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UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK ------x THE CANADIAN ST. REGIS BAND OF MOHAWK INDIANS, :

Civil Action Nos. Plaintiff : 82-CV-783 82-CV-1114 UNITED STATES OF AMERICA, : (NPM)

Plaintiff-Intervenor, : v. : STATE OF NEW YORK, et al., : Defendants. ------x THE ST. REGIS MOHAWK TRIBE, by THE ST. REGIS MOHAWK TRIBAL COUNCIL and THE PEOPLE OF THE LONGHOUSE AT AKWESASNE, by THE MOHAWK : NATION COUNCIL OF CHIEFS, : Civil Action No. Plaintiffs, 89-CV-829 : (NPM) UNITED STATES OF AMERICA, : Plaintiff-Intervenor, : v. : STATE OF NEW YORK, et al., : Defendants. ------x

DEFENDANT NEW YORK POWER AUTHORITY’S RESPONSE TO PLAINTIFFS’ OBJECTIONS TO MAGISTRATE JUDGE REPORT AND RECOMMENDATION

MANATT, PHELPS & PHILLIPS, LLP 7 Times Square New York, New York 10036 (212) 790-4500

Attorneys for Defendant New York Power Authority Case 5:82-cv-00783-LEK-TWD Document 610 Filed 02/04/13 Page 2 of 42

TABLE OF CONTENTS

Page

Preliminary Statement...... 1 Argument ...... 4 I. The Magistrate Correctly Found That the Island Claims Are Inherently Disruptive ...... 4 A. There Is No Dispute That the Plaintiffs’ Claims Are “Inherently Disruptive” Within the Meaning of Cayuga ...... 5 B. The Magistrate Correctly Concluded Cayuga and Oneida Do Not Turn on the Remedies – Whether Judicial or Administrative – Sought by Plaintiffs ...... 6 C. The FPA Provisions That Apply to Indian Reservations Are Not Relevant Under Cayuga and Do Not Prevent Disruption ...... 7 1. The FPA Has No Provisions to Address the Concerns Raised in Sherrill...... 8 2. The FPA Contemplates Settled Ownership as to Project Lands, Particularly as to Tribal Interests, Not the Unilateral Insertion of “Reservations” During the Project Term ...... 9 D. A Unilaterally Established Indian Reservation on the Islands Would Spell Unthinkable Disruption to the Project ...... 12 1. The FPA Empowers the Department of the Interior to Impose Any Condition Related to an On-Site Reservation, Even Over FERC’s Objections ...... 12 2. Reservation Status in the Islands Would Occasion a Decades-Long Jurisdictional Power Struggle, Precisely the Danger Addressed in Sherrill...... 13 3. The Parties’ Settlement Agreement, Aside from Being Plainly Inadmissible, Demonstrates the Potential Disruption Feared by NYPA...... 15 II. The Magistrate Correctly Concluded That Cayuga Required Dismissal as to the Islands, Which Have Undergone Extraordinary Development Reflecting Firmly Settled Expectations...... 16 A. Nothing in the Federal Power Act or the Project History Undermines the Settled Expectations of Non-Indian Ownership in the Islands ...... 17 1. The Federal Government’s Regulatory Presence Does Not Lessen the Societal Expectations in Settled Land Ownership ...... 17 2. The United States’ Repeated Endorsement of NYPA’s Possession Strengthens Settled Expectations and the Case for Laches ...... 19 B. All Relevant Facts Demonstrate Well Settled Expectations Are Present, Compelling Dismissal...... 21

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TABLE OF CONTENTS (continued) Page

1. Plaintiffs Concede Their Long Delay and That the Islands Have No “Indian Character” ...... 21 2. The Magistrate Correctly Considered the Island Claims as a Whole and Found that the Islands Have Been Subject to Enormous Development...... 22 3. The Islands – Whose Very Geography Has Been Changed by the Project – Are Not “Undeveloped” ...... 24 4. Plaintiffs Cannot Avoid Dismissal By Casting NYPA as a “Wrongdoer”...... 25 III. The United States’ Newly-Asserted Claim to Underlying Fee Title Cannot Save Plaintiffs’ Claims ...... 27 A. The United States Did Not Bring This Action To Protect Its Alleged Ownership Interest In The Islands ...... 28 B. The United States Does Not Have an Ownership Interest in the Islands...... 30 C. Laches Is Appropriate Given the United States’ “Egregious Delay” in Bringing Suit and the Absence of a Statute of Limitations ...... 33 Conclusion ...... 35

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TABLE OF AUTHORITIES

Page CASES Andrus v. Allard , 444 U.S. 51, 65-66 (1979) ...... 18 Cayuga Indian Nation v. Pataki , 413 F.3d 266 (2d Cir. 2005)...... passim City of Sherrill v. Oneida Indian Nation , 544 U.S. 197 (2005)...... passim City of Tacoma v. FERC , 460 F.3d 53, 131 (D.C. Cir. 2006)...... 13, 15 Cuglar v. Power Authority , 4 A.D.2d 801, 802 (3d Dep’t 1957)...... 24 Escondido Mutual Water Co. v. La Jolla Band of Mission Indians , 466 U.S. 765, 772, 779 (1984)...... 12, 13 Forest Props., Inc. v. United States , 177 F.3d 1360, 1366 (Fed. Cir. 1999)...... 24 FPC v. Tuscarora Indian Nation , 362 U.S. 99, 115 (1960)...... 14 Harcourt v. Gaillard , 25 U.S. 523, 527-28 (1827) ...... 33 In re New York Power Authority , 105 FERC ¶ 61,102 (Oct. 23, 2003) ...... 10 In re Power Authority of the State of New York , 12 F.P.C. 172 (July 15, 1953) ...... passim Lingle v. Chevron U.S.A. Inc. , 544 U.S. 528, 538-39 (2005) ...... 18 Mont. Power Co. , 38 F.P.C. 766 (1967), aff’d , Mont. Power Co. v. F.P.C. , 459 F.2d 863 (D.C. Cir. 1972)...... 8 Nez Perce Tribe v. Idaho Power Co. , 847 F. Supp. 791, 800-01 (D. Idaho 1993) ...... 11 Oneida Indian Nation of New York v. County of Oneida , 617 F.3d 114 (2d Cir. 2010), cert. denied 132 S. Ct. 452 (2011)...... passim Oneida Indian Nation of New York v. State of New York , 860 F.2d 1145, 1150 (2d Cir. 1988)...... 30 Onondaga Nation v. State of New York , -- Fed. Appx. --, No. 10-cv-4273, 2012 WL 5075534 (2d Cir. Oct. 19, 2012) (summary order), rehear’g denied Slip. Op., No. 10-4273 (2d Cir. Dec. 21, 2012) ...... 6, 22

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TABLE OF AUTHORITIES (continued) Page Onondaga Nation v. State of New York , No. 05-cv-0314 (LEK), 2010 WL 3806492 (N.D.N.Y. Sept. 22, 2010) ...... 6, 8, 24, 26 Pacific Gas & Elec. Co. v. FERC , 720 F.2d 78, 86-87 (D.C. Cir. 1983)...... 9 Penn Cent. Transp. Co. v. City of New York , 438 U.S. 104, 136 (1978)...... 18, 24 Portland Gen. Elec. Co. , 20 FERC ¶ 61,294 (1982)...... 8, 15 Portland Gen. Elec. Co. 31 FERC ¶ 61,306 (1985)...... 15 Portland Gen. Elec. , 111 FERC ¶ 61,450 (2005)...... 15 Pub. Util. Dist. No. 1 of Pend Oreille County , 130 FERC ¶ 62,148 (2010)...... 15 Putney v. People , 94 A.D.3d 1193, 1194-1195 (3d Dep’t 2012)...... 23 Rosebud Sioux Tribe v. Kneip , 430 U.S. 584, 605 (1977)...... 18 S. Carolina Pub. Serv. Auth. v. FERC , 850 F.2d 788, 792-93 (D.C. Cir. 1988)...... 11 Seneca Nation of Indians v. New York , 206 F. Supp. 2d 448 (W.D.N.Y. 2002), aff’d 382 F.3d 245 (2d Cir. 2004) ...... 32 United States v. Admin. Enters., Inc. , 46 F.3d 670, 672-73 (7th Cir. 1995) ...... 28 United States v. Beebe , 127 U.S. 338, 346 (1888)...... 29 United States v. Des Moines Nav. & Ry. Co ., 142 U.S. 510, 539-40 (1892) ...... 29, 30 United States v. Pend Oreille County Pub. Util. Dist. No. 1 , 135 F.3d 602, 606-608 (9th Cir. 1998) ...... 15 United States v. Stone , 2 Wall. 525, 537, 17 L.Ed. 765 (1865) ...... 18 Wis. Valley Improvement Co. v. FERC , 236 F.3d 738, 745 (D.C. Cir. 2001)...... 12, 16

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TABLE OF AUTHORITIES (continued) Page STATUTES 18 C.F.R. § 11.2(e)...... 20 9 NYCRR § 384.9(a) ...... 22 16 U.S.C. § 796...... 8 16 U.S.C. § 796(11) ...... 23 16 U.S.C. § 803(a)(1)...... 23 16 U.S.C. § 828b...... 21 FPA § 3, 16 U.S.C. §796(2)...... 14 FPA § 4(e), 16 U.S.C. § 797(e)...... 10, 12, 20, 23 FPA § 6, 16 U.S.C. § 799 ...... 9 FPA § 6, 16 U.S.C § 799 ...... 9 FPA § 10(e), 16 U.S.C. § 803(e)...... 10, 20 FPA § 13, 16 U.S.C. § 806 ...... 9 FPA § 14, 16 U.S.C. § 807 ...... 21 FPA § 23(b)(1), 16 U.S.C. § 817(1) ...... 9 FPA § 24, 16 U.S.C. § 818 ...... 10, 20 N.Y. Em. Domain Proc. L. § 403...... 17 N.Y. Em. Domain Proc. L. § 505...... 17 N.Y. Pub. Auth. L. § 1001 ...... 26 N.Y. Pub. Auth. L. § 1002 ...... 26 Pub. L. 83-278, 67 Stat. 587 (Aug. 15, 1953)...... 21 Pub. L. 86-124, 73 Stat. 271 (July 31, 1959)...... 21 Treaty of Ghent, 8 Stat. 218, Article VI (1814)...... 31 Treaty of Paris, 8 Stat. 80, Article II (1783) ...... 31 OTHER AUTHORITIES Decision of the Commissioners Under the Sixth Article of the Treaty of Ghent, June 18, 1822, published in BULLETIN OF THE UNITED STATES GEOLOGICAL SURVEY , Vol. 171, pp. 14, 16 (1900)...... 31 Exec. Order No. 10500, 18 Fed. Reg. 7005 (Nov. 4, 1953) ...... 20 Senate Report No. 83-599, 1953 U.S.C.C.A.N. 2401 (July 17, 1953) ...... 21 Senate Report No. 86-186, 1959 U.S.C.C.A.N. 1974, 1977 (Feb. 11, 1959)...... 21

