Opinion ID: 152512
Heading Depth: 3
Heading Rank: 1

Heading: New York's Sovereign Immunity Bars the Oneidas' Contract Claim

Text: We begin with first principles. It is well established that the States entered the federal system with their sovereignty intact, and that this sovereignty limits the judicial authority in Article III unless the states have consented to suit in court, either expressly or in the plan of the convention. Blatchford v. Native Vill. of Noatak, 501 U.S. 775, 779, 111 S.Ct. 2578, 115 L.Ed.2d 686 (1991) (internal quotation marks omitted); see also Principality of Monaco v. Mississippi, 292 U.S. 313, 322-23, 54 S.Ct. 745, 78 L.Ed. 1282 (1934). It is also well established that in entering the federal union, the states implicitly gave consent to suits by the United States, see, e.g., Alden v. Maine, 527 U.S. 706, 755, 119 S.Ct. 2240, 144 L.Ed.2d 636 (1999); Principality of Monaco, 292 U.S. at 329, 54 S.Ct. 745; cf. United States v. Minnesota, 270 U.S. 181, 195, 46 S.Ct. 298, 70 L.Ed. 539 (1926) (The reason the Indians could not bring the suits . . . lies in the general immunity of the state . . . from suit in the absence of consent. Of course, the immunity of the state is subject to the constitutional qualification that she may be sued in this Court by the United States . . . .), but not to suits against states by Indian tribes, see Blatchford, 501 U.S. at 781, 111 S.Ct. 2578 (finding no compelling evidence to suggest that consent to suit by Indian tribes was inherent in the constitutional compact). The Supreme Court determined in Arizona v. California, 460 U.S. 605, 103 S.Ct. 1382, 75 L.Ed.2d 318 (1983), a dispute among several states concerning their claims to the waters of the Colorado River, that because the United States had intervened in the action to assert water rights claims on behalf of Indian tribes, the intervention of the tribes themselves did not infringe the states' sovereign immunity. See Arizona, 460 U.S. at 614, 103 S.Ct. 1382. Significantly, however, the tribes intervening in Arizona did not seek to bring new claims or issues against the states other than those already asserted by the United States. [10] Id. The Court recently reaffirmed the continuing validity of Arizona, but again suggested that the case only applies when a private party asserts an entirely overlapping claim to one properly before the court, and only when the overlapping claim would burden[] the State with no additional defense or liability. Alabama v. North Carolina, ___ U.S. ___, 130 S.Ct. 2295, 2315, ___ L.Ed.2d ___ (2010). [11] Relying on Arizona, we also have approved the denial of an Eleventh Amendment defense in a case in which an Indian tribe sued New York State and the United States intervened in the action seeking the same relief. See Seneca Nation of Indians v. New York, 178 F.3d 95 (2d Cir.1999) (per curiam), aff'g 26 F.Supp.2d 555 (W.D.N.Y.1998). We again emphasized, however, that the State of New York retains its Eleventh Amendment immunity to the extent that the [plaintiff Indian tribes] raise claims or issues that are not identical to those made by the United States. Seneca Nation, 178 F.3d at 97 (emphasis added); see also Seneca Nation of Indians v. New York, 26 F.Supp.2d at 560 (noting that the United States' complaint in intervention sought the identical relief as the Senecas' [complaint]); accord Mille Lacs Band of Chippewa Indians v. Minnesota, 124 F.3d 904, 912-13 (8th Cir.1997) (rejecting Minnesota's sovereign immunity defense when United States intervened in Indian tribes' suit seeking the same relief as sought by the tribes in the underlying action). This is consistent with the Supreme Court's admonition that [a] federal court must examine each claim in a case to see if the court's jurisdiction over that claim is barred by the Eleventh Amendment. Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89, 121, 104 S.Ct. 900, 79 L.Ed.2d 67 (1984). We need not address here the precise contours of when a tribe's complaint raises a claim or issue not identical to one asserted by the United States, because even construing the United States' most recent amended complaint liberally, it simply does not contain the contract-based claim that the district court found to be adequately pled by the Oneidas. The United States admits before this Court that while a complaint need not specify the legal theory underlying its claims, it must set forth those facts necessary to a finding of liability. Amron v. Morgan Stanley Inv. Advisors Inc., 464 F.3d 338, 343 (2d Cir.2006) (emphasis omitted). Here, the United States' complaint alleges no facts whatsoever regarding essential aspects of a contract-based claimthat the consideration the Oneidas received for the subject lands was inferior or grossly inferior to the lands' fair market value, that New York deceived or misled the Oneidas as to the value of the land, or that New York had knowledge of any fact bearing on the value of the land that was not known by the Oneidas themselves. See Oneida III, 500 F.Supp.2d at 144 (describing facts required to be established to prevail on the district court's contract-based claim). Although the United States' amended complaint refers in one instance to the alleged profits the State made on its sales of the lands at issue, U.S. Second Am. Compl. ¶ 18, it is clear from the complaint's description of the nature of the action, the facts of the land transfers, the claims asserted, and the prayer for relief that