* Plaintiffs seek more than $239 mln in damages, penalties
* FedEx accused of shipping about 400,000 cartons of
* FedEx says case lacks legal foundation
(Adds comments from New York Attorney General, FedEx)
March 31 New York state joined New York City in
suing FedEx Corp for allegedly violating state and
federal laws by delivering untaxed cigarettes, but the company
said customer privacy prevented it from checking packages
New York City accused FedEx of creating a "public nuisance"
through its partnership with Shinnecock Smoke Shop to ship
untaxed cigarettes to homes.
An amended complaint filed on Sunday included New York
Attorney General Eric Schneiderman among the plaintiffs seeking
more than $239 million in damages and penalties.
"Not only has FedEx cheated the state out of millions in tax
dollars - but many of these cigarettes may have ended up in the
hands of teenagers, who are particularly vulnerable to
low-priced cigarettes," Schneiderman said in a statement. (r.reuters.com/hex97v)
New York state alleged that FedEx knowingly shipped nearly
400,000 cartons of unstamped cigarettes to homes in the state,
depriving it of $15, $27.50 or $43.50 on each carton in tax
FedEx said the case lacked legal foundation. The company
said it had to protect the privacy of customers and would not
open packages to determine their contents without reason.
"While the lawsuit identifies several shippers of untaxed
cigarettes with which we stopped doing business, those shippers
are not being sued in the case, nor are any recipients who
evaded paying applicable taxes," FedEx spokesman Perry Colosimo
said in a statement emailed to Reuters.
New York City had alleged in December that the company
deprived it of excise tax of $15 per carton.
"The claims advanced in the amended complaint by the NYAG
are substantively identical to the City's claims in the original
complaint," Assistant Corporation Counsel Eric Proshansky, who
represents New York City in the case, said in a letter on
"Accordingly, the proposed objections to the pleadings
raised by FXG (FedEx Ground Package) should still form the basis
for discussion at the April 9th pre-motion conference."
FedEx requested the court last week to dismiss or
substantially narrow New York City's complaint.
The case is City of New York v. FedEx Ground Package System
Inc et al, U.S. District Court, Southern District of New York,
(Reporting by Supriya Kurane and Sagarika Jaisinghani in
Bangalore; Editing by Joyjeet Das and Kirti Pandey)