Cayuga Indian Nation of NY v. Gould, 2008 NY Slip Op 52478(U) (N.Y. Sup. Ct. 12/9/2008)
| Decision Date | 09 December 2008 |
| Docket Number | 2008-16350. |
| Citation | 2008 NY Slip Op 52478 |
| Parties | CAYUGA INDIAN NATION OF NEW YORK, Plaintiff, v. DAVID S. GOULD, AS CAYUGA COUNTY SHERIFF, SENECA COUNTY SHERIFF JACK S. STENBERG, CAYUGA COUNTY DISTRICT ATTORNEY JON E. BUDELMANN, SENECA COUNTY DISTRICT ATTORNEY RICHARD E. SWINEHART, Defendants. |
| Court | New York Supreme Court |
This is an action for declaratory and injunctive relief pursuant to CPLR § 3001 and Article 63. The complaint seeks in its first cause of action a declaration that NY Tax Law §471-e, as amended by L.2005, ch. 61, part K, L. 2005, ch. 63, §4, exclusively governs plaintiff's obligation to pay or collect taxes on the cigarettes they sell on property owned by plaintiff's members, and that therefore the Cayuga Indian Nation has not evaded or avoided the payment of cigarette taxes in violation of Tax Law §1814. In the second cause of action, plaintiff seeks a declaration that, by virtue of the Fourth Department's decision in Day Wholesale, Inc. v. State of New York, 51 AD3d 383 (4th Dept. 2008), which upheld a preliminary injunction directed against the State and Attorney General precluding enforcement of Tax Law §471-e, as amended, regarding the taxation of cigarettes on Indian reservations on the ground that the amended version of the statute is not presently in effect, the search warrant issued to Cayuga and Seneca County law enforcement authorities on November 25, 2008, and the seizures made thereunder on the same day, were illegal and unauthorized, and that the property seized must be returned to the owners.
In the third cause of action, plaintiff seeks a declaration that the Cayuga County law enforcement authorities who executed the warrant exceeded the scope of the warrant's authorization by seizing a computer used in, and essential to, the operation of the Union Springs store, which also sells gasoline. The fourth cause of action seeks an injunction restraining defendants from pursuing a threatened criminal prosecution by "alleging that Plaintiff and/or its employees have violated New York Tax Law §§471, 471-e, 473, or 1814, at least until such time as the Tax Department has taken the necessary actions and promulgated the necessary rules or regulations to implement the Indian tax exemption coupon system under §471-e." Finally, in plaintiff's prayer for relief and in the paragraph entitled Nature of the Case in paragraphs 1-2 of the complaint, plaintiff seeks an order "requiring the Defendants immediately to return the Plaintiff's property that was seized pursuant to the unlawfully obtained search warrants."
By order to Show Cause, plaintiff seeks a preliminary injunction which (1) orders defendants to return all property issued pursuant to the two search warrants; and (2) enjoins defendants from alleging that plaintiff or its employees have violated Tax Law §§ 471, 471-e, 473, and 1814. The motion also seeks an order and judgment declaring that section 471-e is not in effect; that by possessing unstamped cigarettes, plaintiff is not in violation of section 1814; and that therefore the seizure of property pursuant to the warrants was unlawful.
By Notice of Cross-Motion, defendants Gould and Stenberg, the sheriffs of Cayuga and Seneca counties, respectively, seek an order dismissing the complaint pursuant to CPLR 3211(a)(1)(defenses based on documentary evidence), (a)(5)(collateral estoppel), and (a)(7)(failure to state a cause of action). In the alternative, these two defendants seek conversion of plaintiff's motion to one for summary judgment, and they move for summary judgment dismissing the complaint as against them. The other defendants have not similarly so moved, but have opposed plaintiff's motion for a preliminary injunction.
At oral argument, however, plaintiff suggested, and all defendants agreed, that the motion for a preliminary injunction and the motions to dismiss should be converted to cross-motions for summary judgment on due notice to all parties. A motion for a preliminary injunction opens the record and permits the court to pass on the sufficiency of the parties' respective claims and defenses. Guggenheimer v. Ginzburg, 43 NY2d 268, 272 (1977); Berio v. Berio, 143 AD2d 866, 867-68 (2d Dept. 1988). See also, Rochester City School District v. County of Monroe, 13 AD3d 1052, 1053 (4th Dept. 2004). It is the duty of the court in this declaratory judgment action to "declar[e] the rights of the parties." Village of Webster v. Town of Webster, 270 AD2d 910 (4th Dept. 2000).
