Appendix — Cayuga Indian Nation of New York v. Pataki (No. 05-982)

10a

The Court further ruled, on December 23, 1999, that it would

not allow testimony related to equitable issues to be

presented to the jury and that all equitable issues would be

reserved to the Court. Cayuga Indian Nation v. Pataki, 79 F.

Supp. 2d 78, 92 (N.D.N.Y. 1999) (“Cayuga XII’). The Court

decided that, because it had rejected ejectment as an available

remedy, it would allow evidence of current fair market value

as a proper measure of damages. Jd. at 94. As a result of

these rulings, the District Court bifurcated the proceedings

into (1) a jury trial to determine current fair market value and

rental damages and (2) a subsequent hearing on prejudgment

interest and other equitable issues.

A jury trial was held from January 18, 2000 through

February 17, 2000. The parties’ experts presented widely

disparate estimates of the measure of plaintiffs’ damages.

The jury was presented with a Special Verdict Form that

asked for a calculation of current fair market value of the

subject land and for a year-by-year breakdown of rental

damages from 1795 to 1999. The jury was instructed not to

adjust rental damages to current day value, as all adjustments

would be performed later by the Court. On February 17,

2000, the jury returned a verdict finding current fair market

value damages of $35 million and total fair rental value

damages of $3.5 million. In awarding the fair rental value

damages, the jury awarded the same rental value damages for

each year from 1795 to 1999, in the amount of $17,156.86.

The jury gave the State a credit for the payments it had made

to the Cayugas, of about $1.6 million, leaving the total

damages at this stage at approximately $36.9 million.

The hearing on prejudgment interest and other equitable

issues was held from July 17, 2000 through August 18, 2000.

Eight expert witnesses testified, regarding both the historical

context and the assessment of prejudgment interest.

lla

Unsurprisingly, the experts reached substantially divergent

estimates of the prejudgment interest to which the Cayugas

were entitled, ranging from approximately $1.75 billion to

zero (this counterintuitive calculation was based on the

assumption that the jury verdict needed to be “adjusted”

because the jury had expressed its verdict in “constant 2000

dollars’’).3

On October 2, 2001, the District Court issued a

Memorandum-Decision and Order on the interest issue.

Cayuga Indian Nation v. Pataki, 165 F. Supp. 2d 266

(N.D.N.Y. 2001) (“Cayuga XVI’). The District Court

rejected both the “lowball” figure of the State’s expert and

the stratospheric figure of the plaintiffs’ expert and relied on

the estimate of the United States’s expert, who had arrived at

a figure of $529,377,082. Jd. at 364. In doing so, the District

Court took into account a number of equitable

considerations, including “(1) the passage of 204 years; (2)

the failure of the U.S. to intervene or to seek to protect the

Cayuga’s interests prior to 1992; (3) the lack of fraudulent or

calculated purposeful intent on the part of the State to deprive

the Cayuga of fair compensation for the lands ceded by them

in the 1795 and 1807 treaties; and (4) the financial factors

enumerated by [the State’s expert].” /d. at 366. The District

Court noted that these financial factors encompassed a

number of considerations, including the question whether the

Cayugas had access to financial markets or “the ability,

knowledge, or skills to take advantage of such markets,

especially in the early years,” the failure of the verdict to take

into account the Cayugas’ expenses over the past 204 years,

3 The expert actually testified that the Cayugas owed the State

approximately $7.6 million, though the State assured the Court that it

would not attempt to collect from the Cayugas.

12a

the fact that the unimproved claim area had no rental value

until the twentieth century, and the fact that compounding

interest over 204 years is at best “a theoretical exercise,”

because it ignores the history of banking in this country and

is extremely unlikely to occur in a real-world market. /d. at

364. In light of all these factors, the District Court adjusted

downward the interest estimate by 60 percent, resulting in a

prejudgment interest award of $211,000,326.80 and a total

award of $247,911,999.42. /d. at 366. The District Court

entered judgment that day.

The District Court addressed various post-judgment motions

on March 11, 2002. Cayuga Indian Nation v. Pataki, 188 F.

Supp. 2d 223 (N.D.N.Y. 2002) (“Cayuga XVII"). The Court

first denied the State’s motions for judgment as a matter of

law and for a new trial. /d. at 247-48. The Court granted the

State’s motion “to amend the judgment to provide that it runs

jointly in favor of the U.S., as trustee, and the tribal

plaintiffs,” but denied the State’s motion “to amend the

judgment to run exclusively in favor of the U.S.” /d. at 257.

Finally, the Court denied both parties’ motions for

recalculation of the prejudgment interest and _ plaintiffs’

motion for reconsideration of the Court’s earlier decision

rejecting ejectment as a remedy. /d.

On June 17, 2002, the District Court granted the parties’

motions for permission to appeal and certified for appeal,

pursuant to 28 U.S.C. §1292(b), the issues related to liability

and remedies. We granted the District Court’s certification

of issues for immediate appellate resolution on December 11,

2002.

13a

DISCUSSION

The Supreme Court’s recent decision in City of Sherrill v.

Oneida Indian Nation, 544 U.S. ----, 125 S. Ct. 1478, 161 L.

Ed. 2d 386 (2005), has dramatically altered the legal

landscape against which we consider plaintiffs’ claims.

Sherrill concerned claims by the Oneida Indian Nation,

another of the Six Iroquois Nations, that its “acquisition of

fee title to discrete parcels of historic reservation land

revived the Oneidas’ ancient sovereignty piecemeal over

each parcel” and that, consequently, the Tribe need not pay

property taxes to the City of Sherrill. /d at 1483. The

Supreme Court rejected this claim, concluding that “the Tribe

cannot unilaterally revive its ancient sovereignty, in whole or

in part, over the parcels at issue.” /d.

We understand Sherrill to hold that equitable doctrines, such

as laches, acquiescence, and impossibility, can, in

appropriate circumstances, be applied to Indian land claims,

even when such a claim is legally viable and within the

statute of limitations. See, e.g., id at 1494 (“[T]he distance

from 1805 to the present day, the Oneidas’ long delay in

seeking equitable relief against New York or its local units,

and developments in the city of Sherrill spanning several

generations, evoke the doctrines of laches, acquiescence, and

impossibility, and render inequitable the piecemeal shift in

governance this suit seeks unilaterally to initiate.”). Sherrill

clarified that the decision does not “disturb” the Supreme

Court’s holding in County of Oneida v. Oneida Indian

Nation, 470 U.S. 226, 229-30, 105 S. Ct. 1245, 84 L. Ed. 2d

169 (1985) (“Oneida II’’), which allowed Indian Tribes to

seek fair rental value damages for violation of their

possessory rights following an ancient dispossession. See

Sherrill, 125 S. Ct. at 1494 (“In sum, the question of

damages for the Tribe’s ancient dispossession is not at issue

l4a

in this case, and we therefore do not disturb our holding in

Oneida IlI.”). Because the Supreme Court in Oneida I/

expressly declined to decide whether laches would apply to

such claims, see Oneida II, 470 U.S. at 244-45, 253 n. 27,

105 S. Ct. 1245, this statement in Sherrill is not dispositive

of whether laches would apply here.

The Court’s characterizations of the Oneidas’ attempt to

regain sovereignty over their land indicate that what

concerned the Court was the disruptive nature of the claim

itself. See id. at 1483 (“{W]e decline to project redress for

the Tribe into the present and future, thereby disrupting the

governance of central New York’s counties and towns.”); id.

at 1491 (“This long lapse of time, during which the Oneidas

did not seek to revive their sovereign control through

equitable relief in court, and the attendant dramatic changes

in the character of the properties, preclude [the Tribe] from

gaining the disruptive remedy it now seeks.”); id. at 1491 n.

11 (“[The Oneidas’] claim concerns grave, but ancient,

wrongs, and the relief available must be commensurate with

that historical reality.”). Although we recognize that the

Supreme Court did not identify a formal standard for

assessing when these equitable defenses apply, the broadness

of the Supreme Court’s statements indicates to us that

Sherrill’s holding is not narrowly limited to claims identical

to that brought by the Oneidas, seeking a revival of

sovereignty, but rather, that these equitable defenses apply to

“disruptive” Indian land claims more generally.

In their post-Sherrill briefs, both the Cayugas and the United

States maintain that the Sherrill decision “does not affect the

award of monetary damages,” Cayuga Letter Br. at 1, and

“concerned particular equitable remedies” which are not at

issue here as “the district court confined its judgment to an

award of damages.” United States Letter Br. at 6. Our

15a

reading of Sherrill suggests that these assertions do not

present an entirely accurate assessment of its effect on the

present case While the equitable remedy sought in Sherrill--

a reinstatement of Tribal sovereignty--is not at issue here,

this case involves comparably disruptive claims, and other,

comparable remedies are in fact at issue.

Despite the eventual award by the District Court of monetary

damages, we emphasize that plaintiffs’ claim is and has

always been one sounding in ejectment; plaintiffs have

asserted a continuing right to immediate possession as the

basis of all of their claims, and have always sought ejectment

of the current landowners as their preferred form of relief.

As noted above, in their complaint in this case the Cayugas

seek “immediate possession” of the land in question and

ejectment of the current residents. Indeed, the District Court

noted early in the litigation that it was “clear” that the

complaint “presents a possessory claim, basically in

ejectment.” Cayuga If, 565 F. Supp. at 1317 (internal

quotation marks omitted). Plaintiffs continue to maintain,

on appeal in this Court, that ejectment is their preferred

remedy. It was not until 1999, nineteen years after the

complaint was filed, and eight years after the District Court’s

decision on liability, that the District Court determined that

the ejectment remedy sought by the Cayugas was, “to put it

mildly, ... not an appropriate remedy in this case.” Cayuga

X, 1999 U.S. Dist. LEXIS 10579, at *97. The District Court

thus effectively “monetized” the cjectment remedy in

concluding that “monetary damages will produce results

4 Plaintiffs took the position in the District Court that mcnetary

damages would not adequately compensate them for two hundrec years

of wrongful occupation. See Cayuga VIII, 1999 U.S. Dist. LEXIS 5228,

3.

l6a

which are as satisfactory to the Cayugas as those which they

could properly derive from ejectment.” /d. at *79.

The nature of the claim as a “possessory claim,” as

characterized by the District Court, underscores our decision

to treat this claim like the tribal sovereignty claims in

Sherrill. Under the Sherrill formulation, this type of

possessory land claim--seeking possession of a large swath

of central New York State and the ejectment of tens of

thousands of landowners--is indisputably disruptive. Indeed,

this disruptiveness is inherent in the claim itself--which asks

this Court to overturn years of settled land ownership--rather

than an element of any particular remedy which would flow

from the possessory land claim. Accordingly, we conclude

that possessory land claims of this type are subject to the

equitable considerations discussed in Sherrill.

This conclusion is reinforced by the fact that the Sherrill

opinion does not limit application of these equitable defenses

to claims seeking equitable relief. We recognize that

ejectment has been characterized as an action at law, as

opposed to an action in equity. See, e.g, New York v. White,

528 F.2d 336, 338 (2d Cir. 1975) (discussing “the legal

remedy of ejectment”); but see Bowen v. Massachusetts, 487

U.S. 879, 893, 108 S. Ct. 2722, 101 L. Ed. 2d 749 (1988)

(stating in dicta that “[o]ur cases have long recognized the

distinction between an action at law for damages--which are

intended to provide a victim with monetary compensation for

an injury to his pevson, property, or reputation--and an

equitable action for specific relief--which may include an

order providing for ... ejectment from land ....”). Plaintiffs

urge us to conclude that, as a legal remedy, ejectment is not

subject to equitable defenses, relying, infer alia, on the

Supreme Court’s statement in Oneida // that “application of

the equitable defense of laches in an action at law would be

17a

novel indeed.” Oneida IJ, 470 U.S. at 244 n. 16, 105 S. Ct.

1245. In response to this claim, we note Sherrill‘s statement

that “[n]o similar novelty exists when the specific relief [the

Tribe] seeks would project redress ... into the present and

future.” 125 S. Ct. at 1494 n. 14. Whether characterized as

an action at law or in equity, any remedy flowing from this

possessory land claim, which would call into question title to

over 60,000 acres of land in upstate New York, can only be

understood as a remedy that would similarly “project redress

into the present and future.”>

> We note that even though ejectment has traditionally been considered

an action at law, numerous jurisdictions have recognized the applicability

of equitable defenses, including laches, in an action for ejectment based

on a claim of legal title or prior possession, regardless of whether

damages or an order of possession was sought. See, e.g., Pankins v.

Jackson, 891 S.W.2d 845, 848 (Mo. Ct. App. 1995) (noting that

ejectment is claim of legal right of possession, considering whether

laches “defeated” “plaintiff's right of possession,” and concluding it did

not because the delay was not the fault of plaintiff and defendants were

not prejudiced); Jansen v. Clayton, 816 S.W.2d 49, 51-52 (Tenn. Ct.

App. 1991) (upholding dismissal of ejectment action because of laches

and noting that “[aJlthough ejectment is an action at law, equitable

defenses may bar purely legal claims”); McRorie v. Query, 32 N.C. App.

311, 232 S.E.2d 312, 319 (1977) (“[Plaintiffs}] contend that the defense of

laches is not applicable here because this is an action in ejectment. They

cite no authority for this position, and we find none.”); Miller v. Siwicki,

8 Ill. 2d 362, 134 N.E.2d 321, 323 (1956) (holding laches barred

ejectment action brought after 22-year delay and specifying that laches,

“even though an equitable defense, can be interposed in an ejectment

action.”); Olson v. Williams, 185 Mich. 294, 151 N.W. 1043, 1044-45

(1915) (enjoining pending ejectment action because barred by laches);

Loomis v. Rosenthal, 34 Or. 585, 57 P. 55, 61 (1899) (holding that

plaintiffs’ “laches [was] so gross as to preclude their recovery 9f the

land.”).

18a

One of the few incontestable propositions about this

unusually complex and confusing area of law is that

doctrines and categorizations applicable in other areas do not

translate neatly to these claims. See, e.g., Oneida II, 470

U.S. at 240-44, 105 S. Ct. 1245 (holding that the general law

favoring the borrowing of state law limitations-periods does

not apply to federal Indian land claims); Mohegan Tribe v.

Connecticut, 638 F.2d 612, 614-15 & n. 3 (2d Cir. 1980)

(holding that adverse possession does nc: run against Indian

land). This proposition was well stated by the District Court:

As the parties are well aware, the Cayugas are

seeking to enforce a “federal common law” right of

action for violation of their possessory property

rights, as well as seeking to vindicate their rights

under the Nonintercourse Act. Unfortunately, that

Act is silent as to remedies, thus leaving courts to

resort to the common law as a means of “assisting ...

in formulating a statutory [Nonintercourse Act]

damage remedy.” Therefore, in molding a remedy in

the present case and in structuring a manageable trial,

in the court’s opinion it may well be appropriate, and

indeed necessary, to fashion a federal common law

remedy, which although having some resemblance to

remedies available for common law torts such as

trespass, is a remedy uniquely tailored to fit the needs

of this unparalleled land claim litigation. As the

discussion below demonstrates, however, and has

been evident for some time as the issue of remedies

has come to dominate this litigation, common law

principles, whether tort-based or not, are not readily

transferrable to this action.

Cayuga XI, 79 F. Supp. 2d at 70-71 (internal citations,

quotations, and emphasis omitted). In light of the unusual

19a

considerations at play in this area of the law, and our

agreement that ordinary common law principles are indeed

“not readily transferrable to this action,” we see no reason

why the equitable principles identified by the Supreme Court

in Sherrill should not apply to this case, whether or not it

could be technically classified as an action at law.

Thus, whatever the state of the law in this area before

Sherrill, see Oneida II, 470 U.S. at 253 n. 27, 105 S. Ct. 1245

(reserving “the question whether equitable considerations

should limit the relief available” in these cases); id. at 244-

45, 105 S. Ct. 1245 (deciding not to reach the question of

laches because defendants had waived it), we conclude, for

the above-stated reasons, that, after Sherrill, equitable

defenses apply to possessory land claims of this type.

Our reading is not in conflict with the Supreme Court’s

decision in Oneida Indian Nation v. County of Oneida. 414

U.S. 661, 94 S. Ct. 772, 39 L. Ed. 2d 73 (1974) (“Oneida I’),

where the Court specifically found federal jurisdiction to hear

such possessory claims, including those in ejectment. /d. at

666, 94 S. Ct. 772. The Court there noted that “the

complaint in this case asserts a present right to possession

under federal law. The claim may fail at a later stage for a

variety of reasons; but for jurisdictional purposes, this is not

a case where the underlying right or obligation arises only

under state law and federal law is merely alleged as a barrier

to its effectuation.” /d. at 675, 94 S. Ct. 772. The holding of

Sherrill thus addresses the question reserved in Oneida 1] and

follows from Oneida Is holding by providing that these

possessory claims are subject to equitable defenses.

Inasmuch as the instant claim, a possessory land claim, is

subject to the doctrine of laches, we conclude that the present

case must be dismissed because the same considerations that

20a

doomed the Oneidas’ claim in Sherrill apply with equal force

here. These considerations include the following:

“(g]jenerations have passed during which non-Indians have

owned and developed the area that once composed the

Tribe’s historic reservation,” Sherrill, 125 S. Ct. at 1483; “at

least since the middle years of the 19th century, most of the

[Tribe] have resided elsewhere,” id. the longstanding,

distinctly non-Indian character of the area and _ its

inhabitants,” id.; “the distance from 1805 to the present day,”

id. at 1494; “the [Tribe’s] long delay in seeking equitable

relief against New York or its local units,” id; and

“developments in [the area] spanning several generations.” -

Id.; see also id. at 1492-93 (“[T]his Court has recognized the

impracticability of returning to Indian control land that

generations earlier passed into numerous private hands.’’)

