White v. Cuomo

• Decision Date: 06 February 2020
• Docket Number: 528026
• Citation: 181 A.D.3d 76,118 N.Y.S.3d 775
• Parties: Jennifer WHITE et al., Respondents—Appellants, v. Andrew CUOMO, as Governor of the State of New York, et al., Appellants—Respondents.
• Court: New York Supreme Court — Appellate Division

181 A.D.3d 76
118 N.Y.S.3d 775

Jennifer WHITE et al., Respondents—Appellants,
v.
Andrew CUOMO, as Governor of the State of New York, et al., Appellants—Respondents.

528026

Supreme Court, Appellate Division, Third Department, New York.

Calendar Date: November 14, 2019
Decided and Entered: February 6, 2020

OPINION AND ORDER

Mulvey, J.

118 N.Y.S.3d 777

181 A.D.3d 78

Cross appeals from an order of the Supreme Court (Connolly, J.), entered October 31, 2018 in Albany County, which (1) partially granted plaintiffs' motion for summary judgment, and (2) partially granted defendants' cross motion for summary judgment dismissing the complaint.

In August 2016, the Legislature amended the Racing, Pari–Mutuel Wagering and Breeding Law by adding an article related to the registration and regulation of interactive fantasy sports (hereinafter IFS) contests (see Racing, Pari–Mutuel Wagering and Breeding Law art 14, as added by L 2016, ch 237). Racing, Pari–Mutuel Wagering and Breeding Law article 14 declares that IFS contests do not constitute gambling and provides for consumer safeguards, minimum standards and the registration, regulation and taxation of IFS providers. Plaintiffs – several state taxpayers who are or have been affected by the negative impacts of gambling – commenced this action seeking a declaratory judgment that article 14 violates N.Y. Constitution, article I, § 9 and seeking to enjoin defendants from implementing the statutes. After joinder of issue, plaintiffs moved for summary judgment on their complaint. Defendants cross-moved for summary judgment dismissing the complaint and for a declaration that article 14 does not violate the N.Y. Constitution. Supreme Court partially granted plaintiffs' motion for summary judgment, holding that article 14, to the extent that it authorizes and regulates IFS, was void as in violation of N.Y. Constitution, article I, § 9. The court also partially granted defendants' cross motion for summary judgment dismissing the complaint, holding that article 14, to the extent that it excludes IFS from the scope of the definition of "gambling" in Penal Law article 225, was not in violation of N.Y. Constitution, article I, § 9. Defendants appeal and plaintiffs cross-appeal.

Supreme Court properly granted summary judgment to plaintiffs inasmuch as it found that Racing, Pari–Mutuel Wagering and Breeding Law article 14, to the extent that it authorizes IFS contests, permits gambling in violation of N.Y. Constitution, article I, § 9. "Legislative enactments enjoy a strong presumption of constitutionality and parties challenging

181 A.D.3d 79

a duly enacted statute face the initial burden of demonstrating the statute's invalidity beyond a reasonable doubt" (

118 N.Y.S.3d 778

Overstock.com, Inc. v. New York State Dept. of Taxation & Fin., 20 N.Y.3d 586, 593, 965 N.Y.S.2d 61, 987 N.E.2d 621 [2013] [internal quotation marks, ellipsis, brackets and citations omitted], cert denied 571 U.S. 1071, 134 S.Ct. 682, 187 L.Ed.2d 549 [2013] ; see Schulz v. State of N.Y. Exec., 138 A.D.3d 1197, 1201, 30 N.Y.S.3d 721 [2016], appeal dismissed 27 N.Y.3d 1123, 36 N.Y.S.3d 878, 57 N.E.3d 71 [2016] ; Matter of Concerned Home Care Providers, Inc. v. State of New York, 108 A.D.3d 151, 154, 969 N.Y.S.2d 210 [2013], lv dismissed 22 N.Y.3d 946, 977 N.Y.S.2d 175, 999 N.E.2d 538 [2013] ). A

"basic tenet of constitutional and statutory interpretation [is] that the clearest and most compelling indicator of the drafters' intent is the language itself. Resort must be had to the natural signification of the words employed, and if they have a definite meaning, which involves no absurdity or contradiction, there is no room for construction, and courts have no right to add to or take away from that meaning" ( Hernandez v. State of New York, 173 A.D.3d 105, 111 [99 N.Y.S.3d 795] [2019] [internal quotation marks, brackets and citations omitted]; see Matter of King v. Cuomo, 81 N.Y.2d 247, 253 [597 N.Y.S.2d 918, 613 N.E.2d 950] [1993] ).

