August 12, 2010 - Mail order cigarette sellers from the Seneca Nation and elsewhere were handed another setback at federal court this afternoon. In an order filed about 3 p.m., U.S. District Judge Richard J. Arcara refused to further delay the enforcement of a new federal law that prevents businesses from selling cigarettes through the mail.
Background:Seneca Nation businesses oppose the new law, saying it will destroy the tribe's lucrative mail order tobacco industry, which has provided low- and middle-income jobs to thousands of Senecas while turning a few into millionaires. The Seneca businesses will continue their appeal of the new law, but the case now moves up to the Second Circuit Federal Appeals Court in New York City.
U.S. Federal District Court Judge Richard Arcara, earlier in the week heard arguments by both sides – the U.S. government and the Seneca Free Trade Association -- appealing his split decision made last week regarding the constitutionality of the Prevent All Cigarette Trafficking Act (PACT Act) (U.S. Federal Court - appeal of judges split decision regarding PACT Act..);
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So far, the Senecas have "failed to establish a clear likelihood" that their appeal will be successful, Arcara wrote in an eight-page ruling. "Preventing [cigarette sellers] from using the mails pending appeal will undoubtedly impact the profitability of their business," Arcara wrote. "Postal delivery clearly represents the most efficient and most cost-effective means for delivery of their products. However ... it is not the only means, and alternative ways to deliver their products do exist."
The judge also refused to grant a motion by the federal government, which wants to force cigarette sellers to proactively pay billions of dollars in state and local taxes for all tobacco sales.
Today's ruling relates to the Prevent All Cigarette Trafficking Act (PACT Act), which went into effect in late June. The law bans businesses from selling cigarettes through the mail. (U.S. PACT Act takes effect Tuesday, June 29, 2010..)
Supporters of the law say its aim is to prevent teenagers from buying cigarettes through the mail. They say the Senecas are by far the largest mass marketers of cheap cigarettes in the entire nation. One anti-smoking group, the Campaign For Tobacco-Free Kids, estimates that 3.4 million Americans under the age of 18 are regular smokers. The group alleges that tobacco Web sites, such as those run by the Senecas, make it easy for teens to illegally buy smokes.
Seneca Nation smokeshop owners filed a legal challenge to the law in late June. On July 30, Arcara ruled that the government has the legal right to ban the mailing of cigarettes, but he said the tax collections ordered by the law were not legal. (In a mixed decision, on Friday, July 30th, Judge Richard Arcara upheld the mail-order ban contained in the Prevent All Cigarette Trafficking Act (PACT) but temporarily exempted more than 140 Seneca-owned businesses from a provision requiring them to comply with all taxing laws in the places they sell cigarettes. (Seneca Indians - split ruling from NY judge on cigarette regulation..)
On Tuesday, August 10th Seneca business owners asked Arcara to delay the government ban on mail order cigarette sales until their appeal can be heard by a higher court.
The Senecas say many of their mail-order smokeshops already have gone out of business because of the new law. "Businesses have stopped operating and people have lost jobs," said Lisa A. Coppola, an attorney for one tobacco business owned by Seneca Nation member Aaron Pierce.
Reference: Judge refuses to further delay enforcement of PACT Act by Dan Herbeck News Staff Reporter, The Buffalo News, 8/12/2010.