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TABLE OF AUTHORITIES (continued) Page RULES Fed. R. Evid. 403 ...... 15

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Defendant New York Power Authority (“NYPA”) submits this Memorandum of Law in response to the Objections of Plaintiffs Mohawk Council of Akwesasne (the “MCA”), the

Objections of Plaintiffs the Saint Regis Mohawk Tribe and the Mohawk Nation Council of

Chiefs (the “SRMT”, together with the MCA, the “Tribes”), and the Objections of Plaintiff-

Intervenor the United States of America (collectively with the Tribes, the “Plaintiffs”) to the

Report and Recommendation of Magistrate Judge Therèse Wiley Dancks dated September 28,

2012 (the “Report”) recommending that Defendants’ motion to dismiss the so-called “Island

Claims” be granted. 1

Preliminary Statement

In this lawsuit, Plaintiffs assert ancient claims of ownership to three islands in the St.

Lawrence River (the “Islands” and the “Island Claims”) that today host a modern hydroelectric

project, have not been possessed by any Indian tribe for at least 190 years, have undergone

billions of dollars in development, and indisputably have had no Indian presence of any kind.

With the express endorsement of the federal government, NYPA for decades has maintained

exclusive possession of the Islands to produce low-cost hydroelectric power, to preserve New

York State’s natural resources, and to provide recreational benefits for New Yorkers and tourists

1 Exhibits to this Memorandum are attached to the accompanying Declaration of Kimo S. Peluso, dated February 4, 2013, and abbreviated “NYPA Ex.” The Plaintiffs’ various briefs objecting to the Report are abbreviated as “Obj. Br.” NYPA hereby incorporates the points and authorities raised in its opening Memorandum of Law dated November 6, 2006 (“NYPA Moving Br.,” Dkt. No. 449-2); its Reply Memorandum of Law dated Dec. 5, 2007 (“NYPA Reply Br.,” Dkt. No. 499); its Opening Supplemental Memorandum of Law dated Feb. 7, 2011 (“NYPA Suppl. Br.,” Dkt. No. 553); and its Supplemental Reply Memorandum of Law dated March 9, 2011 (“NYPA Suppl. Reply Br.,” Dkt. No. 564). NYPA further adopts and joins in the State and Municipal Defendants’ Response to Plaintiffs’ Objections to Magistrate Judge’s September 28, 2012 Report and Recommendation, dated February 4, 2012.

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alike. The essence of Plaintiffs’ claims is an alleged ancient flaw in title, challenging nearly two centuries of non-Indian ownership and upending deep-rooted societal expectations. This is precisely the type of land claim that the Supreme Court and the Second Circuit have foreclosed.

The Magistrate Judge correctly recommended Plaintiffs’ claims to the Islands be dismissed.

Plaintiffs’ principal argument is that the Federal Power Act (“FPA”) distinguishes this case, because it will prevent disruption to NYPA. They are wrong on several counts. Nothing in the FPA prevents the type of disruption addressed in Sherrill and Cayuga . The FPA has no

provision for establishing a new Indian reservation within an existing power project, or for

avoiding the disruption to settled expectations that inherently occurs when centuries of title are

overturned.

To be sure, the FPA allows for power projects to be constructed on Indian reservations in

exchange for annual payments. This does not distinguish the Islands from any other potential

tribal land claims. Such an arrangement – essentially a permit to use tribal land – could exist as

to any property. The Second Circuit in Cayuga and Oneida refused to allow such outcomes,

rejecting claims by the tribal plaintiffs for damages based on rent values in lieu of ejectment.

Second Circuit law is clear: the relevant disruption is caused by the claim itself, i.e. , a judicial

declaration that existing title is invalid due to an ancient flaw. The Magistrate Judge thus

correctly concluded that any administrative remedies that the Federal Energy Regulatory

Commission (“FERC”) might impose after such a court judgment were irrelevant.

Moreover, the Magistrate Judge correctly noted that Plaintiffs’ claims would in fact be

disruptive to the St. Lawrence-FDR Power Project (the “Project”) operated by NYPA. The

Tribes have told FERC unequivocally that a judgment in this Court may require FERC to evict

NYPA and/or to decommission the Project. More troubling are the FPA provisions that apply to

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projects located on Indian reservations. For such projects, the Secretary of the Interior (who oversees Indian policy, not energy policy) can unilaterally impose onerous operational and management conditions, even over FERC’s objections. The FPA does not prevent the disruptiveness of Plaintiffs’ claims; the FPA aggravates it.

Plaintiffs also argue that the Project is subject to overarching federal regulation, which somehow prevents expectations of ownership from being “well settled.” The “well settled” inquiry is the crux of whether Cayuga actually bars a particular land claim, and it is very clearly

defined. The Supreme Court and Second Circuit have articulated the relevant factors – the

length of delay since the loss of Indian possession, the subsequent development of the lands, and

their non-Indian character. These are the issues that matter, not the various regulatory statutes,

alternative legal theories or other extraneous issues championed by Plaintiffs today.

If anything, the Project’s regulatory history actually reinforces the settled expectations of

non-Indian ownership and governance. It is a matter of public record that the Federal Power

Commission never considered the Project to include federal land or an Indian reservation.

Indeed, NYPA’s possession of the Islands was endorsed by an international U.S.-Canadian

commission, the U.S. President, Congress, FERC, and even the Department of the Interior. The

United States has again and again confirmed NYPA’s rightful possession of the Islands. Thus,

the regulatory history supports the Magistrate Judge’s conclusion of well-settled expectations.

The Magistrate Judge correctly found that the relevant factors decidedly supported

dismissal here. Plaintiffs suggest the Magistrate Judge should have subdivided the Islands in her

analysis, preserving their claims as to the parts of the Islands that are “undeveloped.” Courts in

similar cases, however, have consistently looked at each land claim area as a whole; all the more

appropriate here because the Islands are part of a single comprehensive Project. Plaintiffs’

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premise too is flatly wrong. NYPA’s massive public works project has transformed all of the

Islands; even their geographic shapes have dramatically changed. From any vantage, the Islands have been tremendously developed, and, as the Magistrate Judge concluded, Plaintiffs’ claims to them should be dismissed in their entirety.

Plaintiffs also argue that Cayuga should not apply because the Islands are in the hands of

the State (or its power authority), which is the original “wrongdoer” and not entitled to invoke

Cayuga . This argument ignores that, at the time of the alleged wrongs against the Tribes, NYPA

did not even exist. More importantly, the Islands had passed through private ownership for more

than 130 years before being acquired for NYPA. Sherrill makes clear that such extended periods

of non-Indian ownership create justifiable expectations. Those expectations are not erased by

subsequent acquisitions.

Finally, the Magistrate Judge correctly rejected the United States’ eleventh hour

arguments based on its supposed claim to direct title in the Islands. Even now, the United States

admits that its sole purpose in this suit is to assert the legal claims of the Tribes. The law is clear

that when the United States litigates solely for the benefit of particular parties, it is subject to

equitable defenses like any other litigant. Even if it had properly asserted its own interests, the

United States’ purported title claims would fail as a matter of law. For all these reasons, the

Court should adopt the Magistrate Report recommendation that the Island Claims be dismissed.

Argument

I. The Magistrate Correctly Found That the Island Claims Are Inherently Disruptive

As the Second Circuit has summarized, Indian land claims premised on an ancient flaw in

title are inherently disruptive, and subject to City of Sherrill v. Oneida Indian Nation , 544 U.S.

197 (2005) (“ Sherrill ”). Such claims, based on “a flaw in the original termination of Indian title”

are “by their nature disruptive and [], accordingly, the equitable defenses recognized in Sherrill

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apply to such claims.” Oneida Indian Nation of New York v. County of Oneida , 617 F.3d 114,

125 (2d Cir. 2010), cert. denied 132 S. Ct. 452 (2011) (“Oneida”).

A. There Is No Dispute That the Plaintiffs’ Claims Are “Inherently Disruptive” Within the Meaning of Cayuga

Plaintiffs do not dispute that this case falls within the heart of Cayuga – a claim “at base, premised on the invalidity of the initial transfer of the subject lands.” Oneida , 617 F.3d at 136-

37. Such claims are inherently disruptive, and the Second Circuit has emphatically declared that claimants cannot avoid laches defenses under Cayuga by tinkering with remedies or underlying legal theories. See Cayuga Indian Nation v. Pataki , 413 F.3d 266, 278 (2d Cir. 2005)

(“ Cayuga ”) (noting all of plaintiffs’ claims, whether for ejectment or trespass, were “based on a violation of their constructive possession,” and were therefore foreclosed); Oneida , 617 F.3d at

136-38 (rejecting novel theory of liability, noting that “this claim is, at base, premised on the invalidity of the initial transfer of the subject lands” and holding that “ Cayuga clearly indicated that adroit manipulation of the remedy sought will not rescue a claim”). 2

Here, the Plaintiffs’ claims to the Islands pose precisely the inherent disruption described in Oneida . Plaintiffs seek to invalidate the Islands’ initial transfer of ownership – land patents

issued by New York State to private owners as far back as 1822 – and seek declaratory

judgments that the Tribes hold title, along with ejectment of Defendants. ( See NYPA Ex. 1,

MCA Cplt. ¶¶ 43-45, 50 & pp.9-10 ¶¶ 2, 3; NYPA Ex. 2, SRMT Cplt. ¶¶ 40, 43, 44 & pp.21-22

¶¶ 2, 3, 4; NYPA Ex. 3, U.S. Cplt. ¶¶ 30, 31, 33-35 & p.14 ¶ 1, 2.) Even today, Plaintiffs clearly

2 Despite this, the MCA asserts that the claims here are different because they rest in part on violations of international treaties. This is plainly irrelevant under Second Circuit precedent. See Oneida , 617 F.3d at 125 (“Each of these claims, whether asserting violations of federal common law, the Nonintercourse Act, or the Treaty of Canandaigua , sounds either in ejectment, trespass, or a related theory of injury derived from the Oneidas’ claimed right to possession of the lands.”) (emphasis added).

