in a manner even approaching good faith. Not only did the State pass this improvident Act in the first place (and in so doing overrode the Council of Revision's soundly reasoned veto), but it then proceeded to enter into the 1795 Cayuga Ferry Treaty under the authority of that same Act.

SPA-216-17.

* * *

As to the 1795 Cayuga Ferry Treaty itself, the State also did not act in good faith either as to its sale of the former Cayuga lands thereunder, or as to the consideration which it paid for those lands. Because the 1795 Act provided for a sizeable profit to the State, the profit

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scheme inherent in that legislation manifests the State's lack of good faith regarding its subsequent sale of the Cayuga's land.

SPA-223.

The State relegates reference to the Council of Revision's veto to a footnote

embedded nearly two hundred pages into its brief. AB-193. The State does not

discuss the court's factual findings, rather it engages in rank speculation regarding

the motives for the legislature's overriding the Council's veto and the Council's

"apparent" subsequent failure to object to the Act authorizing the Treaty's

ratification. Id. The State, however, did not even offer evidence that members of

the Council did not object to the ratification.

The State refers to the difference between what it paid the Cayugas for the

land and what it received at auction as a mere "discrepancy", AB-192, based in part

on its contention that it purchased only the Cayuga's "right of occupancy," but sold

the land at fee simple. See, Point III, infra. Without citation to the factual

historical record, the State contends that the differential resulted from the fact that

the land was sold in subdivided small parcels of land rather than as a single parcel.

AB-192-93. None of these contentions addresses the court's factual findings that

the Treaty and the State's subsequent profit thereon was contrary to the express

provision in the 1795 Act that its purpose was to benefit the Indians.

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The district court also found that the record was replete with references,

including later proceedings before the State Land Board, "to the State's self-serving

profit motive." SPA-223. The court explained:

[T]he Council of Revision was prescient when it vetoed that Act because, among other reasons, essentially that Act was a revenue generating mechanism for a new State anxious to establish and extend itself in the new Republic. See Gov. exh. 375 at 142. Indeed, in a proceeding 114 years after the fact, that is what the State Board of Land Commissioners found; that the State had realized a profit of $247,609.33, or an average price of $4.50 per acre, or $2.50 per acre, more than the statutory minimum. See Gov. exh. 374 at 74-77.

SPA-216.

The State acknowledges that its own Board of Land Commissioners had

concluded that it profiteered in the 1795 Treaty. AB-196. However, it erroneously

claims that the court only considered two documents (G-464 at 2 and G-375

at 141-43), in its findings with respect to the State Board of Land Commissioners,

which documents "contained no evidence that the Committee had reviewed the

historical record or engaged in any appraisal of the land based upon the market

value in 1795 and 1807." AB-196. As the above quotation from the court's

opinion (SPA-216) makes clear, the district court actually cited to the Report of the

Commissioners of the Land Office (G-374), a document ignored entirely by the

State. That Report was made pursuant to Chapter 493 of the Laws of 1907,

A-2087-2091. It stated:

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Your committee has examined the several treaties made by the State with the Cayugas, as well as other treaties made about the same time with the different tribes within the State. We have also examined the different tribes within the State. We have also examined the several Acts of Legislature which were directly related to these treaties and, in addition, the records of the sales of the lands acquired from the Cayugas, which are on file in the office of the Comptroller and the State Engineer.

A-2091. It is clear from the Report, which was actually cited by the court, and

from the authorizing Act, that the Commissioners examined the historical record

and the contemporary market data. As the Land Commissioners concluded, the

Cayugas were owed the sum of $247,609.33, representing the unconscionable

"profits realized by the State of New York from the sale of lands heretofore

belonging to said Nation, and made possible by reason of the superior knowledge,

ability and position of said State in its negotiations with said Cayuga Nation in

consequence of the ignorance, helplessness and dependence of such Nation."

G-374 at 77-78.

The district court also found that between the 1795 and 1807 Treaties, the

State entered into several treaties that fully complied with the NIA. SPA-224-26:

[T]he record firmly establishes that the State entered into at least two, perhaps three separate treaties for cessions of Indian lands prior to its 1807 Treaty with the Cayuga; and at least two of those treaties fully complied with the Nonintercourse Act. The foregoing demonstrates the State's awareness, not just generally but specifically, as to the proper procedures to be followed under the

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Nonintercourse Act, yet, the State again, in 1807, failed to follow that procedure with respect to the Cayuga.

SPA-225. In utter disregard of the court's factual findings, the State, nevertheless,

asserts: "There is nothing in the record to establish that between 1795 and 1807

New York knew that its Indian Treaties required approval pursuant to Article II of

the Constitution." AB-198.

Relying on an earlier statement in the district court opinion,16 the State

claims that the court found its officials were not aware of "a specific statutory

duty" imposed by the NIA, and that it found "the State was not motivated by a

deliberate intent to cheat or defraud the Cayugas." AB-189. Tellingly, however,

appellants omit the court's revisiting of this statement and its different conclusion

after considering the totality of the facts:

In its earlier discussion of this factor, the court found that the State had a general awareness of the Nonintercourse Act, but that the record is unclear as to the extent of that awareness, especially as it relates to the 1795 Cayuga Ferry Treaty. The court emphasizes, however, that when it made this finding it did so in isolation. Stepping back and viewing the totality of the evidence in historical context, however, reveals that the State's failure to comply with the Nonintercourse Act, despite its general awareness of the same at the time, was an act which was not wholly innocent, especially given the State's overt profit motive. To conclude, although the court cannot find that the State willfully violated the Nonintercourse Act, there is sufficient evidence in the record to show that

16 SPA-220.

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it acted in calculated disregard of that federal statute; and such calculated disregard is not indicative of good faith.

SPA-223-24.17

The district court found that there was an "abundance of proof

demonstrating that the Cayuga were not adequately compensated" under the 1795

Treaty, SPA-217 (emphasis in original), and that the consideration paid the

Cayugas in 1807 was likewise inadequate "as is evidenced by the fact that the State

bought that land for $.50 an acre, and shortly thereafter it was appraised at

approximately $4.50 an acre." SPA-229.

Contrary to the State's contentions, the court also found that it failed to act in

good faith toward the Cayugas throughout the nearly two centuries after the

Treaties. SPA-232-35. The State argues, however, that it agreed to additional

compensation in 1913, and attempts to blame delay in making payments on

internal disagreements among tribe members between 1919 and 1930. AB-199.

The State ignores the court's finding that such relief only occurred after a hundred

17 The district court rejected the United States' argument that the State's violation of the NIA established its bad faith, SPA-345-46, although that was the conclusion reached by Judge Port in 1981 in Oneida: "the bad faith consisted of the violation of the Non-Intercourse Act by the State of New York," quoted in Judge McCurn's more recent opinion in Oneida XI, 217 F. Supp. 2d at 297. In Cayuga XII, Judge McCurn concluded that the court would not follow Judge Port's conclusion that a statutory violation was bad faith per se because it was made during the liability phase of Oneida. SPA-345. However, Judge McCurn subsequently confirmed that Judge Port's conclusion was made in the damages phase of Oneida. Oneida XI, 217 F. Supp. 2d at 296.

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years of petitioning by the Cayugas, including a writ of mandamus compelling the

State to negotiate. SPA-232. The district court's factual findings utterly belie the

State's contentions:

In arguing that it acted in good faith because eventually the Cayuga received additional compensation from it, the State is ignoring two important points. Assuming arguendo the adequacy of those increased annuity payments, the State is ignoring the length of time it took the Cayuga to finally receive those payments. It did not take the State a few years, or even a few decades to make those payments; it took over 100 years. And while some of that time is understandable given the delay inherent in most political processes, there is evidence in the record that a substantial portion of that delay is attributable to the State, which often times refused to acknowledge its obligations to the Cayuga. See, e.g. Gov. exh. 445, exh. 35 thereto at 4 (Supreme Court State Land Office "wholly neglected failed and refused" to negotiate with the Cayuga as required by State law). The State is also ignoring the fact that the court must, as it has done throughout Phase II of this litigation, view the State's treatment of the Cayuga post-1807, not in isolation, but in the larger context. When that is done, there is simply no basis for finding that the State's actions in those later years were taken in good faith.

SPA-233.18

18 The State also contends that there was no evidence that it acted with animosity toward the Cayugas in its delayed response to the Cayugas' 1853 and 1861 Memorials (AB-199), ignoring the State's 1889 Whipple Report which characterized the Iroquois leadership as "corrupt and vicious," their religious practices as "depraved, immoral and superstitious" and their present condition as "infamously vile and detestable" and "a stain of no small magnitude" on the "fair name of the Empire State." N-61 at 36-38. In the same vein, William F. Sheehan, Chairman of the Ways and Means Committee in the State Assembly and later Lieutenant Governor, who was instrumental in obstructing recompense to the

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The State claims it should have been permitted to offer evidence to the jury

that it paid adequate consideration, AB-194, ignoring the fact that the district court

had already determined in the liability stage that the issue of consideration was

irrelevant to transactions void under the NIA. SPA-557.

Although appellants repeatedly rely on the 1789 Treaty in connection with

their claim that the Cayugas abandoned the Claim Area, see, Point III, infra, they

pay scant attention to the district court's factual finding that the State did not act in

good faith even with respect to that treaty:

There is more than enough proof in the record, however, to support a finding that in several critical ways the State of New York did exhibit a lack of good faith in its dealings with the Cayuga during the relevant time frame. The first such instance occurred in 1789. In July, 1788, the State ratified the U.S. Constitution which explicitly provides: "No State shall enter into any Treaty[.]" U.S. CONST. art. 1, §10 (West 1987)(emphasis added). The Constitution also explicitly grants treaty making power to the U.S. President, "with the Advice and Consent of the Senate[.]" Id. art. 2, §2, cl.2. Given the State's ratification of the U.S. Constitution in 1788, presumptively it should have been aware of those two provisions when it entered into the Treaty of Albany with the Cayuga Lake minority less than a year later, in February 1789. Yet, disregarding that unequivocal constitutional language, the State, not the Federal Government, and not the U.S. President, entered into the 1789 Treaty without the "Advice and Consent of the Senate[.]" See id. The State's brazen disregard of the

Cayugas, succinctly stated: "The only good Indian was a dead one." G-362 at 71; G-448.

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U.S. Constitution significantly undermines its assertion that it acted in good faith as to this 1789 Treaty.

SPA-221.

The State expresses surprise that the court made findings with respect to a

Treaty not involved in the case. It asserts that the 1789 Treaty occurred before the

Constitution took effect and the first NIA was passed, AB-191, ignoring the court's

specific finding that New York had ratified the Constitution in 1788 and was thus

aware of the treaty-making powers reserved to the President and Congress.19

Nevertheless, the State asserts there was nothing in the record to support the court's

finding that it should have known the 1789 Treaty was unconstitutional. AB-191.

2. The Court's Findings That TheCayugas Were Not Guilty Of Laches

Appellants are even more vociferous and repetitive in claiming that the

Cayugas unduly delayed bringing this action. AB-2, 6, 11, 67, 69-70, 145-63, 175,

179-80, 182, 183, 186, 200, 201, 219, 223, 241. Again, the State makes no

reference at all to the fact that the district court made explicit factual findings with

respect to the laches defense:

The record contains considerable proof as to the Cayuga's efforts, beginning in 1853, and continuing right up to the filing of this lawsuit in 1980, to "make their voice heard" with respect to the sales to the State of their homelands in 1795 and 1807.

19 Indeed, the 1789 Treaty was not ratified until June 22, 1790, after March 4, 1789, when the Constitution took effect. SPA-166-67; S-35 at 428-29; T-5372.

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SPA-230. The court detailed certain of the Cayugas' efforts to protect their rights,

SPA-230-32, but did not "go into the minutia" because the records of the Cayugas'

attempts to receive compensation from the State for the past approximately 150

years were "largely undisputed," SPA-230, and on this appeal remain

unchallenged.

Based upon these "undisputed" facts, the district court found that the

Cayugas had not unduly delayed commencing this action:

The court cannot find that the Cayugas are responsible for any delay in bringing this action. The Cayugas' efforts to seek redress from the State for the loss of their homeland, as recounted above, attest to their perseverance and fortitude.

SPA-236.

Without addressing the explicit factual finding that the Cayugas were not

guilty of laches, appellants contend that laches should be applied to bar the

Cayugas' claim entirely, or to dramatically reduce the Cayugas' award of

prejudgment interest by selecting a later accrual date. AB-2, 6, 145-63, 175,

179-80, 186. The State also argues that the Cayugas' delay warrants a calculation

of damages solely as of the date of the transaction, AB-218-19, and demonstrates

that the jury failed to take into account the Cayugas' duty to mitigate damages.

AB-241.

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By repeatedly ignoring the court's critical factual determination that the

Cayugas were not guilty of laches, the State clearly has given this Court no basis to

substitute its view of the facts for that of the trial judge who heard the expert

witnesses and was thoroughly familiar with the documentary evidence from the

trial and his twenty-two years' experience with this case. See, Anderson v.

Bessemer City, supra, 470 U.S. at 573-74.

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ARGUMENT: LIABILITY ISSUES

POINT II

THE DISTRICT COURT CORRECTLY FOUND THAT THE TRIBAL PLAINTIFFS ARE

"INDIAN TRIBES" WITHIN THE MEANING OF THE NIA

The district court ruled that the Nation and the Tribe were both "Indian

tribes" within the meaning of the NIA and eligible to seek relief under that statute.

In reaching that conclusion, the court gave great weight to the fact that both tribal

plaintiffs are "federally recognized Indian tribes" with governing bodies that are

acknowledged as such by the United States, through the Bureau of Indian Affairs

("BIA") within the Department of the Interior. SPA-554-55.

Contrary to appellants' suggestion, AB-74-75, 83, however, the court had

substantial evidence before it in making this determination of tribal status.

Affidavits submitted by BIA officials attested to the fact that both tribes were

federally recognized; that the Nation was the same tribe with whom the United

States entered into the 1794 Treaty of Canandaigua; that the Tribe was a successor

tribe to the tribe with whom it treated in 1794; and that the United States

maintained government-to-government relations with both tribes. SPA-554. The

United States, not then a party, filed an amicus brief strongly supporting the status

of the Nation and the Tribe as Indian tribes within the meaning of the NIA. Dkt.

201. In addition, the district court noted that both tribal plaintiffs were included on

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the list of federally recognized tribes published periodically in the Federal Register

by the BIA.20

This record was confirmed at the ejectment hearing as well as both the jury

and non-jury trials. In addition, the State's recognition of the Cayugas was aptly

demonstrated by the State's own conduct toward the Cayugas over the last two

hundred years, not the least of which was the continuous payment of an annuity to

the Cayugas under the 1789 and 1795 Treaties. Ejectment T-72; T-4427, 4469;

S-612; A-599-600, 5663.

Appellants, however, argue that the lower court should not have accorded

any weight to the fact of federal recognition. Instead, they contend that under

Golden Hill Paugusset Tribe v. Weicker, 39 F.3d 51 (2d Cir. 1994), the court was

obligated to conduct an evidentiary hearing to determine whether the tribal

plaintiffs met the four-part test for tribal existence enunciated in United States v.

Candelaria, 271 U.S. 432, 442 (1926). AB-72-83.

The court should reject this argument for two reasons. First, Golden Hill,

Candelaria, and the other cases upon which appellants rely, involved

determinations of tribal status of Indian groups that were not federally recognized.

With respect to federally recognized Indian tribes, courts must give significant

20 The district court examined a list published in 1986. Significantly, both the Nation and the Tribe have continued to be included on such lists, including the most recent. See 67 Fed. Reg. 46328 (July 12, 2002).

9874903v5

deference to the fact of federal recognition. Second, appellants' suggestion that

Indian tribes can be federally recognized for some purposes, but not for others, has

been expressly rejected by Congress.

A. The Decision Below Is Consistent With Well-Established Law                  

Under the Constitution, the authority for regulating Indian affairs is granted

to Congress under the Indian Commerce Clause. U.S. Const. art. 1, § 8, cl. 3; see,

Cotton Petroleum Corp. v. New Mexico, 490 U.S. 163, 192 (1989) ("[T]he central

function of the Indian Commerce Clause is to provide Congress with plenary

power to legislate in the field of Indian affairs."). Congress, in turn, has delegated

much of the responsibility for management of Indian affairs to the Executive

branch. 25 U.S.C. §§ 2, 9; 43 U.S.C. § 1457; see, Morton v. Ruiz, 415 U.S. 199,

231 (1974) ("In the area of Indian affairs, the Executive has long been empowered

to promulgate rules and policies, and the power has been given explicitly to the

Secretary [of the Interior] and his delegates at the BIA.").

The recognition of Indian tribal governments is one of the prerogatives of

the legislative and executive branches -- the "political departments" of the federal

government -- to which the judiciary historically grants substantial deference.

Over a century ago, the Supreme Court stated:

[I]t is the rule of the Court to follow the action of the executive and other political departments of the

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government, whose more special duty it is to determine such affairs. If by them certain Indians are recognized as a tribe, this Court must do the same.

United States v. Holliday, 70 U.S. (3 Wall.) 407, 419 (1865). The principle was

subsequently reaffirmed in United States v. Sandoval, 231 U.S. 28, 46 (1913):

in respect of distinctly Indian communities, the questions whether, to what extent, and for what time they shall be recognized and dealt with as dependent tribes…are to be determined by Congress, and not by the courts.

The doctrine that federal courts defer to the legislative and executive

branches of government on questions of federal recognition and tribal status has

been carried forward in an unbroken line of more recent cases involving a wide

variety of statutory and treaty-based issues. Miami Nation of Indians of Indiana v.

U.S. Department of the Interior, 255 F.3d 342, 346-47 (7th Cir. 2001), cert. denied

sub nom., Miami Indians of Indiana v. Norton, 534 U.S. 1129 (2002)

("Recognition is, as we have pointed out, traditionally an executive function" that

may involve questions outside the "cognitive competence" of federal courts);

Western Shoshone Business Council v. Babbitt, 1 F.3d 1052, 1057 (10th Cir. 1993)

("The judiciary has historically deferred to executive and legislative determinations

of tribal recognition."); James v. U.S. Dep't. of Health and Human Services, 824

F.2d 1132, 1137 (D.C. Cir. 1987) ("[I]f the Executive Branch determines that a

tribe of Indians is recognized, that decision must be respected by the Judicial

Branch."); Price v. Hawaii, 764 F.2d 623, 628 (9th Cir. 1985), cert. denied, 474

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U.S. 1055 (1986) ("In the absence of explicit governing statutes or regulations, we

will not intrude on the traditionally executive or legislative prerogative of

recognizing a tribe's existence."); see also, Oneida X, 194 F. Supp. 2d at 119;

Oneida Indian Nation of New York v. State of New York, 520 F. Supp. 1278, 1301

(N.D.N.Y. 1981), aff'd in part and rev'd in part, Oneida IV (whether plaintiff is

proper party under NIA "is to be resolved whenever possible through acceptance of

executive determinations of tribal status.").

As correctly noted by the district court, SPA-555, some courts have

concluded that the issue of tribal recognition requires more than substantial

deference and raises a non-justiciable political question. Kahawaiolaa v. Norton,

222 F. Supp. 2d 1213 (D. Hawaii 2002); Masayesva v. Zah, 792 F. Supp. 1178,

1184-86 (D. Az. 1992); United States v. State of Washington, 384 F. Supp. 312,

401 (W.D. Wash. 1974), aff'd, 520 F.2d 676 (9th Cir. 1975), cert. denied, 423 U.S.

1086 (1976). In this case, because the district court did not adopt that position, the

Court need not reach that issue. Instead, the Court need only conclude that, based

upon the evidence before it, the lower court properly accorded weight to the fact of

federal recognition in determining that the tribal plaintiffs were "Indian tribes"

within the meaning of the NIA.

Appellants argue that the district court should not have given any deference

to the fact of federal recognition. Significantly, every one of the cases cited by

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appellants involves a judicial determination of tribal status with respect to Indian

groups that were not federally recognized, and in which, therefore, the court was

required to make a determination of tribal status without the benefit of a prior

congressional or executive determination.

Appellants contend that the district court was required to conduct such an

evidentiary hearing in this case to determine if the tribal plaintiffs met the four-part

definitional test of a "tribe" under Candelaria. AB-78-82. However, Candelaria

also involved an unrecognized tribe and "applied this definition to bring within the

scope of the Nonintercourse Act a tribe of Indians that did not have a federally

recognized form of government." Catawba Indian Tribe v. South Carolina, 718

F.2d 1291, 1298 (4th Cir. 1983). In the case of a federally recognized tribe, no

court has ever conducted an evidentiary hearing to determine if the federally

recognized tribe is a "tribe" for NIA purposes. Thus, Candelaria is irrelevant with

respect to tribal status under the NIA of federally recognized tribes, such as the

Tribe and the Nation.

Appellants' reliance on Golden Hill Paugussett Tribe, supra, is similarly

misplaced. That case, again, involved a tribe that was not federally recognized,

and the Court concluded that the doctrine of "primary jurisdiction" required that

the district court defer its decision to allow the BIA to complete its pending

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administrative determination of tribal status under 25 C.F.R. Part 83 before the

district court ruled on the tribe's standing to bring an NIA claim.21

Appellants attempt to argue that Golden Hill says that courts should give no

"deference" to BIA determinations of recognition made prior to 1978. AB-79-80.

The case says no such thing. The court used the word "deferral," meaning "delay,"

and simply noted that prior to the adoption of the 1978 regulations, it would have

served no useful purpose for a court to have waited for a BIA determination of

tribal status that might never have been made.

To the extent that appellants rely on Golden Hill for a ruling that any pre-

1978 recognition by the federal government is not entitled to weight, such reliance

is misplaced. Where, as here, there are two centuries of federal recognition of the

plaintiff, and where the State itself has continuously recognized the plaintiffs and

their undisputed predecessors, there is no basis to argue that either Candelaria or

Golden Hill requires the district court to give no weight to the well-established

status of the plaintiffs. Such circumstances were not present in either of those

cases.

21 The regulations contained in 25 C.F.R. Part 83 were promulgated in 1978 and had prospective effect only. They are inapplicable to tribes that were federally recognized prior to 1978. 25 C.F.R. § 83.3(b). The Cayugas have been recognized by the federal government since the making of the Treaty of Canandaigua in 1794. As a result, these regulations have no relevance to this case.

9874903v5

In this respect, Golden Hill is consistent with other NIA cases involving

unrecognized tribes which have noted that federal recognition would be entitled to

substantial weight. Mashpee Tribe v. New Seabury Corp., 592 F.2d 575, 582 (1st

Cir.), cert. denied, 444 U.S. 866 (1979) (federal recognition would be entitled to

substantial weight); Joint Tribal Council of the Passamaquoddy Tribe v. Morton,

528 F.2d 370, 377 (1st Cir. 1975) (federal recognition would be of "great

significance" in determining tribal status under the NIA). Similarly, in Mashpee

Tribe v. Secretary of the Interior, 820 F.2d 480, 484 (1st Cir. 1987), the court

affirmed the denial of tribal status under the NIA because "neither the executive

nor legislative branch of the federal government has recognized the five entities as

tribes" and they did not appear on the BIA's published list of federally recognized

Indian tribes. Thus, nothing in Golden Hill's basic holding is inconsistent with the

district court's analysis or ruling on tribal status.

B. Congress Has Expressly Determined ThatFederally Recognized Indian TribesAre "Tribes" For All Federal Purposes        

Finally, appellants' argument that an Indian tribe can be federally recognized

for some purposes, such as the receipt of federal benefits, but not be a "tribe"

within the meaning of the NIA, has been expressly rejected by Congress.

In the early 1990's, the BIA notified Congress that it intended to begin

differentiating between federally recognized tribes as being either "historic" or

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"created" tribes and that "created" tribes would be deemed to have fewer federal

privileges and immunities than "historic" tribes. Congress responded in 1994 by

adopting section 5(b) of Pub. L. 103-263, codified at 25 U.S.C. § 476(f) and (g).

Those new provisions prohibited the BIA from distinguishing between

federally recognized tribes for any purpose, or from according any tribe greater or

lesser federal privileges and immunities than any other federally recognized tribe.

During floor debate on the measure, its sponsors, the chairman and vice-chairman

of the Senate Indian Affairs Committee, made it clear that Congress would not

permit tribes to be federally recognized selectively for some purposes, but not for

others. According to Senator John McCain:

The recognition of an Indian tribe by the Federal Government is just that -- the recognition that there is a sovereign entity with governmental authority which predates the U.S. Constitution and with which the Federal Government has established formal relations. Over the years, the Federal Government has extended recognition to Indian tribes through treaties, executive orders, a course of dealing, decisions of the Federal courts, acts of Congress and administrative action. Regardless of the method by which recognition was extended, all Indian tribes enjoy the same relationship with the United States and exercise the same inherent authority.

140 Cong. Rec. S 6144, 6146 (daily ed. May 16, 1994). Senator Daniel Inouye, in

a colloquy with Senator McCain, continued:

Our amendment makes it clear that it is and has always been Federal Law and policy that Indian tribes

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recognized by the Federal Government stand on an equal footing to each other and to the Federal Government. That is, each federally recognized Indian tribe has the same governmental status as other federally recognized tribes by virtue of their status as Indian tribes with a government-to-government relationship with the United States. Each federally recognized Indian tribe is entitled to the same privileges and immunities as other federally recognized tribes and has the right to exercise the same inherent and delegated authorities. This is true without regard to the matter in which the Indian tribe became recognized by the United States.

Id. at 6147. The purpose of this legislation, then, was to make it clear that a tribe

could not be "federally recognized" for some purposes but not for others. See also,

25 C.F.R. § 83.2. Yet, this is precisely the position advocated by appellants here,

who argue that these federally recognized tribes might not be "Indian tribes" under

the NIA.

The significance of federal recognition, and the fallacy of appellants'

argument, was acknowledged by Congress a second time in 1994, through the

enactment of Pub. L. 103-454. That statute, codified by 25 U.S.C. §§ 479a and

479a-1, required that the Secretary of the Interior publish a list of federally

recognized Indian tribes in the Federal Register annually. The House Report

accompanying that legislation again made it clear that a federally recognized tribe

is an Indian tribe for all federal purposes:

"Recognized" is more than a simple adjective; it is a legal term of art. It means that the government acknowledges as a matter of law that a particular Native American

9874903v5

group is a tribe by conferring a specific legal status on that group, thus bringing it within Congress' legislative powers. This federal recognition is no minor step. A formal political act, it permanently establishes a government-to-government relationship between the United States and the recognized tribe as a "domestic dependent nation," and imposes on the government a fiduciary trust relationship to the tribe and its members. . . .  In other words, unequivocal federal recognition of tribal status is a prerequisite to receiving the services provided by the Department of the Interior's Bureau of Indian Affairs (BIA), and establishes tribal status for all federal purposes.

H.R. Rep. 103-781, at 2-3 (1994), reprinted in 1994 U.S.C.C.A.N. 3768-69.

(emphasis added).

Because "federal recognition … establishes tribal status for all federal

purposes," the district court was correct in finding that the tribal plaintiffs were

"Indian tribes" within the meaning of the NIA, and appellants' argument to the

contrary must be rejected.

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POINT III

ABANDONMENT IS NOT A VALID DEFENSE TO A NON-INTERCOURSE ACT

CLAIM BASED UPON RECOGNIZED INDIAN TITLE

The district court properly rejected the appellants' affirmative defense of

abandonment as legally insufficient. In a well-reasoned opinion, the court

carefully analyzed the distinction between aboriginal Indian title, which can be lost

through physical abandonment of the property, and recognized or reserved Indian

title, which creates federally-protected interests in land that can only be

extinguished through express Congressional action. SPA-532-41. The court then

went on to find that the 1794 Treaty of Canandaigua had conferred recognized title

on the Cayugas with respect to the Claim Area, (making the question of physical

abandonment irrelevant), and that the State had not been improperly deprived of

any property interest in the land at issue because the State did not have a

compensable interest in the Claim Area at the time of the Treaty of Canandaigua.

SPA-535-39.

A. Appellants’ Analysis Continues To Ignore The Critical Distinction Between Aboriginal And Recognized Indian Title

Although appellants continue to reject the distinction as meaningless,

AB-85-88, the law is clear and well-settled that the availability of an abandonment

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defense with respect to Indian landholdings turns on the question of whether the

lands were held under "aboriginal" or "recognized" title.

In determining whether or not an Indian tribe has a compensable interest in lands, two types of title interest have been recognized. They are: "recognized title" (by treaty, statute or otherwise), and Indian or "aboriginal title," (continual occupancy and use to the exclusion of other tribes or persons.)

