Million-dollar lawsuit filed over cigarettes seized on reserve

Hobbema’s Montana First Nation, Chief Carolyn Buffalo and a Quebec-based cigarette company are embroiled in a legal battle to recover $7 million worth of confiscated cigarettes. Investigators from Alberta Gaming and Liquor Commission and the RCMP seized about 75,000 cartons of cigarettes in Hobbema in early January.

Hobbema’s Montana First Nation, Chief Carolyn Buffalo and a Quebec-based cigarette company are embroiled in a legal battle to recover $7 million worth of confiscated cigarettes.

Investigators from Alberta Gaming and Liquor Commission and the RCMP seized about 75,000 cartons of cigarettes in Hobbema in early January.

It was alleged the cigarettes were contraband and the cartons were not properly marked for sale in Alberta, which is a violation of the Tobacco Tax Act. The AGLC said the cigarettes represented a potential loss of up to $3 million in taxes to the province.

The stash was found in a Quonset used for storage by the Montana First Nation when police responded to a report of a break-in. At the time, police said the Montana First Nation had no financial stake in the cigarettes and was not involved in their storage.

However, the discovery created a furor in the community. The following day Chief Carolyn Buffalo and Councillor Leonard Standingontheroad were reportedly suspended without pay for their alleged involvement.

Buffalo, Rainbow Tobacco G.P. of Quebec’s Kahnawake Reserve, and Montana First Nation have since filed a $1.5 million lawsuit claiming the province lacked jurisdiction to enforce the province’s Tobacco Tax Act on status Indians.

A statement of claim filed two weeks ago claims $1 million in damages for defamation because of the suggestion in the AGLC’s news release that the cigarettes were illegal and would result in lost tax revenue.

“These statements are defamatory as they suggest that the Montana First Nation is dishonestly attempting to deprive the Provincial Government of Alberta revenue.”

The statement says the cigarettes were federally licensed and duty paid when shipped from Quebec. The AGLC described the cigarettes as contraband despite markings showing “duty paid,” says the statement of claim.

Buffalo hoped to distribute the cigarettes on other reserves “and thereby create employment on the Montana 139 Reserve.”

The lawsuits states the “AGLC did not have the right to seize the cigarettes and does not have the right to continue to detain the cigarettes.”

It calls for the return of the cigarettes, $1 million in general damages for lost reputation and lost profits, and $499,000 in punitive damages.

None of the allegations have been proven in court.

Edmonton lawyer Chady Moustarah, who filed the statement of claim, said they are still waiting for the AGLC’s statement of defence.

AGLC spokeswoman Angelle Sasseville could say little about the ongoing dispute.

“At this time, while there is an investigation ongoing, it is inappropriate for us to comment on anything that’s happening legally,” she said.

Meanwhile, Rocky Mountain House RCMP continues to investigate the incident.

Sgt. Jim Lank said charges have not yet been laid.

“Really, it’s in the hands of the Alberta Gaming and Liquor Commission and the prosecutor. There is still some investigation ongoing.

“That’s sort of where we’re at with things. There has been no change with that.”

A spokesman for Montana First Nations could not be reached for comment.

pcowley@bprda.wpengine.com

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