BATON ROUGE — Louisiana’s indoor smoking ban would be expanded to include bars, but not casinos, under legislation that squeaked 
out of a Senate committee on Wednesday.
The Senate Health & Welfare Commtitee voted 4-3 to send Senate Bill 133 to the floor after supporters said it was needed to protect the health of workers and patrons.
It’s at least the third time that a similar bill has passed out of that committee only to die later in the process.
The bill by Sen. Rob Marionneaux Jr., D-Livonia, originally would have banned smoking in bars and casinos. But an amendment took casinos out of the mix in an effort to soften the lobbying against the ban.
“We take what we can get,” Marionneaux said.
At least 27 states have enacted similar bans, he said.
Opponents, said a ban would spell economic harm for bars and gambling establishments, curtail personal freedom and reduce state tax revenues.
“We are talking about adult establishments … and we continue to feel that the people who should make these decisions are the bar owners and their customers,” said Chris Young, who represents the Louisiana Association of Beverage Alcohol Licensees.
Voting for the ban were Sens. Butch Gautreaux, D-Morgan City, Joe McPherson, D-Woodworth, Ben Nevers, D-Bogalusa, and Cynthia Willard-Lewis, D-New Orleans. Voting against it were Sens. David Heitmeier, D-Algiers, Sherri Cheek, R-Shreveport, and Fred Mills Jr., R-St. Martinville.
By Jan Moller, The Times-Picayune The Times-Picayune
Nebraska lawmakers advance cigarette legislation
LINCOLN, Neb. (AP) — A bill that would create a way for Nebraska to collect tobacco tax revenue from American Indian tribes 
advanced Wednesday through a first-round legislative vote.
The measure would call for state officials to reach compacts with tribes so they could collect money to comply with a national legal settlement with the four largest U.S. tobacco companies.
At stake is $46 million in settlement money for health care expenses. The four companies have claimed recently that states are failing to collect escrow payments from smaller tobacco manufacturers that were not part of the settlement. The escrow payments were required as part of the settlement to keep small manufacturers from having an unfair advantage.
Grand Island Sen. Mike Gloor said his bill is intended to keep Nebraska in compliance with the terms of the 1998 agreement to reimburse governments for tobacco-related health care costs. The settlement stemmed from a lawsuit filed by the attorneys general of 46 states, the District of Columbia, Puerto Rico and the Virgin Islands.
The settlement requires the four companies — Philip Morris USA, R.J. Reynolds Tobacco Company, Brown & Williamson Tobacco Corp. and Lorillard Tobacco Co. — to pay at least $206 billion over a 25-year period.
Gloor said one of the four, R.J. Reynolds Tobacco Company, withheld $2.5 million from its latest payment because it claims Nebraska is not complying with the settlement.
“We literally are at risk of having to pay back some of the money we use in the health care cash fund if we do not get compliant,” Gloor said.
American Indian reservations and federal trust lands are generally considered sovereign nations, immune from state tobacco taxes. In March, Nebraska Tax Commissioner Doug Ewald apologized to the Ponca Tribe in Niobrara after state officials seized $14,000 worth of tribal cigarettes on the mistaken belief that they should have had a state tax stamp. The cigarettes were returned.
But the state can collect taxes on tobacco sales to non-tribal customers.
Wholesalers within the Winnebago Tribe in northeast Nebraska collect about $250,000 a year in tribal tobacco taxes. The chief executive of Ho-Chunk Inc., the tribe’s economic-development arm, told the Legislature’s Revenue Committee in March that tobacco and gas taxes account for tribe’s entire tax base. Nebraska and the tribe already share tax revenue from gas sales.
Lance Morgan, the chief executive, told the committee that the bill was an attempt by the big tobacco companies to crush its competitors by eliminating their price advantage.
The bill advanced, 38-0, but requires two more votes before it clears the Legislature.
North Carolina Propose Increasing Cigarette Tax
Raleigh, NC — Two North Carolina lawmakers have filed a bill that, if passed, would increase the state’s cigarette tax by $1.