Bennett County v. United States, 394 F.2d 8, 11 (8th Cir. 1968). While aboriginal

title derives from actual, historic possession of the property, recognized title is

derived from documentary sources.

Where Congress has by treaty or statute conferred upon the Indians or acknowledged in the Indians the right to permanently occupy and use land, then the Indians have a right or title to that land which has been variously referred to in court decisions as "treaty title", "reservation title", "recognized title" and "acknowledged title."

Miami Tribe of Okla. v. United States, 175 F. Supp. 926, 936 (Ct. Cl. 1959)

(emphasis in original).

Because aboriginal title is based upon continued use and occupancy of the

land, aboriginal title can be voluntarily abandoned. Such is not the case with

recognized title:

Since original Indian title is dependent upon proof of actual, continuous, and exclusive possession, proof of the voluntary abandonment of an area by a tribe constitutes a defense to the aboriginal claim. Original Indian title differs in this respect from Indian title derived from documentary sources such as treaty, statute, or executive

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order that remain valid until clearly and specifically extinguished by Congress.

F. Cohen, Handbook of Federal Indian Law, (1982 ed.) at 492-93 (footnote

omitted); Strong v. United States, 518 F.2d 556, 563 (Ct. Cl.), cert. denied, 423

U.S. 1015 (1975) ("The significance of the recognized title doctrine generally lies

in the fact that a plaintiff successful on this issue need not present proof

demonstrating aboriginal use and occupancy").

The Supreme Court has repeatedly held that recognized title, derived from

formal action by the United States, can only be extinguished through an express

Congressional enactment. United States v. Celestine, 215 U.S. 278, 286 (1909)

("when Congress has once established a reservation, all tracts of land included

within it remain a part of the reservation until separated therefrom by Congress").

More recently, the Court strongly reaffirmed this holding:

The first and governing principle is that only Congress can divest a reservation of its land and diminish its boundaries. Once a block of land is set aside for an Indian reservation and no matter what happens to the title of individual plots within the area, the entire block retains its reservation status until Congress explicitly indicates otherwise.

Solem v. Bartlett, 465 U.S. 463, 470 (1984); accord, Rosebud Sioux Tribe v.

Kneip, 430 U.S. 584, 587-88 (1977); DeCoteau v. District County Court, 420 U.S.

425, 444 (1975); Mattz v. Arnett, 412 U.S. 481, 504-05 (1973); Tee-Hit-Ton

Indians v. United States, 348 U.S. 272, 278-79 (1955). Thus, recognized title

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creates a federally-protected interest in the land that continues to exist, regardless

of a tribe's physical possession of that land, unless that interest is terminated by

Congress.

The judicial development of the "aboriginal" versus "recognized" Indian title

distinction is of relatively recent vintage, beginning in the 1940s following passage

of the ICCA and other special jurisdictional acts authorizing Indian land claims.

See, Northwestern Band of Shoshone Indians v. United States, 324 U.S. 335, 340

(1945); Hynes v. Grimes, 337 U.S. 86, 102 n. 21 (1949); Tee-Hit-Ton Indians v.

United States, supra, 348 U.S. at 278-79; United States v. Sioux Nation of Indians,

448 U.S. 371, 415 and n. 29 (1980).

The cases cited by appellants challenging this doctrine, which date from

1873 to 1930 and which describe a generic "Indian right of occupancy," all pre-

date the modern era of Indian land title analysis and are based on precedents that

"did not consider the scope of Indian title rights … based upon federal treaties …

or other evidence of federal protection." F. Cohen, Handbook of Federal Indian

Law (1982 ed.) at 488. Consequently, the cases cited by appellants neither hold,

nor suggest, that the present day concept of recognized title can be abandoned.

For example, Williams v. City of Chicago, 242 U.S. 434 (1917), found that

under the 1795 Treaty of Greenville, the tribes had nothing more than "the right of

continued occupancy." 242 U.S. at 437. It was not until 42 years after Williams,

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in 1959, that the Court of Claims reviewed that same Treaty using contemporary

analysis and held that the 1795 Treaty had conferred what was by then called

"recognized title" on the tribes. Miami Tribe of Okla., supra, 175 F. Supp. at 936;

accord, Potawatomie Nation of Indians v. United States, 507 F.2d 852, 857 (Ct. Cl.

1974). Significantly, in neither Miami nor Potawatomie did the Court of Claims

discuss, or even cite, the Williams decision, lending further support to the

conclusion that Williams is simply irrelevant to contemporary Indian treaty

analysis. As a result, courts and respected commentators now cite Williams for the

proposition that voluntary abandonment by a tribe is a defense only to a claim for

aboriginal title. Seneca Nation of Indians v. State of New York, 206 F. Supp. 2d

448, 504 n. 31 (W.D.N.Y. 2002); F. Cohen, Handbook of Federal Indian Law,

(1982 Ed.) at 492 and n. 172; Clinton and Hotopp, Judicial Enforcement of the

Federal Restraints on Alienation of Indian Land: The Origins of the Eastern Land

Claims, 31 Me. L. Rev. 17, 71, and n. 283, 81 and n. 345 (1979).22

Appellants' other cases are similarly unavailing. In United States v.

Shoshone Tribe, 304 U.S. 111, 118 (1938), the Supreme Court itself significantly

limited the holding of United States v. Cook, 86 U.S. (19 Wall.) 591 (1873),

22 Two other cases cited by appellants, Buttz v. Northern Pac. R.R., 119 U.S. 55 (1886) and Shore v. Shell Petroleum Corp., 60 F.2d 1 (10th Cir. 1932), also involved a generic “Indian right of occupancy” and are similarly cited by Cohen and by Clinton and Hotopp in the same footnotes as involving the voluntary relinquishment of aboriginal title.

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expressly noting that Cook "did not involve adjudication of the scope of Indian

title to land …." Spalding v. Chandler, 160 U.S. 394 (1896) found that the Indian

right of occupancy had been extinguished by a federal statute. Finally, Indians of

Fort Berthold Reservation v. United States, 71 Ct. Cl. 308 (Ct. Cl. 1930), citing

Williams v. Chicago, supra., merely noted that a generic "Indian right of

occupancy" was dependent upon actual possession, essentially restating the

definition of what is today known as "aboriginal" title.

B. The Cayugas Obtained Recognized Title Under The Treaty of Canandaigua

1. Indian Treaties Should Be Interpreted As The Indians Understood Them              

As the district court correctly noted, special canons of construction apply to

the interpretation of Indian treaties. SPA-540-41 n. 3. Because of the unequal

bargaining position of the parties, and the general lack of sophistication on the part

of the tribes at the times the treaties were made, "it is well established that treaties

should be construed liberally in favor of the Indians," Oneida VI, 470 U.S. at 247;

that ambiguities should be resolved in favor of the tribes, McClanahan v. Arizona

State Tax Commission, 411 U.S. 164, 174 (1973); and, most importantly, that the

treaties are to be interpreted "as the Indians themselves would have understood

them." Minnesota v. Mille Lacs Band of Chippewa Indians, 526 U.S. 172, 199

(1999); Choctaw Nation v. Oklahoma, 397 U.S. 620, 631 (1970).

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This last canon is especially relevant here, where the appellants devote

eleven pages of their brief to analyzing what formal estates in land 21st Century

attorneys can find in the 1789 Treaty and the Treaty of Canandaigua. AB-89-100.

According to the Supreme Court, however, an Indian treaty "must . . . be

construed, not according to the technical meaning of its words to learned lawyers,

but in the sense in which they would naturally be understood by the Indians."

Washington v. Washington State Commercial Passenger Fishing Vessel

Association, 443 U.S. 658, 676 (1979) (quoting Jones v. Meehan, 175 U.S. 1, 11

[1899]). This Court has recently quoted Jones v. Meehan to make it clear that

Indians would not have understood "the modes and forms of creating the various

technical estates" known to American property law. Connecticut v. United States,

228 F.3d 82, 92 (2d Cir. 2000), cert. denied, 532 U.S. 1007 (2001). Thus, this

Court should view with substantial skepticism appellants' technical analyses of the

relevant treaties, and instead interpret their provisions as the Cayugas of the late

1700s would have understood them. Here, testimony based on the oral history of

the Cayugas explained that the Cayugas understood the Treaty of Canandaigua as

guaranteeing their lands reserved in the 1789 Treaty "forever". T-4425-26, 4489,

Ejectment T-44.

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2. The Treaty Of Canandaigua Conferred Recognized Title  

Appellants contend that the 1794 Treaty of Canandaigua could not have

conferred recognized title on the Cayugas because, they suggest, the 1794 Treaty

merely sought to acknowledge what had been reserved to the Cayugas under the

1789 State Treaty, and the 1789 Treaty had extinguished all of the Cayugas'

interest in and to the 64,000-acre Claim Area. AB-90-97. In fact, neither the

relevant language of the treaties nor the cases cited by appellants, support this

argument. Indeed, appellants' interpretation of this important federal undertaking

would render it entirely meaningless.

Precisely the same argument was made by New York in the Oneida

litigation, and recently rejected. The court held that it "simply makes no sense

when consider[ing] the Treaty's words, later treaties, the United States' treatment of

the Oneidas and their lands, and the fact that Defendants later purchased this very

land from the Oneidas." Oneida X, 194 F. Supp. 2d at 139-40. Every factor

considered by the court in Oneida leads to the same conclusion, and supports Judge

McCurn's holding, in this case.

First, the language of the 1788 Oneida/State Treaty and the 1789 Treaty is

identical.23 In the first Article of both treaties, the tribes "do cede and grant all

their lands to the people of the State of New York forever." Yet, as the court 23 The 1789 Cayuga treaty is found at SPA-632.

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correctly noted, the treaties must be read as a whole, and in the second Article of

each, it is acknowledged that the tribes "hold to themselves and their posterity

forever" certain specified lands which are later described in the Oneida/State

Treaty as "reserved lands," 194 F. Supp. 2d at 139, and in the 1789 Treaty as

"lands reserved to the Cayugas" (Article Four, line 24) and as "the said

reservation" and "reserved lands" (Article Five, last sentence). Interpreting these

provisions "as the Indians would have understood them," the court had no

difficulty in rejecting the State's contention that the Oneida/State Treaty had

completely extinguished the Oneidas' interest in the lands described in Article Two

of that Treaty.

In reaching this conclusion, Judge Kahn also considered the Supreme

Court's analysis of Oneida landholdings, which, again, is directly applicable to

those of the Cayugas. In discussing the effect of the 1788 Oneida/State Treaty, the

Supreme Court held that the State "purchased the vast majority of the Oneidas'

lands. The Oneidas retained a reservation of about 300,000 acres." Oneida VI,

470 U.S. at 231. This description is remarkably similar to Judge McCurn's

description of the 1789 Cayuga Treaty, under which he found "the Cayugas

relinquished approximately 3,000,000 acres in what is now central New York State

to the State, reserving for their own use the 64,015 acres that is the subject of the

present dispute." SPA-541, n. 4. Although appellants contend that this is a

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misconstruction of the 1789 transaction, AB-94, n. 41, it is entirely consistent with

the Supreme Court's analysis of identical language in the Oneida/State Treaty.

The 1794 Treaty of Canandaigua also dealt with the landholdings of the

Oneidas and the Cayugas in the same provisions, using identical language: "The

United States acknowledge the lands reserved to the Oneida, Onondaga and

Cayuga Nations, in their respective treaties with the State of New York, and called

their reservations, to be their property… [and] the said reservations shall remain

theirs. . . ." Significantly, the Supreme Court found that federal treaties, including

the Treaty of Canandaigua, were designed "to recognize and guarantee the rights of

the Indians to specified areas of land," Oneida II, 414 U.S. at 667, and "promised

that the Oneidas would be secure in the possession of the lands on which they were

settled." Oneida VI, 470 U.S. at 231. Again, the same conclusion is warranted

with respect to the Cayugas' reserved lands, as Judge McCurn held.

Finally, the district court in Oneida also found that "the land at issue was

also recognized by New York State as Oneida land" by the fact that the State

purchased the land from the Oneidas in a series of subsequent, post-Constitutional

transactions. Oneida X, 194 F. Supp 2d at 140. Again, the analogy to the Cayuga

situation is perfect; the State purported to purchase the bulk of the Cayugas'

reserved lands in the 1795 and 1807 transactions.24 24 Shortly after the 1795 transaction, the Surveyor General of New York, at the direction of the State Legislature, surveyed the 64,015-acre Cayuga Claim Area in

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Based upon these factors, Judge Kahn rejected the State's argument that the

1788 Oneida/State Treaty had extinguished the Oneida's interest in its claim area

and adopted Judge McCurn's analysis:

As in Cayuga v. Cuomo, the land at issue in this action was reserved to the Oneidas in a pre-Constitutional treaty and subsequently recognized and guaranteed by the United States in the Treaty of Canandaigua.

Oneida X, 194 F. Supp. 2d at 146. The State's argument here is equally

unpersuasive and should be rejected by the Court.25 Indeed, the State's position

was rejected by the New York State Indian Commission in 1922 in the Everett

Report. Ejectment N-1. The Commission concluded that the Iroquois had title to

all territories guaranteed to them by federal treaty unless such lands had been

diverted by a treaty of equal force. Ejectment N-396-99.

3. The Treaty Of Canandaigua DidNot Impermissibly Divest The StateOf Any Compensable Property Right

The district court properly rejected appellants' theory that the Treaty of

Canandaigua could not have conferred recognized title on the Cayugas without

unlawfully divesting the State of a compensable property interest in the subject

anticipation of the sale of lots to settlers. Those lands were described by the State at that time as the “late Cayuga Reservation.” S-115; G-413.

25 The State’s reliance on Andrews v. New York, 79 N.Y.S. 2d 479 (Ct. Cl. 1948), Seneca Nation of Indians v. United States, 173 Ct. Cl. 912 (1965) and People ex rel. Ray v. Martin, 60 N.E. 2d 541 (N.Y. 1945), AB-91-92, is misplaced for the reasons discussed in a thorough analysis by the court below. SPA-536-38.

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property. SPA-539. Significantly, Judge Kahn recently reached the same

"compelling" conclusion in the Oneida litigation, noting that the State's argument

"fails to acknowledge established federal law." Oneida X, 194 F. Supp. 2d

at 146-47. This Court should similarly reject those contentions.

Contrary to appellants' suggestion, the interest that New York held under the

1789 Treaty was, at most, the right of preemption; i.e., the right to purchase the

land if and when Indian title was extinguished. Oneida VIII, 860 F.2d at 1150.

However, upon the ratification of the Constitution, relations with the Indian tribes

and authority over Indian lands became the exclusive province of federal law.

Oneida II, 414 U.S. at 667; Oneida VI, 470 U.S. at 234. As a result, both the

nature of Indian occupancy rights and the conditions under which the states' right

of preemption could be exercised became matters solely of federal law.26 So, for

example, the enactment of the NIA clearly affected the ability of the states to

exercise their preemptive rights, but that federal legislation did not constitute a

"taking" of those rights. Likewise, when the United States recognized the

Cayugas' title by the Treaty of Canandaigua, that action did not "take" the state's

preemptive rights any more than the ratification of the Constitution or the

enactment of the NIA did. Rather, it merely subjugated those rights to the superior

26 The right of preemption is not a property right. "Until Congress acts to extinguish the Indian interest, the holder of the underlying fee title or right of preemption has only an expectancy with no further rights in the land." F. Cohen, Handbook of Federal Indian Law, (1982 ed.) at 514 (and cases cited therein).

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authority of federal law, a power that the State of New York had granted to the

federal government by its ratification of the Constitution.

It is well established that after the ratification of the Constitution, state rights

of preemption became subject to exclusive federal authority. In Oneida II, the

Supreme Court noted:

The rudimentary propositions that Indian title is a matter of federal law and can be extinguished only with federal consent apply in all of the States, including the original 13. It is true that the United States never held fee title to the Indian lands in the original States as it did to almost all the rest of the continental United States and that fee title to Indian lands in these States, or the pre-emptive right to purchase from the Indians, was in the State, Fletcher v. Peck, 6 Cranch 87, 3 L Ed 162 (1810). But this reality did not alter the doctrine that federal law, treaties, and statutes protected Indian occupancy and that its termination was exclusively the province of federal law.

414 U.S. at 670. The same conclusion was reached by this Court in Mohegan

Tribe v. State of Connecticut, 638 F.2d 612 (2d Cir. 1980), cert. denied, 452 U.S.

968 (1981):

In accordance with the "right of discovery" of the European settlers, native Indians found in this country were granted the "right of occupancy" to their lands. That is, the natives were allowed to remain upon their lands, but their freedom to alienate those lands was restricted.

* * *

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Thus, while the Indians retained the "right of occupancy," the settlers retained the "fee interest" in the land and retained a "pre-emptive right" to purchase the land from the Indians. After the Revolution, this "pre-emptive right" lay in the individual states -- at least in the already settled part of the country. And when the states joined the Union, unless they ceded the lands, they retained their "pre-emptive rights." Nevertheless, the right to purchase Indian lands was not inconsistent with federal control over the extinguishment of Indian occupancy. Thus, the first Nonintercourse statute provided that even where the states retained "pre-emptive rights" to purchase the land, the federal government was responsible for overseeing any transfer of land from the Indians to the states.

Id. at 616-17.

From this analysis, it is clear that the recognition of title contained in the

1794 Treaty did not "take" any property rights of New York State. To the extent

that New York's right of preemption had been affected by federal law, that had

occurred as a result of the ratification of the Constitution and the enactment of the

NIA, which made the extinguishment of all Indian title to lands -- whether

"aboriginal" or "reserved" -- subject to exclusive federal control. When the United

States conferred recognized title on the Cayuga Nation in 1794, it was acting

within that constitutional sphere of authority. As a result, appellants' arguments

with respect to a purported "taking" of New York's "property rights" through the

Treaty of Canandaigua must be rejected. The Court, therefore, should affirm Judge

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McCurn's holding that appellants' defense of abandonment of the subject property

is legally insufficient to bar the Cayugas' claim.

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POINT IV

THE FEDERAL GOVERNMENTHAS NEVER APPROVED OR

RATIFIED THE 1795 AND 1807 TREATIES

Under the NIA, a conveyance of Indian lands without the consent of the

United States is void. The necessary consent can come either through

contemporaneous compliance with the NIA's requirements when made, or through

subsequent federal ratification. In this case, the district court correctly found that

the 1795 and 1807 Treaties had not been made in compliance with the NIA's

requirements and that appellants had failed to demonstrate effective subsequent

ratification. SPA-543-48. Those holdings should be affirmed by this Court.

A. The Treaties Were Not Made In Compliance With The NIA

The 1793 and 1807 versions of the NIA, in effect when the 1795 and 1807

Treaties were made, prohibited purchases of Indian lands "unless the same be

made by treaty or convention entered into pursuant to the Constitution." It is

undisputed that the state treaties were not made under the Constitution’s formal

treaty-making procedure, involving ratification by the Senate and proclamation by

the President. AB-102. The State, however, seizes upon the phrase "or

convention" to argue that NIA compliance can come through "less formal actions,"

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as long as the intent of those actions is plain and unambiguous. AB-102-105.

Appellants are wrong for several reasons.

First, appellants' argument ignores the plain language of the NIA. Whatever

was meant by a "convention" in 1793, it still had to be "entered into pursuant to the

Constitution." Moreover, continuing in the same sentence of that provision, it is

also evident that both treaties and conventions had to be negotiated; a relatively

formal process. Thus, under the plain language of the 1793 version of the NIA,

actions by federal employees in the field, such as attending a state-sanctioned

treaty, or signing such a document as a witness, could not constitute

contemporaneous compliance with the NIA.

Second, courts have generally considered treaties and conventions under the

NIA to be synonymous. In Mohegan Tribe, 638 F.2d at 614, this Court noted that

the NIA, "since 1790, has prohibited the sale of Indian land unless conveyed by a

treaty approved by the federal government…." And the only federal court to have

extensively analyzed the issue, United States v. Hunter, 21 F. 615 (Circuit Court,

E.D. Mo. 1884), "having in view the plain and ordinary meaning of the terms and

the evident intent of congress," concluded that "treaty or convention" under the

NIA "refers to some public compact entered into by the United States, or under the

authority of the federal constitution, with an Indian nation or tribe." Id. at 616.

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Appellants have offered no persuasive reason why the Court should not

adhere to the plain and settled meaning of the language of the NIA; that is, that

federal approval of land conveyances within its scope requires formal action under

the Constitution involving congressional and presidential assent. See, Joint Tribal

Council of Passamaquoddy Tribe v. Morton, 388 F. Supp. 649, 656 (D. Me. 1975)

("it is eminently clear that the literal interpretation of the [NIA] is required to give

effect to the Congressional intent."); see also, Federal Power Commission v.

Tuscarora Indian Nation, 362 U.S. 99, 119 (1960) (purpose of NIA "is to prevent

unfair, improvident or improper dispositions by Indians of lands owned or

possessed by them … without the consent of Congress." (Emphasis added).27

Accordingly, the Court should conclude that at the time of the making of the

1795 and 1807 Treaties, compliance with the NIA required formal action under the

Constitution, in the form of a federally-sanctioned treaty or other action involving

congressional consent.

27 In rejecting the State’s argument in Oneida VI that the treaties in that case had been validly made, the Supreme Court noted that those treaties were not included in an 1822 Congressional compilation of treaties that extinguished Indian title in New York. 470 U.S. at 242, n. 20. Neither the 1795 or 1807 Treaties are included on this list. A-1411-15.

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B. The Treaties Were Never Ratified By The Federal Government                    

1. The District Court Properly Required "Explicit"Federal Action As Evidence Of Subsequent Ratification

In determining whether federal actions could be found to have ratified the

unlawful state treaties, Judge McCurn had earlier opined that "[i]t is difficult, if not

impossible, for the Court to envision instances where implicit federal government

ratification will be plain and unambiguous." SPA-555. Accordingly, he rejected

appellants' contention that implicit congressional ratification would satisfy the

requirements of the NIA.

In doing so, Judge McCurn joined every other district court within this

Circuit that has considered this issue. See, Oneida III, 434 F. Supp. at 538; Seneca

Nation of Indians v. State of New York, 26 F. Supp. 2d 555, 571 (W.D.N.Y.

1998); Oneida X, 194 F. Supp. 2d at 121.

The unanimous view of these district courts is not contrary to the teaching of

Oneida VI, as appellants contend. AB-104-06. Appellants focus on the Supreme

Court’s continued quotation from United States v. Santa Fe Pac. R. Co., 314 U.S.

339 (1941) in Oneida VI that "Congressional intent to extinguish Indian title must

be 'plain and unambiguous' … and will not be 'lightly implied'." (Emphasis added).

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From this latter phrase, appellants deduce that implicit ratification under the NIA is

permissible. AB-105.

Appellants' conclusion is wrong for three reasons. First, the "lightly

implied" language was used in Santa Fe not to say that implicit extinguishments of

Indian title was permissible, but in the context of discussing the unique canons of

statutory construction applicable to treaties and statutes involving Indians. See,

Santa Fe, 314 U.S. at 353-54.

Second, appellants' argument ignores the more relevant quotation in Oneida

VI that immediately preceded the Santa Fe quotation, and which accurately

describes the law in this area: "'Absent explicit statutory language,' this Court

accordingly has refused to find that Congress has abrogated Indian treaty rights."

470 U.S. at 247 (quoting Washington v. Washington State Commercial Passenger

Fishing Vessel Assoc., 443 U.S. at 690.

Third, when the Court in Oneida VI actually considered the issue of

ratification under the NIA, the Court rejected the cases advanced by the State as

not constituting effective ratification because they "do so implicitly." 470 U.S. at

248, n. 21. Thus, Oneida VI supports the district court's holding that ratification

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under the NIA requires plain, unambiguous and explicit congressional action to be

effective.28

Two final points are worthy of note in this regard. Ratification of the

unlawful 1795 and 1807 Treaties would abrogate the rights of the Cayugas to their

lands at Cayuga Lake, as guaranteed to them under the Treaty of Canandaigua.

While Congress does have the authority to abrogate Indian treaties, the Supreme

Court requires

clear evidence that congress actually considered the conflict between its intended action on the one hand and Indian treaty rights on the other, and chose to resolve that conflict by abrogating the treaty.

Minnesota v. Mille Lacs Chippewa Indians, 526 U.S. at 202-03. This requirement

of conscious decision-making by Congress is also inconsistent with implicit

ratification under the NIA.

Finally, and in any event, the Court should reject each of appellants' specific

theories of ratification for failing to meet the basic "plain and unambiguous"

standard.

28 Appellants cite Seneca Nation of Indians v. United States, 173 Ct. Cl. 912 (1965), for the proposition that implicit federal ratification can satisfy the NIA’s requirements. AB-105-06. To the extent the case says or suggests that, it is incorrectly decided. In addition, in Seneca Nation of Indians v. New York, 26 F. Supp. 2d at 570-72, the court addressed the precise question decided by the Court of Claims using a post-Oneida analysis and reached the contrary conclusion that the federal statute had not ratified the unlawful state acquisition of tribal land.

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2. Acts Of Federal Officials Cannot RatifyA Transaction Unlawful Under The NIA

Appellants contend that actions by federal officials and employees, if plain

and unambiguous in their intent, can serve to ratify otherwise unlawful state action

under the NIA. AB-107-10. This argument ignores the critical rule that the "plain

and unambiguous" standard to which they refer applied only to acts of Congress,

not acts of federal officials. The limited scope of the Court's ruling in Oneida VI

was clear: "Congressional intent to extinguish Indian title must be 'plain and

unambiguous'." 470 U.S. at 247-48 (emphasis added), and the cases cited by the

Court there all involved questions of whether particular acts of Congress had, in

fact, extinguished Indian title in other contexts. By extending the "plain and

unambiguous" standard into the NIA arena, the Oneida Court evidenced a

willingness to consider whether subsequent Congressional acts, such as the

approval of later federal treaties, could reasonably be construed as effective

Congressional consent to earlier, unlawful state actions under the NIA. The Court

in Oneida VI did not hold, however, and no subsequent federal court has ever held

or suggested, that acts by federal officials or employees, such as Indian agents or

interpreters, even if "plain and unambiguous," could constitute effective federal

ratification under the NIA. Appellants' argument seeks an unprecedented and

unwarranted weakening of the protections afforded Indian tribes under the NIA; a

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weakening contrary to Supreme Court precedent and all federal authority, which

should be rejected by this Court.

In any event, the actions of the federal officials in connection with the

making of the 1795 and 1807 Treaties cannot be deemed to be "plain and

unambiguous" federal approval of those transactions. As the historical record

makes clear, the Attorney General of the United States had opined that the State’s

proposed purchase of Cayuga lands would be unlawful unless made in compliance

with the NIA; this admonition was conveyed to New York Governor John Jay prior

to the making of the 1795 Treaty; Indian Agents Chapin and Israel were directed

by the Secretary of War not to countenance the proposed state action; and neither

was appointed a federal treaty commissioner. SPA-191-96.29

These facts could not support a defensible conclusion that acts of federal

employees before, during or after the making of the unlawful state treaties could

lawfully constitute plain and unambiguous federal ratification of those

conveyances.

29 Nor do the facts support appellants’ statement that “neither President Washington nor Governor Jay were of the view that the 1795 Treaty was void.” AB-108. As noted above, Governor Jay declined to “consider and decide the issue.” And as the district court noted, it is undisputed that President Washington “adhered steadfastly to treaty formalities when dealing with Indian nations,” SPA–546, and the fact that he failed to submit the 1795 Treaty to the Senate “may be probative of the fact that Washington viewed the document as invalid and unworthy of further consideration.” Id.

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3. Appellants' Reliance On National Gypsum Is Misplaced

Appellants cite United States v. National Gypsum, 141 F.2d 859 (2d Cir.

1944), for the proposition that longstanding "federal understanding" of state

authority over Indian lands constitutes federal approval under the NIA.

AB-110-14. This assertion is unwarranted for at least three reasons.

First, appellants' brief discussion of the facts of that case omitted one

important fact. That case involved an 1858 federal treaty, 11 Stat. 735, 736, which

expressly directed the federal government to transfer the Tonawanda reservation to

the State of New York, after which the State would be authorized to exercise

general trust responsibility over those Indian lands. 141 F.2d at 861. Contrary to

appellants' suggestion, this Court neither held nor implied that the State's exercise

of authority over those lands would have been valid absent the 1858 treaty.