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seek title and possessory rights in the Islands. See U.S. Obj. Br. at 24 (“ownership of title to the

Islands is a genuinely disputed material issue of fact”); SRMT Obj. Br. at 4 (describing Tribes’

claim to Islands as a “possessory claim”). These claims are inherently disruptive under Cayuga

and Oneida , and the same laches analysis applies.

Purportedly to distinguish Sherrill and Cayuga , Plaintiffs continue to engage in the very

arguments that the Second Circuit and Supreme Court have already rejected. 3 Even if the Court

credits every single one of Plaintiffs’ contentions, they are utterly irrelevant to Sherrill and

Cayuga.

B. The Magistrate Correctly Concluded Cayuga and Oneida Do Not Turn on the Remedies – Whether Judicial or Administrative – Sought by Plaintiffs

The Second Circuit has been clear that Tribal Plaintiffs and the United States cannot

evade a Cayuga -based defense through artful selection of remedies. Indeed, both Cayuga and

Oneida barred claims for purely monetary relief – namely, payment of fair market value of land

and back rent. See Oneida , 617 F.3d at 126; Cayuga , 413 F.3d at 276, 278. Even declaratory

judgment claims are barred. See NYPA Ex. 18, Onondaga Nation v. State of New York , No. 05-

cv-0314 (LEK), 2010 WL 3806492 (N.D.N.Y. Sept. 22, 2010), aff’d NYPA Ex. 19, -- Fed.

Appx. --, No. 10-cv-4273, 2012 WL 5075534 (2d Cir. Oct. 19, 2012) (summary order)

(“ Onondaga ”), rehear’g denied Slip. Op., No. 10-4273 (2d Cir. Dec. 21, 2012).

The gist of Plaintiffs’ objections is that NYPA will be fine even if the Tribes re-establish

title to the Islands. The United States, for example, seems to believe that the sole relevant issue

is the impact on defendants . See U.S. Obj. Br. 19. The law is clear, however, that Plaintiffs’

3 Plaintiffs’ pre-Sherrill descriptions of their own claims underscore the futility of their attempts to distinguish this matter from the various cases that have since been dismissed. In 1990, for example, Plaintiffs declared that their suit was “[i]n all essential respects . . . identical to the claim of the Oneida Nation.” NYPA Ex. 4, Excerpts of Mem. of Law of Plaintiffs in Opposition to Motions to Dismiss at 2, dated Jan. 12, 1990 (No. 89-CV-829, Dkt. No. 17).

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claims are inherently disruptive because of their impact, not on land owners , but on land

ownership . See Oneida , 617 F.3d at 128 (noting that “prejudice to the particular defendants” is

distinct from “disruption of broader societal expectations”). Similarly, the SRMT states, that in

Cayuga and Oneida , that the Second Circuit “assumed that an award of possession would occur

and then forecasted the impacts if such possession were awarded” and therefore that

“[d]isruption is thus defined by the identification of the consequences that flow from upsetting

settled expectation.” SRMT Obj. Br. 15, Dkt. No. 590. One searches Cayuga and Oneida in

vain for any passage in which the court “identif[ies] the consequences” of upsetting settled

expectations. Oneida repeatedly states that the ultimate issue is disruption to “societal

expectations” of land ownership, not on any particular “consequences” that follow. See Oneida ,

617 F.3d at 123-24, 127-28, 135, 136, 138.

Adhering to these principles, the Magistrate Judge correctly declined to consider what

administrative remedies might later be available if Plaintiffs first achieved an inherently

disruptive judgment from the Court. Based on their misreading of Cayuga , Plaintiffs argue that

the Magistrate’s conclusion was “circular.” The Magistrate Judge’s recommendation, however,

rightly reflects that Cayuga and Oneida are based on the nature of plaintiffs’ claims, not the

potential remedies that follow. See Cayuga , 413 F.3d at 277-78 (“substitut[ing] a monetary remedy for plaintiffs’ preferred remedy of ejectment cannot salvage the claim, which was subject to dismissal ab initio ”). Whether remedies are fashioned by the Court or FERC is immaterial; either way, they cannot prevent dismissal under Cayuga .

C. The FPA Provisions That Apply to Indian Reservations Are Not Relevant Under Cayuga and Do Not Prevent Disruption

The mission of the FPA was to develop the nation’s hydro-electric resources in the public interest, not to resolve land disputes. The FPA has special provisions for Indian reservations, but

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no provision for a reservation to be introduced within an already existing power project. 4

Regardless, the FPA has no relevance to Cayuga and Sherrill under any honest reading of those cases.

1. The FPA Has No Provisions to Address the Concerns Raised in Sherrill

The FPA has no provisions to address the unique disruption that occurs when centuries of land title are unilaterally overturned by litigation. FERC can set annual charges and impose other conditions to protect the reservation, not to protect well-settled expectations of ownership. 5

The Plaintiffs argue that NYPA’s interests are secure because the FPA prevents NYPA’s

ejectment (although they argued the opposite to FERC). 6 Ejectment, however, is not the problem. In each of the cases controlling here – Sherrill , Cayuga , Oneida and Onondaga – tribal claims were dismissed even when there was no prospect of ejectment. Plaintiffs’ claims are premised on an underlying invalidity in more than 150 years of title to the Islands, and these claims must be dismissed.

4 For the Court’s convenience, attached at NYPA Exhibit 20 is a copy of the pertinent provisions of the Federal Power Act from the 1960 version of the United States Code, 16 U.S.C. §§ 796, et seq. , reflecting those provisions in the form they existed as of the 1953 License. A printout of the current version is attached at NYPA Exhibit 21. 5 Plaintiffs never explain their assertion that annual “reservation” charges would have no disruptive impact on NYPA or its customers. In the few cases in which FERC has imposed charges in a contested case for use of Indian reservation land, the charges have been significantly higher than fees for use of other federal lands, and have been calculated based on project generation or revenue (creating a type of royalty payment). E.g. , NYPA Ex. 22, Portland Gen. Elec. Co. , 20 FERC ¶ 61,294 (1982); NYPA Ex. 23, Mont. Power Co. , 38 F.P.C. 766 (1967), aff’d , Mont. Power Co. v. F.P.C. , 459 F.2d 863 (D.C. Cir. 1972). 6 See infra at 13.

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2. The FPA Contemplates Settled Ownership as to Project Lands, Particularly as to Tribal Interests, Not the Unilateral Insertion of “Reservations” During the Project Term

The FPA presumes settled ownership of the project lands at the beginning of a project.

“The Act’s overarching purpose . . . is to promote the development of the nation’s waterways.

Congress determined that development should be financed largely by private investment, and

sought to promote that investment by making licenses secure.” Pacific Gas & Elec. Co. v. FERC ,

720 F.2d 78, 86-87 (D.C. Cir. 1983). Thus, project licensing is statutorily required to occur

before construction even begins. See FPA § 23(b)(1), codified at 16 U.S.C. § 817(1) (making it

unlawful, except under very narrow circumstances, to construct, operate or maintain a

hydroelectric project “except under and in accordance with the terms of . . . a license granted

pursuant to this act”). The FPA demands that a licensee not only understand, but affirmatively

accept, all licensing terms before committing substantial investments. See FPA § 6, codified at

16 U.S.C § 799. 7

The FPA plainly envisions that any federal land or Indian reservations are known at the front end. Licenses can be issued only after the Commission carefully evaluates the impact on any Indian reservation within the project:

That licenses shall be issued within any reservation only after a finding by the Commission that the license will not interfere or be inconsistent with the purpose for which such reservation was created or acquired . . .

7 A license is expressly conditioned “upon acceptance by the licensee of all of the terms and conditions,” so a licensee faced with unacceptable terms may simply decline the project. FPA § 6, codified at 16 U.S.C. § 799. Even after initially accepting the license, if the licensee prior to construction determines that the license conditions are not viable, it is free to abandon construction, and the license simply lapses. See FPA § 13, codified at 16 U.S.C. § 806 (license shall be terminated if licensee does not begin construction within time set by license).

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FPA § 4(e), codified at 16 U.S.C. § 797(e) (emphasis added). 8 The license – again, issued and affirmatively accepted before construction may even begin – must contain certain statutorily required conditions, including the terms of annual charges for U.S.-owned land. See FPA

§ 10(e), codified at 16 U.S.C. § 803(e) (license must include charges “recompensing [the United

States] for the use, occupancy, and enjoyment of its lands”). The license also must include any

annual charges due to the presence of Indian reservations. See id. Congress, recognizing the considerable investment and resources required to develop large-scale facilities such as the

Project here, intentionally and expressly crafted a statutory scheme to protect these investments by avoiding surprises – the licensee understands the implications of building on U.S. lands or tribal reservations before it breaks ground. In this manner, the FPA not only protects, but reinforces, the well-settled expectations regarding ownership of lands within a licensed project.

Needless to say, none of the FPA’s requirements for projects built on Indian reservations or federal land have ever been imposed on the Project. Such conditions were not included in the

1953 license. See NYPA Ex. 5, In re Power Authority of the State of New York , 12 F.P.C. 172

(July 15, 1953) (the “1953 License”). Nor were any of those findings or conditions set forth in the 2003 re-license issued by FERC. Rather, as the Magistrate Judge noted ( see Report at 29-

30), FERC expressly declined to review the merits of the Tribes’ land claim, to impose annual

charges, or to predict whether any regulatory relief might follow a judgment in this action. See

NYPA Ex. 6, In re New York Power Authority , 105 FERC ¶ 61,102, at 50, ¶ 141 (Oct. 23, 2003)

(the “2003 License”); see also id. at 57, n.225; id. at 58-60, ¶¶ 165, 167; id. at 97, Art. 418.