(citing Yankton Sioux Tribe v. United States, 272 U.S. 351,

357, 47 S. Ct. 142, 71 L. Ed. 294 (1926) (“It is impossible ...

to rescind the cession and restore the Indians to their former

rights because the lands have been opened to settlement and

large portions of them are now in the possession of

innumerable innocent purchasers ....”)). We thus hold that

the doctrine of laches bars the possessory land claim

presented by the Cayugas here.© The District Court, after

serious consideration of this exact question, explicitly agreed

with this assessment. Cayuga X, 1999 U.S. Dist. LEXIS

6 Sherrill effectively overruled our Court’s holding in Oneida Indian

Nation v. New York, 691 F.2d 1070, 1084 (2d Cir. 1982), that laches and

other time-bar defenses should be unavailable and that “suits by tribes

should be held timely if such suits would have been timely if brought by

the United States.” We note that in a subsequent Oneida case, Judge

Newman, while writing for the Court, stated that “[t}he writer accepts the

prior panel's rejection of a laches defense as the law of the case, though

would find the issue to be a substantial one if it were open.” Oneida

Indian Nation v. New York, 860 F.2d 1145, 1149 n. 1 (2d Cir. 1988)

2la

10579, at *86 (“Thus, even though some delay on the part of

the Cayugas is explainable, in the context of determining

whether ejectment is an appropriate remedy, ... the delay

factor tips decidedly in favor of the defendants.”).

To summarize: the import of Sherrill is that “disruptive,”

forward-looking claims, a category exemplified by

possessory land claims, are subject to equitable defenses,

including laches. Insofar as the Cayugas’ claim in the instant

case is unquestionably a possessory land claim, it is subject

to laches. The District Court found that laches barred the

possessory land claim, and the considerations identified by

the Supreme Court in Sherrill mandate that we affirm the

District Court’s finding that the possessory land claim is

barred by laches. The fact that, nineteen years into the case,

at the damages stage, the District Court substituted a

monetary remedy for plaintiffs’ preferred remedy of

ejectment’ cannot salvage the claim, which was subject to

dismissal ab initio. To frame this point a different way: if the

Cayugas filed this complaint today, exactly as worded, a

District Court would be required to find the claim subject to

the defense of laches under Sherrill and could dismiss on that

basis.

Although we conclude that plaintiffs’ ejectment claim is

barred by laches, we must also consider whether their other

claims, especially their request for trespass damages in the

7? After finding for plaintiffs on liability and ruling out ejectment as a

remedy, the District Court seems to have folded all of the plaintiffs’

requests for relief into its award of damages, without separate

consideration of any of the requests for relief. See Cayuga X/, 79 F.

Supp. 2d at 70. Our conclusion that the award of damages stems entirely

from the ejectment claim follows from the District Court’s approach.

22a

amount of the fair rental value of the land for the entire

period of plaintiffs’ dispossession, are likewise subject to

dismissal. In assessing these claims, we must recognize that

the trespass claim, like all of plaintiffs’ claims in this action,

is predicated entirely upon plaintifts’ possessory land claim,

for the simple reason that there can be no trespass unless the

Cayugas possessed the land in question. See, e.g., West ]4th

Street Commercial Corp. v. 5 West 14th Owners Corp., 815

F.2d 188, 195 (2d Cir. 1987) (holding that a trespass cause of

action must allege possession). Inasmuch as piaintiffs’

trespass claim is based on a violation of their constructive

possession, it follows that plaintiffs’ inability to secure relief

on their ejectment claim alleging constructive possession

forecloses plaintiffs’ trespass claim. In other words, because

plaintiffs are barred by laches from obtaining an order

conferring possession in ejectment, no basis remains for

finding such constructive possession or immediate right of

possession as could support the damages claimed. Because

the trespass claim, like plaintiffs’ other requests for relief,

depends on the possessory land claim, a claim we have found

subject to laches, we dismiss plaintiffs’ trespass claim, and

plaintiffs’ other remaining claims, along with the plaintiffs’

action in ejectment.

We recognize that the United States has traditionally not

been subject to the defense of laches. See United States v.

Summerlin, 310 U.S. 414, 416, 60 S. Ct. 1019, 84 L. Ed.

1283 (1940). However, this does not scem to be a per se

rule. See, e.g., Clearfield Trust Co. v. United States, 318

U.S. 363, 369, 63 S. Ct. 573, 87 L. Ed. 838 (1943) (holding

that laches is a defense to the United States in its capacity as

holder of commercial paper). Judge Posner has aptly noted

that “the availability of laches in at least some government

suits is supported by Supreme Court decisions, notably

23a

Occidental Life Ins. Co. v. EEOC, 432 U.S. 355, 373, 97 S.

Ct. 2447, 53 L. Ed. 2d 402 (1977); Heckler v. Community

Health Services of Crawford County, Inc., 467 U.S. 51, 60-

61, 104 S. Ct. 2218, 81 L. Ed. 2d 42 (1984); and Jrwin vy.

Department of Veterans Affairs, 498 U.S. 89, 95-96, 111 S.

Ct. 453, 112 L. Ed. 2d 435 (1990), that refuse to shut the

door completely to the invocation of laches or estoppel

(similar doctrines) in government suits.” United States vy.

Administrative Enterprises, Inc., 46 F.3d 670, 672-73 (7th

Cir. 1995). Indeed, the Seventh Circuit has made clear that,

in appropriate circumstances, laches can apply to suits by the

federal government. See NLRB v. P*I*E Nationwide, Inc.,

894 F.2d 887, 894 (7th Cir. 1990) (“Following dictum in

Occidental Life and the general principle noted earlier that

government suits in equity are subject to the principles of

equity, laches is generally and we think correctly assumed to

be applicable to suits by government agencies as well as by

private parties.”’) (internal citations omitted).

Notwithstanding our conclusion that the United States as

plaintiff-intervenor is subject to laches in this case, we do not

purport to set forth broad guidelines for when the doctrine

might apply. Rather, we follow the Seventh Circuit, which,

after canvassing the case law, noted in Administrative

Enterprises that there are three main possibilities for when

laches might apply against the United States: first, “that only

the most egregious instances of laches can be used to abate a

government suit”; second, “to confine the doctrine to suits

against the government in which ... there is no statute of

limitations”; and third, “to draw a line between government

suits in which the government is seeking to enforce either on

its own behalf or that of private parties what are in the nature

of private rights, and government suits to enforce sovereign

rights, and to allow laches as a defense in the former class of

24a

cases but not the latter.” Administrative Enterprises, 46 F.3d

at 673 (internal citations omitted). We need not decide

which of these three possibilities might govern because this

case falls within ali three. First, given the relative youth of

this country, a suit based on events that occurred two

hundred years ago is about as egregious an instance of laches

on the part of the United States as can be imagined; second,

though there is now a statute of limitations, see 28 U.S.C.

§2415(a), there was none until 1966--i.e., until one hundred

and fifty years after the cause of action accrued; and third,

the United States intervened in this case to vindicate the

interest of the Tribe, with whom it has a trust relationship.’

Accordingly, we conclude that whatever the precise contours

of the exception to the rule against subjecting the United

States to a laches defense, this case falls within the heartland

of the exception.

We acknowledge that we stated in Oneida Indian Nation v.

New York, 691 F.2d 1070 (2d Cir. 1982), that “[i]t is clearly

established that a suit by the United States as trustee on

behalf of an Indian tribe is not subject to state delay-based

defenses.” Jd. at 1084. That opinion, however, left open the

possibility of asserting delay-based defenses founded on

federal law in these circumstances. See id. (stating that

“{t]here remains the question whether a delay-based defense

founded on federal law may be asserted” and concluding that

because the suit was within the statute of limitations of 28

8 Our holding here thus does not disturb our statement in United States

v. Angell, 292 F.3d 333, 338 (2d Cir. 2002), that “laches is not available

against the federal government when it undertakes to enforce a public

right or protect the public interest,” inasmuch as this case does not

involve the enforcement of a public right or the protection of the public

interest.

25a

U.S.C. §2415, the suit was timely in any case). In light of

Sherrill, which, as noted above, we read to have substantially

altered the legal landscape in this area, we conclude that the

federal law of laches can apply against the United States in

these particular circumstances.

The Cayugas and the United States highlight the District

Court’s findings, in deciding whether to award prejudgment

interest, that the Cayugas were not “responsible for any delay

in bringing this action” and that the “delay was not

unreasonable, insofar as the actions of the Cayuga are

concerned.” Cayuga Letter Br. at 3, United States Letter Br.

at 3. We acknowledge these findings, but do not believe they

are dispositive for our consideration of the laches question.

The equitable considerations relevant to an assessment of a

possessory land claim--which is precisely what this case was

from the outset--differ dramatically from the equitable

considerations in a claim for prejudgment interest, which is

what the case had become at the time the District Court made

these findings. The District Court itself, as discussed adove,

found that laches barred the Cayugas’ preferred remedy of

ejectment. Indeed, the District Court noted that “[rjegardless

of when the Cayugas should have or could have commenced

this lawsuit, the court cannot overlook the prejudicial

consequences which the defendants would sustain if the court

were to order ejectment,” and found that the “prejudice

factor” was “a factor which is far too important to ignore.”

Cayuga X, 1999 U.S. Dist. LEXIS 10579, at *85-86. In light

of these findings, and the Supreme Court’s ruling in Sherrill,

we see no need to remand to the District Court for a

determination of the laches question.

Our decision to reverse the judgment of the District Court

and enter judgment for defendants should in no way be

interpreted as a reflectio.. on the District Court’s efforts and

26a

rulings in this case. We recognize and applaud the

thoughtful and painstaking efforts, over many years, of Judge

Neil P. McCurn, who presided over this and related land

claims in upstate New York with fairness and due regard to

the rights and interests of all parties as well as with a keen

appreciation of the complexities of the subject matter and of

the relevant law. Our decision is based on a subsequent

ruling by the Supreme Court, which could not be anticipated

by Judge McCurn in his handling of this case over more than

twenty years.

The judgment of the District Court is REVERSED and

judgment is entered for defendants.

HALL, District Judge, dissenting in part and concurring in

part in the judgment.

While City of Sherrill v. Oneida Indian Nation, 544 U.S. ----,

125 S. Ct. 1478, 161 L. Ed. 2d 386 (2005), has an impact on

this case, it does not compel the conclusion that the plaintiffs

are without any remedy for what the District Court found to

be the illegal transfer of their land. My understanding of City

of Sherrill is that it supports the majority’s conclusion that

the plaintiffs cannot obtain ejectment of those currently in

possession of the land which was, over 200 years ago, the

Cayuga Nation’s Original Reservation. However, based on

the nature of the claims long asserted in this case, the

elements of the defense of laches, and the language and

precedent relied on in City of Sherrill, 1 cannot join the

majority in its conclusion that laches bars all of the plaintiffs’

remedies, including those for money damages. Therefore, |

respectfully dissent in part and concur in part in the

judgment.

27a

I. Procedural History

The majority sets forth an excellent summary of the

extensive background to this appeal. There are, however, a

few procedural aspects that bear noting.

The history of this case makes clear that the Cayuga

plaintiffs! have, from its filing, asserted multiple causes of

action and sought multiple remedies. The complaint states a

claim, inter alia, for trespass damages. The Cayuga plaintiffs

allege that “‘[a]ll of the defendants are in trespass” and that

“(t]he defendants are keeping plaintiffs out of possession of

their land in violation of the common law and 25 U.S.C.

§177 (The Non-Intercourse Act).” Cayuga Indian Nation

Compl. at 450. The Cayuga plaintiffs sought several forms

of relief, including declaratory relief, ejectment, an

accounting, and trespass damages for the fair rental value of

the land. it bears noting that the statute of limitations

established by Congress did not expire until approximately

three years following the date this action was filed 28

U.S.C. §2415(a) (“for those claims that are on either of the

two lists published pursuant to the Indian Claims Limitations

Act of 1982, any right of action shall be barred unless the

complaint is filed within (1) one year after the Secretary of

the Interior has published in the Federal Register a notice

rejecting such claim ...”); 48 Fed. Reg. 13920 (Mar. 31,

1983) (listing Cayuga’s “Nonintercourse Act Land Claim”);

see also County of Oneida v. Oneida Indian Nation of N.Y.,

470 U.S. 226, 243, 105 S. Ct. 1245, 84 L. Ed. 2d 169 (1985)

(“Oneida IT’) (“So long as a listed claim is neither acted

upon nor formally rejected by the Secretary, it remains live.”)

1 “Cayuga plaintiffs” refers collectively to the Cayuga Indian National

and the Seneca-Cayuga Tribe.

28a

While the majority may be correct that “ejectment is [the

plaintiffs’] preferred remedy,” Maj. Op. at 274, there is

certainly nothing in the record to suggest that the Cayuga

plaintiffs relinquished their claims for money damages. See,

e.g., Cayuga Indian Nation y. Cuomo, 565 F. Supp. 1297,

1305- 06 (N.D.N.Y. 1983) (“Cayuga I’) (“With respect to

the common law bases for their claim, references are made in

plaintiffs’ papers to ‘ejectment’, ‘trespass’, ‘waste’ and

‘conversion’, either as analogous forms of action or as

indices of damages.”’). Indeed, federal common law provides

the Cayuga plaintiffs with a variety of remedial theories.

“The Supreme Court has recognized a variety of federal

trespass, including actions for ejectment, accounting for

profits, and damages.” U.S. v. Pend Oreille Pub. Util. Dist.

No. 1, 28 F.3d 1544, 1549 n. 8 (9th Cir. 1994), cert. denied,

514 U.S. 1015, 115 S. Ct. 1356, 131 L. Ed. 2d 214 (1995).

The District Court found that, “the plaintiffs are not

specifying a single source for their substantive possessory

right, or a single source for their right of action” and read the

complaint and the plaintiffs’ papers to state a claim “derived

from the Nonintercourse Act itself or from federal common

law.” Cayuga I, 565 F. Supp. at 1306. Such a claim has

been recognized to include as a remedy a monetary award for

damages. Oneida II, 470 U.S. at 235-40, 105 S. Ct. 1245.

Thus, the plaintiffs here have sought money damages from

the filing of this case.

The District Court addressed the application of equitable

defenses early in the case, when it considered the non-state

defendants’ argument “that the equitable remedies of

rescission and restitution are no longer available where the

29a

use and the value of the land has changed drastically, and

where it is held by innocent purchasers.”? Cayuga I, 565 F.

Supp. at 1310. The court concluded on the basis of Second

Circuit precedent that, while laches did not bar the Cayuga

plaintiffs’ claims, it may later become relevant with respect

to the relief sought. /d.

After the District Court held that the 1795 and 1807 land

conveyances to New York State were invalid, Cayuga Indian

Nation v. Cuomo, 730 F. Supp. 485, 493 (N.D.N.Y. 1990)

(“Cayuga III’), the District Court again faced the question of

laches. Cayuga Indian Nation v. Cuomo, 771 F. Supp. 19, 20

(N.D.N.Y. 1991) (“Cayuga V’). However, the District Court

again relied on pre-City of Sherrill precedent to find that the

action had been filed timely and that laches did not apply. /d.

at 20-24 (citing Oneida Indian Nation of New York v. Oneida

County, 719 F.2d 525, 538 (2d Cir. 1983); Oneida Indian

Nation of New York v. New York, 691 F.2d 1070, 1084 (2d

Cir. 1982)).

On November 5, 1992, the United States filed a motion to

intervene. It did so both on its own behalf and as trustee to

the tribe. In its Answer to the United States’ Complaint in

Intervention, which, inter alia, sought trespass damages, the

State alleged that the common law defense of laches barred

the claims of and relief sought by the United States. The

District Court never reached the question of whether laches

could be asserted against the United States in this case

2 Notably, at that time, the defendants did not raise the defense of

laches, an equitable defense, to any of the plaintiffs’ non-equitable

claims. Cayuga /, 565 F. Supp. at 1310 (discussing application of delay-

based defenses to availability of equitable remedies of rescission and

restitution).

30a

because the parties stipulated that the court’s previous

rejection of the defense as to the other plaintiffs would apply

with equal force as to the United States.

Following the District Court’s grant of partial summary

judgment on the question of liability, the defendants then

moved to preclude ejectment as a remedy. The court found

“that from the outset ejectment is one of several remedies

which the Cayugas have been seeking, and their claims also

have been framed in terms of ejectment.” Cayuga Indian

Nation v. Cuomo, 1999 U.S. Dist. LEXIS 10579, at *58

(N.D.N.Y. July 1, 1999) (“Cayuga X”’). Following the

reasoning in United States v. Imperial Irrigation District, 799

F. Supp. 1052 (S.D. Cal. 1992), the District Court treated the

ejectment remedy as a request for a permanent injunction.

The court considered the factors iterated by the Restatement

(Second) of Torts for application to requests for injunctions

against trespass. Cayuga X, 1999 U.S. Dist. LEXIS 10579,

at *62- 63. The District Court did so because, as noted in

Imperial Irrigation, “an equitable analysis is appropriate

before issuing any final orders other than for monetary

damages.” 799 F. Supp. at 1068 (quoted in Cayuga X, 1999

U.S. Dist. LEXIS 10579, at *62) (emphasis added).

After considering the interest to be protected, the relative

adequacy of various remedies, delay, misconduct, and

relative hardship, the interests of third parties, and the

practicability of an injunction, see Restatement (Second) of

Torts §936(1)(a)-(g), the District Court granted the

defendants’ motion to preclude ejectment as a remedy.?

3 Thus, contrary to the majority’s assertion, the District Court did not

find “that laches barred the possessory claim,” Maj. Op. at 277, but rather

3la

Cayuga X, 1999 U.S. Dist. LEXIS 10579, at *99. The court

then dismissed those defendants against whom the plaintiffs

had sought ejectment and no other remedies. /d Those

defendants against whom the plaintiffs had sought other

remedies remained in the case. While the majority states that

the District Court “monetized” the remedy, Maj. Op. at 275,

as I understand the term, it is only partially correct.4 Instead,

it rejected an ejectment remedy based on _ equitable

considerations, including the remedial adequacy of money

damages, and allowed the plaintiffs to pursue other

remedies.°

II. Application of Laches to the Plaintiffs’ Claims for

Damages

The issue before this couri—‘the application of a

nonstatutory time limitation in an action for damages”--has

not been addressed by the Supreme Court. See City of

Sherrill, 125 S.Ct at 1494 n. 14 (citing Oneida II, 470 U.S. at

244, 105 S. Ct. 1245.6 To extend this defense to the Tribe’s

concluded that equitable considerations prevented the award of the

equitable remedy of possession.