Second, appellants' more general theory, that longstanding federal

acquiescence in state control over Indian lands can constitute federal approval

under the NIA, was expressly rejected by this Court in Mohegan Tribe v. State of

Connecticut, 638 F.2d 612 (2d Cir. 1980). In that case, the Court acknowledged

that for many years the federal government had generally disclaimed responsibility

for overseeing the affairs of eastern Indian tribes, had not availed itself of the

provisions of the NIA, and had often deferred to the states with respect to Indian

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affairs. Id. at 623. Nevertheless, the Court held, "it does not follow that the

federal government had no obligation to do so, or that the states had the authority

-- unimpeded by the [NIA] -- to buy land from the eastern tribes without federal

approval." Id.30

Third, to the extent that appellants' argument here relies on its own unique

interpretation of the Treaty of Canandaigua, AB-111-12, that interpretation is

incorrect.

As a result, National Gypsum fails to support appellants' position in this

case.

4. The Treaty Of Buffalo Creek DidNot Ratify The Unlawful State Treaties

Although appellants fail to mention it, in 1977 Judge Port rejected this very

argument in one of the first decisions in the Oneida litigation, describing the

State’s interpretation of the Buffalo Creek Treaty as "a mirage rather than an

oasis." Oneida III, 434 F. Supp. at 539. Twenty-four years later, Judge Hurd, in a

detailed analysis, likewise rejected that State’s contention that the Treaty of

Buffalo Creek had disestablished the Oneidas' reservations in New York. Oneida

Indian Nation of New York v. City of Sherrill, 145 F. Supp. 2d 226, 248-54

30 Moreover, if federal actions inconsistent with the NIA cannot substitute for state compliance with its requirements, mere statements made by the federal government in proceedings such as those before the ICC or the British-American Arbitral Tribunal, AB-113-14, cannot do so either.

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(N.D.N.Y. 2001).31 These two decisions, which address and reject virtually all of

the contentions advanced by appellants here, AB-114-20, provide ample authority

and reasoning for this Court to also reject the argument.

Only a few of appellants' additional points warrant further response.

Appellants quote from New York Indians, 170 U.S. 1, 21 (1898), to the effect that

under the Treaty of Buffalo Creek, "these tribes [which appellants invite the Court

to assume includes the Cayugas] divested themselves of their title to lands in New

York." AB-118. In so doing, appellants seriously misrepresent the rule and the

reasoning of that case. In fact, the phrase "these tribes" clearly and unambiguously

refers only to the Senecas and Tuscaroras who, in the immediately preceding

paragraph, are explicitly described as having made specific cessions of particular

lands in New York under Articles 10 and 14 of the Buffalo Creek Treaty. 170 U.S.

at 21. Contrary to appellants’ characterization, this reference has nothing

whatsoever to do with the Cayugas or their interests in lands in New York. See,

Sherrill, 145 F. Supp. 2d at 249-1250 (same conclusion).

Appellants also erroneously contend that the Cayugas relinquished their

rights to lands in New York by "accepting a new reservation" in Kansas under the

1838 Treaty. AB-118-20. Appellants cite no language from the treaty in support

of this contention, because there is none. The Treaty of Buffalo Creek explicitly 31 For purposes of this discussion, the distinction between ratification and disestablishment is meaningless. Oneida V, 719 F.2d at 539.

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ceded the New York Indians’ land in Wisconsin to the federal government in

exchange for promised lands in Kansas. (Art. 1). It did not cede the Cayugas'

lands in New York. Oneida III, 434 F. Supp. at 539. The Cayugas and the other

New York Indians were allowed to recover for the value of the Kansas lands

promised to them because they had made an irrevocable cession of their Wisconsin

lands to the federal government in the treaty, not because they relinquished land to

the State of New York. New York Indians, 170 U.S. at 19. In addition, the treaty

also recognized that Indians would refuse to leave New York. It did not require

them to do so. The consequence for declining to move was the loss of promised

lands in Kansas (Art. 3), not in New York. Thus, the express language of the

Treaty belies any suggestion that the Cayugas (or any other signatory tribe)

"accepted a new reservation" or relinquished their claims to lands in New York.32

As a result, appellants' reliance on Santa Fe to support their interpretation of

the 1838 treaty is, as Judge Port found, entirely misplaced. Oneida III, 434 F.

Supp. at 540. In Santa Fe, the Court distinguished two federal efforts to create a

new reservation for the Hualapai Tribe. In the first, Congress acted unilaterally to

create a reservation that the tribe did not want, would not accept, and did not

occupy. Under these circumstances, the Court found no basis upon which to find

32 In fact, in the end virtually all of the New York Indians repudiated the Buffalo Creek Treaty, virtually none left New York under its auspices, and the United States wound up patenting the lands in Kansas to settlers. 170 U.S. at 26-33.

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that the tribe's interest in its original reservation had been extinguished. 314 U.S.

at 353-56. But fifteen years later, when the Hualapai Tribe, by formal action of its

Tribal Council, expressly requested that a new reservation be created for it and the

tribe accepted that new reservation, the Court found these tribal actions to

constitute a "voluntary cession" of the tribe's rights to its aboriginal lands. As

described above, the language and circumstances surrounding the Treaty of

Buffalo Creek are far more analogous to the first Hualapai situation than the

second. In the absence of a tribe's request for a new reservation and its acceptance

thereof, neither of which happened under the Treaty of Buffalo Creek, Santa Fe

makes clear that no involuntary relinquishment of tribal land rights can be

implied.33

In summary, three district courts have considered and rejected appellants'

argument that the Treaty of Buffalo Creek "clearly and unambiguously" ratified

unlawful acquisitions of Indian land by the State of New York. The argument is

without merit and the Court should join in rejecting it here.

33 In any event, Santa Fe did not involve ratification under the NIA; it involved potential tribal claims against the United States, which stand on an entirely different legal footing than tribal claims against a state under the NIA.

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5. Proceedings Involving The British-American ArbitralTribunal Did Not Constitute Ratification Of The 1795 Treaty

Appellants' argument concerning the British-American Arbitral Tribunal

("Tribunal") borders on the specious. AB-121-24. Indeed, even appellants have

difficulty arguing that these events "ratified" the 1795 Treaty. Instead, they

contend that by these federal actions, the United States "embraced" or "recognized"

the 1795 Treaty. AB-122. The district court correctly rejected any suggestion that

federal actions involving Tribunal proceedings constituted effective Congressional

ratification of the 1795 Treaty. SPA-547.

First, the Tribunal did not find that the 1795 Treaty was valid under federal

law, as appellants assert. AB-122, 123. To the contrary, the Tribunal found that

the treaty was "exclusively a New York contract" and "the United States does not

appear anywhere in the negotiations nor in the treaty." SPA-547. Instead, as

appellants' concede, the basis for the Tribunal's finding of United States' liability

was that, having been made aware of the Canadian Cayugas' claims for

compensation, "the [United States] Government did nothing to carry out the treaty

provisions." AB-122. While appellants continue to argue that this finding

"necessarily determined that the Treaty was valid," Id., they cannot rationally

explain how the federal governments' failure to make payments owed by the State

of New York under an unlawful state treaty could possibly operate to make that

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treaty valid under federal law. As the district court correctly found, no such

conclusion is warranted. SPA-547.

Appellants further contend that the district court should not have focused on

the Tribunal's findings, but, rather, it should have found that the payment of the

Tribunal's award constituted "recognition" of the Treaty by the federal government.

However, appellants offer no support whatsoever for the novel contention that

payment of a disputed arbitration award which did not find the underlying

transaction valid could constitute "plain and unambiguous" ratification of the 1795

Treaty.

In Oneida VI, the Supreme Court held that two federally approved treaties,

made just three and seven years after the unlawful State purchase of Oneida lands,

and which included references to the State's "last purchase from" the Oneidas and

the "other lands heretofore ceded" by the tribe, did not demonstrate a plain and

unambiguous intent to ratify the earlier conveyance. 470 U.S. at 248. Under this

standard, there is no basis to find that the federal government's payment of the

Tribunal's award, which occurred 131 years after the fact and included no reference

whatsoever to the interest in lands of the American Cayugas, could constitute plain

and unambiguous congressional ratification of the unlawful 1795 Treaty.

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6. The ICC Had No Authority To, And Did Not, Ratify The Unlawful State Treaties

Appellants' Indian Claims Commission argument begins with several

inaccurate assumptions and proceeds to an incorrect conclusion.

First, the ICC, by the express terms of its authorizing legislation, could only

hear claims by Indian tribes against the United States. 25 U.S.C. § 70(a) ("The

Commission shall hear and determine the following claims against the United

States…"); Otoe and Missouri Tribe of Indians v. United States, 131 F. Supp. 265,

283 (Ct. Cl. 1955) (purpose of ICC was to "settle extra-legal or moral claims of

Indians against the United States…"). Claims involving the rights of third parties,

such as appellants, were outside of the Commission's jurisdiction. See, Oneida

Nation of New York v. United States, 41 Ind. Cls. Comm. 391, 393 (1978)

(denying petition for intervention by counties of Madison and Oneida, New York).

Second, the ICC had no authority to extinguish Indian title to lands. Under

the ICC, the only relief that the ICC could award was money damages to

compensate tribes for unlawful actions of the federal government. "It was not

within the jurisdiction of the Indian Claims Commission to extinguish Indian title

on its own authority, nor did the Commission purport to exercise such

jurisdiction." United States v. Dann, 706 F.2d 919, 928 (9th Cir. 1983), rev'd on

other grounds, 470 U.S. 39 (1985).

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Third, as discussed below in Point V C, it was not necessary for the ICC to

consider or determine the validity of land transactions between tribes and third

parties in order for the ICC to determine the liability of the United States to a tribe.

In connection with an Oneida case (which was in all respects procedurally identical

to the Seneca-Cayugas' case), the ICC and the Court of Claims went out of their

way to make this fact abundantly clear.

The Commission had the power to hear claims against the United States

based upon the actions of third parties only where the United States was shown to

have actual knowledge of the third party transactions. See, Cayuga Nation of

Indians v. United States, Docket No. 343, 36 Ind. Cl. Comm. 75, 76 (1975); United

States v. Oneida Nation, 201 Ct. Cl. 546 (1973). Thus, the Indian Claims

Commission was required in the Seneca-Cayuga case only to find that the federal

government had contemporaneous knowledge of the fact that the 1795 and 1807

Treaties were taking place, not that the United States approved the transactions.

As a result, the district court correctly concluded that the "issue of federal

government ratification was not before the ICC. It was not raised; it was not

litigated; and it was not essential to the ICC’s decision." SPA-558. The lower

court therefore properly rejected appellants' argument that these ICC proceedings

constituted plain and unambiguous congressional ratification of the unlawful state

treaties.

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In conclusion, the district court correctly determined that the 1795 and 1807

Treaties have never received the federal approval required under the NIA.

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POINT V

THE DISTRICT COURT PROPERLY REJECTED APPELLANTS'

ELECTION OF REMEDIES THEORY

Appellants sought to bar the Cayugas from pursuing this NIA claim on the

theory that at various times both the Nation and the Tribe had sought and received

additional (but nominal) consideration related to the 1795 and 1807 transactions

with the State. The district court found this election of remedies theory to be

without merit. SPA-557. More recently, the courts in Seneca Nation of Indians v.

New York, 26 F. Supp. 2d at 573-74 and Oneida X, 194 F. Supp. 2d at 125, both

rejected the State's same election of remedies argument.

A. Federal Courts Virtually Never Apply An Election Of Remedies Defense To Claims Based On Federal Law

In rejecting appellants' election of remedies defense, the district court

correctly held that "[t]he doctrine of election of remedies is given little, if any,

validity in federal practice," citing Carbone v. Gulf Oil Corp., 812 F.2d 1416, 1421

(Temp. Emer. Ct. App. 1987) and Quinn v. DiGiulian, 739 F.2d 637, 644 (D.C.

Cir. 1984). SPA-557.

Although the doctrine was sometimes applied before the merger of law and

equity, since the adoption of the Federal Rules of Civil Procedure, federal courts

virtually never apply this principle to claims based on federal law except when

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required by statute. Newport News Shipbuilding v. Director, Office of Workers'

Comp. Programs, 583 F.2d 1273, 1277 (4th Cir. 1978), cert. denied, 440 U.S. 915

(1979) ("in the absence of express legislative declaration to the contrary, the courts

have been reluctant to extend this relatively harsh doctrine"); Newman v. Avco

Corp., 451 F.2d 743, 746-47, n. 1 (6th Cir. 1971) (doctrine is "dying rapidly" and

"has long been in disrepute"); Kline Hotel Partners v. Aircoa Equity Interests, 729

F. Supp. 740, 742 (D. Col. 1990) (after adoption of Federal Rules, election of

remedies inapplicable to claims arising under federal law). Moreover, at least one

New York district court has declared that the doctrine of election of remedies no

longer exists as a defense in actions based on federal law. Lanza v. Drexel & Co.,

[1970-71] Fed. Sec. L. Rep. (CCH) ¶ 92,826, 90, 102 n. 14 (S.D.N.Y. 1970), aff’d,

479 F.2d 1277 (2d Cir. 1973).

Appellants cite a number of federal cases attempting to support their false

contention that federal courts routinely apply election of remedies principles to bar

claims in those courts. AB-129-31. With one exception, however, all of those

cases either pre-date adoption of the Federal Rules,34 are diversity cases applying

34 Stuart v. Hayden, 169 U.S. 1 (1898); United States v. Oregon Lumber Co., 260 U.S. 290 (1922); Equitable Trust Co. v. Connecticut Brass & Mfg. Corp., 10 F.2d 913 (2d Cir. 1926) (holding that the doctrine is inapplicable).

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state law-based election of remedies theories,35 or are not applying an election of

remedies doctrine at all.36

Appellants cite only one modern federal case in which the court used an

election of remedies defense to bar a claim based on federal law. Artis v. Norfolk

& Western Ry., 204 F.3d 141 (4th Cir. 2000). AB-141. Yet, that case

demonstrates, with absolute clarity, that federal courts today apply this doctrine

only when the express language of the federal statute requires it. The court in Artis

described the current scope of the doctrine as "determining whether rights in one

statute may be pursued cumulatively with those rights granted in another statute."

204 F.3d at 143.37 Artis involved application of the Federal Employers' Liability

Act (FELA) and the Longshore and Harbor Workers' Compensation Act

(LHWCA), both of which include language that they were to provide the exclusive

remedy for workplace injuries. Id. at 143. The court held that since both FELA

and LHWCA were meant to provide exclusive remedies, the text of the statutes

35 Myers v. Ross, 10 F. Supp. 409 (S.D. Fla. 1935); Metcalfe Bros., Inc. v. Am. Mut. Liab. Ins. Co., 484 F. Supp. 826 (W.D. Va. 1980); Guy James ConsT-Co. v. Trinity Ins., Inc., 644 F.2d 525 (5th Cir. 1981); Medcom Holding Co. v. Baxter Travenol Labs., 984 F.2d 223 (7th Cir. 1993).

36 Piver v. Pender County Board of Educ., 835 F.2d 1076 (4th Cir. 1987) (utilizing test for accord and satisfaction to determine effect of alleged prior settlement).

37 See also, Brooks v. United States, 337 U.S. 49, 53 (1949) ("We will not call either remedy in the present case exclusive, nor pronounce a doctrine of election of remedies, when Congress has not done so.").

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precluded the filing of an LHWCA claim by a party who had already prosecuted a

successful FELA claim that was settled after the plaintiff signed a complete release

of all claims against the same defendant. Id. at 144-46. Therefore, the Artis case

is clearly distinguishable from the facts of this case, where Congress has not

statutorily decreed that relief under the NIA is inconsistent with, or prohibited by,

any other federal law.38

Furthermore, the adjudication of the Cayugas' rights under the NIA is

exclusively a matter of federal law. Because state law-based defenses cannot bar

such claims, Oneida II, 414 U.S. at 674, and because no federal statute mandates

the application of election of remedies principals in this case, the district court was

correct in rejecting appellants' election of remedies defense. See also, United

States v. 93.970 Acres of Land, 360 U.S. 328, 332-33 (1959).

38 The Artis court cited to Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974), which is cited in appellants' brief. That case also provides no support for appellants’ argument. In Alexander, the Supreme Court rejected an election of remedies argument, noting that the doctrine does not apply to suits under Title VII. Among the cases cited by the Supreme Court was Voutis v. Union Carbide Corp., 452 F.2d 889 (2d Cir. 1971), cert. denied, 406 U.S. 918 (1972), where this Court found that Title VII had been enacted to protect victims of discriminatory practices after Congressional recognition of the inadequacy of state and local laws. The Court concluded that, given the purposes of the Act, the election of remedies doctrine was unavailable to bar plaintiff's federal claims. Similar considerations apply here under the NIA.

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B. There Can Be No Election Of Remedies When There Is No Choice Of Remedies

In arguing that the Cayugas made a choice of remedies by requesting

additional payments from the State in 1906, or by pursuing an ICC proceeding in

the 1950's, the appellants have ignored the critical legal fact that the 1795 and 1807

Treaties were, by the terms of the NIA, uncontrovertibly void. Even under New

York law, two essential elements of an election of remedies defense are the

existence of two or more remedies and the existence of a meaningful choice

between them. As Judge Cardozo stated:

An election of remedies presupposes a right to elect. It "is simply what its name imports; a choice, shown by an overt act, between two inconsistent rights, either of which may be asserted at the will of the chooser alone". If in truth there is but one remedy, and not a choice between two, a fruitless recourse to a remedy withheld does not bar recourse thereafter to the remedy allowed. As to this, there is nothing of uncertainty in the decisions in New York.

Schenck v. State Line Tel. Co., 238 N.Y. 308, 311 (1924) (citations omitted).

In this case, because the 1795 and 1807 Treaties were void, the district court

was correct in concluding that the Cayugas were not "afforded a true choice of

remedies, as the receipt of additional consideration is no remedy at all for an

invalid conveyance of land." SPA-557.

As the New York Court of Appeals has stated:

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The right to make an election must actually exist and if it shall appear that it did not, then it is quite immaterial, in its bearing upon a subsequent action, that some previous action, looking to a remedy for the plaintiff's loss, had been brought.

Henry v. Herrington, 193 N.Y. 218, 222 (1908); see also, Siderpali S.P.A. v. Judal

Indus., 833 F. Supp. 1023, 1033 (S.D.N.Y. 1993).

Appellants contend that the election of remedies doctrine has been applied in

cases involving void contracts. However, the case law cited by appellants does not

support their conclusion. In Stuart v. Hayden, 169 U.S. 1 (1898), the Court held

that a transfer of stock was voidable under banking laws, and that a prior action

foreclosed a second action on the same claim. Appellant's also cite ARP Films,

Inc. v. Marvel Entm't Group, Inc., 952 F.2d 643 (2d Cir. 1991), which simply held

that after repudiation, the non-breaching party has no right to affirm a contract

while refusing to perform under its terms. The case itself has nothing to do with

the validity of the underlying contract. Appellants also cite United States v.

Oregon Lumber Co., 260 U.S. 290 (1922), which held that the plaintiffs must

choose to affirm or disaffirm, when "[u]pon the facts stated the sale was voidable."

Id. at 294. Appellants' other cases all involve state-law based election of remedies

theories which, as noted above, are inapplicable to bar a federal claim based on the

NIA.

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As a result, the district court was correct in holding that the doctrine of

election of remedies cannot bar a claim regarding a transaction void under federal

law, such as those involved in this case.

C. The Proceedings Under Which The NationAnd The Tribe Received Additional Payments Do Not Support An Election Of Remedies Defense

Finally, any additional payments received by the Cayugas were neither

exclusive remedies, nor inconsistent with the pursuit of an NIA claim.

As the State itself has acknowledged, any monies paid the Nation during the

early years of the 20th Century, as a result of the 1906 Memorial, were not in the

nature of a legal remedy, but were paid solely out of a temporary sense of moral

obligation. As the New York Court of Appeals stated:

It will be apparent from this review of the history of the claim, and of the proceedings which have been taken upon it, that it was at all times, rested upon a moral obligation of the state to appropriate to the benefit of the Indians the profits that it had made from the purchase of their lands. The claim had been reported upon to the legislature by the commissioners as one that was not enforceable at law, but which constituted a moral obligation on the part of the state, and it was in that review of the matter that the act of 1909 was passed. The enactment of the law was proposed by the commissioners upon the very assumption that there was no legal claim. . . .

People ex rel. Cayuga Nation of Indians v. Commissioners of Land Office, 207

N.Y. 42, 49 (1912) (emphasis added). The court's opinion makes it clear that the

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State of New York was offering a gift, and not a legal remedy that could have the

effect of foreclosing all subsequent legal claims by the Cayugas. 39

Similarly, the ICC proceeding initiated by the Tribe in 1951, which

ultimately resulted in a $70,000 stipulated judgment against the United States (and

in which none of the appellants was a party) cannot be the basis for an election of

remedies defense by the appellants. First, the doctrine does not bar claims against

different defendants. Anderson v. Abbott, 321 U.S. 349, 354-56 (1944); Russell v.

Sarkeys, 286 F.2d 736, 740 (5th Cir. 1961); see, 18 Wright, Miller & Cooper

§ 4476 at 774-75 (citing "general rule that pursuit of remedies against one party is

not an election that forecloses remedies against another party"). Here, the Tribe's

ICC proceeding was brought against the United States; none of the appellants in

the instant case was a defendant in that proceeding. Therefore, the doctrine of

election of remedies cannot operate to bar this claim against different defendants.

Second, a party may pursue different causes of action without a need to

choose between them if the causes are not mutually inconsistent. See, e.g., United

States v. Brown, 348 U.S. 110 (1954); United States v. Kales, 314 U.S. 186

39 Appellants argue that an in pais proceeding can be a basis of application of the election or remedies doctrine. AB-131-32. However, their cases once against fail to support this contention. In Piver v. Pender County Board of Educ., 835 F.2d 1076, supra, the court discussed only a test for accord and satisfaction, the election of remedies test was never used. Defendants also cite two state law cases, which are inapplicable in this context, and a case decided prior to the merger of law and equity.

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(1941); Quinn v. DiGiulian, supra, 739 F.2d at 644-46; Guerra v. Manchester

Terminal Corp., 498 F.2d 641, 650-51 (5th Cir. 1974); Louis Cook Plumbing and

Heating, Inc. v. Frank Briscoe Co., 445 F.2d 1177, 1179 (10th Cir. 1971).

This condition is clearly met here. In the ICC, the Tribe sought money

damages from the United States for the federal government's breach of its fiduciary

responsibility to the Tribe. Awards against the United States for such breaches

were made by the ICC without regard to the validity of the underlying state

transactions. As the ICC clearly stated in similar proceedings by the Oneidas:

Whether New York acquired valid title to the lands which were the subject of the various treaties is not at issue in this case . . . because the Government's liability rests not upon passage of title from the Oneidas to New York State but rather on the Government's failure to live up to its fiduciary obligation under the Indians Trade and Intercourse Act and to deal fairly and honorably with the Oneida Indians within the meaning of Clause 5 of section 2 of the Indian Claims Commission Act.

Oneida Nation of New York v. United States, 43 Ind. Cl. Comm. 373, 407 (1978)

(emphasis added). The Court of Claims affirmed, again expressly noting that:

our decision does not determine whether the cessions to New York in 1785 and 1788 extinguished the Oneidas' Indian title to those lands. That issue is not before us, we have not passed upon it, and we do not imply or suggest any position on it.

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United States v. Oneida Nation of New York, 217 Ct. Cl. 45, 67, n.26 (1978).

Likewise, in the Tribe's proceeding, the ICC did not consider and made no finding

with respect to the validity or invalidity of the 1795 and 1807 Treaties.

In summary, no federal court has ever held that a tribal NIA land claim was

barred under an election of remedies defense, and it would be an impermissible

extension of that doctrine to apply it here. For all the reasons discussed above, the

Court should affirm the lower court’s rejection of this defense.

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POINT VI

THE DISTRICT COURT DID NOT ABUSE ITS DISCRETION IN REJECTING THE DEFENSE OF LACHES

Appellants argue that the lower court improperly rejected the defense of

laches to bar the Cayugas' claims. AB-145–163. Appellants’ argument fails for

several reasons.

A. The Trial Court Did Not Abuse Its Discretion

It is well settled that the determination of whether laches bars a plaintiff

from equitable relief is entirely within the discretion of the trial court. Tri-Star

Pictures v. Leisure Time Productions, 17 F.3d 38, 44 (2d Cir.), cert. denied, 513

U.S. 987 (1994). See also, King v. Innovation Books, 976 F.2d 824, 832 (2d Cir.

1992) and Dickey v. Alcoa Steamship Co., 641 F.2d 81, 82 (2d Cir. 1981). Thus,

to overturn the trial court's rejection of a laches defense requires appellants to show

that the trial court abused its discretion in doing so. Appellants have not even

approached such a showing.

As set forth in Point I, supra, the district court found on the factual record

that the Cayugas were not guilty of laches. While appellants disagree with this

finding, they simply fail to provide any factual or legal basis upon which this Court

could find that the trial court abused its discretion in rejecting the defense of

laches.

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B. For Many Years, The Cayugas Lacked A Federal Forum To Bring This Claim

Laches is an equitable doctrine designed to punish litigants who knowingly

"sleep on their rights." But to that end, the law has long held that laches cannot be

imputed to a party who could not have effectively asserted those rights. See, e.g.,

Galliher v. Cadwell, 145 U.S. 368, 372 (1892) (laches cases "proceed on the

assumption that the party to whom laches is imputed has knowledge of his rights

and an ample opportunity to establish them in a proper forum.")(emphasis added);

Northern Pac. Ry. Co. v. United States, 277 F.2d 615, 624 (10th Cir. 1960) (". . .

laches cannot be imputed to one who is without remedy or right of action."). And,

in Travelers Ins. Co. v. Cuomo, 14 F.3d 708 (2d Cir. 1993), rev'd on other grounds

sub. nom., New York State Conference of Blue Cross v. Travelers Ins. Co., 514

U.S. 645 (1995), this Court refused to apply laches to a litigant who had failed to

bring an action because of lower court precedent that barred such cases until, years

later, the Supreme Court had reversed and permitted such actions.

The same circumstances facing the Travelers plaintiff faced the Cayugas for

most of the last two hundred years. Starting with Cherokee Nation v. Georgia, 30

U.S. (5 Pet.) 1 (1831), courts consistently refused to recognize the right of Indian

tribes to maintain a land claim in the U.S. courts. See generally, Clinton &

Hotopp, Judicial Enforcement of the Federal Restraints on Alienation of Indian

Land: The Origin of the Eastern Land Claims, 31 Me. L. Rev. 17, 47 (1979)

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(Cherokee Nation "had a chilling effect that discouraged the tribes from bringing

suit" in federal courts.). A hundred years later, in Deere v. St. Lawrence River

Power Co., 32 F.2d 550 (2d Cir. 1929), this Court found that neither a treaty nor

the NIA conferred jurisdiction upon the district court to hear a Mohawk land claim.

As recently as 1972, this Court affirmed the dismissal of the Oneida case for lack

of federal subject matter jurisdiction. Oneida I, 464 F.2d at 920-21. It was not

until two years later, in Oneida II, when the Supreme Court reversed that decision

(over the arguments of the State) and expressly held that tribal land claims based

on treaties and violations of the NIA did state a federal question, that federal courts

were effectively opened to Indian tribes.40

From the time of the wrongful taking of their land until 1974, the Cayugas

did not have an opportunity to establish their rights in a proper forum as required

by Galliher. Clearly, the lack of any effective forum and opportunity for the

Cayugas to bring their claims until the last quarter of the twentieth century

precludes any finding of laches here.

40 While the State now argues that the Cayugas should be barred by laches for failing to file this action prior to 1980, as recently as 1973, the State argued to the Supreme Court in Oneida II, with substantial precedent, that federal courts had no jurisdiction over such claims.

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C. Oneida VI And Substantial Case Law Supports The Rejection Of Laches

Appellants' attack upon the district court's rejection of a laches defense

chiefly relies upon Justice Steven's dissenting opinion in Oneida VI, 470 U.S. at

255-262 and the three very old cases cited there: Ewert v. Bluejacket, 259 U.S. 129

(1922); Wetzel v. Minnesota R. Transfer Co. , 169 U.S. 237 (1898); and Felix v.

Patrick, 145 U.S. 317 (1892). Appellants, however, wholly ignore the laches

discussion contained in the majority opinion. The majority pointedly rejected the

minority view espoused by Justice Stevens regarding laches:

We note, as JUSTICE STEVENS properly recognizes, that application of the equitable defense of laches in an action at law would be novel indeed.