A threshold question raised by defendants in their consolidated response to the motion is whether collateral declaratory relief is available to the target of a criminal investigation, and whether coercive relief in the nature of an injunction directed against local law enforcement authorities is at all appropriate in these circumstances. Despite some statements in cases that "only an application for declaratory relief by the People should be entertained," Matter of Morganthau v. Erlbaum, 59 NY2d 143, 152 (1983) (citing Kelly's Rental v. City of New York, 44 NY2d 700 (1978)), the Court of Appeals has sanctioned as "an appropriate use of a declaratory judgment action to challenge a criminal statute," a potential criminal defendant's use, after three acquittals during successive vagrancy prosecutions, of CPLR 3001 to seek "a declaration that the vagrancy statute was unconstitutional on its face." Id. 59 NY2d at 151, discussing Fenster v. Leary, 20 NY2d 309 (1967). See, Erlbaum, 59 NY2d at 150-51, which described New York Foreign Trade Zone Operators v. State Liquor Authority, 285 NY 272 (1941) as also involving an appropriate use of a declaratory judgment action brought by a plaintiff who "potentially faced criminal prosecution" seeking a declaration whether, in the undisputed circumstances of that case, a distiller's license was required to conduct plaintiff's activities of "import[ing] liquor into a trade zone, where it diluted the spirits, repackaged them, and then shipped them to other parts of the United States or to foreign countries." Erlbaum, 59 NY2d at 151.
In none of these cases was the plaintiff "[a] party against whom a criminal proceeding is pending" at the time of commencement of the declaratory judgment action such that he or she "may not seek declaratory relief." Kelly's Rental, Inc. v. City of New York, 44 NY2d at 702. Cf., Cooper v. Town of Islip, __ AD3d __, 2008 WL 4890009 (2d Dept. November 12, 2008)(criminal action pending). See also, People v. Mateo, 2 NY3d 383, 400-01 (2004); Oglesby v. McKinney, 28 AD3d 153, 158 (4th Dept. 2006), aff'd, 7 NY3d 561, 565 (2006). The argument that entertaining an action for declaratory relief would interfere in the proper administration of criminal justice was, for cases of the current kind, ultimately laid to rest in New York Foreign Trade Zone Operators v. State Liquor Authority, 285 NY at 277-78; Playtogs Factory Outlet, Inc. v. Orange County, 51 AD2d 772, 780 (2d Dept. 1976)(collecting cases); Bemis v. Conway, 17 AD2d 207, 208-09 (4th Dept. 1962)(" [r]esort to this remedy and also to that of an injunction may be had even with respect to penal statutes and against a public official or public agency whose duty it is to conduct appropriate prosecutions'")(quoting De Veau v. Braisted, 5 AD2d 603, 606-07, aff'd, 5 NY2d 236, aff'd, 363 U.S. 144, 80 S.Ct. 1146); Rockland County Multiple Listing System, Inc. v. State, 72 AD2d 742, 743 (2d Dept. 1979).
The absence of a pending criminal action at the time of commencement makes it discretionary whether to entertain this action for declaratory relief. Beneke v. Town of Santa Clara, 9 AD3d 820 (3d Dept. 2004)("petitioner failed to avail himself of this remedy prior to the commencement of the criminal action")(emphasis supplied); Royal Service LLC v. Village of Monticello, 247 AD2d 779, 781 (3d Dept. 1998). That discretion is exercised in favor of entertaining the action insofar as it does not concern a collateral review of the validity of the search warrants or the manner of execution of the Cayuga County warrant. Calderon v. City of Buffalo, 61 AD2d 323, 326-27 (4th Dept. 1978). There are no factual issues, as only questions of law about the application of certain statutes to plaintiff's undisputed conduct are presented. Erlbaum, 59 NY2d at 150-51. The defendant district attorneys, in their memoranda of law, each posit that there is a factual issue inasmuch as the targets of the investigation have not explicitly admitted that they sold untaxed cigarettes as alleged in the warrant applications. But that argument strains this record; plaintiff's complaint is wholly premised on the proposition that their members indeed do sell untaxed cigarettes on the parcels targeted for search, and that this is permissible under our law and at oral argument, plaintiff's attorneys made this concession explicit. The first two causes of action are, therefore, cognizable in this declaratory proceeding.
The balance of the complaint, directed to the manner of the Cayuga County search and seeking an injunction prohibiting prosecutions and a return of the seized property, is subject to a different analysis. The remedy of prohibition is not available to remedy an unconstitutional search conducted pursuant to a warrant which has already been executed, Matter of James "N" v. D'Amico, 139 AD2d 302, 308-09 (4th Dept. 1988)(Boomer and Pine, J.J., concurring), but a writ will lie to challenge the territorial jurisdiction of a criminal court over a crime. Matter of Taub v. Altman, 3 NY3d 30, 33 n.2 (2004); Matter of Rush v. Mordue, 68 NY2d 348, 353 (1986); Matter of Steingut v. Gold, 42 NY2d 311 (1977).
Separately, a writ of prohibition is available to obtain return of seized property after an unreasonable length of time in a case of an unfocused investigation in which there was no indication that...
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