4 Fair rental value damages, as a monetary remedy, had been sought

since the filing of the case.

5 The power of a court sitting in equity to award monetary relief as, or

in place of, an equitable remedy has long been recognized. Cathcart v.

Robinson, 30 U.S. 264, 278, 5 Pet. 264, 8 L.Ed. 120 (1831) (Marshall,

C.J.); see also Mora v. United States, 955 F.2d 156, 159-160 (2d Cir.

1992).

6 Although the Oneida II majority did not reach the question, it did

observe that “it is far from clear that this [laches] defense is available in

suits such as this one [for money damages], ....” Oneida I/, 470 US. at

244, 105 S.Ct. 1245. The Court further noted that “application of the

equitable defense of laches in an action at law would be novel indeed.”

Id. at 244 n. 16, 105 S.Ct. 1245.

32a

claim for money damages would be “novel indeed.” Oneida

Il, 470 U.S. at 244 n. 16, 105 S. Ct. 1245. The majority

argues that, “[o]ne of the few incontestable propositions

about this unusually complex and confusing area of law is

that doctrines and categorizations applicable in other areas do

not translate neatly to these claims.””’ Maj. Op. at 276. Such

complexity is best addressed by relying on relevant precedent

and established principles. Congressional action and

centuries of precedent with regard to both Indian land claims

and foundational distinctions between rights and remedies,

coercive relief and damages, and legal claims and equitable

relief, should guide the attempt to resolve this historic

dispute.

The plaintiffs here seek relief under two theories, ejectment

and trespass. As noted, all claims were brought prior to

expiration of the relevant statute of limitations. Historically,

both ejectment and trespass are actions at law. Dan B.

Dobbs, Law of Remedies §§5.1, 5.10(1) (2d ed. 1993).

Unless a party’s delay amounts to either an estoppel or

waiver, it does not bar a party’s access to remedies at law.

Id. at §2.4(4) (“When laches does not amount to estoppel or

waiver, it does not ordinarily bar legal claims, only equitable

remedies.”). Furthermore, laches is not a complete deferse

to a claim. “Because laches is based on prejudice to the

7 The cases cited by the majority in support of this point, to the extent

that they suggest that Indian land claims are to be treated different from

non-Indian claims, strongly suggest that Indian claims are entitled to

more protection, rather than less, as a result of strong federal policy

protecting tribal title from application of state law. See Oneida II, 470

U.S. at 240-44, 105 S.Ct. 1245; Mohegan Tribe v. Connecticut, 638 F.2d

612, 614-15 (2d Cir. 1980).

33a

defendant, the bar it raises should be no broader than the

prejudice shown.” Jd.

A. Ejectment and Laches

An action for ejectment generally seeks two remedies,

restoration of possession and damages equivalent to the fair

market rent for the period the plaintiff was wrongfully out of

possession, sometimes referred to as mesne profits. Id. at

§5.10(1). Reinstatement of one’s possessory interest in land

is typically the most salient of the two remedies. It is hardly

surprising, therefore, that some jurisdictions have chosen to

make the doctrine of laches available to defendants in

ejectment actions where a coercive remedy is sought. See

Maj. Op. at 275-76 n. 5. New York courts have held, for

example, that “[a]n equitable defense is good in ejectment.”

Dixey v. Dixey, 196 A.D. 352, 354, 187 N.Y.S. 879 (2d Dep’t

1921) (citing Phillips v. Gorham, 17 N.Y. 270 (1858)).

The defense of laches pertains only to the remedy sought, not

the cause of action itself. The elements of laches are both

delay and prejudice. City of Sherrill, 125 S. Ct. at 1491

(“laches, a doctrine focused on one side’s inaction and the

other’s legitimate reliance, may bar long-dormant ciaims for

equitable relief’); Kansas v. Colorado, 514 U.S. 673, 687,

115 S. Ct. 1733, 131 L. Ed. 2d 759 (1995) (“The defense of

laches requires proof of (1) lack of diligence by the party

against whom the defense is asserted, and (2) prejudice to the

party asserting the defense.” (internal quotations omitted));

Penn Mut. Life Ins. Co. v. City of Austin, 168 U.S. 685. 698,

18 S. Ct. 223, 42 L. Ed. 626 (1898) (“The reason upon which

the rule [of laches] is based is not alone the lapse of time

during which the negiect to enforce the right has existed, but

the changes of condition which may have arisen during the

period in which there has been neglect.”); see also Fred F.

34a

Lawrence, A Treatise on the Substantive Law of Equity

Jurisprudence, §1037 (1929) (“Being, like a!l other equitable

relief, purely protective, it is not to be inferred from delay

alone, but rather from the consequences which may under the

circumstances flow from it.”). The nature of the remedy

sought will necessarily change the court’s analysis of the

effect of delay. ‘“[E]quity may, in the exercise of its own

inherent powers, refuse relief where it is sought after undue

and unexplained delay, and when injustice would be done, in

the particular case, by granting the relief asked.” Abraham vy.

Ordway, 158 U.S. 416, 420, 15 S. Ct. 894, 39 L. Ed. 1036

(1895) (emphasis added). “[L]aches is not, like limitation, a

mere matter of time; but principally a question of the inequity

of permitting the claim to be enforced.” Galliher v. Cadwell,

145 U.S. 368, 373, 12 S. Ct. 873, 36 L. Ed. 738 (1892).

Thus, the application of the equitable defense of laches is, by

its nature and function, confined by the particular prejudice

caused by the remedy.

However, where a plaintiff seeks ejectment damages, rather

than restoration of a possession interest, application of the

doctrine of laches to such a money damage claim is rarely if

ever justified. Even where reinstatement of possession is

disruptive, attendant damage claims are not similarly

disruptive. It is axiomatic that a menu of remedies, some

mutually exclusive, may be associated with the same right

and that, in different factual situations, different remedies

will be appropriate. Here, the plaintiffs’ claims for

possession and for fair rental value damages should be

treated separately. While the element of delay found in

connection with application of the defense to the possession

remedy is equally present with regard to the money damages

remedy, there is no corresponding prejudice to the defendant

New York State (“State”) in connection with an award of

35a

money damages. The bar of laches does not rise high enough

to bar the money judgment here. See Dobbs, supra, §2.4(4).

Determining that the coercive remedy of restoration of

possession is barred by laches requires a fact-intensive

inquiry regarding the disruptiveness of that remedy. In City

of Sherrill, for example, the Court found that the defendants

in that case had “justifiable expectations” which were

“grounded in two centuries of New York’s exercise of

regulatory jurisdiction.” 125 S. Ct. at 1490-91. The

Supreme Court held that the remedy sought by the Oneida

Indian Nation--the reassertion of sovereignty resulting in “a

checkerboard of state and tribal jurisdiction”--was disruptive

to justifiable expectations regarding the state, and therefore

local, regulatory authority over territory. /d at 1482. The

City of Sherrill Court concluded, in the face of two hundred

years of sovereign control by the State of New York and its

municipalities, that the reassertion of tribal sovereignty

would be “disruptive.” /d. at 1491.

City of Sherrill would thus support a finding that restoration

of possession, following two hundred years of unlawful

possession, is a sufficiently disruptive remedy that it may

satisfy the prejudice element of the laches defense.

However, the proof involved with the remedy of damages

will be radically different than that involved with a claim for

an injunction, specific performance, or equitable re-

possession in real property. Indeed, there does not appear to

be anything in the money damages award in this case that

would be disruptive.

5 6

The majority concludes that the plaintiffs’ “possessory land

claims” are barred in their entirety by City of Sherrill and

reasons that the plaintiffs, having been denied the right to

possession, cannot prove the elements of their claims for

36a

money damages. However, current possession is not an

element of a legal claim for ejectment. A legal claim for

ejectment consists of the following elements: “[p]laintiffs

are out of possession; the defendants are in possession,

allegedly wrongfully; and the plaintiffs claim damages

because of the allegedly wrongful possession.” Oneida

Indian Nation of N.Y. v. County of Oneida, N.Y., 414 US.

661, 683, 94 S. Ct. 772, 39 L. Ed. 2d 73 (1974) (“Oneida I’)

(citing Taylor v. Anderson, 234 U.S. 74, 34 S. Ct. 724, 58 L.

Ed. 1218 (1914)). Making out this claim cannot depend on

the plaintiffs’ ability to obtain the right to furure possession,

whether legal or constructive, as such requirement would

make the claim circular. Instead, the only necessary element

in this regard is that the plaintiffs are wrongfully out of

possession, which element the District Court here found.

Cayuga III, 730 F. Supp. at 493. The inability to obtain the

coercive remedy of possession, as a result of the court’s

exercise of discretion in the same case, should not bar an

ejectment claim for money damages.

B. Trespass

While the majority does not appear to apply the laches

defense to a claim for trespass damages, it nevertheless

dismisses the plaintiffs’ trespass claim on the basis that it is

derivative of the ejectment claim and requires proof of

possession. The fact that “possession” is an element of a

claim for trespass does not require dismissal of the action,

however. The trespass claim is not predicated upon the

plaintiffs’ possessory claim, nor is there any relationship

between the two claims that necessitates dismissal of the

trespass claim. Indeed, the plaintiffs may be able to prove

37a

the right to possession® while being unable to obtain a

coercive remedy that would restore them in the future to

physical possession.

The majority’s contention that the plaintiffs cannot make out

their claim for damages because their claim for coercive

relief fails treats the special defense of laches as if it were in

the nature of a statute of repose. However, nowhere in City

of Sherrill is the “right” of possession addressed; the Court

writes always about the “remedy” of possession. See, e.g.,

City of Sherrill, 125 S. Ct. at 1489. Courts have discretion to

apply laches to deny a party some or all remedies. See supra

at 283-84. However, the defense of laches does not apply to

prevent a party from establishing an element of its cause of

action. See Felix v. Patrick, 145 U.S. 317, 325, 12 S. Ct.

862, 36 L. Ed. 719 (1892) (discussed in City of Sherrill, 125

S. Ct. at 1491-92). Perhaps if laches were a doctrine akin to

a statute of repose, such that, first, it applied to a legal claim

and, second, it vitiated the claim, the majority’s analysis that

claims involving the right to possess are barred by laches

because laches bars the remedy of possession might be

persuasive. See generally P. Stolz Family P’ship v. Daum,

355 F.3d 92, 102 (2d Cir. 2004) (discussing difference

between statutes of repose, which define and limit rights, and

statutes of limitations, which “bear on available remedies”).

Nothing in the case law concerning laches, however, supports

such an analysis.

8 There are issues on appeal concerning the rulings by the District

Court that the plaintiffs have a right to possession because the land

transfers were illegal.

38a

C. United States as Plaintiff

The United States is a plaintiff in this case. “The principle

that the United States are not ... barred by any laches of their

officers, however gross, in a suit brought by them as a

sovereign Government to enforce a public right, or to assert a

public interest, is established past all controversy or doubt.”

United States v. Beebe, 127 U.S. 338, 344, 8 S. Ct. 1083, 32

L. Ed. 121 (1888) (quoted in Alaska Dep't of Envil.

Conservation v. EPA., 540 U.S. 461, 514, 124 S. Ct. 983, 157

L. Ed. 2d 967 (2004) (Kennedy, J., dissenting)); see also

United States v. Summerlin, 310 U.S. 414, 416, 60 S. Ct.

1019, 84 L. Ed. 1283 (1940). In the instant case, the United

States pursues a right created by a federal statute and

proceeds in its sovereign capacity and, as such, is not subject

to a laches defense. Summerlin, 310 U.S. at 417, 60 S. Ct.

1019; c.f, United States v. California, 507 U.S. 746, 757-58,

113 S. Ct. 1784, 123 L. Ed. 2d 528 (1993). That the United

States acts both on its own behalf as well as that of the

Cayugas does not affect this principle for “it is also settled

that state statutes of limitation neither bind nor have any

application to the United States, when suing to enforce a

public right or to protect interests of its Indian wards.”

United States v. Minnesota, 270 U.S. 181, 196, 46 S. Ct. 298,

70 L. Ed. 539 (1926); see also Nevada v. United States, 463

U.S. 110, 141-42, 103 S. Ct. 2906, 77 L. Ed. 2d 509 (1983);

Board of County Comm’rs of Jackson County v. United

States, 308 U.S. 343, 350-51, 60 S. Ct. 285, 84 L. Ed. 313

(1939).

The majority explains its application of the defense of laches

to claims asserted by the United States by suggesting that the

doctrine that the United States is not subject to the defense of

laches “does not seem to be a per se “ rule. See Maj. Op. at

278. For this point, it relies upon Clearfield Trust Co. v.

39a

United States, 318 U.S. 363, 63 S. Ct. 573, 87 L. Ed. 838

(1943). However, that case is distinguishable from the instant

one in two important respects, both of which exclude this

case from the limited holding reached in Clearfield Trust.

First, the Court in Clearfield Trust limited its application of

non-statutory time bars to those claims brought by the United

States that were not subject to any statutory time bar. /d. at

367, 63 S. Ct. 573 (“In absence of an applicable Act of

Congress it is for the federal courts to fashion the governing

rule of law according to their own standards.”). The claims

in this case are subject to a statutory time bar. See 28 U.S.C.

§2415; see also supra at 280-81. As Congress has already

defined the applicable time bar, Clearfield Trust supports the

conclusion that this court should not reach the question of

whether it ought to fashion a time-bar, whether from state

law or federal common law. See id. at 367, 63 S. Ct. 573; see

also Northwest Airlines, Inc. v. Transport Workers Union of

America, AFL-CIO, 451 U.S. 77, 95, 101 S. Ct. 1571, 67 L.

Ed. 2d 750 (1981) (“the federal lawmaking power is vested

in the legislative, not the judicial, branch of government;

therefore federal common law is ‘subject to the paramount

authority of Congress.) New Jersey v. New York, 283 U.S.

336, 348, 51 S. Ct. 478, 75 L. Ed. 1104 (1931); Westnau

Land Corp. v. United States Small Bus. Admin., 1 F.3d 112,

117 (2d Cir. 1993) (“[T]he acknowledged federal interest in

the ‘rights of the United States arising under nationwide

federal programs,’ United States v. Kimbell Foods, Inc., 440

U.S. 715, 726, 99 S. Ct. 1448, 59 L. Ed. 2d 711 (1979),

should be determined by application of the statutory rule

provided by Congress.”’).

Second, the Clearfield Trust Court limited the application of

laches to those claims deriving not from the sovereign

authority and rights of the United States but, instead, relating

40a

to the actions of the United States with respect to business

and commerce. Clearfield Trust, 318 U.S. at 369, 63 S. Ct.

573 (“The United States as drawee of commercial paper

stands in no different light than any other drawee.”); see also

Franconia Assocs. v. United States, 536 U.S. 129, 141, 122

S. Ct. 1993, 153 L. Ed. 2d 132 (2002) (citing Clearfield Trust

for the proposition that “[o]nce the United States waives its

immunity and does business with its citizens, it does so much

as a party never cloaked with immunity.”); Mobil Oil

Exploration & Producing Southeast, Inc. v. United States,

530 U.S. 604, 607, 120 S. Ct. 2423, 147 L. Ed. 2d 528 (2000)

(“When the United States enters into contract relations, its

rights and duties therein are governed generally by the law

applicable to contracts between private individuals.” (internal

quotation marks omitted)). In the instant case, the United

States is not a commercial actor. Here, it acts both “to

enforce a public right [and] to protect interests of its Indian

wards.” United States v. Minnesota, 270 U.S. at 196, 46 S.

Ct. 298. It is clear, then, that the United States’s claims in

this case, both on its own behalf and as trustee to the Tribe,

are not barred by laches.

After relying on Clearfield Trust to open the door for

application of laches to claims by the United States, the

majority then finds that the defense is appropriate in the

instant case. In doing so, it relies on a Seventh Circuit case

for the proposition that three Supreme Court cases support

the application of laches in cases such as this one. United

States v. Admin. Enters., Inc., 46 F.3d 670, 673 (7th Cir.

1995) (citing Occidental Life Ins. Co. v. EEOC, 432 USS.

355, 373, 97 S. Ct. 2447, 53 L. Ed. 2d 402 (1977); Heckler v.

Community Health Services of Crawford County, Inc., 467

U.S. 51, 60-61, 104 S. Ct. 2218, 81 L. Ed. 2d 42 (1984);

4la

Irwin v. Dep’t of Veterans Affairs, 498 U.S. 89, 95-96, 111 S.

Ct. 453, 112 L. Ed. 2d 435 (1990)).

However, neither Administrative Enterprises, nor the cases

cited therein, support the application of laches to the United

States in the instant case. Of the three cases cited by

Administrative Enterprises, only one specifically addresses

the applicability of a delay-based defense like laches in a suit

brought by the United States.? Occidental Life, 432 U.S. at

373, 97 S. Ct. 2447. The Occidental Life Court declined to

allow delay to bar a claim by the United States. /d. To the

extent that it “refuse[d] to shut the door completely to the

invocation of laches or estoppel,” Administrative Enterprises,

Inc., 46 F.3d at 673, it did so, in dicta, only where a “private

plaintiff's unexcused conduct of a particular case” made —

limitations on relief, specifically backpay, appropriate.

Occidental Life, 432 U.S. at 373, 97 S. Ct. 2447. Occidental

Life, thus, differentiates between claims and remedies, and

unexcused delay by private plaintiffs and the United States.

