Six Nations cigarette maker sued in California

The State of California is suing a Six Nations cigarette manufacturer.

In a civil suit filed July 7 in Sacramento, Attorney General Xavier Becerra alleges Grand River Enterprises — or GRE, for short — failed to comply with tobacco sales laws and illegally sold cigarettes.

More specifically, the company is accused of failing to make roughly $13 million in escrow payments between 2014 and 2016 and of violating California’s revenue and taxation code and health and safety code.

According to those, all cigarette makers that do not participate in the so-called Master Settlement Agreement are required to make annual payments into an escrow fund for their sales in California. The state has alleged GRE, which does not participate in the agreement, sold more than 400 million cigarettes over a three-year span and didn’t pay.

None of the allegations has been proven in court.

Becerra is seeking the unpaid escrow, civil penalties, legal costs and a court order to stop GRE from selling cigarettes, either directly or through an intermediary, to consumers in California until it has paid what it allegedly owes and proves it is in compliance with the health and safety code. He has also called for a two-year ban on GRE selling or supplying cigarettes in the state, among other relief.

According to the California Department of Justice, GRE has not filed a response to the filing because the company has not yet been served with the complaint and summons. As a general rule, a plaintiff must serve a complaint within 60 days of filing the complaint, although the deadline may be extended by court order.

Once GRE has been served, it has 30 days to respond, according to state rules.

GRE lawyer John F.C. Hammond declined to comment, saying it is premature speak about the filing at this stage.

When a lawsuit is filed in California against a Canadian company, the plaintiff — in this case, the state — must comply with a procedure outlined in the Hague Service Convention, a treaty that governs the service of legal filings abroad, including on First Nations. GRE is headquartered in Ohsweken, which is Six Nations territory.

The lawsuit is the latest in a list launched by U.S. states against the company, which, in the past, has also been sued by Ohio — a lawsuit that ended in 2011, when GRE paid close to $1 million in escrow — New York and California. GRE and four of its shareholders, meanwhile, are pursuing their own $3-billion lawsuit against Ottawa for allegedly forcing them to incorporate and lose their tax-exempt status while failing to stamp out contraband competitors.