Judge Rules UPS Improperly Shipped Untaxed Cigarettes Into New York
March 24 2017 - 9:15PM
Dow Jones News
By Paul Ziobro
A federal judge ruled Friday that United Parcel Service Inc.
illegally shipped millions of cigarettes to New York state from
Indian reservations, opening up the parcel carrier to damages and
other penalties for skirting taxes on tobacco products.
In a 218-page ruling, Judge Katherine Forrest said New York
state and New York City are entitled to compensatory damages and
monetary penalties that have yet to be determined.
The case, filed in the Southern District of New York, stems from
UPS allegedly failing to establish proper procedures to flag
tobacco shipments from Indian reservations when they were shipped
into New York.
The suit, filed in 2015, sought $180 million in damages and
penalties. It accused UPS of shipping nearly 700,000 cigarette
cartons between 2010 and 2014, depriving the city of $5 million in
taxes and the state of $30 million.
In a statement, UPS said it was still evaluating the decision.
"We are pleased that the court found that UPS's current tobacco
compliance program is adequate, and declined to award plaintiffs
the injunctive relief they sought or to appoint a monitor to
oversee UPS's compliance program," the company said.
A similar suit is also pending against UPS rival FedEx Corp.
Write to Paul Ziobro at Paul.Ziobro@wsj.com
(END) Dow Jones Newswires
March 24, 2017 21:00 ET (01:00 GMT)
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