Department of Taxation and Finance of N. Y. v. Milhelm Attea & Bros. - Oral Argument - March 23, 1994

Department of Taxation and Finance of N. Y. v. Milhelm Attea & Bros.

Media for Department of Taxation and Finance of N. Y. v. Milhelm Attea & Bros.

Audio Transcription for Opinion Announcement - June 13, 1994 in Department of Taxation and Finance of N. Y. v. Milhelm Attea & Bros.

Audio Transcription for Oral Argument - March 23, 1994 in Department of Taxation and Finance of N. Y. v. Milhelm Attea & Bros.

William H. Rehnquist:

We'll hear argument next in Number 93-377, Department of Taxation and Finance of New York v. Milhelm Attea Brothers.

General Koppell.

G. Oliver Koppell:

Mr. Chief Justice and may it please the Court:

This case is of enormous importance to the State of New York, indeed, to other States, and also to people in private business.

I urge this Court to reverse our own court of appeals which found our system for taxing cigarette sales by Indian traders to non-Indians preempted by Federal law.

It is indeed somewhat ironic that I must ask this Court to protect our State's fisc by reversing the determination of our court of appeals.

However, this Court's prior decision in Moe, Colville, and Potawatomi, sustained the State system as consistent with Federal law, and that is what the court of appeals said was not so.

Indeed, when this Court remanded this very case to our State courts 2 years ago, I believe that it did so because you recognized that States may require both retail and wholesale Indian traders to assist in collecting taxes due on sales to non-Indians at reservation stores.

Sandra Day O'Connor:

General Koppell, may I ask you if this case was litigated below at all on the notion that the New York statute is severable, that there are a variety of provisions in it, and that some of them should survive even if others do not?

G. Oliver Koppell:

Your Honor, the case before us narrowly focuses on the regulation of wholesalers, and not retailers, and what we are looking here is merely those aspects of the regulation that regulate the sale, or sales by wholesalers.

In my opinion, those are very narrow, they are very limited, and the Court should look at the regulatory scheme only as it affects the respondents here, who are cigarette wholesalers.

Sandra Day O'Connor:

And is the statute severable, in your view?

G. Oliver Koppell:

Yes, I think it's severable.

I think the Court could indeed uphold even portions of the regulations on wholesalers and not others, and certainly this Court should only deal with wholesalers.

The Solicitor General brings into his brief before this Court the way the regulations affect the retailers.

That's really not before this Court.

It was not briefed below.

There's really no evidence in the record with respect to how the regulations affect retailers.

With respect to wholesalers, again, I think this Court could sever and find some of the regulations applicable, but I do want to emphasize that the regulations on the cigarette wholesalers are quite limited, and really only require a limited amount of record-keeping and in fact are quite consistent with the regulation of Indian traders that has been upheld by this Court in the Moe case and in the Colville.

Sandra Day O'Connor:

Does the provision requiring licensing of--

G. Oliver Koppell:

Of the wholesalers?

Sandra Day O'Connor:

--the wholesaler, is that before us?

G. Oliver Koppell:

The wholesalers only have to be licensed with respect to sales to non-Indians.

If there were a wholesaler... and in fact Elias Attea, who is one of the respondents here, sells only on Indian reservations.

If he contended that he wanted to sell only to Indians, and not to non-Indians, and that he would only meet Indian demand on the reservation, he would not have to be licensed.

However, we believe that virtually all Indian stores sell both to Indians and to non-Indians.

To the extent that cigarettes go from the wholesalers to non-Indians, they would have to be licensed, as are all wholesalers in the State of New York who sell cigarettes that are not tax-exempt.

David H. Souter:

And the retailers would have to be licensed as well, so--

G. Oliver Koppell:


David H. Souter:

--They would not?