Idaho sues
New York-based cigarette dealer
By REBECCA BOONE
Associated Press
Tuesday, September 23, 2008 11:04 AM PDT
BOISE — The state of Idaho is suing Native Wholesale Supply Co., contending that the upstate New York cigarette supplier illegally sold millions of smokes to retailers on Native American lands in Idaho.
The lawsuit, originally filed in state court last month, was removed last week to U.S. District Court at the request of Native Wholesale of Gowanda, N.Y.
The complicated case involves Seneca and Opal cigarettes that are made by Grand River Enterprises of Ohsweken, Ontario, and sold by Native Wholesale to Native American-owned retail outlets on reservations in Idaho.
Arthur Montour Jr., listed in documents filed by the U.S. government in a North American Free Trade Agreement dispute with Grand River Enterprises as the sole shareholder of Native Wholesale, could not be reached by The Associated Press Monday. Calls to Native Wholesale were not returned.
Similar lawsuits accusing Native Wholesale of illegally funneling the Canadian cigarettes into the U.S. have been filed by California and Oklahoma and also are pending in federal court.
Idaho contends that the cigarettes were sold without required tax permits in violation of the state’s Tobacco Master Settlement Agreement Complementary Act, which requires that tobacco products be registered and approved by the state attorney general’s office before being be sold in Idaho.
Though there are hundreds of brands on the approved list, cigarettes made by Grand River have never been added to the directory, so they are considered contraband, Deputy Attorney General Brett DeLange said.
It’s not the first round of litigation by the state involving Grand River.
Several years ago Idaho sued the company in state court and won a judgment of more than $100,000 that has yet to be collected.
In that case, Idaho argued that Grand River was selling cigarettes in 2001 and 2002 without paying into a special escrow account as required for cigarette companies that are not part of the state’s master tobacco settlement agreement.
In the case moved to federal court last week, Idaho sued Native Wholesale rather than Grand River, claiming that the wholesale company was an agent of Grand River and aided and abetted the Canadian company in illegal cigarette sales.
‘‘We have the records showing the sales of the cigarettes, and the cigarettes are not on the directory,’’ DeLange said.
‘‘The law says they’re not supposed to do that, and they’re doing it.’’
