PRESENT: HON. THOMAS J.

McNAMARA Acting Justice STATE OF NEW YORK SUPREME COURT

COUNTY OF ALBANY

ROBERT L. SCHULZ, Plaintiff, -againstSTATE OF NEW YORK EXECUTIVE; ANDREW CUOMO, Governor; STATE OF NEW YORK LEGISLATURE; SHELDON SILVER, Speaker of the New York State Assembly; DEAN SKELOS, Temporary President and Republican Coalition Leader; JEFFREY KLEIN, Temporary President and Democrat Coalition Leader, Defendants. (Supreme Court, Albany County, Motion Term) APPEARANCES: Robert L. Schulz PlaintiffPro Se 2458 Ridge Road Queensbury, New York

JUDGMENT
Index No.: 4115-13 RJI No.: 01-13-111997

12804

Eric T. Schneiderman Attorney General of the State of New York (By: James B. McGowan, Assistant Attorney General, of Counsel) Attorney for Defendants The Capitol Albany, New York 12224-0341

McNamara, 1. In this declaratory judgment action plaintiff challenges the constitutionality of two statutes and separate agreements (Agreements) between the State ofNew York and the Oneida Indian Nation, the Seneca

Schulz v. State o/New York Executive, et al. Index No.: 4115-13; RJINo.: 01-13-111997
Nation of Indians and the St. Regis Mohawk Tribe. Defendants have moved for summary judgment dismissing the complaint. The first enactment challenged by plaintiffis known as the START-UP NY program (L 20 13, ch 68). Plaintiff contends that this legislation was created in violation of New York Constitution Article III, 14 and 17; Article VII, 8 (l); Article VIII, 1 and Article IX, 2. The other legislation attacked is known as the Upstate New York Gaming Economic Development Act (L 2013, chI74). According to plaintiffthis enactment, which addresses, among other things, the placement of casinos in the State, violates New York Constitution Article III, 14. The three Agreements are alleged to violate New York Constitution Article III, 17; Article VII, 8 (l) and Article IX, 2 as well as the separation of powers principal. New York Constitution Article III, 14 provides that: "No bill shall be passed or become a law unless it shall have been printed and upon the desks of the members, in its final form, at least three calendar legislative days prior to its final passage, unless the governor, or the acting governor, shall have certified, under his or her hand and the seal of the state, the facts which in his or her opinion necessitate an immediate vote thereon " The challenge under Article III, 14 is based on certificates issued by the Governor calling for immediate passage of the legislation effecting the START-UP NY program and the Upstate New York Gaming Economic Development Act. Both messages contained the same following language: "The facts necessitating an immediate vote on the bill are as follows: I previously handed to the Legislature a bill that was introduced as Governor's Program Bill No. 33 (S. 5883 and A. 8101) on June 10,2013. That bill was constitutionally aged and can be acted on without a Message of Necessity before the Legislature's adjournment at the end of this week. Among other things, it establishes a comprehensive framework for regulating destination resort gaming in New York State and otherwise effectuates
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agreements with Indian nations and tribes. However, that legislation has some technical errors which, given the effective date of parts of the legislation, must be corrected to better effectuate the Legislature's and the Executive's intentions. This bill, corrects those errors, could not otherwise be acted upon before the adjournment of the Legislature. Because the bill has not been on your desks in final form for three calendar legislative days, the Leader of your Honorable House has requested this message to permit the immediate consideration of this bill." While plaintiff argues that the certifications issued by the Governor failed to certify facts that necessitated immediate votes on the bills, the law in this regard is well settled: "as long as the Governor's certificate contains some factual statements, the sufficiency of the stated facts to support the Governor's conclusion may not be challenged" (Maybee v State ofNew York, 4 NY3d 415 [2005]). Here, while plaintiff may disagree with the Governor's assessment of the need to act quickly, the Governor included in his certificate a recitation of his reasons for urging speedy passage. That is all the Constitution requires and consequently, the challenge based on Article III, 14 fails. As alleged in the amended complaint, the legislation creating the START-UP NY program violates Article IX 2 of the State Constitution, the Municipal Home Rule Clause, which provides: "(b) Subject to the bill of rights of local governments and other applicable provisions of this constitution, the legislature:" .... "(2) Shall have the power to act in relation to the property, affairs or government of any local government only by general law, or by special law only (a) on request of two-thirds of the total membership of its legislative body or on request of its chief executive officer concurred in by a majority of such membership, or (b) except in the case of the city of New York, on certificate ofnecessity from the governor reciting facts which in the judgment ofthe governor constitute an emergency requiring enactment ofsuch law and, in such latter case, with the concurrence oftwo-thirds ofthe members elected to each house of the legislature. "(Const Art IX, 2 [b] [2].)

