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Tobacco

AG Challenges UPS on Tobacco Deliveries

Cigarettes vs. ‘little cigars’ major discrepancy in New York lawsuit against delivery firm

NEW YORK – United Parcel Service Inc. finds itself on the defensive as the New York attorney general’s office accuses the shipping firm of delivering untaxed tobacco products from American Indian reservations, according to Bloomberg.

The state is seeking more than $800 million against the Atlanta-based company. Bloomberg reported New York Attorney General Eric Schneiderman as saying that from 2010 to 2014, UPS allegedly made more than 78,500 illegal shipments, violating a 2005 pact to stop the practice. The shipments translated to more than 683,000 cartons of untaxed cigarettes and a direct tax loss to the state of $30 million and New York City of $4.7 million, Schneiderman said.

In an opening statement this week in a Manhattan federal court, Carrie Cohen, the lawyer for UPS, said the company was in full compliance with the law, saying the city and state mistook cartons of legally shipped “little cigars” for cigarettes.

“Little cigars are practically indistinguishable from cigarettes,” Cohen said in her opening statement, calling the damages amount a “ridiculously high” number. “UPS is in full compliance with the law.”

The attorney general first filed the lawsuit in early 2015 and after some legal wrangling last fall, the case has proceeded to trial. New York filed a similar suit against Memphis, Tenn.-based FedEx for allegedly shipping 80 million in contraban cigarettes across the state, which is also making its way through the legal process.

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