Seneca Nation of Indians v. Paterson et al
DECISION AND ORDER granting 101 Defendants' Motion for Summary Judgment; denying 106 Plaintiffs' Motion to Dismiss. The complaints (docs. 1, 30) are therefore dismissed in their entirety with prejudice. Signed by Hon. Michael A. Telesca on 1/23/17. (Clerk to close case.) (JMC)-CLERK TO FOLLOW UP-
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
SENECA NATION OF INDIANS,
CAYUGA INDIAN NATION,
No. 1:10-CV-00687 (MAT)
DAVID PATERSON, Governor of the
State of New York, JAMIE WOODWORD,
Acting Commissioner, New York
State Department of Taxation and
Finance, WILLIAM COMISKEY, Deputy
Commissioner, Office of Tax
Enforcement, New York State
Department of Taxation and
Finance, JOHN MELVILLE, Acting
Superintendent, New York State
Police, each in his or her
DECISION AND ORDER
The Seneca Nation of Indians (“SNI”) commenced this action on
August 17, 2010, seeking declaratory and injunctive relief “to
prevent [d]efendants from infringing on the Nation’s federallyprotected right of self-government and from plunging the Nation’s
well-regulated tobacco economy into chaos.” Doc. 1 at ¶ 1. The
restraining order, on October 14, 2010 this Court (Arcara, J.)
denied the plaintiffs’ motion for a preliminary injunction. See
Seneca Nation of Indians v. Paterson, 2010 WL 4027796 (W.D.N.Y.
Oct. 14, 2010). This Court then granted plaintiffs’ request for a
stay pending an interlocutory appeal. On May 9, 2011, the Second
Circuit affirmed this Court’s denial of a preliminary injunction,
and the stay was subsequently vacated by this Court. See Oneida
Nation of New York v. Cuomo, 645 F.3d 154 (2d Cir. 2011); doc. 100
(order vacating stay).2
Presently before this Court are defendants’ motion for summary
judgment pursuant to Fed. R. Civ. P. 56 and plaintiffs’ crossmotion to dismiss the complaint pursuant to Fed. R. Civ. P.
defendants’ motion is granted and plaintiffs’ motion is denied.
The Pending Motions3
Defendants’ summary judgment motion argues that plaintiff’s
complaint should be dismissed in its entirety on the merits.
41(a)(2) requests that the Court dismiss the matter “with prejudice
to the Nations’ asserted claims that N.Y. Tax Law §§ 471(1), (2),
(5), N.Y. Tax Law § 471-e, as amended June 2010, and 20 N.Y.C.R.R.
§ 74.6 should be declared invalid as written and enjoined prior to
This case was originally assigned to Judge Richard Arcara.
Judge Arcara transferred the case to this Court by order dated
January 19, 2017.
This Court refers to a prior order dated October 14, 2010
(doc. 87 at 2-11; Seneca Nation, 2010 WL 4027796, at *2-6), for a
thorough summary of the factual background of this matter.
their implementation and enforcement as violative of the federally
protected rights of the Nations, their members, and their licensed
business.” Doc. 106-1 at 8. However, plaintiffs’ motion further
requests that dismissal be granted conditionally “without prejudice
to any future action brought by the Nations, their members, and/or
their licensed businesses claiming that the actual implementation
or enforcement of [the above-enumerated tax laws] has resulted in
the violation of their federally-protected rights.” Id.
III. Standard of Review
Summary judgment is appropriate where the court determines
“there is no genuine issue as to any material fact and that the
movant is entitled to judgment as a matter of law.” See Fed. R.
Civ. P. 56(c). The court must view all facts in the light most
favorable to the nonmoving party, but “only if there is a ‘genuine’
dispute as to those facts.” See Scott v. Harris, 550 U.S. 372, 380
(2007). A genuine issue of material fact exists if “the evidence is
nonmoving party.” See Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986). The nonmoving party, however, may not rely on
“[c]onclusory allegations, conjecture, and speculation,” Kerzer v.
affirmatively “set out specific facts showing a genuine issue for
trial.” See Fed. R. Civ. P. 56(e). To meet this burden, “a
plaintiff must come forward with evidence to allow a reasonable
jury to find in his favor” on each of the elements of his prima
facie case. See Lizardo v. Denny's, Inc., 270 F.3d 94, 101 (2d Cir.
2001). A Court may dismiss an action pursuant to Fed. R. Civ. P.
