We recently wrote about a federal case here and here involving key issues related to the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) authority to enforce the Prevent All Cigarette Trafficking Act (PACT Act) against federally recognized Indian tribes and ATF’s interpretation of key sections of the PACT Act. In addition to appealing the U.S. District Court for the Central District of California’s decision, we noted that the Twenty-Nine Palms Band of Mission Indians (the Tribe) asked the district court to require ATF to remove it from the agency’s PACT Act noncompliant list (NCL) and prevent ATF and the other defendant, the Department of Justice from taking action against it pending its appeal before the U.S. Court of Appeals for the Ninth Circuit. On July 30, the federal district court denied the Tribe’s request.
The reason for the denial centered on the timing of the ATF’s placing of the Tribe on the NCL and the Tribe’s subsequent notice of appeal. On February 27, the district court issued an order for summary judgment in favor of the defendants. ATF placed the Tribe on the NCL on March 10 after agreeing to defer doing so in a settlement agreement with the Tribe’s business partner until the district court issued an initial ruling. Consistent with its February 27 order, the district court entered judgment in favor of the defendants and dismissed the case on March 24. The Tribe filed its notice of appeal on April 9 and asked the district court to issue an injunction pending appeal. The district court held that it lacked jurisdiction to grant the Tribe’s requested relief because it could not issue injunctions that alter the status quo after an appeal has been filed. This is consistent with the general rule followed by other federal courts.
In this case, the Tribe filed a notice of appeal after the ATF placed the Tribe on the NCL. The status quo at the time of the Tribe’s appeal was that the Tribe was already on the NCL. Therefore, the district court concluded it could not order the Tribe’s removal from the NCL or prevent ATF from taking further action, as doing so would constitute a change from the status quo.
Why It Matters
This case indicates that ATF is still actively enforcing the PACT Act, at least in some cases, despite a recent directive to shift resources away from tobacco enforcement, which we discussed in a February 26 blog post. While the facts that led to this decision are somewhat unique, the decision underscores the need for anyone choosing to appeal a decision in favor of a federal agency to file its notice of appeal as soon as the district court issues a final order. The decision also potentially incentivizes an agency that receives a favorable order from a district court to modify the status quo in its favor as quickly as possible before the district court issues a final judgment. The Tribe will remain on the NCL, a decision that would be financially catastrophic to any business making interstate sales and shipments of tobacco products covered by the PACT Act, including, for example, online retailers. Interestingly, ATF will not be prohibited from taking additional enforcement action against the Tribe pending its appeal, although one wonders why new action during the appeal would not modify the status quo. It is worth noting that the timing of a party’s notice of appeal matters: this decision puts private businesses that sell covered tobacco products in interstate commerce at risk of potentially financially catastrophic agency action (such as being placed on the NCL) without any possibility of redress until a final decision is issued by an appellate court, a process that can take months, if not years, to complete.
