New York Smokeshop Files Suit Against PACT Act
Wednesday, June 30, 2010
There has been a development since the PACT Act took effect yesterday, as outlined in the Buffalo News article below. One tribal smokeshop filed suit against the law and has succeeded in obtaining a temporary, 2-week restraining order. While the order technically applies only to this retailer, the Department of Justice may wait to see how the early stages of the case play out before taking broad enforcement actions. The Department is expected to file its response to the court by Friday, July 2.
Mail-Order Cigarette Shops Close By Dan Herbeck and Charlie Specht
New Federal Law Hits Seneca Businesses Except for One that Filed Suit
News Staff Reporters
June 30, 2010
Every cigarette business in the United States is now subject to a new federal law that bars the U.S. Postal Service from delivering cigarettes through the mail.
Except one: SenecaSmokeshop.com, a mail-order tobacco shop in Irving on the Cattaraugus Indian Reservation, operated by Aaron J. Pierce, a member of the Seneca Indians.
The Prevent All Cigarette Trafficking (PACT) Act took effect throughout the nation Tuesday, but Pierce obtained a 14-day reprieve in the form of a temporary restraining order from U.S. District Judge Richard J. Arcara.
Arcara issued the order Monday after Pierce's attorneys filed court papers asking that the new law, signed by President Obama in March, be declared unconstitutional.
Even before that decision, though, several Seneca-owned smokeshops already have shut down their mail-order businesses because of the law, according to Seneca business owners.
"I shut down my shop on June 15, and I know others who have shut theirs down," said Reggie Crouse, 73, who ran the Red Nation Tobacco shop in Salamanca. "We were a small operation. Most of our sales were mail order, but you can't do it anymore. I decided to shut down before the government goes around and shuts people down."
Operators of several other tobacco businesses — including the Seneca Hawk in Irving, founded by Seneca Nation President Barry L. Snyder Jr. — told The News they have halted their mail-order sales.
If the courts find the law violates the Constitution, Pierce will become a popular man among the Seneca businessmen.
"He'll be a hero in the eyes of a lot of people, because this new law is going to eliminate thousands of jobs," said Aaron Dombrowski, who is not a Seneca but is one of the managers of the Big Indian Smoke Shop in Irving. "I sure hope he succeeds."
Who is Aaron Pierce, and why is he fighting his battle in the courts?
The Seneca retailer has been in business for 10 years, has 17 employees and his company has sold cigarettes in 46 states, according to court papers filed by his attorney, Lisa A. Coppola.
After reporters made several attempts to contact Pierce — including a visit to his business office, which is set back from the road on Route 438 in Irving — Pierce's representatives called a reporter and said he has no comment at this time.
His company continued to take cigarette orders on Tuesday, and the information posted on his Web site gave no indication that there is legal trouble.
"You've entered the sovereign territory of the Seneca Nation," a notation on the Web site reads.
The site offers a wide range of tobacco products, ranging from Pride cigarettes at $20.99 a carton to Winstons for $46.99 and Lucky Strikes at $58.99 — most of them far below prices offered in non-Indian stores.
J.C. Seneca, owner of the successful Native Pride tobacco business on Route 20, congratulated Pierce for his legal challenge. Seneca is also a tribal councillor for the Senecas and co-chairman of the tribe's foreign relations committee.
The lawsuit will give cigarette sellers their first real opportunity to present their side of the story, Seneca said.
"[The new law] should be given a permanent injunction," Seneca said. "They [federal government] didn't want to give us an opportunity to bring many of the issues that needed to be brought forward before them."
If the new law withstands the court challenge, "it will be devastating," costing as many as 3,000 jobs held by tribe members and others, Seneca said.
The law will have a negative effect on Seneca's First American Tobacco Co., because 120 of its 200 clients are mail-order businesses. Stock in the company's wholesale warehouse has been sliced in half, according to manager Jack Salerno.
Similar criticism of the law came from Dakota Snyder, who is Barry Snyder's cousin and operator of the Catt-Rez tobacco shop on Route 438. Dakota Snyder said he shut down his mail- order business last week and laid off five people.
"I hope the law gets struck down," said Joyce Waterman Cruz, 65, a Seneca from North Collins who has six children, 11 grandchildren and three great-grandchildren. "One of my daughters works in a smokeshop, and she needs that job. It's the only job she's had for eight years."
Of course, organizations involved in the fight against lung cancer are equally anxious to see Pierce lose.
These organizations see the PACT Act as a vital law that will stop thousands of teenagers from ordering cigarettes through the mail and also prevent cigarette businesses from dodging billions of dollars in tax payments.
"This legislation is a necessary part of a national effort to reduce cigarette sales to youths," said Matthew L. Myers, president of the Campaign For Tobacco-Free Kids. "This is an important public health issue. Every day, more than 3,000 kids under 18 light up [cigarettes] for the first time."
The group says there are more than 3.4 million smokers under 18 who consume an estimated 800 million packs of cigarettes annually.
Myers said his Washington-based group is watching the situation in Arcara's court closely.
"You have a unique situation in Western New York," Myers said. "There are more cigarettes illegally sold from Western New York than any other part of this country."
Private carriers, such as UPS and FedEx, agreed several years ago to stop making retail cigarette deliveries, after pressure was applied by state attorneys general throughout the nation, Myers said. Now the Postal Service has also stopped.
No arrests based on the new law were announced on Tuesday, but law enforcement officials said they didn't expect to make many arrests until the law has been in effect for a few months.
Myers is convinced that Pierce will ultimately lose his legal fight.
"Before this legislation was enacted, it was debated in Congress for years. Constitutional experts were consulted. Native American leaders were consulted," Myers said. "The Senecas are the only tribe I know of that protested after it was passed."
Pierce's lawsuit claims the PACT Act violates several different clauses of the U.S. Constitution and several different treaties signed by Indian tribes with the federal government.
"The act is overbroad, unduly burdensome and impermissibly vague," Coppola said in court papers. "Among other things, it requires out-of-state retailers (even those without a physical presence in the state) to collect the sales and use taxes of states and localities in which they have no presence."
Arcara told government attorneys to submit their written arguments in defense of the new law on Friday. After that, the judge will hear arguments July 7.
"The government is looking forward to presenting its arguments on this matter next week," U.S. Attorney William J. Hochul Jr. said Tuesday.