Rep. Jennifer Weiss (D-Wake) and Sen. William Purcell (D-Scotland) said the tax could generate about $300 million in new revenue for North Carolina, which is the nation’s top tobacco-producing state. But Purcell told WFMY News 2 money isn’t his main goal. He wants to prevent teens from smoking.
If passed, the bill would raise the current cigarette tax from $0.45 per pack to $1.45, matching the national average for cigarette taxes.
In a February 2011 poll released by the NC Alliance for Health, 66 percent of voters favored the increase to help close the budget deficit and fund health programs. WFMY News 2 Facebook users, however, are sounding off on the proposition.
The tax increase could keep 81,200 North Carolina kids from smoking, encourage 49,500 current smokers to quit and save $1.8 billion in long-term tobacco-related health care costs, according to data from the Campaign for Tobacco-Free Kids.
“We know that teens are the most sensitive to a price increase, especially as much as a dollar,” said Mary Gillett, who’s a tobacco use prevention coordinator with the Guilford County Department of Public Health. “So we’re really looking at a three-way win for North Carolina. There will be fewer smokers. Adults will quit, teens will not start. It’s going to raise revenue for the state and we know that two-thirds of adult voters in North Carolina favor this type of increase.”
Purcell, who is a retired pediatrician, maintains that the health benefits of the bill are his main motivation. But he adds the extra money it could create for the state is crucial in the midst of a budget crisis.
“I think it’d be extremely important as we’re talking about firing teachers and teacher aides and the cuts to education and Health and Human Services,” Purcell said. “They’re going to be pretty significant [cuts] without another source of revenue.”
North Carolina’s cigarette tax was five cents in 2002. It was increased to 30 cents in September 2005 and rose again in July 2006 to 35 cents. It was last raised in September 2009 to 45 cents, the 7th lowest in the country.
After the hike in 2005, state officials said cigarette sales dropped by 18 percent.
Governor Bev Perdue proposed a $1 tax increase in her budget proposed in 2009. At the time, Reynolds American called it an “outrageous attack on jobs in our state” and suggested it would put 50,000 North Carolina jobs at risk.
In a statement to WFMY News 2 on Monday, the company maintained that position in regards this proposal, too.
“The math is pretty simple,” the company said through an emailed statement. “Higher taxes [equals] higher cigarette prices. Higher cigarette prices [equals] lower sales. Lower sales [equals] fewer jobs. The very last thing this state needs right now [is] fewer jobs.”
By Chelsi Zash
Missouri Officials Refuse to Increase Cigarette Tax
A pack of Marlboro red at one of the smoke shop in the Missouri 
state capital costs $5.14. The same cigarettes cost more than $13 on the Upper East Side of Manhattan. “In case this is a race to the bottom, Missouri will win,” stated Missouri state representative, Mary Still, referring to the fact that currently Missouri levies the lowest cigarette tax in the U.S. (17 cents per pack).
New York has the highest cigarette tax, at $4.35 a pack, according to data presented by the Campaign for Tobacco-Free Kids. At a time when Deep South states are switching to golden leaf to increase sin taxes, some find it strange that Missouri wants to maintain its tobacco product taxes at rather low levels. Exactly since the state is facing a budgetary gap of almost $600 million next year.
All attempts to increase cigarette taxes are repeatedly turned down. Mrs. Still will try one more time in 2011, to draft a bill, which will increase the tax by 12 cents for eight years. But antitax Republicans monitor both legislative chambers and they do not plan to intervene in a dispute on that right now.
The University of Missouri, which is predicting a potential $50 million reduction from the state next year, currently hosted legislators to find practical ideas for covering the budgetary gap. The tax on cigarettes happened because it seems to be a low-hanging fruit, given the high social expenses of smoking. 23.1% of adult Missourians are smokers; this is one of the highest rate in the nation, after Kentucky with 25.7%, according to findings presented by the Centers for Disease Control (CDC). Tobacco-related diseases cost the Medicaid system about $641 million last year, and according to CDC, smoking kills approximately 9,500 Missouri residents annually. Also it was found that increasing tobacco products taxes by 10% may decrease smoking nearly 5%, especially among teenagers.