* * *

this Court has indicated that extinguishment of Indian title requires a sovereign act. See, e.g., Oneida I, 414 U.S. 661, 670 (1974); United States v. Candelaria, 271 U.S. 432, 439 (1926), quoting United States v. Sandoval, 231 U.S. 28, 45-47 (1913). In these circumstances, it is questionable whether laches properly could be applied. Furthermore, the statutory restraint on alienation of Indian tribal land adopted by the Nonintercourse Act of 1793 is still the law. See 25 U.S.C. § 177. This fact not only distinguishes the cases relied upon by the dissent, but also suggests that, as with the borrowing of state statutes of limitations, the application of laches would appear to be inconsistent with established federal policy. Although the issue of laches is not before us, we add these observations in response to the dissent.

470 U.S. at 244 n. 16.

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Even Justice Stevens' dissent acknowledged the controlling view in this

Circuit regarding laches: "The Court of Appeals' rejection of delay-based defenses,

719 F.2d 525, 538 (CA2 1983), will remain the law of the Circuit until it is

reversed by this Court, and will no doubt apply to the numerous Indian claims

pending in the lower courts." Oneida VI, 470 U.S. at 261, n. 10.

Moreover, rejection of a laches defense by the district court follows a well-

established rule of law. A recent and thorough discussion of the inapplicability of

laches was set forth in Oneida X, 194 F. Supp. 2d at 123-24. See also, Swim v.

Bergland, 696 F.2d 712, 718 (9th Cir. 1983) (laches cannot defeat Indian treaty

rights).

The judicial practice of disregarding allegations of laches in this context is

also completely consistent with congressional intent to allow additional time for

the filing of Indian land claims under 28 U.S.C. § 2415. According to the Supreme

Court, "[i]n 1972 and again in 1977, 1980 and 1982, as the statute of limitations

was about to expire for pre-1966 claims, Congress extended the time within which

the United States could bring suits on behalf of the Indians." Oneida VI, 470 U.S.,

at 242. These extensions were granted, in part, due to the acknowledged difficulty

in researching these land claims, the historic lack of adequate tribal legal assistance

and administrative resources, and to allow tribes additional time for preparation

and negotiations of claims arising from the allegedly illegal expropriations of tribal

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lands. See, e.g., South Carolina v. Catawba Indian Tribe, Inc., 476 U.S. 498, 520

n. 6 (1986); 123 Cong. Rec. 22171 (Rep. Weiss) ("[A]s a result of the numerous

injustices suffered by American Indians during the last 150 years . . . it is

incumbent on the United States to give these people -- our country’s first

inhabitants -- a full chance to redress their grievances."). Clearly, it would be

contrary to Congressional intent to preclude the Cayugas under the "equitable"

doctrine of laches from asserting their claim when Congress expressly discussed

and considered the equities involved, and found they warranted extending the

applicable statute of limitations under which the United States could bring such

actions.

Although appellants note that compliance with a statute of limitations does

not necessarily preclude a finding of laches, AB-149-51, even cases cited by

appellants recognize that compliance with the applicable statute of limitations

generally precludes a finding of laches. See, Ikelionwu v. United States, 150 F.3d

233, 238 (2d Cir. 1998) ([I]f the applicable legal statute of limitations has not

expired, there is rarely an occasion to invoke the doctrine of laches."); United

States v. Rodriquez-Aguirre, 264 F.3d 1195, 1208 (10th Cir. 2001); Advanced

Cardiovascular Sys. v. SciMed Life, 988 F.2d 1157, 1161 (Fed. Cir. 1993); Elvis

Presley Enterprises, Inc. v. Elvisly Yours, Inc., 936 F.2d 889, 894 (6th Cir. 1991).

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In light of these principles, the district court correctly rejected appellants'

laches defense.

D. Appellants’ Case Law Is Inapposite

Appellants devote considerable space in their brief discussing general laches

principles found in non-Indian case law. Such cases are inapposite, however, as

the controlling case law denying the defense in Indian cases is well developed.

It is well settled that the application of an equitable principle such as laches

turns upon the particular circumstances of the case at issue. See, e.g., Tri-Star

Pictures v. Leisure Time Productions, 17 F.3d at 44; Stone v. Williams, 873 F.2d

620, 623 (2d Cir.), cert. denied, 493 U.S. 959 (1989), vacated on other grounds,

891 F.2d 401 (2d Cir. 1989). Yet, approaching the instant case as if it were

nothing more than a lot line dispute between neighbors, appellants cite a string of

"laches" cases involving a myriad of issues, AB-149-51, none of which even

remotely approaches the unique circumstances of the present case.

It is inappropriate to equate the circumstances involved in these non-Indian

cases with the extraordinary dispossession of the Cayugas from their land, or to

conclude that any of those holdings have any applicability here.

Appellants cite one case, Robins Island Preservation Fund v. Southold Dev.

Corp., 755 F. Supp. 1185 (E.D.N.Y. 1991), aff'd, 959 F.2d 409 (2d Cir.), cert.

denied, 506 U.S. 1001 (1992), which, at least, provided an analogous fact pattern.

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In Robins Island, a party claimed title to property stemming from an "estate tail"

granted in 1734. The property claim ended in 1779 when a treason conviction

resulted in the forfeiture of all property claims to the State. The Robins Island

court first noted that the plaintiff’s claim came 194 years after the expiration of the

applicable statute of limitations. Not surprisingly, the Robins Island court also

found that the 194-year delay also constituted laches. The instant case is very

different, of course, not only because the record establishes that the Cayugas did

not unreasonably delay bringing their claims, but also because they brought this

case within the applicable federal statute of limitations. See, e.g., Oneida V, 719

F.2d at 538.

In summary, then, there is no basis upon which this Court could find that the

district court abused its discretion in rejecting appellants’ laches defense.

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POINT VII

THE DISTRICT COURT PROPERLY DETERMINED THAT THE NON-INTERCOURSE ACT APPLIED TO THE STATE OF NEW YORK

Appellants' liability stems from the State's violation of the 1793 and 1802

versions of the NIA, an Act whose "obvious purpose . . . is to prevent unfair,

improvident or improper disposition by Indians of lands owned or possessed by

them to other parties, except the United States, without the consent of Congress,

and to enable the Government, acting as parens patriae for the Indians, to vacate

any disposition of their lands made without its consent." Federal Power Comm'n

v. Tuscarora Indian Nation, 362 U.S. 99, 119 (1960). Accordingly, as the Supreme

Court held in Oneida II, 414 U.S. at 670, "The rudimentary propositions that

Indian title is a matter of federal law and can be extinguished only with federal

consent apply in all of the States, including the original 13."

Despite the NIA's plain language and overriding purpose of safeguarding

Indian land rights and the Supreme Court's contrary determination, appellants

argue that the NIA did not apply to the State or prevent the State from acquiring

the Cayuga's lands in 1795 and 1807. AB-164-171. Both of appellants' arguments

in this regard should be rejected.

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A. The NIA Barred The State’s Actions

Appellants begin with the flawed assertion that, in order for the NIA to

apply in this case, "Congress 'must make its intention to do so unmistakably clear

in the language of the statute.'" AB-164. The Supreme Court recently rejected this

"unmistakably clear" standard in Jinks v. Richland County, 123 S. Ct. 1667, 1673

(April 22, 2003) ("[T]he idea that an 'unmistakably clear' statement is required

before an Act of Congress may expose a local government to liability cannot

possibly be reconciled with our holding in Monell v. New York City Dep't of Social

Servs., 436 U.S. 658 [1978]").

But under any standard, the NIA's plain language clearly prohibited the

State's actions with regard to the Cayugas. The State's primary argument relies

upon a change in the NIA's language from 1790 to 1793 (and as continued in

1802). AB-164–168. The 1790 NIA stated:

. . . no sale of lands made by any Indians, or any nation or tribe of Indians within the United States, shall be valid to any person or persons, or to any state, whether having the right of pre-emption to such lands or not, unless the same shall be made and duly executed at some public treaty, held under the authority of the United States.

In 1793, the NIA was changed to read:

. . . no purchase or grant of lands, or of any title or claim thereto, from any Indians or nation or tribe of Indians, within the bounds of the United States, shall be of any validity in law or equity, unless the same be made by a

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treaty or convention entered into pursuant to the constitution.

According to appellants, and without any supporting law or legislative

history, the removal of the words "any state, whether having the right of pre-

emption to such lands or not" somehow evidenced a Congressional intent to excuse

the original thirteen states (which at that time encompassed all of the states other

than Vermont and Kentucky) from the NIA's restrictions, despite the inclusion of

the phrase "within the bounds of the United States." In other words, appellants

urge that the plain language of "no purchase or grant of lands . . . within the bounds

of the United States . . . shall be of any validity in law or equity" means something

quite different, i.e., "within the bounds of Vermont and Kentucky."

The 1793 and 1802 versions of the NIA do not say this, or even suggest such

a reading. In light of the clear wording of the statute and the complete lack of

support for appellants' argument, the district court directly addressed, and

summarily rejected, the State’s position:

In determining the scope of a statute, the Court must first examine its language. "Absent a clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive." The language of the 1793 and 1802 Nonintercourse Acts reveals no ambiguity whatsoever as to their geographic scope. By their express terms both are applicable to land transactions "within the bounds of the United States," an area that has always included the State of New York. It is difficult to conceive why Congress would have

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employed this unequivocally inclusive language if it sought to exclude from coverage most of the territory formerly within the scope of the statute. If such was its intent, one would expect Congress to have simply changed the previous clause, "any state, whether having the right of pre-emption or not," to some variant of "any state, except those having the right of pre-emption." Instead, Congress omitted all reference to preemption states, apparently deeming any reference superfluous, and made the statute applicable "within the bounds of the United States." In our view, that change of language evidences, if anything, a legislative intent to remove all doubt as to the uniformly-inclusive nature of the nonalienability clause.

SPA-574-75.

The district court also relied upon this Court's ruling in Mohegan Tribe v.

State of Connecticut, 638 F.2d 612, 621 (2d Cir. 1980), cert. denied, 452 U.S. 968

(1981) that "the statute was meant to apply to Indian Land throughout the United

States." Although the appellants argue here, AB-166-67, as they did below, that

the Mohegan decision related primarily to the "surrounded by settlements"

exception in the NIA, the district court correctly noted that it would be improper

to fixate on the ultimate holding in Mohegan and ignore almost the entire basis for that holding: the Court's finding that the statutory language, the legislative and jurisdictional history, and the case law all indicate that the Nonintercourse Act was meant to apply to land transactions throughout the United States.

SPA-575.

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Upon remand the district court in Mohegan expressly rejected the specific

argument that appellants advance here, finding that the 1793 version of the NIA

included "a stronger prohibition, not a weaker one . . ." against state purchases.

Mohegan Tribe v. Connecticut, 528 F. Supp. 1359, 1364 (D. Conn. 1982).

B. The NIA Is Not Limited To Transactions Involving Aboriginal Title

As a secondary argument, appellants assert here for the first time that the

NIA only applies to tribal lands held under aboriginal title. Because, they assert,

the Cayugas did not hold their land pursuant to aboriginal title, the State's

acquisitions did not violate the NIA. AB-168–171.

Appellants admittedly did not raise this argument in the court below despite

having more than 20 years to do so, and offer no explanation for that failure.

AB-167 n. 61. This Court has consistently refused to reverse judgments based

upon, or even consider, arguments raised for the first time on appeal. Leyda v.

Allied Signal, Inc., 322 F.3d 199, 207 (2d Cir. 2003); Greene v. United States, 13

F.3d 577, 586 (2d Cir. 1994) (this Court refused to consider United States'

argument, first raised on appeal, which would have required examination of 13

year-old legislative history.); see also, Arizona v. California, 530 U.S. 392, 410

(2000) (refusing to consider an argument not previously advanced merely because

a "light finally dawned" years into the litigation). While this rule is discretionary,

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there is no reason to depart from it here, where the applicable legislative history is

hundreds of years old and the State devotes only a cursory five pages, out of 251,

to the issue. Greene, supra.

Even if the Court were to consider the argument, it would find it

unpersuasive. First, the argument appears to be based on the precise language in

the 1790 NIA that was eliminated in the 1793 and later versions of that statute.

Appellants offer no reason whatsoever why this Court should draw inferences from

language that does not appear in the relevant versions of the NIA.

Second, this new argument wholly fails to explain why Congress would

have been more concerned about protecting Indian lands held under aboriginal title

than those held under recognized title. Given the fact that recognized title derives

from some formal act of recognition by the United States, Point II, supra,

appellants' contention is both illogical and counterintuitive.

Finally, this new argument is unsupported by relevant authority. The most

comprehensive summary of the law regarding the relationship between the NIA

and Indian title is Tonkawa Tribe v. Richards, 75 F.3d 1039, 1045-46 (5th Cir.

1996). There, an Indian tribe brought an action pursuant to the NIA, claiming it

had been wrongfully dispossessed of its former land in Texas. The Tonkawa court

ruled against the tribe, finding it had no vested interest or claim to the Texas land.

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However, in doing so, it discussed at length the NIA's scope, expressly rejecting

any suggestion that it applied only to tribal lands held under aboriginal title:

The Nonintercourse Act protects a tribe's interest in land whether that interest in (sic) based on aboriginal right, purchase, or transfer from a state. See, e.g., Alonzo v. United States, 249 F.2d 189, 196 (10th Cir. 1957) (grants made by governments of Spain and Mexico and by purchase), cert. denied, 355 U.S. 940, 78 S. Ct. 429, 2 L.Ed. 2d 421 (1958); Joint Tribal Council of Passamaquoddy Tribe v. Morton, 528 F.2d 370 (1st Cir. 1975) (grants by state); United States v. 7405.3 Acres of Land, 97 F.2d 417, 422 (4th Cir. 1938) ("It makes no difference that title to the land in controversy was originally obtained by grant from the state of North Carolina."); see also, Oneida Indian Nation v. County of Oneida, 434 F. Supp. 527, 538 (N.D.N.Y. 1977) (Nonintercourse Act protects land reserved for tribe in treaty with New York prior to passage of United States Constitution), aff’d, 719 F.2d 525 (2nd Cir. 1983), aff’d in part and rev’d in part on other grounds, 470 U.S. 226, 105 S. Ct. 1245, 84 L. Ed. 2d 169 (1985).

Against this authority holding that the NIA makes no distinction regarding

the nature by which the Indians acquired or held their interest in land, appellants

rely upon Mashpee Tribe v. Watt, 542 F. Supp. 797 (D. Mass. 1982), aff'd, 707

F.2d 23, cert. denied, 464 U.S. 1020 (1983). But Mashpee does not support

appellants' contention. Mashpee construed the scope of the 1834 NIA in light of its

change from 1802, and whether individual tribal members could maintain an action

under the 1834 NIA. 542 F. Supp. at 802-04. And to the extent that dicta in

Mashpee might be construed to limit the scope of the NIA's coverage, that dicta is

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inconsistent with the overwhelming weight of authority cited and discussed in

Tonkawa Tribe, above.

As a result, even if the Court should decide to consider appellants' argument

for the first time on appeal, the Court should reject it as without merit and affirm

the decision of the district court that the NIA applies to the State of New York.

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POINT VIII

THE ELEVENTH AMENDMENTDID NOT REQUIRE DISMISSAL

OF THE CAYUGAS' CLAIMS

Appellants argue that the trial court erred in not finding that the Eleventh

Amendment completely barred the Cayugas' claims against the State. AB-172-73.

Appellants acknowledge that Seneca Nation of Indians v. New York, 178 F.3d 95,

97 (2d Cir. 1999) conclusively held that the Eleventh Amendment did not

constitute such a bar. Yet they assert, completely without argument, that "the

decision in Seneca Nation was incorrect," and they raise the argument simply to

preserve it for further appellate review. AB-173. Because appellants provide no

basis for this Court to reconsider its Seneca Nation ruling, clearly there is no

reason to do so. Accordingly, the Court should affirm the district court's holding

that the Eleventh Amendment does not bar the Cayugas' claims against the State.

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POINT IX

THE DISTRICT COURT PROPERLY FOUND THAT PLAINTIFFS

HAD A PRIVATE RIGHT OF ACTION

Appellants argue that the trial court improperly held that the Cayugas had a

private right of action under the NIA. AB-173-74. Although Appellants

acknowledge that this Court has reached the same conclusion in Oneida V, they

assert that Alexander v. Sandoval, 532 U.S. 275 (2001) creates "intervening

Supreme Court precedent" that no such private right of action exists.

In fact, Sandoval creates no such precedent. Sandoval involved the private

enforceability of certain agency regulations promulgated pursuant to § 602 of Title

VI of the 1964 Civil Rights Act. The Sandoval Court noted that private individuals

may sue to enforce § 601. Id. at 279. Section 602, however, is different. Section

602 simply authorizes federal agencies to effectuate section 601 "by issuing rules,

regulations and orders of general applicability." Id. at 288. Section 602 "focuses

neither on the individuals protected nor even on the funding recipients being

regulated, but on the agencies that will do the regulating." Id. Thus the Sandoval

court found no basis to infer a § 602 private right of action.

But unlike § 602, the NIA does not address rules, regulations or federal

agencies. Rather, it focuses on the protected entities and expressly prohibits sales

of Indian land without Congressional approval. Thus, it is clear that Congress

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intended the NIA to protect the Cayugas from actions by the State, and as,

explained by both the trial court, SPA-581-85, and in Oneida V, to provide a

private right of action to address any violation.

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ARGUMENT: REMEDY ISSUES

POINT X

THE COURT BELOW ERRED INDENYING THE REMEDY OF EJECTMENT

The United States Supreme Court, this Court and the court below have

repeatedly held that Indian land claims to regain possession of wrongfully taken

tribal lands are actions in ejectment. See, e.g., Oneida VI, 470 U.S. at 235 ("That

an action of ejectment could be maintained on an Indian right to occupancy and

use, is not open to question. This is the result of the decision in Johnson v.

McIntosh," quoting Marsh v. Brooks, 8 How. 223, 232 (1850)); Oneida II, 414

U.S. at 682-83 (Rehnquist, J. concurring) ("plaintiffs' right to possession . . . was

and is rooted firmly in federal law . . . [and] the complaint in this action is basically

one in ejectment."); Oneida V, 719 F.2d at 540 (The Oneidas' suit "corresponds to

the common law action for ejectment in which a plaintiff need only establish his

right to possession."); Cayuga I, SPA-573 (the Cayugas "seek the appropriate legal

remedy for one out of possession who claims a paramount right to possession:

recovery of possession and damages through an action in ejectment.").

Ejectment is a legal remedy, and hence not subject to equitable defenses.

See, e.g., Oneida VI, 470 U.S. at 245 n. 16 (expressing doubt that equitable

defense of laches could have application for legal action for ejectment.); Ewert v.

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Bluejacket, 259 U.S. 129, 138 (1922); Dunbar v. Green, 198 U.S. 166, 170 (1905);

Sun Oil Co. v. Fleming, 469 F.2d 211, 214 (10th Cir. 1972) ("It is the rule that if

the law affords a remedy and that remedy is adequate, the cause may not be made

the basis of a suit in equity. The gravamen of . . . [the] claim is its demand for

possession. . . . The legal action of ejectment is the proper remedy for the recovery

of possession under such circumstances. . . . It follows that the equitable defense

of laches cannot prevail."). See also, Green, Specific Relief For Ancient

Deprivations of Property, 36 Akron L. Rev. 245, 280 (2003) (hereinafter "Green")

("an equitable defense may not be set up to defeat a strictly legal cause."); 25 Am.

Jur. 2d, Ejectment §1 ("ejectment is an action at law, not in equity, and equity will

not take jurisdiction as a substitute for an action in ejectment.").

Despite these principles and its own expressed doubt regarding the

application of equitable factors in the context of an ejectment claim, SPA-475, the

district court, following a three-day evidentiary hearing which it decided to

conduct, SPA-454, applied equitable factors to deny the remedy of ejectment to the

Cayugas. In so doing, the court relied upon the equitable factors applicable in an

action to enjoin a trespass as set forth in the Restatement (Second) of Torts §936(1)

(a)-(g), as applied in United States v. Imperial Irrigation District, 799 F. Supp.

1052 (S.D. Cal. 1992). SPA-473-74.

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In Imperial Irrigation, the plaintiff tribe did not plead ejectment. A claim for

ejectment was not available to the tribe because it remained in possession. The

California district court analyzed the case under the Restatement factors for a

permanent injunction against trespass which was entirely proper under the

circumstances of that case, but wholly inappropriate to this case. As recently

explained by Professor Green in criticizing Judge McCurn's denial of ejectment,

supra:

What Imperial Irrigation was saying was that ejectment is not the remedy for trespass, which was what the pleadings and facts there had established. In contrast, in Cayuga, the plaintiffs have been dispossessed and have stated a cause of action in ejectment. Thus, while Imperial Irrigation correctly denied ejectment on the grounds and facts recited, it was not correct for Cayuga, to deny ejectment on the basis of Imperial Irrigation when the facts of the two cases were in opposition.

36 Akron L. Rev. at 289.41

By disregarding the established remedies for an action in ejectment and by

analyzing the proceedings under wholly inapposite standards, the district court's

analysis of the Restatement factors was flawed from the outset. The court

41 The district court's application of an erroneous legal standard is subject to de novo review by this Court. Winter Storm Shipping, Ltd. V. TPI, 310 F.3d 263, 267 (2d Cir. 2002), cert. denied, 2003 U.S. LEXIS 4627 (June 16, 2003); National Union Fire Ins. Co. v. Bonnanzio (In Re Bonnanzio), 91 F.3d 296, 301 (2d Cir. 1996).

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compounded its error by determinations that were contrary to controlling

precedent, and the principles governing ejectment and property law.

At the ejectment hearing, Clint Halftown, a representative of the Nation,

A-4149, and Patty Harjo Shinn, a member of the Tribe, A-4153, testified with

respect to the first Restatement factor, as to the importance of land to the Cayugas,

the significance of certain landmarks in the Claim Area -- The Great Gully and

Cayuga Castle -- to the Cayugas, and the devastating negative impact that being a

landless peoples has had on the Cayugas' ability to preserve their culture, language,

religious practices and to obtain government funding. Ejectment T28-29, 40-41,

45, 56-62, 155-59, 175-76. Describing the Cayugas' religious ceremonies, Ms.

Shinn explained:

. . . we consider the land our mother. This is where we come from, this is what our whole religion you might say is about, our beliefs. It gives us a base to continue, it gives us a place to return to, a place to raise and teach our children, a place to return and to rekindle our fires of our nation.

Ejectment T-175-76.

Justice Brennan made similar observations regarding the significance of land

to Indians in Lyng v. Northwest Indian Cemetery Protective Association, 485 U.S.

439, 460-61 (1988):

Native American faith is inextricably bound to the use of the land. The site-specific nature of Indian religious

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practice derives from the Native American perception that land is itself a sacred, living being. . . . Rituals are performed in prescribed locations, not merely as a matter of traditional orthodoxy, but because land, like all other living things, is unique, and specific sites possess different spiritual properties and significance.

The court also heard testimony from Kevin Gover, then the Assistant

Secretary of the Interior and the Director of the Bureau of Indian Affairs, who

explained that as a landless tribe, the Cayugas were ineligible for funding for

schools, housing, courts and social services. Ejectment T-213-14. Similarly, the

Cayugas were ineligible for programs administered by the Department of

Agriculture, the Farmers Home Administration, the Housing and Urban

Development Department, the Justice Department and the Environmental

Protection Agency. Ejectment T-219-21,

Mr. Gover testified that although the Cayugas were not one of the smallest

Nations, it received one of the smallest federal budgets -- $76,000 in fiscal year

1998. This compared to a budget of $676,000 for the Seneca Nation and $1.2

million for the Oneida Nation, both resident in upstate New York. The

discrepancy was attributable to the Cayugas' status as a tribe without land.

Ejectment T-231-34; Ejectment G-7.

The court acknowledged that "great hardships have befallen the Cayugas as

a result of the 1795 and 1807 cessions; and the Cayugas will continue to sustain

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some hardships if the court refuses to order ejectment." SPA-82. Nevertheless, the

court found that "[a]part from the relatively few acres which comprise the Great

Gully and Cayuga Castle, the Cayugas have not shown how the subject property is

so unique that the objectives which they hope to attain, such as economic, political

and cultural development, cannot be reached without ejecting thousands upon

thousands of landowners." SPA-79. The "objectives" of the Cayugas' lawsuit,

however, were the return of the Claim Area and the damages to which they were

entitled for the centuries of dispossession.

By relying on inappropriate factors, the district court imposed an improper

burden on the Cayugas of establishing that the land was unique, while imposing no

concomitant burden on those who occupied it wrongfully. Moreover, under basic

principles of real property law, all land is presumptively considered unique. See,

e.g., Bean v. Independent Am. Sav. Ass'n, 838 F.2d 739, 743 (5th Cir. 1988);

United Church of the Medical Center v. Medical Center Comm'n, 689 F.2d 693,

701 (7th Cir. 1982); Sportsmen's Wildlife Defense Fund v. United States Dep't of

the Interior, 949 F. Supp. 1510, 1523 (D. Col. 1996). See also, Green, supra, 36

Akron L. Rev. at 279.

The district court subordinated the Cayugas' right and title to the land to the

interests of those currently in possession, despite its recognition that the Cayugas'

title to the land was recognized by the Treaty of Canandaigua with the United

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States. See, United States v. State of Washington, 157 F.3d 630, 647 (9th Cir.

1998) (fishing right of various Indian tribes arose "from a treaty with the United

States, . . . reserved and protected by the supreme law of the land, [which] does not

depend on state law, [and] is distinct from rights or privileges held by

others . . . .").

While the court recognized that the Cayugas were not guilty of any

disqualifying misconduct even under the equitable rules it was misapplying,

SPA-481-82, it refused to order ejectment against the "blameless" landowners

currently in possession. SPA-478. However, whether an occupier entered

property innocently is irrelevant in an action in ejectment to restore title to the

proper owner. See, e.g., Green v. Biddle, 21 U.S. (8 Wheat.) 1, 74-76 (1823). See

also, Ewert v. Bluejacket, supra (granting specific relief for the recovery of

aboriginal lands despite the passage of decades and the transfer of title to good

faith successor purchasers where the successors' claim derived from a void deed);

Phillips Petroleum Co. v. Mississippi, 484 U.S. 469, 482, 484 (1988) ("[t]he fact

that petitioners have long been the record title holders, or long paid taxes on these

lands [for more than a century] does not change the outcome" that the lands

belonged to the respondent.). Moreover, as the testimony at the hearing

demonstrated, many of these landowners acquired their properties after this action

was commenced in 1980, and even after summary judgment was entered in 1991.

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They ignored the lis pendens filed in this case, confident that the Cayugas would

not prevail. SPA-481; Ejectment T-544-50.

With respect to State-owned lands, the court's analysis is even less sound.

The court found on the facts that the State did not act in good faith at the time it

acquired the Cayuga lands in 1795 and 1807, and has not acted in good faith since

then. See, Point I, supra. Thus, even if there were a basis for considering the

equitable considerations regarding the good faith of an occupant in a legal action

for ejectment, there was no basis for not awarding the Cayugas title to State-owned

lands in the Claim Area.

The court also relied upon the equitable defense of laches to deny the

Cayugas' recovery of title to the Claim Area, SPA-480-81, despite previously cited

ample authority that laches has no application to a legal claim for ejectment, and

contrary to its subsequent ruling that the Cayugas were not guilty of any

unreasonable delay in commencing this action.42 See, Point I, supra.

The court recognized that this Court had ordered the ejectment of non-

Indians in possession on Oneida Indian land in United States v. Boylan, 265 F. 165

(2d Cir. 1920), and it attempted to distinguish Boylan and United States v. Brewer,

42 After the court issued its post-trial findings of fact, determining, inter alia, that the State did not act in good faith and that the Cayugas were not guilty of laches, the Cayugas asked the court to reconsider its denial of ejectment on that basis. The motion was denied. SPA-64-65.

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184 F. Supp. 377 (D. N.M. 1960), which also ordered the ejectment of non-tribal

defendants from Indian lands, on the ground that these cases involved smaller

acreage and affected fewer people. It cited no authority for its conclusion that the

availability of relief in an action at law for return of specific property is dependent

upon the size of the property involved, or the number of persons subject to

ejectment.

In Heckman v. United States, 224 U.S. 413 (1912), the Court affirmed the

reinstatement of a complaint canceling 3,715 conveyances of Cherokee Indian

land. The suit was one of a group of actions, seeking cancellation of 30,000

conveyances of land of the Five Civilized Tribes, affecting 16,000 defendants.

More recently in Banner v. United States, 238 F.3d 1348 (Fed. Cir. 2001), the

Federal Circuit affirmed the decision of the Court of Claims, 44 Fed. Cl. 568

(1999), dismissing the claims of individuals who were ejected after refusing to

enter into leases approved by Congress with the Seneca Nation of Indians.

