Jenner & Block Wins Ruling for Cauygas over Cigarette Sales

For Native American tribes, cigarette sales are a huge source of revenue. So a decision issued on Friday by a state appellate court in New York declaring that the Cayuga Indian Nation can sell cigarettes tax free to non members is welcome news for all tribes in the state.

For Native American tribes, cigarette sales are a huge source of revenue. So a decision issued on Friday by a state appellate court in New York declaring that the Cayuga Indian Nation can sell cigarettes tax free to non members is welcome news for all tribes in the state.

Jenner & Block partner David DeBruin, an attorney for the Cayuga Nation, gave us some background on the case Tuesday. He told us that there’s long been tension in New York over whether Native American tribes can sell tax-free cigarettes to non members. To prevent non members from buying tax free cigarettes, the state passed a law in 2005 that would provide Native Americans with special coupons to buy tax-free cigarettes. But it never implemented the plan, so stores on Native American lands continued to sell cigarettes tax free to both its members and non members.

The case against the Cayugas, DeBruin said, started last November when officials from Cayuga and Seneca counties obtained search warrants and seized cigarettes worth hundreds of thousands of dollars from two Cayuga convenience stores. They claimed that the stores were violating tax laws and threatened prosecution.

The Cayugas initiated an action that same month in New York Supreme Court against the Cayuga County Sheriff and Seneca County Sheriff seeking to get their cigarettes back and a declaration that the sales were legit. But Supreme Court Justice Kenneth Fisher ruled against the Cayugas. Even though the state had not implemented the coupon program, Judge Fisher ruled that the stores still could not sell tax-free cigarettes to non members. He also ruled that the Cayuga stores were not on qualified reservation land and therefore could not sell cigarettes tax-free to anyone.

Jenner & Block, which came in on appeal, obtained a stay of the ruling in February, which headed off a criminal prosecution. Then on Friday, in a 4-1 vote, the Appellate Division, Fourth Judicial Department, reversed Judge Fisher on both grounds.

DeBruin told us that the Cayuga stores started selling cigarettes again the same day the ruling came down. He also said that the Cayuga nation offered to pay the legal fees for the sheriffs’ offices if they agreed to stop litigating the case.

“The ball is in the [their] court,” said DeBruin.

Philip Spellane of Harris Beach, who represented the defendants, was not available for comment.

source: http://www.law.com

Similar Posts:

If you enjoyed this post, make sure you subscribe to my RSS feed!