Huffington Post – by Jonathan Stempel
NEW YORK, Dec 30 (Reuters) – New York City has sued FedEx Corp, accusing the package delivery company of illegally delivering millions of contraband cigarettes to people’s homes, violating a 2006 settlement.
Monday’s lawsuit was filed in the U.S. District Court in Manhattan and seeks $52 million of civil fines and unpaid taxes from FedEx, which is based in Memphis, Tennessee.
It marks one of the last acts by the administration of New York City Mayor Michael Bloomberg, whose more than decade-old campaign to ban smoking in various public and private places has been credited with saving thousands of lives and become a blueprint for other cities.
According to the city, FedEx created a “public nuisance” through its partnership with Shinnecock Smoke Shop, located on the Shinnecock Indian Nation reservation in Southampton, New York, to ship untaxed cigarettes to residential homes.
FedEx allegedly did so despite, and even while negotiating, a February 2006 agreement with then-New York Attorney General Eliot Spitzer to stop such deliveries in New York, an agreement later expanded to cover deliveries throughout the country.
The city said FedEx delivered about 19.5 tons, or 55,000 cartons, of cigarettes to city residents in 9,900 shipments from 2005 to 2012 and deprived it of a $15 excise tax on each carton. A typical carton has 200 cigarettes.
FedEx’s activity violated various federal and state laws, including an anti-racketeering statute, the complaint said.
The city wants FedEx to pay a $49.5 million fine, equal to $5,000 per shipment, plus $2.48 million representing triple the lost tax revenue. It also wants FedEx to hire an independent monitor to ensure future compliance and provide training.
A FedEx spokeswoman was not immediately available to comment. A lawyer for the company had no immediate comment.
Corporation Counsel Michael Cardozo, who brings lawsuits on the city’s behalf, was not immediately available to comment.
City and state officials have long fought in court to collect taxes on cigarettes sold by Indian-owned businesses.
The Shinnecock Indian Nation did not immediately respond to a request for comment. Neither it nor the smoke shop are defendants in the FedEx lawsuit.
New York City Mayor-elect Bill de Blasio takes office on Jan. 1, ending Bloomberg’s 12-year mayoralty. De Blasio has named former U.S. Attorney Zachary Carter in Brooklyn, New York, to succeed Cardozo as the city’s top lawyer.
The case is City of New York v. FedEx Ground Package System Inc et al, U.S. District Court, Southern District of New York, No. 13-09173. (Reporting by Jonathan Stempel in New York; Additional reporting by Nate Raymond; Editing by Dan Grebler)
unconstitutional law!! period!!! do not comply!!!
hey Jeno i’m thinking about rolling my own too. any advice?
hey Paul.. I use a corkscrew kind of machine I bought off ebay, it is ok but since it is a corkscrew it has a tendency to grind it up and you loose your cherry alot… friends of mine have other electric machines that push it in and seems to work good for them with minimal problems… Also, I use a type of tobacco called Red River Smooth 10-13 dollars a pound, and my tubes are a brand called Good Times.. pointers are as follows. most of the time when people have troubles it is with the tubes some can be pretty harsh, some tobacco is pretty nasty too, try a cheap slider machine and purchase small quantities of tobacco.. I have found that full flavor tubes are actually less harsh then lights… It does take a little time to get used to em but it has got to be better than packaged smokes.. tobacco stores are quite easy to find here.. Best Wishes…
Have a good one…
Hey Jeno i consume European smokes now. they do not have all the bad stuff in them that amer. tobacco has. however they will probably put a stop to that some day. I smoke the lightest i can find as regular ones are too heavy for me at this time in my life. any advice in that regard would be helpful as well. thanks for you knowledge.
Paul; to import cigarettes is quite risky, as you can read by the article they want their revenue. also imports sometimes don’t make it to their destination and there is no recourse unless you buy the insurance… also I’ve known people that have been ripped off including yours truly… Don’t be afraid to research the cigs you smoke now to find out who makes them and if they are just tobacco.. also e cigs make me jittery, to much nicotine.. good luck in your endeavors….
well researched before did business with them. very good people. product top notch. understand the risky part. some product was confiscated in the past, however the company sent me replacement. another time the product just got lost, and they replaced that as well. that said…….i know it is just a matter of time before this will be interrupted, and gathering info for that time. thanks for your concern. I’m like you.. cant stand e cigs.
@ Paul and JENO, have you guys ever tried the herbal called “lobelia”. It is use in a lot of preparations for people to help stop smoking. Lobelene – I believe that is how ya spell it 😉 – is the active ingredient in “lobelia” that they use.It blocks the nicotene receptors in the brain so you do not crave the nicotene as much I guess. It may be worth a search to check out that “lobelia”. I have forgot the dosage but it may be worth to check out guys. I quit about 13 yr.s ago after being a heavy smoker – pack and a half – two packs daily for over 40 + yr.s with no problem.
Hey Digger. thanks for the info. will take a look at it.
thanks for the insight dig… you spelled it right “lobelia” what sucks is cigs are more like a pacifier to me than nicotine.. will keep it in mind though and will do more research… thank you sir… over and out…
This is what happens when you tax items heavily and try to steal from citizens,black markets and smuggling emerge.I am surprised more do not roll their own and on a side not tobacco a easy to grow plant,even in a apt.The higher the taxes and the more things illegal the larger the underground economy grows,which is a very good thing.