Id. It does not support application of laches here, where the

9 Heckler concerns estoppel, not laches, but does confirm as “well

settled” precedent that “the Government may not be estopped on the same

terms as any other litigant.” 467 U.S. at 60, 104 S.Ct. 2218. /rwin

addresses equitable tolling and concludes that the statute of limitations on

a private party’s claim against the United Statutes may be equitably tolled

where the statutory waiver of sovereign immunity allowing for the private

right action also makes the cule of equitable tolling applicable to the

United States. 498 U.S. at 95-96, 111 S.Ct. 453. Notably, the Court

commented that “Congress, of course, may provide otherwise if it wishes

to do so.” /d. at 9S, 111 S.Ct. 453.

42a

majority applies the defense to bar the claim itself, rather

than a specific remedy for the claim. !?

These cases cannot support the proposition that this Court

has the authority to craft a federal common law defense of

laches against an Indian land claim sought by the United

States. Indeed, Administrative Enterprises’ “three main

possibilities for when laches might apply against the United

States,” Maj. Op. at 279, are not present in this case. With

regard to Administrative Enterprises’ first “possibility,”

egregious delay, while two hundred years is surely a

significant length of time, the majority fails to consider the

nature of that delay and to what extent it may be excused.

With regard to Administrative Enterprises’ second

“possibility,” the absence of an applicable statute of

limitations, here Congress did enact a statute of limitations

applicable to the plaintiffs’ claims for damages. 28 U.S.C.

§2415(a).!! With regard to Administrative Enterprises’ third

“possibility,” situations where the United States pursues a

“private” interest, the Supreme Court has found that, insofar

10 Another case, NLRB v. P*/*E Nationwide, Inc., is relied on by the

majority for the proposition that “laches is generally and we think

correctly assumed to be applicable to suits by government agencies ....”

Maj. Op. at 278 (quoting 894 F.2d 887, 894 (7th Cir. 1990)). That case,

however, limits the court’s equitable discretion to areas where neither

Congress nor a federal agency has made a “value choice” contrary to the

exercise of equitable discretion of the court. P*/*E Nationwide, Inc., 894

F.2d at 894 (“[W]e do not mean to suggest that the court is entitled to

substitute its conception ... for that of Congress ...”). Congress has

spoken on the issue of time bars to Indian land claims. While

distinguishing between remedies may be appropriate, barring: those

claims entirely ignores the controlling statute.

11 That §2415(a) applies only to actions for money damages supports the

conclusion that laches cannot be applied to bar a claim for money

damages, but may be applied to bar a claim for equitable relief.

43a

as it acts on behalf of Indian tribes, the United States acts to

protect a public interest, entirely dissimilar from the private

interest served where the United States pursues an action

based on its purely commercial endeavors. See United States

v. Minnesota, 270 U.S. 181, 196, 46 S. Ct. 298, 70 L. Ed.

539 (1926) (describing United States’ role in serving public

interest by protecting “interests of its Indian wards.”).

Indeed, it is in its role as a sovereign that the United States

participates in this case. /d. at 194, 46 S. Ct. 298 (United

States’ interest in suit in which it represents Indians’ interests

as trustee is based in its own sovereignty.). Thus, even if

Administrative Enterprises were persuasive precedent, this

case presents none of its suggested possible situations

justifying use of laches against the United States.

Il. The Import of City of Sherrill

The majority sees “no reason why the equitable principles

identified by the Supreme Court in City of Sherrill should not

apply to this case, whether or not it could be technically

classified as an action at law.” Maj. Op. at 276. However,

the clear language of City of Sherrill confines its holding to

the use of laches to bar certain relief, not to bar a claim or all

remedies:

“The question whether equitable consideration should

limit the relief available to the present day Oneida

Indians ....” City of Sherrill, 125 S. Ct. at 1487

(quoting Oneida IT, 470 U.S. at 253, n. 27, 105 S. Ct.

1245) (emphasis added).

“In contrast to Oneida I and JJ, which involved

demands for monetary compensation, OIN sought

equitable relief prohibiting, currently and in the

44a

future, the imposition of property taxes.” Jd. at 1488

(emphasis added).

“When the Oneidas came before this Court 20 years

ago in Oneida II, they sought money damages only.

The court reserved for another day the question

whether ‘equitable considerations’ should limit the

relief available to the present-day Oneidas.” /d. at

1489 (internal citations omitted) (emphasis added).

“The principle that the passage of time can preclude

relief has deep roots in our law.... It is well-

established that laches, a doctrine focused on one

side’s inaction an? the other’s legitimate reliance,

may bar long-dormant claims for equitable relief.”

Id. at 1491 (emphasis added).”. . . the Oneida’s long

delay in seeking equitable relief ... evokes the

doctrine[ |] of laches...” Jd. at 1494.

The City of Sherrill opinion is not support for the application

of the equitable defense of laches as a bar to money damages

in this case.!2

The City of Sherrill Court’s analysis, which underpins its

holding, is framed by the nature of the equitable remedy that

the Oneida Indian Nation sought there. See 125 S.Ct at 1488

(“OIN sought equitable relief’); id at 1489 (“OIN seeks

declaratory and injunctive relief”); id at 1491 (“This long

lapse of time, during which the Oneidas did not seek to

revive their sovereign control through equitable relief in

court, and [evidence of prejudice] ... preclude OIN from

12 It is also telling that Justice Stevens noted in dissent that the majority

“relie[d] heavily on the fact that the Tribe is seeking equitable relief in

the form of an injunction.” /d. at 1496 (Stevens, J., dissenting) (emphasis

in the original and added).

45a

gaining the disruptive remedy it now seeks.”); id. at 1494

(“long delay in seeking equitable relief”); id. at 1494 n. 14

(“specific relief”). This language makes clear that the City of

Sherrill Court addresses laches in the context of the specific

equitable relief sought in that case. Further, it repeatedly

notes the difference between a right and a remedy. As the

City of Sherrill Court notes, the question of right is ‘very

different” from the question of remedy. /d. at 1489 (quoting

Dan B. Dobbs, Law of Remedies §1.2 (\st ed. 1973)). The

City of Sherrill Court also quotes with approval a Tenth

Circuit case for the principle that “the distinction between a

claim or substantive right and a remedy is fundamental.” /d.

at 1489 (quoting Navajo Tribe of Indians v. New Mexico, 809

F.2d 1455, 1467 (10th Cir. 1987). As if to emphasize this

point, and its importance to the opinion, the City of Sherrill

Court also quotes, with approval, the district court in Oneida

Indian Nation of New York v. County of Oneida on this

distinction between right and remedy. “[There is a] ‘sharp

distinction between the existence of a federal common law

right to Indian homelands,’ a right this Court recognized in

Oneida II, ‘and how to vindicate that right.” City of

Sherrill, 125 S. Ct. at 1488 (quoting Oneida Indian Nation of

N.Y. v. County of Oneida, 199 F.R.D. 61, 90 (N.D.NLY.

2000) (emphasis in original).

Further, the Supreme Court in City of Sherrill addresses at

length an Indian land claim case, Felix v. Patrick, 145 US.

317, 12 S. Ct. 862, 36 L. Ed. 719 (1892) 125 S. Ct. at 1491-

92. While the Felix Court applied laches to bar the equitable

remedy of a constructive trust over land conveyed by the

plaintiffs Indian ancestor in violation of a statutory

restriction, the Court noted, in dicta, that a money damages

award would be appropriate. Felix, 145 U.S. at 334, 12 S.

Ct. 862. While the law demanded a measure of money

46a

damages, the delay and prejudice due to changed

circumstances over thirty years supported the application of

the doctrine of laches to the equitable remedy of constructive

trust. /d. at 333-34, 12 S. Ct. 862; see Ciy of Sherrill, 125 S.

Ct. at 1491-92.

Finally, the City of Sherri’: Court expressly noted that, “the

question of damages for the Tribe’s ancient dispossession is

not at issue in this case, and we therefore do not disturb our

holding in Oneida IJ.” 125 S. Ct. at 1494. While this

statement is not dispositive of whether laches would apply

here to bar a money damage award, the Court in City of

Sherrill did reiterate its observation in Oneida II that

“application of a nonstatutory time limitation in an action for

damages would be ‘novel.’” /d. at 1494 n. 14. (quoting

Oneida IT, 470 U.S. at 244, 105 S. Ct. 1245). In contrast, it

noted that “no similar novelty exists when the specific relief

OIN now seeks would project redress for the Tribe into the

present and future.” /d. (emphasis added). In light of the

clear language and the analysis in City of Sherrill, the

conclusion that City of Sherrill limits the application of the

equitable defense of laches to the award of forward-looking,

disruptive equitable relief is compelling.'5

Further, even assuming laches could apply to the money

damages award in this case, there is nothing in the record

before us to support a finding of the disruptive nature of the

monetary award. The City of Sherrill decision certainly

13 The contention that a damages award for either past fair rental value

or present fair market value would “project redress into the present and

future,” Maj. Op. at 275, in order to bring that award within the scope of

the City of Sherrill holding vitiates any reasonable meaning the Supreme

Court could have intended that phrase to have.

47a

supports affirming the District Court’s denial of repossession

as an equitable remedy, based on the District Court’s findings

that the equitable considerations involved in the case did not

permit it. See Cayuga X, 1999 U.S. Dist. LEXIS 10579, at

*74-*99.!4 However, there is no basis to support such a

finding on the prejudice element with regard to the award of

money damages as a remedy in this case.

IV. Conclusion

While City of Sherrill may have “dramatically altered the

legal landscape” of Indian land claims, Maj. Op. at 273, it

does not reach as far as the majority reads it. City of Sherrill

holds that laches can bar a tribe from obtaining the disruptive

remedy of re-assertion of tribal sovereignty. Furthermore,

the case supports the proposition that the nature of forward-

looking, disruptive remedies generally will serve as equitable

considerations that can bar such equitable remedies as re-

possession, even against the United States. An award of

money damages is not an equitable remedy, nor is it forward-

looking or disruptive in the way dispossession inherently is.

Nothing in City of Sherrill suggests a total bar on the ability

14 The District Court did not conclude, as the majority suggests, that the

“doctrine of laches bars the possessory land claim presented by the

Cayugas here.” Maj. Op. at 277. Indeed, the District Court concluded,

on then-existing precedent, that laches did not bar the plaintiff's claims,

Cayuga I, 565 F. Supp. at 1310, but it later concluded that equitable

considerations did prevent the award of the equitable remedy of

possession. Cayuga X, 1999 U.S. Dist. LEXIS 10579, at *98. Properly

distinguishing between claims and remedies, the District Court concluded

that, “in the context of determining whether ejectment is an appropriate

remedy, the delay factor tips decidedly in favor of the defendants.” /d. at

*36.

48a

of Indian tribes to obtain damages for past wrongs where

Congress has explicitly provided for it.

City of Sherrill serves as strong support to affirm the District

Court’s refusal to award possession to the plaintiffs, and |

join in the judgment to that extent. However, I respectfully

dissent from that part of the majority opinion which

dismisses the Tribe’s claim for money damages. While there

remain issues as to the nature or amount of the money

damages awarded, | cannot join the majority in reading City

of Sherrill to bar all remedies.

While I do not join entirely in the majority’s resolution of

this case, I wholeheartedly concur in its comments

concerning Judge McCurn’s tireless and thoughtful attention

to this complex and challenging case for over two decades.

413 F.3d 266

Cayuga |]

Cayuga Il

Cayuga Ill

Cayuga IV

Cayuga V

Cayuga VI

Cayuga VII

Cayuga VIII

Cayuga IX

Cayuga X

49a

Appendix B

List of District Court Opinions

Cayuga Indian Nation v. Cuomo, 565 F.

Supp. 1297 (N.D.N.Y. 1983)

Cayuga Indian Nation v. Cuomo, 667 F.

Supp. 938 (N.D.N.Y. 1987)

Cayuga Indian Nation v. Cuomo, 730 F.

Supp. 485 (N.D.N.Y. 1990)

Cayuga Indian Nation v. Cuomo, 758 F.

Supp. 107 (N.D.N.Y. 1991)

Cayuga Indian Nation v. Cuomo, 762 F.

Supp. 30 (N.D.N.Y. 1991)

Cayuga Indian Nation v. Cuomo, 771 F.

Supp. 19 (N.D.N.Y. 1991)

Cayuga Indian Nation v. Pataki,

unpublished opinion (N.D.N.Y. July 10,

1996)

Cayuga Indian Nation v. Pataki, 1999

WL 224615 (N.D.N.Y. April 15,4999)

Cayuga Indian Nation v. Pataki, 1999

WL 258433 (N.D.N.Y. April 30, 1999)

Cayuga Indian Nation v. Cuomo, 1999

WL 509442 (N.D.N.Y. July 1, 1999)

Cayuga XI

Cayuga XII

Cayuga XIII

Cayuga XIV

Cayuga XV

Cayuga XVI

Cayuga XVII

50a

Cayuga Indian Nation v. Pataki, 79 F.

Supp. 2d 66 (N.D.N.Y. 1999)

Cayuga Indian Nation v. Pataki, 79 F.

Supp. 2d 78 (N.D.N.Y. 1999)

Cayuga Indian Nation v. Pataki, 83 F.

Supp. 2d 318 (N.D.N.Y. 2000)

Cayuga Indian Nation v. Pataki,

unpublished opinion (N.D.N.Y. April 18,

2000)

Cayuga Indian Nation v. Pataki, 2000

WL 654963 (N.D.N.Y. May 17, 2000)

Cayuga Indian Nation v. Pataki, 165 F.

Supp. 2d 266 (N.D.N.Y. 2001)

Cayuga Indian Nation v. Pataki, 188 F.

Supp. 2d 223 (N.D.N.Y. 2002)

Sla »

Appendix C

United States District Court,

N.D. New York.

THE CAYUGA INDIAN NATION OF NEW YORK. et al.,

Plaintiffs,

and

The Seneca-Cayuga Tribe of Oklahoma and the United States

of America,

Plaintiff-Intervenors,

Vv.

George E. PATAKI, as Governor of the State of New York,

et. al., Defendants.

No. 80-CV-930, 80-CV-960.

Oct. 2, 2001.

MEMORANDUM-DECISION AND ORDER

MCCURN, Senior District Judge.

INTRODUCTION

On January 18, 2000, the court commenced with jury

selection in this historic land claim litigation. The court’s

resolution of the liability issues,! left only one issue for the

1 See Cayuga Indian Nation of New York v. Cuomo, 730 F. Supp. 485

(N.D.N.Y. 1990) (“Cayuga /V”’) (granting Cayuga’s motion for partial

summary judgment, and declaring that its 1795 and 1807 Treaties with

the State were invalid under the Nonintercourse Act because the Federal

Government never ratified those conveyances); Cayuga Indian Nation of

New York v. Cuomo, 758 F. Supp. 107 (N.D.N.Y. 1991) (because the

Cayuga obtained recognized title in the subject land through the 1794

Treaty of Canandaigua, defendants’ abandonment defense was

insufficient to defeat the Cayuga’s claims to that land); and Cayuga

Indian Nation of New York v. Cuomo, 771 F. Supp. 19 (N.D.N.Y. 1991)

(defense of laches unavailable).

52a

jury’s consideration--the amount of compensation, if any, to

which the tribal plaintiffs, the Cayuga Indian Nation of New

York and the Seneca-Cayuga Tribe of Oklahoma (“the

Cayuga”),? were entitled for the loss of their tribal lands over

two centuries ago. Nineteen days, six witnesses, whose

testimony comprises the nearly 3,000 page trial transcript,

and approximately 130 Exhibits later, on February 17, 2000,

the jury rendered its verdict. It found the State of New York

(“the State”)3 liable to the Cayuga in the total amount of

$36,911,672.62. Those damages were divided into two

categories: (1) $1,911,672.62 for the fair rental vaiue of the

Cayuga’s former homeland for 204 years; and (2) an

additional $35,000,000.00 in damages for future loss use and

possession of that same land.

BACKGROUND

No less than twenty years of litigation preceded that jury

verdict. Assuming familiarity with the protracted and at

times convoluted history of this action, the court will not

2 Nearly two years after the commencement of this action, the United

States of America (“the U.S.”) intervened as a plaintiff in this action “on

its own behalf and to enforce the restrictions on alienation found in 25

U.S.C. § 177 [the Nonintercourse Act]” for the tribal plaintiffs. See U.S.

Complaint in Intervention at 2,9 4. Hereinafter, the U.S. and the Cayuga

plaintiffs will be collectively referred to as “plaintiffs,” unless it is

necessary to distinguish between the two.

3 To avoid “a morass of complicated and lengthy litigation which could

easily extend well into the next century[,]” if the court allowed the

Cayuga to proceed against all of the defendants, including the

approximately 7,000 individual landowners, it granted the U.S.’ motion

“to proceed to trial first against the State[.]” See Cayuga Indian Nation of

New York v. Pataki, 79 F. Supp. 2d 66, 76 (N.D.N.Y. 1999) (“Cayuga X17

“). Hence, the State was the lone defendant in the jury trial or what has

come to be known as “Phase I” of this litigation, and it continued to be

the only defendant in ‘Phase II” of this litigation, the non-jury trial. -

53a

repeat that entire history herein. To place the issue of

prejudgment interest which now dominates this litigation in

context, however, an overview of some of this court’s rulings

in recent years, especially as to remedies, is in order.

IL. Pre-Trial Motions

Faced with several motions in limine seeking to “severely

limit the remedies available to the Cayugas[,]” in Cayuga

Indian Nation of New York v. Pataki, No. 80-CV-930, 80-

CV-960, 1999 WL 224615, at *1 (N.D.N.Y. April 15, 1999)

(“Cayuga VIIT’), the issue of prejudgment interest first arose.

Holding that federal rather than state law governs the issue of

the availability of prejudgment interest, this court recognized

its “sweeping discretion to decide whether to award

prejudgment interest ..., as well as [its] considerable latitude

in establishing both the rate of interest and the accrual date.”

