Dalton v. Pataki

CourtNew York Supreme Court Appellate Division
Citation835 N.E.2d 1180,2005 N.Y. Slip Op. 03581,5 N.Y.3d 243
Decision Date03 May 2005

5 N.Y.3d 243
835 N.E.2d 1180
2005 N.Y. Slip Op. 03581

Court of Appeals of New York.

Joseph DALTON et al.,
Appellants-Respondents,
v.
George PATAKI, as Governor of the State of New York, et al.,
Respondents-Appellants, et al., Respondents.
(Action No. 1.)
Mrs. Lee Karr,
Appellant-Respondent,
v.
George Pataki, as Governor of the State of New York, et al.,
Respondents-Appellants, et al., Respondents.
(Action No. 2.)

May 3, 2005.

802 N.Y.S.2d 75]

O'Connell and Aronowitz, Albany (Cornelius D. Murray and James A. Shannon of counsel), for appellants-respondents in the first above-entitled action.

Eliot Spitzer, Attorney General, Albany (Caitlin J. Halligan, Daniel Smirlock, Gregory Silbert and Marcus J. Mastracco of counsel), for State respondents-appellants in the first above-entitled action.

Bleakley Platt & Schmidt, LLP, White Plains (Frederick J. Martin, Robert D. Meade and Susan E. Galvo of counsel), for Yonkers Racing Corporation, respondent-appellant in the first above-entitled action.

Jay Goldberg, P.C., New York City (Jay Goldberg and Faith A. Friedman of counsel), for appellant-respondent in the second above-entitled action.

Hodgson Russ LLP, Buffalo (Kevin M. Kearney and Kathleen Sellers of counsel), for Finger Lakes Racing Association, Inc., respondent-appellant in the first and second above-entitled actions.

Gibson, Dunn & Crutcher LLP, New York City (Randy M. Mastro of counsel), for intervenor-respondent in the second above-entitled action.

Daniel T. Warren, West Seneca, amicus curiae pro se in the first above-entitled action.

Law Offices of Neal Brickman, New York City (Neal Brickman of counsel), Mintz & Gold, LLP (Vito J. Titone, Jr. of counsel), and Meyer, Suozzi, English & Klein, P.C., Mineola (Michael A. Ciaffa of counsel), for Standardbred Owners Association, Inc. and others, amici curiae in the first and second above-entitled actions.

[802 N.Y.S.2d 76]

Featherstonhaugh, Wiley, Clyne & Cordo, LLP, Albany (Randall J. Ezick of counsel), for New York Thoroughbred Horsemen's Association, Inc., amicus curiae in the first and second above-entitled actions.

OPINION OF THE COURT

CIPARICK, J.

[5 N.Y.3d 251]

[835 N.E.2d 1184]

In 2003, we addressed whether the Governor had the authority

[5 N.Y.3d 252]

to enter into compacts with Indian tribes pursuant to the federal Indian Gaming Regulatory Act of 1988 (IGRA) (25 USC §§ 2701-2721; 18 USC §§ 1166-1168) allowing casino gaming on Indian lands within the state (see Saratoga County Chamber of Commerce v. Pataki, 100 N.Y.2d 801, 766 N.Y.S.2d 654, 798 N.E.2d 1047 [2003] ). We determined that the Governor's actions in unilaterally negotiating and entering into such tribal-state compacts violated separation of powers principles because such actions involved policy decisions within the power of the Legislature. Since the compacts were invalidated on this ground, we did not reach the questions whether casino gaming permitted by such tribal-state compacts violated the commercial gambling prohibitions of article I, § 9 of the New York State Constitution and whether IGRA preempts in this area. Those issues are now squarely presented for our review. Also presented is the constitutional validity of video lottery gaming and New York's participation in the multistate Mega Millions lottery.

Chapter 383 of the Laws of 2001 was introduced in the Senate and the Assembly on the evening of October 24, 2001, and the early morning of October 25, 2001. The 81-page bill contained a wide range of provisions aimed, in part, at countering the anticipated negative economic effects of the terrorist attacks of September 11th and at generating revenue. The Governor submitted a message of necessity, certifying the need for an immediate vote on the bill, which had not been on the legislators' desks in final form for the required three calendar days (see N.Y. Const., art. III, § 14). The Legislature enacted the bill immediately and the Governor signed it into law shortly thereafter.