Plaintiffs cite Article 418 of the 2003 License, which reserves FERC’s authority to revisit the

8 In addition, for any lands owned by the United States, there are special filing and procedural requirements that do not apply to privately owned property. See FPA § 24, codified at 16 U.S.C. § 818 (filing procedures when “[a]ny lands of the United States [are] included in any proposed project”).

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license if Plaintiffs’ claims in this Court result in the establishment of an Indian reservation within the Project. Plaintiffs suggest that Article 418 puts NYPA “on notice” of potential remedies and has otherwise altered well settled expectations surrounding the Islands. (See MCA

Obj. Br. 15-16; U.S. Obj. Br. 16-17; SRMT Obj. Br. 22 n.14.) Plaintiffs’ arguments regarding

Section 418 are not persuasive.

FERC’s stance does not inform the disruptiveness inquiry under Cayuga . FERC’s

position on the pending land claims is best summarized as “wait-and-see.” It changes nothing.

Moreover, the 2003 License was issued after the Plaintiffs filed this lawsuit. Conceptually, it is

meaningless to put Defendants “on notice” of claims after the lawsuit is pending. It is equally

meaningless to suggest Plaintiffs’ claims were timely based on events that happened after the

claims expired.

Finally, Plaintiffs mistakenly suggest that the relevant “settled expectations” are unique

here because FERC may alter license conditions at any time. (See SRMT Obj. Br. 4-5, 16; cf.

U.S. Obj. Br. 15-16.) What matters under Cayuga are settled expectations as to land ownership

and non-Indian sovereignty, which FERC has no authority to change. Ancient claims that

challenge years of settled ownership expectations could never occur at the regulatory level, 9 and

they are inherently disruptive.

In all, Plaintiffs’ reliance on the FPA as some sort of antidote to disruption is misplaced.

This is the essence of Sherrill : there is an enormous difference between an Indian reservation

that has always been in place, versus one that is established unilaterally and after significant land

development. See Sherrill , 544 U.S. at 219 (acknowledging that Oneida claim “does not seek to

9 FERC has no jurisdiction to resolve such matters. See S. Carolina Pub. Serv. Auth. v. FERC , 850 F.2d 788, 792-93 (D.C. Cir. 1988); Nez Perce Tribe v. Idaho Power Co. , 847 F. Supp. 791, 800-01 (D. Idaho 1993).

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uproot current property owners” but finding that “the unilateral reestablishment of present and future Indian sovereign control, even over land purchased at the market price, would have disruptive practical consequences”) (emphasis added). Despite the FPA, Plaintiffs’ claims are inherently disruptive.

D. A Unilaterally Established Indian Reservation on the Islands Would Spell Unthinkable Disruption to the Project

The Magistrate Judge noted that Plaintiffs’ claims would also disrupt NYPA’s operation of the power Project and New York State’s governance of the Islands. (Report at 31 n.24.)

Although that finding is not necessary to support dismissal, it was certainly correct.

1. The FPA Empowers the Department of the Interior to Impose Any Condition Related to an On-Site Reservation, Even Over FERC’s Objections

Power projects on federal Indian reservations are subject to divided jurisdiction. FPA

Section 4(e) provides that any license issued within a federal reservation “shall be subject to and contain such conditions as the Secretary of the department under whose supervision such reservation falls shall deem necessary for the adequate protection and utilization of such reservation.” 16 U.S.C. § 797(e). The Secretary of the Interior may impose conditions to protect

Indian reservations, potentially with no regard for the operation of the project. See, e.g., Wis.

Valley Improvement Co. v. FERC , 236 F.3d 738, 745 (D.C. Cir. 2001) (affirming license conditions requiring significant operational and power production changes at a FERC-licensed project to promote wild rice cultivation and production). The Supreme Court in Escondido

Mutual Water Co. v. La Jolla Band of Mission Indians , 466 U.S. 765, 772, 779 (1984), held that

FERC is required to include Section 4(e) conditions submitted by the Secretary of the Interior –

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even if FERC disagrees with them. 10 FERC’s only remedy if it opposes the Secretary’s

conditions is to decline the license altogether. See id. , at 778. Even FERC believes such conditioning authority is potentially disruptive. 11

2. Reservation Status in the Islands Would Occasion a Decades-Long Jurisdictional Power Struggle, Precisely the Danger Addressed in Sherrill

The administrative record reflects the disruptive conditions that might arise in the name of protecting a “reservation” on the Islands. As part of the 2003 re-licensing, the SRMT Tribe suggested that FERC shutter the Project entirely to protect tribal interests. See NYPA Ex. 7, St.

Regis Mohawk Tribe Comments to FERC on Draft Application, In re Power Authority of State of New York , at p. 27 (2001) (“[A]n example of such a ‘condition’ that might be ‘necessary’ to protect [the Tribe] is the total removal of the Project from the St. Lawrence Landscape.”). In the event of a successful case before this Court, they also forecast their intent to seek NYPA’s eviction through the regulatory process. See id. (“a favorable Land Claims ruling [in federal court] may lead to the applicant’s eviction from the Project Lands.”). Plaintiffs’ intentions for the Project are clear.

Thus, a reservation on any part of the Islands promises severe disruption to the Project, including annual charges due the Tribes, potentially unlimited conditions imposed by the

Department of the Interior, and unending legal battles as the Tribes, the Secretary of the Interior,

10 Under the D.C. Circuit’s rulings, such conditions may be imposed on any aspect of the project, even when the reservation occupies only a small part of it. See City of Tacoma v. FERC , 460 F.3d 53, 131 (D.C. Cir. 2006) (where reservation included 11 acres occupied by project transmission lines, Interior could impose conditions requiring the licensee to increase instream flows by 400 percent, and despite adverse effects on power production, “to the extent doing so is reasonably related to protecting the reservation and the Tribe”). 11 FERC unsuccessfully opposed Escondido , and joined in the briefs submitted to the Supreme Court that such authority in the hands of the Secretary of the Interior “would frustrate the purpose of centralizing licensing procedures.” Escondido , 466 U.S. at 772, see also id. at 772 n.13.

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FERC and NYPA struggle for control of the Project. The jurisdictional fights would be all the more knotty, given the assertion of title by three separate tribal entities. 12 For the Project to survive, this chorus of various interests must somehow harmonize not only with each other but also with the Project’s international treaty partner, Canada. This is precisely the sort of terrifying

scenario that the Court found unacceptable in Sherrill . See Sherrill , 544 U.S. at 220 (“If OIN

may unilaterally reassert sovereign control and remove these parcels from the local tax rolls,

little would prevent the Tribe from initiating a new generation of litigation to free the parcels

from local zoning or other regulatory controls that protect all landowners in the area.”).

Plaintiffs contend there are numerous examples of power plants peacefully operating on

Indian reservation lands, and that any fears of disruption are unfounded. Although well beyond

the record on this pleadings motion, it should be no surprise to see power plants successfully

operating on Indian reservations that were known when the project began . This is fundamentally

a different process than what the Tribes propose here: declaring an Indian reservation within the

project boundary decades after it was built. 13

12 All three tribal plaintiffs here also intervened in the 2003 FERC re-licensing process and asserted an interest affected by the Project – the St. Regis Mohawk Tribe (recognized as an Indian tribe by the government of the United States), the Council of Akwesasne (recognized as an Indian tribe by Canada), and the Mohawk National Council of Chiefs (not recognized as a tribe by the United States or Canada). See, e.g. , 2003 License, at 7 n.14. 13 That scenario would have been entirely unforeseeable as to the Islands. The FPA defines Indian “reservations” as U.S.-owned lands held in trust for Indian tribes. FPA § 3(2), codified at 16 U.S.C. §796(2). Here, the Islands were never part of the St. Regis reservation , which Plaintiffs concede. (NYPA Ex. 2, SMRT Cplt. ¶¶ 16, 17 (distinguishing Islands from “original reservation” land reserved by Seven Nations Treaty of 1796); NYPA Ex. 3, U.S. Cplt. ¶ 13 (noting land claim includes portions of original reservation “along with” the Islands).) The Tribes merely claim ownership of the Islands in fee. As the Supreme Court has explained, lands merely “owned in fee simple” by an Indian tribe, where “no ‘interest’ in them is ‘owned by the United States,’” is not a “reservation” within the meaning of the FPA. FPC v. Tuscarora Indian Nation , 362 U.S. 99, 115 (1960) (quoting 16 U.S.C. § 796(2)). Even a victory in this lawsuit does not automatically trigger the FPA provisions that the Tribes claim will somehow prevent disruption to the Project.

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In fact, even where reservation lands are a known factor in advance of licensing and construction, extended conflicts between the interests of power plants and Indian tribes often arise. For example, in the 1998 license for the Cushman Hydroelectric Project in Washington

State partially located on Indian allotments within the Skokomish Indian Reservation, the suite of conditions imposed in part to protect the Tribe’s interests were so crippling that one FERC commissioner dissented from the relicensing order, stating that it amounted to a “de facto decommissioning” of the project. NYPA Ex. 24, City of Tacoma , 84 FERC ¶ 61,603 (1998).

Other examples are easy to find, 14 and reflect the inherent potential discordance between project interests and reservation interests. Because the FPA cannot prevent disruption to societal expectations, and only aggravates the potential disruption to Defendants, the Island Claims should be dismissed.

3. The Parties’ Settlement Agreement, Aside from Being Plainly Inadmissible, Demonstrates the Potential Disruption Feared by NYPA

The Plaintiffs argue that NYPA must be able to spare some of the Islands, because NYPA

purportedly offered to give them to the Tribes during settlement discussions. It is brazenly

inappropriate for Plaintiffs to invite adverse inferences from a settlement offer. See Fed. R.