One thing that causes a problem in reforming cigarette taxes is linked to state constitution. Any significant tax increase should go before the voters. In 2006, such a proposal to increase the cigarette tax to 97 cents per pack lost a hard referendum, 51% to 49%. Anti-tobacco advocates and hospitals allocated millions of dollars into the campaign for the tax; opposition came at once from the tobacco lobby.
Many opponents of higher taxes on tobacco declare that sin taxes are regressive and affect poop people most of all. They also stated that the low taxes are very useful for the state because bargain-hunting smokers of the eight states bordering Missouri cross the state in order to provide themselves with cheaper cigarettes. It is possible to safe about $12 per carton in state taxes.
Los Angeles gets new smoking rules
LOS ANGELES — Los Angeles is gearing up to become the nation’s largest city with smoke-free outdoor dining.
Starting Tuesday, the city is toughening its rules with a ban on smoking in outdoor dining areas that even includes areas near food trucks.
The prohibition is believed to be one of few that includes mobile food vendors.
City officials on Thursday launched a public education campaign about the new law that was adopted in January 2010 with a one-year grace period to give business owners time to prepare.
Food tastes better “with a side of fresh air,” proclaim posters and radio announcements to be used in the campaign.
“We will be putting out cigarettes all over Los Angeles, and that’s a beautiful thing,” said Kathy Magliato, president of the American Heart Association.
Tobacco-toking is already prohibited at city beaches, farmers markets and parks, as well as within 25 feet of playgrounds, bleachers, sports fields and picnic areas.
Now it also will be off-limits within 10 feet of outdoor dining areas or within 40 feet of a food truck. Bars, clubs and private events at restaurants will be exempt.
The ordinance will be largely self-regulatory, said Councilman Tom LaBonge. Businesses will be required to post signs and request that patrons extinguish their cigarettes or face fines of up to $500 for the smoker and the business.
“We can clean up the city, as well,” LaBonge said. “How many butts go down the drains and onto our beaches?”
The new restriction has many restaurateurs fuming, particularly those who installed sidewalk tables and patios to accommodate smokers, said Daniel Conway, spokesman for the California Restaurant Association.
It seems, however, that the movement to snuff out smoking in al fresco dining areas is growing. A number of cities surrounding Los Angeles have similar bans, including Beverly Hills and Santa Monica. Starbucks last year barred lighting up in the patio areas of its California coffee shops.
The ESPN Zone restaurant in downtown Los Angeles has had an outdoor smoking ban since it opened two years ago, and customers appreciate it, marketing manager Tim Whiteman said.
Advocates for smokers’ rights say outdoor bans particularly aggravate them because there’s little evidence about the effects of secondhand smoke in fresh air. They say the vast majority of studies were conducted in confined environments.
“Sitting outside in L.A., the cars and smog are going to kill you faster than secondhand smoke,” noted Robert Best, western regional director of Citizens Freedom Alliance, a smokers’ rights organization.
For anti-smokers, it’s a matter of public health. Exposure to secondhand smoke increases incidence of heart disease and lung cancer by 30 percent, said Magliato, a heart surgeon.
“Smokers have a right to smoke, but non-smokers have a right to fresh air,” she said.
When smoking is restricted, studies show, the incidence of smoking-related disease in that area plunges anywhere from 6 to 47 percent, she said.
Smokers, who comprise 14.3 percent of Los Angeles County residents, say the anti-smoking lobby should simply butt out.
Longtime smoker Bonnetta Davis said the ban would affect the restaurants where she goes.
“In a closed environment, I can understand. But come on, this is outdoors, in the air,” she said. “It’s discriminatory.”
By CHRISTINA HOAG
New rules could remove products based on ingredients
Federal regulators on Wednesday outlined rules for the tobacco industry that for the first time require disclosure of any changes to 
their products, and that detail how to seek permission to market new products under the sweeping tobacco control law signed by President Obama in June 2009.
“Up to now, tobacco products have been the only mass-consumed products for which users do not know what they are consuming,” Dr. Lawrence R. Deyton, director of the Center for Tobacco Products of the Food and Drug Administration, said in a conference call with reporters.
