Litigation

Philip Morris USA Sues Retailer For Allegedly Selling Counterfeit Cigarettes

RICHMOND, Va. - Philip Morris USA (PM USA) on July 8 filed a lawsuit in the U.S. District Court for the Eastern District of New York against Mastic, N.Y.-based G Talks Smoke Shop for allegedly selling counterfeit versions of the company's Marlboro brand cigarettes (Philip Morris USA Inc. v. Williams, et al., No. 2:10cv3122, E.D. N.Y.).

According to the company:

The lawsuit is aimed at stopping the sale of counterfeit cigarettes and the unauthorized use of PM USA's trademarks. PM USA's action follows purchases of 30 packs of counterfeit cigarettes made by company investigators at G Talks Smoke Shop and a seizure with Suffolk County Police of an additional 30 packs of counterfeit cigarettes bearing Marlboro brand trademarks at this same retail location. These latest seizures are in addition to 4,870 packs of counterfeit PM USA cigarettes seized on the Poospatuck reservation in 2009 to 2010.

"The sale of counterfeit cigarettes undermines the value of Philip Morris USA's brands and the legitimate channels through which our products are distributed and sold," said Joe Murillo, vice president and associate general counsel, Altria Client Services, speaking on behalf of PM USA. "Selling counterfeit cigarettes is illegal, and we will take appropriate action to protect our brands."

In New York, increased contraband activity is being fueled by the highest excise tax in the United States, combined with the state's continued lack of collection of excise taxes on cigarettes sold through Native American reservations.

On July 1, New York's state excise tax increased by $1.60 per pack, raising the tax from $2.75 to $4.35 per pack. This 60 percent increase in the state excise tax is in addition to the existing New York City excise tax of $1.50 per pack. However, today no excise tax is collected on cigarettes sold through about 200 outlets affiliated with tribal reservations, which has led to these outlets selling about one-third of the cigarettes sold in New York.

To protect its brands and the legitimate trade channels through which they are distributed and sold, PM USA pursues numerous strategies to address the sale of counterfeit, illegally-imported, stolen and untaxed or under-taxed cigarettes

In New York, PM USA has taken a number of recent actions to protect its valuable trademarks, promote the lawful sale of its brands and to safeguard the integrity of the distribution system.

With this new lawsuit, PM USA currently has 16 counterfeit retailer lawsuits pending in the New York area against 39 defendants, all of whom allegedly sold counterfeit cigarettes in 2009 and 2010. In Mastic specifically, PM USA has filed four cases against eight defendants during 2009-2010.

The company said it has provided information and support for a number of local, state and federal law enforcement investigations involving contraband trade in cigarettes in New York.

Philip Morris USA is an operating company of Altria Group, Inc. More information on Philip Morris USA and its policies and positions on tobacco issues is available at www.philipmorrisusa.com.

Download the complaint.