New York State Dept. of Taxation and Finance v. St. Regis Group
| Decision Date | 13 May 1994 |
| Citation | 613 N.Y.S.2d 833,161 Misc.2d 383 |
| Parties | NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE, Plaintiff, v. ST. REGIS GROUP (Mohawk Akwesasne Reservation), St. Regis Group (Fredericksburg, VA), A. Smith Bowman Distillery, Inc., Defendants. NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE, Plaintiff, v. Wayne STEHLIN, T.N.C. Trading Inc. Todhunter International, Inc., Florida Distillers Company, Defendants. . Lawrence County |
| Court | New York Supreme Court |
G. Oliver Koppell, Atty. Gen. (Anthony Gigliotti, Asst. Atty. Gen., of counsel), and James Zaccaria, Albany, for NYS Dept. of Taxation and Finance.
Pease & Willer, Massena (Daniel S. Pease, of counsel and co-counsel John M. Peebles), for St. Regis Group.
Zdarsky, Sawicki & Agostinelli, Buffalo (Gerald T. Walsh, of counsel), for Wayne Stehlin.
On December 1, 1993, the New York State Police stopped a tractor trailer along Route 37 in the Town of Massena, New York for an apparent violation of the Truck Mileage Tax provisions under Article 21 of the New York Tax Law. During the course of the officer's investigation, the driver indicated he was transporting liquor and provided the officer with liquor manifests and shipping documentation that 1,704 cases of liquor were consigned to the St. Regis Group on the Mohawk Akwesasne Reservation and indicated that the St. Regis Group possessed New York State liquor distributor permit number 9361799. The officer became suspect as it was his understanding that the St. Regis Group was not a registered New York State liquor distributor; and furthermore, typically, such registration numbers were preceded with the letter "L" and followed by four numbers. The officer radioed for assistance and upon consultation with an Investigator, New York State Police Bureau of Criminal Investigations, concluded there were reasonable grounds to believe the permit number was fictitious and that the liquor was being imported illegally into New York State in violation of Articles 18 and 37 of the New York Tax Law. Upon consultation with James Zaccaria, Principal Attorney with the New York State Office of Tax Enforcement, it was discovered that the registration number was fictitious and that neither the St. Regis Group, nor the A. Smith Bowman Distillery was a registered New York State liquor distributor. The liquor and tractor trailer were then seized pursuant to New York Tax Law, § 1845.
PROCEDURAL HISTORY:
In compliance with New York Tax Law § 1845(c), the Tax Department, within five business days of the temporary seizure, moved in St. Lawrence County Supreme Court (the County in which the temporary seizure took place) for an order confirming the temporary seizure. Upon oral argument by both parties' counsel, the Court reserved decision as to whether "... there is a substantial probability that the Department will prevail on the issue of forfeiture."
The Tax Department was required to commence an action for forfeiture within forty-five (45) days from the date of the seizure in accordance with § 1845(d). St. Regis Group asserted lack of personal jurisdiction in its March 8, 1994, Notice of Motion (seeking dismissal of the action pursuant to CPLR 3211(a)(3)), however, on the return date defendant's counsel consented to personal jurisdiction as CPLR 306-b(b) would have granted the Tax Department 120 days following dismissal to commence a new action. Thus, the Tax Department is now deemed to have appropriately commenced the forfeiture action.
On December 3, 1993, the New York State Police stopped a tractor trailer along Route 37 in the Town of Massena, New York which displayed neither a front license plate nor a Truck Mileage Tax sticker pursuant to Article 21 of the New York Tax Law. During the course of the officer's investigation the driver stated he was transporting liquor and produced documentation that the cargo consisted of 1,728 cases of liquor consigned to W. Stehlin d/b/a Windsail Trading to be delivered to the Mohawk Akwesasne Reservation. However, the driver did not possess the standard manifest form for liquors, ie. Form MT-132, required by the Tax Law, nor did his documentation clearly identify the owner of the liquor or a registered New York State liquor distributor responsible for the importation. The documents presented to the investigating officer created reasonable grounds to believe the liquor was being imported illegally into New York State in violation of Articles 18 and 37 of the New York Tax Law. Upon consultation with James Zaccaria, Principal Attorney with the New York State Office of Tax Enforcement, it was discovered that none of the parties identified by the documentation aboard the tractor trailer was a registered New York State liquor distributor. The liquor and tractor trailer were seized pursuant to New York Tax Law, § 1845.
PROCEDURAL HISTORY:
In compliance with New York Tax Law § 1845(c), the Tax Department, within five business days of the temporary seizure, moved in St. Lawrence County Supreme Court (the County in which the temporary seizure took place) for an order confirming the temporary seizure. Upon oral argument by both parties' counsel, the Court reserved decision to determine whether "... there is a substantial probability that the Department will prevail on the issue of forfeiture." In accordance with § 1845(d) the Tax Department commenced an action for forfeiture within forty-five (45) days from the date of the seizure.
