Cayugas Can't Be Charged

Injunction temporarily bars cigarette tax-evasion prosecution by N.Y. counties

SYRACUSE, N.Y. -- A New York state appellate court on Wednesday ruled the Cayuga Indian Nation cannot be criminally charged for not paying cigarette taxes at its Finger Lakes convenience stores. The court granted the Cayugas' request for a preliminary injunction, which temporarily blocks Cayuga and Seneca counties from prosecuting them on felony tax-evasion charges, reported The Post-Standard.

The decision sets up the possibility for the Cayugas to reopen their LakeSide Trading gas stations and c-stores in Union Springs and town of Seneca Falls, a nation lawyer [image-nocss] told the newspaper. "The Cayuga nation is reviewing the option of reopening and hopes to make a determination within a matter of days," said lawyer Daniel French.

The appellate court also ruled that the Cayugas could seek to regain possession of the 17,600 cartons of unstamped cigarettes that were seized by both counties in a Nov. 25, 2008, raid, said the report.

The Cayugas, which closed both of their stores a day after the raids, are also considering asking court permission to get their cigarettes returned, French said. "Given their perishable nature, the nation may very well make application," he added.

Rochester lawyer Philip Spellane, who represents both counties, said he was disappointed by the ruling. He declined further comment to the paper other than to say he would review the decision "and figure out what to do with the next step."

The Cayugas requested the preliminary injunction after state Supreme Court Justice Kenneth Fisher ruled December 9 that the nation does not have sovereign rights to sell tax-free cigarettes at its stores. Fisher also said in his decision that the counties could prosecute the Cayugas on tax-evasion charges. The nation immediately appealed Fisher's ruling and also asked the appellate court to grant the preliminary injunction until it rules on the appeal.

"That's the way it seems to go with this issue-one step forward, one step back," Jim Calvin, president of the New York Association of Convenience Stores (NYACS) told CSP Daily News.The appeal is now set to be heard in the court's May 11 term, Spellane said.

Cayuga County District Attorney Jon Budelmann and Seneca County District Attorney Richard Swinehart was unavailable for comment. Budelmann and Swinehart ordered the November cigarette raids and said at the time that they planned to present tax-evasion cases to grand juries in their respective counties.

French said he was happy with the decision. "The Cayuga nation is pleased and believes this to be the correct decision and also believes that prosecutions-given the current state of the law-are an inappropriate way to try to resolve issues that can and should be negotiated," he told the paper.