along speaking right now with respect to the appeal in this case the government believes the district court erred in granting summary judgment on the kind of that cigarette trafficking act claim in a nutshell the government's claim was that the cigarettes in this case were subject to the california state tax and because they were unpaid were going to be contraband in the meaning of the c c t n a the district court in this case concluded that the cigarettes in this case were not subject to the california state tax and also the california distribution tax that's because the taxes imposed upon either sale or used for consumption and use or consumption is defined by the statute as the exercise of any power or right of the cigarettes incident to the ownership thereof except the keeping of those cigarettes pending sale by a licensed distributor and in this case intrigue was not a license distributor and what this language means is that if someone is unlicensed that does fall then the meaning of use of consumption and therefore the cigarette tax  distribution tax as to tobacco products when they're actually sold out of state so the california state legislators actually contemplated that cigarettes held by an unlicensed distributor even for sale a different state are going to be subject to the tax intreat argued the rent for the space in the federal trade zone other than that in three cigarettes the entire time it possessed the cigarettes the entire time in fact intrigue when it wanted to actually put stamps on cigarettes went through the legal transaction of selling the cigarettes from intrigued to the license distributor n t i and most importantly the board of equalization the california state taxing authority viewed the two entities as being separate issue to licensed only to n t i it had no d b a or otherwise known as viewed these as two separate entities and not as the possession is being joint more as a legal matter the joint possession argument doesn't work because we side of the case is cross go and the miscellaneous firearms case the fact that a piece of contraband is due in the possessed by someone who's allowed to have it and not allowed to have it doesn't somehow negate the fact that the prohibited person is still possessing that contraband and that's what we have in this case moreover adopting that rule this kind of joint possession in this case would largely frustrate the purpose of the california scheme california set up kind of an either or scheme if your license distributor you can possess cigarettes in certain circumstances for instance if you're if they're pending sale or if you're purchasing them from the original importer or from the directly from the manufacturer where you don't pay taxes on but license manufacture license distributors are required to actually report and open their books and they have those types of obligations of the state authorities can see what they're doing and can watch statutes and regulations with respect to those indicate the customs you know that that domestic merchandise such as that in this particular case is within custom supervision the statute actually says that eighty one ca and also the regulations  govern it provide that injury or that customs has the authority to unstacked merchandise it's being housed there and so the government's initial position is that there is no reasonable expectation of privacy intrigue resists that on the notion and it's  didn't really regularly exercise that authority and somehow lost its legal authority to do so the government doesn't feel that argument works both because as a factual matter the record indicates that during the time period issue customs actually came by two or three times a year learn about the sticker as a fact the operator said that they weren't there initially the fact that they didn't have the right records the fact that they were covered in black tarp and the fact that you know we combined all these factors together with the fact that many of the customs agents had not seen this type of thing before and it all pointed toward the fact that there was something suspicious going on amounted to probable cost and because this is a somewhat regulated area under the supreme court's precedent regarding regulatory searches as long as the statutory authorization for some sort of search without a warrant that that's appropriate and here c f r one eight one sixty two point zero eleven grants statutory authorization to seize items where customs is lawfully on the premises which they are sure doesn't seem to make common sense to me as to why california can tax for distribution i think there's a lot to say for the district judges conclusion that really  all common sense this isn't at the warm tax because the cigarettes are there why i've let me respond to that in two ways the first response is that the statutory language regarding the california tax is fairly clear that it unlicensed distributors and that makes sense in light of the california scheme because the california skiing is designed to either require my sister beaters to report the fact these cigarettes exist or if you're not a license distributor and you're not required to report that cigarettes  and open your books up and open everything else up for inspection if you're an unlicensed repeater the way that california monitors are is by actually testing so that either way california either taxes it or it knows what's going to happen with it so that either cas constitutes use under the definitions of the other set forth yes yes and the thing is is this doesn't you know work and unfairness across the border are because in this case taxation you know in this case an injury was easily avoided of intrigue had put the cigarettes in the possession of the n t i its sister company which had a license and which would have then been required to report the fact that the cigarettes were here but in truth didn't do that i mean there was an easy way to avoid this issue in which case it would not seem to be particularly unfair in terms of the courts perhaps broader fairness concerns either get taxed if you're an unlicensed you just have reporting requirements if your license for possession as it would be in th and in georgia imposed a separate tax with absolutely that that gasoline