Federal District Judge Richard Arcara temporarily ordered that the Prevent All Cigarette Trafficking Act (PACT Act), a new law that disallows cigarettes to be shipped via the mail-which was set to go into effect yesterday-to be placed on hold, the Associated Press reported.
A Seneca Indian Nation tobacco business owner asked for the restraining order to stop the PACT Act. A hearing has been set for July 7.
“We are very disappointed in the ruling and reviewing all possibilities for a legal response. NACS was a strong proponent for passage of the PACT Act and worked for years to obtain its enactment,” said Lyle Beckwith, NACS senior vice president of government relations. “We will not stop fighting.”
The Senecas seek to stop the PACT Act, claiming it will damage its multi-million dollar tobacco industry and eliminate 3,000 jobs. According to tribe estimates, its member businesses sell four out of each five cigarette packs via mail order.
“It’s a major impact, a major obstacle we’re going to have to find a way to overcome,” said J.C. Seneca, a tribe counselor.
Tobacco companies, meanwhile, praised the act for preventing customers from avoiding state taxes, from which Native American businesses are exempt. But the Senecas view the new law as against tribal sovereignty and a way for tobacco companies to devour lost market share.
Cigarette mail orders reportedly accounted for $30 million to $40 million in annual revenue for the U.S. Postal Service.