the United States asserts predominantly, if not exclusively, trespass and ejectment-based claims. [12] Even if the United States' complaint is deemed to allege a purportedly nonpossessory claim, moreover, it is clear that any such claim in the complaint is based entirely on the Nonintercourse Act. The United States' complaint asserts two claims against New Yorka Federal Common Law Trespass Claim and a Trade and Intercourse Claim. The former claim appears to ground its cause of action in both the Nonintercourse Act and federal common law but, as a claim for trespass, is clearly possessory. See id. ¶ 24; Cayuga, 413 F.3d at 278 ([T]he trespass claim . . . is predicated entirely upon plaintiffs' possessory land claim, for the simple reason that there can be no trespass unless the Cayugas possessed the land in question.). The latter claim, grounded only in the allegation that the original land transactions violated the Nonintercourse Act, is therefore the only potential source of a nonpossessory claim. But the district court did not derive the Oneidas' purportedly nonpossessory claim from the Nonintercourse Act; rather, the fair compensation claim is based on an entirely different theorythat the Oneidas possess a common law right of action sounding in contract to reform land sale agreements that were supported, they allege, by unconscionable consideration. See Oneida III, 500 F.Supp.2d at 140-41 & n. 6; see also id. at 139 n. 4 (indicating that a claim predicated on a violation of the Nonintercourse Act . . . might also be appropriate, but declining to consider such a claim). The United States suggests that we may consider its pleadings constructively amended to include the nonpossessory contract claim brought by the Oneidas and recognized by the district court because the issue was litigated below. Constructive amendment, when used by appellate courts, is a judicially created discretionary doctrine that we have used extremely sparing[ly] to recognize that an issue not in the parties' pleadings was actually litigated in the court below. City of Rome, N.Y. v. Verizon Commc'ns, Inc., 362 F.3d 168, 181 (2d Cir.2004). When issues that were not raised in the pleadings are tried by express or implied consent of the parties, this consent acts to permit what is in effect a constructive amendment of the pleadings to include those issues. Walton v. Jennings Cmty. Hosp., Inc., 875 F.2d 1317, 1320 n. 3 (7th Cir.1989) (emphasis added) (internal quotation marks omitted). Here, however, New York never consented, expressly or otherwise, to the litigation of any nonpossessory claims, and certainly not to the claim as formulated by the district court; indeed, it vigorously contended before the district court that neither the Oneidas nor the United States had asserted such a claim in their complaints. See, e.g., Def.'s Reply Mem., Doc. 606 (Mar. 2, 2007), at 2-8 & n. 3. [13] Although the district court rejected this argument and found that the Oneidas' complaint alleged a nonpossessory claim, see Oneida III, 500 F.Supp.2d at 139-40, this does not alter the fact that New York did not in any way consent to the litigation of any such nonpossessory claims such that we may consider the United States' complaint constructively amended. Cf. 6A Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1494 (3d ed. 2010) ([I]f the issue in fact has not been tried with the consent of the parties, then an amendment to conform to the pleadings will not be permitted no matter when made.); Wahlstrom v. Kawasaki Heavy Indus., Ltd., 4 F.3d 1084, 1087 (2d Cir. 1993) (although plaintiffs could not state a claim under state tort law, defendants had argued before district court that federal maritime law governed the claim at issue, and parties had litigated whether relief was available under maritime law; thus complaint could be constructively amended to assert a maritime law claim). Finally, we note that the United States in its brief before this Court does not even defend the contract claim as articulated by the district court. The United States asserts with regard to the district court's contract-based claim that it does not agree with the entirety of the district court's analysis, U.S. Br. at 64, and, specifically, that it believes it need only show violation of the Nonintercourse Act to establish a basis for recovering restitutionary damages. The United States' argument with regard to New York's sovereign immunity, at base, is that because the United States could have asserted in its complaint (if granted leave to amend) a claim on which the Oneidas were permitted to proceed, we should take the United States to have pleaded this claim. We have our doubts that this casual approach to analysis of a state's assertion of sovereign immunity could ever be appropriate. See Blatchford, 501 U.S. at 785, 111 S.Ct. 2578 (noting that [t]he consent, `inherent in the convention,' to suit by the United States . . . is not consent to suit by anyone whom the United States might select; and even consent to suit by the United States for a particular person's benefit is not consent to suit by that person himself). It is particularly inappropriate in this case, moreover, given that the United States in effect disavows on appeal the claim on which the Oneidas were permitted to proceed. We therefore determine that New York is immune from suit with regard to the contract claim recognized by the district court and conclude that this claim must be dismissed. [14]