The United States Postal Service (USPS) is facing a lawsuit alleging it is illegally accepting and delivering millions of foreign cigarettes to Californians and New Yorkers.

The State of California and New York City filed the lawsuit against USPS and its Post Master General Megan Brennan on Tuesday.

Allegations against USPS

In the complaint, California Attorney General Xavier Becerra and New York City Acting Corporation Counsel Georgia Pestana alleged that USPS violated the non-mailability provision of the Prevent All Cigarettes Trafficking Act (PACT Act).

According to them, USPS knowingly accepted and delivered packages that it had reasonable cause to believe contained untaxed cigarettes or smokeless tobacco. The postal service is aware of those illegal packages and failed to stop them.

Becerra and Pestana argued in their complaint that USPS’ action “deprives state and local governments of millions of dollars in tax revenue.” It also “thwarts the public health policies of those jurisdictions.”

In 2010, President Barack Obama signed into law the PACT Act to reduce the availability of tax-evading, low-cost cigarettes and smokeless tobacco over the internet and to increase government revenues by ensuring the collection of federal, state and local taxes on cigarettes and smokeless tobacco sold online. The law also aims to stop the sales of these products to kids and to prevent /reduce smoking and its health risks.

According to Becerra and Pestana, USPS consistently received reports from the California AG’s office, state and local officials about the strategy of online cigarette sellers to avoid enforcement of the PACT Act. U.S.-based online cigarette sellers are using international fulfillment centers and postal systems to send orders, which are then transferred into domestic mails upon reaching the United States. From there, USPS delivers those packages containing cigarettes and smokeless tobacco to recipients across the country.

In statement, AG Becerra said, “Accepting and delivering contraband cigarettes is not only a health hazard for our citizens but a detriment to our state’s economy.” He added that the California Department of Justice (DOJ) remains vigilant in stopping the smuggling of contraband cigarettes into the state.