A federal judge has ruled that New York City cannot use a racketeering statute to recover uncollected tax revenues from an Internet tobacco seller, the New York Law Journal reported March 20.

U.S. Southern District Judge Deborah Batts dismissed the city's Racketeer Influenced and Corrupt Organizations Act (RICO) lawsuit against tobacco retailer Nexicon, saying that the plaintiffs did not prove that the company's actions met the definition of a racketeering enterprise. The city was using this case and four others to try to reclaim up to $100 million in city and state taxes.

A lawyer for the city said the ruling would be appealed. The city claimed that the company committed mail and wire fraud by failing to fully report on sales of cigarettes to New York residents as required by the Jenkins Act. But the judge in the case said that the act applied to criminal cases, not civil suits, and also said that the case failed to meet a number of other prerequisites needed for a case to be filed under RICO.