When the Supreme Court remanded Madison County v. Oneida Indian Nation to the Second Circuit yesterday morning, Indian-tax watchers, and adherents to the Court’s long recognition of robust Tribal sovereign immunity, breathed a sigh of relief. No good could have come from this case, and many expected the Court to fashion a new exception to Tribal sovereign immunity, very possibly adopting petitioners’ “immovable property” or in rem exception to Tribal sovereign immunity. Had the Court done so, it would have been wrong. The Court decided to hear the case, in part, to determine “whether tribal sovereign immunity from suit, to the extent it should continue to be recognized, bars taxing authorities from foreclosing to collect lawfully imposed property taxes.” Even from the cert grant, this case spelled disaster.
The Oneida Indian Nation seems to have recognized what was at risk, and wisely mooted the dispute before the Roberts Court could rule on it. After cert was granted to determine whether a state could ignore a tribe’s immunity in foreclosing on tribal property, the Nation waived its sovereign immunity for enforcement of real property taxation through foreclosure. Yesterday the Court remanded the case to the United States Court of Appeals for the Second Circuit.
Petitioners Madison and Oneida Counties had argued in their merits brief that “Tribal sovereign immunity does not bar in rem foreclosure for nonpayment of real property taxes[.]” Petitioners synthesized City of Sherrill v. Oneida Indian Nation of New York, 544 U.S. 197 (2005) and County of Yakima v. Confederated Tribes and Bands of the Yakima Indian Nation, 502 U.S. 251 (1992), into a new rule that would be laughable if it weren’t so terrifying. They argued that (1) the Court’s strongest sovereign immunity cases were inapplicable as in personam rather than in rem cases (nevermind sovereign immunity is a matter of subject matter jurisdiction) and (2) that the Court had already allowed something like what Petitioners were asking for when it found congressional authorization for taxation in County of Yakima. But that case didn’t deal directly with sovereign immunity, let alone an in rem exception.
An in rem exception could have swallowed tribal sovereign immunity. States, counties, and other enemies of tribal self-governance might have still been barred from suing tribes. But the exception would have allowed them to “sue,” take, and sell tribes’ property. In adopting the rule, the Court would have destroyed the very purpose of sovereign immunity – whether tribal, federal, or state. That is, to protect assets of many from depredation by few.
In their attack, petitioners ignored precedent dealing directly with the in rem exception to sovereign immunity and holding that it doesn’t exist. United States v. Nordic Village, Inc., 503 U.S. 30, 38 (1992). As Justice Scalia wrote: “[W]e have never applied an in rem exception to the sovereign-immunity bar against monetary recovery, and have suggested that no such exception exists.” Id. Thankfully, we don’t have to witness the intellectual acrobatics necessary to retreat from such a clear statement of the law.
Anthony Broadman is a partner at Galanda Broadman PLLC, of Seattle, an American Indian majority-owned law firm. His practice focuses on company-critical business litigation and representing tribal governments. He can be reached at 206.691.3631 or email@example.com, or via galandabroadman.com.