Evid. 403. In addition, Plaintiffs are factually incorrect. The abandoned settlement deal was

14 At the Pelton Round Butte Project, the licensee Portland General Electric and Confederated Tribes of the Warm Springs litigated for years regarding annual charges before settling the matter in 1985. See NYPA Ex. 25, Portland Gen. Elec. Co. 31 FERC ¶ 61,306 (1985) (order approving settlement); see also NYPA Ex. 22, Portland Gen. Elec. Co. , 20 FERC ¶ 61,294 (1982) (order modifying initial decisions and determining readjusted annual charges). In the late 1990s, the Confederated Tribes of Warm Springs filed a competing relicensing application with FERC in an effort to take over the entire Pelton Round Butte Project. See NYPA Ex. 26, Portland Gen. Elec. , 111 FERC ¶ 61,450, at PP 1-4 (2005). And at the Box Canyon Project in Washington State, the licensee and tribe have litigated extensively regarding issues such as trespass, flooding damages, and annual charges payments since the project’s construction in the 1950s and over re-licensing conditions. E.g. , United States v. Pend Oreille County Pub. Util. Dist. No. 1 , 135 F.3d 602, 606-608 (9th Cir. 1998); NYPA Ex. 27, Pub. Util. Dist. No. 1 of Pend Oreille County , 130 FERC ¶ 62,148 (2010).

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expressly conditioned on Congress passing legislation to instruct FERC to formally remove those areas from the project boundary. See NYPA Ex. 8, Agreement of Settlement, dated Feb. 1, 2005, at ¶ II.C.3; see also id. at ¶ II.E. The point of this condition is obvious: to ensure that the Tribes not hold even one acre within the Project, which could potentially cripple FERC’s and NYPA’s ability to manage the Project. 15 The Tribes’ unwarranted attempt to draw admissions from

settlement discussions is as inappropriate as it is unpersuasive.

II. The Magistrate Correctly Concluded That Cayuga Required Dismissal as to the Islands, Which Have Undergone Extraordinary Development Reflecting Firmly Settled Expectations

After finding that the Cayuga defense was available, the Magistrate Judge correctly

applied the Second Circuit factors to conclude the Island Claims were barred. The relevant

considerations, as identified in Cayuga and Oneida , include the expanse of time that the lands

have been owned or possessed by non-Indians; the development of the lands by non-Indians; and

the non-Indian character of the lands. See Oneida , 617 F.3d at 126-27; Cayuga , 413 F.3d at 277.

Finding these factors to be present, the Second Circuit concluded there were “justified societal

expectations” and a “scheme of ‘settled land ownership.’” Oneida , 617 F.3d at 127 (“These

developments have given rise to justified societal expectations . . . under a scheme of ‘settled

land ownership’ that would be disrupted by an award pursuant to the Oneidas’ possessory

claims.”). Claims that disrupt such settled expectations must be dismissed as an equitable

matter.

15 See, e.g., City of Tacoma v. FERC , 460 F.3d 53, 131 (D.C. Cir. 2006) (even though only 11 acres of reservation land at the project were occupied, Secretary of the Interior could impose any license conditions “reasonably related to protecting the reservation and the Tribe,” even protecting parts of the reservation outside the project); Wis. Valley Improvement Co. v. FERC , 236 F.3d 738, 745 (D.C. Cir. 2001) (affirming license conditions requiring significant operational and power production changes to allow rice cultivation, even though the project occupied less than one acre of tribal reservation).

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A. Nothing in the Federal Power Act or the Project History Undermines the Settled Expectations of Non-Indian Ownership in the Islands

Disregarding the factors articulated in Cayuga and Oneida , the Plaintiffs propose an

entirely different line of analysis. They insist that expectations are not “well settled” because the

Project area is now extensively regulated by the federal government. Federal regulation has no

relevance here for one simple reason: it has no logical impact on “well settled expectations” of

ownership. In reality, the Project’s regulatory history only strengthens the case for laches. 16

1. The Federal Government’s Regulatory Presence Does Not Lessen the Societal Expectations in Settled Land Ownership

Plaintiffs contend that, in light of the FPA and FERC regulations, NYPA does not have

“uninhibited possession” of the Islands (SRMT Obj. Br. p. 16) and has no expectations of

“unfettered ownership” (SRMT Obj. Br. p. 25). This is a non-sequitur. The Cayuga laches

inquiry has nothing to do with whether the defendant’s use of his lands is “unfettered,” but

whether the land’s history – the delay since Indian ownership, the extent of development, the

extent of ongoing Indian presence – indicates that expectations are “settled.” Plainly, regulatory

burdens are not relevant to the Cayuga inquiry or to questions of settled ownership, because

16 The United States contends, without any authority, that the act of eminent domain “extinguished all private expectations regarding holding title.” (U.S. Obj. Br. 13.) This makes no sense. Cayuga is not concerned with private interests of particular owners, much less former owners. It is concerned with societal expectations in ownership being settled. Eminent domain for public work projects achieves the same result as a private purchase by a real estate developer – the prior owner is compensated, title changes hands, prior tenants leave, old developments are removed, and new ones are built. In eminent domain proceedings, the preceding chain of title is indispensable, since owners are constitutionally entitled to fair compensation. See N.Y. Em. Domain Proc. L. § 403 (condemner required to deliver to legal officer “names of the reputed condemnees of parcels to be acquired”); N.Y. Em. Domain Proc. L. § 505 (in event of title conflicts, “court shall determine the compensation due the condemnees as well as the respective interests and rights of all parties” and has jurisdiction to “determine all questions relating to title and priority of interests incident to the acquisition.”).

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regulation does not cloud title. 17 Non-Indian governance in any form reinforces those expectations. 18

To the extent Plaintiffs contend that there is no New York sovereignty over the Project,

the contention is neither relevant nor correct. 19 Plaintiffs never explain why non-Indian

government oversight over non-Indian commercial activities, whether state or federal, should

weaken settled expectations. Plaintiffs’ assertion is also factually wrong. The Islands are part of

New York State, located within New York’s St. Lawrence County, both as a matter of geography

and sovereignty. The Project is operated by NYPA, a state-created corporation, which in turn is

subject to New York law. FERC monitors Project operations under the FPA’s broad licensing

scheme, but state tax treatment, state environmental law, state employment law, state crimes and

17 It is well established that even extensive regulation is not a federal “taking” of land unless for example it is inconsistent with “distinct investment-backed expectations” for the property. Lingle v. Chevron U.S.A. Inc. , 544 U.S. 528, 538-39 (2005); see also Penn Cent. Transp. Co. v. City of New York , 438 U.S. 104, 136 (1978) (landmark site designation was not a “taking” where owners could continue to use the property as they had in the past). Obviously, the Project construction was intended for NYPA’s long-term possession and operation. None of FERC’s regulatory conditions negate the present ownership interests. See Andrus v. Allard , 444 U.S. 51, 65-66 (1979) (“At least where an owner possesses a full ‘bundle’ of property rights, the destruction of one ‘strand’ of the bundle is not a taking, because the aggregate must be viewed in its entirety.”). 18 The concept of “justifiable expectations” cited in Sherrill fully applies to federally managed land used for non-Indian purposes. The Supreme Court’s decision in Rosebud Sioux Tribe v. Kneip , 430 U.S. 584, 605 (1977), cited in Sherrill , in turn, cited United States v. Stone , 2 Wall. 525, 537, 17 L.Ed. 765 (1865), which involved a disputed boundary separating an Indian reservation from a U.S. military camp. See Rosebud , 403 U.S. 584 at 605 n.28, quoting United States v. Stone , 2 Wall. 525, 537, 17 L.Ed. 765 (1864) (“In the case of private persons, a boundary surveyed by the parties and acquiesced in for more than thirty years, could not be made the subject of dispute by reference to courses and distances called for in the patents under which the parties claimed, or on some newly discovered construction of their title deeds. We see no reason why the same principle should not apply in the present case . . . .”). 19 To be sure, in Sherrill , the Supreme Court referred several times to the “jurisdictional history” of the lands in question. This is not surprising, because Sherrill was not a land ownership dispute, but a suit by the Oneida tribe to establish sovereignty in the area, to the exclusion of the State.

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trespasses and myriad other state laws govern the Islands. 20 More importantly, none of the

Islands have been within the Tribes’ sovereign control, if at all, for nearly 200 years. As

between New York State and the Tribes, only the State has had jurisdiction over the Islands for

the past several generations.

The Project operates under an industrial regulatory framework designed to provide

environmental, recreational and energy benefits to the public as a whole. That project only

reinforces the expectations of ownership in the Islands.

2. The United States’ Repeated Endorsement of NYPA’s Possession Strengthens Settled Expectations and the Case for Laches

The United States, at every level of government, endorsed the State and NYPA’s

ownership and possession of the Project, and the Islands, for decades prior to this suit. Compare

Sherrill , 544 U.S. at 214 (“From the early 1800’s into the 1970’s, the United States largely

accepted, or was indifferent to, New York’s governance of the land in question and the validity

vel non of the Oneidas’ sales to the State.”).

The terms of the 1953 License make clear that even the United States government shared society’s expectations that the Islands were neither Indian reservation lands nor U.S.-owned lands. The 1953 License expressly contemplated and required NYPA’s exclusive possession of the entire Project area. See 1953 License, 12 F.P.C. at 190, Art. 17 (requiring that NYPA “retain

the possession of all project property covered by the license . . . including the project area” and

not transfer ownership without Commission approval). The Commission did not observe any of

20 Unremarkably, the Federal Power Commission (FERC’s predecessor) acknowledged New York’s state sovereignty over the Islands and the Project when it issued the license. “The applicant has shown satisfactory evidence of compliance with the requirements of the laws of the State of New York with respect to bed and banks, and to the appropriation and diversion or use of water for power purposes, and with respect to the right to engage in the business of developing, transmitting, and distributing power, and in any other business necessary to effect the purposes of the license under the act.” NYPA Ex. 5, 1953 License, 12 F.P.C. at 185.

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the licensing procedures that would have applied to a project on an Indian reservation or federally-owned land. 21 It did not claim federal jurisdiction on the grounds that the facility is on federal land.22 And the 1953 License did not require, and the United States has never required,

NYPA to pay statutorily-mandated annual charges that are due when a project is on an Indian

reservation or federal land. 23 Indeed, the 1953 License – a 25-page legal opinion that contains 31 findings and 28 terms and conditions – does not once mention any U.S. or tribal property interests in the Islands. The Commission’s regulation under the 1953 License, therefore, can only confirm the well settled expectations of non-Indian, non-U.S. ownership in the Islands.

NYPA’s possession of the Islands has at other times been blessed by the United States at the executive and legislative levels. President Eisenhower issued an executive order designating

NYPA as the entity responsible for construction, maintenance, and operation of the Project. See

NYPA Ex. 28, Exec. Order No. 10500, 18 Fed. Reg. 7005 (Nov. 4, 1953). NYPA’s appointment

was then acknowledged by the International Joint Commission, the international body that had

approved the Project in 1952. See NYPA Ex. 29, IJC Order of Approval at 1 (July 2, 1956).

