Eastern District of New York – Page 3

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.

Shinnecock Cigarette Trader’s Demand for Return of Confiscated Smokes Rejected

January 14, 2013Matthew L.M. Fletcher

Here are the materials in Smith v. Fredrico (E.D. N.Y.):

DCT Order Adopting R&R

Smith Motion for PI

Suffolk County Opposition

Smith Reply

MJ R&R Recommending Denial of Motion

Smith Objection to R&R

Suffolk County Response to Objection

Federal Court Denies Motions to Dismiss Indictment for Drug Smuggling in Akwesasne

December 19, 2012Matthew L.M. Fletcher

Here is the order in United States v. Cournoyer (E.D. N.Y.):

DCT Order Denying Cournoyer Motions to Dismiss

Cherokee/Choctaw Man’s Suit against Employer for Withholding Federal Taxes Dismissed

September 24, 2012Matthew L.M. Fletcher

Here are the materials in Bey v. UPS (E.D. N.Y.):

UPS Motion to Dismiss

DCT Order Granting Motion to Dismiss

New York City Shows No Injury in Fact in Sale of Unstamped Cigarettes by Day Wholesale

August 21, 2012Matthew L.M. Fletcher

Here is the opinion in City of New York v. Milhelm Attea & Bros. (E.D. N.Y.):

DCT Order Granting Summary J to Day Wholesale

An excerpt:

The City of New York has brought an Amended Complaint against the above-captioned defendants, [2] cigarette wholesalers who are state-licensed cigarette stamping agents. The principal contention of the City is that the wholesalers violated the Contraband Cigarette Trafficking Act (“CCTA”), 18 U.S.C. § 2341 et seq., by shipping in excess of 10,000 unstamped cigarettes to Native American reservation retailers who re-sold the cigarettes to the public. According to the City, the former version New York Tax Law § 471 applied a tax to cigarettes sold to reservation retailers for re-sale to the public, and the defendant agents violated that provision by distributing large quantities of cigarettes to reservation retailers without purchasing and affixing the requisite state tax stamps. The City currently seeks civil penalties or disgorgement of profits pursuant to the CCTA, and also brings state law claims for public nuisance and violations of the Cigarette Marketing Standards Act (“CMSA”), New York Tax Law § 484. The parties have engaged in multiple rounds of motion practice, as well as some discovery, and now cross-move for summary judgment.

The defendants’ principal contentions are that the City lacks standing to pursue this action against them, that they were not legally required to [3] affix state tax stamps to the cigarettes at issue, and that they lack the requisite scienter for liability. The City counters that the defendants’ arguments can all be rejected as a matter of law, and that there are no outstanding issues of material fact regarding its entitlement to monetary relief under the CCTA.

For the reasons stated below, the Court grants summary judgment to Day Wholesale, Inc. on the grounds that the City has failed to put forth sufficient evidence that it suffered an injury-in-fact from Day’s sales of unstamped cigarettes. The Court concludes that the City is entitled to summary judgment on the issue of the liability of defendants Gutlove & Shirvint, Inc. and Mauro Pennisi, Inc. for CCTA violations, and that some amount of civil penalties is appropriate. The Court will hold a further hearing for the purpose of assessing the penalty amount. The Court denies the cross-motions as to the City’s CMSA claim, and deems the public nuisance claim withdrawn.