PRESENT: CENTRA, J. P., PERADOTTO, CARNI, LINDLEY, AND GREEN, JJ.

DOCKET NO. CA 10-01813

DAY WHOLESALE, INC., SCOTT B. MAYBEE, PLAINTIFFS-APPELLANTS, AND SENECA NATION OF INDIANS, INTERVENOR-PLAINTIFF, V STATE OF NEW YORK, ANDREW M. CUOMO, AS ATTORNEY GENERAL OF STATE OF NEW YORK, JAIME WOODWARD, AS ACTING COMMISSIONER OF NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE, ELIOT SPITZER, AS FORMER ATTORNEY GENERAL OF STATE OF NEW YORK, AND DAVID WEINSTEIN, AS FORMER ASSISTANT ATTORNEY GENERAL, DEFENDANTS-RESPONDENTS.

Appellants having moved, upon the return of an order to show cause granted by the Honorable Samuel L. Green on September 1, 2010, for a preliminary injunction pending this Court's determination of the appeal taken herein from the order of the Supreme Court entered in the Office of the Clerk of the County of Erie on August 31, 2010,

Now, upon reading and filing the affirmation of Margaret A. Murphy, Esq. dated August 31, 2010, said show cause order with proof of service thereof, the affirmation of Andrew D. Bing, Esq. dated September 3, 2010, the affirmation of Robert D. Plattner, Esq. dated September 3, 2010, the affirmation of David T. Archer, Esq. received September 3, 2010, the memoranda of appellants, respondents, and amici curiae New York Association of Convenience Stores, Wilson Farms, Inc., NOCO Energy Corp., City of New York, American Cancer Society Cancer Action Network, et al., and due deliberation having been had thereon,

It is hereby ORDERED that the motion is denied.

Memorandum: Plaintiff Day Wholesale, Inc. (Day) is a wholesale dealer of cigarettes (see Tax Law § 470 [8]) and a licensed cigarette stamping agent (see § 470 [11]), and plaintiff Scott B. Maybee is a member of the Seneca Nation of Indians (Seneca Nation) who owns and operates businesses engaged in the wholesale and retail sale of cigarettes on land owned by the Seneca Nation. Plaintiffs commenced this action seeking a determination that Tax Law § 471-e (as amended by L 2005, ch 61, part K, § 2; ch 63, part A, § 4) is not in effect and injunctive relief preventing the enforcement of the amended version of the statute against them. This Court previously affirmed the order granting a preliminary injunction preventing such enforcement, and we concluded that the amended version of Tax Law § 471-e was not in effect because defendants had not taken all actions and promulgated rules and regulations "necessary to implement" that statute, including the issuance of Indian tax exemption coupons (Day Wholesale, Inc. v State of New York, 51 AD3d 383, 388). A second preliminary injunction preventing enforcement of the statute was thereafter entered.

On June 21, 2010, the Legislature enacted chapter 134 of the Laws of 2010. Part D thereof (Part D) amended, inter alia, Tax Law §§ 471 and 471-e and required that the Department of Taxation and Finance (Department) issue rules and regulations to effectuate the Indian cigarette tax exemption system, including the coupon system, by August 20, 2010. On June 22, 2010, the Department adopted an emergency rule enacting regulations for the implementation of the amendments promulgated through Part D, including provisions for the issuance of Indian tax exemption coupons (see 20 NYCRR 74.6; 20 NYCRR 74.7).

Defendants moved to vacate the prior preliminary injunctions preventing the enforcement of the amended version of Tax Law § 471-e, contending that the enactment of rules and regulations necessary to the implementation of that statute and the preparation of Indian tax exemption coupons for distribution rendered the preliminary injunctions no longer necessary. Plaintiffs cross-moved for leave to amend the complaint to address the Part D amendments and their implementing regulations and to modify or to extend the terms of the second preliminary injunction enjoining defendants from enforcing the amended version of Tax Law § 471-e. Supreme Court granted defendants' motion to vacate the prior injunctions and denied that part of plaintiffs' cross motion seeking to modify or to extend the terms of the second preliminary injunction. Plaintiffs appealed and moved this Court for a preliminary injunction preventing such enforcement pending the determination of their appeal.

Plaintiffs' motion for a preliminary injunction is denied. The prior preliminary injunctions were based on the Department's failure to ensure that " �any actions, rules and regulations necessary to implement' " Tax Law § 471-e were complete, including, "[a]t a minimum . . .[,] the issuance of Indian tax exemption coupons," because such "actions, rules and regulations" were a condition precedent to the effectiveness of the statute (Day Wholesale, Inc., 51 AD3d at 387). Because those actions have been completed and rules and regulations have been promulgated by the Department to implement the amended version of Tax Law § 471-e, we conclude that the prior preliminary injunctions are no longer warranted.

To the extent that plaintiffs seek to extend the second preliminary injunction to prevent the enforcement of the Part D amendments and their implementing regulations, we conclude that plaintiffs have failed to demonstrate their entitlement to such relief. "In order to establish its entitlement to a preliminary injunction, the party seeking the injunction must establish, by clear and convincing evidence . . ., three separate elements: (1) a likelihood of ultimate success on the merits; (2) the prospect of irreparable injury if the provisional relief is withheld; and (3) a balance of equities tipping in the moving party's favor . . . A motion for a preliminary injunction is addressed to the sound discretion of the . . . court[,] and the decision of the . . . court on such a motion will not be disturbed on appeal, unless there is a showing of an abuse of discretion" (Destiny USA Holdings, LLC v Citigroup Global Mkts. Realty Corp., 69 AD3d 212, 216 [internal quotation marks omitted]). In our view, plaintiffs have not met their burden with respect to any of those elements in their facial challenge to the amended statutes and their implementing regulations.

Entered: September 14, 2010

Patricia L. Morgan, Clerk