A case currently pending before the Idaho Supreme Court could establish new precedent regarding a State’s authority to regulate tribal tobacco sales.

In August 2008, the State of Idaho and Idaho State Tax Commission sued Native Wholesale Supply Company, a native-owned tobacco distributor. Native Wholesale has sold cigarette brands to Warpath, a native-owned business located on a reservation in Idaho. Those cigarette brands are not listed on the Idaho Tobacco Directory and Native Wholesale does not hold a state distribution permit.

The State sought an injunction, arguing that Native Wholesale could not import cigarettes that were not listed on the Idaho Directory and that Native Wholesale could not sell cigarettes in Idaho without obtaining a cigarette permit. In response, Native Wholesale argued that the Idaho trial court did not have jurisdiction to hear the case because Native Wholesale is a Native American business. Despite Native Wholesale’s arguments, the trial court concluded that the applicable laws permit regulation of off-reservation conduct of a native-owned company. The trial court granted the Plaintiffs’ injunction, finding that it was unlawful for Native Wholesale to sell cigarettes not listed on the Idaho Directory and for Native Wholesale to act as a wholesaler without first obtaining a permit to sell the cigarettes.

Last month, the Idaho Supreme Court heard Native Wholesale’s appeal. The Court has taken the matter under advisement and is expected to issue a decision in a few months.

The Idaho Supreme Court’s interpretation of the applicable Idaho state laws could impact tribal tobacco companies going forward. We will report back when the Court issues its decision.

For questions and/or comments, please contact Bryan Haynes, at 804.697.1420 or by email.