• Industry News

Both Sides Claim Victory in Rulings on Cigarettes

Published: 2010-10-20    Views:104 reads

 

Several Indian tribes won reprieves Thursday and Friday in their attempts to halt collection of state taxes on cigarettes that Indian businesses sell to non-Indians, and both sides could claim victory following a pair of decisions.

In Buffalo - part of the federal court system's Western District of New York - U. S. District Judge Richard J. Arcara concluded that attorneys for the Seneca Nation and the Cayuga Indians have "failed to demonstrate a likelihood of success" on their claims that the state taxation of those cigarettes is unconstitutional.

But Arcara indefinitely extended his ban on state taxation of cigarette sales by those two tribes.

In Utica - part of the Northern District of New York, the Oneida Nation won a victory when U. S. District Judge David N. Hurd granted a preliminary injunction -more permanent than a temporary restraining order-barring the collection of taxes on sales to non-Indians.

"The Oneida Nation has established [that] irreparable harm will occur [without] injunctive relief, there is a likelihood of success on the merits, and the balance of the equities tips in its favor," Hurd wrote in granting the injunction.

So two similar cases, decided by two federal judges in different parts of the state, yielded different opinions on the "likelihood of success" of the Indians' claims.

Legal experts, though, expect all these cases to be lumped together and decided by the Second Circuit Court of Appeals.

Arcara suggested in Thursday's ruling that two Indian tribes' right to self-government is not impeded by these taxes; that Seneca Nation attorneys haven't argued in their legal papers that these taxes would violate Indian treaties; and that Seneca attorneys have acknowledged, as a general principle, that New York State has the authority to collect such taxes on sales to non-Indians.

State officials interpreted Arcara's order as a real victory for the state in its attempt to collect the taxes.

"It is time for decades of court battles to come to an end," Morgan Hook, communications director for Gov. David A. Paterson, said Friday. Hook added that the state now is closer than it has been in decades to resolving this long-standing dispute.

Hook said the governor's office will seek to have any appeal process completed as quickly as possible.

But outside Arcara's courtroom Friday afternoon, Harry Wallace, chief of the Unkechaug Nation in Suffolk County, gave a different interpretation of where the case is heading.

"My feeling is that ultimately we will prevail on this, because it is an unconstitutional, impermissible burden on tribal sovereignty," Wallace said.

Wallace was in Arcara's courtroom Friday as attorneys for the St. Regis Mohawks, the Unkechaug Nation and New York State discussed an extension of the tax-collection ban for those two tribes. A temporary restraining order for the two expired Friday.

"I'm going to grant [a 14-day extension]," Arcara told both sides. "I'm not going to be dealing with these very difficult decisions in a matter of a day or two."

Arcara granted the two-week extension and set oral arguments for Oct. 26.