Ward v. New York

• Decision Date: 19 August 2003
• Docket Number: No. 03-CV-485S.,03-CV-485S.
• Parties: Anna L. WARD a/k/a Big Indian Smoke Shop, and Barry Snyder, Jr. a/k/a Jr's Smoke Shop, Plaintiffs, v. The State of NEW YORK, Eliot Spitzer, in his Official Capacity as Attorney General of the State of New York, Antonia C. Novello, M.D., in her Official Capacity as Commissioner of Health for the State of New York, and Arthur J. Roth, in his Official Capacity as Commissioner of Taxation and Finance of the State of New York, Defendants.
• Court: U.S. District Court — Western District of New York

291 F.Supp.2d 188

Anna L. WARD a/k/a Big Indian Smoke Shop, and Barry Snyder, Jr. a/k/a Jr's Smoke Shop, Plaintiffs, v. The State of NEW YORK, Eliot Spitzer, in his Official Capacity as Attorney General of the State of New York, Antonia C. Novello, M.D., in her Official Capacity as Commissioner of Health for the State of New York, and Arthur J. Roth, in his Official Capacity as Commissioner of Taxation and Finance of the State of New York, Defendants.

No. 03-CV-485S.

United States District Court, W.D. New York.

August 19, 2003.

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Paul Cambria, Lipsitz, Green, Fahringer, Roll, Salisbury & Cambria, Buffalo, NY, for Plaintiffs.

Stephen F. Gawlik, Assistant Attorney General, Buffalo, NY, for Defendants.

DECISION AND ORDER

SKRETNY, District Judge.

I. INTRODUCTION

One of federalism's fundamental principles is that the States are primarily responsible for protecting the health, safety, and welfare of their citizens. As such, the State of New York has a legitimate and substantial interest in enacting laws and regulations pursuant to its historic police power. On the other hand, Indian tribes have a unique sovereign status, recognized by the Supreme Court and deeply rooted in traditions of tribal independence, which insulates them from state regulation in some respects. This case involves a collision of these competing concerns.

Currently before this Court is Plaintiffs' Motion for a Temporary Restraining Order. Plaintiffs, two enrolled members of the Seneca Indian Nation, challenge the constitutionality of § 1399-ll of the New York Public Health Law ("the Statute"), which bans the direct shipment and transportation of cigarettes to New York consumers. Plaintiffs contend that the Statute violates certain rights secured to Indians under the Constitution. In addition, they assert that the Statute is preempted by federal legislation governing the regulation of common and contract carriers. For the reasons set forth below, Plaintiffs' Motion will be granted in part and denied in part.

II. BACKGROUND

A. The Statute

New York Governor George E. Pataki signed the Statute into law on August 16, 2000.¹ Subdivision One of the Statute makes it unlawful to ship cigarettes directly to New York consumers. See N.Y. PUB. HEALTH LAW § 1399-ll (1).² Subdivision Two prohibits the knowing transportation of cigarettes to New York consumers. See N.Y. PUB. HEALTH LAW § 1399-ll (2).³ However, Subdivision Two contains a limited "home delivery" exception, which allows a person other than a common or contract carrier to transport eight hundred cigarettes or less at any one time to any person in the state. N.Y. PUB. HEALTH LAW § 1399-ll (2). Violation of either subdivision is a class A misdemeanor for a first-time offender and a class E felony for subsequent violations. N.Y. PUB. HEALTH LAW § 1399-ll (5). In addition, the Statute authorizes the imposition of civil fines for violations of either subdivision. N.Y. PUB. HEALTH LAW § 1399-ll (5).

Shortly after the Statute became law, a group of tobacco manufacturers and retailers filed lawsuits in the United States District Court for the Southern District of New York challenging its constitutionality. These suits were later consolidated into a single action. The plaintiffs in that action argued that the Statute unconstitutionally restrained and discriminated against interstate commerce. On November 13, 2000, the district court issued a Temporary Restraining Order prohibiting the State from enforcing the Statute. On June 8, 2001, the district court issued a Decision and Order declaring that the Statute violated the Interstate Commerce Clause and permanently enjoining its enforcement. Santa Fe Natural Tobacco Co., Inc. v. Spitzer, No. 00-CIV-7274 (LAP), 00-CIV-7750 (LAP), 2001 WL 636441 (S.D.N.Y. June 8, 2001).

On February 13, 2003, the United States Court of Appeals for the Second Circuit issued a decision reversing the district court. Brown & Williamson Tobacco Corp. v. Pataki, 320 F.3d 200 (2d Cir. 2003). The appeals court found that the Statute did not violate the Interstate Commerce Clause and remanded the case with instructions to enter judgment in favor of the State. Id. at 219. On May 2, 2003, the district court vacated its prior order and granted judgment in favor of the State. Shortly thereafter, the State publicly declared its intention to begin enforcing the Statute.⁴

B. Background of this Litigation

Plaintiffs commenced the instant action on June 20, 2003, by filing a Summons and Complaint in New York State Supreme Court, Erie County. On June 24, 2003, Defendants removed the case to the United States District Court for the Western District of New York. Plaintiffs filed an Amended Complaint on August 4, 2003.

