FedEx Lawsuit Over Untaxed Smokes Joined by New York Stat

New York State joined a federal racketeering lawsuit filed by New York City contending FedEx Corp. (FDX) wrongly delivered more than 140 tons of untaxed cigarettes ordered over the Internet or by mail.

The deliveries were made in defiance of a 2006 agreement with the state that the Memphis, Tennessee-based company would cease the practice, lawyers for the city and state said in an amended complaint filed yesterday in Manhattan.

Some of the cigarettes allegedly came from Indian reservations, including the Shinnecock Smoke Shop in Southhampton, Long Island. New York City imposes a $15 excise tax on each carton of cigarettes. New York Indian tribes, including the Shinnecock Indian Nation, have claimed that their smoke shops aren’t subject to state and local cigarette taxes.

Jess Bunn, a FedEx spokesman, didn’t immediately return an e-mail seeking comment on the amended lawsuit.

The case is City of New York v. FedEx Ground Package System Inc., 13-cv-09173, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Phil Milford in Wilmington, Delaware at

To contact the editors responsible for this story: David E. Rovella at Stephen Farr, Charles Carter

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