Congress itself has reaffirmed NYPA’s and New York State’s ownership of the Project

area. In 1959, Congress enacted legislation specific to the St. Lawrence Project, that would have

21 See supra Part I.C.2; see also, e.g. , FPA § 4(e), codified at 16 U.S.C. § 797(e); FPA § 24, codified at 16 U.S.C. § 818. 22 Rather, jurisdiction for the 1953 License is expressly premised solely on the St. Lawrence River being a “navigable water” and an “international boundary water.” Id. 12 F.P.C. at 181, finding (7); compare 16 U.S.C. § 797(e) (federal jurisdiction over power projects arises from location of projects on navigable waterways, use of government dams or presence on “public lands or reservations of the United States”). 23 See 12 F.P.C. at 192, Art. 27 (requiring only administrative charges, not occupancy charges); compare 16 U.S.C. § 803(e) (requiring that “[a]ll licenses” issued by FPC “ shall ” be on condition “that the licensee shall pay to the United States reasonable annual charges . . . for recompensing it for the use, occupancy and enjoyment of its lands or other property”) (emphasis added); see also 18 C.F.R. § 11.2(e) (setting minimum annual charge).

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made it more difficult for the U.S. to purchase the Project (including the Islands) at the end of the license. 24 The Department of the Interior expressly endorsed this protection, noting the “absence of any known compelling reason” why NYPA should be less secure in its ownership of the

Project than any other state licensee. 25 Thus, even the federal department charged with protecting Indian rights and U.S. lands supported NYPA’s uninterrupted possession of the

Islands.

The United States has repeatedly endorsed and protected the non-Indian ownership and possession of the Islands. Well-settled expectations could not be stronger.

B. All Relevant Facts Demonstrate Well Settled Expectations Are Present, Compelling Dismissal

1. Plaintiffs Concede Their Long Delay and That the Islands Have No “Indian Character”

Plaintiffs do not seriously challenge the length of their delay or the non-Indian character

24 At the end of a project license term, the FPA generally allows the federal government to purchase all project property (upon repaying the licensee’s total investment costs), the so-called federal “recapture” provision. See FPA § 14, codified at 16 U.S.C. § 807. Congress amended the FPA in 1953 to exempt state-owned projects generally from the federal recapture provision (initially excluding the St. Lawrence Project), and again in 1959 to exempt the St. Lawrence Project specifically. See NYPA Ex. 30, Pub. L. 83-278, 67 Stat. 587 (Aug. 15, 1953) and NYPA Ex. 31, Pub. L. 86-124, 73 Stat. 271 (July 31, 1959), codified at 16 U.S.C. § 828b. The purpose of the exemption was to assist state and local governments in bond financing for power projects “by removing the uncertainty of license tenure.” NYPA Ex. 32, Senate Report No. 83-599, 1953 U.S.C.C.A.N. 2401, 2402 (July 17, 1953). 25 Specifically, the Department of the Interior noted there was no reason to treat the St. Lawrence Project different from other state-owned facilities: [I]n the absence of any known compelling reason why the benefits of the 1953 act should not be made equally applicable to any license issued to the New York State Power Authority for hydroelectric development in the international rapids section of the St. Lawrence River, we would favor, in the interest of treating all such licenses on an equal basis, the enactment of S. 114. NYPA Ex. 33, Dep’t of Interior written statement to Senate Committee on Public Works, Senate Report No. 86-186, 1959 U.S.C.C.A.N. 1974, 1977 (Feb. 11, 1959). The Department of the Interior then, as now, presided over the Bureau of Land Management and the Bureau of Indian Affairs.

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of the Islands over the past nearly 200 years. Magistrate Judge Dancks correctly noted that the

Tribes’ 190 year delay could not be excused, regardless of whether Plaintiffs had attempted to assert claims sooner. See Report at 33-34; see also NYPA Suppl. Reply. Br. at 2-3; Onondaga ,

2012 WL 5075534, at *2 (summary order) (“even if the Onondaga showed after discovery that they had strongly and persistently protested, the ‘standards of federal Indian law and federal equity practice’ stemming from Sherrill and its progeny would nonetheless bar their claim”).

Magistrate Judge Dancks also correctly concluded, based largely on Plaintiffs’ own pleadings, that the Mohawks have not possessed or populated the Islands since at least 1822.

(Report at 32-33.) The Plaintiffs essentially concede the Islands’ non-Indian character, forced to retreat to an oxymoron: “the character of the islands [is] neither Indian nor non-Indian.” SRMT

Obj. Br. 25. 26 Semantics aside, there has been no Indian presence on the Islands – nothing to prevent settled expectations of non-Indian ownership – for some 150 years prior to this lawsuit.

These factors alone strongly support dismissal.

2. The Magistrate Correctly Considered the Island Claims as a Whole and Found that the Islands Have Been Subject to Enormous Development.

The Magistrate Judge correctly noted that development of the Islands has been massive.

The Islands host the plant’s enormous main generating unit, the United States-side of a power

dam that stretches three thousand feet, other dams that control river flow, state parks open to the

public, environmental preserves, and hundreds of workers. 27 The Project provides power for

26 The MCA tribe cites various population statistics, but these refer to areas outside the Islands, including the Indian presence on Cornwall Island. (MCA Obj. Br. 1-2, 8-9.) To be clear, Cornwall Island is not part of the Island Claims. It is located across the international boundary in Canada. There is simply no basis for imputing any purported Indian character that may be found in adjacent lands, particularly those found across state or national borders. 27 Croil Island and parts of Barnhart Island (those areas not dedicated to power facilities) are State Park land. See 9 NYCRR § 384.9(a) (listing state parks in Thousand Islands Region,

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local industries supporting thousands of workers, and with adjustments for inflation has cost billions of dollars in construction and in capital improvements. (See Dkt. No. 449-2, NYPA

Moving Br. 8-9; Dkt. No. 553, NYPA Suppl. Br. 9.) It is difficult to fathom a stronger equitable case against the revival of ancient land claims.

Plaintiffs focus on the existence of environmental preserves, and suggest that these areas are unnecessary for power generation and should be treated separately. As a matter of law, however, the Project is a single economic and regulatory unit. Production of power is not the

Project’s only purpose. 28 Quite to the contrary, Congress directed that FERC-licensed

hydroelectric projects “be best adapted to a comprehensive plan for improving or development of

a waterway,” and encompass lands used for a variety of public purposes, such as recreation,

navigation, and “the adequate protection, mitigation and enhancement of fish and wildlife.” 16

U.S.C. § 803(a)(1); see also 16 U.S.C. § 796(11) (defining “project” as a “ complete unit of

development ” that includes all “lands, or interest in lands the use and occupancy of which are

necessary or appropriate in the maintenance and operation of such unit”)(emphasis added); 2003

FERC License at 61, ¶ 170. 29 Thus, any preservation lands that exist at the Project meet a

including Croil Island, Robert Moses State Park and St. Lawrence State Park); see also 1953 License, 12 F.P.C. at 188 (Art. 7) (NYPA to allow public access to Project waters and lands to extent practicable). The dedication of these Islands to such a public use reinforces the societal expectations as to non-Indian ownership and governance by the State of New York. 28 The Project is “a comprehensive plan” for the “benefit of interstate or foreign commerce, for the improvement and utilization of water-power development, and for other beneficial public uses, including recreational purposes.” 1953 License 12 F.P.C. at 183 (finding 15). This multi- faceted mission – equal parts energy, environment and recreation – is required by statute. See FPA § 4(e), codified at 16 U.S.C. § 797(e) (Commission must give “equal consideration to” “power and development purposes,” protection of “fish and wildlife,” “the protection of recreational opportunities,” and “other aspects of environmental quality”). 29 As other courts have ruled, the inclusion of certain lands as necessary or beneficial to the Project cannot be second-guessed by litigants in a private civil suit. See Putney v. People , 94 A.D.3d 1193, 1194-1195 (3d Dep’t 2012) (rejecting challenges that certain lands acquired were

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designated statutory obligation under the FPA—an obligation subject to significant disruption by

Plaintiffs’ ancient claims.

This legally recognized “complete unit of development” cannot be subdivided to suit

Plaintiffs’ legal position. Neither Sherrill , Cayuga , Oneida , nor Onondaga invited the plaintiffs to carve out select, undeveloped portions of the claimed lands. 30 (See State Obj. Br. 4-10.) In other areas, courts expressly forbid plaintiffs from subdividing their land claims in order to manufacture a stronger legal case. See Penn Central Transp. Co. v. City of New York , 438 U.S.

104, 130-131 (1978) (finding relevant land area was entire block designated as a “landmark site” by the City and noting “‘[t]aking’ jurisprudence does not divide a single parcel into discrete segments and attempt to determine whether rights in a particular segment have been entirely abrogated.”). 31 The Magistrate Judge correctly evaluated the Island Claims as a whole.

3. The Islands – Whose Very Geography Has Been Changed by the Project – Are Not “Undeveloped”

The factual assertion that some of the Project area is “undeveloped,” moreover, is simply wrong. To begin with, the Project has permanently submerged significant areas of the Islands, including Croil and Long Sault – they do not have the same geographic shape that they did in

unnecessary to St. Lawrence Project); Cuglar v. Power Authority , 4 A.D.2d 801, 802 (3d Dep’t 1957) (same). 30 Sherrill did not involve any factual analysis of the particular lands at issue, other than noting they were scattered and contained various commercial sites. Sherrill , 544 U.S. at 211. The expansive land claim area in each of Cayuga , Oneida , and Onondaga was likewise analyzed as a whole, although some segments were certainly less developed than others. NYPA hereby adopts and incorporates the arguments raised by the State and Municipal Defendants in their Objections filed November 16, 2012 (Dkt. No. 589), at pp. 4-10. 31 In Fifth Amendment cases, the relevant “parcel” is defined by “economic reality,” and cannot be tailored to plaintiffs’ litigation. See Forest Props., Inc. v. United States , 177 F.3d 1360, 1366 (Fed. Cir. 1999) (entire project area was the relevant “parcel” as defined by “economic reality,” even though separate upland and lake bottom segments had been acquired in different transactions, in different kinds of title, and were capable of separate development).

