A federal judge has granted summary judgment to New York City on its claim that cigarette wholesalers violated the Contraband Cigarette Trafficking Act by bootlegging untaxed cigarettes through American Indian reservations. Eastern District Judge Carol Amon (See Profile) ruled against wholesalers Mauro Pennisi of Lindenhurst and Gutlove & Shirvint of Long Island City for shipping more than 10,000 unstamped cigarettes to reservation retailers on the Poospatuck Reservation on Long Island. The retailers then resold the cigarettes to the public in the city.
The judge rejected the claims of the wholesalers that the city lacked standing to bring suit. Amon granted summary judgment in favor of one wholesaler, Day Wholesale, on the grounds that the city failed to put forward sufficient evidence it had suffered injury-in-fact from Day’s sale of unstamped cigarettes. Amon said the next step is to hold a hearing to assess the penalty amount for violations of the act. The city is seeking upwards of $15 million in penalties in City of New York v. Milhelm Attea & Bros., 06-CV-3620.