Federal Court Allows Some Tobacco Business Claims in Dispute between Sac and Fox, Seneca, and Susanville Rancheria Companies

Here are the materials so far in Allegheny Capital Enterprises LLC v. Cox (W.D. N.Y.):

8 Amended Complaint

17-8 Motion to Dismiss

17-5 Arbitration Decision

21 Response

22 Reply

23 DCT Order

An excerpt:

This is a diversity action commenced by a corporate entity affiliated with the Sac and Fox of Oklahoma Tribe (doing business in the Seneca Nation in New York) and a partnership doing business in the Seneca Nation. They claim that Defendants, officers of affiliated corporations of the Susanville Indian Rancheria (a Native tribe in California, also referred to as “SIR”), made misrepresentations to Plaintiffs that led to Plaintiffs entering into the tobacco manufacturing and distribution contracts with one of the affiliated corporations. Defendants represented that they had the authority to waive tribal sovereign immunity for the affiliate corporation and that the affiliate in fact waived that immunity. After an alleged breach of these contracts, Plaintiffs lodged claims against one of the affiliate corporations, but the corporation successfully asserted that it did not waive its tribal sovereign immunity. Plaintiffs then commenced this action against the officers; they did not name the corporation as a Defendant.

Before this Court is Defendants’ Motion to Dismiss (Docket No. 17) the Amended Complaint on sovereign immunity, jurisdictional, and pleading grounds. For the reasons stated herein, Defendants’ Motion to Dismiss is granted in part (dismissing claims against Defendants Stacy Dixon and Jolene Robles for lack of personal jurisdiction), denied in part (denying other grounds asserted). After resolution of this motion, Plaintiffs retain claims against Defendant Gretchen Cox.

New Scholarship Condemning the Tobacco Master Settlement Agreement for Selling Out Indian Nations

Ryan D. Dreveskracht has posted his new paper, “Forfeiting Federalism: The Faustian Pact with Big Tobacco,” (PDF) just published in the Richmond Journal of Law and Public Interest.

Here is the abstract:

This article discusses the effects of the largest legal settlement in United States history: the so-called Master Settlement Agreement, or “MSA.” Part I discusses the settlement generally, and its intended effect on the U.S. tobacco market. Parts II through IV discuss the unintended consequences of the settlement. Specifically, Part II considers how states got into their current disarray, and how a perceived state windfall of billions of dollars ended up putting states on what by all accounts now appears to be very real risk of insolvency. Part III examines how the major tobacco companies are using the states’ dire financial condition to stifle tribal sovereignty and Indian industry. Part IV analyzes the federal government’s role in similar oppressive tactics. The concluding section suggests lessons that might be learned from the MSA.


State ex rel Attorney General v. Grand River Enterprises — New Mexico

From April:


An excerpt:

Defendant Grand River Enterprises Six Nations, Ltd., a tobacco company, appeals the district court’s denial of its motion to set aside a default judgment entered against it in an action brought by the State to force Grand River to contribute money into New Mexico’s  tobacco escrow fund. On appeal, Grand River argues that the default judgment must be set aside because (1) the State failed to comply with the rules governing the service of process on foreign corporations; and (2) the district court did not have personal jurisdiction over Grand River when it entered the default judgment. Because we agree with Grand River that the district court lacked personal jurisdiction, we conclude that the district court’s default judgment is void and must be set aside.

R.J. Reynolds Sues US Dept. of Ag. over Tribal Tobacco Retailers

Here is the complaint in R.J. Reynolds Tobacco Co. v. Dept. of Agriculture (D.D.C.):

1 Complaint

1-1 Exhibit A

1-2 Exhibit B

News coverage here.

Oklahoma Supreme Court Affirms District Court Decision in Oklahoma v. Native Wholesale Supply


Here, NWS purposefully targeted the Oklahoma cigarette market and reaped the economic benefit of selling cigarettes in Oklahoma. Defiantly, NWS continued to import and distribute contraband Seneca cigarettes into Oklahoma and reap millions of dollars from the sale of the contraband cigarettes to Oklahoma consumers for more than two years after Oklahoma’s chief law enforcer filed this suit. NWS may not evade the public policy embodied in the MSA, the Escrow Statute, and the Complementary Act and thereby shift the burden of tobacco-related health care costs to the State. Disgorging gross receipts that NWS, a cigarette importer and distributor, received when it intentionally distributed contraband cigarettes into the Oklahoma market in violation of the Complementary Act is no more excessive than seizing and forfeiting contraband cigarettes from a cigarette distributer or wholesaler.22 NWS’ claim to Eighth Amendment protection minimizes the egregiousness of its flagrant disrespect for Oklahoma, our laws, and our citizens.

¶38 NWS had gross receipts that totaled at least $47,767,795.20 from the sale of contraband Seneca cigarettes for resale in Oklahoma from August of 2006 to August of 2010. Based upon the Complementary Act, the settled law of the case, and the undisputed material facts on summary judgment, the summary judgment was proper, and the district court did not abuse its discretion in denying NWS a new trial.

Grand River Enterprises Six Nations Cert Petition in Challenge to Tobacco Master Settlement Agreement

Here is the petition in Grand River Enterprises Six Nations Ltd. v. Oklahoma ex rel. Pruitt:

GRE Six Nations Cert Petition

And the questions presented:

1. Whether this Court’s precedents establish that the State of Oklahoma (along with 45 other States and various U.S. territories with similar statutes) can impose escrow obligations on certain cigarette manufacturers based partly on sales by Indian tribes to tribal members in Indian country.

2. Whether the Oklahoma Escrow Statute, as interpreted by the state courts in this case, violates federal law by imposing escrow obligations on certain cigarette manufacturers — including Indian-owned businesses operating on reservation lands mbased partly on sales by Indian tribes to tribal members in Indian country.


GRE v Oklahoma Cert Opp

GRE Six Nations Cert Reply

Indian Smokeshop Cert Petition Filed in Challenge to Tobacco MSA

The case is Maybee v. Idaho: Maybee Cert Petition

Lower court materials here.

Question presented:

In 1998, the Attorneys General of 46 states, five U.S. territories and the District of Columbia (the “Settling States”) settled various legal actions involving antitrust, product liability and consumer protection claims against the nation’s four largest tobacco companies. In exchange for substantial sums of monies, tied in part to sales volume, to be paid by settling manufacturers, each Settling State agreed to enact and diligently enforce a qualifying escrow statute that would artificially inflate costs for other tobacco manufacturers and which “effectively and fully neutralizes the cost disadvantage that the Participating Manufacturers experience vis-a-vis Non-Participating Manufacturers.” The question presented to the Court is whether a Settling State may prohibit the sale of certain brands of cigarettes manufactured by tobacco companies that have never been sued, or otherwise alleged or found culpable for conduct giving rise to liability.

Muscogee (Creek) Nation Motion to Enjoin Enforcement of Tobacco Master Settlement Agreement is Denied

The complaint in Muscogee (Creek) Nation v. Henry is posted here.

Preliminary injunction materials here:

DCT Order Denying Muscogee Motion

Muscogee Motion for Preliminary Injunction

OTC Response

Henry Response

Edmonson Response

Muscogee Reply to OTC

Muscogee Reply to Henry

Muscogee Reply to Edmonson