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Schulz v. State o[New York Executive, et al. Index No.: 4115-13,' RJI No.: 01-13-111997
Legislative enactments enjoy a strong presumption of constitutionality and while the presumption is rebuttable any invalidity must be demonstrated beyond a reasonable doubt (Matter ofMcGee v Korman, 70 NY2d 225,231 [1987]). Plaintiff contends that the legislation creating the START-UP NY program violates the Municipal Home Rule Clause because it is a special law, i.e., it is a law that "in terms and in effect applies to one or more, but not all counties, counties other than those wholly included within a city, cities, towns or villages." (NY Const, art IX, 3 [d] [4]) and no legislative body requested passage of such legislation. There is, however, an exception to the requirement for a home rule message "where the State possesses a substantial interest in the subject matter and the enactment bears a reasonable relationship to the legitimate, accompanying substantial State concern" (Greater New York Taxi Assn. v State ofNew York, 21 NY3d 289,301 [2013] [internal quotations and citations omitted]). Plaintiff has not, however, made any effort to demonstrate that the legislation does not promote a substantial State interest and does not bear a reasonable relationship to a State concern. Moreover, the stated purpose of the program, to spur business creation and expansion, is a substantial State concern and the financial incentives provided under the program are reasonably related to that purpose. Plaintiff also argues that the legislation creating the START-UP NY program violates NY Const, art III, 17, the Exclusive Privileges Clause. The provision prohibits the legislature from passing "a private or local bill ... [g]ranting to any person, association, firm or corporation, an exemption from taxation on real or personal property" (NY Const, art III, 17). "The Exclusive Privileges Clause, which targets monopolies, may only be violated if the 'private or local bill' is 'directed at a single entity' and it confers 'a privilege upon the single entity to the exclusion of all others'" (Greater New York Taxi Assn. v State of

New York at 307, quoting Consumers Union ofU.S., Inc. v State ofNew York, 5 NY3d 327,360-361, n 27
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Schulz v. State o/New York Executive, et al. Index No.: 4115-13; RJI No.: 01-13-111997
[2005]). Under the START-UP NY program public and private colleges and universities in New York are able to apply to have vacant land designated as tax-free areas. New businesses or existing businesses that expand to create net new jobs can locate in the tax-free areas. The law is not directed to a single entity

which thereby gains an exclusive privilege and therefore, the Act does not violate the constitutional provIsIOn. Under Constitution Article VII, 8 (1) "[t]he money of the state shall not be given or loaned to or in aid of any private corporation or association, or private undertaking ...". Plaintiff argues that the tax

exemptions provided under the START-UP NY program are unconstitutional gifts of State money. However, as defendants point out the State Constitution article XVI, 1 expressly provides for exemptions from taxation. Reading the provisions together compels the conclusion that a tax exemption is not a gift of State money. Though plaintiff argues in reply that article XVI prohibits the exemptions the START-UP NY program authorizes, the Act is not challenged on that basis in either the complaint or the amended complaint. Moreover, plaintiffmisreads the constitutional provision when arguing that tax exemptions must be used exclusively for educational, religious or charitable purposes and that the property subject to the exemption must be owned by such a corporation or association. The language relied on by plaintiff is preceded by language which provides that exemptions may be altered or repealed except those exempting the types ofproperty to which plaintiffrefers. The clause does not limit exemptions to specific organizations and property as plaintiff contends. "Article VIII, 1 is the local analogue to article VII, 8 (1), prohibiting local governments from giving or loaning any money to private recipients or giving or lending their credit to private or public corporations" (Bordeleau v State o/New York, 18 NY3d 305, 318, n.3 [2011]). Consequently, it provides
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no basis for invalidating the statute. One ofthe grounds offered by defendants for dismissal ofthe challenges to the Agreements is based on plaintiffs failure to join as parties all of the signatories. CPLR 1001 (a) states that an individual or

