Second Circuit Vacates Shinnecock Injunction 

In a 2-1 decision, dated June 25, 2012, a three-judge panel (Walker, B.D. Parker and Hall, Circuit Judges) of the Second Circuit Court of Appeals vacated a judgment of the United States District Court for the Eastern District of New York (Joseph F. Bianco, Judge) granting a permanent injunction prohibiting the Shinnecock Indian Nation and its tribal officials from developing a casino on a plot of land known as “Westwoods” without complying with the laws of the State of New York and Town of Southampton.

A majority of the Court held that the State’s original complaint alleged only violations of State and local law and, therefore, no federal question was presented under the “well-pleaded complaint” rule. Further, the majority held that the substantial federal question exception to the well-pleaded complaint rule does not apply because the case could have been decided without reaching the federal issues. As an example, the majority opinion cited that the case could have been resolved if the Shinnecocks established that their construction of the casino complied with State and local law.

The majority was not persuaded that a federal question would be created as a result of the fact that, to prevail on their claims, the State and Town would have to establish that, inter alia, federal Indian law does not preclude the application of state and local law to the Shinnecock’s activities at Westwoods. The majority also rejected an argument that federal question jurisdiction could be premised on an extension of Oneida Indian Nation v. County of Oneida, 414 U.S. 661 (1974), where the Court held that a case gave rise to federal question jurisdiction because the Oneida Nation’s “complaint asserted a current right to possession conferred by federal law, wholly independent of state law.” Id. at 666

The dissent by Circuit Judge Hall commented that the majority opinion “flies in the face of over 200 years of federal Indian law jurisprudence, which has evolved in large part to address and accommodate the historically thorny nature of tribal-state relations and fear of ‘home-cooking’ in state courts, particularly as to issues involving the assertion of state jurisdiction over Indian tribes.” Unlike the majority, the dissent would have held that the case raised federal question jurisdiction because relief sought by the State and Town “necessarily depends on the resolution of a substantial question of federal law – is Westwoods “Indian land” within the meaning of 25 U.S.C. § 2703(4) and 18 U.S.C. § 1151.” Having concluded that federal jurisdiction exists, the dissent goes on to conclude that the case would not be barred by tribal sovereign immunity, the Shinnecock’s aboriginal title was extinguished in the 17th Century and that, in the absence of aboriginal title, the Shinnecocks are subject to application of State and local laws.

A copy of the Second Circuit's decision may be found here.

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