Although approximately twenty plaintiffs were ejected, they were joined in their

action by some 2300 plaintiffs who signed the leases but objected to their terms.

See also, Fluent v. SILA, 928 F.2d 542 (2d Cir.), cert. denied, 502 U.S. 819 (1991)

(rejecting claims that the leaseholders had property rights or owned the

improvements on Seneca land.).

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The court below also expressed concern that an order of ejectment, even if

long-term leases were a component, would create enforcement impediments,

including the possibility of massive non-compliance, civil disobedience and

"satellite contempt proceedings." SPA-484. The court did not cite any authority

that would withhold ejectment on the basis of such considerations.

Again applying equitable standards appropriate for injunctions, the district

court determined that monetary damages would be adequate substitute relief: "As

the court envisions it, eventually the Cayugas will have the financial means to

purchase land within the claim area from willing sellers." SPA-478. While a

plaintiff seeking ejectment is entitled to both restoration of possession and

damages for use and occupancy, the gravamen of the claim is the demand for

possession. Sun Oil Co. v. Fleming, supra. See also, Pernell v. Southall Realty,

416 U.S. 363, 375 (1974) ("ejectment . . . permit[s] the plaintiff to evict one who is

wrongfully detaining possession and to regain possession himself."). By relegating

the Cayugas to an action for damages and the dismal prospect of negotiating to

purchase their own property in approximately 7,000 separate transactions from

hostile "willing sellers," the court effectively eliminated the major basis of the

Cayugas' complaint and undermined the remedy of ejectment through the

application of inapposite equitable considerations. See, Green, supra, 36 Akron. L.

Rev. at 293-95.

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Moreover, placing the Cayugas' ability to repossess the Claim Area in the

hands of the jury led to a grossly unfair result which failed to achieve the district

court's stated aim of achieving adequate compensation for the Cayugas to

repurchase their homeland. The jury was instructed to calculate and award the

present or current value of the Claim Area (as a substitute for ejectment), and in

addition, to award the value of the use and occupancy value of the land for each of

the 204 years of dispossession. SPA-350.43 However, a hostile jury awarded only

$35 million as the current value of the Claim Area, A-4767, ignoring the

indisputable documentary evidence that the defendant Counties had themselves

assessed the Claim Area in its unimproved condition three years before the

verdict at $156 million, even excluding tax exempt property.44 SPA-277; N-23;

T-2165.45

The jury award obviously does not provide adequate monetary damages as a

substitute remedy for ejectment. In any event, as the Supreme Court stated in

Federal Power Comm'n v. Tuscorara Indian Nation, 362 U.S. 99, 142 (1960), in 43 Because the current or present value award was intended as a substitute for the return of the Claim Area, SPA-350, and because the court only calculated prejudgment interest on the use and occupancy damages, to which a plaintiff suing for ejectment is also entitled, Green v. Biddle, 21 U.S. at 74-75, there was no "double recovery," despite the State's contention. AB-203 n. 78.

44 The total assessed value of improvements which the court did not allow as damages, was then an additional $286 million. T-2165.

45 Indeed, the State breathed a public sigh of relief at the "low" amount awarded by the jury, as the district court noted in a post-trial decision. SPA-274.

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connection with the cultural and spiritual significance of land to Indians: "Some

things are worth more than money. . . ."

The result below, therefore, contravened established principles of property

law, and in addition, led to an unjust result. As Professor Green stated in

criticizing the Cayuga decision: "The importance of the cause of action of

ejectment . . . cannot be overstated . . . it was required as the fulfillment of the idea

of property." Green, 36 Akron L. Rev. at 279.

The right to possess property and exclude others is the quintessential feature

of the right of property. Indeed, the Supreme Court defined the right to exclude as

"the essential element of property." Kaiser Aetna v. United States, 444 U.S. 164,

176 (1979). Green, supra, 36 Akron L. Rev. at 280 n. 192. As the Supreme Court

ruled in Green v. Biddle, supra:

The common law of England was . . . as it still is . . . that a right to land, by that law, includes the right to enter on it, when the possession is withheld from the right owner; to recover possession by suit and to receive the issues and profits arising from it. *** [A] law which denies to the owner of land a remedy to recover possession of it, when withheld by any person, however innocently he may have obtained it . . . impairs his right to, and interest in, the property. If there be no remedy to recover possession, the law necessarily presumes a want of right to it.

21 U.S. at 75-76.

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By preferring the rights of trespassers over the federally recognized title of

the Cayugas, the district court effectively extinguished the Cayugas' title, which

may not be done without Congressional approval. See, e.g., Fellows v.

Blacksmith, 60 U.S. 366, 372 (1857); United States v. Boylan, supra, 265 F. at 171

("It is only where Congress has enacted legislation controlling the disposition of

property of Indian reservations that valid conveyances may be made."). Indeed,

the district court itself had earlier ruled that "plaintiffs obtained recognized title to

the subject land by the Treaty of Canandaigua, and therefore only Congress can

divest the plaintiffs of their title to this land." SPA-540. See also, Clinton and

Hatopp, Judicial Enforcement of the Federal Restraints On Alienation of Indian

Land: The Origins of the Eastern Land Claims, 31 Me. L. Rev. 17, 85 (1979)

(defense that would have effect of transferring title to tribal land without federal

approval would conflict with NIA and must fail). As Professor Green concludes:

"Denying ejectment also permits alienation of property which federal policy has

made inalienable in order to ensure to its holders possession in perpetuity." Money

damages are an inadequate substitute because the federal "prohibition is against

alienation, not alienation without compensation. . . ." 36 Akron. L. Rev. at 294-95.

This Court should grant the Cayugas' cross-appeal and §1292(b) appeal and

reverse the district court's order denying the remedy of ejectment as to all

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defendants. At a minimum, this Court should reverse the order as to State-owned

lands.

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POINT XI

THE STATE HAS NOT MET THE STANDARDS FOR A NEW TRIAL

Although the State publicly expressed satisfaction with the unexpectedly

"low" jury verdict, SPA-274, it is the State, not the Cayugas or the United States,

which seeks a new trial, relief the district court denied.

This Court reviews the denial of a motion for a new trial under an abuse of

discretion standard. Ball v. Interoceania Corp., 71 F.3d 73, 76 (2d Cir. 1995), cert.

denied, 519 U.S. 863 (1996); Metromedia Co. v. Fugazy, 983 F.2d 350, 363 (2d

Cir. 1992), cert. denied, 508 U.S. 952 (1993).

A. The District Court Properly Rejected The State's Attempt To Limit Recovery To "Time Of Conveyance" Damages

Attempting to build on the district court's denial of ejectment, the State

argues that this decision implies that the Cayugas have suffered a total deprivation

of property and should have been limited at trial to damages based upon the market

value at the time of taking.46 The State's argument erroneously assumes that title

has been legally conveyed and ignores the thrust of the NIA that any attempted 46 The State cites to the Restatement (Second) of Torts § 927 which deals primarily with the conversion of chattels. The State fails to cite § 927(2) which provides that "damages also include . . . (b) the amount of any further pecuniary loss of which the deprivation has been a legal cause; (c) interest from the time at which the value is fixed; and (d) compensation for the loss of use not otherwise compensated."

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transfer of title to Indian land without Congressional approval is illegal and void.

Significantly, this measure of damages does not apply to illegal takings. As

explained in Nichols on Eminent Domain (3d Ed.) § 8.05[3], the rule assessing

damages as of date of taking "does not contemplate a physical taking not

sanctioned by law" and does not apply to takings not conducted under the power of

eminent domain. Because this is not an eminent domain case, the authorities cited

by the State, AB-215, for its valuation argument have no application here.

The State relies principally, and inappropriately, on Shoshone Tribe of

Indians v. United States, 299 U.S. 476 (1937), for its contention that damages must

be limited to the time of taking. Shoshone was not an action to recover possession

and damages under the NIA, or under federal common law; the plaintiff-tribe was

seeking just compensation for the wrongful taking of its lands by the actions of the

United States in permitting the Arapahoe tribe to settle and remain on Shoshone

territory. Unlike the instant action, "the occupancy of the Arapahoes and their

equal interest in the land, was ratified by Congress" 299 U.S. at 489.

The other cases cited by the State, AB-217, were actions by Indians against

the federal government pursuant to the ICCA, for the wrongful taking of Indian

lands. As the district court explained, "valuation based upon the time of 'taking'

was statutorily mandated under the ICCA. The NIA does not include any such

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provision." SPA-499. The ICCA, the court continued, was created to address

claims by Indians against the federal government, and:

was never intended to address this situation where Indians are asserting land claims for wrongful possession against non-federal entities, such as the Counties, the State, and private landowners. In light of these differences, this court is not constrained to apply the fair market value date-of-taking method employed in ICCA cases.

SPA-499.

The district court also found that a date of taking damages approach would

fail to address the centuries of dispossession suffered by the Cayugas and would be

contrary to the purpose of the NIA. SPA-500. The court concluded that valuing

the land as of the date of conveyance would allow for an inconsequential recovery,

and, coupled with the State's request, that it be afforded an offset for the

consideration it has paid to the Cayugas, would lead to the "untenable" and

"incongruous" result that the Cayugas owed the State money:

It is unfathomable how the State can even pretend to seriously argue for such a result, but it is indicative of its highhanded attitude in dealing with the Cayugas throughout this litigation, and indeed throughout history. SPA-500.

Even assuming arguendo, that damages were based upon the market value at

the time of the 1795 and 1807 Treaties, the result would be identical to what the

Cayuga seek on their cross-appeal. The State realized approximately $300,000 as

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a result of their sales of the Claim Area almost immediately after their

"purchase." 47 In current dollars, this equals the approximate $1.75 billion the

Cayugas seek. Moreover, this amount is consistent with the Restatement (Second)

of Torts § 927(2) which the State omits from its discussion.

B. The District Court Properly Rejected New York's Statutory Limitation On Rental Value Damages

Despite the fact that the Cayugas were denied the use and occupancy of the

Claim Area and denied access to the courts for two centuries, the State argues that

the district court should have limited recovery for rental damages to a period

commencing six years before this action was commenced by adopting NYRPAPL

§ 601. AB-220-24.

In accordance with this Court's ruling in Oneida V, the district court held

that the Cayugas have a private remedy under the NIA. Where, as here, the claim

arises under a federal act, "the scope of the remedy as well as the substance of the

rights created thereby is a matter of federal not state law." F.D. Rich Co., Inc. v.

United States, on Behalf of Industrial Lumber Co., 417 U.S. 116, 127 (1974).

Relying primarily on Wilson v. Omaha Indian Tribe, 442 U.S. 653 (1979),

the State argues that even where federal law is involved, a federal court may,

47 Certainly, this is an indication of the Claim Area's value. See also, note 71 at p. 234.

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nevertheless, look to state law to adopt a rule. However, Wilson, and the two other

cases cited by the State, Bd. of Comm'rs of County of Jackson, supra, 308 U.S. 343

(1939) and United States v. Hess, 194 F.3d 1164, 1173 (10th Cir. 1999), confirm

that state law will not be applied where there is an issue requiring a uniform federal

policy, particularly where the claim is based on a federal statute.

Indeed, the Supreme Court ruled, in a case which the State chooses not to

cite, that the cases cited by the State do not apply, where, as here, a federal statute

was the source of plaintiffs' rights. California ex rel. State Lands Comm'n v.

United States, 457 U.S. 273, 284 (1982) ("In Wilson, where we did adopt state law

as the federal rule, no special federal concerns, let alone a statutory directive,

required a federal common-law rule"). See also, California ex rel. State Lands

Comm'n v. United States, 805 F.2d 857, 861 (9th Cir. 1986), cert. denied, 484 U.S.

816 (1987) ("Because in the present case the United States' claim is based in part"

on a federal statute, we "apply a federal rule of decision; we do so without

balancing, under Wilson, the varying federal and state interests. . . ."). See also,

Jicarilla Apache Tribe v. Andrus, 687 F.2d 1324, 1341 n. 11a (10th Cir. 1982)

(uniform federal law was required in dispute between tribe and lessees because

leases at issue were governed by federal law).

In Brooks v. Nez Perce County, 670 F.2d 835, 838 (9th Cir. 1982), the Court

of Appeals addressed the inapplicability of a state statute of limitations to an Indian

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land claim. It ruled that Wilson, County of Jackson, and the state limitation period

did not apply because there was an "explicit legislative policy cutting across state

interests" contained in 28 U.S.C. § 2415, superceding a state statute of limitations,

such as NYRPAPL § 601. Willis v. McKinnon, 178 N.Y. 451, 455-56 (1904).

Applying NYRPAPL § 601 would conflict with the "explicit legislative

policy" set forth in 28 U.S.C. § 2415, and numerous federal cases holding that state

statutes of limitation do not apply to Indian land claims, including this Court's

rulings in Oneida IV, 691 F.2d at 1083-84 (Oneida not subject "to state delay-

based defenses") and Mohegan Tribe v. Connecticut, 638 F.2d 612, 615 n. 3 (2d

Cir. 1980), cert. denied, 452 U.S. 968 (1981). Similarly, in Oneida VI, 470 U.S. at

244 n. 16, the Court stated that "as with the borrowing of state statutes of

limitations, the application of laches would appear to be inconsistent with

established federal policy."

The district court's refusal to apply NYRPAPL to drastically reduce the

Cayugas' recovery for the many years of their dispossession was an appropriate

exercise of its discretion and in furtherance of the federal statutes protecting the

rights of Indians in their tribal lands.

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C. The State Was Properly Held Liable For The Full Amount Of The Cayugas' Damages        

The district court denied the United States' motion to hold the State jointly

and severally liable for all of the damages, but granted the United States'

alternative request for a separate trial against the State, to be followed, if

necessary, by a trial against the remaining Non-State Defendants. Cayuga XI,

SPA-353-62. All of the interests of the Non-State Defendants were derived under

a chain of title derived from the State, as so stated in their cross-claims against the

State. A-405-15.

The State contends that the district court erred by permitting the jury to

award use and occupancy damages against it for the full period of the Cayugas'

dispossession, and it maintains that such a result is contrary to the common law.

The authority it cites, however, does not support its argument.

The State claims that at common law the party causing a dispossession was

only liable for damages arising immediately from the ouster, and not for damages

subsequently suffered. It relies on Prosser and Keaton on Torts §13 at 78 (5th ed.

1984) and the Restatement (Second) of Torts §162 cmt. c (1965) for this

proposition. AB-225. The treatise, however, merely states that an owner may not

bring an action for trespass damages after the ouster, but may, instead, seek the

appropriate relief by way of an action for ejectment, and for mesne profits, as the

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Cayugas have done. The Restatement comment does not address the nature of the

action or remedies available to an ousted or ejected owner. Indeed, at common

law, a trespasser who made subsequent transfers of his ill-gotten title was

responsible to the original owner for all of the damages, including "all the mean

profits." Liford's Case, (11 Co. 46) (1614), overruled on other grounds in

Holcomb v. Rawlyns, (Cro. Eliz. 540). See, Green v. Biddle, 21 U.S. at 74-75.

The State also incorrectly relies on dicta in City of New Orleans v. Gaines's

Admin'r, 131 U.S. 191 (1889). There, the City, as the grantor of deeds

subsequently declared void, was held liable to the original owner for mesne profits

not merely for the time the City possessed the land, but also for the time its

grantees occupied the land. "As between the city and its grantee, the former, by

reason of its guaranty of title, is really the principal debtor. . . ." 131 U.S. at 212.

The Court found that the original owner was subrogated to the rights of the

grantees and affirmed the award of damages against the City for the grantees'

period of wrongful use and occupancy even though the grantees were not parties to

the action. Id. at 220.

In support of its important, but unremarkable, ruling that the familiar

common law rule that an original tortfeasor is responsible for ensuing damages

caused by others applies to the State's wrongful acquisition of Cayuga land, the

district court cited Zenith Bathing Pavilion, Inc. v. Fair Oaks S.S. Corp., 240 N.Y.

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307, 313 (1925). There, Judge Cardozo held that a proper claim had been asserted

against the defendant "as the author of the trespass, liable as such for all the

ensuing damage, irrespective of later transfers. . . ." See also, Guille v. Swan, 19

Johns 381, 382 (1822) where the court found that a trespasser may be liable for

acts that "ordinarily and naturally produced the acts of the others"; Restatement

(Second) of Torts § 433A cmt. c (original tortfeasor may be liable not only for the

harm he inflicted but also for the additional damages caused by subsequent actors).

In arguing for a new trial in which the United States would be held jointly

liable with the State for the Cayugas' loss of the Claim Area,48 the State concedes

that it is liable for the entire harm suffered by the Cayugas by citing to Restatement

(Second) of Torts § 875, which provides:

Each of two or more persons whose tortuous conduct is a legal cause of a single and indivisible harm to the injured

48 The State contends that the United States should be jointly and separately liable for damages, including the $70,000 paid to the Tribe by the United States in settlement of the ICC claim in 1978. AB-227-31. The district court denied the State's motion to assert a counterclaim against the United States, asserted in year 2000, nearly a decade after the United States intervened, as untimely, concluding that the State "may well be permitted to make such claims in a subsequent lawsuit. . . ." SPA-278-79. The State's reliance on Restatement (Second) Torts § 920A is unwarranted. That section only allows a tortfeasor to be credited for payments by another who is "subject to the same tort liability." Here, as the State acknowledges, AB-227, in the ICC proceeding, the United States was found to have breached its fiduciary duties to the Tribe. See, Point V, C, supra. The United States was thus not subject to the same tort liability as the State. In any event, because the Nation did not participate in the settlement, which was paid solely to the Tribe, the State is not entitled to offset this settlement payment against the Nation's recovery.

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party is subject to liability to the injured party for the entire harm.

Thus, in its reliance on § 875, the State acknowledges that the loss of the Claim

Area is an indivisible harm and it may be held liable for the entire harm. It does

not matter that the acts occur at different times or the liability of the tortfeasors

rests on different theories, as the State acknowledges. Restatement of Torts

(Second) § 879 and cmt. a.

Under the foregoing authorities and the fact that the State had already been

found liable for violating the NIA prior to the Phase I trial, the court did not abuse

its discretion by declining to instruct the jury that the State's liability was limited to

damages it alone caused. As this Court explained in New York State Org. For

Women v. Terry, 886 F.2d 1339, 1361 (2d Cir. 1989), cert. denied, 495 U.S. 947

(1990):

To be liable, the trespasser need not anticipate the damaging consequences of his acts, but need only intend the act that amounts to an unlawful intrusion upon and interference with the property rights of another.

See also, Phillips v. Sun Oil Co., 307 N.Y. 328, 331 (1954). Here the district court

found that the State acted knowingly in entering into the 1795 and 1807 Treaties

and proceeded in "calculated disregard" of the NIA, SPA-224, and the Cayugas'

rights guaranteed thereunder. The State, and the State alone, intended the act that

caused the unlawful dispossession.

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D. Equitable Defenses Were Properly Determined By The Court

The State argues that its good faith defense as a basis for an offset for public

improvements should have been heard by the jury. It cites Green v. Biddle, 21

U.S. (8 Wheat.) 1, 75 (1823) for the proposition that under the common law of

England in 1789, the only remedy of a wrongful occupant was to "recoup [his]

value against the claim of damages." AB-236. From this the State extrapolates the

proposition that juries could decide questions of good faith as an offset for trespass

damages. AB-236. However, Green states that at common law, in an action at law

for ejectment there was no set-off of any kind for improvements. An unsuccessful

defendant, however, could then apply to the Court of Chancery for an offset based

upon alleged good faith. Id. 21 U.S. at 22, 59-60, 74, 80-81. Accord: Jones v.

Great Southern Fireproof Hotel Co., 86 F. 370, 385-86 (6th Cir. 1898); Haight v.

Pine, 10 A.D. 470, 474, 42 N.Y.S. 303 (2d Dep't 1896) (offset for improvements

by good faith occupier is an equitable defense). Thus, Green stands for the

proposition that, at common law, a defendant was entitled to seek an offset for

improvements made in good faith, but only in equity; it does not support the State's

claim that juries heard such defenses at the time the Constitution was adopted.49

49 Jackson v. Loomis, 4 Cow. 169 (1825) is similarly unhelpful to the State's position. There, the court refused to hear testimony on the value of improvements. The appeals court ordered a new trial, but did not rule that the issue of a setoff for improvements was to be tried to a jury.

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The issue was further addressed in F.C. Ayres Mercantile Co. v. Union Pac.

R. Co., 16 F.2d 395, 397 (8th Cir. 1926), where the defendant in an ejectment

action at law based its equitable offset defense on public improvements. The Court

of Appeals ruled that this equitable defense is to "be disposed of as in a court of

equity," quoting Liberty Oil Co. v. Condon Nat'l Bank, 260 U.S. 235, 242 (1922).

See also, People of Porto Rico v. Livingston, 47 F.2d 712, 720 (1st Cir. 1931), cert.

denied, 284 U.S. 642 (1931) (also an ejectment action, reciting the standard rule

that the defendant's equitable defenses must be heard by the court).

Because the State was not found to have acted in good faith at the Phase II

bench trial, its challenge to the district court's conclusion that the jury did not

consider infrastructure improvements in calculating use and occupancy damages,

SPA-276, is academic. In any event, the court was clearly correct in concluding

that, based on its small award, the jury did not take into account public

infrastructure, or deemed it to have little value. The court summarized the State's

position as untenable: "despite the fact that the jury's nearly 37 million damage

award was less than that suggested by both real estate appraisal experts, the State is

attempting to reduce the award by insisting on offsets for infrastructure

improvements." SPA-274-75. Finally, the district court found that "[p]roving an

offset for the contribution of infrastructure would be speculative and likely

impossible." SPA-277.

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In addition, the State contends that the court erred in not permitting the jury

to consider its purported defenses of mistake and mitigation, which are based,

respectively, upon its equitable claims of good faith and laches.50 However, the

State never pleaded mistake or mitigation, and thus waived these defenses. In

Eassa v. Hartford Fire Ins. Co., 90-CV-321, 1991 U.S. Dist. LEXIS 17309, at *22

(N.D.N.Y. Nov. 29, 1991), aff'd, 979 F.2d 845 (2d Cir. 1992) the district court

ruled that "failure to plead mitigation of damages as an affirmative defense results

in a waiver of that defense and its exclusion" from the case, relying on this Court's

ruling on the residuary clause of Fed. R. Civ., Rule 8(c), in United States v.

Continental Illinois National Bank and Trust, 889 F.2d 1248, 1253 (2d Cir. 1989).

The defense of mistake must not only be pleaded, but must be pleaded with

specificity pursuant to Rule 9(b), Fed. R. Civ. P. Moreover, in Alcoa S.S.C. Co. v.

Ryan, 211 F.2d 576, 578 (2d Cir. 1954), this Court stated that a defense based on

mistake "seems one for court and not jury trial under the federal practice." The

district court clearly did not abuse its discretion in not instructing the jury on these

unavailable defenses.

The State next claims that it was entitled to prove good faith to the jury to

warrant an offset for public infrastructure improvements because NYRPAPL

50 The State's mistake defense is based upon its claim that it had a good faith belief it was not violating the NIA. AB-239-40. Its mitigation defense is based upon its claim that the Cayugas unreasonably delayed bringing suit and is nothing more than a restatement of its laches defense. AB-240-42.

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§ 601, limits recovery to the unimproved land. Although the district court properly

characterized this statute as "remote from the present case" and ruled it

inapplicable, SPA-502, the State simply misreads it. In referring only to use and

occupancy damages, the statute states," . . . but the damages shall not include the

value of the use of any improvements made by the defendant. . ." (emphasis

added). The very next sentence provides that the defendant is entitled to a set off

for the cost of the improvements themselves, but only when they were "made in

good faith by the defendant." It is a complete misreading of this inapplicable

statute to read it so as to depart from settled law and credit a defendant with the

value of improvements without regard to its good faith. None of the authorities

cited by the State supports this proposition, or the State's argument that this was an

issue for the jury.

Based on the district court's assessment of the extensive factual record on the

State's good faith and laches defenses, there can be little doubt that the court would

have been compelled to direct a verdict in the Cayugas' favor had the same

testimony been presented at the Phase I trial. See, e.g., This is Me, Inc. v. Taylor,

157 F.3d 139, 142 (2d Cir. 1998); Cruz v. Local Union No. 3, 34 F.3d 1148,

1154-55 (2d Cir. 1994); Piesco v. Koch, 12 F.3d 332, 343 (2d Cir. 1993); Granite

Computer Leasing Corp. v. Travelers Indem. Co., 894 F.2d 547, 551 (2d Cir.

1990).

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E. The Court Properly Excluded BaselessTestimony From State "Experts"

The State argues that the court should have permitted its "ethno historian,"

Professor von Gernet, an untenured, part-time, assistant professor of anthropology

at the University of Toronto, T-5372, 5534, to testify concerning the fair market

value of the Claim Area and the impact of the State's alleged good faith on value.

AB-234-35. Von Gernet, however, was unqualified to render any opinion as to

damages, and his expert report never discussed the issue. A-5116-17, 5122. The

district court properly exercised its gatekeeper role by excluding this testimony.

Daubert v. Merrill Dow Pharms., Inc., 509 U.S. 579 (1993). Similarly, the court

properly excluded the testimony of Dr. Scott W. Anderson, with respect to large

purchases of Indian lands in other states, well beyond the Claim Area, as irrelevant

and speculative. T-5458. As Dr. Anderson admitted, his analysis was suggested to

him by the State, and contained at least a 30% margin of error. T-5442-46. He

also did not consider such basic concepts as whether the lands were proximate to

navigable bodies of water, T-5444-46, whether treaties provided protection to the

Indians, or whether reservations were created. T-5442. In sum, his report

attempted to compare the price paid for the Claim Area with treaties involving

entirely different lands, circumstances and history. T-5451.

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POINT XII

IF A NEW TRIAL IS ORDERED, OR IF THE JUDGMENT IS MATERIALLY

REDUCED, A NEW TRIAL SHOULD BE HELD FREE FROM PREJUDICIAL ERROR

The court stated in its decision denying ejectment, that as a substitute for

that remedy, the Cayugas would receive sufficient funds to enable them to

purchase the Claim Area from willing sellers, so that they "should have no

difficulty accomplishing the same goals which they hope to accomplish through

ejectment." SPA-479. However, the court's erroneous rulings in connection with

the jury trial made such a result impossible, and assured the low verdict which was

returned.

In fixing the rules for valuation testimony, the court determined, and

ultimately charged the jury, that the Claim Area would be valued as if it were a

single tract of unimproved land, but with infrastructure in place. Cayuga VIII.

SPA-492-94. The court indicated that it somehow believed this formulation was

necessary to avoid the necessity of proving the value of each parcel of land

individually. SPA-494.

Compounding this error, the court allowed the State to argue that valuation

of the single tract should be based on the condition of the land as it was in 1795.

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The effect of this ruling, however, was to eliminate most of the true value of

the Claim Area from the jury's consideration because the Claim Area has never

been a single tract, and most of the value is in the improvements.51

As a result, the jury value the Claim Area at a small fraction of its worth

which cannot enable the Cayugas to purchase much Claim Area land.

The Cayugas cross-appeal from these rulings only conditionally, preferring

to not delay the day when this case is finally at an end. However, if this Court

were to otherwise order a new trial, or materially decrease the size of the judgment,

the Cayugas ask this Court to order a new trial free from these prejudicial errors.

A. The Court Below Improperly Denied The Cayugas' Motion For A Change Of Venue

The Cayugas moved to have the venue of the jury trial transferred from

Syracuse to the Southern District of New York because a Northern District panel

would likely include many persons potentially affected by the Cayuga and Oneida

claims, or by the well-publicized threatened Onondaga claim. A-3603-17. In

addition, the jury pool in the Northern District, unlike the Southern District, was

exposed to substantial negative pre-trial publicity, including reported overt

hostility toward Indian reservations, businesses and supposed "privileges" granted

51 The jury heard no evidence as to the value of improvements except that the total of 1998 assessed values of Claim Area land was $442 million of which $156 million was for the land and $286 million for improvements. T-2165.

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to Native Americans. The Cayugas' motion included approximately 170 local

news articles reporting sentiments such as "Some people are talking about

violence." A-3817; violence against Indians "would sure get their attention,"

A-3793; "I got my guns out. I got my shotgun loaded." A-3786; "people in this

area . . . say they won't have a problem defending their property with a firearm if it

comes to that." A-3695. In addition, boycotts of tribal businesses were urged, and

protest rallies were held at various locations, including the federal courthouse in

Syracuse. A-3613-14.

