PM USA Sues Eight NYC Retailers

RICHMOND, Va. -- Altria Group's Philip Morris USA (PM USA) filed lawsuits this week in federal court against eight retailers in the New York City area for allegedly selling counterfeit versions of the company's Marlboro brand cigarettes.

"The New York metropolitan area is the most lucrative market in the U.S. for counterfeit and contraband cigarette smugglers," Joe Murillo, vice president and associate general counsel, Altria Client Services, said in a statement on behalf of PM USA. "The highest cigarette excise taxes in the nation -- $6.86 per pack in federal, state and city taxes -- fuel this illicit trade, making New York the largest market for counterfeit and contraband cigarettes in the country.

New York State's lack of effective enforcement on cigarettes sold to Native-American retailers makes the already significant problems in the New York area worse."

These lawsuits are the latest by PM USA, which has taken a stand against the sale of counterfeit cigarettes in New York, the company stated. Since May 2009, PM USA has filed lawsuits against 47 retailers in New York for selling counterfeit Marlboro brand cigarettes.

The retailers named in these latest lawsuits include:
• Elmhurst Mexican Grocery Co., Elmhurst, N.Y.
• Sutphin Mini Market, Queens, N.Y.
• Eman Deli Grocery/Bushra Deli and Grocery, Elmhurst, N.Y.
• L&C Grocery Deli, Brooklyn, N.Y.
• R&L Grocery, New York, N.Y.
• E & L Grocery, Bronx, N.Y.
• Cigarettes Cigar in Town, Bronx, N.Y.
• Ademi Convenience Store, Bronx, N.Y.

In a related case, PM USA also sued Tammy's Smoke Shop, located on the Poospatuck Indian Reservation on Long Island. Filed in the U.S. District Court for the Eastern District of New York, the judge in that case recently determined PM USA is entitled to $100,000 statutory damages for trademark infringement based on the sale of counterfeit Marlboro brand cigarettes, the company stated.

The judge noted in the decision: "The record indicates there are numerous other cigarette sellers in defendants' vicinity on the Poospatuck Indian Reservation [and] there appears to be a real need to deter others from such insidious conduct."

In addition to violating trademark laws, counterfeit cigarettes are almost always sold without the appropriate federal and state excise tax, PM USA stated. The counterfeit cigarettes purchased from the retailers named in the most recent suits had no tax stamp or a counterfeit tax stamp. As a result, the applicable excise taxes were not paid, according to the company.

"New York is slated to begin collecting excise taxes Sept. 1 on cigarette sales by New York wholesalers to Native American retailers for sales to non-tribal consumers," Murillo explained. "Effective tax collection could help stabilize the legitimate cigarette distribution channel in New York, which is increasingly under attack from counterfeit and contraband cigarette smuggling."

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