An article from the National Association of Attorneys General (NAAG) Tobacco Project, entitled Regulating Tribal Cigarette Sales Under the Master Settlement Agreement, evidences NAAG’s recent focus on collecting escrow payments for tribal cigarette sales.
The article describes a recent decision from the Oklahoma Supreme Court in which the Oklahoma Attorney General sought to enforce state escrow requirements against a tribal wholesaler. The Court found that the State’s claims were not barred by sovereign immunity because the tribal wholesaler was run by an individual tribe member, and not by the tribe. The Court found that the State’s claims were not barred by the Indian Commerce Clause because they involved sales between three different tribes, and involved sales to non-Indian consumers.
In light of the major tobacco companies’ complaints about tribal tobacco sales in the MSA “diligent enforcement” arbitration, tribal tobacco merchants will continue to see more vigorous efforts from the states to collect escrow on their sales.