US Supreme Court upholds decision by Oklahoma Court of Civil Appeals that state law requiring payments under tobacco settlement applies to all cigarettes sold with a state excise tax stamp

Nevin Barich

Nevin Barich

OKLAHOMA CITY , December 3, 2013 () – The U.S. Supreme Court on Monday upheld Oklahoma's right to collect payments from a tobacco company for cigarettes sold to American Indians.

Without comment, the high court let stand a decision by the Oklahoma Court of Civil Appeals that a state law requiring payments under the tobacco settlement applies to all cigarettes sold with a state excise tax stamp.

Grand River Enterprises Six Nations, a tribal-owned Canadian company, asked the U.S. Supreme Court to intervene in the case, claiming the state could not tax cigarettes sold to Indians at the same rate as those sold to non-Indians.

The case grew out of the 1998 settlement between 46 states and the nation's four largest tobacco companies. The settlement required those four companies to make payments in perpetuity for the states' cost of treating people with smoking-related illnesses.

An Oklahoma law then required tobacco companies that didn't participate in the settlement to deposit money in escrow, based on the number of cigarettes sold. Under the law, the money would be refunded to the companies in 25 years if not needed to pay health-related judgments or settlements against them.

The U.S. Supreme Court has ruled that tribal tobacco retailers don't have to charge taxes on tribal members, but the state law on the escrow payments encompassed all packs of cigarettes bearing a state tax stamp.

The Oklahoma appeals court ruled that a decision for Grand River Enterprises would allow the company to evade its escrow obligation "by distributing its cigarettes to be sold only on tribal lands." Then, the court said, the company also could avoid the intent of the tobacco settlement -- shifting the health care costs from the states "to the entities who profit from the smoking enterprise."

A state court judge found Grand River Enterprises owed more than $5 million in escrow payments for 2005 and 2006 and fined the company about $508,000.

___

(c)2013 The Oklahoman

Visit The Oklahoman at www.newsok.com

Distributed by MCT Information Services

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.

Share:

About Us

We deliver market news & information relevant to your business.

We monitor all your market drivers.

We aggregate, curate, filter and map your specific needs.

We deliver the right information to the right person at the right time.

Our Contacts

1990 S Bundy Dr. Suite #380,
Los Angeles, CA 90025

+1 (310) 553 0008

About Cookies On This Site

We collect data, including through use of cookies and similar technology ("cookies") that enchance the online experience. By clicking "I agree", you agree to our cookies, agree to bound by our Terms of Use, and acknowledge our Privacy Policy. For more information on our data practices and how to exercise your privacy rights, please see our Privacy Policy.