Id. at *17 (emphasis added). Ultimately, the court declined

to decide whether the Cayuga were entitled to recover

prejudgment interest because at that time the record was not

sufficiently developed.

The court also was operating in a “legal vacuum” because the

parties had not addressed the factors which the Second

Circuit in Wickham Contracting v. Local Union No. 3, Int'l

Bhd. of Elec. Workers, 955 F.2d 831 (2d Cir. 1992), had

identified as relevant in deciding “whether to award

prejudgment interest [.]” See id at *19 and *21. After

reciting the Wickham factors, the court stressed that an award

of prejudgment interest was not a foregone conclusion. /d. at

*16.

With a date for jury selection looming, the parties sought

further clarification on a variety of issues including, yet

again, prejudgment interest. The court held that it would not

receive proof of present day value during Phase I. In a final

54a

round of motions in limine made in anticipation of Phase I,

the U.S. sought, inter alia, to have the court “reserv[e] to

[itself] all issues of law and equity, leaving only fact issues as

to the amount of damages for the jury[.]” Cayuga Indian

Nation of New York v. Pataki, 79 F. Supp. 2d 78, 86

(N.D.N.Y. 1999) (“Cayuga XII’). Adopting this approach,

the court held that equitable issues such as laches would “be

reserved to [it], and if necessary, the same may be the subject

of post-trial motions and/or additional post-trial proceedings

before the court, without a jury.” /d. at 92.

IT. Jury Instructions

At various points during Phase I the court instructed the jury

in conformity with the pre-trial rulings outlined above.

Among other things, in its preliminary instructions the court

briefly explained the respective roles of the jury and the

court, i.e., the court decides legal issues and the jury decides

fact issues. Consistent with those different roles, the court

further explained that the trial would occur in two phases. In

Phase I the jury’s task was to resolve the issue of the amount

of damages, if any, to which the Cayuga would be entitled.

The court then explained that there would be another

proceeding after the jury trial where the Court would resolve

certain equitable issues, such as interest.

At the close of the proof the court reiterated these points,

explaining that “interest on the amount of any damages you

may award, conversion to present day value of any past

damages you-may award,” and “a possible reduction in any

damages you may award to the plaintiffs due to their alleged

failure to timely commence this action, that is, laches[,]” are

all equitable issues outside the province of the jury. See

Transcript (“Tr.”) at 2748-49. Thus, the jury was

unequivocally advised, not once, but twice that it should not

concern itself with equitable issues such as_ interest.

55a

Consistent with the foregoing, the jury was explicitly

instructed that it “should [not] ... calculate an amount to

compensate the plaintiffs for the fact that they did not have

the use of the money between when the injury occurred and

the present.” /d at 2773-74. That particular charge

concluded by advising the jury: “It has previously been

decided that the Court will determine whether an award of

same will or will not be made in connection with the amount

you determine as damages.” Jd. at 2774. The jury was

further instructed that it “should not make any adjustment for

the effect of inflation or the loss of use of the money.” Id. at

2773 (emphasis added). Presupposing that it would award

damages in dollars for the year the injury was sustained, the

jury also was instructed that it “should not, ... attempt to

convert the value of the dollar at the time of the injury for

which you have determined damages to an equivalent value

in current dollars [.]” /d. Further, insofar as calculating lost

rent, the jury was instructed, “you must determine ... the loss

of the value of the use of the lands of the Cayugas for each of

the 204 years they were wrongfully detained or prevented

from the use of the land.” Jd. at 2768-69.

Hil. Verdict

The verdict form was fairly lengthy, but the jury only had to

answer two discrete questions. The first was:

What amounts, if any, do you find that

plaintiffs have been damaged for loss of use

and possession of the claim area from July 27,

1795 to date as measured by a fair rental value

without improvements but with infrastructure

in place, less credit, if any, to the State for

payments made to plaintiffs?

56a

Gov. Exh. 21 at 1, 91 (footnote omitted). The verdict form

also required the jury to indicate for each year from July 27,

1795, through “2000 to date,” the following: the “amount”

of such loss; the “credit to the State [;]” and the “net

amount.” See id. at 1. For the first designated time period,

from July 27, 1795 to the end of that year, the jury found that

the Cayuga had sustained losses in the amount of $7,148.69.

See id. For every full year thereafter through 1999, the jury

found that the Cayuga had sustained losses in the amount of

$17,156.86 per year. For the year 2000, to the verdict date,

February 17, 2000, the jury found that the Cayuga had

sustained losses in the amount of $2,859.48. See id. at 10.

In accordance with a stipulation between the Cayuga and the

State, the jury then credited the State for its annuity payments

to the Cayuga for the years 1795 through 1999. After finding

total rental losses in the amount of $3,510,007.61, and

payments by the State totaling $1,598, 334.99, the jury

concluded that the Cayuga were entitled to $1,911,672.62 for

the fair rent value of the claim area over the 204 years. See

id.

After polling the jury, the court advised the parties that it

would not enter a final judgment at that time because of the

outstanding issues which needed to be resolved in Phase II.

The parties were given the opportunity within sixty days of

the verdict to file any motions in relation thereto, but no such

motions were filed.

Anticipating Phase II, among other things, the parties filed

their respective economists’ reports. On May 17, 2000, after

reviewing the same, those reports revealed an “enormous

disparity[ ]” as to the amount of prejudgment interest to

which the Cayuga may be entitled, and the court was forced

“to conclude that it [could not] properly assess the

availability of prejudgment interest in the first instance

57a

without some context, beyond the mathematical calculations

found in th[ose] ... reports.” Cayuga Indian Nation of New

York v. Pataki, Nos. 80-CV-930, 80-CV-960, 2000 WL

654963, at *3 (N.D.N.Y. May 17, 2000), amended on other

grounds, 2000 WL 687901 (N.D.N.Y. May 22, 2000).

Therefore, the court agreed to allow the parties’ witnesses to

testify as to certain “equitable factors[.]” See id. The court

went on to list several such factors, but it did not mention

allowing any witness to testify as to what the jury actually

intended when it rendered its verdict. In the end though, the

court was extremely generous in terms of the proof which it

permitted during Phase II, reasoning:

Because the stakes are simply too high, the

experts’ views too antithetical, and the

equities on all sides too important to

disregard, ... the only way to proceed at this

- juncture is to make every effort to insure that

all parties to this litigation have an equal

opportunity to present their respective

versions of history, and how those versions

impact the remaining issues of prejudgment

interest and laches.

Id. at *4.

The Phase II trial was lengthy and the court’s task in

analyzing the extensive proof adduced therein was an

arduous one, to say the least. Under the best of

circumstances analysis of the Phase II proof would have beer

difficult. But the court’s task was unnecessarily complicated

by the fact that all of the parties frequently either cited to a

document which did not support their contention, or equally

disconcerting, would take a quote out of context. All too

often this selective quoting meant that when the court

consulted a source document or the transcript, the assertion

58a

was not actually supported therein.4 Moreover, when the

court read such a quote in context the meaning was often

times very different than that ascribed to it by the quoting

party. The court is fully aware that lawyers have an

obligation to represent their clients “zealously[,]” see N.Y.

code of Professional Responsibility Canon 7, reprinted in

N.Y. JUD. LAW APP. (McKinney Supp. 2001); but there are

limits to such zealousness and a lawyer does not do his or her

client any great service by engaging in such tactics which

distract from a party’s otherwise valid legal arguments and

undermine a lawyer’s credibility to a certain extent.

4 The parties are equally guilty of this practice. To give but a few

examples, the U.S. declares that “[t]he Cayuga minority protested the

treaty vehemently, and again accused New York of having defrauded

them at the Treaty 1 Albany in 1789.” United States’ Revised Post-Trial

Memorandum of Law (“U.S. Post-Tr. Memo.”) at 26. It then cites page

2995 of Dr. Whiteley’s testimony to support that assertion. Support for

the U.S.” proposition cannot be found anywhere on that page however. In

another example, the State compounded its misstatement by inaccurately

stating the opposition’s position. The State asserts that according to the

Cayuga “/bjoth the 1789 and 1795 treaties, ..., were negotiated in bad

faith because they were not conducted with the full council of chiefs of

the Iroquois confederacy.” State of New York Defendants’ Phase II Post-

Hearing Reply Memorandum (“St. Reply”) at 10 (emphasis added). The

State then goes on to cite to the Cayuga’s and U.S.’ memorandum

respectively. When those cites are consulted, however, they pertain only

to the 1789 Treaty and not to the 1795 Treaty.

Equally troubling, and adding to the court’s burden, was the parties’

tendency to at times cite to an entire exhibit without referring to a page

number. This practice is bothersome enough when the documents are

relatively short, such as when the State cited to four speeches from the

1795 Treaty negotiations without including specific references, see State

of New York Defendants’ Phase II Hearing Memorandum (“St. Pre-Tr.

Memo.”) at 10; but when the cite is to a voluminous exhibit such as the

two volume “Proceedings of the Commissioners of Indian Affairs,”

compiled by historian, Franklin Hough, this practice is inexcusable. See

St. Exh. 35.

59a

Discussion

The issues the parties raise in connection with Phase II are

legion. The first and in some ways perhaps most important

issue pertains to the meaning of the jury verdict itself.

I. Verdict

More than four months affer the jury rendered its verdict and

more than four months after the jury’s discharge, the State

raised for the first time the possibility of an inconsistent

verdict. In its June 30, 2000, memorandum of law submitted

prior to Phase II the State did not employ the phrase

“inconsistent verdict.” Its economist Richard S. Grossman

did not shy away from that concept in his report,

unequivocally stating that the “verdict presents the Court

with an inconsistency{.]” See St. Exh. 721 at 10,9 26. In

the State’s view this alleged inconsistency arises because in

Phase I the jury, colloquially speaking, impermissibly

compared apples and oranges. See Pre-Tr. Memo at 74.

This supposedly impermissible comparison occurred,

Grossman believes, because the jury did not distinguish

between current and constant dollars as he defines and

employs those terms. In Grossman’s report he wrote that

from an economic standpoint there are “two types of dollars:

‘current dollars,’ which are merely the dollars of a particular

year in that year, and ‘constant dollars,’ which are sums that

are expressed in the dollars of one particular year (called the

base year).” St. Exh. 721 at 7, 18 (emphasis in original).

When “compar[ing] quantities of dollars from different

years,” Grossman declared that “[i]t is not possible to make

an economically meaningful comparison between sums

denominated in dollars of different years.” /d at 8. § 20

(emphasis added). Grossman therefore asserted “it makes no

economic sense to add or to subtract sums denominated in

dollars of different years[;]” yet that is precisely what the

60a

jury did Grossman concludes. Jd. (emphasis added). Such

calculations are in Grossman’s view “completely

unacceptable from an economic perspective[.]” /d. That type

of calculation is “troublesome” suggests Grossman because,

for example, when subtracting 1999 and year 2000 dollars,

those dollars “differ in value by 3 percent[.]” /d

Accordingly, a meaningful comparison of dollars in different

years can only be had, Grossman contends, when those

dollars are “denominated in the constant dollars of any given

year.” See id.

Grossman posits that the jury disregarded these general

economic precepts by crediting the State with payments to

the Cayuga through the years in “current dollars,” while at

the same time using “constant dollars,” as he defines that

term, in determining the amount of lost rent in any given

year. See id. at 9, 9 22 and 23. To support his theory as to

how the jury calculated lost rent damages, Grossman made

two assumptions. First, because “the ‘credit to state’ column

... corresponds exactly to the amounts actually paid by the

[State] to the plaintiffs in each year of the 204-year period

[,!” Grossman believes that “the figures stated in this column

are clearly expressed in the dollars of the years in which they

were paid, i.e., current dollars.” Jd. at 922.

Second, in determining the amount due the Cayuga each year

for lost rent, Grossman hypothesizes that the jury used

“constant” year 2000 dollars. To support this hypothesis,

Grossman observes that the jury “award[ed] [a total of] $3.5

million divided up into 204 equal payments (since $3.5

million divided by 204 equals $17,156.86 exactly).” /d. at {

23. Further, Grossman observes that the $3.5 million in lost

rent damages, as found by the jury is (not coincidentally in

Grossman’s view), equivalent to exactly ten percent of the

$35 million which the jury awarded the Cayuga for future

loss of use and possession of the claim area. Given what

6la

Grossman deems to be this obvious correlation between the

total rental value damages and the current fair market value

of the land, and the fact that rents are identical in each year

from 1795 to 2000, he concludes that “it is...clear that the

jury expressed the lost rents in current dollars.” Jd.

Grossman also relies upon the court’s instruction to the jury

not to adjust the award or “attempt to convert the value of a

dollar at the time of the injury[ ],” see Tr. at 2773, to support

his conclusion “that the jury’s verdict in the ‘amount’ column

is expressed in dollars of the year 2000.” See St. Exh. 721 at

9, § 23. Additionally, Grossman opines that the dollars in

the “amount” column cannot be expressed in current dollars

because prices have not stayed constant over the past 204

years. See id. at 9,4 24. Finally, Grossman believes in part

that because the jury was instructed not to make adjustments

for inflation, it “gave its verdict in the dollars it ... knows

best: constant 2000 dollars.” See id. at 10,4 25.

In light of the foregoing, instead of accepting the verdict on

its face, the State maintains that the court should “adjust[ ]”

the verdict “by either converting the annual rent to historical

damages for each year or by converting the State payments to

present-day dollars.” State Defendants’ Memorandum of

Law in Support of their Request to Examine the Economic

Witnesses on the Jury’s Award for Fair Market Rental Value

of the Claim Area at 2 (emphasis added); see also St. Post-

Tr. Memo. at 70. The State argues that adjusting the jury

verdict in this way is entirely proper because where. as the

State believes occurred here, “the verdict is not clear on its

face, it is appropriate to look at how the verdict was

constructed|.]” Tr. at 6116. Once the court makes such an

adjustment or conversion, the State wants the court to

recalculate the jury verdict using those adjusted figures. The

State contends that this process, as opposed to the process

outlined by Grossman, which the State suspects the jury

62a

employed, will “yield a meaningful total net rental figure”

from which the court can then compute prejudgment interest.

See id.

In contrast to the State’s approach, which requires

interpreting the jury verdict, both the Cayuga’s and the U.S.’

respective economists, while arriving at different conclusions

as to the amount of prejudgment interest, accept the verdict

“at face value.” See Cayugas’ Post-Trial Memorandum

(“Cay.Post-Tr.Memo.”) at 22. Dr. Berkman, the U.S.’

economist, acknowledged that his calculations were based

upon “the numbers presented on the jury verdict form[.]”

See Tr. at 6053-54. The Cayuga’s economist, Dr. Temin,

similarly testified that in terms of yearly rent payments, he

“started from the jury verdict form[.]” See id. at 5809. Thus

Drs. Temin and Berkman assumed, in conformity with the

charge, that the jury expressed both the State’s credit

payments and the fair rental value “in dollars of the

particular year in which they were incurred.” U.S. Post-Tr.

Memo. at 60 (emphasis added). Any other reading of the

verdict amounts to improper “second-guessing” of the jury’s

intent, according to the Cayuga. See Cay. Post-Trial Memo.

at 20. Finally, characterizing Grossman’s suggested

“adjustments” to the verdict as “tampering” with the same,

the Cayuga are taking the position that there is no need, and

indeed it would be improper for the court to make the

adjustments which the State is urging because such

adjustments would “lead [ ] to a complete nullification of the

jury’s award[.}” Cayugas’ Post-Trial Reply Memorandum

(“Cay.Reply”) at 8 (citations omitted); see also U.S. Post-

Trial Memo. at 65.

Given these conflicting views as to the meaning of the jury

verdict, the first issue which this court must consider is

whether it is proper, in hindsight, to reexamine the verdict in

an effort to ascertain how the jury arrived at the final damage

63a

figure for 204 years of lost rent. More specifically, in

calculating prejudgment interest, should the court, as the

State urges, “adjust” the dollar amounts as found by the jury,

or should it simply make any prejudgment interest

calculation it deems proper using the dollar figure,

unadjusted, found ex ihe verdict form.

5 Somewhat surprisingly, the Cayuga are not questioning the timing of

the State’s argument that the verdict is inconsistent. If the court

ultimately agrees with the State, finding that the verdict is inconsistent,

the ramifications are tremendous, including the possibility of a retrial. In

terms of both judicial economy and upholding the sanctity of jury

verdicts generally, retrials are disfavored. That is especially so in a case

of this magnitude where the trial was relatively lengthy and hard-fought.

See Grant v. Westinghouse Elec. Corp., 877 F. Supp. 806, 815 (E.D.N.Y.

1995). Given the enormity of the task which a retrial would involve here, -

and given the fact that the State did not even hint at the possibility of an

inconsistent verdict until four months after the discharge of the jury, the

court cannot ignore the timing of the State’s argument in this regard.

Generally “if trial counsel fails to object to any asserted

inconsistencies and does not move for resubmission of the inconsistent

verdict before the jury is discharged, the party’s right to seek a new trial

is waived.” James v. Tilghman, 194 F.R.D. 408, 413 (D. Conn. 1999)

(quoting Manes v. Metro-North Commuter R.R., 801 F. Supp. 954, 959

(D. Conn. 1992), aff'd without published opinion, 990 F.2d 622 (2d Cir.

1993)) (emphasis added by Manes court). The purpose of waiver is easy

to see; it “promote[s] the efficiency of trials by allowing the original

deliberating body to reconcile inconsistencies without the need for a new

presentation of evidence toa different body.” Wright v. Wilburn, 194

F.R.D. 54, 59 (N.D.N.Y. 2000) (internal quotation marks and citations

omitted). Otherwise, especially where counsel is fully aware of the

claimed inconsistency when the jury renders its verdict, the jury’s work-

product is “unfairly scuttled[.J” /n re Wedtech Corp., 196 B.R. 274, 278

(Bankr. S.D.N.Y. 1996) (internal quotation marks and citations omitted).