The provisions at issue on this appeal are parts B, C and D of chapter 383. Adding a new Executive Law § 12, part B authorized the Governor to enter into "a tribal-state compact with the Seneca Nation of Indians pursuant to the [federal] Indian Gaming Regulatory Act of 1988 ... consistent with a memorandum of understanding between the [parties]" (L. 2001, ch. 383, part B, § 2). The memorandum of understanding permitted the parties to negotiate a compact to allow class III gaming in up to three casinos. 1 The compact would be deemed adopted by the Legislature when the Governor certified that the agreement provided for, among other things, reasonable access to the gaming

[5 N.Y.3d 253]

facilities by labor unions, a satisfactory system for civil recovery and adequate liability insurance. Part B also authorized the Governor to enter into tribal-state compacts with unnamed tribes to allow up to three additional class III gaming facilities in Ulster and Sullivan counties. Those compacts would likewise be deemed adopted by the Legislature when the Governor certified they met the requisite labor union, civil recovery and liability insurance requirements.

Part C authorized the use of video lottery terminals (VLTs)-under

[835 N.E.2d 1185]

[802 N.Y.S.2d 77]

Tax Law § 1617-a-at several racetracks, including Aqueduct, Monticello, Yonkers, Finger Lakes and Vernon Downs (see L. 2001, ch. 383, part C, § 1). The bill also amended Tax Law § 1612 to include a revenue distribution scheme for the VLT proceeds (see L. 2001, ch. 383, part C, § 2). Between 12% and 25% of the total revenue was designated a vendor's fee. The legislation provided that a portion of the vendor's fee must be reinvested in the racing industry by applying it to enhancing purses and to the appropriate breeding fund. Finally, part D amended Tax Law §§ 1604 and 1617 to authorize the State's participation in a multijurisdictional lottery (see L. 2001, ch. 383, part D, §§ 1, 3).

Plaintiffs are a group of citizen taxpayers, state legislators and not-for-profit organizations "opposed to the spread of gambling." They commenced this action in January 2002. Plaintiffs moved for summary judgment declaring parts B, C and D of chapter 383 unconstitutional. Defendants and intervenor-defendant (Park Place) each cross-moved for summary judgment dismissing the complaint. Supreme Court granted the cross motions, denied plaintiffs' motion for summary judgment and declared the challenged portions of chapter 383 of the Laws of 2001 constitutional.

The Appellate Division modified, in a comprehensive opinion, by reversing the portion of Supreme Court's order that declared part C constitutional, declared part C unconstitutional and, as so modified, affirmed (see 11 A.D.3d 62, 780 N.Y.S.2d 47 [2004] ). The Court determined that the Governor's message of necessity was sufficient to meet the requirements of article III, § 14 of the State Constitution. It further found that since the State allows the type of gaming at issue, with certain limitations, the gaming was "properly the subject of a tribal-state compact and part B"

[5 N.Y.3d 254]

was constitutional (11 A.D.3d at 83, 780 N.Y.S.2d 47). Similarly, the Appellate Division found that part D, authorizing the multistate lottery, was constitutional-finding that the State "retains sufficient supervision over the multistate lottery ... to satisfy the constitutional requirement that a lottery be ‘operated by the state’ " (11 A.D.3d at 105, 780 N.Y.S.2d 47 [citations omitted] ). The Court also determined that the net proceeds from the multistate lottery were properly dedicated to education in the state (see 11 A.D.3d at 106, 780 N.Y.S.2d 47).

As to part C-authorizing the operation of video lottery terminals-the Appellate Division concluded that the VLTs were components of lotteries rather than slot machines and, as such, were constitutionally permitted (see 11 A.D.3d at 94, 780 N.Y.S.2d 47).However, the Court determined that the portion of the legislation directing that certain percentages of the vendor fees be reinvested for enhancing purses and in an appropriate breeding fund did not meet the constitutional requirement that lottery proceeds be dedicated exclusively to the support of education within the state (see 11 A.D.3d at 99, 780 N.Y.S.2d 47). The Appellate Division found the revenue distribution defect was not severable because severance would result in "either an inflated vendor fee or no fee at all" (11 A.D.3d at 102, 780 N.Y.S.2d 47). Thus, the Appellate Division declared part C unconstitutional in full. Plaintiffs now appeal, and defendants cross-appeal, as of right pursuant to CPLR 5601(b)(1). We modify the Appellate Division and declare that parts B, C and D of chapter 383 of the Laws of 2001 are in all respects constitutional.

New York State Constitution

While our State Constitution generally prohibits gambling, this broad prohibition

[835 N.E.2d 1186]

[802 N.Y.S.2d 78]

is subject to limited exceptions. For example, the Constitution provides that

"no lottery or the sale of lottery tickets, pool-selling, bookmaking, or any other kind of gambling, except lotteries operated by the state and the sale of lottery tickets in connection therewith as may be authorized and prescribed by the legislature, the net proceeds of which shall be applied exclusively to or in aid or support of education in this state as the legislature may prescribe, and except pari-mutuel betting on horse races as may be prescribed by the legislature and from which the state shall derive a

[5 N.Y.3d 255]

reasonable revenue for the support of government, shall hereafter be authorized or allowed within this state" (N.Y. Const., art. I, § 9[1] ).

