United States Second Circuit

In a case concerning allegations that out-of-state cigarette retailers are liable for failing to report purchases by state residents to the state, dismissal of civil Racketeer Influenced and Corrupt Organizations Act (RICO) claims and state claims on common law fraud, violations of General Business Law section 249, and common law public nuisance for failure to state a claims, is vacated in part, remanded in part, severed in part, affirmed in part, and two questions are certified to New York Appeals Court where: 1) defendant-City had standing to sue under RICO, where it has alleged a direct injury of lost taxes by reason of defendants' commission of mail and wire fraud through sale of cigarettes to New York City residents without complying with the Jenkins Act, and had adequately alleged its RICO claims; 2) in all four cases, City failed to plead "reasonable reliance on the part of the plaintiff" for its claim of common law fraud; 3) for the claim under General Business Law (GBL) section 349 omission of information about a consumer's duty to pay taxes to that consumer's home state and city cannot be tantamount to an affirmative misrepresentation that a consumer does not need to pay taxes; and 4) question regarding whether the City has standing to sue under GBL section 349 and a question regarding whether the City may assert a common law public nuisance claim that is 41 predicated on N.Y. Public Health Law section 1399-ll were certified to New York Court of Appeals .

Appellate Information

• Decided 09/02/2008
• Published 09/02/2008

Judges

Court

• United States Second Circuit

Counsel