As trial approached, the Cayugas requested, but were denied, voir dire of

each potential juror outside the presence of other panel members. A-4451-54. The

request was necessitated by further anti-Indian protests and media coverage which

could influence jurors. A group, called the United States National Freedom

Fighters, reportedly stated in November 1999, that it would execute an Indian

"about every three days beginning on Thanksgiving Day," Post-Standard

(Syracuse), November 5, 1999, A-4455-56, prompting the creation of a federal,

state, and local Task Force to pursue wrongdoers. A-4458. In addition, on

December 19, 1999, two weeks before the trial was to commence, the Post-

Standard (Syracuse) ran a front-page article, A-4459-65, describing the threatened

claim of the Onondaga Indian Nation to 100 square miles of land "including nearly

all of the city of Syracuse." A-4459.

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Against this background, the Cayugas submitted proposed voir dire

questions designed to uncover bias, A-4475-81, and seeking to ask each

prospective juror if he or she owned or lived on land that was involved in the

instant lawsuit, in pending actions, or actions announced for filing, or whether

immediate relatives or close personal friends lived on such lands. A-4477.

Although the court was apprised of articles describing the prospective Onondaga

claim, it ruled that it would not permit voir dire with respect to the unfiled

Onondaga suit because "we wouldn't be able to get a jury here." SPA-326.

A change of venue should be granted where (a) the pool of jurors will be

drawn from counties in which they are directly affected, or are relatives, friends,

neighbors, employers or employees of those directly affected, or (b) the pool has

been prejudiced by extensive adverse regional publicity. Either of these factors is

sufficient to require transfer, Washington Public Utilities Group v. United States

District Court, 843 F.2d 319 (9th Cir. 1987), and both factors were amply present

here.

In Kiernan v. Van Schaik, 347 F.2d 775, 781 (3d Cir. 1965), the Court of

Appeals expressed a fundamental truism regarding human nature and the

impartiality of jurors:

That men will be prone to favor that side of a cause with which they identify themselves either economically,

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socially or emotionally is a fundamental fact of human character.

Prohibitively large numbers of potential jurors were likely to believe that the

value of their properties were negatively impacted by this action and hence to

identify themselves economically, socially or emotionally with the State. Such

apparent financial interest of panels was sufficient to require a change of venue.

See, Washington Public Utilities Group, supra, 843 F.2d at 327.

Protesters against the Cayugas and other Iroquois tribes characterized

Indians as an alien form of government and demonstrated their resentment at what

they perceived to be unfair economic advantages enjoyed by Native Americans.

As the United States Supreme Court has repeatedly ruled, it is the duty of the trial

court to determine whether potential jurors should be disqualified because of racial

or religious prejudices. See, e.g., Aldridge v. United States, 283 U.S. 308, 314-15

(1931) (Hughes, J.). See also, United States v. Powers, 482 F.2d 941, 944 (8th Cir.

1973), cert. denied, 415 U.S. 923 (1974).

The voir dire conducted by the trial court, which precluded inquiry into the

jurors' association with lands affected by the looming Onondaga land claim, was

insufficient to elicit bias. See, e.g., United States v. Bear Runner, 502 F.2d 908,

912-13 (8th Cir. 1974) (events of Wounded Knee took place in the vicinity of the

trial and feelings of the citizenry ran high against Indians).

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As the district court itself acknowledged, a thorough voir dire into all areas

of potential bias would have required the elimination of great numbers of potential

jurors, see, e.g., United States v. Apodaca, 666 F.2d 89, 94 (5th Cir. 1982), cert.

denied, 459 U.S. 823 (1982); United States v. Corey, 625 F.2d 704 (5th Cir. 1980),

cert. denied, 450 U.S. 925 (1981); United States v. Nell, 526 F.2d 1223 (5th Cir.

1976), and would have made trial in Syracuse impossible. SPA-326. Such

reasoning required a change of venue, rather than denying the Cayugas' motion for

extended voir dire.

Even if the district court had permitted extensive and exhaustive

individualized voir dire, it would not have assured an impartial jury because of the

pervasive and negative pre-trial publicity. As Justice Holmes stated in Patterson v.

Colorado, 205 U.S. 454, 462 (1907):

The theory of our system is that the conclusions to be reached in a case will be induced only by evidence and argument in open court, and not by any outside influence, whether of private talk or public print.

Legal trials "are not like elections, to be won through the use of the meeting-hall,

the radio, and the newspaper." Bridges v. State of California, 314 U.S. 252, 271

(1941).

These principles apply equally to civil and criminal trials. See, e.g.,

Sheppard v. Maxwell, 384 U.S. 333, 350-51 (1966) (jury verdicts "both criminal

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and civil" must be based on evidence received in open court, not from outside

sources).

In Irvin v. Dowd, 366 U.S. 717 (1961), the Supreme Court ruled that a

defendant had been denied a fair trial where a "huge wave of public passion"

evidenced by a mere 46 newspaper headlines and articles was "clear and

convincing" evidence of the "strong prejudice" against the accused. 366 U.S. at

725-26. Here, approximately 170 regional articles submitted below relentlessly

stressed the "bitter and angry" feelings of the populace and demonstrated a "pattern

of deep and bitter prejudice," 366 U.S. at 727, present throughout the community.

See also, Stroble v. California, 343 U.S. 181 (1952).

Where the adverse pretrial publicity has been extensive, the burden of

showing essential unfairness need not be undertaken, and the court must discount

disclaimers by jurors that they would not be influenced by news articles. Sheppard

v. Maxwell, supra, 384 U.S. at 351, 352. Nevertheless, the court below rejected

the Cayugas' request for a change of venue partly because a statistical study of

juror prejudice had not been undertaken. SPA-404-10.

In Sheppard, the Supreme Court criticized the trial court for failure to grant

"a change of venue to a locale away from where the publicity originated." 384

U.S. at 352-53. In Washington Public Utilities Group, supra, the Ninth Circuit

ruled that once there has been "pervasive prejudicial publicity," a trial judge has a

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duty to change the venue of the trial even in the absence of a motion for transfer.

843 F.2d at 326.

In denying the motion for a change of venue, the district court stressed the

fact that this dispute involved title to land and was thus a local action.

SPA-404-10. The district court did not consider whether such facts may outweigh

the Constitutional requirements for a fair trial. Indeed, this Court has recognized

that even the Constitutionally-protected exercise of a free press must yield where it

conflicts with the right to trial by an impartial jury. In re Application of Dow

Jones & Co., 842 F.2d 603, 609 (2d Cir.), cert. denied sub nom. Dow Jones & Co.

v. Simon, 488 U.S. 946 (1988). Moreover, both aspects of juror bias in this case --

financial or emotional ties to the outcome, and exposure to prejudicial pre-trial

publicity -- were entirely localized and do not exist in the Southern District of New

York where a new trial, if one is required, should be held.

B. The State Was Not Entitled To Credits For Payments Made Pursuant To Transactions Which Are Invalid Under The NIA

The district court denied the Cayugas' in limine motion to preclude evidence

of the State's annuity payments to the Cayugas. SPA-340-43. The payments were

made pursuant to the 1795 Treaty, which was void under the NIA, or, in the court's

words, "as if it did not occur at all." SPA-557. The district court, however,

reasoned that although the NIA contained penal provisions, it was not a penal

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statute, and the payments could not be excluded on the grounds that they were in

furtherance of an illegal contract. SPA-342-43. Accordingly, the State was

permitted to prove its payments at the Phase I trial, and the jury was instructed to

credit the payments as an offset for each of the 204 years that it awarded fair use

and occupancy damages.

The error was prejudicial at trial because it enabled the State to unfairly

argue to the jury that the State did not take the Cayugas' land; they paid for it, and

that a "deal is a deal."

The court's decision was contrary to well-established authority, and the

exclusion is clearly not limited to transactions made criminal by penal law. The

law generally prohibits any recovery where a party must rely on an agreement that

is void as against public policy, or is illegal because it violates a statute. See, e.g.,

Hazelton v. Sheckells, 202 U.S. 71, 78 (1906) ("if any part of [the consideration] is

contrary to public policy, the whole promise fails.") (Holmes, J.); American

Seating Co. v. Zell, 322 U.S. 709 (1944); Tool Co. v. Norris, 69 U.S. 45 (1864).

As explained in 6 Williston on Contracts § 12:4 (4th ed. 1992), the

Restatement (Second) of Contracts § 178 no longer speaks in terms of illegal

bargains, focusing instead on whether a promise or term in an agreement is

unenforceable on grounds of public policy. The Restatement provides that "[a]

promise or other term of an agreement is unenforceable on grounds of public

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policy if legislation provides that it is unenforceable or the interest in its

enforcement is clearly outweighed in the circumstances by a public policy against

the enforcement of such terms." See also, Chung, Yong Il v. Overseas Nav. Co.,

774 F.2d 1043, 1052 (11th Cir. 1985).

Numerous federal courts have refused to enforce agreements where

enforcement would violate a public policy expressed in statutes. See, e.g., Hurd v.

Hodge, 334 U.S. 24, 34-35 (1948) ("The power of the federal courts to enforce the

terms of private agreements is at all times exercised subject to the restrictions and

limitations of the public policy of the United States as manifested in . . . federal

statutes. . . . Where the enforcement of private agreements would be violative of

that policy, it is the obligation of courts to refrain from exertions of judicial

power."). Accord: Kaiser Steel Corp. v. Mullins, 455 U.S. 72, 83-84 (1982);

Bruce's Juices, Inc. v. American Can Co., 330 U.S. 743, 756 (1947) ("If, in order to

prove his own case, a plaintiff proves his violation of law, then no court will aid

the plaintiff to recover."); Resolution Trust Corp. v. Home Sav. of Am., 946 F.2d

93, 96 (8th Cir. 1991); Davies v. Grossmont Univ. High School Dist., 930 F.2d

1390, 1396 (9th Cir.), cert. denied, 501 U.S. 1252 (1991); Comdisco, Inc. v. United

States, 756 F.2d 569, 576 (7th Cir. 1985); Quinn v. Gulf & Western Corp., 644

F.2d 89, 92-94 (2d Cir. 1981); Community Fed. Sav. & Loan Ass'n v. Fields, 128

F.2d 705 (8th Cir. 1942).

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The clear rule is: "No court will lend its aid to a man who founds his cause

of action upon an immoral or illegal act." Holman v. Johnson, [1775] 1 Comp.

(Eng.) 341; Gibbs & Sterrett Mfg. Co. v. Brucker, 111 U.S. 597, 601 (1884). See

also, Bankers Trust Co. v. Litton Sys., Inc., 599 F.2d 488 (2d Cir. 1979); Kaiser-

Frazer Corp. v. Otis & Co., 195 F.2d 838 (2d Cir.), cert. denied, 344 U.S. 856

(1952).

Because the State was necessarily compelled to rely on the validity of the

1795 Treaty to obtain offsets for its annuity payments made thereunder, it was

error for the court to permit such offsets where the Treaty was void under the NIA.

C. The District Court Improperly Excluded The Testimony Of The Cayugas' Expert Real Estate Appraiser

Following a hearing, conducted pursuant to Daubert v. Merrill Dow

Pharms., Inc., supra, the court considered a motion by the State to preclude the

testimony of the Cayugas' appraisal expert, John F. Havemeyer III, and the United

States' expert, Arvel M. Hale, and motions by the Cayugas and the United States to

preclude the State's expert, John D. Dorchester. Cayuga XIII, SPA-282-90.52

52 The trial court's evidentiary rulings, and its decisions to admit or exclude expert testimony, are reviewed for abuse of discretion. Amorgianos v. National R.R. Passenger Corp., 303 F.3d 256 (2d Cir. 2002); General Electric Co. v. Joiner, 522 U.S. 136, 141-42 (1997), and will be reversed where the challenged ruling affects a substantial right of a party. Federal Rules of Evidence, Rule 103. Hester v. BIC Corp., 225 F.3d 178, 181 (2d Cir. 2000).

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The court ruled that Mr. Havemeyer, a member of the Real Estate Appraisal

Institute, had a "reliable basis in knowledge and experience" and was qualified to

testify as an expert on the "issue of valuation methodology herein." SPA-284.

Indeed, Mr. Havemeyer had nearly thirty years experience as a real estate appraiser

in the area, and had conducted approximately 24,000 appraisals, including

approximately 200 in the Claim Area. Daubert T-51-56, 59.

The Court concluded also that Mr. Havemeyer, unlike the State's and the

United States' appraisers, had utilized "a recognized appraisal method, the sales

comparison approach." SPA-286. By contrast, Messrs. Hale and Dorchester

"freely admitted to developing their respective valuation methodologies for first-

time use in this case. . .," SPA-289, and there were "flaws in the[ir]

methodologies." Id.

Nevertheless, the district court, while denying motions to preclude the

State's and the United States' experts, struck Mr. Havemeyer as a trial witness. As

a consequence, the Cayugas had no expert witness of their own at trial, but were

dependent on the United States' expert, whose estimation of the rental value of the

Claim Area was less than Mr. Havemeyer's. In addition, Mr. Hale offered no

testimony as to the value of minerals and natural resources taken from the Claim

Area.

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In determining the use and occupancy rate for the 204 years, Mr. Havemeyer

reviewed in excess of 10,000 sale transactions, Daubert T-68, 93, 95, 390, rejecting

those which apparently were not arms' length transactions or which involved

improved property. This winnowing process left him with 2,900 sales. Daubert

T-68, 95. From these, he selected four representative sales per year from 1797 to

1987 to determine the price per acre for each of those years. Daubert T-116. From

1988 to 1998, Mr. Havemeyer used 12 sales per year to determine the Claim Area's

market value and its use and occupancy value. Daubert T-89-92, Dkt. 596, Cayuga

Nation Appraisal 1988-1998.

The district court pinpointed a handful of inaccuracies in his report, none of

which were material. For example, Mr. Havemeyer recorded as a $41,000 sale in

1988 what was actually a $135,000 transaction. As the district court

acknowledged, the transcription error was decidedly in the State's favor and

trivialized this item at the hearing. Daubert T-363-64. Nevertheless, the court

later cited this discrepancy as a basis for excluding Havemeyer as a witness.

SPA-286.

The court also focused on a discrepancy in a 1795 sale, SPA-286, but Mr.

Havemeyer began his sales analysis at 1796 and did not use any 1795 deeds or

sales in reaching his analysis. Daubert T-88.

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Without citing specific testimony, the court incorrectly ruled that Mr.

Havemeyer had failed to deduct lake frontage from the overall acreage, an

argument not even raised by the State. In fact, Mr. Havemeyer testified that he

separately valued the agricultural land from the lakefront land in both Cayuga and

Seneca Counties for the period 1988 through 1998.53 Dkt. 595 at p. 61. Daubert T-

128-32, 146-50, 430.

Mr. Havemeyer testified that he rejected the highest and lowest sales in

seeking to determine the representative sales for each year. Daubert T-120,

122-23, 390. The court cited to his 1945 figures to demonstrate that Mr.

Havemeyer had not consistently eliminated the highest sale, although Mr.

Havemeyer explained that higher sales had been eliminated in the initial steps of

the winnowing process before the final selection of the 2900 sales in his report.

Daubert T-414-20.

Contrary to the court's inference, SPA-287, Mr. Havemeyer did not rely on

subjective feelings in finalizing his selections. Rather, he based his judgment on

his extensive experience as an appraiser, his familiarity with the Claim Area, and

his knowledge of what the values were, particularly from the 1970's, when he first

became an appraiser. Daubert T-120-22. As the Supreme Court recognized in 53 The fact that Mr. Havemeyer did not separately value more highly expensive lakefront property in determining the use and occupancy values for the 194 years before 1988 resulted in lower values for those years that clearly benefitted the State. Daubert T-128-29, 153.

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Kumho Tire v. Carmichael, 526 U.S. 137, 148 (1999), specialized knowledge

derived from personal observation and experience may properly be the subject of

expert testimony. See also, United States v. 68.94 Acres of Land, 918 F.2d 389,

393-94 (3d Cir. 1990).

The district court also found that Mr. Havemeyer failed to make any

adjustments for the size of the Claim Area. SPA-288. Mr. Havemeyer, however,

testified that he had excluded small lots in selecting the sales for his report.

Daubert T-91. Moreover, there was no reason for Mr. Havemeyer to adjust the

size of any property he used to compare it with a fictional sale of the Claim Area as

a single unit of 64,000 acres. He testified repeatedly that the Claim Area was

never sold as a single unit of 64,000 acres. Daubert T-96, 182-83, 444. Rather, the

Claim Area was sold by the State in small parcels, as the State admits. AB-30.

Mr. Havemeyer testified that he considered several factors in arriving at a

10% use and occupancy rate. He testified that, unlike a normal rental situation, the

Cayugas would not be getting their land back. He stated that a 10% use and

occupancy rate was used in other valuations of real property, specifically in

determining a capitalization rate. Daubert T-156-59, 314.

The court also based its decision on the fact that Mr. Havemeyer had looked

to sales three to four years after the valuation date under consideration. This,

however, is an accepted appraisal practice, particularly when the appraiser is

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conducting a retroactive appraisal. Daubert T-125-26. The Uniform Standards of

Professional Appraisal Practice ("USPAP") deals specifically with "retrospective

value opinions" in Statement on Appraisal Standards No. 3:

Data subsequent to the effective date may be considered in developing a retrospective value as a confirmation of trends that would reasonably be considered by a buyer or seller as of that date.

A-4571. This Court has given express approval to the admissibility of subsequent

sales evidence in the valuation of real property. United States v. 63.04 Acres of

Land, 245 F.2d 140, 144 (2d Cir. 1957). See also, United States v. 1,108 Acres of

Land, 204 F. Supp. 737 (E.D.N.Y. 1962).

The factors raised by the court concerning Mr. Havemeyer's underlying data

and his judgment in drawing certain conclusions, should have gone merely to the

weight a jury should give his testimony, not its admissibility. They are "matters

properly to be tested in the crucible of adversarial proceedings; they are not the

basis for truncating that process." United States v. 14.38 Acres of Land, 80 F.3d

1074, 1079 (5th Cir. 1996). See also, McCullock v. H.B. Fuller Co., 61 F.3d 1038,

1045 (2d Cir. 1995) (overly detailed scrutiny of expert witnesses' testimony

"inexorably lead[s] to evaluating witness credibility and weight of the evidence,

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the ageless role of the jury"); Greenwell v. Boatwright, 184 F.3d 492, 494 (6th Cir.

1999); Viterbo v. Dow Chemical Co., 826 F.2d 420, 422 (5th Cir. 1987).54

As this Court explained in Amorgianos, supra, 303 F.3d 256, a trial judge

should only exclude expert testimony "if the flaw is large enough" such that the

expert lacks good grounds for his or her conclusion. ''Vigorous cross-

examination," the Supreme Court stressed in Daubert, "presentation of contrary

evidence, and careful instruction on the burden of proof, are the traditional and

appropriate means of attacking shaky but admissible evidence." 509 U.S. at 596.

See also, McCullock, 61 F.3d at 1044; Borawick v. Shay, 68 F.3d 597, 610 (2d Cir.

1995), cert. denied, 517 U.S. 1229 (1996).

Mr. Havemeyer also was prepared to testify with respect to the Cayugas'

claim for damages based on the wrongful removal of minerals and resources

during the years of dispossession. From the available records, he researched the

values of salt extracted for the period 1820 to 1864, which he concluded was

$51,154,000, and gypsum extracted for the period 1809 to 1880, which he

concluded was $20,646,000.

During Mr. Havemeyer's cross-examination, the State questioned whether he

had factored the costs of production or removal in his figures. Daubert T-169.

54 Many of the objections raised by the State to the district court's decision not to exclude the United States' appraisal expert (AB-242-47) also concern issues as to the weight the jury might give the testimony, not its admissibility.

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Havemeyer replied that he had not found any cost of production figures, but had

used the "best information" he could find, recognizing that "natural resources . . .

had been removed from the Cayuga Nation over the 204 years." Daubert T-170.

The court interrupted the cross-examination to sua sponte exclude his testimony

because there was no evidence as to the cost of removal, Daubert T-176, although

it was undisputed that such resources had been extracted.

This was error. A bad faith trespasser "is given little or no credit for costs of

mining, transporting or milling" severed minerals or other natural resources.

Dobbs, Remedies § 5.3(3). Thus, in United States v. Wyoming, 331 U.S. 440, 458

(1947), the Court explained that "one who 'wilfully' or in 'bad faith' trespasses on

the land of another, and removes minerals, is liable to the owner for the full value

computed as of the time the trespasser converted them to his own use, by sale or

otherwise." Only an "innocent" trespasser or one who acted "in good faith," the

Court continued, could deduct from such damages the expenses of extraction. See

also, Annot., Right of Trespasser To Credit For Expenditures In Producing, As

Against His Liability For Value Of, Oil or Minerals, 21 A.L.R.2d 380 at § 5.

The district court erred in summarily excluding Havemeyer's testimony

regarding the Cayugas' loss of natural resources.

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D. The District Court Improperly Allowed The Jury To Consider The Unreliable Testimony Of The State's Appraisal Expert And To Make A Legal Determination On Valuation Methodology

In contrast to its ruling on Mr. Havemeyer's testimony, the court erroneously

allowed Mr. Dorchester, the State's expert, to provide testimony and opinion that

was totally lacking in reasoning, methodology, validation, and factual basis, and

which clearly failed to satisfy the Daubert standards. Moreover, in allowing Mr.

Dorchester's testimony, the court improperly left to the jury a legal determination

of whether the land should be valued as one single parcel of largely vacant land as

it existed in 1795, or as the sum of subdivided parcels as it exists today without

improvements.

Mr. Dorchester's opinion of the value of the Claim Area was based on

"Special Assumptions," which he erroneously claimed were dictated by his

interpretation of Cayuga VIII, and thus relied upon inadmissible legal conclusions

derived from the order. See, e.g., United States v. Scop, 846 F.2d 135, 140 (2d

Cir.), modified in part on other grounds, 856 F.2d 5 (2d Cir. 1988) (expert

witnesses may not determine the applicable law); Marx & Co. v. Diners' Club, Inc.,

550 F.2d 505, 509-10 (2d Cir.), cert. denied, 434 U.S. 861 (1977).

Dorchester testified that both for the rental value and current value of the

Claim Area under his first "Special Assumption," . . . "the entirety of that property

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as a single ownership, or as a 'unit', is to be considered at all pertinent dates and for

all relevant analyses." S-538-A Vol. II, Appendix B. This hypothetical

assumption of a single, undivided 64,000 acre parcel offered for sale by a single

owner ignored the actual sales and rental history of the Claim Area, including the

State's subdivision of the Claim Area and auction of parcels of approximately 250

acres immediately after the 1795 Treaty. As a consequence, Dorchester insisted

that only similarly-sized sales, however factually incomparable, were the proper

measure of value. Dorchester acknowledged that his analysis was not based on

available data, S-538A, Vol. I at 9-8. Under his analysis, the Cayugas owed the

State between $65 and $95 million dollars. S-538A, Vol. I at 9-21.

Similarly, Mr. Dorchester's opinion of the fair rental value of the Claim Area

was totally lacking in accepted valuation methodology or investigation. Instead, he

made a rental value "determination" as at 1795 and another as at 1999, and then,

working backwards, simply interpolated the rental values for the intervening two

centuries by inventing an arbitrarily drawn curved line graph between those two

numbers, which is not an accepted or recognized valuation methodology. Contrary

to Daubert, he made no inquiry into the actual rental values during any of those

intervening years to test the validity of this hypothetical graph. Allowing such

unreliable and misleading evidence was prejudicial error, justifying a new trial.

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Mr. Dorchester's valuation opinion was inherently unreliable and misleading

because he improperly formed it without regard to the actual circumstances of the

Claim Area. He subjectively valued the Claim Area only as farm, forest, and waste

land, as he divined it existed in 1795, completely ignoring the numerous uses and

improvements that have occurred, and presently exist. T-1945-46. This analysis was

again based on another "Special Assumption": "Despite the fact that improvements

were made to the Claims Area lands subsequent to the Cayugas' sale, the lands at all

relevant times are to be considered as vacant, unimproved lands." S-538A, Vol. II,

Appendix B. Clearly, the court did not intend to exclude infrastructure

improvements over two centuries when it ordered that the land was to be valued as

unimproved but with public infrastructure in place. An ill-informed guess which

ignores 200 years of progress is not accepted scientific methodology: "Conjectures

that are probably wrong are of little use, however, in the project of reaching a quick,

final, and binding legal judgment -- often of great consequence -- about a particular

set of events in the past." Daubert, 509 U.S. at 597.

Moreover, allowing the introduction of this evidence and opinion by Mr.

Dorchester was unfairly prejudicial to the Cayugas, making it impossible for the

jury to award to them a sum sufficient to purchase land in the Claim Area as it

exists today, in lieu of ejectment. This would be contrary to the court's stated goal

of providing monetary damages as a substitute for ejectment. SPA-478-79. Thus,

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the district court should have determined the United States' in limine motion to

resolve whether the Claim Area should have been valued (i) hypothetically, as a

single parcel owned by one party; or (ii) realistically, as the sum of numerous

separately owned parcels as it actually developed. The answer to this legal

question yielded substantially different results and therefore materially impacted

the ultimate determination of value. But whereas Cayuga VIII addressed various

legal issues regarding the valuation of the Claim Area, the court declined to rule upon

this legal issue, instead leaving it to the jury to decide.

It is well settled that "questions of law are not 'to be decided by the trier of

fact'; rather it is for the judge, not the lawyers or the witnesses, to inform the jury

of the law applicable in the case." Nieves-Villanueva v. Soto-Rivera, 133 F.3d 92,

100 (1st Cir. 1997). The failure to determine and then properly instruct the jury as

to how the property was to be valued, and instead leave the jury to decide this

important legal question, was a fundamental error of law.

E. The District Court Improperly Excluded The Testimony Of The Cayugas As To The Value Of The Claim Area

The district court excluded as witnesses Clint Halftown and Patricia Shinn,

leaders of the Nation and Tribe respectively, and Hazel Wallace, a religious leader

of the Tribe. SPA-350. They were prepared to testify as to the importance, and

hence the value, of land and the Claim Area in Cayuga religion and traditions, and

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the difficulties the Cayugas experienced in maintaining their language, religion and

culture after losing their land. A-4153-54. The court also limited the testimony of

Bernadette Hill, a Nation Clanmother, A-4149, to actions the Cayugas took after

the 1795 and 1807 transactions to assert their rights. SPA-350. The court

concluded that the proffered testimony concerning the value of the Claim Area to

the Cayugas of these tribal witnesses was speculative, "its probative value, if any"

was substantially outweighed by its prejudicial impact on the jury, and that the

testimony was of "questionable relevance" to the issues of valuation. SPA-350.

However, the significance of religion and culture in understanding the value

of land to tribal plaintiffs was explained by the U.S. Supreme Court in Federal

Power Comm'n v. Tuscarora Indian Nation, 362 U.S. 99, 142 (1960):

It may be hard for us to understand why these Indians cling so tenaciously to their lands and traditional tribal way of life. The record does not leave the impression that the lands of their reservation are the most fertile, the landscape the most beautiful or their homes the most splendid specimens of architecture. But this is their home -- their ancestral home. There, they, their children, and their forebears were born. They, too, have their memories and their loves.

Moreover, the district court had earlier ruled that the 1795 and 1807 Treaties

with the State were invalid, and that the Cayugas were the rightful owners of the

Claim Area. It is well recognized that the testimony of the owner of property is

admissible on the issue of its value, and it is error to exclude such testimony. See,

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e.g., LaCombe v. A-T-O, Inc., 679 F.2d 431, 435 (5th Cir. 1982); Bingham v.

Bridges, 613 F.2d 794, 796 (10th Cir. 1980); United States v. 3,698.63 Acres of

Land, 416 F.2d 65, 67 (8th Cir. 1969). Indeed, the testimony of an owner as to the

value of land is expert opinion under Fed. R. Evid. 702. United States v. 10,031.98

Acres of Land, 850 F.2d 634, 636-37 (10th Cir. 1988); United States v. Laughlin,

804 F.2d 1336, 1341 (5th Cir. 1986).

F. The Court Below Improperly Excluded Testimony As To TheCayugas' Loss Of Federal Benefits

The district court also excluded Kevin Gover, indiscriminately including

him with the tribal witnesses who were being offered to establish that the Cayugas

have suffered "emotional, psychological and cultural damage." SPA-350. Mr.

Gover, however, was the Assistant Secretary of the Department of the Interior for

Indian Affairs. Ejectment T-194. He was not being offered to testify regarding

emotional, psychological or cultural damages. Rather, his testimony concerned

specific damages the Cayugas have suffered as a consequence of being a landless

tribe.

As Mr. Gover explained at the ejectment hearing, a landless tribe is denied

many federal benefits otherwise available to landed tribes. Ejectment T-205-06.

