State v Native Wholesale Supply (2014) H&FLR 2014-32

State of Oklahoma ex rel. E. Scott Pruitt v Native Wholesale Supply (2014) H&FLR 2014-32

Supreme Court of Oklahoma

10 June 2014

Coram: Colbert CJ, Reif VCJ, Watt, Winchester, Taylor, Kauger and Gurich JJ.

Appearing for the Plaintiff: E. Clyde Kirk and Ryan R Chaffin (Assistant Attorneys-General)
Appearing for the Defendant: David L. Kearney, Gregory T. Metcalfe and Paula M. Williams (of Gable Gotwals)

Catchwords: Oklahoma – tobacco – health care expenses – contraband cigarettes – disgorgement – settled law of the case – jury trial

Facts: In 1999 and 2004 the Oklahoma legislature enacted two statutes in relation to the sale of tobacco products* (Acts). The effect of the Acts was to require tobacco product manufacturers whose products were sold in Oklahoma to pay money into escrow accounts to cover health care expenses resulting from cigarette smoking. The State’s Attorney-General would publish a directory of cigarette brands that may be sold in Oklahoma and a list of tobacco product manufacturers who had complied with the Acts. The Acts made it unlawful for a person to sell or possess for sale cigarettes which were not listed in the directory or where the manufacturer had not complied with the Acts.

In August 2006 ‘Seneca’ brand cigarettes and their manufacturer (Grand River Enterprises Six Nations Ltd) were removed from the directory. In 2007 and 2008 the defendant, Native Wholesale Supplies (NWS), brought Seneca cigarettes into the State. In May 2008 the Attorney-General commenced proceedings seeking disgorgement and payment to the State of NWS’ gross proceeds of sale of the contraband cigarettes. After an intervening dispute over jurisdiction (State ex rel. Edmonson v Native Wholesale Supply, 2010 OK 58, 237 P.3d 199) (NWS I), the Oklahoma County District Court on 9 May 2013 entered judgment against NWS for $47,767,795.20. NWS appealed.

Held: By Colbert CJ, Reif VCJ, Watt, Winchester, Taylor and Kauger JJ, dismissing the appeal, that –

1. The “settled-law-of-the-case doctrine” forbids parties re-litigating issues which are finally settled by an appellate decision or which a party failed to raise on appeal. Accordingly, the factual conclusions in NWS I were binding on the parties and the District Court.

Smedsrud v Powell, 2002 OK 87, 61 P.3d 891, followed.

2. The defendant was not entitled to a jury trial on the unsettled factual issues because the Acts did not provide for a jury trial andf neither the Federal nor State constitutions required one to be held. The right to a jury trial recognised in the Oklahoma Constitution referred to the right as it existed at the time of the Constitution’s adoption.

A.E. v State, 1987 OK 76, 743 P.2d 1041; Maryland National Insurance Co v District Court of Oklahoma County, 1969 OK 73, 455 P.2d 690; Keeter v State, 1921 OK 197, 198 P. 866, followed

A dissenting judgment was entered by Gurich J.

Judgment

The Court’s judgment is available here.
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* The “Escrow Statute“, 37 O.S. Supp 1999 §§600.21-600.23 and the Master Settlement Agreement Complementary Act, 68 O.S. Supp. 2004 §§360.1 et eq.