A Virginia-based delivery company could be on the hook for tens of millions of dollars in penalties after a federal judge on Thursday allowed the city to move forward with a lawsuit accusing the business of illegally assisting upstate Indian reservations in delivering untaxed cigarettes to Big Apple residents.
Manhattan federal Judge George Daniels denied a motion by LaserShip Inc. to dismiss the suit filed last year, which seeks $ 5.6 million in money damages and up to another $ 115 million in civil penalties. The decision means the case will proceed to trial.
“This is a significant decision in the city’s aggressive campaign against illegal untaxed cigarettes,” said Aaron Bloom, a senior counsel for the city’s Law Department and lead attorney on the suit.
Lasership allegedly failed to charge the required $ 5.85 per pack while delivering about 120,000 cartons of cigarettes in some 23,000 deliveries citywide over the past two years and three months, according to updated stats provided to The Post.
The city’s efforts are part of a wider legal battle nationally involving the ability of states to tax cigarettes sold on Indian reservations, where tribal leaders have long maintained that the state has no authority to tax anything sold on their territory.
LaserShip lawyers did not immediately return messages.
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