A landless tribe has no real opportunity to prosper and no place to exercise the

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authority that federal law says it has as a sovereign government. Ejectment

T-207, 226.

It was improper to exclude from the jury's consideration this testimony

regarding substantial actual damages the Cayugas suffered as a result of losing

their land. Mr. Gover's testimony was not speculative, prejudicial or irrelevant,

SPA-350, and the district court's stated reasons for his exclusion as a witness

clearly did not apply.

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POINT XIII

THE DISTRICT COURT CORRECTLY COMPUTED PREJUDGMENT INTEREST

BUT ABUSED ITS DISCRETION BY FAILING TO AWARD AN AMOUNT THAT FULLY COMPENSATES THE CAYUGAS

A. Standard Of Review: Prejudgment Interest

This Court reviews an award of prejudgment interest for abuse of discretion.

Sharkey v. Lasmo (AUL Ltd.), 214 F.3d 371, 374 (2d Cir. 2000); In the Matter of

Oil Spill by the Amoco Cadiz, 954 F.2d 1279, 1334 (7th Cir. 1992).55 Rendering

an award that fails to fully compensate the plaintiffs is an abuse of discretion.

Saulpaugh v. Monroe Cmty. Hosp., 4 F.3d 134, 145 (2d Cir. 1993), cert. denied,

510 U.S. 1164 (1994).

B. The Jury Instructions And Verdict

Unlike the State's economic witnesses, the economic expert for the Cayugas,

Dr. Peter Temin, Elisha Gray II Professor of Economics at the Massachusetts

Institute of Technology, and the United States' expert, Dr. Mark P. Berkman, vice

president, Natural Economic Research Associates, Inc., SPA-238, N-63; G-1, both

accepted the jury verdict "at face value" as the starting point for determining

prejudgment interest. SPA-83. Because the district court agreed with their

55 While acknowledging the appropriate standard of review for prejudgment interest awards, the State also contends that such interest rulings, if legally and factually erroneous, are reviewed de novo. AB-180. The State does not cite any prejudgment interest cases for this assertion.

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approach, SPA-80-86, consideration of the jury instructions and special verdict is

the appropriate starting point for consideration of prejudgment interest.

In accordance with the court's earlier ruling that equitable issues would be

decided by the court, SPA-345-46, the jury was instructed several times regarding

the allocation of issues they were to decide, and those reserved for resolution by

the court. The panel was properly instructed that the district court would decide

the equitable issues including: "Interest on the amount of any damages you may

award, [and] conversion to present day value of any past damages you may

award. . ." T-2748-49.

With respect to the issue of prejudgment interest, the jury was again

pointedly advised that the issue was for the court, and it should neither consider

inflation, nor attempt to convert the award it was to render in dollars as of the time

of injury into current dollars:

In determining the amount of damages, if any, to award to the plaintiffs, you should not make any adjustment for the effect of inflation or the loss of use of the money. You should not, for example, attempt to convert the value of the dollar at the time of the injury for which you have determined damages to an equivalent value in current dollars; nor should you calculate an amount to compensate the plaintiff for the fact that they did not have the use of the money between when the injury occurred and the present. It has previously been decided that the Court will determine whether an award of same will or will not be made in connection with the amount you determine as damages.

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T-2773-74.56

The jury was instructed that there were two components of damage, T-2746,

which were expressed in questions on a special verdict form, T-2774-76;

A-4758-67:

1. What amounts, if any, do you find that plaintiffs have been damaged for loss of use and possession of the claim area from July 27, 1795 to date as measured by a fair rental value without improvements, but with infrastructure in place, less credit, if any, to the State from payments made to plaintiffs? 57 A-4758.

2. What amount, if any, do you find that plaintiffs have been damaged for future loss of use and possession of the claim area, i.e., the fair market value of the claim area as of this date without improvements but with infrastructure in place.

A-4767.

At trial, the State's expert valued the present value of the land alternatively at

$25 million, considering the land as it was comprised in 1795, or at $40 million,

considering clearing and drainage developments. T-1799. Based upon a 2% return

on land, he calculated the rental value damages as between $6.7 million and $11

million. S-617. The United States' expert estimated the current value of the land at

$265 million, and estimated the rental damages at $70.5 million. G-500, 505.56 The instruction was based virtually verbatim to the State's Proposed Jury Instruction No. 22. A-4604.

57 The first question was followed by a chart which had with four columns: YEAR, AMOUNT, CREDIT TO STATE and NET AMOUNT for each of the years of dispossession. A-4758-67.

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The jury returned its verdict on February 17, 2000, A-4758-67, finding that

the damages for present value or loss of future use and possession was $35 million,

and the net amount of damages for loss of use and possession was $1,911,672.62.

A-4767. After rendering its verdict, the jury was discharged without comment

from the State. T-2808-12. Indeed, the State's attorney publicly acknowledged

that the State was satisfied with the verdict, stating we "never expected the [jury]

award to come in so low." SPA-274.

Recognizing that the jury had been instructed not to make any conversion to

current dollars, the Cayugas asked the court to make such an adjustment. The

State wrote to the court on April 4, 2000, A-4776-85, contending that the amounts

of the State's payments to the plaintiffs should be converted to their present value,

A-4777, but that it would move in limine "to preclude plaintiffs from presenting

evidence of the current value of the rental value damages" as duplicative of the

current value award. A-4783.58 It was thus clear nearly two months after the jury

verdict that the State did not believe that the use and possession damages awarded

by the jury were already expressed in current dollars; otherwise, it would have not

opposed the Cayugas' motion. As discussed below, the State's position soon

changed.

58 The district court denied these motions, advising the parties to brief the issues in their Phase II pre-trial submissions. SPA-273-74.

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C. The Assault On The Jury Verdict

Engaging in pure speculation, the State argues that the jury disregarded the

court's explicit instruction not to "attempt to convert the value at the time of the

injury for which you have determined damages to an equivalent value in current

dollars." Instead, the State urges, the jury stated the use and occupancy damages

for each year based on then current year 2000 dollars and credited the annuity

payments made each year by the State in the dollars of that year. AB-200-03,

208-13.

At the Phase II trial, the State's second guessing of the jury's verdict was left

in the hands of Richard S. Grossman, an associate professor of economics at

Wesleyan University. T-6069. Dr. Grossman claimed that the credits to the State

determined by the jury were in dollars contemporaneous with the year of payment,

but that the rental values for each year were expressed in 2000 dollars. T-6353-62,

6442. He admitted that his analysis meant that the jury subtracted values stated in

terms of one currency from values stated in an entirely different currency. T-6365,

6442. Professor Grossman's method of dealing with this purported "error" was to

rewrite the jury verdict so that the rental values are not the amounts determined by

the jury, but were converted to entirely new values not found anywhere on the

verdict form. The result of this tampering with the jury verdict would be the

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Cayugas actually owing the State for the centuries of their dispossession,59

SPA-239; T-6370, which, the district court found, "would erode the whole concept

of prejudgment interest." SPA-241-42.

Professor Grossman's premise was that people tend to think in dollars of

present value and, consequently, were presumably thinking of rental values in year

2000 terms. T-6469. As the Court pointed out to Professor Grossman, "we have

no idea, nor do you, as to what terms that jury was thinking in at the time."

T-6364. Dr. Grossman testified that he considered the possibility that the jury

might have been thinking in terms of 1795 dollars, and he asked the State's

attorneys whether the jury had heard any testimony as to the currency of earlier

years, including 1795, and was told inaccurately that they had not. T-6472, 6487.

However, in addition to extensive testimony on the subject by various witnesses,

there were exhibits prepared by all experts which were presented to the jury, and

which set forth historic rental values during the entire period 1795 to the present.

These clearly acclimated the panel to thinking in historical dollars of each year.

S-322, S-323; G-505. Particularly, the United States' expert provided specific

rental values that equaled or exceeded the values determined by the jury for 200 of

the years on the special verdict form. G-505. Indeed, the State in its closing

59 The State, however, graciously asserts that it does not seek to collect any monies owed by the Cayugas in the event a court lends credence to this theory. AB-201.

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specifically acknowledged a possible award of $20,000 per year for the early years.

T-2458. There is no error in a jury award that is less than an amount testified to by

experts. Leefe v. Air Logistics, Inc. 876 F.2d 409, 411-12 (5th Cir. 1989).

In Oldham v. Korean Air Lines Co., 127 F.3d 43, 54 (D.C. Cir. 1997), cert.

denied, 523 U.S. 1005 (1998), the Court of Appeals rejected a similar argument as

that raised by the State. The defendant airline argued that there was no need for

the Court to add prejudgment interest because the jury had presumably rendered its

damage award in current 1993 dollars. In rejecting this argument, the Court found

that the jury had not only heard expert testimony regarding 1993 values, but also

heard rebuttal testimony of values in 1983 dollars. There was thus no basis to infer

that the jury rendered its award in 1993 dollars. Accordingly, the district court had

properly exercised its discretion in awarding prejudgment interest. Here, the

testimony before the jury as to various historical values was not limited to rebuttal

testimony. By contrast, in DeFalco v. Bernas, 244 F.3d 286, 325-28 (2d Cir.), cert.

denied, 534 U.S. 891 (2001), cited by Appellants in this sparsely annotated portion

of their brief,60 AB-209, there was no evidence at all presented about the value of

truck wheels and tires, and there was thus no basis to justify the panel's award of

$1,000 for these items. Contrary to the State's implicit argument, a jury is not

60 The other case cited by appellants, Newmont Mines Ltd. v. Hauser Ins. Co., 784 F.2d 127, 132-33 (2d Cir. 1986), ruled that appellants had not met their "heavy burden" in order to overcome the jury's verdict, and does not support an effort to do so here.

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required to return a verdict in the exact amount of any particular expert testimony.

Leefe v. Air Logistics, Inc., supra. Rather, its verdict should be sustained where it

"falls within the universe of possible awards that are supported by the evidence,"

Milone v. Moceri Family, Inc., 847 F.2d 35, 41 (1st Cir. 1988), quoting Clark v.

Taylor, 710 F.2d 4, 14 (1st Cir. 1983). See also, Ranger Transp., Inc. v. Wal-Mart

Stores, 903 F.2d 1185, 1187 (8th Cir. 1990) ("The verdict was not perverse given

uncertainty as to the precise amount owed . . . .")

The district court, however, recognized that the issue is whether the verdict

has logical consistency, citing Crockett v. Long Island R.R. Co., 65 F.3d 274, 278

(2d Cir. 1995); Webb v. GAF Corp., 936 F. Supp. 1109, 1125 (N.D.N.Y. 1996),

which the court found:

Having said that, the court recognizes that apparently to avoid the complex task of separating out specific rents for each of the 204 years at issue, the jury calculated lost rent by taking $3.5 million, or 10% of what it deemed to be the current value of the property ($35 million) and dividing it by each of the 204 years at issue. Presumably the jury found that the amount would adequately compensate the Cayuga for the accumulation of rental dollars for all of those 204 years. The effect of figuring lost rent in that way, when carried out over 204 years, according to the State, is to "overstat[e] the compensation in the early years and understat[e] it in the later years." St. Pre-T-Memo. at 75; see also T-at 6356-66. Assuming that is so, consistent with the court's explicit instruction not to consider interest because the court would do so at a later date, the jury recognized that it would be possible

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for the court to amend those rent figures and rectify that discrepancy through its award of prejudgment interest.61

SPA-95.

The State's attorney understood that the jury would be awarding rental

damages based upon the values of 1795 and each year thereafter. In his closing

argument, he speculated, prophetically, that if the jury awarded use and occupancy

damages in the approximate amount of $20,000 for 1795, 1796 or other years, as

the jury ultimately did, there would be tremendous financial consequences once

prejudgment interest was applied to such relatively small rental damages:

Other thing might be going through your head, you're hearing me go on and on and on about what really is not, when you think about it, relatively speaking, a whole lot of money. I mean, when we're talking about 1795 or '96 or thereabouts, the amount of money that the plaintiff is asking for that particular year might only amount -- I don't even know for a fact what it is, but let's just, to throw a number out, lets say it's 20,000 bucks. Keep in mind that there's a further hearing that takes place later in this case and the Judge will instruct you about when he

61 Indeed, a member of the panel confirmed the district court's view of the verdict. The juror stated she felt the "award was too low". . . "[e]specially the rental value part . . . . I was uncomfortable with the verdict, but I realized it was just a starting point. We all knew the judge would review our verdict and could make adjustments." David L. Shaw, “Juror Says Land Claim Award Was Not Sufficient,” The Post-Standard (Syracuse, NY) March 26, 2000, B-1. The juror's comment was cited to the district court in the Cayugas' Phase II Pretrial Memorandum Dkt. 809 at 19 n. 5. This Court may take judicial notice of the report of the juror's statement. See, e.g., Oneida IX, 199 F.R.D. at 68 n. 19, citing Fed. R. Evid. Rule 201; The Manufacturers Life Ins. Co. v. Donaldson, Lufkin & Jenrette Sec. Corp., No. 99 Civ. 1944, 2000 U.S. Dist. LEXIS 7444, at *2 n. 1 (S.D.N.Y. June 1, 2000).

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tells you about it, there's a potential that interest will be applied to these amounts. So even though these amounts might not seem like earth shaking dollar amounts, when you're looking at these early sales, these early interest rates -- or these early rental payments, these numbers are incredibly important, and they can have tremendous ramifications at a later juncture in this case when you start considering issues like prejudgment interest.

T-2458. When the State suggests a particular verdict, and the trier of fact returns

almost that exact result, the State has surely waived any argument that the result it

suggested was irrational. Cf., United States v. Bentson, 947 F.3d 1353, 1356 (9th

Cir. 1991).

The district court concluded that "[a]djusting the jury's verdict in conformity

with the State's theory would require the court to find an inconsistency or conflict

where none exists, which in turn would run afoul of the general notion that

whenever possible a court must 'reconcile and preserve even a seemingly

inconsistent jury verdict.'" SPA-95, quoting Indu Craft, Inc. v. Bank of Baroda, 47

F.3d 490, 497 (2d Cir. 1995). See also, Atlanta & Gulf Stevedores, Inc. v.

Ellerman Lines, Ltd., 369 U.S. 355, 364 (1962); Tolbert v. Queens College, 242

F.3d 58, 74 (2d Cir. 2001) ("where the special verdict answers appear to be

inconsistent but 'there is a view of the case that makes the jury's answers. . .

consistent, they must be resolved that way.'").

The requirement to uphold a jury verdict whenever possible despite

seemingly inconsistent answers to a special verdict flows from the "strong

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presumption" that a properly instructed jury has followed the court's directives.

Bonner v. Guccione, 178 F.3d 581, 588 (2d Cir. 1999); Gierlinger v. Gleason, 160

F.3d 858, 875 (2d Cir. 1998); GSGSB, Inc. v. New York Yankees, 122 F.3d 1056

(2d Cir. 1997); Gentile v. County of Suffolk, 926 F.2d 142, 154 (2d Cir. 1991)

("The policy of deferring to a jury verdict is a powerful one, even in cases in which

the jury has taken action that is at first blush difficult to explain."). Indeed, the

district court noted this Court's aggressive approach to harmonizing seemingly

inconsistent jury verdicts. SPA-92. The foregoing standards are also applied on

review. Crockett v. Long Island R.R. Co., 65 F.3d at 278 (where it is claimed that

a special verdict is inconsistent, the reviewing court must adopt, where possible, a

view of the case that resolves any seeming inconsistency.).62

The State simply ignores these principles and standards of review and asks

the Court to forego its precedents, accept its hypothesis and disregard the jury's

verdict.

Finally, the district court found that the State had presumably waived its

right to challenge the jury's verdict as inconsistent by raising the issue for the first 62 The jury's verdict in Phase I of the trial is reviewed for the sufficiency of the evidence. The reviewing court must view all the evidence, all reasonable inferences, and all credibility determinations in the light most favorable to the verdict. If the evidence, so viewed, is such that a rational finder of fact could come to the same conclusion, there is sufficient evidence to support the verdict. Crockett v. Long Island R.R. Co., 65 F.3d at 277. It may not reweigh the evidence or substitute its conclusions for the findings of the jury. Leblanc-Steinberg v. Fletcher, 67 F.3d 412, 429 (2d Cir. 1995), cert. denied, 518 U.S. 1017 (1996).

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time in a post-judgment motion and not before the jury's discharge. See, e.g.,

Lavoie v. Pacific Press & Shear Co., 975 F.2d 48 (2d Cir. 1992). The court noted

that the State not only failed to object prior to the panel's discharge but did not

challenge the jury's answers immediately after the verdict, although the jurors were

individually polled. SPA-84-86; T-2810-12. The court concluded that the State

developed the "alleged inconsistency" in hindsight, SPA-86, a view confirmed by

the fact that nearly two months after the verdict the State was objecting to the

Cayugas' effort to restate the use and occupancy damages in current dollars,

A-4783, a position entirely inconsistent with the State's theory that the jury had

already done so.

The State acknowledges that a waiver may have occurred, but claims this

Court may, nevertheless, review the jury's inconsistent findings, citing Lavoie v.

Pacific Press & Shear Co., supra. However, in Lavoie this Court found the

defendant had waived its right to challenge the jury verdict where it did not claim

the verdict was inconsistent until the jury was discharged. The State argues that

the plaintiffs did not first raise the issue, but does not suggest what difference, if

any, that makes to its waiver. It cites without comment to Gibeau v. Nellis, 18

F.3d 107, 109 (2d Cir. 1994), AB-213, which did not even involve a challenge to

an allegedly inconsistent jury verdict. Rather, this inapposite case involved

appellees' failure to raise the defense that appellant had waived its right to move

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for judgment after verdict by failing to move before for a directed verdict. This

Court in Gibeau found that the appellees had failed to preserve the issue for appeal.

The State ignores the fact that here the district court raised the State's waiver sua

sponte.

D. It Was Proper For The District Court To Determine The Issue Of Prejudgment Interest

Relying on two decisions of this Court, which it incorrectly claims have

never been overruled, and decisions from the First Circuit Court of Appeals, AB-

205-07, the State contends that the lower court erred when it ruled that the court,

not the jury, would determine interest. SPA-512.

As the court below found, SPA-512, Frank v. Relin, 851 F. Supp. 87, 90

(W.D.N.Y. 1994) held that the Second Circuit law cited by appellants had been

"superseded and overruled" by Wickham Contracting Co. v. Local Union No. 3,

Int'l Bhd. Of Electrical Workers, 955 F.2d 831 (2d Cir.), cert. denied, 506 U.S. 946

(1992) and that "the weight of the Second Circuit decisions" is to favor the

determination of prejudgment by the district judge.63 River Oaks Marine, Inc. v.

The Town of Grand Island, 89-CV-1016S, 1992 U.S. Dist. LEXIS 18974, at *14

(W.D.N.Y. Nov. 24, 1992) and Silvanich v. Celebrity Cruises, Inc., 95 Civ. 0374, 63 In addition to Wickham, see this Court's decisions Gierlinger v. Gleason, 160 F.3d 858, 873 (2d Cir. 1998); Zicherman v. Korean Air Lines Co., 43 F.3d 18, 24 (2d Cir. 1994), aff'd in part and rev'd in part on other grounds, 516 U.S. 217 (1996); Waterside Ocean Navigation Co. v. International Navigation, Ltd., 737 F.2d 150, 153 (2d Cir. 1984).

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2000 U.S. Dist. LEXIS 12155 (S.D.N.Y. Aug. 23, 2003) reached the same

conclusion. Finally, as noted in River Oaks, supra, this Court has routinely

remanded to the district courts for the addition of prejudgment interest without

further involvement of the jury. 1992 U.S. Dist. LEXIS 18974, at *15 and cases

cited therein. See also, Sharkey v. Lasmo (AUL Ltd.), 214 F.3d 371, 375-76 (2d

Cir. 2000).

Clearly, the district court did not abuse its discretion in ruling on the issue of

prejudgment interest.

E. The District Court Concluded That Plaintiffs Were Entitled To Prejudgment Interest Under Factors Identified By This Court In Wickham

Preliminarily, the district court ruled that the Cayugas were entitled to an

award of prejudgment interest for the established violations of the NIA under the

factors identified by this Court in Wickham.64 Under the Wickham factors an

award of prejudgment interest should be a function of (i) the need to fully

compensate the wronged party for actual damages suffered, (ii) considerations of

fairness and the relative equities of the award, (iii) the remedial purpose of the

64 The district court was not required to engage in this analysis. As this Court ruled in Design v. K-Mart Apparel Co., 13 F.3d 559 (2d Cir. 1994), the Wickham factors need not be addressed by the district court in every instance to determine whether prejudgment interest was appropriate for an alleged statutory violation. Moreover, since the instant case involved violations of federal common law, the Wickham analysis was unnecessary.

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statute involved, and (iv) such other general principles deemed relevant by the

court. 955 F.2d at 833-34. The other "general principles" include the certainty of

the damages due to plaintiffs and whether the statute already provides full

compensation. Id. at 835. SPA-511.

1. Full Compensation Requires AnAward Of Prejudgment Interest

All of the economists, including the State's, agreed that full compensation

requires that plaintiffs receive the "full value of . . . money over the time which

plaintiff was deprived of" the Claim Area and that the Cayugas had, in the words

of the State's expert, sustained the "missed opportunity of being able to invest."

SPA-100, 102; T-6087. As the Cayugas' expert explained:

If the Cayugas had not been injured at that time in the amounts the jury determined for each year, they theoretically would have had the amounts for each year which the jury awarded, and could have used or invested those funds. . . . Without that property or money, they incur the opportunity cost of property or money. . . . If we compensate for any injury in 1795 (or other past year) as if it took place today, we ignore the opportunity cost of this injury. We compensate the injured party for the dollar amount of the injury, but not for the foregone use of the injury sustained as the injury at the time of loss.

SPA-101; N-64 at 6, ¶¶ 16 and 17.

The courts have long recognized that prejudgment interest is essential to

make a plaintiff whole for the time and investment loss of money. See, e.g.,

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Osterneck v. Ernst & Whinney, 489 U.S. 169, 175 (1989) ("[W]e have repeatedly

stated that prejudgment interest is an element of [plaintiff's] complete

compensation."); Proctor & Gamble Distrib. Co. v. Sherman, 2 F.2d 165, 166

(S.D.N.Y. 1924) (Hand, J.) ("The present use of my money is itself a thing of

value, and, if I get no compensation for its loss, my remedy does not altogether

right my wrong."); Prager v. New Jersey Fidelity & Plate Glass Ins. Co., 245 N.Y.

1, 5-6 (1927) (Cardozo, J.) ("While the dispute as to the value was going on, the

defendant had the benefit of the money, and the plaintiff was without it. Interest

must be added if we are to make the plaintiff whole."). See also, Knoll, Primer on

Prejudgment Interest, 75 Tex. L. Rev. 293, 294:

If justice were immediate, there would never be an award of prejudgment interest. The injured party would receive an enforceable judgment immediately, with no loss in value from the time value of money. Because justice often takes many years to achieve, interest is added to the original judgment to ensure that compensation is complete.

2. The Remedial Purpose Of The NIA

The district court also ruled that an award of prejudgment interest served the

"self-evident" remedial purpose of the NIA "to protect the lands of the Indian tribes

in order to prevent fraud and unfairness." SPA-106. Such a conclusion was a

basis for this Court's ruling in Oneida V recognizing that an implied private right

of action could be brought under the NIA. The silence of the NIA regarding

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prejudgment interest has no impact on its availability. SPA-107. See, e.g.,

Rodgers v. United States, 332 U.S. 371, 373 (1947); Wickham, 955 F.2d at 834

(prejudgment interest has been allowed "under a variety of federal laws, despite the

silence of the laws on the subject of interest.")65

3. The "Relative Equities" Required Prejudgment Interest

In its initial Phase II pretrial order, SPA-268-81, the district court

contemplated a modest bench trial limited to the issue of prejudgment interest on

the jury's use and occupancy award. The court found that because it was

inconceivable that the jury included in its award the actual value of public

infrastructure in its small award, the State would not be permitted to claim a credit

for the infrastructure even if it could establish that it had acted in good faith toward

the Cayugas, and that the State would therefore not be permitted to attempt to

establish its good faith. SPA-274-78. With respect to the issue of plaintiffs'

alleged delay in commencing the action, the court stated it "may consider" the

issue of laches, but that the parties should simply stipulate to the relevant facts.

SPA-278-79.

65 See also, Assiniboine Indian Tribe v. United States, 121 F. Supp. 906, 912 (Ct. Cl.), cert. denied, 348 U.S. 863 (1954), where the court, citing numerous Supreme Court cases, stated that it is well established that interest or its equivalent should be allowed in Indian claims as well as other cases despite the silence of the pertinent act on the subject.

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In a supplemental pre-trial order, SPA-256-67, however, the court greatly

expanded the scope of the Phase II trial, allowing proof on the various equitable

factors set forth in reports of the State's witnesses. In addition, the court ruled that

it would take proof on the laches issue regarding the efforts plaintiffs had made in

asserting their claims and the State's response thereto. SPA-265-66. As the district

court later acknowledged, the issues of fairness and relative equities came to

dominate Phase II. SPA-113.

Although the lower court ultimately found irrefutable evidence that the State

had never acted in good faith toward the Cayugas, see, Point I, supra, it remains

doubtful that the court needed this exhaustive evidence. Because prejudgment

interest is neither penal in nature, nor intended to punish the defendant, but serves

to fully compensate the plaintiffs for the time value of money, defendant's good

faith is irrelevant to the inquiry. See, e.g., City of Milwaukee v. Cement Division,

Nat'l Gypsum Co., 515 U.S. 189 (1995); West Virginia v. United States, 479 U.S.

305, 311 n. 3 (1987); Lodges 743 and 1746, Int'l Ass'n of Machinists v. United

Aircraft Corp., 534 F.2d 422, 447 (2d Cir. 1975), cert. denied, 429 U.S. 825 (1976)

(prejudgment interest is compensatory, not punitive in nature, and "wrongdoing by

a defendant is not a prerequisite to an award"); Webb v. GAF Corp., 949 F. Supp.

102, 106 (N.D.N.Y. 1996) ("defendant's good faith does not shift the balance of

equities away from a grant of prejudgment interest in this matter"). See also,

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General Motors Corp. v. Devex Corp., 461 U.S. 648, 655 n. 10 (1983) ("The

traditional view, which treated prejudgment interest as a penalty awarded on the

basis of the defendant's conduct, has long been criticized on the ground that

prejudgment interest represents 'delay damages' and should be awarded as a

component of full compensation.").

Having, nevertheless, decided to take evidence of the State's alleged "good

faith" in acquiring the Cayuga land, the court properly placed the burden of proof

upon the State "because the State's good faith argument is akin to an affirmative

defense in that it is responding to the Cayuga's claim for prejudgment interest,"

see, National Union Fire Ins. v. City Sav., F.S.B., 28 F.3d 376, 393 (3d Cir. 1994).

SPA-123. See also, 9 J. Wigmore Evidence § 2486, at 288 (Chadbourne rev. ed.

1981) (burden of proof is on one asserting affirmative defense); State Distributors,

Inc. v. Glenmore Distilleries Co., 738 F.2d 405, 410 (10th Cir. 1984); Dyson v.

Kocik, 564 F. Supp. 109, 113 (M.D. Pa. 1983), aff'd, 740 F.2d 956 (3d Cir. 1984)

(good faith is an affirmative defense).

While not disputing that good faith is in the nature of an affirmative defense,

the State argues that because interest is a form of damages, the Cayugas should

have the burden not only of proving their entitlement to prejudgment interest, but

also disproving the State's claim of good faith. The State cites to a single case for

the general proposition that interest is a form of damages, AB-190, but cites no

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authority for its burden-shifting argument. By the State's logic, every party who

makes a claim for damages assumes the burden of disproving the defendants'

affirmative defenses. This is contrary to the previously cited authorities and this

Court's holding in Oneida V, 719 F.2d at 541-42 ("The burden of proving good

faith rests on the Counties.").

In any event, the evidence overwhelmingly established both the State's lack

of good faith and the Cayugas' diligence and perseverance. See, Point I, supra.

4. Other "General Principles" Favor Prejudgment Interest

The State contends that at the time of its violation of the NIA, it was not

subject to interest, citing to the long-discredited distinction between liquidated and

unliquidated claims. AB-184. 66 As appellants acknowledge, courts routinely

award prejudgment interest on unliquidated claims. See, e.g., City of Milwaukee

v. Cement Division, Nat'l Gypsum Co., supra, 515 U.S. at 197; Virginia v. West

Virginia, 238 U.S. 202, 232 (1915) (rejecting claim that interest was not

recoverable because claim was unliquidated and indefinite.). The district court,

citing to this Court's decision in Wickham ruled that "the damages awarded by the

jury were not 'so conjectural that prejudgment interest should not be awarded,'"

66 To the extent the State may be asserting a broader proposition, it is clear that interest has long been available against the State. See, e.g., Walrath v. Redfield, 18 N.Y. 457 (1858); Parmenter v. State of New York, 135 N.Y. 154, 173 (1892); Coxe v. State of New York, 144 N.Y. 396, 413 (1895).

