People v Sprint Nextel Corp.

People v Sprint Nextel Corp. 2014 NY Slip Op 01403 Decided on February 27, 2014 Appellate Division, First Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on February 27, 2014
Mazzarelli, J.P., Acosta, Renwick, Freedman, Manzanet-Daniels, JJ.
11848 103917/11

[*1]The People of the State of New York, Eric T. Schneiderman, etc., et al., Plaintiffs-Respondents,

v

Sprint Nextel Corp., et al., Defendants-Appellants. Broadband Tax Institute and Council of State Taxation, Amici Curiae.




Williams & Connolly LLP, Washington, DC (Kannon K.
Shanmugam of the bars of the State of Kansas and District of
Columbia, admitted pro hac vice, of counsel), for appellants.
Eric T. Schneiderman, Attorney General, New York (Brian A.
Sutherland of counsel), for respondents.
Morrison & Foerster LLP, New York (R. Gregory Roberts of
counsel), for Broadband Tax Institute, amicus curiae.
McDermott will & Emery LLP, New York (Arthur R. Rosen of
counsel), for Council of State Taxation, amicus curiae.

Order, Supreme Court, New York County (O. Peter Sherwood, J.), entered July 1, 2013, which denied defendants' motion to dismiss the complaint in its entirety, unanimously affirmed, without costs.

The court properly denied the motion to dismiss the complaint in its entirety. Plaintiffs' complaint adequately alleges that defendants violated New York's False Claims Act (State Finance Law § 189[1][g]), Executive Law § 63(12) and Article 28 of the Tax Law by knowingly making false statements material to an obligation to pay sales tax pursuant to Tax Law § 1105(b)(2). Contrary to defendants' interpretation, the Tax Law provision is not preempted by the Federal Mobile Telecommunications Sourcing Act (4 USC 116 et seq.).

The court also properly rejected defendants' argument that the New York False Claims Act with respect to statements made under the Tax Law should not be given its stated retroactive [*2]effect. Defendants fail to show that the Act's sanction of civil penalties, including treble damages, is so punitive in nature and effect as to have its retroactive effect barred by the Ex Post Facto Clause (US Const, art I, § 10).

THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: FEBRUARY 27, 2014

DEPUTY CLERK