Instead of taking a hard-line approach to waiver, the Second Circuit in

Denny v. Ford Motor Co., 42 F.3d 106, 111 (2d Cir. 1994), adopted a

“case-by-case” approach to evaluating whether a party has waived its

right to challenge a verdict as inconsistent. While the Second Circuit

does “take a guarded approach to the per se application of the waiver

64a

rule, acknowledging that a party’s failure to make a timely objection

carries some weight in [a] court’s analysis of the waiver issue[,]” at the

same time it recognizes “that a court may not completely abdicate its

responsibility to resolve inconsistencies in jury verdicts.” Tilghman, 194

F.R.D. at 413 (internal quotation marks and citations omitted); see also

Trinidad v. American Airlines, Inc., No. 93 Civ. 4430 SAS, 1997 WL

79819, at *2 (S.D.N.Y. Feb.25, 1997) (“[Ajlthough this Circuit has

rejected a per se waiver rule, waiver can and should be applied in

appropriate cases.”)

Adopting a “contextual approach” to waiver, see Manes, 801 F. Supp.

at 959, the Second Circuit in Lavoie v. Pacific Press & Shear Co., 975

F.2d 48 (2d Cir. 1992), found that the defendant manufacturer waived its

challenge to the jury verdict as inconsistent where it made that challenge

for the first time in a post-trial motion, and where it failed to raise that

inconsistency before the jury’s discharge. /d. at 54. In a similar vein, in

Tilghman, 194 F.R.D. at 412, the court deemed the plaintiff to have

waived his argument that the verdict form’s answers were inconsistent

where he did not object to that form after the verdict. See id. at 413. Nor

did that plaintiff ask for reconsideration of the jury’s verdict, or move for

a new trial on that basis. See id.; see also Castle v. Leach Co., 4 F. Supp.

2d 128, 130 (N.D.N.Y. 1998) (in products liability and negligence case,

plaintiff waived right to seek a new trial based upon an asserted

inconsistent verdict where she did not object to the verdict sheet at the

charge conference, nor to the jury’s answers; and she did not move for

resubmission to the jury to resolve the alleged inconsistency); Blissett v.

P_K. Deputy Eisensmidt, D.S.S., 940 F. Supp. 449 (N.D.N.Y. 1996)

(McCurn, J.) (defendant correction officers waived right to object to

verdict as inconsistent based upon a finding of a constitutional violation,

but no finding of battery, where despite several opportunities, they failed

to object to the same before the_jury’s discharge). By the same token,

however, in Denny itself the Second Circuit held that the defendant

manufacturer did not waive its objection to submitting to the jury the

issues of strict products liability and breach of implied warranty where

the defendant had timely objected to such submission in that it was made

before the jury was instructed on the claims, arguing that it could lead to

inconsistent results. See 42 F. 3d at 111. The Second Circuit also noted

that resubmission to the jury would have amounted to no more than

renewal of the party’s earlier objection. See id Thus, in essence,

whether or not a party is deemed to have waived its right to object to a

verdict as inconsistent depends largely upon the timing of that objection.

65a

In accordance with the waiver principles developed within this

Circuit, here, in all likelihood, the State did waive its right to object to the

jury’s verdict as inconsistent. First of all, the State did not raise the

specter of an inconsistent verdict prior to the jury’s discharge, thus

preventing the court from resubmitting the case to the jury for further

deliberations to clarify and/or perhaps correct this perceived

inconsistency. The State also did not object to the jury’s answers

immediately after it the verdict, even though the jurors were individually

polled, giving the State additional time in which to contemplate the jury’s

verdict. Due to the State’s silence, the court was never made aware of

this claimed inconsistency prior to discharging the panel.

The jury has long since been discharged and along with that the

possibility of reconciling the jury’s verdict has also disappeared.

Furthermore, if this alleged inconsistency is as readily transparent as the

State seems to believe, it is difficult to imagine why the State did not

immediately notify the court of same and seek to have the verdict

resubmitted to that jury which had attentively sat through several weeks

of often tedious testimony. See Trinidad, 1997 WL 79819, at *2 (“[I]f

the alleged inconsistency is as blatant as plaintiff suggests, plaintiff

cannot ... claim that the inconsistency was unnoticeable at the time of the

verdict and therefore that plaintiff was justified in his delay.”). {n short,

the State had a number of opportunities to object to the jury verdict form,

as well as the instructions, on the basis that possibly an inconsistent

verdict would result: (1) during the charge conference, which

commienced on a Thursday, and continued over to the following Monday,

giving the State ample time to study the proposed verdict form and the

charge with an eye toward possible inconsistencies; (2) after the court’s

instructions, but before the jury began deliberations; (3) and again after

the jury returned its verdict. The State was silent at each of those critical

junctures. In fact, the court ventures to say that this alleged inconsistency

did not become evident to the State except with the advantage of

hindsight when its retained economist analyzed the verdict and the

process which the jury supposedly undertook in arriving at same. Having

said all that, the court need not definitively hold that the State has waived

its right to object to the verdict as inconsistent because, for the reasons set

forth above, the court is not persuaded that an inconsistency exists here.

Consequently, there is no danger in the present case of the court

abdicating its responsibilities to reconcile a claimed inconsistent verdict.

66a

To support its argument that the court shouid “look behind”

the jury verdict, the State relies heavily upon Sharkey v.

Lasmo (AUL Ltd.), 214 F.3d 371 (2d Cir. 2009). According

to the State, Sharkey stands for the proposition “that where

the verdict is not clear on its face, it is appropriate to look at

how the verdict was constructed[.]” Tr. at 6116. It is also

“appropriate” under Sharkey, argues the State, for the court

to consider evidence regarding the jury’s intent in rendering

its verdict. See id. at 6117.

In Sharkey, a case brought pursuant to the Age

Discrimination in Employment Act (“ADEA”), the plaintiff

argued “that because he did not include lost pension benefits

in his calculations of damages ... or attempt to quantify his

lost benefits ..., the jury must not have included them it its

award[;]” hence the district court erred in denying an award

of prejudgment interest and pension benefits. Sharkey, 214

F.3d at 375. The defendant countered that because the

evidence included references to pension benefits offered to

plaintiffs colleagues, when the jury awarded plaintiff

“damages for [his] fofa/ financial losses|,]” it included the

value of his lost pension benefits in the verdict. See id.

(emphasis in original) (internal quotation marks omitted).

The defendant also pointed to the fact that the jury had been

instructed that plaintiff was entitled to recover his “economic

loss[;]” and that he “was entitled to recover lost salary and

benefits, including ... fringe benefits.” /d Finally, the

defendant noted that the jury was also instructed that it “may

award [plaintiff] an amount equal to the salary and benefits

he would have received ... less the amount of salary and

benefits he received after he left the employ of the

defendants, including severance payments, pension benefits

and amounts from other employers ....” /d (emphasis in

original) (internal quotation marks omitted).

67a

Given the ambiguous state of the record as to whether the

jury included the value of lost pension benefits in its verdict

for “ ‘total financial losses [,]’” the Second Circuit concluded

that it was impossible to definitively say whether the jury

included the value of such benefits in making its award. See

id. Therefore, the Court instructed the district court on

remand to “make a determination whether the jury’s award

included the value of lost pension benefits.” /d.

On remand the Second Circuit also instructed the district

court “to apportion the jury’s award[ ]” to determine what

part was attributable “to stock rights and options and the

value of lost pension benefits[.]” /d. Such apportionment

was necessary according to the Second Circuit because an

award of “prejudgment interest may be inappropriate on the

portion attributable to the value of lost pension benefits, if

any.” /d.

Sharkey does not mandate the conclusion that this court

should, after-the-fact, in effect rewrite the jury verdict here.

There is a fundamental distinction between Sharkey and the

present case--a distinction which the State conveniently

disregards. In Sharkey the district court’s task on remand

was to ascertain the scope of the jury’s award and to

apportion it. Here, the State is asking the court to engage in a

far different task--a task which would, as will be seen, result

in usurping the jury’s function. In the present case it is not

simply a matter, as it was in Sharkey, of ascertaining the

scope of the jury’s award and then apportioning it. Rather,

analyzing the verdict in the manner which the State is

advocating would require this court to examine the Phase |

evidence in its entirety, as well as the jury instructions, and

then speculate as to how the jury derived damages for fair

rental value. The analysis which the State proffers through

Grossman would also require the court to improperly assume

that the jury disregarded the court’s instructions. Plainly

68a

such an analysis goes far beyond any contemplated by the

Sharkey Court.

Of equal if not more import is that in Sharkey the possibility

of an inconsistent verdict was never raised; but the State is

raising that possibility now. Therefore, this court’s

obligations differ significantly from those of the district court

in Sharkey. Because the State is claiming that the verdict is

potentially inconsistent, this court has an obligation to

harmonize the verdict where possible--an obligation which

did not arise in Sharkey. In short, given the obvious

differences between Sharkey and the present case, the court

declines to rely upon the latter as justification for, as the State

insists, ascertaining “how the verdict was constructed [.]”

See Tr. at 6116.

In addition to Sharkey, to support its assertion that the court

should scrutinize this verdict and adjust it in the manner

which Dr. Grossman is urging, the State cites to Malarkey v.

Texaco, Inc., 983 F.2d 1204 (2d Cir. 1993). Claiming that

the district court’s award of equitable relief, in the form of

ordering plaintiff's promotion upon her reinstatement, “went

far beyond making [her] whole, as mandated by the

ADEAJ,]” on appeal the defendant employer sought, inter

alia, to set aside that relief for an abuse of discretion. See id.

at 1214. The Second Circuit in Malarkey did observe that the

district court had “surmised [that] the jury awarded plaintiff

$65,000 by comparing her salary to that of ... [another

employee who was given the secretarial position to which

plaintiff claim[ed] she was entitled].” /d. (emphasis added).

Relying upon the just quoted language from Malarkey, the

State urges this court to “surmise” that the jury calculated its

award in the manner which Dr. Grossman posits. The court

will not do that because Malarkey presents an entirely

different situation than does the present case. In exercising

69a

its “broad” discretion to fashion relief under the ADEA by

ordering plaintiff's promotion, the district court in Malarkey

was drawing what the Second Circuit implicitly found to be a

“logical extension” of the jury’s award “express

findings[.]” See id. In sharp contrast with what the State is

asking this court to do, the district court in Malarkey did not

adjust or rewrite the jury’s factual findings; nor did it

supplant those jury findings with its own--both of which

would happen if this court were to adopt the State’s

argument. Analyzing the verdict as the State’s economist

suggests would require more than a “logical extension” of the

jury’s verdict. It would require this court to completely

transform the Phase I verdict, so much so that it would result

in substantially altering if not completely reversing that

verdict. Clearly, such a readjustment of the jury’s factual

findings is not- what the Second Circuit had in mind in

Malarkey when it implicitly approved of the fact that the

district court had surmised how the jury arrived at a back pay

award. Becaus. falarkey is readily distinguishable from the

present case, it does not advance the State’s argument in any

way. Accordingly, Malarkey does not, as the State contends,

support this court reexamining and ultimately readjusting the

jury’s verdict as to fair rental value. In sum, the State has not

brought to the court’s attention any legal authority to support

its argument that the court should essentially rewrite the

jury’s findings as to lost rent damages.

This omission by the State is all the more glaring given the

plethora of case law set forth below pertaining to the sanctity

of a jury’s verdict and a court’s duty to reconcile a

purportedly inconsistent verdict. Typically that case law

centers on situations where courts are confronted with

potentially inconsistent verdicts in the context of either a

motion for a new trial or a motion for judgment as a matter of

law. Although the State is not seeking a new trial, those

70a

cases are instructive at this juncture nonetheless, particularly

in the absence of any case law directly on point.

In this Circuit “‘[w]hen confronted with a potentially

inconsistent jury verdict, the court must ‘adopt a view of the

case, if there is one, that resolves any seeming

inconsistency.’” Densberger yv. United Technologies

Corporation, 125 F. Supp. 2d 585, 598 (D. Conn. 2000)

(quoting Turley v. Police Dep't of the City of N.Y., 167 F.3d

757, 760 (2d Cir. 1999)) (other citation omitted). Thus

‘““(blefore a court may set aside a special verdict as

inconsistent and remand the case for a new trial, it must make

every attempt ‘to reconcile the jury’s findings, by exegesis if

necessary.” Jd. (quoting Turley, 167 F.3d at 760) (other

citations omitted). “ ‘[A]nd[,] if there is any way to view a

case that makes the jury’s answers to the special verdict form

consistent with one another, the court must resolve the

answers that way even if the interpretation is strained.””

Wright, 194 F.R.D. at 57 (quoting McGuire v. Russell Miller,

Inc., 1 F.3d 1306, 1311 (2d Cir. 1993)) (other citation

omitted). The mere fact that a trial court may disagree with a

jury’s verdict does not provide a basis for granting a motion

for a new trial based upon an alleged inconsistent verdict. See

Wright, 194 F.R.D. at 57 (citing Saloomey v. Jeppesen &

Co., 707 F.2d 671, 679 (2d Cir. 1983)).

In assessing whether a given verdict is inconsistent, a court is

not limited to examining “ ‘just the [jury] answers

themselves.’ “ See Densberger, 125 F. Supp. 2d at 598

(quoting McGuire, 1 F.3d at 1311) (citations omitted). The

court “ ‘should refer to the entire case[,]’” see id, including

jury instructions. See Finnegan v. Fountain, 915 F.2d 817,

820 n.3 (2d Cir. 1990) (citing Gallick v. Baltimore & Ohio R.

Co., 372 U.S. 108, 118-22, 83 S. Ct. 659, 9 L. Ed. 2d 618

(1963)). “This duty ‘derives from the Seventh Amendment’s

obligation on courts not to recast factual findings of a jury,

Tla

., and is based on the notion that ‘juries are not bound by

what seems inescapable logic to judges.’” Densberger, 125

F. Supp. 2d at 598 (quoting /ndu Craft, 47 F.3d at 497) (other

citations omitted).

In attempting to reconcile a seemingly inconsistent verdict,

the Second Circuit has held that “[w]here ‘the district court

properly instructed the-jury ..., [t]here is a strong presumption

that the jury in reaching its verdict complied with those

instructions.”” Jd. Given that “strong presumption,” the

Second Circuit has held that “[a] jury’s verdict reached after

proper instructions must be upheld where there is a

reasonable explanation for the jury’s seemingly inconsistent

answers.” Bonner vy. Guccione, 178 F.3d 581, 588 (2d Cir.

1999) (internal quotation marks and citation omitted). In

fact, the Second Circuit has expressly stated that “[gliven

correct instruction on the law and no clear disregard for that

instruction on the face of the verdict, a jury verdict must

remain immune from questioning by the district court.” Jd. at

588 (internal quotation marks and citations omitted). As the

foregoing principles show, the Second Circuit “has been

aggressive in [its] efforts to harmonize inconsistent jury

verdicts.” Shaun P. Martin, Rationalizing the Irrational:

The Treatment of Untenable Federal Civil Jury Verdicts, 28

Creighton L.R. 683, 717 (1995).

It is fundamental that “‘[w]hen a jury returns a verdict by

means of answers to special interrogatories [under Rule 49(a)

], the findings must be consistent with one another, as they

form the basis for the ultimate resolution of the action.”

Densberger, 125 F. Supp. 2d at 598 (quoting Crockett v.

Long Island R.R., 65 F.3d 274, 278 (2d Cir. 1995)).

Furthermore, “where the special verdict answers appear to be

inconsistent but there is a ‘view of the case that makes the

jury’s answer[s] ... consistent, they must be resolved that

way.” Tolbert v. Queens College, 242 F.3d 58, 74 (2d Cir.

72a

2001) (quoting Atlantic & Gulf Stevedores, Inc. v. Ellerman

Lines, Ltd., 369 U.S. 355, 364, 82 S. Ct. 780, 7 L. Ed. 2d 798

(1962)). Here, because the jury was asked to make certain,

specific factual findings as to the amount of damages, and

because it was not asked to determine liability, this is a

“special” verdict under Fed. R. Civ. P. 49(a). The present

verdict further conforms with a Rule 49(a) verdict in that it

“did not offer the jury the ultimate choice normally called for

by a general verdict--the defendant is liable to the plaintiff

for a specified amount of damages, or the defendant is not

liable to the plaintiff.” See Bradway v. Gonzales, 26 F.3d

313, 317 (2d Cir. 1994) (internal quotation marks and

citation omitted). Consequently, in analyzing whether or not

this verdict is inconsistent, the court will treat the same as a

“special verdict” in accordance with Rule 49(a).

The State, through its economist Grossman, is claiming that

the verdict is inconsistent because purportedly whe

calculating fair rental damages, the jury uniformly employed

year 2000 dollars in determining the yearly lost rent, bui

from those amounts it subtracted dollars in the year in which

the State made payments. It is conceivable that the jury did

in effect, as the State maintains, subtract apples from

oranges. It is “equally rational to believe,” however, that the

jury did not engage in such a comparison. See Indu Craft, 47

F.3d at 497. In fact, keeping with its “‘duty ... to attempt to

harmonize the jury’s answers, if it is at all possible under a

fair reading of the responses[,]’” the court has little difficulty

finding that this verdict is not inconsistent. See Densberger,

125 F. Supp. 2d at 598 (internal quotation marks and citation

omitted).

Examining both the verdict form and the relevant jury

instructions, as the court must, see Finnegan, 915 F.2d at 820

n.3 (citation omitted), it can be readily determined that the

jury found the amount of lost rent using dollars in the years

73a

in which that rent was lost--not as the State urges in year

2000 dollars. Any other reading of the verdict would require

the court to assume that the jury disregarded the court’s

explicit instruction that it “should not, ... attempt to convert

the value of the dollar at the time of the injury for which you

have determined damages to an equivalent value in current

dollars[.]” Tr. at 2773 (emphasis added). In other words the

jury was instructed, albeit implicitly, to award fair rent

damages for each of the 204 years in the year those damages

were sustained and not to convert the same to an equivalent

value in year 2000 dollars--the year of the verdict.

