Opinion ID: 8407619
Heading Depth: 3
Heading Rank: 1

Heading: The Statute’s Alleged “Loopholes”

Text: The district court cited the delivery exception in its discussion of the loopholes that would permit minors to continue purchasing cigarettes “without an in-store, face-to-face transaction.” Id. The court did not expressly indicate in what way or to what extent minors would take advantage of this so-called exception nor did it cite any evidence showing that minors currently avoid face-to-face transactions by making such purchases. We need not make such determinations, however, because we find that even if minors were to purchase cigarettes in this manner, this exception nonetheless furthers one of the Statute’s two goals: to reduce demand for cigarettes by requiring that purchasers pay New York’s high cigarette excise tax. 2
The district court also concluded that the Statute’s goals would be undermined by cigarette sales by Indian nations. Id. at , . The court found that “no enforcement efforts under [the Statute] will be directed to direct sellers on Indian reservations.” Santa Fe, 2001 WL 636441, at . The court based this determination on a failed attempt by the state to collect excise and sales taxes from on-reservation cigarette sales in 1997, and assertions made by Indian nations upon passage of the Statute at issue that they “would continue to sell and deliver tax-free cigarettes without interference.” Id. We find the district court’s conclusion both speculative and contradicted by the evidence. As enforcement of the Statute was preliminarily enjoined, the State’s resolve to enforce its prohibitions has not yet been tested. Further, the State submitted evidence that, because of Indian sovereignty, the Statute would not apply to “[s]ales and shipments of cigarettes to ... [1] recognized Indian nations or tribes, [2] Indian-run businesses on reservations in New York State, or [3] Indian consumers residing on reservations in New York State.” The State did explain, “[h]owever, [that the Statute] dofes] apply to shipments of cigarettes by Indian nations, tribes, and businesses to any person other than recognized, Indian nations or tribes, Indian-run businesses on reservations or Indian consumers residing on reservations in .New York State.” (emphases added). Thus, the State retains significant enforcement powers with respect to Indian-related sales despite the fact that it is prohibited from enforcing the Statute against Indian sellers in the three circumstances noted above. We do not view these narrow limitations on the State’s enforcement power as constituting a “loophole” in the Statute so significant as to be “fatal to its effectiveness.” Id. at . The State argues that it intends to enforce the Statute’s provisions against Indian sellers to the extent it is legally able to do so, and we see no reason to doubt the veracity of this contention before the State has had an opportunity to attempt such enforcement. Cf. ILGWU v. Donovan, 722 F.2d 795, 821 (D.C.Cir.1983) (“[C]ourt[s] must be particularly deferential when reviewing an agency’s predictive judgments about areas that are within the agency’s field of discretion and expertise.”). Furthermore, because subdivision two of the Statute penalizes independently entities that deliver cigarettes directly to New York consumers, even if the State chose not to enforce the Statute against Indian sellers themselves, it could without limitation enforce that provision against carriers that transport cigarettes from Indian reservations to New York consumers, thereby effectively cutting off the usefulness of this potential “loophole.”
The district court also found that because the State is without authority to dictate what the United States Postal Service may or may not ship, this fact likewise “make[s] the law ineffective in stopping minors from accessing cigarettes,” id. at , and “prevent[ing] smokers from obtaining lower-priced cigarettes,” id. at . This conclusion is based on a misinterpretation of the Statute. Subdivision one prohibits “any person” from “ship[ping] or causing] to be shipped” cigarettes to New York consumers directly. N.Y. Pub. Health Law § 1399-ll (1). This means that direct shippers are subject to the Statute’s civil and criminal penalties regardless of what means of transport they use to deliver the cigarettes. Subdivision two imposes the same penalties on those entities that transport cigarettes directly to New York consumers. To the extent that the State cannot enforce the Statute against the United States Postal Service, it is only without authority to penalize it for violations of subdivision two. In other words, while the State cannot prosecute the Postal Service itself for transporting cigarettes directly to New York consumers under subdivision two, it can prosecute direct shippers for shipping cigarettes to New York consumers through the Postal Service under subdivision one. Thus, under a proper reading of the Statute, this alleged loophole is not “fatal to its effectiveness,” id. at , because it is, in practice, nonexistent. For these reasons, we conclude that the Statute’s de minimis burden on interstate commerce is not “clearly excessive in relation to the local putative benefits,” Pike, 397 U.S. at 142, 90 S.Ct. 844, and that the Statute therefore survives Pike scrutiny.