Matthew L. Myers, president of the Campaign for Tobacco-Free Kids, a Washington advocacy group, praised the F.D.A. for its progress regulating tobacco. “As a result of the bright spotlight of F.D.A. scrutiny, tobacco companies will no longer be able to secretly manipulate their products in ways that make them more addictive and appealing,” he said in a statement.
Any tobacco product changed after Feb. 15, 2007, when the legislation was introduced in Congress, must be reviewed by the agency. The disclosures by the companies are expected by March 22. Companies may apply for a fast track review of new products that are “substantially equivalent” to earlier products.
One of the practical effects, Mr. Myers said, is that tobacco products changed after March 22 cannot be sold unless the F.D.A. permits it. The agency has the power to order some products to be removed from the market that were introduced in the period from Feb. 15, 2007, to March 22.
Steven Callahan, a spokesman for Altria, the maker of Marlboro cigarettes and the largest tobacco company, said the proposed rules were expected and under review by Altria.
David Howard, a spokesman for R.J. Reynolds Tobacco, maker of Camel products and the second-largest tobacco firm, said the company’s products are all identical or substantially similar to earlier products, and it had applied for the designation. “We’ll see what happens,” he added.
Lorillard, the third-largest tobacco company, declined comment.
Lorillard is facing a F.D.A. review of menthol flavored products, which account for 90 percent of its sales. The F.D.A. Tobacco Products Scientific Advisory Committee plans to hear evidence about menthol at a hearing Monday and Tuesday, and is expected to issue recommendations by March.
Also Wednesday, Gregory N. Connolly of the Harvard School of Public Health, a critic of the tobacco industry, said he had resigned from the scientific advisory panel. “The responsibilities of the advisory committee were very narrow, and they also place burdens on members in terms of you can’t report on your own science, you can’t communicate with your fellow members unless it’s in public, and implicit restraint from speaking with the media,” he said in an interview. “I think my effectiveness can be much greater not being on the board.”
He also said the panel was in effect acting as tobacco industry scientists and had been too cautious in attacking menthol and nicotine.
Dr. Connolly said he planned to testify on Monday about a new study showing the promotion of menthol cigarettes to women in Japan had increased the rate of female smoking even as Japanese men smoked less.
The American law banned candy-, fruit- and spice-flavored cigarettes but left the issue of menthol to the F.D.A. Congress questioned whether menthol contributed to smoking initiation or deterred quitting.
David J. Adelman, tobacco industry analyst for Morgan Stanley, said in a note to investors Wednesday that the chances of an F.D.A. ban of menthol were reduced by the resignations of Dr. Connolly and Dr. Joshua M. Sharfstein, the F.D.A. deputy commissioner.
Dr. Connolly was the “dominant antitobacco voice in the menthol hearings thus far,” Mr. Adelman wrote.
Dr. Sharfstein, who is leaving to become Maryland’s secretary of health, was a former Congressional staff member involved in developing the legislation.
By DUFF WILSON
Nytimes
FDA regulations make harder to Quit Smoking
It’s time to think about New Year’s resolutions. Quitting smoking, appropriately, is at the top of many lists.
Now, 2010 was the first full year that the Food and Drug Administration, or FDA, regulated tobacco, but with its new powers, did it do anything to make it easier for smokers to quit when we ring in the New Year?
The answer is not only a resounding “no,” it is worse: The government, as well as many government-funded anti-smoking groups, is making it harder for smokers to give up the deadly habit.
The FDA and groups such as the Campaign for Tobacco-Free Kids oppose the use of “tobacco harm reduction,” which is the use of less harmful products than cigarettes to help people quit smoking.
Late last year, the FDA warned about the safety of electronic or E-cigarettes and began a campaign to keep them away from smokers. E-cigarettes not only supply “clean” nicotine, but also look like cigarettes — many even have an LED light at the tip. These products, which contain no actual tobacco, are noncombustible. While nicotine is addictive, it isn’t particularly harmful. It is like the caffeine in soda: It makes you want to drink more, but it isn’t what packs on the pounds — the calories from the sugar.