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1822. See NYPA Ex. 9, 10, 11 (U.S. Geological Survey maps comparing outlines of Islands

before and after Project construction); see also NYPA Ex. 1, MCA Cplt. ¶ 56 (the Project

“submerged substantial portions of Barnhart Island and Croil Island”); NYPA Ex. 2, SRMT Cplt.

¶ 46 (noting Project’s flooding of Islands). Likewise, Plaintiffs cannot seriously suggest that

parts of the Islands are truly “uninhabited,” when NYPA possesses and is responsible for all the

Islands under its license. 32 The Project has transformed the entire area – commercially and even geographically. (See NYPA Ex. 11 (maps depicting changed outlines of Islands); see also

NYPA Ex. 6, 2003 FERC License at pp.2-5, ¶¶ 5-16 (describing Project).) The public record and Plaintiffs’ own allegations demonstrate the Magistrate Judge correctly concluded the that the

Project has “dramatically” changed the Islands in their entirety. ( See Report at 23). There are simply no genuine doubts about the “development” of these lands within the meaning of Sherrill .

4. Plaintiffs Cannot Avoid Dismissal By Casting NYPA as a “Wrongdoer”

Plaintiffs argue that Cayuga cannot apply because the Islands, although in private

ownership for over 130 years, are now in the hands of State and NYPA, who are both somehow

the “original wrongdoer[s].” Plaintiffs are wrong on the law and the facts.

Nothing in Sherrill or its progeny suggests that laches applies only to protect present-day property rights of innocent landowners. Sherrill indicates the opposite. There, the relevant lands were not in the hands of innocent landowners at risk of ejectment – they had already been acquired by the Tribe itself. 33 Even reacquisition by the tribe – the purported original title holder

32 1953 License, 2 F.P.C. at 190, Article 17. The 2003 FERC license also requires NYPA to control the use and occupancy of all lands within the project area. See 2003 FERC License at 98-102, Art. 423. 33 As Justice Stevens pointed out, the Oneida tribe’s claim in Sherrill did not pose any threat to “innocent landowners,” because all of the relevant lands had been acquired by purchase on the open market. See Sherrill , 544 U.S. at 226 (2005) (Stevens, J., dissenting) (“In this case, the

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– did not erase the “justifiable expectations” that had formed since the Oneidas’ dispossession.

Such expectations certainly cannot become “unsettled” by non -Indian acquisitions.

Here too, the 1950s acquisitions by the State cannot revive doubts about ancient Indian interests, which is the real issue. In Oneida , to be sure, the Second Circuit commented that the lands at issue had “ passed into the hands of a multitude of entities and individuals, most of whom have no connection to the historical injustice the Oneidas assert.” 617 F.3d at 127 (emphasis added). Here, there is no dispute that the Islands passed through numerous private hands, whether by purchases or inheritance, before reacquisition by the State. 34 This “passing” itself reflects an express reliance on non-Indian title, evidencing a scheme of settled expectations. In

Onondaga , the Court expressly noted that the claim area included State-owned land. See

Onondaga Nation v. State of New York , No. 05-cv-0314, 2010 WL 3806492, *2 (N.D.N.Y. Sept.

22, 2010) (“the State of New York is sued as the original purchaser of the land in question, which the State continues to partially occupy or claim an interest therein.”). Modern ownership by the State is simply not relevant.

Moreover, the Islands are not in the hands of an alleged “wrongdoer.” They are in the possession and control of NYPA, a corporation created by statute in 1931. See N.Y. Pub. Auth.

L. §§ 1001, 1002. The Islands now serve the public, including all of the commercial, energy, environmental and recreational objectives of the Project. Various non-Indian participants have

Tribe reacquired reservation land in a peaceful and lawful manner that fully respected the interests of innocent landowners—it purchased the land on the open market.”). 34 See MCA Cplt. ¶ 19 (claiming land was unlawfully conveyed to NYPA’s “ predecessors in title ”) (emphasis added); MCA Cplt. ¶¶ 56, 58 (NYPA submerged parts of Barnhart and Croil Islands and “[c]ompensation was paid to putative owners of the submerged lands who were successors in interest to those who received patents from the State of New York”) (emphasis added); SRMT Cplt. ¶ 40 (New York issued patents for title to Islands to “third parties”); SRMT Cplt. ¶ 45 (alleging NYPA “and/or its predecessors in interest have been in possession of Barnhart and Baxter Islands, without lawful authority from approximately 1822 until the present”) (emphasis added); U.S. Cplt. ¶ 36 (same) (emphasis added).

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made enormous contributions to this development, from local to international players, including the United States Federal Power Commission itself, which licensed the project and approved the acquisition and development of land proposed by NYPA. 35 The public at large has invested in

the expectations surrounding the Islands, having funded NYPA’s construction efforts through a

public bond offering, 36 and power operations of the Project serve industrial, commercial and

residential customers in New York and six neighboring states. See 2003 FERC License at 97-98,

Art. 419. Every possible indication of settled land ownership is present here. The Magistrate

Judge correctly recommended that the Island claims be dismissed.

III. The United States’ Newly-Asserted Claim to Underlying Fee Title Cannot Save Plaintiffs’ Claims

The United States now contends it is protecting its own title in the Islands, a claim that made its debut as an equivocal assertion in supplemental briefing in 2011, twenty-two years after the U.S. intervened. 37 The Magistrate Judge recognized this argument as mere pretext, observing

that “it is clear that from the allegations in the United States’ Amended Complaint in

Intervention that it intervened in this litigation on behalf of the Indians of the Village of St. Regis

and not for the purpose of enforcing a public right or protecting the public interest.” Report at

35 The various participants, as revealed by the 1953 License, include the Hydro-Electric Power Commission of Ontario responsible for construction on the Canadian side of the Project; the Canadian chartered St. Lawrence Seaway Authority, responsible for constructing seaway facilities; and the International Joint Commission, which approved the construction in the international rapids section of the St. Lawrence River. See 1953 License, 12 F.P.C. at 180-83, findings 3.A, 6, 14. 36 On December 1, 1954, NYPA issued its first bonds, totaling $335 million at 3.18 percent interest, for the purpose of constructing the St. Lawrence project. (See NYPA Ex. 12). Adjusted for inflation, the investment would be the equivalent of more than $2 billion in today’s dollars. (See NYPA Ex. 13). 37 In its 2011 brief, the United States stated only that it might own title to the Islands. See, e.g. , Dkt. No. 557, U.S. Supp. Mem. at 10 (“the United States may own title to the Islands”); id. at 12 (“underlying title may have passed to the United States”); id. (“United States’ claims to protect the Mohawks may be based in part on its underlying title to the Islands”).

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27. As a party intervening solely on behalf of the Tribe, the United States is subject to equitable defenses. Its claims cannot survive Cayuga.

Cayuga applies for two additional reasons. First, as a matter of law, the United States has

no ownership interests in the Islands. Second, even if the United States were intervening to

vindicate its own property interests, its claims are nonetheless subject to dismissal under the

express holding in Cayuga.

A. The United States Did Not Bring This Action To Protect Its Alleged Ownership Interest In The Islands

In keeping with well-established precedent, Cayuga and Oneida allowed defendants to

assert equitable defenses against the United States. The Second Circuit explained that the United

States, normally immune from equitable defenses, is subject to laches in any of three situations,

including where the Government merely “seek[s] to enforce either on its own behalf or that of

private parties what are in the nature of private rights.” Cayuga , 413 F.3d at 279 (citing United

States v. Admin. Enters., Inc. , 46 F.3d 670, 672-73 (7th Cir. 1995)); Oneida , 617 F.3d at 129

(citing Cayuga ).

The Magistrate Judge correctly rejected the United States’ argument that, as to the

Islands, equitable defenses are unavailable because it has intervened to enforce a “public right.”

The Magistrate Judge examined the United States’ own pleadings to determine the United States

purpose here is to vindicate the private rights of the Tribes (who are certainly subject to Sherrill and Cayuga ), and not the public interest. See Report at 27-28 (citing Dkt. No. 447-6 at ¶¶ 1, 5

and p. 15-16). 38 The Government’s prayer for relief is no different from the relief sought by the

38 This finding has ample support in the record. Most notably, in its prayer for relief – the very statement of what the federal government “seeks” – the United States requests a declaratory judgment “that the Indians of the Village of St. Regis have the right to occupy the lands described in the complaint” and seeks monetary and possessory damages based exclusively on “injury to the Tribes” and “injury to the Indians of the Village of St. Regis.” NYPA Ex. 3, U.S.

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United States in Cayuga and Oneida . Indeed, when the United States first intervened, it assured the Court that its intent was to “litigat[e] the same questions” and “present[] the same theory of liability” as the Tribes. See NYPA Ex. 14, U.S. Mem. in Support of Mot. to Intervene at 8 (Dkt.

No. 153). Even when the United States first raised this claim in 2011, they did so in the most

equivocal terms, asserting only that the Government “may” have a direct claim to the Islands.

(See , supra n.37.) The United States is asserting the same interests as the plaintiffs and the same

interests that it did in Cayuga and Oneida . Its claims are equally subject to dismissal.

In challenging the Magistrate Judge’s decision that no such “public right” was being

pursued, Plaintiffs focus on federal pleading standards, but this misses the point. To be immune

from equitable defenses, the Government cannot assert sovereign rights in name only. If the

Government’s sincere purpose in bringing suit is to vindicate the rights of other parties, then the

usual equitable defenses apply. See United States v. Beebe , 127 U.S. 338, 346 (1888) (allowing

laches defense because claims asserted by government in bill in equity “might have been asserted

without the intervention of the United States at all”); United States v. Des Moines Nav. & Ry.

Co ., 142 U.S. 510, 539-40 (1892) (quoting bill in equity to rule that government was “only a

nominal party, whose aid was sought to destroy the title of the navigation company and its

grantees, in order to enable the settlers to perfect their titles”); see also NYPA Supp. Reply Br. 9-

10. The Magistrate Judge analyzed the United States’ Amended Complaint, not merely to

determine what claims were alleged, but also as the best evidence of the Government’s purpose

in bringing suit.

