Summary
The Oklahoma Supreme Court affirmed summary judgment awarding the State of Oklahoma $47,767,795.20 against Native Wholesale Supply for violating the Oklahoma Master Settlement Agreement Complementary Act through the distribution of contraband Seneca cigarettes. The Court held that factual conclusions from the prior appeal were binding under the settled-law-of-the-case doctrine, that Native Wholesale Supply was not entitled to a jury trial, and that the State had established entitlement to disgorgement of gross receipts as a matter of law.
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Practice areas
Questions Presented
- Whether the district court on remand was bound by the factual conclusions supporting the Oklahoma Supreme Court's earlier jurisdictional decision under the settled-law-of-the-case doctrine.
- Whether Native Wholesale Supply was entitled to a jury trial on whether it knew that the Seneca cigarettes were intended for distribution or sale in violation of the Master Settlement Agreement Complementary Act.
- Whether the undisputed evidentiary materials established the Attorney General's entitlement to summary judgment and disgorgement of $47,767,795.20 in gross receipts.
- Whether the district court abused its discretion in denying Native Wholesale Supply's motion for new trial.
Holdings
- Under the settled-law-of-the-case doctrine, the factual conclusions based on the undisputed evidentiary materials in the prior appeal were binding on the district court on remand because they were necessary to resolve the jurisdictional issues and were not shown to be palpably erroneous or to cause gross injustice.
- Native Wholesale Supply was not entitled to a jury trial on whether it knew the cigarette distribution violated the Complementary Act or on the amount of gross proceeds subject to disgorgement.
- The Attorney General was entitled as a matter of law to summary judgment and disgorgement of $47,767,795.20 in gross receipts from Native Wholesale Supply's distribution of contraband Seneca cigarettes into Oklahoma.
- The district court did not abuse its discretion in denying Native Wholesale Supply's motion for new trial because the summary judgment was proper.
Key quotations
“The factual conclusions in Native Wholesale Supply I are settled between the parties in this case and were binding on the district court on summary judgment.” (¶ 18)
“This is a suit authorized by statute to disgorge the gross proceeds NWS gained from the flagrant violation of Oklahoma's Complementary Act.” (¶ 25)
“Section 360.8(G) is a legislative mandate to the courts to order disgorgement of 1) profits, 2) gain, 3) gross receipts, OR 4) other benefit from the violation of the Complementary Act.” (¶ 31)
Factual background
Native Wholesale Supply, a corporation chartered by the Sac and Fox Tribe, imported Seneca cigarettes manufactured in Canada and sold them to tribal wholesalers whose transactions brought the cigarettes into Oklahoma. The Seneca manufacturer and brand had been removed from the Oklahoma Attorney General's directory because of escrow noncompliance, making the cigarettes contraband under Oklahoma law. Native Wholesale Supply continued distributing the cigarettes into Oklahoma from 2006 through 2010, and sales records showed gross receipts of at least $47,767,795.20. Native Wholesale Supply did not controvert the Attorney General's evidentiary materials concerning the sales, its knowledge of the cigarettes' status, or the amount of receipts.
Procedural history
The Attorney General filed suit in Oklahoma County District Court in 2008 seeking disgorgement of proceeds from the sale of contraband Seneca cigarettes. Native Wholesale Supply removed the action to federal court, but the case was remanded. The district court initially dismissed for lack of subject matter jurisdiction while denying dismissal for lack of personal jurisdiction. In the first appeal, the Oklahoma Supreme Court held that Oklahoma had both personal jurisdiction and subject matter jurisdiction and remanded. After discovery, a bankruptcy stay, and its lifting, the district court granted the Attorney General summary judgment for $47,767,795.20, denied Native Wholesale Supply's cross-motion for summary judgment, and denied its motion for new trial.