E-cigarettes are being used by many smokers to quit smoking real cigarettes. But the FDA, which found tiny levels of carcinogens in some E-cigarettes, is doing everything it can to keep smokers from getting their hands on this far less dangerous product.
The FDA’s strategy entails calling for E-cigarettes to go through expensive testing that medicines and drug devices have to endure, rather than have them regulated more loosely, ironically, as are their more dangerous cousin, cigarettes.
While we’d certainly benefit from a review of their safety, as well as their efficacy as cessation devices, you don’t need to be a heart surgeon to know they aren’t as dangerous as the real thing. Just this month, the FDA sought to overturn a court decision that denied it the right to confiscate E-cigarettes shipped from overseas.
Meanwhile, some states and municipalities seek to ban the use of E-cigarettes everywhere that smoking is already prohibited.
Similarly, the FDA and activist groups oppose the use of snus, or smokeless tobacco, as a means of harm reduction.
Manufacturers describe snus as “spit-free” pouches of smokeless tobacco. Studies from Sweden show that snus has been used effectively to help smokers quit smoking cigarettes. Again, snus isn’t a “safe” product, but it is up to 99 times safer than cigarettes. But so-called “health groups” are making it a priority to stop smokers from using snus here. And the FDA and other agencies are leading the charge in the fight against tobacco harm reduction.
This “quit or die” approach is hard to defend. Even with nicotine replacement therapy such as gum or the patch, fewer than 15 percent of people trying to quit manage to remain off cigarettes for as long as six months.
The best argument puritanical activists and government regulators make is that tobacco companies aren’t trying to get people to switch; rather, they are trying to keep smokers addicted by training them to use smokeless tobacco in areas where smoking isn’t allowed.
But this so-called “dual use” argument is dubious. The reason companies haven’t been more persuasively encouraging smokers to switch to smokeless is because it would be against the new tobacco control law. Tobacco companies are forbidden from telling consumers a simple, critical, and undeniable fact: Smokeless tobacco is not as harmful as cigarette smoking.
But now, at least one tobacco company is taking the “switch” argument directly to smokers who want to quit smoking. In (what shouldn’t actually be) provocative new ads, Reynolds America’s “Smoke-Free Resolution” campaign, the company is telling smokers they can quit smoking by using snus. The ads ignore the best argument to switch, which is that the product is less likely to kill you. And for that, we have the government and the “health” activists to blame.
The best thing for smokers to do is to quit tobacco completely. But the multitudes who have tried and failed should not despair. They should tell the nanny-staters to “butt out” so they can realistically resolve to quit smoking, this time with the help of less harmful approaches such as E-cigarettes and snus.
By Jeff Stier
New Law in South Dakota Creates Mixed Signals In Establishment
The smoking ban passed in November that South Dakota voters thought was pretty clear is proving instead to be hazy.
While most of the owners of Yankton’s bars, restaurants and casinos have ensured that smoking no longer takes place in their establishments, one business is taking a different approach that is leaving some citizens fuming.
Since the ban took effect Nov. 10, there have been at least five reports to police of people smoking at Tobacco Road in the 900 block of Broadway Avenue. The latest report was received Friday evening, though when police arrived they found no one smoking and ash trays in the establishment clean.
Because smoking is being allowed to occur in Tobacco Road — something representatives of the business don’t dispute — the owners of other establishments who once enjoyed the patronage of smokers are crying foul.
“We’re losing business every day,” Gary Boom of Boomer’s Lounge told the Yankton City Commission at its Dec. 13 meeting. “Some of us are even thinking about laying people off. It’s a big problem — a lot bigger than the petty offense of smoking.”
Yankton isn’t the only community with questions about the new law. Sara Rabern, a spokesperson for South Dakota’s attorney general office, said it has received hundreds of inquiries regarding the ban.
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“There are no official opinions (from the attorney general’s office) at this time, and no one has requested any official opinions,” she said. “But because of the wide variation of inquiries … the AG’s office has basically just been talking with the state’s attorneys and city attorneys on these issues. It’s a petty offense, so the AG’s office can’t really get involved in prosecution. It’s coming down to the state’s attorneys determining how they are going to handle it.”
Rabern said she expects the law to be the subject of various pieces of legislation in the 2011 legislative session.
