Follow Up: Court issues injunction in NY cigarette case

On Tuesday, a federal judge granted the city of New York's request for an injunction against a group of  tobacco vendors on the Poospatuck reservation on Long Island.  As we first reported last year, Mayor Bloomberg filed suit against the reservation, arguing that the city and the state lose more than $1 billion a year in tax revenue because of what it calls bootleg cigarettes distributed on Indian reservations in New York. Of that amount, the administration contends, $195 million represents the city’s share, and officials blame the Unkechaug Nation reservation for most of that. A four day preliminary injunction hearing was held in May.  

According to the Mayor's press release, the Court issued the injunction after concluding that "the City has established a clear or substantial likelihood of success on the merits of its claim" that the defendant businesses' "receipt, possession, sale, distribution and purchase of quantities far in excess of 10,000 cigarettes, which do not bear New York tax stamps, under circumstances where such stamps are required" violates the Federal Contraband Cigarette Trafficking Act as well as the New York Cigarette Marketing Standards Act.  The judge rejected an argument that the smoke shops and their owners, which are licensed by the Unkechaug tribe, could not be sued because they are part of a sovereign nation.

This is a win  for the city because the injunction prohibits the vendors from selling tax-free cigarettes to the general public until a federal court rules in the lawsuit between the reservation and the City. The vendors have thirty days to appeal.  

We will continue to follow this story.

You can read the article on nytimes.com

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