Friday, October 15, 2010

Judge Not...!

Judge Richard Arcara has to be the biggest judicial goofball in NY State-his latest ruling extending the retraining order on the Indian tax collection has to be read to be believed: "U.S. District Judge Richard J. Arcara on Thursday extended indefinitely his ban on state taxation of cigarette sales by the Seneca Nation and other Indian tribes...In one of two rulings, Arcara extended a temporary restraining order that prevents the state from collecting taxes on cigarette sales by Indian-owned businesses to non-Indians. The temporary order, which the judge initially issued during the summer, had been scheduled to end today. Arcara said Indian tribes throughout the state would "suffer irreparable injury" if he did not extend the temporary order. He said thousands of smoke shop workers would be likely to lose jobs if the state taxation begins now.

Unbelievable! Not a scintilla of evidence that this judge understands just how much the Indian tax avoidance scheme-the one that has allowed their smokeasies to flourish-has caused irreparable harm to the state's legitimate retailers and tobacco wholesalers. Not to mention the $150 million budget hole that has been created because of the judge's asinine ruling.

But Arcara wasn't finished conclusively demonstrating that the only bench he belongs on is a park bench. He goes on to say that his ruling was motivated in part because of his fear of Indian violence: "The judge also voiced concerns about public safety if he does not extend the order. He said he is concerned about the threat of violence by Indian protesters if the taxation begins."

And he goes on to reiterate these fears: "Shortly before the [tax collections] were to be implemented, parties on both sides publicly spoke about the potential for violence," Arcara wrote. "Given the passionate sentiments involved, the court finds that granting a stay pending appeal is in the public interest because it will simply preserve the status quo while a higher court considers the merits of the [Indian tribes'] claims."

Adding insult to injury is that fact that the judge has little regard for the merits of the Indian legal claims: "While his extension of the temporary restraining order is good news for Indian tribes, Arcara also filed a second order in which he turned down some of the arguments that Indian tribes have presented to fight off taxation. He said lawyers for the Seneca Nation and the Cayuga Indians have "failed to demonstrate a likelihood of success" on their claims that the state taxation plan is unconstitutional."

No legal grounds, but Arcara's first ruling allows the patently illegal activities to not only continue, but to flourish as a result of the extra differential that the newly imposed cigarette tax gives them: "In its legal arguments, the Seneca Nation "expressly acknowledges that, as a general principle, New York State has the authority to require reservation retailers to collect excise taxes on sales to non-Indians," Arcara wrote. "This point is significant. New York estimates that of the 10 million cartons [of cigarettes] sold last year by [Seneca] retailers, less than 70,000 were purchased by Seneca Nation members for their own personal consumption. Under [previous federal court rulings], the vast majority of sales made by reservation retailers are taxable," the judge wrote."

So, we have a judge who unmindful of anyone's pain but that of the Indian plaintiffs-and allows them to continue inflicting more harm on the state's tax payers as well-allowing the lawful collection of the tax to be postponed for perhaps years: "The bottom line, according to many court observers, is that the state could eventually succeed in its efforts to tax Indian cigarette sales, but the multiple legal challenges could block taxation for months or even years."

In our view, this should be a compelling issue that all candidates for elective office in the state should be forced to address in the next two weeks. The exit question is: Are we going to allow one special interest to remain above the law, while legitimate tax paying retailers and wholesalers continue to be squeezed right out of business?