CURRENT MOTIONS: ST. REGIS AND WAYNE STEHLIN
Both St. Regis, by Notice of Motion dated March 8, 1994, and Wayne Stehlin, by Notice of Motion dated February 16, 1994, have moved for an Order dismissing the forfeiture action pursuant to CPLR 3211(a)(3), lack of subject matter jurisdiction, asserting that exclusive jurisdiction over these seizure cases lies in the Federal Courts since New York has no jurisdiction to enforce its tax laws, or concomitant forfeiture laws, with respect to Indian Commerce on an Indian reservation.
In response, Plaintiff attempts to characterize New York Tax Law, Article 18 as a regulation and distribution statute, and in so doing, relies on the United States Supreme Court's holding in Rice v. Rehner, 463 U.S. 713, 103 S.Ct. 3291, 77 L.Ed.2d 961 (1983). They argue Congress has acted specifically to establish joint federal, state and tribal jurisdiction over the sale and distribution of alcoholic beverages on Indian reservations. In turn, Defendants urge Plaintiff's reliance on Rice is misplaced since the liquor was seized in accordance with a tax statute; and no tax being due on Indian commerce, the seizure was unlawful.
There has been a considerable amount of uncertainty and turmoil with respect to the applicability of the New York tax seizure statutes, ie. § 1848 (motor fuel), § 1846 (cigarettes), and now--effective November 1, 1993--s 1845 (liquor), with regard to Indian traders. See Herzog Bros. Trucking, Inc. v. State Tax Commission, 72 N.Y.2d 720, 536 N.Y.S.2d 416, 533 N.E.2d 255 (1988), Attea and Bros., Inc. v. Department of Taxation and Finance of the State of New York, 81 N.Y.2d 417, 599 N.Y.S.2d 510, 615 N.E.2d 994 (1993), cert. granted, --- U.S. ----, 114 S.Ct. 380, 126 L.Ed.2d 329 (1993). Although these issues are yet to be decided by the U.S. Supreme Court, this Court is constrained to interpret and apply the law in New York State, as it stands in its present posture.
Hence, it is apparent that such language specifically incorporates state law into federal law, and in no way alienates to the separate states the federal government's regulatory powers over the Indian trader. See United States v. Cowboy, 694 F.2d 1228, 1236 (10th Cir.1982). Section 1161 fulfills the need to "... provide 'the standard of measurement to define lawful and unlawful activity on the reservation' (Rice v. Rehner, 463 U.S. at 744 n. 7 " Fort Belknap Indian Community of Fort Belknap Indian Reservation v. State of Montana, 793 F.Supp. 949, 953 (D.Mont.1992). Fort Belknap held that while the state had the authority to regulate the possession and sale of liquor by Indians in Indian country, the federal government retains criminal jurisdiction pursuant to §§ 1154 and 1156 to enforce the penalties for violations of state liquor laws. The retention of federal jurisdiction is further evidenced by the existence of 18 U.S.C. §§ 3113, 3488, 3668-3670 which authorize federal authorities to seize or commence forfeiture proceedings resulting from violations of Federal Indian liquor laws, 18 U.S.C. § 1161. It follows that despite state law being used as a standard of measurement to determine whether introduction of alcohol into Indian country is lawful, the enforcement mechanisms as provided for in Federal law respecting alcohol on Indian reservations are exclusively a federal concern, and the Federal Courts have exclusive jurisdiction over such seizures.
The United States Supreme Court in Rice v. Rehner, 463 U.S. 713, 103 S.Ct. 3291, 77 L.Ed.2d 961 (1983) held that 18 U.S.C. § 1161 authorized, rather than preempted,...
To continue reading
Request your trial
-
New York State Dept. of Taxation and Finance v. St. Regis Group (Mohawk Akwesasne Reservation)
...the forfeiture actions and then treated the motions to confirm the temporary seizures as moot. (New York State Dept. of Taxation & Fin. v. St. Regis Group, 161 Misc.2d 383, 613 N.Y.S.2d 833). Shortly after Supreme Court issued the orders dismissing action Nos. 1 and 2, the US Supreme Court ......
-
New York State Dept. of Taxation and Finance v. Tyler Distribution Centers Inc.
...by forfeiture of tribal property. Relying on the earlier Supreme Court decision and order in New York State Dept. of Taxation & Fin. v. St. Regis Group, 161 Misc.2d 383, 613 N.Y.S.2d 833, mod. 217 A.D.2d 214, 635 N.Y.S.2d 980, the motion courts dismissed the actions, finding that Federal pr......
-
New York State Dept. of Taxation and Finance v. Seitz
...At the time of the seizures, Supreme Court had previously ruled in a similar case (see, New York State Dept. of Taxation & Fin. v. St. Regis Group, 161 Misc.2d 383, 613 N.Y.S.2d 833, mod. 217 A.D.2d 214, 635 N.Y.S.2d 980) that it did not have jurisdiction to entertain the actions because th......
-
King Transp. Servs. v. State
...courts had exclusive enforcement jurisdiction (New York State Dept. of Taxation & Fin. v St. Regis Group [Mohawk Akwesasne Reservation], 161 Misc 2d 383, mod 217 AD2d 214).[2] An appeal of Justice Demarest's decision and several related cases involving the same issue were subsequently consi......