The most pressing issue in Yankton is the interpretation of a portion of the law that reads, “Any person that owns, manages, operates, or otherwise controls a public place or place of employment shall inform persons violating [that no person may smoke tobacco or carry any lighted tobacco product in any public place or place of employment].”
The owners of Tobacco Road say they are in full compliance with the law.
“This is not an ambiguous statute, and there can be only one interpretation,” they told the Press & Dakotan. “We would suggest our critics actually read the new law or have someone explain it to them.”
They are not alone in their view. Yankton County State’s Attorney Rob Klimisch said that, while he is still considering how he will enforce the smoking ban, it appears that is the correct interpretation.
“If you read the law, it looks like the owner’s only responsibility is to let people know (what it says),” he stated. “Their responsibility ends at that spot.”
Klimisch said he will consult with other counties to see how they plan to handle the situation and then have a meeting with law enforcement and affected business owners. He expects that to occur in the first two weeks of January.
“I’ll let all the affected people know what is expected of them and where things are going to go,” Klimisch said. “I want everybody to be playing by the same rules. It’s not fair that you have a business interpreting something a little differently.”
However, one area of the ban needs no explanation, he said. Those caught smoking will be fined $25. Klimisch stated that he has seven such complaints filed by police officers and, if after reviewing the reports it is determined those individuals were smoking, he will press ahead with issuing fines.
District 18 Rep. Bernie Hunhoff (D-Yankton) said legislators put the burden of the law on smokers and not the business owners out of the belief that South Dakotans are law-abiding citizens.
“Everybody has an obligation to know basic laws — like stopping at stop signs, buckling your seat belt, paying your taxes on time and, now, not smoking indoors in public places,” he said. “Obviously some bar owners are less enthusiastic about the new law than others, but the primary responsibility is on the smoker to obey the law. You can play games with any law, but this one is simple: You don’t smoke indoors in public places. Ninety-nine percent of the people know what it means and will obey the law. The other 1 percent will eventually come around.”
With that in mind, Hunhoff said legislators crafting the ban didn’t expect local law officers to be patrolling businesses looking for smokers.
“That would probably be about as effective as patrolling gravel roads for stop-sign violations,” he said. “We rely on the integrity and honesty of South Dakotans to follow the laws, and the vast majority do just that.”
District 18 Sen. Jean Hunhoff (R-Yankton) agreed that the intent of the law is clear in that the public did not want any exceptions to smoking indoors at a public place. Local governments will have to figure out how to best enforce the ban, she said.
“Other communities in the state are being proactive and working with businesses to create outdoor smoking options,” Sen. Hunhoff stated. “The city has the authority to renew liquor licenses in this community. In their review process for license renewal, non-compliance with statues could be taken into consideration for non-renewal. Local control can be proactive and/or punitive in dealing with noncompliance.
“This does also raise the question of, does a citizen who enters an establishment expecting a smoke-free environment — but smoking is occurring — and gets sick have any cause for civil litigation against the owner of the business for not maintaining a smoke-free environment?” she added.
None of Yankton County’s three legislators mentioned plans to introduce legislation to amend the law.
“I’m inclined not to support any changes right now,” said District 18 Rep. Nick Moser (R-Yankton). “We’re still very early on in seeing what the impacts are going to be. I think you need to give these local governments an opportunity to work some of these things out before you just go and automatically change the law.”
Rep. Hunhoff said he would be open to clarifications and improvements.
“Someone in state government — probably in the health department or the attorney general’s office — should write a summary on the do’s and don’ts of outdoor smoking areas,” he said. “I’ve been contacted by bar owners and contractors who have good questions and seem to have a hard time getting answers.”
As officials work their way to finding a definitive approach to enforcing the law, it’s the police officers and sheriff’s department employees on the front lines who are stuck in the middle of public expectations of the law and the limits of the letter of the law.
“Everybody’s got their interpretation,” said Yankton Police Chief Brian Paulsen. “The only thing everybody is in agreement on is, it’s a horribly written law.”
He was the police chief in Plattsmouth, Neb., when that state passed a similar smoking ban.