is actually eventually sold in the course of the not have a circumstance the tax in two different transactions and then and it's ok in that circumstance to impose double taxation so there may be some risk of it in think the telephony purpose is to i mean the reason with the policy behind it is eight encourage people to be licensed distributors and second to avoid if you are going to distribute it in the state but that if they are going to distribute it in the state morning in the state or another i mean you know the california legislature clearly intent by by the fact that it grants refund for the sale out of state in some circumstances indicate that the legislature wanted to reach even cigarettes that were that move through the state for sale elsewhere and again another way to avoid the tax in this case we need cigarettes removed from florida to california to potentially i'm going to go to missouri i mean they could have just moved been moved directly from florida where it let's go back to bed and ten all right the intent and then is for t distributor cigarettes in the state of california right now they're trying to tax the a distribution of cigarettes in another state i think only if they move through the state and only that in the hands of an unlicensed distributor well if they move through this and so that if any any storage of cigarettes in the state that are going to be sold in it's somehow been preempted by the thought by such an eighty one and the government's position i mean for two arguments in our brief first dealing with the fact that there's a distinction between transshipment and goods destined for domestic consumption but i think the more immediate and straightforward way to just the general definitions of what means to be an apple on taxes that's why the government doesn't believe that this preemption for the dis preemptive provision apply and just simply honest plain language without even getting to the other issue of whether or not should apply to goods which are which already have to messic for four a day or a month or whatever it has no effect at all there is no requirement whatsoever of who report the requirement is on the act of distribution and at that time before right before that can happen there have to be if it's in california to have to be stamped placed on the cigarette for that act of distribution but otherwise the while the cigarettes are sitting in the foreign trade zone as domestic status centrally one entity one process that was being operated there for the purposes of actual stamping and then say only california it would be placed in the end name of n t i at that moment for that purpose for the actual distribution but before that is actually the company's cigarettes without the formality of actually transferring it into the other name there's no sale was just transferred soup and  terms of california the cigarettes were going to be sold in california but if for the sale to go to missouri it would have state in the trades name and then sold directly in the story i'm sorry to the company in missouri who would then have the responsibility of paying the taxes there now whether they are going to do it by fans or just paying taxes directly to the state of missouri that was up to the buyer and that case but now would have been sold directly to the company in missouri the other thing is that california for the quotation had gone to that site and the facts show it to take on the site periodically every two or three months and they saw one stamp cigarette in the possession of the be an illegal tax her conclusion was no no taxes were zero because in the status they were there just being the mere possession for sale outside of the state no taxes were out so yes i would disagree with that but presumption in other words your view is that the trial court did not draw a distinction between agile or on taxes and excise as her conclusion was that conclusion was that the mere fact that cigarettes were sitting there for whatever like the time i mean if it sat there for one day according to the government california come in and slap an eighty seven cents per pack tax  even though it was in safe harbor for one day in transit to go to missouri the next day then california stall tactic and the courts conclusion was no that that's a that's an ad lauren tax there's no distribution there's no  with you up to that point well actually it brings up an interesting point like by their buying cigarettes from the seller in florida and then bringing them here not good quality cigarettes as a court suggest and what if some non marber cigarettes were were mixed in with them and they had to reject some of those cigarettes and return to florida court of the government it doesn't matter the they were being held by an unlicensed company right and you know and this talk about unlicensed vs licenses i think is really unfair in this case because in st and pac an n t i had complied with all know i don't think she even reached me to reach that argument because of the of the of the foreign trade zones safe harbor cycling you know so i don't think you really had to take that argument that seriously who earlier said that  alarm or not if under california law even though it might not make common sense but if under california law owed then you lose don't i think it's contraband yeah if you find under the facts of this case that california bureau of equalization in fact taxed people in these circumstances which they didn't and there was a reporting requirement which there wasn't and that in three did not intend to sell the cigarettes in missouri which they did he find all of those factors and you feel that intrigue characterized as if it's just there for use and used as characterized as having any property interests whatsoever they're well here's how under california law is not to tax even though it might the within definition it's trying to be brought to do i believe the legislative intent is to try to be broad to define any type of act that would come within use to consumption isn't it i mean isn't that definition y not apply the drug possession definition to this case and that's what the government said even though they cited cases to that effect they say you really shouldn't because it's not it really is not the same fact