The dissent asserts that "our judicial inquiry is limited to deciding whether the Legislature rationally determined, after hearing and considering evidence, that IFS contests are not ‘gambling’ as defined under Penal Law § 225.00" (dissenting op. at 783). The dissent implies that, in exercising our judicial function in this action, we are limited to reviewing the legislative record and determining whether the Legislature's determination was rational. The parties' submission of a statement of agreed-upon facts indicates that even they did not believe that the courts are so limited in what we can consider.

Further, the cases relied upon by the dissent mainly use this rationality standard to determine whether legislative actions violate the Equal Protection Clause or the Due Process Clause of the N.Y. and U.S. Constitutions (see e.g. United States v. Carolene Products Co., 304 U.S. 144, 154, 58 S.Ct. 778, 82 L.Ed. 1234 [1938] [analyzing an equal protection challenge by determining whether a rational basis exists for the legislation whose constitutionality is attacked]; Old Dearborn Distributing Co. v. Seagram–Distillers Corp., 299 U.S. 183, 196, 57 S.Ct. 139, 81 L.Ed. 109 [1936] ; Lincoln Bldg. Assoc. v. Barr, 1 N.Y.2d 413, 415, 153 N.Y.S.2d 633, 135 N.E.2d 801 [1956], appeal dismissed 355 U.S. 12, 78 S.Ct. 12, 2 L.Ed.2d 20 [1957] ). In a more recent case, while addressing arguments other than equal protection challenges, the Court of Appeals – without mentioning

181 A.D.3d 80

the source of factual 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 standard invoked by the dissent here, but instead simply interpreted the language of N.Y. Constitution, article I, § 9 against legislative enactments to determine for itself whether the statutes violated that constitutional anti-gambling provision ( id. at 263–265, 270–272, 802 N.Y.S.2d 72, 835 N.E.2d 1180 ; compare id. at 265–266, 802 N.Y.S.2d 72, 835 N.E.2d 1180 [addressing equal protection challenge under the standard utilized by the dissent herein] ). We discern our judicial function here as more than simply reviewing the legislative record to see if any known or assumed facts could support the Legislature's choice, even if other evidence would also support the opposite choice (compare

118 N.Y.S.3d 779

Matter of Marine Holdings, LLC v. New York City Commn. on Human Rights, 31 N.Y.3d 1045, 1047, 76 N.Y.S.3d 510, 100 N.E.3d 849 [2018] [noting that courts must approve agency action that is supported by substantial evidence in the record, even where there is substantial evidence on both sides of the issue] ); rather, our role is to examine and interpret the constitutional and statutory language, and to determine for ourselves whether the legislative enactment violates the explicit constitutional provision at issue (see Dalton v. Pataki, 5 N.Y.3d at 264–265, 802 N.Y.S.2d 72, 835 N.E.2d 1180 ).¹ We do not rule on the wisdom of the Legislature's enactment of laws, but on whether the N.Y. Constitution prohibited the Legislature from enacting such laws.

In the law being challenged, the Legislature declared that IFS contests do not constitute gambling (see Racing, Pari–Mutuel Wagering and Breeding Law § 1400[2] ). Because "[p]ublic policy continues to disfavor gambling," exceptions to the constitutional prohibition on gambling must be strictly construed to ensure that they do not consume the rule itself ( Ramesar v. State of New York, 224 A.D.2d 757, 759, 636 N.Y.S.2d 950 [1996], lv

181 A.D.3d 81

denied 88 N.Y.2d 811, 649 N.Y.S.2d 378, 672 N.E.2d 604 [1996] ; see Molina v. Games Mgt. Servs., 58 N.Y.2d 523, 529, 462 N.Y.S.2d 615, 449 N.E.2d 395 [1983] ). As Supreme Court aptly observed, allowing the Legislature unfettered discretion to determine what is not gambling would render meaningless the constitutional prohibition on "lottery or the sale of lottery tickets, pool-selling, book-making, or any other kind of gambling" ( N.Y. Const, art I, § 9 [1] ) because this area would devolve to being governed by statutory law and not by the constitutional provision (see generally Dalton v. Pataki , 11 A.D.3d 62, 90, 780 N.Y.S.2d 47 [2004] [holding that the general definition of lotteries advanced by the defendants, which was consistent with all gambling, "would expand the constitutional exception permitting state-run lotteries to such an extent that it would swallow the general constitutional prohibition on gambling"], mod 5 N.Y.3d 243, 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] ). Thus, IFS contests are not excluded from the constitutional meaning of "gambling" merely because the Legislature now says that it is so.

NY Constitution, article I, § 9 (1) provides that, aside from certain enumerated exceptions, "no lottery or the sale of lottery tickets, pool-selling, book-making, or any other kind of...