Cplt. Dkt. No. 447-6 at 15-16. The sole reference to relief specific to the federal government is a prayer for attorneys’ fees and costs. Id . at 16. None of the relief sought requires a finding that the United States owns underlying title to the Islands.

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Notably, the Government’s own Objections concede that its only sincere motivation in this action is to vindicate the rights of the Tribes. See U.S. Obj. Br. at 24 (“[o]nly now that the

Second Circuit has crafted a new defense has it become relevant whether the United States owns the underlying fee of the Islands.”). 39 Issues that are relevant only to defeating affirmative defenses are by definition not rights that the government’s suit is “seeking to enforce.” Cayuga ,

413 F.3d at 279. The Magistrate Judge correctly found laches to apply, because, as the United

States has conceded, it intervened solely to vindicate the alleged rights of the Tribe.

B. The United States Does Not Have an Ownership Interest in the Islands

The Magistrate Judge did not reach the merits of the United States’ ownership claims, correctly finding that the federal government’s intervention in this matter is “solely for the benefit of the St. Regis Indians.” Report at 28. In any event, the United States’ direct ownership claim is without merit. Even if the United States were sincerely motivated by its own supposed land interests, this newly raised claim would fail as a matter of law.

The so-called “right of preemption” claimed by the United States today has always belonged to New York State. Upon the American Revolution, the right of preemption – the exclusive right to acquire Indian land once aboriginal title is extinguished – passed from Great

Britain to the original thirteen states (not to the United States). Oneida Indian Nation of New

York v. State of New York , 860 F.2d 1145, 1150 (2d Cir. 1988). All sides agree that New York retained this right over Indian land that was part of the State prior to the 1789 adoption of the

39 See also U.S. Obj. Br. at 23 (“Whether the United States brought the suit to vindicate its own title or to vindicate Mohawk title to the land, the end result will be the same so long as Mohawk title remains unextinguished.”); id. (“Lands owned by the United States in trust for a tribe and lands owned by a tribe in restricted fee are generally functionally equivalent.”); id. at 23-24 (whether U.S. “owns underlying title to the Islands . . . was not pertinent to the question of whether the State violated the Nonintercourse Act”); id. at 22 (“Until their Indian title is validly extinguished, their rights to the Islands are paramount.”). Again, these are the U.S. Government’s own words in this action.

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U.S. Constitution. 40 The United States, however, argues that the Islands became part of the

United States after 1789. U.S. Obj. Br. at 25. That is demonstrably wrong as a matter of law.

The boundary in question has been law of the land since before the adoption of the U.S.

Constitution. The 1783 Treaty of Paris established a border between the United States and

British North America “along the middle of the [St. Lawrence] River.” NYPA Ex. 15, Treaty of

Paris, 8 Stat. 80, Art. II (1783). Because of the ambiguity of that description, title to numerous islands in the St. Lawrence River remained disputed. The 1814 Treaty of Ghent established a

Boundary Commission, not to recommend new borders, but to map the precise boundaries set by the 1783 treaty. The Commission’s charge was to

designate the boundary through the said river, lakes and water communications . . . and decide to which of the two contracting parties the several islands within the said rivers, lakes and water communications do respectively belong, in conformity with the true intent of the said treaty of one thousand seven hundred and eighty-three . And both parties agree to consider such designation and decision final and conclusive.

NYPA Ex. 16, Treaty of Ghent, 8 Stat. 218, Art. VI (1814) (emphasis added). Thus, by the express terms of the treaty, the Boundary Commission had no authority to transfer lands from one sovereign to the other. Its mandate was judicial in nature – to resolve the boundaries already set as of 1783. 41 As a matter of law, the Islands were part of New York before the Constitution.

New York State, rather than the United States, thus held the right of preemption, and the United

States has no viable claims of title in the Islands.

40 The Defendants do not concede that the federal government ever obtains the right of preemption over land located within one of the original 13 states, even if that land comes within the nation’s borders after 1789. The Court need not resolve that issue, because the relevant treaties are clear that the Islands were part of New York State as of 1783. 41 The Boundary Commission’s Report underscores this reading. The Commission found that the Islands were part of the United States “in conformity with the true intent of the said treaty of 1783, and of the sixth article of the treaty of Ghent.” NYPA Ex. 17, Decision of the Commissioners Under the Sixth Article of the Treaty of Ghent, June 18, 1822, published in BULLETIN OF THE UNITED STATES GEOLOGICAL SURVEY , Vol. 171, pp. 14, 16 (1900) (excerpts).

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The Second Circuit handled this precise issue in Seneca Nation of Indians v. New York .

In Seneca Nation , the Western District of New York found, and the Second Circuit affirmed, that

New York had retained the right of preemption over previously disputed islands judged by the

1822 Boundary Commission to be part of the United States. In 1995, the Seneca Nation of

Indians brought – and the United States intervened in – a Non-Intercourse Act land claim in the

Western District of New York, alleging the right to occupy certain islands on the Niagara River, an international boundary (the “Niagara Islands”). See Seneca Nation of Indians v. New York ,

206 F. Supp. 2d 448 (W.D.N.Y. 2002), aff’d 382 F.3d 245 (2d Cir. 2004). Like the Islands in

this litigation, prior to 1822, the Niagara Islands were the subject of dispute due to the

“ambiguity of the United States-British Canada boundary under the 1783 Treaty of Paris.” Id . at

538. Sovereignty over the Niagara Islands was genuinely disputed during this time and was

finally resolved in favor of New York in 1822. The United States, however, did not thereby acquire the right of preemption.

The district court, rather, found that the right of preemption over the Niagara Islands had passed to New York State. See id. at 517-18 (“Prior to the American Revolution, Great Britain

held the right of preemption to the Niagara strip and the Niagara Islands. That right passed to

the State of New York upon the Revolution.” ) (emphasis added, citation omitted). The Second

Circuit affirmed this reasoning, ruling that “on the defeat of the British after the Revolutionary

War, title passed to New York,” Seneca Nation of Indians v. New York , 382 F.3d 245, 260 (2d

Cir. 2004), despite the fact that the question of sovereignty over the islands was “finally

determined in 1822.” Id . at 249. 42

42 Plaintiffs argue that New York actually “acquired” new lands, based on the historical record in connection with the 1822 Commission. Such an implication cannot be sustained where it is

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The same result is compelled here. Indeed, until recent years, the United States clearly shared the belief that there was no federal title in the Islands. The United States did not assert any claim to the Islands in 1822 when the Boundary Commission report was issued; in the

1850s, when the St. Regis Indians were compensated for their alleged dispossession; in the 1920s when the U.S. and Canada identified the Islands as the suitable site for a hydroelectric project; in

1954, when the Federal Power Commission approved NYPA’s license; in the mid-1950s while

NYPA was constructing massive facilities on, and flooding parts of, the Islands; or in 1959, when Congress enacted legislation securing NYPA’s long-term possession of the Islands. This history does not simply show delay; it confirms what the relevant treaties and precedent have made clear: the United States has no claim to title. Accordingly, the United States has no “public right” to assert, and the Island Claims should be dismissed under Cayuga.

C. Laches Is Appropriate Given the United States’ “Egregious Delay” in Bringing Suit and the Absence of a Statute of Limitations.

Even if the United States’ Complaint in Intervention asserts a legitimate sovereign right – and, as discussed, it clearly does not – equitable defenses against the United States should still

contrary to the text of the relevant treaties. The Supreme Court announced this precise principle just five years after the 1822 Boundary Commission, in describing the 1783 Treaty of Paris: It has never been admitted by the United States, that they acquired any thing by way of cession from Great Britain, by that treaty. It has been viewed only as a recognition of pre-existing rights, and on that principle, the soil and sovereignty within their acknowledged limits, were as much theirs at the declaration of independence as at this hour. By reference to the treaty, it will be found, that it amounts to a simple recognition of the independence and the limits of the United States, without any language purporting a cession, or relinquishment of right, on the part of Great Britain. Harcourt v. Gaillard , 25 U.S. 523, 527-28 (1827). The United States can offer no reason why the Treaty of Ghent – which similarly lacks any language “purporting a cession, or relinquishment of rights” – should be treated any differently. There can be no question that the land confirmed to be part of the United States in 1822 was part of the State of New York no later than 1783, rendering the United States’ argument incorrect as a matter of law.

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apply. Cayuga specifies three independent grounds for allowing a laches defense to be asserted

against the government. See Cayuga , 413 F.3d at 279 (“[w]e need not decide which of these

three possibilities might govern because this case falls within all three”). As explained above,

the Island Claims, like Cayuga fall within the first ground because the United States intervened here not to protect a public interest, but “to enforce either on its own behalf or that of private parties what are in the nature of private rights.” Cayuga , 413 F.3d at 279.

Each of the other two grounds – the egregious nature of the government’s delay and the absence of any statute of limitations – requires dismissal of the United States’ claims as well.

Certainly, as in Cayuga , there was no applicable statute of limitations until long after the Tribe’s claims accrued. Cayuga , 413 F.3d at 279. More importantly, as discussed above, the United

States missed every obvious opportunity to assert an interest in the Islands for over 190 years.

During that time, it actively endorsed and secured NYPA’s possession of the Islands, including through litigation. ( See supra, Part II.A.2.) For frame of reference, the Second Circuit described the government’s 150 years of delay in Cayuga as “about as egregious an instance of laches on the part of the United States as can be imagined.” Cayuga , 413 F.3d at 279. The Government’s conduct here as to its own direct title claims – 190 years of delay and decades of open support for NYPA’s possession – is much worse. Regardless of any new legal theories, the United

States’ claims are barred by Cayuga .

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Conclusion

For the above reasons, as recommended by the Magistrate Report, the Island Claims should be dismissed in their entirety.

New York, New York Respectfully submitted, February 4, 2013 MANATT, PHELPS & PHILLIPS, LLP

By: /s/ Kimo S. Peluso Kimo S. Peluso Nirav S. Shah 7 Times Square New York, New York 10036 (212) 790-4500 (telephone) (212) 790-4545 (facsimile) [email protected] [email protected]

Arthur T. Cambouris New York Power Authority 123 Main Street White Plains, New York 10601 (914) 390-8007 (telephone) (914) 390-8038 (facsimile) [email protected]

Attorneys for Defendant New York Power Authority

35