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Contact:
Nina McCann
Director of Public Relations
Forchelli, Curto, Deegan, Schwartz, Mineo, Cohn & Terrana, LLP
516-248-1700
nmccann@ForchelliLaw.com
PRELIMINARY INJUNCTION GRANTED
ON BEHALF OF TRADE ASSOCIATIONS DELAYING THE IMPLEMENTATION
OF NEW TOBACCO FEES BY NEW YORK STATE
On April 15, 2010, the Second Department
granted a preliminary injunction staying the implementation
of the new fee schedule set forth in New York Tax Law §480-a(2)(a)(ii)
as amended by the Act of April 7, 2009, Ch.58, Pt. C, §125,
2009 N.Y. Laws 400, 477 (McKinney) (the “Statute). The
Forchelli, Curto, Deegan law firm by Andrew E. Curto, Esq.,
and Richard Goldberg, Esq. successfully argued that a preliminary
injunction is warranted because the Plaintiff trade associations
and their individual members have standing to commence
this action because each of the 10,000 individual members
will be injured by the implementation of a fee schedule
that is an unconstitutional tax disguised as a license
fee for the right to sell tobacco products.
Appellants’ stressed
that the tax violates the equal protection clause because
there is a gross disparate treatment amongst similarly situated
tobacco retailers that must all pay this tax for the right
to sell tobacco products, but are paying varying rates even when their tobacco
gross sales are identical because the amount of
the tax is determined on the gross sales generated from
all other goods sold at a retail location.
The crux of Appellant’s argument is that the tax
is unconstitutional because it is not limited to the gross
sales of tobacco products. Although the tax confers
a right to sell tobacco products, it is not a tax on tobacco
products. Rather, it is a tax on all products sold
at any given retail location.
Last
month on March 19, 2010, the Second Department reinstated
a TRO for the same purpose—to stay the enforcement
of the Statute. The first stay was granted in Nassau
Supreme Court by Judge Feinman on September 16, 2009; however,
the stay was vacated when the judge denied the retailers’ motion
for a preliminary injunction on standing grounds alleging
that the Plaintiff trade associations did not show injury
to at least one of its retailer members.
The Second Department’s grant of the preliminary
injunction will stay the implementation of the Statute
pending a determination of the appeal on the standing issue. The
Statute imposes a dramatic increase in tobacco registration
fees from a $100 flat fee to a graduated scale of $1000,
$2500, and $5000 based on the gross sales of all products. The
stay permits retailers state-wide to maintain their 2009
tobacco registration certificates and continue selling
cigarettes without paying the new fees.
Andrea Tsoukalas, Esq., who assisted in drafting Appellants’ motion
for preliminary injunctive relief, is General Counsel to
the Long Island Gasoline Retailers Association (LIGRA). LIGRA
and four other trade associations commenced this action
in September, 2009 on behalf of its individual members.
Andrew E. Curto concentrates
his practice in complicated commercial and employment litigation. Prior
to joining the firm in 1999, Mr. Curto was a partner in
a Melville, New York law firm. He routinely litigates
claims in both federal and state courts in a wide variety
of commercial claims, such as corporate dissolution and
derivative actions, contract and real estate disputes,
employment and discrimination claims, estate litigations,
regulatory claims and compliance issues arising out of
municipal zoning and code enforcement proceedings. Mr.
Curto has substantial experience in appellate practice,
and has gained valuable experience from prior employment
with the United States Environmental Protection Agency,
the Suffolk County District Attorney's office and Matthew
Bender Co., a well-known legal publisher.
Mr. Curto is admitted
to practice before the New York State Bar, the United States
District Court for the Eastern and Southern Districts of
New York, and the Second Circuit Court of Appeals.
Andrea Tsoukalas concentrates
her practice in zoning, land use, environmental and municipal
law matters. Ms.
Tsoukalas represents a wide variety of clients including
national corporate chains, local developers and small business
owners in the development of commercial and residential
properties. Ms. Tsoukalas also has extensive experience
in appellate practice and civil litigation. She litigates
contract and real estate claims, corporate and partnership
disputes, and regulatory claims arising out of building
and zoning code violations. Ms. Tsoukalas is general counsel
to the Long Island Gasoline Retailers Association, a nationally
recognized non-profit trade association with over 600 members. She
also serves as counsel to the Village of Kensington Board
of Trustees, Zoning Board of Appeals and Architectural
Review Board.
Founded in 1976, Forchelli,
Curto, Deegan, Schwartz, Mineo, Cohn, & Terrana LLP
is one of Long Island's most acclaimed and distinguished
law firms. Headquartered in Uniondale, NY,
the Firm provides counsel to a broad range of clients,
including national, regional and local businesses, major
real estate developers and organizations, banks, insurance
companies, municipalities, educational institutions, and
individuals.
*The Omni, 333 Earle Ovington Boulevard, Suite 1010, Uniondale,
New York 11553*
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