41(a)(2) at the plaintiff’s request, “on terms that the court
The tax law amendments at issue in this case are set forth in
N.Y. Tax Law §§ 471(1), (2), (5), N.Y. Tax Law § 471-e, as amended
amendments”). The amendments provide that the cigarette tax imposed
under New York State Law shall be applied to all wholesale sales of
cigarettes in New York State, and “the ultimate incidence of and
liability for the tax shall be upon the consumer.” N.Y. Tax Law
§ 471(2). Under the statutory scheme, the tax does not apply to
consumption on their nations’ qualified reservations,” but a tax is
non-members of the Indian nation or tribe” and “evidence of such
tax shall be by means of an affixed [New York State] cigarette tax
stamp.” Id. § 471(1). The amendments provide that Indian nations
and their members may obtain tax-exempt cigarettes by means of
either a “coupon system” or a “prior approval system.” The Court
refers to its October 14, 2010 order for a thorough review of these
alternate systems. See doc. 87 at 8-11; Seneca Nation, 2010 WL
4027796, at *4-6.
In its decision and order dated October 14, 2010, denying
plaintiffs’ initial request for a preliminary injunction, the Court
found that plaintiffs had failed to establish a likelihood of
success on the merits with respect to their tribal sovereignty
claims. See Seneca Nation, 2010 WL 4027796, at *6-17. Specifically,
the Court held that plaintiffs’ “right of tribal sovereignty is not
amendments.” Id. at *17. For the same reasons as stated in the
previous order’s lengthy discussion, this Court again finds that
the amendments at issue in this case do not unconstitutionally
burden plaintiffs’ right of tribal sovereignty and therefore denies
plaintiffs’ request for a declaratory judgment regarding this
Plaintiffs further argue that the amendments violate the
interstate commerce clause, U.S. Const., art. I, § 8, cl. 3, and
the Internet Tax Freedom Act (“ITFA”), reproduced at 47 U.S.C.
§ 151 note §§ 1101-09,4 and request declaratory relief to that
effect. As defendants point out, however, this Court previously
As enacted, the ITFA created a moratorium prohibiting
individual states from imposing internet access taxes on internet
service providers (ISPs), unless the ISP did not offer filtering
software to the customer. 47 U.S.C. § 1101(a)(1) (former); see Pub.
L. 105-277, Title XI. The SNI claims that the amendments at issue
in this case violate the ITFA by “prohibit[ing] Nation-licensed
businesses from obtaining non-New York taxed cigarettes for
purposes of internet sales to out-of-state residents, which sales
are subject to cigarette tax in such persons’ state of residence.”
Doc. 1 at ¶ 69. The CIN does not explicitly state a claim under the
ITFA, but claims that the amendments impermissibly “require[s] the
prepayment of cigarette tax to which it is not legally entitled.”
Doc. 30 at ¶ 55.
noted that “an entirely separate provision of the New York Tax Law
provides a mechanism for cigarette retailers to obtain a refund for
cigarette sales made to out-of-state purchasers.” Id. at *12
(citing N.Y. Tax Law § 476). “This refund provision represents a
legitimate, nondiscriminatory state law that applies equally to
reservation and non-reservation cigarette sellers operating in
New York.” Id. (citing Mescalero Apache Tribe v. Jones, 411 U.S.
plaintiffs’ request for a declaratory judgment regarding their
Interstate Commerce Clause and ITFA claims. Therefore, defendants’
entirety, with prejudice.
The Court further notes that plaintiffs’ request for dismissal
plaintiffs ask that dismissal be granted “without prejudice to the
assertion of any post-enforcement claims that [may] arise from the
actual implementation and enforcement of the scheme and that would
Doc. 106-1 at 6. Plaintiffs concede, however, that their complaints
do not relate to any post-enforcement scenario and allege only
pre-enforcement claims. The Court cannot extend its holding to
include “future” or “hypothetical” claims, as those claims are
speculative and unripe. In the interest of clarity, the Court
emphasizes that the dismissal ordered herein regarding plaintiffs’
motion pursuant to Rule 41(a)(2) is with prejudice as to all of
Defendants’ motion for summary judgment (doc. 101) is granted
and plaintiffs’ motion to conditionally dismiss
Rule 41(a)(2) (doc. 106) is denied. The complaints (docs. 1, 30)
are therefore dismissed in their entirety with prejudice.
ALL OF THE ABOVE IS SO ORDERED.
S/Michael A. Telesca
HON. MICHAEL A. TELESCA
United States District Judge
January 23, 2017
Rochester, New York.
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