Seneca Free Trade Association Chairman Rick Jemison said about 3,000 Western New Yorkers will be out of work come Monday morning following a Friday court ruling prohibiting the U.S. Postal Service from mailing cigarettes.
U.S. District Court Judge Richard Arcara's ruling came after 141 Seneca Indian-owned businesses questioned the constitutionality of the Prevent All Cigarette Trafficking Act, which was signed by President Barack Obama and was set to go into effect at the end of June. The Seneca Free Trade Association, along with merchant Aaron Pierce, challenged the constitutionality of the PACT Act first, however.
The Seneca merchants filed suit to stop the act and said the measure is aimed at destroying their mail-order businesses, which take orders via the Internet and mail orders to customers. Despite the concerns, those favoring the law have cited a decrease in governmental revenue made in tax collections as a reason for its implementation, along with curtailing sales to minors, whose age, they say, can be easier checked at brick-and-mortar stores. Act sponsors allege funding of terrorist organizations from illegal cigarette trafficking occurs, thinking the law would curtail that, also.
"The post office will not be in the business of mailing cigarettes anymore," said U.S. Attorney William Hochul about the decision.
"We're extremely pleased," said Hochul. "There will be no more shipping of cigarettes," he said.
"It's going to be sad," said Jemison, who said those whose businesses relying on being able to ship cigarettes that are no longer able to do so are expected to shut down. Jemison said that will result in bread winners being without paychecks.
Fact Box
"It's going to be sad. No one helps Western New York more than us Senecas."
Rick Jemison
Seneca Free Trade Association chairman
"No one helps Western New York more than us Senecas," he said, adding most money from Albany seems to be channeled downstate, while Seneca businesses provide jobs here.
Instead, the Seneca Free Trade Association will meet this weekend to look at options, which could include an appeal.
It is an option Seneca Nation President Barry Snyder wants the group, made up of Seneca business owners, to consider.
"We are deeply disappointed the federal court did not enjoin all aspects of the PACT Act at this point," he said, adding, that "fails to safeguard our Seneca tobacco retailers and their employees from the act's harm."
Snyder said the nation urges Seneca business people to continue their court battle - all the way to the U.S. Supreme Court, if necessary.
"Congress and President Obama have portrayed the PACT Act as a tool to protect Americans from terrorism and to prevent tobacco sales to minors, but it's really nothing more than a vehicle for global tobacco giants ... to kill off competition from Native American entrepreneurs," said Snyder.
Senecas were successful on part of the suit, however.
The act specifies all applicable taxes for a shipment's destination would have to be pre-paid by the seller. Seneca entrepreneurs questioned how they can know tax laws of thousands of locations to which they send products. Seneca members claim that as a sovereign nation, they are not required to collect state sales and excise taxes. They say the purchaser is responsible for paying any taxes owed to the state.
"We lost on some points and we won on some," said Jemison about Arcara's ruling the case's plaintiffs do not have to pre-pay taxes to places they sell cigarettes. Jemison said the question remains how they can ship the cigarettes, however, he said.
In light of the ruling, Jemison said he will ask attorneys this weekend how the judge's taxation ruling applies to the state's planned September tax collections on reservation sales.
State Gubernatorial Spokesman Morgan Hook could not be reached to comment Friday regarding the state tax that has been calculated as part of budget revenues. Even if it can still be collected, Jemison's prediction of store's closing due to Friday's Pact Act ruling may result in no sales left to tax.