“It was made to create a fair and even playing field,” Paulsen said. “South Dakota did not do that well.”
He said officials with Tobacco Road had told him they would actively prohibit smoking in the establishment after it was raised as an issue before the City Commission in November. However, Paulsen later learned that smoking was being allowed again and that a flier was being distributed to inform smokers of the law.
“(The owners of Tobacco Road are) covering (their) bases, but (they are) leaving (their) patrons out there to hang,” he said. “To me, what (they are) doing is totally disrespectful. (They are) being driven by the almighty dollar, and eventually I think it will come back to bite (them). (They aren’t) hurting anybody but the rest of the businesses. I think, eventually what is going to happen is, (they) will need support for something and the rest of the businesses will say, ‘No, you cut our throats.’ That’s what it is. You’ve got one (business that) doesn’t want to play fair with the rest of the businesses.”
Paulsen said his officers won’t begin doing walk-throughs of establishments looking for smokers, but they will respond to complaints.
“I don’t want anyone to be harmed by the law business-wise, but we’re kind of stuck in between,” he said. “We’re going to be complaint-driven and won’t initiate any type of formal action on our own. We’re not going to start walking bars just to find people smoking. I don’t think that’s fair to the establishments who are playing by the rules, versus the single one in town that isn’t.”
By Nathan Johnson
[email protected]
NY cigarette tax law stopped
UTICA, N.Y. – Judges in two separate federal courts in New York have issued rulings stopping the state from collecting taxes on cigarettes sold to non-Indians on sovereign tribal land.
Judge David Hurd, of the U.S. District Court for the Northern District of New York, issued a preliminary injunction Oct. 14 in a case filed by the Oneida Indian Nation against Gov. David Paterson and other state officials, asking the court to declare illegal the state’s new laws to collect cigarette taxes from Indian businesses.
The ruling was issued a day before the judge’s temporary restraining order was scheduled to expire.
In his decision, Hurd agreed with the nation’s arguments in requesting injunction.
“The Oneida Nation has established irreparable harm will occur absent injunctive relief, there is
likelihood of success on the merits, and the balance of the equities tips in its favor and an injunction is in the public interest,” Hurd wrote.
Under the new law, which was to be implemented Sept. 1, cigarette wholesalers are required to pay for and affix a $4.35-a-package tax stamp on all cigarettes sold in the state. A tribe can opt in to a coupon system for benefits to buy cigarettes online for its members, or into a “prior approval” system to buy tax exempt cigarettes from wholesalers who are approved by the state to sell a certain limited amount of cigarettes to a particular tribe.
The efforts to capture state taxes from Indian cigarette sales were spurred by the states massive $9 billion-plus deficit.
Hurd denied the state’s request to consolidate the Oneida Nation’s lawsuit with lawsuits filed by the Seneca Nation and other Indian nations and move it to the Western District federal court.
He also ruled in favor of the Oneida’s request for mediation in the case, ordering the action to the Hon. Andrew T. Baxter, a U.S. magistrate judge, for mediation to conclude by Dec. 17, 2010.
“The Oneida Nation is pleased that the federal district court has halted an attempt by New York state to circumvent the nation’s sovereignty by imposing taxes upon suppliers of products to be sold on the Oneida reservation,” Oneida spokesman Mark Emery said. “Although we are pleased with the ruling, we remain convinced that these issues are best resolved through negotiation. For that reason, we are especially gratified that the federal court compelled the state to participate in good faith mediation, as we believe that parties who negotiate in good faith resolve these differences in a way that respects all interests involved.”
In his 25-page ruling, Hurd provided a number of devastating arguments against the state’s new cigarette tax law as applied to the Oneida and other Indian nations.
He agreed with Oneida that the law would impose irreparable harm by requiring the nation to pay a $4.35-a-package tax, which he deemed “unconstitutional,” because the tribe is “an untaxable entity.”
“These impingements upon the Oneida Nation’s tribal sovereignty, self-government, and constitutional rights, cannot be compensated for in money damages. Moreover, even if the impingements could be valued at some monetary amount, the plaintiff cannot bring an action against the state to recoup monetary damages it suffers. Thus, the harm from permitting the state to enforce its new tax law will be irreparable to the Oneida nation,” Hurd wrote.
