Tuesday, August 9, 2011
C.A. Upholds Injunction Barring Tobacco Sales on Tribal Land to Non-Indians
By a MetNews Staff Writer
The Fourth District Court of Appeal has upheld an injunction barring the sale of tobacco by stores operating on lands held in trust in eastern Riverside County for the Agua Caliente Band of Cahuilla Indians, to non-Indians.
Div. Two, in a July 13 decision ordered published yesterday, concluded the government was likely to prevail on its claims that Black Hawk Tobacco Inc., and its proprietor Frederick Allen McAllister, were engaged in unlawful business practices in the operations of its four stores in Palm Springs and Cathedral City.
In the government’s complaint, Attorney General Kamala D. Harris asserted McAllister and Black Hawk had violated the state tobacco directory law by selling cigarettes not listed in the directory; sold non-fire-safe-certified products in violation of the California Cigarette Fire Safety and Firefighter Protection Act; and violated the federal Contraband Cigarette Trafficking Act. The government sought a preliminary injunction, enjoining defendants from the foregoing violations, particularly the sale of cigarettes to non-Indians.
McAllister and Black Hawk filed a motion to quash or dismiss the complaint and a demurrer or motion to strike, all asserting jurisdictional challenges. They argued that the directory statute and the cigarette fire-safety act were not enforceable against sales occurring on the Agua Caliente reservation.
The defendants further contended that the federal CCTA could not be enforced by a state agency and that none of the state laws apply on the reservation because of tribal sovereignty and because states cannot regulate Indians in Indian country without congressional consent. They also insisted the government’s claims were preempted by federal law.
Riverside Superior Court Judge John G. Evans overruled the demurrer and denied the motion to quash, ruling that tribal sovereignty did not apply because defendants were not members of the Agua Caliente tribe.
Evans also found that federal preemption did not operate and that state laws apply to regulate sales of cigarettes to non-Indians on tribal lands, and that the government’s claims against defendants were mainly based on violations of the California cigarette tax laws.
Defendants subsequently filed additional opposition to the motion for a preliminary injunction on the grounds that Black Hawk would suffer irreparable harm if the injunction was granted, causing Black Hawk to cease operations and fire 30 employees.
They also contended the government could not establish the likelihood of success because the CCTA claim was barred and the other claims violated the Indian commerce clause.
Evans rejected these additional arguments, granted the preliminary injunction and issued a written ruling prohibiting defendants from selling off-directory, non-fire-safe-certified, untaxed cigarettes except for sales to enrolled members of any federally-recognized tribe of California. He said Black Hawk could also sell unstamped, untaxed packs of cigarettes to registered members of any federally-recognized tribe of California on any Indian reservation in the state other than the Band’s reservation.
Defendants appealed, contending that the state had no right to regulate tobacco sales on the Agua Caliente reservation because the tribe had the exclusive authority to regulate tobacco sales on the reservation.
Writing for the appellate court, Justice Carol D. Codrington said “[w]e reject this entirely new theory, raised for the first time on appeal” since “the United States Supreme Court has confirmed a state’s authority to tax and regulate cigarette sales to non-Indians.” She further noted that “since 1985, the [Agua Caliente Band]’s tribal ordinance has required compliance with California laws governing cigarette sales.”
More recently, Codrington continued, “the court has said where there is no federal preemption and the state has a strong off-reservation interest, the state’s authority extends to conduct on the reservation, including even Indians and tribal members.”
She said the California tobacco directory law “promotes public health by increasing the costs of cigarettes and discouraging smoking,” and the cigarette fire-safety law “serves the public interest in reducing fires caused by cigarettes.”
The justice reasoned California “[l]ikewise… has an important state interest in enforcing the unfair competition law… and the federal and state laws taxing cigarettes.”
Codrington concluded there was no federal or tribal interest which outweighed these state interests, and this showing of obvious public harm was not rebutted by a showing of grave or irreparable harm to defendants, so the government established that it was likely to succeed on the merits of its claims.
Presiding Justice Manuel A. Ramirez and Justice Art W. McKinster joined Codrington in her decision.
The case is People v. Black Hawk Tobacco, Inc., E051027.
Copyright 2011, Metropolitan News Company