New York City - suing tobacco company in Washington State..

December 16, 2010 - New York Mayor Michael Bloomberg’s administration is suing a tobacco company in Washington state. He’s accusing King Mountain Tobacco Company, which lies on the Yakama Indian Reservation, of illegally selling and distributing untaxed cigarettes in New York. In filing the suit, Bloomberg's got a fight over Native American sovereignty on his hands.

According to the suit announced yesterday, December 14th by Bloomberg (see complaint), King Mountain sold thousands of cartons of cigarettes over a nine-month period to smoke shops on the Poopsatuck Indian Reservation in New York.

A recently passed federal law, called the Prevent All Cigarette Trafficking Act, requires King Mountain to ensure that taxes are paid before shipping tobacco to New York, the suit contends. Yet the Yakama company not only failed to do so, but it refused to stop supplying the bootleg cigs after being told by Bloomberg's law office that it was breaking the law, the suit charges.

The civil action, which also accuses King Mountain and two co-owners of racketeering, seeks unspecified financial damages and an injunction to stop King Mountain from sending more cigarettes to Bloomberg territory. The mayor said yesterday that the case is "extending the fight" against tobacco tax evaders to out-of-state companies.

But King Mountain is arguing that Native American sovereignty gives the company a pass on state taxes for wholesale cigarettes. "The state has no jurisdiction," Kamiakin Wheeler, King Mountain CEO and son of co-owner Delbert Wheeler argues to the Yakima Herald-Republic.

Reference: Michael Bloomberg Takes on Yakama Reservation Cigarette Company/a> By Nina Shapiro, Seattle Daily Weekly, 12/15/2010.

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