The Constitution further allows individual municipalities to authorize, by vote at a general or special election, certain "games of chance"-such as bingo, lotto or other types of games where a winner is determined on the basis of a winning number, color or symbol (see N.Y. Const.,...

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33 practice notes
  • White v. Cuomo, 528026
    • United States
    • New York Supreme Court Appellate Division
    • February 6, 2020
    ...information relied upon, or that such information came from the legislative record or was before the Legislature (see Dalton v. Pataki, 5 N.Y.3d 243, 263–265, 802 N.Y.S.2d 72, 835 N.E.2d 1180 [2005], certs denied 546 U.S. 1032, 126 S.Ct. 742, 163 L.Ed.2d 571 [2005] ) – did not use the stand......
  • State v. Farnsworth
    • United States
    • New York Supreme Court Appellate Division
    • April 30, 2010
    ...cert. denied --- U.S. ----, 130 S.Ct. 552, 175 L.Ed.2d 382; see McKinney's Cons. Laws of N.Y., Book 1, Statutes § 150; Dalton v. Pataki, 5 N.Y.3d 243, 255, 802 N.Y.S.2d 72, 835 N.E.2d 1180, rearg. denied 5 N.Y.3d 783, 801 N.Y.S.2d 803, 835 N.E.2d 663, cert. denied 546 U.S. 1032, 126 S.Ct. 7......
  • People v. Davis, No. 86
    • United States
    • New York Court of Appeals
    • June 11, 2009
    ...607, 562 N.Y.S.2d 14, 563 N.E.2d 705 [1990]). Duly enacted statutes enjoy a "presumption of constitutionality" (see id.; Dalton v. Pataki, 5 N.Y.3d 243, 255, 802 N.Y.S.2d 72, 835 N.E.2d 1180 [2005]). Thus, a party who asserts that a statute is facially unconstitutional must demonstrate "bey......
  • New York v. Shinnecock Indian Nation, No. 03-CV-3243 (JFB)(ARL).
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
    • October 30, 2007
    ...on Indian lands provided it is authorized by a tribal ordinance and is carried out pursuant to a tribal-state compact." Dalton v. Pataki, 5 N.Y.3d 243, 259, 802 N.Y.S.2d 72, 835 N.E.2d 1180 (N.Y.2005). In short, under IGRA, class III gaming may only be conducted by an "Indian tribe" on "Ind......
  • Request a trial to view additional results
29 cases
  • White v. Cuomo, 528026
    • United States
    • New York Supreme Court Appellate Division
    • February 6, 2020
    ...information relied upon, or that such information came from the legislative record or was before the Legislature (see Dalton v. Pataki, 5 N.Y.3d 243, 263–265, 802 N.Y.S.2d 72, 835 N.E.2d 1180 [2005], certs denied 546 U.S. 1032, 126 S.Ct. 742, 163 L.Ed.2d 571 [2005] ) – did not use the stand......
  • State v. Farnsworth
    • United States
    • New York Supreme Court Appellate Division
    • April 30, 2010
    ...cert. denied --- U.S. ----, 130 S.Ct. 552, 175 L.Ed.2d 382; see McKinney's Cons. Laws of N.Y., Book 1, Statutes § 150; Dalton v. Pataki, 5 N.Y.3d 243, 255, 802 N.Y.S.2d 72, 835 N.E.2d 1180, rearg. denied 5 N.Y.3d 783, 801 N.Y.S.2d 803, 835 N.E.2d 663, cert. denied 546 U.S. 1032, 126 S.Ct. 7......
  • RINCON BAND OF LUISENO MISSION v. Schwarzenegger, No. 08-55809
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • April 20, 2010
    ...negotiate, but that it also provides tribes with alternative routes to a compact if the states choose not to cooperate); Dalton v. Pataki, 5 N.Y.3d 243, 802 N.Y.S.2d 72, 835 N.E.2d 1180, 1189 (2005) ("IGRA confers a benefit on the state by allowing it to negotiate and to have some input int......
  • People v. Davis, No. 86
    • United States
    • New York Court of Appeals
    • June 11, 2009
    ...607, 562 N.Y.S.2d 14, 563 N.E.2d 705 [1990]). Duly enacted statutes enjoy a "presumption of constitutionality" (see id.; Dalton v. Pataki, 5 N.Y.3d 243, 255, 802 N.Y.S.2d 72, 835 N.E.2d 1180 [2005]). Thus, a party who asserts that a statute is facially unconstitutional must demonstrate "bey......
  • Request a trial to view additional results

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