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SPA-111, citing 955 F.2d at 836. Again quoting Wickham, the court below

explained that "'while the presence of abstruse inquiries and difficult questions of

proof in the calculation of damages are factors to be considered carefully, these

problems must be considered together with other factors that may favor

prejudgment interest', Wickham, 955 F.2d at 836." SPA-112. The court found that

the previously addressed Wickham factors weighed in favor of an award of

prejudgment interest. SPA-112-13.

F. The District Court Properly Accepted The Cayugas' Expert's Methodology And Accrual Date

The district court heard the testimony of three expert economists, Dr. Temin

for the Cayugas, Dr. Berkman for the U.S., and Dr. Grossman for the State.67

SPA-238.

There was uniform agreement among the economists regarding the general

principles of prejudgment interest. The court below stated: "The economists

67 The court properly granted the United States' motion to exclude the State's utility expert, John D. Dorchester, T-6127-28, who was the State's real estate appraisal expert at Phase I. Mr. Dorchester admitted he was not an economist, that his knowledge of economics was limited to real estate transactions, and that he had no formal training in economic history or historical trends in inflation. T-6289-91. He offered no opinion as to the appropriate amount of prejudgment interest due the Cayugas. T-6291-92, 6314-15. Instead, he sought to offer tables of "ball park" estimates, Dkt. 839 at 262, which were not based on the jury's award, T-6233, 6236, and which he conceded were meaningless and unreliable. T-6179, 6228-29. See, e.g., Sparks v. Consolidated Rail Corp., No. 94-CV-1917, 1995 U.S. Dist. LEXIS 6234 (E.D. Pa. May 8, 1995).

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agree, first of all, that in general an award of prejudgment interest is necessary to

wholly compensate a plaintiff because such an award takes into account a

plaintiff's lost opportunity cost, or the time value of money." SPA-239.

The three economists also agreed that compound, as opposed to simple,

interest is preferred. SPA-240. As the State's economist explained "[T]ypically

economists . . . use compound interest in their calculations" because they "assume

that any interest paid could be reinvested and, . . . interest can be earned upon

interest." S-721 at 4, ¶ 10. The court found that compound interest comports with

basic principles of prejudgment interest jurisprudence. SPA-240. Compounding is

clearly favored by the federal courts. See, e.g., In the Matter of Oil Spill by the

Amoco Cadiz, 954 F.2d 1279, 1332 (7th Cir. 1992) ("compound prejudgment

interest is the norm in federal litigation."). See also, Goodrich Corp. v. Town of

Middlesbury, 311 F.3d 154, 176-77 (2d Cir. 2002); Sands v. Runyon, 28 F.3d

1323, 1328 (2d Cir. 1994); Saulpaugh v. Monroe Cmty. Hosp., supra, 4 F.3d at 145

(failure to compound interest on prejudgment interest award was abuse of

discretion); Mentor Ins. Co. (U.K.) v. Brannkasse, 996 F.2d 506, 520 (2d Cir.

1993); China Union Lines, Ltd. v. American Marine Underwriters, Inc., 755 F.2d

26, 30-31 (2d Cir. 1985).68

68 Ignoring federal law, and citing no judicial authority whatever, the State argues that under the common law applicable at the time of its wrongful conduct, interest, was not compounded. AB-184. The early federal cases are to the contrary. In The Packet, 18 F. Cas. 965, 969 (Cir. Ct. Mass. 1823), Justice Story, in ruling that

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Finally, the three economists agreed that the "risk-free" rate is the proper

rate to be used. SPA-240. The State erroneously assumed, however, that such rate

was dependent on proof that the Cayugas had access to financial markets. As

discussed below, neither the principles governing prejudgment interest nor a risk-

free interest rate requires the court to consider the financial acumen or investment

resources of the successful plaintiff.

As Dr. Temin explained, compounding a risk-free interest rate measures the

pure time effect of money precisely and accounts for inflation. SPA-243, N-64

at 9, ¶ 25. Dr. Berkman explained that the use of the risk-free interest rate was

highly favorable to the State: "[b]ecause the risk-free market asset is . . . the one

offering the lowest interest rate, . . . it will result in the most conservative estimate

for [prejudgment interest] in this case." SPA-244; G-2 at 6 § 14, ¶ C.

The court below rejected the analysis of the State's economist because it was

premised on an erroneous construction of the jury verdict and because it would

compound interest was due on a bottomry bond, rejected European civil law precedents and stated that "The doctrine of the civil law denying compound interest, is not of universal application under the common law." Similarly, in Hollingsworth v. Detroit, 12 F. Cas. 352, 354 (Cir. Ct. Mich. 1844), the court characterized the city's objection to paying "interest on interest" as contrary to "every consideration of sound policy, of morals, of logic, and of law."). The State cites the Restatement (Second) of Contracts §354 cmt. a, AB-184, for the proposition that interest was not compounded at common law. That comment expressly states that the Section does not deal with interest on judgments. The Dobbs' Law of Remedies treatise cited by the State does not discuss the practice of awarding compound interest in the federal courts.

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lead to the "untenable result" that the Cayugas owed the State for lost rent.

SPA-241.

As the district court observed, Dr. Temin and Dr. Berkman used the same

methodology. Both accepted the jury verdict both for the amounts awarded for

each year to the Cayugas, and for the amounts credited to the State for each year

for its annuity payments to the Cayugas. Using recognized primary sources for the

history of interest rates, they determined the risk-free interest rate for each year.

For purpose of compounding, they carried over the interest earned for each year to

the balance of the previous year's calculation. T-5743, 5749-53, 5756, 5759-60,

5763, 5939, 5960-65. Both experts also credited the State with the same

computation of interest on the annuity payments made each year by the State, even

for those years in which credits exceeded payments to the Cayugas, and thus

resulted in a net negative number. Because the purpose of prejudgment interest is

to fully compensate the plaintiff and not to reward the wrongdoer, such

calculations were enormously beneficial to the State and greatly reduced the

amount of prejudgment interest to the Cayugas.69

The only distinction between Dr. Temin's and Dr. Berkman's analyses is in

the selection of interest rates for certain years during the late 19th century.

T-5989. As he was instructed by the government, Dr. Berkman at all times 69 As discussed in Point XII B, supra, the State was not entitled to any credits for payments made pursuant to a transaction void by federal statute.

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selected the absolute lowest risk-free interest rates from the same sources utilized

by Dr. Temin. T-5989-90. Dr. Temin utilized the lowest "appropriate" risk-free

interest rates, eschewing certain lower rates for government bonds in the late

nineteenth century because they contained features of value to investors in addition

to interest. Even the State's experts agreed that Dr. Temin's analysis "was

consistent with basic economic principles," was mathematically correct, and that

compounding the nominal interest rate does not constitute "double dipping."

T-6294, 6438.

Drs. Temin and Berkman calculated prejudgment interest from July 27,

1795, the accrual date, which, as the date of the first transaction, was the "date of

injury or deprivation," SPA-248, and was also the starting date utilized by the court

for the jury's award of damages for loss of use and possession.

The State sharply disagrees with the court's selection of this date,

AB-186-88, arguing that accruing interest from July 27, 1918, would have

dramatically reduced the amount of prejudgment interest, which is undoubtedly

true, but offers no factual or legal support whatever for the selection of that date.

The State also erroneously argued for an accrual date based upon New York

RPAPL §601.

District courts have considerable latitude in determining when prejudgment

interest begins to accrue. See, e.g., Conway v. Icahn & Co., 16 F.3d 504 (2d Cir.

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1994). The State ignores the fact that this case involves violations based on federal

statutory and federal common law. Federal law, not the CPLR or the RPAPL, thus

governs the determination of the accrual date. See, e.g., Endico Potatoes v.

CIT/Group Factoring Inc., 67 F.3d 1063, 1071-72 (2d Cir. 1995); Valle v. Joint

Plumbing Indus. Bd., 623 F.2d 196, 205 n. 19 (2d Cir. 1980) ("prejudgment

interest is a substantive formulation of remedy" and the accrual date must be

chosen with reference to the governing law); Carpenters Dist. Council v. Dillard

Dep't Stores, Inc., 15 F.3d 1275 (5th Cir. 1994), cert. denied, 513 U.S. 1126

(1995). In Endico Potatoes, this Court ruled that it was an abuse of discretion to

apply a New York statutory interest rate where the claims were purely the product

of federal law.

Measuring prejudgment interest from the date of injury is the general

practice under federal law. See, e.g., Cement Div. v. City of Milwaukee, 31 F.3d

581, 587 (7th Cir. 1994), aff'd, 515 U.S. 189 (1995); McCrann v. United States

Lines, Inc., 803 F.2d 771, 773 (2d Cir. 1986); Taliercio v. Compania Empressa

Lineas Argentina, 761 F.2d 126, 129 (2d Cir. 1985); Independent Bulk Transport,

Inc. v. Vessel "Morania Abaco", 676 F.2d 23, 25 (2d. Cir. 1982).

The State cites no authority for its implicit argument that a district court

abuses its discretion by selecting the date of injury as the accrual date. Rather, it

cites solely to the anomalous case of Kansas v. Colorado, 533 U.S. 1 (2001),

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AB-182, where the Supreme Court approved an accrual date measured from the

date of filing the complaint as the result of judicial compromise. The Court was

divided as to whether the date of filing or the date when Colorado was aware it was

violating a water rights compact should be chosen as the accrual date. Justice

Stevens, who delivered the opinion of the Court, explained that, to "produce a

majority for the judgment," four Justices, who believed the date of the initial

violation was the proper accrual date, agreed with Chief Justices Rehnquist and

Kennedy "that prejudgment interest should run from the date of the filing of the

complaint." 533 U.S. at 15, n. 5. As Judge McCurn recently wrote in concluding

that Kansas v. Colorado did not change the law regarding the accrual date for

prejudgment interest, "Clearly then, Kansas cannot be read as standing for the

overriding principle that in all cases where prejudgment interest is at issue the

proper accrual date is the filing date of the complaint." Oneida XII, 214 F.R.D. at

97. See also, Essay: The Structure of Judicial Opinions, 86 Minn. L. Rev. 447,

488 n. 180 (2001) (describing Kansas as an "extreme example" of judicial decision

making involving "four Justices endorsing a position with which they disagree in

order to produce a majority for a judgment.").

Judge McCurn also ruled that Kansas was factually distinct because it

involved claims between two states under a water rights compact. The Court's

compromise selection of a date of filing accrual date -- an exercise of its original

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jurisdiction -- was limited to the "factually specific nature of the accrual date

inquiry" and was not controlling with respect to the proper accrual date for an

Indian land claim. Oneida XII, 214 F.R.D. at 98.

It is well settled that for Indian land claims, prejudgment interest accrues

from the time of dispossession or taking: "interest must be awarded on the

judgment from the date the claim accrued, that is, from the date of the taking."

Cohen, Handbook of Federal Indian Law (1982 ed.) at 570. See also, United

States v. Sioux Nation of Indians, 448 U.S. 371, 390 (1980); United States v.

Klamath and Moadoc Tribes, 304 U.S. 119, 123 (1938); Shoshone Tribe of Indians

of Wind River Reservation in Wyoming v. United States, 299 U.S. 476, 497

(1937); United States v. Creek Nation, 295 U.S. 103, 111-12 (1935) (in ruling that

damages and interest accrue from the time of the taking of the lands in 1891, the

court reversed an order measuring damages only from the time of commencement

of the action); United States v. Cherokee Nation, 202 U.S. 101, 123-26 (1906).

G. The District Court's Slashing Of The Prejudgment Interest Award Was An Abuse Of Discretion              

The district court gave no legal basis for its determination to use Dr.

Berkman's interest computation yielding a total sum of $527,500,817 while

discarding Dr. Temin's total sum of $1,749,963,279. SPA-245. Neither the court

nor any evidence suggested that Dr. Temin's figures were inaccurate or that the

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$1.75 billion total was not the correct value for the properly applied interest rate.

The court simply stated that the amount was too high. 70

The $1.75 billion figure for damages in this case is not an extraordinary sum.

Indeed, it is the mirror image of the present value (compounding Dr. Temin's risk-

free interest rates) of the monies the State realized on its unlawful sale of the

Cayugas' homeland. Applying the Temin factors (N-64 at S3), the present worth of

the $247,609.33 realized by the State on the sale of the lands acquired by the 1795

Treaty is $1.4 billion,71 and the present worth of the $14,899.40 realized on the

1807 Treaty is an additional $46.5 million. Indeed, the $1.45 billion in total profits

does not even include the vast revenues the State has realized from taxation,

development and exploitation of the Claim Area over two centuries and thus

represents only a small portion of what New York actually received.

Having chosen Dr. Berkman's $527 million calculation, the district court

next applied a 60% reduction to that figure, yielding a prejudgment interest award

of $211,000,326.80. SPA-254. As purported justification for its wholesale

70 The court's decision on prejudgment interest was filed on October 2, 2001. The only explanation given for not utilizing Dr. Temin's calculation was that the total sum of $1.75 billion approached the $1.9 billion in claims Lloyd's of London then expected to receive as a result of the 9/11 tragedy. SPA-245.

71 A contemporaneous ledger by the State's Surveyor, Simeon DeWitt, however, totaled the State's return at $296,962.22 (N-47, 48) an amount roughly equal to the $296,887 testified at trial by the State's witness, T-1162, from the State's records. S-113, 114. The present value of $296,900, and $14,899.40 realized on the 1807 Treaty is approximately $1.75 billion.

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evisceration of the economists' recommendations, the court stated that "the time

ha[d] finally come to invoke . . . equitable principles." SPA-248. However, as the

court itself acknowledged in 1999, the court had "already twice invoked this

equitable doctrine to somewhat limit the remedies available to plaintiffs. . . . In so

doing, the court limited plaintiffs' recovery to monetary damages, and refused to

allow ejectment as a remedy." SPA-279; A-4923. The court's discussion of

equitable principles demonstrated that its resort to equity to again reduce the

Cayugas' recovery was unjustified, and an abuse of discretion.

Although the court discredited Dr. Grossman's methodology and

calculations, it took into account his arguments that Drs. Temin and Berkman did

not consider what the Cayugas would have done with the money in 1795, whether

they "had access to financial markets and whether or not they had the ability,

knowledge or skills to take advantage of such markets," and expenses the Cayugas

might have incurred had the Cayugas remained in possession. SPA-249.

The district court did not cite any authority that would support considering

such matters in fashioning an award of prejudgment interest, nor does the State

here. AB-188. Such hypothetical considerations as to how a particular plaintiff

might have invested the funds, or what costs they might have incurred, are entirely

irrelevant to the ascertainment of prejudgment interest from an economic as well as

legal perspective.

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In Oldham v. Korean Air Lines Co., supra, the district court applied the

Ibbotson Stock Index to determine prejudgment interest instead of the prime rate

because the lower court believed it reflected more accurately what the decedent

"would have made as a stockbroker." The Court of Appeals ruled that this was

error because the fact that the deceased was a stockbroker was entirely irrelevant to

the determination of prejudgment interest, which is solely intended to reflect the

time value of money:

What Mr. Kohn would have made and saved is irrelevant to the question of what constitutes appropriate compensation for a delay in a successful party's receipt of a cash payment. The time value of the money is the same whether paid in satisfaction of an award for a loss of inheritance or a loss of society.

127 F.3d at 54. See also, Forman v. Korean Air Lines Co., 84 F.3d 446, 449-50

(D.C. Cir.), cert. denied, 519 U.S. 1028 (1996) (affirming prejudgment interest

calculated at prime rate applied in wrongful death of low-paid worker);

Developments in the Law -- Damages, 61 Harv. L. Rev. 113, 136 (1947) ("it is not

considered relevant to investigate what the plaintiff would have actually done with

the money had it been promptly paid.").

There is an elitist and entirely inappropriate element in the suggestion that

the Cayugas lacked the financial acumen to use the money properly. The State's

view of prejudgment interest suggests that an investment banker should be

compensated more richly than a physical laborer for the same injury because the

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former has greater financial knowledge and experience. It is not surprising that

neither the district court nor appellants could cite any authority for this proposition.

As Dr. Temin testified, the purpose of utilizing the risk-free interest rate is to

avoid making hypothetical assumptions as to how the recipient of an interest award

would have invested the funds, or the degree of risk the recipient could tolerate:

Economists don't want to consider the risk premium because when you're doing the opportunity cost, you're talking about some alternative, . . . it's not possible to know how much risk this hypothetical person would take or what the return would be to taking that risk. And so to avoid that, one takes the risk-free interest rate. I might also say that since that -- the risk-free interest rate is lower than almost any rate that you observe, that's a very conservative way of valuing the opportunity cost.

T-5736.

Dr. Berkman, similarly explained that whether the Cayugas had access to

financial markets, how they would have invested the funds, or whether they would

have incurred transaction costs, was entirely irrelevant to the application of risk-

free rates in determining prejudgment interest:

Q. Why did you not consider those factors?

A. Because we're not trying here to replicate what the tribe would have earned or nation would have earned had it actually invested this money, the damage amounts in any particular investment. . . . We're using the interest rates, the risk-free rates as a proxy to determine how much benefit the tribe lost by

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not having that income stream. And so it's not relevant to look at any particular investment because we don't know how the tribe or nation would have actually spent that money. They could have spent it on food, they could have spent it on housing, they could have invested it, we just don't know.

* * *

I'm not trying to replicate an actual investment that would have taken place, so I don't have to be worried about whether or not the tribe or its agents had immediate access to any capital. I'm just saying this interest rate represents to me what the return was and therefore what the loss of benefit would have been to the tribe.

T-6062-63.

The court also attempted to justify its "adjustment" of the prejudgment

award on the impact of compounding interest over a long passage of time.

SPA-250-51, ignoring its own factual finding in the same opinion, that the

Cayugas were not responsible for any delay in bringing this action. SPA-236.

Point I (b)(2), supra.

The only authority cited by the district court for its arbitrary 60% reduction

of Dr. Berkman's prejudgment interest award was Kansas v. Colorado, which

Judge McCurn subsequently determined was of little precedential value and was

not controlling in Indian land claims. Oneida XII, 214 F.R.D. at 96-98. The

district court ignored United States v. Pend Oreille County Pub. Util. Dist. No. 1,

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135 F.3d 602, 613 (9th Cir. 1998), where the Ninth Circuit affirmed an award of

prejudgment interest compounded at 90% of prime rate over the forty years of

damages to the Kalispel Indian Tribe. The district court had awarded $593,795 in

damages and prejudgment interest in the amount of $2,436,396. In affirming the

award, the Ninth Circuit noted the long delay between the tribe's injury and its

recovery:

. . . . [M]oney has a time value, and prejudgment interest is therefore necessary in the ordinary case to compensate a plaintiff fully for a loss suffered at time t and not compensated until t + 1. Moreover, prejudgment interest is a well-established remedy in this circuit. Hopi Tribe v. Navajo Tribe, 46 F.3d 908, 922 (9th Cir.) (citations and quotations omitted), cert. denied, 516 U.S. 931, 116 S. Ct. 337, 133 L. Ed. 2d 236 (1995).

* * *

PUD argues that the award was punitive to it and a windfall to the Tribe. But the Tribe lost the use of its land for forty years while PUD reaped the benefits of additional power generation.

See also, United States v. Sioux Nation of Indians, supra (affirming Court of

Claims ruling that the Sioux were entitled to full just compensation for the taking

of tribal property, including interest for approximately 100 years).

In addition to Kansas, the State relies on Bd. of Comm'rs of County of

Jackson v. United States, 308 U.S. 343, 349-52 (1939), AB-183-85, to argue that

the district court was not only justified in reducing the prejudgment interest award

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because of plaintiffs' delay, but should have applied state law to reduce it even

further. However, in Jackson County, the court could apply state law because it

did not conflict with federal law, unlike the instant case. See, Point XI B, supra.

Appellants own description of Jackson County further distinguishes that case: "In

Jackson County, the Supreme Court upheld the denial of the United States' request

for interest against a County defendant that had acted innocently and was sued by

the United States eight years after it knew the County had violated the law by

wrongfully collecting taxes from an Indian." AB-184-85. Unlike Jackson County,

which "in all innocence acted in reliance on a fee patent given under the hand of

the President of the United States," 308 U.S. at 352-53, the State was aware that its

actions in acquiring Cayuga land violated federal law, and proceeded in calculated

disregard of the NIA, as the court found. Moreover, whatever application Jackson

County may have to the issue of whether the United States acted expeditiously to

intervene on behalf of the Cayugas, the Cayugas did not delay commencing this

action, as the court expressly found.72

72 Appellants also cite to Brooks v. Nez Perce County, 670 F.2d 835 (9th Cir. 1982) to imply that delay by the United States in joining an action as trustee on behalf of Indians may be a factor that can be considered by the court in calculating damages. AB-185. However, in Brooks, the Indian plaintiffs were also guilty of laches in commencing an action fifty years after the county's wrongful taxation of their property in 1923. The Ninth Circuit quoted the lower court: "it would not be equitable to allow the United States and the plaintiffs to recover damages that were increased by their own inaction." 670 F.2d at 836. (emphasis added). Appellants have not cited any authority for their implicit argument that the prejudgment interest award may be reduced where the Indians have been expressly

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Although the district court also cited to the United States' delay in

intervening on behalf of the Cayugas, SPA-251, 254, laches requires a finding of

unreasonable delay by the party against whom the defense is asserted. See, e.g.,

Coalition for Canyon Preservation v. Bowers, 632 F.2d 774, 779 (9th Cir. 1980).

Finally, Dr. Berkman calculated interest only through June 30, 2000,

SPA-245, but the district court entered judgment on October 2, 2001. SPA-67.

Accordingly, the Cayugas requested that the court amend its judgment to add

interest for this intervening period either at the post-judgment rate of 6.28%

applicable at the time of the verdict, or at the rate of 5.54% testified to by Dr.

Berkman as the then appropriate prejudgment rate. The Cayugas also sought

prejudgment interest on the jury's current value award of $35 million from the

February 17, 2000 date of the verdict through the date judgment was entered nearly

twenty months later, either at the 6.28% post-judgment rate or at the 5.54% rate.

A-5245-46. The court erroneously denied the Cayugas' motion for this relief.

SPA-38-42. Reed v. A.W. Lawrence & Co., 95 F.3d 1170, 1183 (2d Cir. 1996)

(remanding for award of interim prejudgment interest where there was

approximately ten months' delay in the Northern District between verdict and entry

of judgment); Sands v. Runyon, 28 F.3d 1323, 1328 (2d Cir. 1994); McGee v. U.S.

Lines, 976 F.2d 821 (2d Cir. 1992).

found not to have delayed commencement of suit.

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While the district courts have discretion in awarding prejudgment interest,

such discretion is not unlimited, and must be exercised in accordance with legal

principles. In the Matter of Oil Spill By The Amoco Cadiz, supra, 954 F.2d at

1334, the court explained that there must be limits to judicial discretion in

prejudgment interest awards:

Limits there must be -- for what is the point of computing the principal amount of damages in intricate detail if the judge may turn around and increase (or reduce) the value of that award by a factor of three on the basis of vague equitable concerns?

"We must not invite the exercise of judicial impressionism. Discretion there may be, but 'methodized by analogy, disciplined by system.' Cardozo, The Nature of the Judicial Process, 139, 141 (1921). Discretion without a criterion for its exercise is authorization of arbitrariness." Brown v. Allen, 344 U.S. 443, 496 . . . (1953) (Frankfurter, J.).

As this Court has held, an award of prejudgment interest that fails to make

the plaintiff whole is an abuse of discretion. Saulpaugh v. Monroe Comty. Hosp.,

supra, 4 F.3d at 145. The district court's rationales for rejecting Dr. Temin's

calculation, accepting Dr. Berkman's figure, and reducing that amount by 60% do

not withstand scrutiny.

Accordingly, this Court should remand for the entry of prejudgment interest

in the amount of $1,749,963,279. See, Amoco Cadiz, supra, 954 F.2d at 1335,

1337 (directing increase of rate of prejudgment interest from 7.22% to 12.31% and

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entry of judgment accordingly on remand). Alternatively, this Court should enter

judgment on the full amount of $527,500,817 as testified to by Dr. Berkman. In

any event, it should award additional interest through October 2, 2001, the date of

judgment, as well as prejudgment interest on the $35 million current value award,

from the February 17, 2000 date of the verdict, through the date of judgment.

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POINT XIV

THE DISTRICT COURT DID NOT ABUSE ITS DISCRETION BY REFUSING TO DIRECT THAT THE JUDGMENT BE

GRANTED SOLELY TO THE UNITED STATES AS TRUSTEE

The State moved to amend the judgment "to run solely, or at least jointly, in

favor of the United States as trustee for all successors-in-interest of the historic

Cayuga Indian Nation." SPA-42. The district court granted the State's request

only to the extent of providing that the judgment run jointly in favor of the United

States as trustee, and the tribal plaintiffs. SPA-42-45.

In so ruling, the district court agreed with the United States that the manner

in which it exercised its trustee powers was a subject for analysis by the Interior

and Justice Departments in consultation with the tribal plaintiffs, and that the relief

requested by the State was at best premature.

Citing no authority, the State contends that the district court's considered

decision to refuse entering judgment to spectral successors-in-interest was an abuse

of discretion. However, the exercise of the United States' fiduciary obligations is

solely a federal concern. Heckman v. United States, 224 U.S. 413 (1912); Joint

Tribal Council of the Passamaquoddy Tribe v. Martin, 528 F.2d 370, 379 (1st Cir.

1975), which, with respect to tribal funds, is regulated by federal statute, 25 U.S.C.

§§ 4001 et. seq. and regulation 25 CFR part 1200.

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If the State were truly concerned about potential Indian claimants -- a

solicitude it never previously exhibited in more than 200 years -- it could have

moved pursuant to Rule 19, Fed. R. Civ. P., in the more than twenty years of this

litigation before judgment was entered. The State, however, does not dispute that

no tribe has come forward to join this action since the Tribe joined the action in

1981, and despite a well-publicized judgment entered nearly two years ago.

The State's effort to add potential successor-in-interest tribes to the judgment

is a thinly-veiled attempt to prolong its day of reckoning and obstruct the payment

of the judgment to the Cayugas. Its attempt to dictate to the United States how to

marshall the trust funds demonstrates that the State still considers its interests

paramount to those of the Cayugas and the United States.

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CONCLUSION

A. On all issues raised by the Appellants, the determinations of the

district court should be affirmed.

B. On the Cayugas' cross-appeal against the State:

1. The decision of the district court denying ejectment should

be reversed and a decree and judgment ejecting the State from all State lands

within the Claim Area should be entered.

2. The decision of the district court limiting prejudgment

interest should be reversed and judgment thereon should be entered in the amount

of $1,749,963,279 or alternatively $527,500,817, plus additional interest thereon

through the date of judgment, on account of mesne profits. If ejectment is not

granted, then the judgment should also include $35 million plus interest thereon

from the date of the jury's verdict through the date of judgment, on account of the

market value of the Claim Area.

C. On the Cayugas' appeal against the Non-State Defendants pursuant

to 28 U.S.C. §1292(b), the decision of the district court denying ejectment should

be reversed and a decree and judgment ejecting all such defendants from all lands

within the Claim Area should be entered.

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D. On the Cayugas' conditional appeal, if the Court orders a new trial

on any other ground, or materially decreases the size of the judgment, then a new

trial should be ordered free from the errors committed below.

Dated: New York, New York July 11, 2003

Respectfully Submitted,

SONNENSCHEIN NATH & ROSENTHAL LLP

By_______________________________MARTIN R. GOLD (MRG509482)RAYMOND J. HESLIN (RJH509442)1221 Avenue of the AmericasNew York, New York 10020(212) 768-6700

Attorneys for Plaintiff/Appellee/Cross-Appellant Cayuga Indian Nation of New York

MARISCAL, WEEKS, McINTYRE & FRIEDLANDER, P.A.

By_______________________________GLENN M. FELDMANBRIAN M. MUELLER2901 North Central Avenue --Suite 200Phoenix, AZ 85012(602) 285-5000

Attorneys for Plaintiff-Intervenor/Appellee/Cross-Appellant Seneca-CayugaTribe of Oklahoma

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TABLE OF CONTENTS

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TABLE OF AUTHORITIES

CASES

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