He also agreed that the tax imposes more than “minimal burdens reasonably tailored to the collection of valid taxes from non-Indians” and, therefore, the nation is likely to be successful in a trial on the merits of its case.
Oneida would have to pay out around $3.5 million to maintain the inventory for its retail businesses, plus at least $208,000 a year in financing costs, Hurd noted.
“It cannot be said that $3.5 million or more imposes only a minimal burden upon the Oneida Nation,” Hurd wrote.
In addition, Hurd noted, New York tax law already has a provision that requires the user to remit the tax to the state within 24 hours of purchase.
“Thus, New York already has a valid law providing for payment of cigarette taxes by non-member on-reservation cigarette purchasers. Given that this law is already in effect and could be enforced by the state, the new law is unnecessary,” Hurd wrote.
By contrast, Judge William Arcara in the Western District Court denied the Seneca and Cayuga Nations’ request for a preliminary injunction against the state.
Arcara found that the nations’ tribal sovereignty “is not unconstitutionally burdened” by the state’s new cigarette tax laws, and that they failed to demonstrate a likelihood of success on the merits of their claims.
He did, however, grant a stay.
“The nations have expressed their intent to appeal the denial of their motion (for a preliminary injunction) to the U.S. Court of Appeals for the Second Circuit, which they have the right to do.”
Arcara acknowledged that the tax law “will almost certainly have an adverse impact upon the nations’ existing tobacco economies.” If the appeals court rules that the tax burden on the nations is unconstitutional, “it may be too late to undo the harm suffered by the nations’ existing tobacco businesses in the interim. Accordingly, the threat of irreparable harm favors granting a stay pending appeal,” Arcara wrote.
Morgan Hook, Paterson’s spokesman, issued a statement applauding Arcara’s ruling.
“Judge Arcara’s well-reasoned ruling makes several matters of law absolutely clear, and all of them are in favor of the state’s position. We will seek to have any appeal process completed as expeditiously as possible. It is time for decades of court battles to come to an end. Due to Gov. Paterson’s leadership, New York is now closer than it has been in decades to reaching resolution on this long standing dispute.”
By Gale Courey Toensing
Indiancountrytoday
Court Nixes Challenge to Tobacco Settlement Law
The 2nd Circuit upheld a New York law requiring cigarette manufacturers who refused to participate in the state’s settlement with the tobacco industry to make annual payments into a reserve fund.
The Manhattan-based federal appeals court rejected a challenge by cigarette importers to New York’s Escrow and Contraband Statutes, which the state enacted to enforce the 1998 landmark Master Settlement Agreement between 46 states and four leading tobacco companies.
Cigarette importers Freedom Holdings and International Tobacco Partners sued the state in 2002, claiming the statutes violated the Sherman Act and the Commerce Clause.
They argued that the laws, by effectively forcing them to join the settlement, improperly restrained trade and attempted to regulate out-of-state commerce.
After five amended complaints and six years, a federal judge rejected the importers’ claims in 2008.
The 2nd circuit affirmed on appeal, joining many of its sister circuits in finding that such state escrow and contraband laws, which all of the settling states have enacted, do not violate federal law.
“The record evidence supports the district court’s finding that plaintiffs failed to prove that New York’s Escrow and Contraband Statutes delegate any regulatory power to private parties,” Judge Reena Raggi wrote.
“The record evidence further supports the district court’s determination that any potentially anti-competitive aspects of the New York Escrow and Contraband Statutes were clearly articulated and affirmatively expressed as state policy as well as actively supervised by the state itself, such that defendants qualified for state action immunity.”
Raggi added that the state laws require tobacco companies that refuse to join the settlement agreement to deposit an amount of money “roughly equivalent” to the costs borne by the settling companies, and thus amounts to a “flat tax.”
“A tax increase, like any cost, will likely be passed on to consumers in the form of higher prices,” she wrote, “but where, as here, the state alone imposes the increased cost, there is no private collusion implicating the antitrust laws.”
By TIM HULL
Courthousenews
