OMAHA, Neb. (AP) — A Native American tribe is suing Nebraska officials, alleging that state regulation of the tribe’s tobacco production is unconstitutional.
Two subsidiaries of the Winnebago Tribe filed a lawsuit last week against Nebraska Attorney General Doug Peterson and Tax Commissioner Tony Fulton, the Sioux City Journal reported. The subsidiaries, HCI Distribution and Rock River Manufacturing, argue that tribal commercial activities are protected under federal law and that Nebraska has no regulatory authority over the tribe’s cigarette operations.
The attorney general’s office declined to comment.
The lawsuit alleges that the largest American tobacco manufacturers are pressuring Nebraska and 45 other states to expand their jurisdiction onto Indian reservations. The “Big Tobacco” manufacturers are leveraging a 1998 settlement of lawsuits with the states, according to the tribe’s allegations.
The tobacco companies have threatened to withhold millions of dollars in settlement payments to coerce states to unlawfully regulate tribal tobacco operations, the lawsuit said.
“This attack has damaged our tribal economy and in turn threatens our sovereignty, self-determination and self-governance,” said Winnebago Tribal Chairman Frank White.
The tribe’s economic development branch, Ho-Chunk, operates the Rock River facility that manufactures cigarettes, which are available in more than 25 states and on most reservations across the country.
Federal agents in January raided sites owned by Ho-Chunk and seized records related to the tribe’s tobacco operations. White said the action was sparked by state regulators to leverage an ongoing tax dispute with the tribe.
The cigarette plant has been operating at a reduced output since the raid, said Ho-Chunk spokesman Sam Burrish.
The tax dispute began after the Nebraska Department of Revenue issued tax assessments against some reservation-based cigarette retailers in 2014. The department alleged the retailers made sales that are subject to Nebraska’s cigarette taxes.
HCI Distribution and Rock River disputed over whether the state’s laws apply to their cigarette operations, but negotiations broke down two years ago.