Because “there is no indication to the contrary, it must be

assumed that the jury followed [that] instruction{ ][.]” See

Gierlinger v. Gleason, 160 F.3d 858, 875 (2d Cir. 1998)

(internal quotation marks and citation omitted). By

following the instruction not to convert, it is obvious that the

jury found the amount due for lost rent in each of the 204

years in the dollars of those particular years. There is no

dispute that the jury then subtracted dollars of each particular

year in which the State made payments to the Cayuga. See,

e.g., U.S. Post-Trial Memo. at 60; and Tr. at 6357. Thus, the

jury did subtract like dollars. Consequently, there is a

plausible explanation for the jury’s answers regarding lost

rent which eliminates the State’s claimed inconsistency for

that aspect of the jury’s award.

The confusion here arises over the definition of “current.”

Grossman’s definition of “current” is different than the

meaning which the court, the lawyers and the jury attributed

to “current” in connection with the instruction not to convert.

According to Grossman, economically speaking “current”

refers to “dollars of a particular year in that year [.|” See St.

Exh. 721, at 7,“ 18 (emphasis in original). Therefore, when

Grossman read the instruction not to convert “to an

equivalent value in current dollars[,]” he defined “current”

74a

differently, i.e., as “dollars of a particular year in that year.”

See St. Exh. 721 at 7, § 18. Applying that definition to the

instruction not to convert, Grossman surmised that the jury

calculated lost rent in year 2000 dollars and in keeping with

his reading of that instruction, the jury did not convert those

dollars to the years in which those losses were sustained.

However, in the context of the court’s instruction not to

convert, “current” actually meant year 2000 dollars. Based

upon that definition, the jury was instructed that it was not to

convert the dollar at the time of injury, i.e., a 1795 dollar to

current or year 2000 dollars.

The State is overlooking the fact, however, that “[l]ogical,

not economic consistency is the touchstone[ ]” in evaluating

a potentially inconsistent verdict. Webb v. GAF Corp., 936

F. Supp. 1109, 1125 (N.D.N.Y. 1996) (citing, inter alia,

Crockett, 65 F.3d at 278). Thus, although a jury’s verdict

might be inconsistent from an economic standpoint, it does

not necessarily follow, a fortiori, that that verdict is legally

inconsistent. See id.

Having said that, the court recognizes that apparently to

avoid the complex task of separating out specific rents for

each of the 204 years at issue, the jury calculated lost rent by

taking $3.5 million, or 10% of what it deemed to be the

current value of the property ($35 million) and dividing it by

each of the 204 years at issue. Presumably the jury found

that that amount would adequately compensate the Cayuga

for the accumulation of rental dollars for all of those 204

years. The effect of figuring lost rent in that way, when

carried out over 204 years, according to the State, is to

“overstat{e] the compensation in the early years and

understat[e] it in the later years.” St. Pre-Tr. Memo. at 75;

see also Tr. at 6356-66. Assuming that is so, consistent with

the court’s explicit instruction not to consider interest

because the court would do so at a later date, the jury

75a

recognized that it would be possible for the court to amend

those rent figures and rectify that discrepancy through its

award of prejudgment interest.

There is one additional reason for refusing to apply the

State’s rigid economic analysis to the jury’s verdict which is

that it would require the court to disregard firmly established

legal principles--principles which were developed wholly

apart from economic principles to preserve the efficient and

fair administration of our judicial system. Adjusting the

jury’s verdict in conformity with the State’s theory would

require the court to find an inconsistency or conflict where

none exists, which in turn would run afoul of the general

notion that whenever possible a court must “reconcile and

preserve even a seemingly inconsistent jury verdict.” See

Indu Craft, 47 F.3d at 497 (citations omitted). Furthermore,

adopting the State’s interpretation of the jury verdict would

thwart the “powerful” policy of deferring to a jury verdict--a

policy which persists “even in cases in which the jury has

taken action that is at first blush difficult to explain.” See

Gentile v. County of Suffolk, 926 F.2d 142, 154 (2d Cir.

1991) (citing Auwood, 850 F.2d at 891). This policy of

preserving the sanctity of a jury’s verdict is especially

compelling in a case of this magnitude which, as this court

has previously recognized, “has so widely impacted every

member, Indian and non-Indian alike, in the claim area

community.” See Cayuga XIV, 2000 WL 654963, at *4.

76a

II. Pre-Judgment Interest®

6 Before delving into the issue of prejudgment interest, there is a

procedural irregularity which bears mentioning. Neither of the Cayuga

plaintiffs expressly seek prejudgment interest in their respective

complaints; only the U.S. does. See Cayuga VIII, 1999 WL 224615 at

*25 n.34. Thus the issue is whether that omission constitutes a waiver of

the right to seek such relief now, many years after the commencement of

this action. The court finds that it does not.

Under federal common law, which this court has previously held

governs the issue of prejudgment interest in this case, see Cayuga VIII,

1999 WL 224615, at *18, the failure of the Cayuga to explicitly request

such interest in their complaints does not amount to a waiver of the right

to such an award. Cf Reed v. A.W. Lawrence & Co., Inc., 95 F.3d 1170,

1182-83 (2d Cir. 1996) (citation omitted) (plaintiff did not waive her

right to award of prejudgment interest in a Title VII action, even though

she did not explicitly request such relief, where the failure to request was

not plaintiff's fault in that she had no reason to be aware of district

court’s severe backlog, which significantly delayed judgment); Frank vy.

Relin, 851 F. Supp. 87, 90-91 (W.D.N.Y. 1994) (court awarded

prejudgment interest even though plaintiff failed to request the same from

jury). Furthermore, assuming they are otherwise entitled to the same, a

finding that the Nation and the Tribe are entitled to a prejudgment interest

award even though they did not specifically request such relief in their

respective complaints is consistent with both Fed. R. Civ .P. 15(b), freely

allowing amendment to complaints to conform to the evidence, and Fed.

R. Civ P. 54(c), allowing a default judgment to be entered granting “the

relief to which the party in whose favor it is rendered is entitled, even if

the party has not demanded such relief in the party’s pleadings.”

A finding of no waiver is bolstered by the fact that the State has not

been prejudiced by this omission as is evidenced by the fact that it was

the State which prior to Phase I first raised the specter of prejudgment

interest on motions in limine. Therefore, the parties and the court have

had ample opportunity to consider and address this issue. Furthermore,

the court cannot overlook the affirmative demand for prejudgment

interest in the U.S.’ complaint in intervention. It stands to reason, given

the trustee nature of the relationship between the U.S. and the Cayuga

that this explicit demand should inure to the benefit of the Cayuga.

Finally, the boilerplate language found in the Cayuga’s respective

complaints, that they are seeking “such other and further relief as the

77a

The issue of prejudgment interest first arose in this litigation

in 1999 when through motions in limine the defendants

sought to bar the Cayuga from recovering any prejudgment

interest whatsoever. See Cayuga VIII, 1999 WL 224615, at

*1. In addressing those motions, this court extensively

discussed the guiding legal principles which courts should

apply in deciding whether to allow an award of prejudgment

interest. See id. at * 15-*22. As part of that discussion, the

court reiterated a number of factors which the Second Circuit

identified in Wickham, 955 F.2d 831, as being relevant to

whether to allow recovery of prejudgment interest:

{T]he award should be a function of (i) the need to

fully compensate the wronged party for actual

damages suffered, (ii) considerations of fairness and

the relative equities of the award, (iii) the remedial

purpose of the statute involved, and/or (iv) such other

general principles as are deemed relevant by the

court.... These other ‘general principles’ include ‘[t]he

certainty of the damages due the plaintiff],]’ and

whether the statute itself already provides for ‘full

compensation and punitive damages [.]’ ... In addition

to the factors enumerated above, ‘[t]he speculative

nature of the damages in question will always be

relevant to a sound decision on a consideration of

whether prejudgment interest should be awarded.’

Court deems just [,]” see Nation Co. at 25, § 11; Tribe Amended Co. at

10, § 11, arguably is sufficient to include prejudgment interest,

particularly given that the scope of remedies in an action such as this has

not been previously litigated in full. Even if the existence of any one of

the foregoing factors was insufficient to allow the Cayuga to seek

prejudgment interest, given the absence of such a demand in their

complaints, certainly these factors taken together justify allowing the

Cayuga to proceed with their attempt to recover this interest.

78a

Cayuga VIII, 1999 WL 224615, at *19 (quoting Wickham,

955 F.2d at 833-34, 835; and 836). In Cayuga VIII, the court

recognized that recovery of prejudgment interest has been

allowed even when a federal statute is silent on that issue, as

is the Nonintercourse Act, so long as those “discretionary

awards ... ‘are fair, equitable and necessary to compensate

the wronged party fully.’” See id. at *20 (quoting Wickham,

955 F.2d at 835). But, as this court further acknowledged,

recovery of prejudgment interest has been disallowed in a

number of situations, including: “ ‘when the defendant acted

innocently and had no reason to know of the wrongfulness of

his actions, ... when there is a good faith dispute between the

parties as to the existence of any liability, or ... when the

plaintiff is responsible for the delay in recovery.’” Jd. at *20

(quoting Cruz v. Local Union Number 3 of the Int'l Bdh. Of

Elec. Workers, No. CV89-4240, 1995 WL 374401, at *3

(E.D.N.Y. Feb.17, 1995)) (other citation omitted).

Summarizing the import of this prejudgment interest body of

case law, in Cayuga VIII this court commented: ‘What

should be ebvious by now is that ‘[i]nterest is not recovered

according to a rigid theory of compensation for money

withheld, but is given in response to considerations of

fairness.’” Jd. (quoting Blau v. Lehman, 368 U.S. 403, 413,

82 S. Ct. 451, 7 L. Ed. 2d 403 (1962)). When the

defendants’ motions in limine were before this court, the

record was far from complete. Thus, the court declined to

“make a prejudgment interest determination in [the] factual

and legal vacuum[ ]” which existed at that time. See id. at

*21. Recognizing the possibility of an abuse of discretion if

it were to do so, the court denied those motions in limine to

the extent they sought to preclude the Cayuga from

recovering prejudgment interest altogether. See id. at *25.

Following Phase II, a five-week non-jury trial which

included the testimony of a number of expert witnesses, the

79a

record is now fully developed as to the prejudgment interest

issues which this litigation raises. The parties have also had

ample opportunity to brief those issues. Accordingly, as Fed.

R. Civ. P. 52 requires, the following constitutes the court’s

findings of fact and conclusions of law in this regard.

Hf. A. Wickham Analysis

The initial determination for the court is whether the Cayuga

are entitled to an award of prejudgment interest in the first

place. Only after making that determination will the court be

in a position to consider the amount, if any, of such an award.

In undergoing its Wickham analysis, the court will address

the second factor listed therein, “fairmess and relative

equities,” last because, as will be seen, the court is convinced

that that factor is relevant not only to the issue of a party’s

entitlement to prejudgment interest, but also to the issue of

the amount of any such award.

1, Full Compensation

Among other things, a prejudgment interest “award should be

a function of ... the need to fully compensate the wronged

party, for actual damages suffered.” See Wickham, 955 F.2d

at 833. In arguing that a prejudgment interest award is

necessary to fully compensate it, the Cayuga contend that

they must be compensated for the lost “opportunity” cost, or,

as the U.S. puts it, for the “time value of money[,]” see Pre-

Trial Memorandum of the Plaintiff-Intervenor, U.S.

(“U.S.Pre-Tr.Memo.”) at 11 (internal quotation marks and

citation omitted); that is, for not having the stream of rental

income available to them over the past two centuries. The

Cayuga also contend that the jury verdict was relatively low

and hence prejudgment interest is necessary to assure that

they are fully compensated. The State agrees that full

compensation in the context of Wickham encompasses a

“plaintiff receiv[ing] the full value of ... money over the time

80a

during which plaintiff was deprived of that sum{,]” but it

disagrees that “ ‘full compensation[ ]’ ... is ... a function of

the amount of damages a jury awards[.]” See St. Pre-Tr.

Memo. 33.

Case law discussing “full compensation” as that phrase is

used in Wickham is scant and not particularly instructive in

this context. However, lost opportunity cost as a part of full

compensation is a widely accepted concept from a legal

standpoint. Case law is replete with references to the time

value of money. See, e.g., Osterneck v. Ernst & Whitney,

489 U.S. 169, 176, 109 S. Ct. 987, 103 L. Ed. 2d 146 (1989)

(internal quotation marks and citations omitted) (“[W]e have

repeatedly stated that prejudgment interest is an element of

[plaintiff's] complete compensation.”); Proctor & Gamble

Distrib. Co. v. Sherman, 2 F.2d 165, 166 (S.D.N.Y. 1924)

(Hand, J.) (“The present use of my money is itself a thing of

value, and, if I get no compensation for its loss, my remedy

does not altogether right my wrong.”); Prager v. New Jersey

Fidelity & Plate Glass Ins. Co., 245 N.Y. 1, 5-6, 156 N.E. 76

(1927) (Cardozo, J.) (“While the dispute as to the value was

going on, the defendant had the benefit of the money, and the

plaintiff was without it. Interest must be added if we are to

make the plaintiff whole.”). Courts’ recognition of the time

value of money is based upon the following reasoning, as

succinctly put by one legal commentator:

If justice were immediate, there would never be an

award of prejudgment interest. The injured party

would receive an enforceable judgment immediately,

with no loss in value from the time value of money.

Because justice often takes many years to achieve,

interest is added to the original judgment to ensure

that compensation is complete.

8la

Michael S. Knoll, Primer on Prejudgment Interest, 75 Tex.

L. Rev. 293, 294 (Dec.1996) (footnotes omitted).

Furthermore, although the three economists who testified

during Phase II differed greatly in their conclusions as to the

proper amount of prejudgment interest which this court

might award, they agreed as to the meaning of opportunity

cost and its relationship to prejudgment interest in this case.

As the Cayuga’s economist Dr. Temin defined it,

“opportunity cost ... [is] an economic term for the cost of [an]

alternate activity[.]” Tr. at 5734. In terms of the Cayuga’s

lost opportunity cost in particular, Dr. Temin expounded:

If the Cayugas had not been injured at that

time in the amounts the jury determined for

each year, they theoretically would have had

the amounts for each year which the jury

awarded, and could have used or invested

those funds .... Without that property or

money, they incur the opportunity cost of

property or money.... If we compensate for an

injury in 1795 (or other past year) as if it took

place today, we ignore the opportunity cost of

this injury. We compensate the injured party

for the dollar amount of the injury, but not for

the foregone use of the injury sustained as the

injury at the time of loss.

Nat. Exh. 64 at 6,94 16 and 17. In a similar vein, the U.S.’

economist Dr. Berkman explained:

[I]f the jury found that there was a loss to the

tribe, ... as a consequence of actions in 1795

and they’ve identified those stream of losses,

these losses by themselves don’t compensate

[the Cayugas] for those losses, ... because it

82a

fails to recognize this opportunity cost ..., that

they, in addition to having those moneys,

could have used those moneys for a variety of

purposes or invested them, and we have to

account for the fact that they would have

benefited from those incomes and

prejudgment interest captures that additional

benefit that they would have received, and

that’s the missing piece to make them whole.

Tr. at 5929. And although the State’s economist, Dr.

Grossman, radically departed from the other two economists

insofar as his conclusion as to the amount of prejudgment

interest which should be awarded here, he too agreed that the

Cayuga had sustained a lost opportunity cost or, as he put it,

the “missed opportunity of being able to invest.” Tr. at 6087.

The economists are thus in agreement that in addition to

sustaining monetary damages for the loss of their homeland

over the past two centuries, the Cayuga have sustained

monetary losses because they did not have that money

available to them for investment or other purposes over the

years. Such loss makes prejudgment interest necessary here

to fully compensate the Cayuga. This conclusion is bolstered

by the fact that the jury was explicitly instructed not to

include prejudgment interest in its award, and as previously

explained, it followed that instruction. See National

Communications Association, Inc. v. Telephone and

Telegraph Col, No. 92-CIV. 1735(LAP), 1999 WL 258263 at

*4 (S.D.N.Y. April 29, 1999) (plaintiff did not receive full

compensation where no evidence suggested that the jury

calculated and added such interest). Therefore, the Cayuga

did not receive “complete compensation,” which the

Supreme Court has, as recently as June of this year,

repeatedly defined as including such interest. See State of

Kansas vy. State of Colorado, 533 U.S. 1, ----, 121 S. Ct.

83a

2023, 2029, 150 L. Ed. 2d 72 (2001) (citations omitted)

(“Our cases since 1933 have consistently acknowledged that

a monetary award does not fully compensate for an injury

unless it includes an interest component.”).

The Cayuga point out, as the court has noted, that the jury

verdict of nearly $37 million was less than the $335 million

suggested by the U.S.’ real estate appraisal expert. See

Cayuga Indian Nation of New York v. Pataki, Nos. 80-CV-

930 and 80-CV-960, slip op. at 8 n.4 (N.D.N.Y. April 19,

2000). The verdict also was less than that suggested by the

State’s real estate appraisal expert who “testified that total

damages ranged from approximately 62 million dollars to

approximately 40 million dollars.” See id. In light of the

foregoing, in the absence of prejudgment interest the Cayuga

assert that the $37 million jury award “does not constitute

full or sufficient compensation ... for the loss of their

homeland.” See Cayugas’ Pre-Trial Memorandum

(“Cay.Pre-Tr.Memo.”) at 26. The court agrees with the

Cayuga that prejudgment interest is necessary for full

compensation; but the court is highly skeptical that such

interest should be used as a vehicle to augment or increase

the jury’s verdict.

The Cayuga have not cited to any authority wherein a court

has held that prejudgment interest is necessary to fully

compensate a plaintiff based upon the supposed inadequacy

of the verdict. What authority there is pertaining to how, if at

all, verdict size impacts prejudgment interest is contradictory

and does not involve a Wickham analysis. In Jn Design v. K-

Mart Apparel Corp., 13 F.3d 559 (2d Cir. 1994), the Second

Circuit affirmed a district court’s denial of prejudgment

interest in a copyright case because there was a “sizable

damage award” of $632,000.00. See id. at 569. The Second

Circuit reached the opposite result, however, in Sharkey v.

