City of New York v. Golden Feather

For the reasons below, the Court grants the City summary judgment as to defendants’ liability under the CCTA and the CMSA. With respect to relief, the Court (1) grants the requested permanent injunction against defendants’ “purchase, receipt, possession, sale, distribution, offer and advertisement of unstamped cigarettes-even to tribe members for personal use”; (2) awards damages as against the Peace Pipe and TDM defendants; (3) awards civil penalties as against the Red Dot defendants, the amount of which will be determined at a later hearing; and (4) awards the City attorney’s fees, the amount of which will be determined in the first instance by Magistrate Judge Vera Scanlon by report and recommendation.

And the bad news (liability):

For the reasons stated, the Court concludes the following: As to defendant Phillips, the City is directed to clarify whether it is still seeking monetary relief against him, and if so, to submit further damages briefing that identifies the amounts the City is seeking against Phillips only. As to the Peace Pipe, TDM, and Red Dot defendants, the Court finds that the City is entitled to summary judgment on (1) defendants’ liability under the CCTA and the CMSA, and (2) its requested permanent injunction against defendants’ “purchase, receipt, possession, sale, distribution, offer and advertisement of unstamped cigarettes-even to tribe members for personal use.” In addition, the Court awards to the City (1) damages in the amount of $10,041,075 as against the Peace Pipe defendants and $450,000 as against the TDM defendants; (2) civil penalties as against the Red Dot defendants, the amount of which will be determined at a later hearing; and (3) attorney’s fees, the amount of which will be determined in the first instance by Magistrate Judge Scanlon by report and recommendation.

Prior posts here and here.

City of New York v. Golden Feather — Update

March 17, 2009March 17, 2009Matthew L.M. Fletcher3 Comments

As Indianz reported, the Eastern District of New York delayed ruling on the City’s motion for a preliminary injunction and rejected a sovereign immunity from the smokeshops. Here is the order — march-16-dct-order

Here is our earlier post that includes the complaint.

NYTs on NYC v. Poospatuck Smokeshops

October 29, 2008Matthew L.M. Fletcher

From the NYTs:

Bootleg cigarette traffic from Long Island’s tiny Poospatuck reservation to New York City is brisk, so much so that some cigarette dealers on the reservation don’t even bother to set up storefronts, according to a motion filed in federal court on Tuesday.

Instead, the dealers take telephone orders for bulk shipments of untaxed cigarettes. Millions of them are delivered to the city by van and distributed through an underground network that dramatically undercuts tax collection, the city alleged.

The Bloomberg administration asked a federal judge in Brooklyn to bar the reservation’s eight largest dealers from selling untaxed cigarettes to the public. Those dealers, named as defendants in a federal lawsuit filed by the city last month, control 95 percent of the sales on the reservation, the city said.

Officials estimate that untaxed cigarette sales by the eight dealers have cut city revenues by nearly $195 million a year, an amount the city can ill afford during a financial crisis. In addition, bootleg cigarette traffic undermines a Bloomberg administration anti-smoking campaign.

Continue reading →