we're not talking about  for the purposes of protecting domestic international and domestic trade and in this case the intrigue and so on the others were able to use the foreign trade zone for the purposes of being free from these types of tactics and now time has no application in may apply to a warehouse that might be after that doesn't have the foreign trade in controls or even a bonded write or the effect of an hour long tax yes sure and which is what what we have here where to say the effect of an ad for one well that's the interpretation by the district court that what happened here by merely holding the cigarette or whether it's an english term attacked attacked and attacked has an effect of being a certain type attack then it's that type you know there was one of the things like the government talked about which was the search issue and it's triggered not content contesting that customs to not tough not have the right to enter the foreign trade zone for the purpose of the search or to examine start purpose of examining merchandise to determine whether it was lawfully imported what happened what the problem was in this case if they went too far they learned after examining the merchandise that the merchandise was genuine it wasn't counterfeit which was the reason they went and soon as they found out that it was genuine they should have returned the merchandise and let mr legal back and and and conduct his business but instead they kept searching and searching for other reasons to maybe hold on to the merchandise they had no basis once they learned that the cigarettes were genuine that was the reason for the for the feature itself of the hundred twelve pilot a cigarette was they were supposedly counterfeit in fact the cigarettes said that they are the results of the first test that it was inconclusive that they were counterfeit so they had no basis to seize the pallet in the first place now going in is one thing but once they learn that the cigarettes themselves were no actually they it was april sixth they did the feature on inconclusive test results on april night they were told that in fact the cigarettes were genuine the results were wrong but they went ahead and sent it to marble anyway to to get re confirmation of that and but they didn't they waited actually another eight days before sending it off tomorrow during that time period they started looking for possible more violations and that's when they found you know suppose of import violations which they intentionally dropped in this case also so you know we're talking about a person trying to conduct business so they knew and they had results on april ninth that the the cigarettes were in and didn't find any potential violations until the tent the next day so as of that night they had no basis hold on the cigarettes and it should have been should have been returned and let and let mr louis going to conduct the business so and then the  they find what they considered import violations not counterfeit not tax related or whatever but it wasn't till day later that they sort of have found some violations and then i waited still another week before sending it off to philip  tory led him to follow the lawsuit on the important violations and then they didn't and then the complaint for another year later than that after discovery and having looked relieved and met in discovery that noted california cigarette were conducted that day and those field tests came back with one of three results either that the cigarettes were counterfeit that they were likely counterfeit or that they were possibly counterfeit and on the basis of the initial suspicion that they had plus the additional suspicion for the field t that ultimately the test was inconclusive and they needed to send the cigarettes to philip morris the manufacturer to determine whether they were legitimate cigarettes or manufactured over and europe and the fact that they were inconclusive that there was an inconclusive test result did not in the government's view dispel the probable cause in this case particularly given the nature of the items here i mean in the customs was that had reason to believe in probable cause they think these items were counterfeit and oftentimes counterfeit cigarettes look a lot like the real thing so the fact that these cigarettes look a lot like the real thing did not i mean they may not have been exactly the same but the fact that they looked a lot like them didn't dispel the probable cause or in any way the gate the initial reasons they have regarding the fact that they were covered in tar that no one knew that they were there all that continue to persist all the way until such time as customs gain additional reasons to hold on to these things on april tenth and that's why when philip morris ultimately determined they were shiny when the next week customs still hadn't of a reason to hold onto them yeah taxation requires no reporting requirements on behalf of an unlicensed distributor right because the because the board of equalization would get a report and say who is this we don't even know you know we don't know who this person is and that's why the purpose is to get people to become licensed so they can monitor them to avoid any sort of smuggling problem with people moving cigarettes that the state without the board of equalization knowing about it but there is no i guess the point i'm getting to is there is no violation on the part of intrigue here for failing to report there's no violation of a reporting requirement but under the statutes they're liable for the task because they're not i stopped by reporting right yet there is no violation for and none of the reporting apartments flat rate taxes that are exactly like the cigarette taxes in this case and both of those courts hold held that in that circumstance it's not an athlon tax i also point to court to the continental motors case that we cited for the fact that a tax on possessory rights is an excise tax not a tax and for that reason we think that the cigarette taxation in this case was not preempted by the federal law and is subject to the state law based on the plain reading of the state statutes and therefore that the seizure was appropriate for me judgment should be reversed by support of me for the question