Lasmo (AUL Ltd), 214 F.3d 371 (2d Cir. 2000), where it

84a

held that in denying prejudgment interest the district court

improperly relied upon its belief that “the jury’s award was

already surprising[ly] generofu]s[.]” /d at 375 (internal

quotation marks and citation omitted). Given the lack of

directly relevant precedent, the court finds that regardless of

the size of the verdict, the underlying purpose of prejudgment

interest, to make the plaintiff whole again, see City of

Milwaukee v. Cement Division, National Gypsum Co., 515

U.S. 189, 196, 115 S. Ct. 2091, 2096, 132 L. Ed. 2d 148

(1995), would best be served by an award of prejudgment

interest in this case.

2. Nature of Statute’

Another Wickham factor which impacts an award of

prejudgment interest “is whether the federal statute under

which damages have been obtained is remedial or punitive in

nature.” See Nu-Life Construction Corp. v. Board of

Education of the City of New York, 789 F. Supp. 103, 104

(E.D.N.Y.1992). Where a statute is remedial, such as Title

VII, which aims “to make persons whole for injuries suffered

on account of unlawful employment discrimination [,]” see

Albemarle Paper Co. v. Moody, 422 U.S. 405, 418, 95 S. Ct.

2362, 45 L. Ed. 2d 280 (1975), an award of prejudgment

interest is appropriate. See, e.g, O’Quinn v. New York

University Medical Center, 933 F. Supp. 341, 344 (S.D.N.Y.

1996) (Title VII plaintiff entitled to prejudgment interest on

tack pay award given, inter alia, the “obvious remedial

purposes” of that statute); National Communications

7 In Wickham the Second Circuit identified “the remedial purpose of the

Statute involved,” and whether the statute itself already provides for full

compensation and punitive damages, as separate factors which are a

“function” of a prejudgment interest award. See Wickham, 955 F.2d at

834 and 835. Because those factors are so closely related, it is logical for —

the court to consider them together.

85a

Association, 1999 WL 258263, at *5 (quoting 47 U.S.C. §

206 (1982)) (remedial purpose of Communications Act

which “provides that a carrier which has violated th[at] Act

‘shall be liable to the person or persons injured thereby for

the full amount of damages sustained in consequence of any

such violation[ |’ “ required prejudgment interest award). On

the other hand, “where the statute itself already provides for

full compensation or punitive damages,” as do the antitrust

laws, the Second Circuit has “suggested that prejudgment

interest is improper[.]” See Wickham, 955 F.2d at 835

(citing, inter alia, Trans World Airlines, Inc. v. Hughes, 449

F.2d 51, 80 (2d Cir. 1971)) (prejudgment interest

unnecessary given Clayton Act’s treble damage provision,

combined with absence of congressional intent as to

prejudgment interest), rev'd on other grounds, 409 U.S. 363,

93 S. Ct. 647, 34 L. Ed. 2d 577 (1973).

Naturally the plaintiffs and the State strongly disagree as to

the nature of the statute at issue herein--the Nonintercourse

Act. The Cayuga argue that because the purpose of that

statute is to “prevent Indians from improvident dispositions

of their lands and becoming ‘homeless charges[,]’ “ it is

remedial, thus mandating an award of prejudgment interest

thereunder. See Cay. Post-Trial Memo. at 4 (quoting Cayuga

Indian Nation of New York v. Cuomo, 565 F. Supp. 1297,

1323 (N.D.N.Y. 1983) (‘Cayuga II’). Echoing this

argument, the U.S. declares that “the oft-recognized

protective purposes of the Nonintercourse Act against

alienation of Indian lands easily encompasses the invocation

of prejudgment interest in this case.” U.S. Pre-Tr. Memo. at

28; and U.S. Post-Tr. Memo. at 7. The State’s view of the

Nonintercourse Act is the antithesis of the Cayuga’s. The

State deems that Act to be “prohibitory,” and hence this court

should refuse to award prejudgment interest. See St. Pre-Tr.

Memo. at 50.

86a

The Nonintercourse Act does not fit neatly into the category

of either a remedial or a punitive statute. That statute may, as

the State urges, be prohibitory in that broadly speaking it

proscribes the acquisition of Indian lands without the Federal

Government’s approval. However, that prohibition does not

necessarily render the Nonintercourse Act punitive. In fact,

this court has previously recognized as much, albeit in a

slightly different context, when in Cayuga I/ it held that it

could not “accept the view that ... the Nonintercourse Act ...

imposes a ‘penalty’ or ‘punishment’ [.]” See Cayuga II, 565

F. Supp. at 1327. This court went on to explain that the

Nonintercourse Act “declares that certain transactions in land

are of no validity in law or equity[;]” and “[t]he purpose of

this restraint against alienation, ..., was to protect Indian

possessory rights.” /d. In concluding that the Nonintercourse

Act was “not penal[,]” this court further reasoned “[t]hough

enforcement could work great hardship upon those who

claim title through a transaction which is invalid under the

Act, it is ... manifest that the statutory disability was

established not to punish, but to accomplish ‘some other

legitimate governmental purpose.” /d. at 1328 (quoting

Trop v. Dulles, 356 U.S. 86, 96, 78 S. Ct. 590, 2 L. Ed. 2d

630 (1958)) (emphasis added). In light of the foregoing, the

State’s argument that the Nonintercourse Act is prohibitory

or punitive is misplaced.

The absence of a punitive damage provision in the

Nonintercourse Act lends further credence to the view that

that statute is not punitive. Moreover, as this court

thoroughly explained in Cayuga IJ, there is a “judicial

consensus” as to the purpose of the Nonintercourse Act,

which is that Congress intended “ ‘to protect the lands of the

Indian tribes in order to prevent fraud and unfairness.””’ /d. at

1322 (quoting /n Joint Tribal Council of the Passamaquoddy

Tribe v. Morton, 388 F. Supp. 649, 656 (D.Me.1975)). As

87a

the case law outlined in Cayuga I] shows, that protective

purpose is “rather self-evident.” /d at 1323. In fact, in

recognizing an implied private cause of action under that

statute, the Second Circuit acknowledged the availability of a

concomitant damage remedy, even in the absence of statutory

language to that effect. See Oneida Indian Nation of New

York State v. County of Oneida, 719 F.2d 525, 540 (2d Cir.

1983). Consequently, even though “the Nonintercourse Act

of 1793 did not establish a comprehensive remedial plan for

dealing with violations of Indian property rights,” and even

though it “contains no remedial provision{,]” Oneida County,

N.Y. v. Oneida Indian Etc., 470 U.S. 226, 239, 105 S. Ct.

1245, 84 L. Ed. 2d 169 (1985) (“Oneida IT’) (emphasis

added), that lack of a remedial framework does not

undermine the fact that at its core the Nonintercourse Act is

remedial in nature.

Neither the silence of the Nonintercourse Act as to

prejudgment interest, nor the fact that it does not expressly

provide for “full” or “just” compensation alters the court’s

view that fundamentally this statute is remedial. The fact

that there is no mention of prejudgment interest in the

Nonintercourse Act does not mean, as the State suggests, that

such interest is not recoverable thereunder. Indeed, in

Wickham the Second Circuit catalogued a number of

Supreme Court decisions wherein recovery of prejudgment

interest was allowed “under a variety of federal laws, despite

the silence of the laws on the subject of interest.” See

Wickham, 955 F.2d at 834 (and cases cited therein)

(emphasis added). Wickham itself was such a case; there, the

Second Circuit upheld an award of prejudgment interest

under the Labor Management Relations Act (*“LMRA”), even

though that statute is silent on the issue of such interest. See

id. at 933-936; see also Securities & Exch. Comm'n v. First

Jersey Sec., Inc., 101 F.3d 1450 (2d Cir. 1996) (affirming

88a

prejudgment interest award of approximately $52 million

despite, inter alia, the absence of explicit statutory

authorization).

This court is fully aware, as the State notes, that it is possible

to infer intent to deny prejudgment interest from a statute’s

silence. Pursuant te Wickham, such intent may be inferred

“from (i) the state of the law on prejudgment interest, for the

type of claim involved, at the time the statute was passed,

and (ii) consistent denial by the courts of prejudgment

interest under the statute and failure by Congress, despite

amendments to the statute, to address prejudgment interest

awards.” Wickham, 955 F.2d at 834 (citing Monessen

Southwestern Ry. Co. v. Morgan, 486 U.S. 330, 336-39, 108

S. Ct. 1837, 100 L. Ed. 2d 349 (1988)). Neither of those

criteria are met in the present case however. Despite the vast

record and the voluminous briefs, there is absolutely nothing

before this court regarding the state of the law with respect to

prejudgment interest when the Nonintercourse Act was first

enacted in 1790. The State attempts to make much of the

fact that the Nonintercourse Act has gone through a number

of permeations with no mention of prejudgment interest. As

already discussed though, that silence is irrelevant because

prejudgment interest is recoverable even when a statute is

silent on that issue.

In any event, the second criteria for inferring intent to deny

recovery of picjudgment interest is also absent here. There is

no history of denial of prejudgment interest under the

Nonintercourse Act. Therefore, the Nonintercourse Act’s

silence regarding prejudgment interest is of little

consequence in determining whether to allow the recovery of

same here, and certainly does not foreclose such an award in

this case.

89a

Moreover, the extremely limited history of prejudgment

interest recovery under the Nonintercourse Act is to the

contrary. As the Cayuga note, in Oneida I/, another eastern

land claim case brought pursuant to the Nonintercourse Act,

the district court did “award[ ] the Oneidas damages in the

amount of $16,694, plus interest [.]” See 470 U.S. at 230,

105 S. Ct. 1245 (emphasis added). As outlined in Cayuga X,

given the posture of that case on appeal, “[t]he propriety of

an interest award was not before either the Second Circuit or

the Supreme Court[ ]” in that case. See Cayuga Indian

Nation of New York v. Cuomo, 1999 WL 509442, at *17

(N.D.N.Y. 1999) (“Cayuga X”). Therefore, the court rejects

the Cayuga’s argument that the Oneida district court’s award

of prejudgment interest for a mere two years, on damages

less than $20,000.00, somehow provides justification for an

award of prejudgment interest in ths case where, among

other differences, the damages span two centuries.

Likewise, the court does not give much credence to the

State’s argument that because the Nonintercourse Act does

not contain explicit language authorizing “just” or “entire”

compensation thereunder, the Cayuga should not be allowed

to recover prejudgment interest. It is the presence, not the

absence, of such language which augurs against an award of

prejudgment interest. In a similar vein, because the

Nonintercourse Act does not provide for exemplary damages

or other excess recovery, the Wickham Court’s admonition

against the recovery of prejudgment interest under those

circumstances is inapplicable here. See Webb v. GAF Corp.,

949 F. Supp. 102, 106 (N.D.N.Y. 1996) (citing Wickham,

955 F.2d at 839).

To conclude, the court agrees with the Cayuga that the

Nonintercourse Act’s silence does not bar prejudgment

interest here. Nor does the fact that that statute does not

expressly provide for full or just compensation prevent the

90a

recovery of prejudgment interest. Furthermore, on balance

the court is convinced that the Nonintercourse Act is

essentially remedial, so that if otherwise appropriate,

prejudgment interest should be allowed thereunder.

J, “Other General Principles”

As mentioned at the beginning of this court’s Wickham

analysis, among the “other general principles” which courts

have deemed relevant to the issue of whether to award

prejudgment interest in any given case are “[t]he certainty of

the damages due the plaintiff],]” and conversely “[t]he

speculative nature of the damages in question[.]” See

Wickham, 955 F.2d at 835 and 836. The former factor, the

certainty of the damages, “is the progeny of the old common

law rule that forbade prejudgment interest when the damages

were unliquidated or unascertainable up until the time of

judgment.” Webb, 949 F. Supp. at 106 (citing 5 Corbin On

Contracts § 1048 (1964)). That rule has been relaxed,

however, and “[p]rejudgment interest is now commonly

awarded in cases where the loss cannot be determined with

certainty at the time of injury, but is susceptible to

calculation by the time of trial or judgment, e.g., wrongful

termination cases, securities fraud cases, [and] patent

infringement cases.” See Thomas v. City of Mount Vernon,

No. 89 Civ. 0552, 1992 WL 84560, at *1 (S.D.N.Y. April 10,

1992) (citing Wickham, 955 F.2d at 835-36). On the other

hand, where damages awarded to a plaintiff in a section 1983

action for her false arrest were “unliquidated and inherently

speculative[,]” in that they were based “exclusively” on her

“emotional injuries[,]” and she had not sustained any

“economic injury[,]” the court denied her motion for

prejudgment interest. See Sulkowaska v. City of New York,

No. 99 Civ. 4228, 2001 WL 428253, at *6 (S.D.N.Y. April

25, 2001) (internal quotation marks and citations omitted).

9la

Only the State addressed these “other general principles”

which are relevant to a “sound decision” as to whether or not

to award prejudgment interest. See Wickham, 955 F.2d at

836. Prior to Phase I the State baldly declared “that a

damages calculation which rests upon estimates of fair

market value and rental or cash value of what was in effect

wilderness land over 200 years ago is highly uncertain and

speculative.” State of New York Defendants’ Trial

Memorandum (St. Ph. I Tr. Memo.) at 66. Thus, reasoned

the State, application of prejudgment interest “to such an

award [would] severely exacerbate[ ] this inherent weakness

in the damage calculation.” /d. After the jury verdict and

prior to Phase II, the State refined its argument. Given the

admittedly “contradictory testimony” as to the proper

methodology for valuing the subject property, and the

experts’ “widely divergent opinions as to the ultimate value

of lost rents for property in the claim area[,]” the State now

asserts that the jury’s methodology for calculating damages

was speculative, and hence it “caution[s] against an award of

prejudgment interest where the other factors tip in favor of

the State.” St. Pre-Tr. Memo. at 53 and 52 (emphasis

added).

State’s argument does not carry much weight with this court.

Given the extraordinarily unique nature of this litigation,

obviously the damages awarded by the jury were not as

readily quantifiable as, for example, a back pay award in a

Title VII case. See, e.g., McIntosh v. Irving Trust Co., 873 F.

Supp. 872, 882 (S.D.N.Y. 1995) (emphasis added) (amount

of back pay award in Title VII action “calculable by

reference to the specific amounts of money the plaintiff has

lost and the defendant has withheld[ |’). By the same token,

however, the damages awarded in this case are not “so

conjectural that prejudgment interest should not be awarded.”

See Wickham, 955 F.2d at 836. To illustrate, this is not a

92a

situation such as that presented in Thomas, 1992 WL 84560,

at *3, wherein the court observed that even if it had the

discretion to award prejudgment interest, it would not

because “plaintiff sustained no economic injury; he was not

deprived of money he would have otherwise earned but for

the wrongdoing of the defendants.” Plaintiff's injuries in

Thomas “were, for the most part, intangible and defendants’

unconstitutional behavior did not enable them to obtain any

financial benefits from their wrongdoing.” /d. at *4 (citation

omitted). Accord MclIntoshv. Irving Trust Co., 873 F. Supp.

872, 882 (S.D.N.Y. 1995) (citations omitted) (refusing to .

award prejudgment interest under New York CPLR § 5001

for pain and suffering because those damages were “not so

easily calculated and represent[ed] the jury’s translation into

monetary terms of a loss that is difficult to quantify[{ }”--a

loss “not easily divided into specific periods like back pay

and {which} does not represent an amount that the defendant

has withheld from the plaintiff in the same way that awards

in contract or property actions do[ }”).

By contrast, in the present case there is no dispute that the

Cayuga sustained economic loss as a result of being deprived

of their homeland for more than 200 years, and the jury so

found. Undoubtedly the fair rental value damages in

particular were difficult for the jury to calculate given the

conflicting and varying methodologies offered by the real

estate appraisal experts during Phase I. That difficulty does

not render the damages inherently speculative, however.

After all, the Cayugas did sustain a tangible loss-- their

property. The difficulty or complexity of calculating

damages “should not obscure the fact that there was a

reasonable basis in the evidence to support the jury’s

award[,]” and “the overall basis for the damage award was

[not] so speculative as to render it invalid.” See National

93a

Communications Association, 1999 WL 258263, at *4

(internal quotation marks and citation omitted).

Moreover, as the Wickham Court astutely recognized, “while

the presence of abstruse inquiries and difficult questions of

proof in the calculation of damages are factors to be

considered carefully, these problems must be considered

together with other factors that may favor prejudgment

interest.” Wickham, 955 F.2d at 836 (internal quotation

marks and citation omitted) (emphasis added). Here, the

other Wickham factors discussed to this point favor an award

of prejudgment interest. So, while admittedly there is a

“degree of speculation” in trying to ascertain the fair rental

value of the subject property across a 200 plus year time

frame, the court will not rule out a prejudgment interest

award on the basis of this factor alone.

Furthermore, the State misses the mark when it focuses upon

the purportedly speculative nature of the method by which

the jury calculated damages. It is the speculative or

conjectural nature of the damages themselves which

potentially could impact an award of prejudgment interest --

not the method by which those damages were calculated.

Finally, as should be evident by now, the court

wholeheartedly disagrees with the State that the Wickham

factors discussed in the preceding sections weigh in its favor,

and thus the purportedly speculative nature of the damages

herein should weigh against an award of prejudgment

interest. That is not to say, however, that the relative

uncertainty of the damages will not enter into this court’s

calculation of the amount of prejudgment interest due here.

It may be that, in taking into account the fairness and relative

equities of a prejudgment interest award, the ‘relative

uncertainty of the damages, could be a basis, among others,

for reducing the amount of any such interest which the court

may award in this case.

94a

4. Fairness and Relative Equities

This text is long and has been trimmed here. Open the source document for the complete record.