Plaintiffs Anna L. Ward and Barry Snyder, Jr. are enrolled members of the Seneca Indian Nation. (Amended Complaint, ¶¶ 7, 9). They operate businesses on the Cattaraugus Indian Reservation, located near Irving, New York. Id. at ¶¶ 8, 10. As part of their business, Plaintiffs sell cigarettes via the telephone, mail order, and the Internet to customers living inside and outside of New York. Id. In addition, Plaintiffs sell cigarettes at "brick and mortar" retail stores located on the reservation. Id.

Defendant Eliot Spitzer is the Attorney General of the State of New York. Defendant Antonia C. Novello is the New York State Commissioner of Health. Defendant Arthur J. Roth is the Commissioner of Taxation and Finance of the State of New York. These defendants are responsible for enforcing the Statute and are sued in their official capacities. Plaintiffs' Amended Complaint also names the State of New York as a defendant. The defendants will be referred to collectively herein as "Defendants" or the "State."

On July 2, 2003, Plaintiffs filed a Motion for a Temporary Restraining Order and Preliminary Injunction.⁵ This Court heard oral argument on July 17, 2003 and August 5, 2003. At the conclusion of oral argument, this Court deemed the matter submitted and reserved decision.

III. DISCUSSION

Plaintiffs' claims can be divided into two broad categories. First, they assert that the Statute infringes upon special rights secured to Indians under the Constitution. For the sake of convenience, this category of claims will be referred to as the "Indian rights claims." Second, Plaintiffs contend that the Statute is preempted by the Federal Aviation Administration Authorization Act of 1994 (the "FAAAA").

A. TRO Standard

Generally, a party seeking injunctive relief "must show (1) `a threat of irreparable injury and (2) either a probability of success on the merits or sufficiently serious questions going to the merits of the claims to make them a fair ground of litigation, and a balance of hardships tipping decidedly in favor of the moving party.'" Motorola Credit Corp. v. Uzan, 322 F.3d 130, 135 (2d Cir.2003) (emphasis added) (quoting Time Warner Cable v. Bloomberg L.P., 118 F.3d 917, 923 (2d Cir.1997)).

However, when the moving party seeks to enjoin government action taken in the public interest pursuant to a statutory scheme, that party must satisfy the more rigorous "likelihood of success on the merits" standard and may not resort to the lower "fair ground of litigation" test. See Forest City Daly Hous., Inc. v. Town of N. Hempstead, 175 F.3d 144, 149 (2d Cir. 1999). "[T]his exception reflects the idea that governmental policies implemented through legislation or regulations developed through presumptively reasoned democratic processes are entitled to a higher degree of deference and should not be enjoined lightly." Able v. United States, 44 F.3d 128, 131 (2d Cir.1995).

In the present case, because Plaintiffs seek to prevent the State from enforcing a duly enacted law, they must demonstrate both a threat of irreparable injury and a likelihood of success on the merits. This Court finds that Plaintiffs have established the first element. Generally, irreparable injury is presumed where, as here, there is an alleged violation of constitutional rights. See Jolly v. Coughlin, 76 F.3d 468, 482 (2d Cir.1996) (finding that district court "properly relied on the presumption of irreparable injury that flows from a violation of constitutional rights"). In addition, Plaintiffs submitted affidavits alleging that enforcement of the Statute will cause them to lose substantial revenue and customer goodwill. (Snyder Affidavit, ¶¶ 23, 24; Ward Affidavit, ¶¶ 26, 27). These damages are non-compensable because the Eleventh Amendment bars Plaintiffs from recovering money damages as against Defendants. Therefore, this Court's analysis will focus on whether Plaintiffs have established the second element — likelihood of success on the merits.

B. Indian Rights Claims

Plaintiffs contend that the Statute infringes upon their Indian rights by regulating Indian commerce in violation of the Indian Commerce Clause and by interfering with tribal sovereignty. Before addressing the merits of these claims, this Court must first decide whether Plaintiffs can challenge the Statute on its face or whether they are limited to an "as applied" challenge.

1. The Nature of Plaintiffs' Constitutional Challenge

Ordinarily, a legislative Act may be challenged in two ways: (a) by establishing that it is wholly, i.e. facially, unconstitutional or (b) by demonstrating that it is unconstitutional as applied in a particular way or as applied to a particular person or group.

a. Facial Challenges

The Supreme Court has held that "[a] facial challenge to a legislative Act is ... the most difficult challenge to mount successfully, since the challenger must establish that no set of circumstances exists under which the Act would be valid." United States v. Salerno, 481 U.S. 739, 745, 107 S.Ct. 2095, 95 L.Ed.2d 697 (1987); see also Cranley v. Nat'l Life Ins. Co., 318 F.3d 105, 110 (2d Cir.2003) (citing Salerno). The fact that a...