In late February, the 10th Circuit Court of Appeals affirmed a trial court’s decision allowing the Oklahoma Attorney General to enforce a new law banning tribal sales of cigarettes that are not included in the state’s directory of approved non-participating manufacturers.
In the lawsuit, the Muscogee (Creek) Nation challenged a state law, effective January 1, 2010, making it a criminal offense to sell cigarettes that are not in the directory. The Nation had been selling unlisted cigarettes without a state tax stamp and remitting payments to the state in lieu of taxes.
The lawsuit contended that the law infringed upon the Nation’s sovereignty, but the trial court dismissed the Nation’s Complaint in December 2010. The Court of Appeals affirmed that decision.
Although the Nation lost its challenge to the law, the state’s ability to enforce the law is probably constrained by the Indian Commerce Clause of the U.S. Constitution. Under well-settled precedent, although the state would have the ability to enforce the law through actions outside tribal lands (such as intercepting cigarette shipments to and from the reservation), the state would not have the ability to enforce the law through on-reservation enforcement action. For this reason, many tribal merchants have implemented their own sources of supply through on-reservation manufacturing.
For questions and/or comments, please contact Bryan Haynes, at 804.697.1420 or by email.