Business | Law

Appeals court affirms preliminary injunction in PACT Act lawsuit

The 2nd Circuit Court of Appeals on Tuesday upheld a preliminary injunction that prevents the Obama administration from enforcing the Prevent All Cigarette Trafficking Act on Seneca Nation smokeshops.

Aaron J. Pierce sells tobacco through Seneca Smokeshop and Red Earth. He says the PACT Act would cripple his business by requiring him to address thousands of state and local tax issues.

"We agree with the district court that the equities tip in the plaintiffs’ favor because of the adverse economic effects that will result from enforcement of the statute in violation of the due process rights they may have," the 2nd Circuit wrote in a per curiam decision.

The decision only affects the taxation issues raised by Pierce and the Seneca Free Trade Association, which represents around 140 Seneca smokeshops. A ban on using the U.S. Postal Service to transport certain types of cigarette products remains in place under the PACT Act.

"This is a positive decision," Seneca President Robert Odawi Porter said in a statement. "While restrictions on mailing remain in place, the method currently used by Seneca Nation merchants to send product -- private shippers other than the major delivery companies -- is back open."

Turtle Talk has posted briefs from the case, Red Earth LLC v. US.

Get the Story:
Cigarette mailing ban on Senecas is upheld (The Buffalo News 9/21)

2nd Circuit Decision:
Red Earth LLC v. USA (September 20, 2011)

Prevent All Cigarette Trafficking Act.
H.R.1676 | S.1147

Related Stories:
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Seneca Nation smoke shop gets restraining order for PACT Act (6/29)
Seneca Nation defends tobacco sales on treaty anniversary (05/24)
ATF schedules tribal consultation on tobacco trafficking law (5/20)
Obama signs cigarette trafficking bill over tribal objections (4/1)
Seneca Nation asks Obama to veto cigarette mailing bill (03/19)
Cigarette trafficking bill sent to White House for review (3/18)
Editorial: PACT Act puts a halt to Internet tobacco sales (3/17)
White House weighs stance on cigarette trafficking bill (3/16)
Seneca Nation blasts passage of cigarette trafficking bill (3/15)
Lance Morgan: PACT Act a hidden power grab for states (3/12)
Seneca Nation lobbies against cigarette trafficking bill (3/8)
New York governor proposes tobacco tax regulations (02/24)
Seneca Nation targets Sen. Gillibrand for tobacco bill (01/25)
Seneca Nation prepares for battle over cigarette taxes (1/20)
New York governor puts Indian tobacco tax in new budget (1/19)
Seneca Nation aims to defeat cigarette trafficking bill (01/12)

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