The opinion of the court was delivered by: MCAVOY
Allegedly pursuant to New York Tax Law § 1845, the New York State Department of Taxation and Finance (the "Department") commenced an action in New York Supreme Court, County of Clinton, to confirm the seizure of a tractor-trailer and 7,325 liters of liquor. Claimants to the seized property include the Tribal Council of the St. Regis Mohawk Tribe (the "Tribal Council"), Julia Back Skidders d/b/a Wolf Clan Trucking ("Skidders"), and the Manormead Group, Inc. ("Manormead"). On October 20, these three claimants filed a removal petition pursuant to 28 U.S.C. § 1446, claiming that the Court could exercise subject matter jurisdiction over this action pursuant to 28 U.S.C. §§ 1331, 1337, and 1362. Before the Court are the Department's motion to remand this action to New York Supreme Court, Skidders' motion to dismiss, and the Tribal Council's motion to dismiss.
On September 30, 1995, the United States Border Patrol stopped a tractor-trailer carrying 17,325 liters of liquor, after it passed from Vermont into the Town of Champlain, Clinton County, New York. The border patrol agent advised his supervisors by radio and requested the Department's assistance. He then requested that the driver, Steven J. Sobotka, accompany the border patrol agents to the United States Border Patrol Station (the "Station") in Champlain. The Department dispatched Excise Tax Investigator Chad Stevens. When Investigator Stevens arrived at the Station, he learned that Mr. Sobotka was an employee of Wolf Clan Trucking and that he was transporting liquor from the Jenkins distillery in Londonerry, New Hampshire, to a warehouse in Hogansburg, New York, presumably for sale or use within New York.
Claimant Skidders apparently owns the tractor and trailer or has them registered in her name. According to the Department, the California-based Manormead had purchased the liquor from Jenkins Spirits, Inc., ("Jenkins"), a New Hampshire corporation, and was the owner and importer of the liquor at the time of the seizure. The Department claims that neither Manormead, Jenkins, the Tribal Council, Wolf Clan Trucking, Skidders, nor any other person or entity connected with the imported liquor was registered by the Department as a distributor.
Article 18, § 421(1) of New York's Tax Law prohibits the importation of liquor into New York for sale or use therein by anyone other than a registered distributor. Article 37, § 1845(a) authorizes designated police and peace officers to seize liquor imported into New York for sale or use therein, together with the means of transportation, when the person importing the liquor or causing it to be imported is not registered pursuant to § 421 as a liquor distributor and the quantity of imported liquor exceeds 90 liters. Allegedly pursuant to § 1845(a), Investigator Stevens seized the tractor-trailer and the liquor on September 30. Section 1845(a) further provides that the Department must move in the Supreme Court of the country where the seizure occurred for an order confirming the temporary seizure. The Department did so, by way of an Order to Show Cause, on October 5. On October 20, the Tribal Council, Skidders, and Manormead filed their notice of removal, asserting 28 U.S.C. §§ 1331, 1337, and 1362 as jurisdictional bases. The Department then filed a motion to remand, in response to which the Tribal Council and Skidders cross-moved to dismiss.
Section 1441(b) of the Judicial Code provides: "Any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties, or law of the United States shall be removable without regard to the citizenship or residence of the parties." The Court resolves whether to remand after removal by referring to the complaint at the time the petition for removal is filed. Rosenberg v. GWV Travel, Inc., 480 F. Supp. 95, 96 (S.D.N.Y. 1979). For a claim or right to "arise under" the Constitution, treaties, or law of the United States, it must be a necessary element of the plaintiff's claim for relief. Oklahoma Tax Comm'n v. Graham, 489 U.S. 838, 103 L. Ed. 2d 924, 109 S. Ct. 1519 (1989) (citing Taylor v. Anderson, 234 U.S. 74, 75-76, 58 L. Ed. 1218, 34 S. Ct. 724 (1914); Louisville & Nashville R.R. Co. v. Mottley, 211 U.S. 149, 53 L. Ed. 126, 29 S. Ct. 42 (1908)); Franchise Tax Bd. v. Construction Laborers Vacation Trust for So. California, 463 U.S. 1, 9-10, 77 L. Ed. 2d 420, 103 S. Ct. 2841 (1983). As a general matter, an action arises under federal law if federal law creates the cause of action. Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 808-09, 92 L. Ed. 2d 650, 106 S. Ct. 3229 (1986). As the party invoking the Court's jurisdiction, claimants bear the burden to establish the propriety of removal. Mermelstein v. Maki, 830 F. Supp. 180, 184 (S.D.N.Y. 1993). If federal jurisdiction is dubious, remand is proper, in part because it prevents parties from winning in federal court, only to have an appellate court reverse for lack of subject matter jurisdiction. See Deats v. Joseph Swantak, Inc., 619 F. Supp. 973, 977 n. 12 (N.D.N.Y. 1985).
The Department's complaint, like Investigator Stevens' affidavit, mentions only New York Tax Law § 1845 as a basis for seizing the tractor, trailer, and liquor. If, however, on motions for remand, the Court took complaints at face value, few defendants would succeed in maintaining a federal forum after removal. Claimants contend that the Court could have exercised federal question jurisdiction over this action had the Department filed here because regardless of how the Department framed the action in its complaint, it seized the property under the authority of 18 U.S.C. § 1161. Section 1161 provides that federal criminal laws regulating the possession and distribution of liquor in Indian country are inapplicable "to any act or transaction within any area of Indian country provided such act or transaction is in conformity both with the laws of the State in which such act or transaction occurs and with an ordinance duly adopted by the tribe having jurisdiction over such area of Indian country". In Rice v. Rehner, 463 U.S. 713, 726, 728-29, 77 L. Ed. 2d 961, 103 S. Ct. 3291 (1983), the Supreme Court noted that § 1161 represents a congressional delegation of authority to the States and the Indian tribes to regulate the use and distribution of alcoholic beverages in Indian country.
From the general proposition that states have authority over Indian Nations only by virtue of Congressional grants of authority, claimants derive the argument that because New York obtained its authority to enforce its liquor laws on Indian reservations from § 1161, § 1161 is the statutory authority pursuant to which the Department must have acted when it seized claimants' property. Therefore, claimants would have the Court conclude, the Department's cause of action arises under federal law--§ 1161 "created" the cause of action--and the Court may exercise federal question jurisdiction over the pending matter.