entity is a necessary party to litigation "if complete relief is to be accorded between the persons who are parties to the action" or [is one] who might be inequitably affected by a judgment in the action." The provision requires that the nonparty be joined if subject to the court's jurisdiction (CPLR 1001 [b]). If jurisdiction over the missing party can only be obtained by his or her consent or appearance, the court, when justice requires, may allow the action to proceed without the missing party being joined (id.). The counties of Madison and Oneida are parties to the Oneida Settlement Agreement. As they are subject to the jurisdiction of the court and might be inequitably affected by a judgment regarding that Agreement they must be joined (CPLR 1001 [b]). Plaintiff has also failed to join the Oneida Nation, the Seneca Nation ofIndians and the S1. Regis Mohawk Tribe, signatories to the Agreements, who also might be inequitably affected by a judgment in this action. However, "[u]nless Congress provides otherwise,

Indian tribes possess sovereign immunity against the judicial processes of states [and] [a]s a result, New York courts cannot force [them] to participate in this lawsuit" (Saratoga County Chamber ofCommerce v

Pataki, 100 NY2d 801 [2003] [citations omitted]). In Saratoga County Chamber ofCommerce the court
determined to allow the action to proceed without the participation of the S1. Regis Mohawk Tribe, a necessary party, because the Tribe had refused to participate after being put on notice of the action and dismissal would have deprived the plaintiffs of their day in court (id. at 820-821). Here, plaintiff has not provided formal notice of the action to the Indian nations so as to allow the opportunity to participate. Consequently, any determination of whether to proceed in their absence would be premature. The better
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course is to require plaintiffto provide notice and allow those interested parties the opportunity to participate regarding the challenges to the constitutionality of the Agreements. Based on the foregoing it is ORDERED, ADJUDGED AND DECREED, that the START-UP NY program (L 2013, ch 68) does not violate New York Constitution Article III, 14 and 17; Article VII, 8 (1); Article VIII, 1 and Article IX, 2 and it is further ORDERED, ADJUDGED AND DECREED, that Upstate New York Gaming Economic Development Act (L 2013, ch174) does not violate New York Constitution Article III, 14 and it is further ORDERED, that with respect to the remaining challenges regarding the challenges to the constitutionality ofthe Agreements, plaintiffserve the County ofMadison, the County ofOneida, the Oneida Indian Nation, the Seneca Nation of Indians and the St. Regis Mohawk Tribe with all the pleadings and supporting papers filed in this action together with a copy ofthis Judgment within thirty (30) days ofthe date of this Judgment and it is further ORDERED, that the County of Madison, the County of Oneida, the Oneida Indian Nation, the Seneca Nation ofIndians and the St. Regis Mohawk Tribe may, if they are so advised, and if plaintiff has complied with the preceding decretal clause, serve and file an answer to the amended complaint by June 16,2014. This constitutes the judgment of the Court. The original judgment is returned to the attorney for defendants. A copy of the judgment and the supporting papers have been delivered to the County Clerk for placement in the file. The signing of this judgment, and delivery of a copy of the judgment shall not

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Schulz v. State ofNew York Executive, et al. Index No.: 4115-13; RJI No.: 01-13-111997 constitute entry or filing under CPLR 2220. Counsel is not relieved from the applicable provisions of that rule respecting filing, entry and notice of entry. SO ORDERED. ENTER. Dated: Saratoga Springs, New York April 10,2014

Thomas J. cNamara Acting Sup me Court Justice Papers Considered:

1. 2. 3. 4.

5. 6. 7.

Verified Complaint dated July 25,2013, with Exhibits A through L annexed thereto; Verified Answer dated November 13,2013; Notice of Motion dated November 13,2013; Affirmation of James B. McGowan dated November 13,2013, with Exhibits 1 through 10 annexed thereto; Defendants' Memorandum of Law dated November 13, 2013 with Appendix annexed thereto; Affidavit ofRobert L. Schulz, sworn to January 6, 2014, with Exhibit A annexed thereto; and Plaintiffs BriefIn Opposition dated January 3, 2014.

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