        SUPREME COURT OF THE STATE OF NEW YORK
           Appellate Division, Fourth Judicial Department

448
CA 15-01764
PRESENT: WHALEN, P.J., CARNI, NEMOYER, TROUTMAN, AND SCUDDER, JJ.


ERIC WHITE AND NATIVE OUTLET,
PLAINTIFFS-APPELLANTS,

                    V                                MEMORANDUM AND ORDER

ERIC T. SCHNEIDERMAN, NEW YORK STATE ATTORNEY
GENERAL, IN HIS OFFICIAL CAPACITY, AND THOMAS H.
MATTOX, COMMISSIONER, NEW YORK STATE DEPARTMENT
OF TAXATION AND FINANCE, IN HIS OFFICIAL CAPACITY,
DEFENDANTS-RESPONDENTS.


LIPSITZ GREEN SCIME CAMBRIA LLP, BUFFALO (PAUL J. CAMBRIA, JR., OF
COUNSEL), FOR PLAINTIFFS-APPELLANTS.

ERIC T. SCHNEIDERMAN, ATTORNEY GENERAL, ALBANY (ROBERT M. GOLDFARB OF
COUNSEL), FOR DEFENDANTS-RESPONDENTS.


     Appeal from a judgment (denominated order) of the Supreme Court,
Cattaraugus County (Jeremiah J. Moriarty, III, J.), entered March 12,
2015. The judgment granted the cross motion of defendants to dismiss
plaintiffs’ complaint and dismissed as moot the motion of plaintiffs
for a preliminary injunction.

     It is hereby ORDERED that the judgment so appealed from is
unanimously modified on the law by reinstating the complaint to the
extent that it seeks a declaration and granting judgment in favor of
defendants as follows:

          It is ADJUDGED AND DECLARED that Tax Law § 471 is not
     inconsistent with Indian Law § 6, the Treaty of 1842 (7 US
     Stat 586), or the Due Process or Commerce Clauses of the
     United States Constitution,

and as modified the judgment is affirmed without costs.

     Memorandum: Plaintiffs commenced this declaratory judgment
action, alleging that the enactment and enforcement of Tax Law § 471,
which imposes requirements on plaintiffs to pre-pay the amount of the
tax to be assessed on the sale of cigarettes to non-Indians and non-
members of the Seneca Nation (collectively, non-Indians), violates
Indian Law § 6 and certain treaties between the Seneca Nation and the
United States of America, particularly the Treaty of 1842 (7 US Stat
586). Plaintiffs sought a preliminary injunction enjoining
enforcement of the Tax Law, and Supreme Court granted defendants’
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                                                         CA 15-01764

cross motion pursuant to CPLR 3211 (a) (7) and dismissed the
complaint. Because the complaint seeks a declaration, the court erred
in dismissing the complaint in its entirety and in failing to declare
the rights of the parties (see Maurizzio v Lumbermens Mut. Cas. Co.,
73 NY2d 951, 954). We therefore modify the judgment accordingly.

     Plaintiffs contend that we erred in determining in Matter of New
York State Dept. of Taxation & Fin. v Bramhall (235 AD2d 75, appeal
dismissed 91 NY2d 849) that the Treaty of 1842 and Indian Law § 6 bar
the taxation of reservation land, but do not bar the imposition of,
inter alia, “sales taxes on cigarettes . . . sold to non-Indians on
the Seneca Nation’s reservations” (id. at 85), and request that we
reconsider our determination. We adhere to our determination in
Bramhall.

     The Treaty of 1842, which provided, inter alia, that the Seneca
Nation would retain the Allegany and Cattaraugus reservations, stated
at article ninth that “[t]he parties to this compact mutually agree to
solicit the influence of the Government of the United States to
protect such lands of the Seneca Indians, within the State of New
York, . . . from all taxes, and assessments for roads, highways, or
any other purpose until such lands shall be sold and conveyed by the
said Indians, and the possession thereof shall have been relinquished
by them” (7 US Stat 586, 590 [emphasis added]). We conclude that the
plain language of that treaty supports our determination that it
prohibited the state from imposing taxes on the “lands” (id.), i.e.,
the real property, of the Seneca Nation.

     Indian Law § 6, entitled “Exemption of reservation lands from
taxation,” states that “[n]o taxes shall be assessed, for any purpose
whatever, upon any Indian reservation in this state, so long as the
land of such reservation shall remain the property of the nation,
tribe or band occupying the same.” That section has remained
unchanged since 1909 (L 1909, ch 31), and it cites to, inter alia,
chapter 45 of the Laws of 1857 as the source of the legislation, and
to Fellows v Denniston (23 NY 420, revd sub nom. The New York Indians,
72 US 761). Chapter 45 of the Laws of 1857, entitled “An Act to
relieve the Seneca nation of Indians from certain taxes on the
Allegany and Cattaraugus reservations” required, inter alia, that,
parcels or lots that were sold by the comptroller for taxes were to be
released “by the State to the Seneca nation of Indians residing on
said reservation” (L 1857, ch 45, § 1), and that “[n]o tax shall
hereafter be assessed or imposed on either of said reservations, or
any part thereof, for any purposes whatever, so long as said
reservations remain the property of the Seneca nation; and all acts of
the legislature of this State conflicting with the provisions of this
section[] are hereby repealed” (L 1857, ch 45, § 4). The Supreme
Court determined in The New York Indians (72 US at 770-772) that the
State was without authority to impose taxes on real property to defray
the costs of building and repairing roads and bridges. Thus, even
construing the statute liberally in favor of the Indians, as we must
(see County of Yakima v Confederated Tribes & Bands of Yakima Indian
Nation, 502 US 251, 269), we conclude that the statutory history of
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                                                         CA 15-01764

Indian Law § 6 supports our determination in Bramhall, and that the
limiting language in the title of the section “effectuate[s] the
legislative intent” (McKinney’s Cons Laws of NY, Book 1, Statutes
§ 94, Comment at 194), i.e., that Indian Law § 6 was enacted to bar
taxes on real property that was part of an Indian nation, tribe or
band.

     Even assuming, arguendo, that we have interpreted the language of
the Treaty of 1842 and Indian Law § 6 too narrowly, we nevertheless
conclude that the court properly agreed with defendants that
plaintiffs are not entitled to the declaratory relief they seek. It
is well established that “the States have a valid interest in ensuring
compliance with lawful taxes that might easily be evaded through
purchases of tax-exempt cigarettes on reservations . . . States may
impose on reservation retailers minimal burdens reasonably tailored to
the collection of valid taxes from non-Indians” (Department of
Taxation & Fin. of N.Y. v Milhelm Attea & Bros., Inc., 512 US 61, 73).
Although plaintiffs are obligated to pay the amount due as tax from
non-Indians who have the tax liability, and from whom the amount is
collected at the time of the sale, “this burden is not, strictly
speaking, a tax at all” (Moe v Confederated Salish & Kootenai Tribes
of Flathead Reservation, 425 US 463, 483).




Entered:   June 10, 2016                       Frances E. Cafarell
                                               Clerk of the Court
