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Grand River Enterprises

GRE sues feds for $3 billion for forcing incorporation and failing to stop “contraband industry

By Lynda Powless
Grand River Enterprises (GRE), Six Nations largest tobacco manufacture and four of its partners are suing the federal government for $3 billion claiming the crown forced them to incorporate, pay taxes and failed to stop the “contraband” tobacco industry from growing.
The decision in the appeal, was reached last week.
The suit was originally launched in 2008, amended in 2013 and has been winding its way through the courts. The suit claims $1.5 billion in damages and “equitable compensation in the same amount.”
Grand River Enterprises Six Nations Ltd., and partners Jerry Bradwick Montour, Kenneth Ryan Hill, Curtis Styres and Gregory Scott Smith launched the suit.
The GRE suit claims Ottawa is liable for “
misfeasance, negligence, breach of fiduciary duty and breach of Aboriginal rights.” the Ontario court of Appeal agreed with GRE’s rejecting the majority of the federal governments arguments.

Jerry Montour GRE CEO

The lawsuit claims the federal government forced the partners to incorporate GRE and to pay taxes that they, as individual respondents would have been exempt from paying as “Indians” under s87 of the Indian Act.
The suit also claims the crown failure to enforce is based on allegations the “Crown undertook to combat the problem of contraband and counterfeit tobacco products on the Six Nations of the Grand River Reserve (the “Reserve”), but failed to do so. They claim that while the Crown adopted initiatives to combat the problem of contraband tobacco, including the 1994 Anti-Smuggling Initiative (the “Initiative”), the Crown failed to follow through even after a promise was made to intensify enforcement against contraband to level the playing field between GRE and other on-Reserve tobacco manufacturers. They allege that the failure to implement or administer the Initiative, including the failure to properly enforce existing laws relating to the manufacture and sale of tobacco products, amounted to negligence, misfeasance in public office and breach of fiduciary duty, and caused the respondents to incur substantial losses.”
The suit alleges the crown forced them to incorporate in order to be granted an excise license to manufacture tobacco in the late 1990s.
GRE was founded in 1996 and the suit says they were harassed by RCMP who raided their business office and seized equipment and the Crown confiscated “money that the partnership has paid into the Reserve’s community fund.”


Curt Styres GRE partner


In 1996, charges were brought against the partnership and the partners for violating excise and customs legislation.
The suit says the charges were aimed at forcing the partnership to incorporate.
The charges were later dropped after one partner, the late Peter Montour, pleaded guilty to two Customs Act, R.S.C. 1985, c.1, violations and paid a fine.
The suit says faced with the government ultimatum, on April 29, 1996, GRE was incorporated taking on the tobacco manufacturing business of the partnership and applied for an excise license to manufacture tobacco products.
“In April 1997, one of the individual respondents and other band council members met with an official at the Department of National Revenue. At the meeting, the terms and conditions that would be imposed on GRE if it wished to obtain an excise licence were outlined.
“At the same meeting, there was a clear agreement that if GRE were to be given an excise licence on the conditions that had been outlined, the government would carry out intensified enforcement against contraband under the federal government’s Initiative, and take all measures to ensure that other on-Reserve manufacturers of tobacco products would abide by the same rules as the respondents. In the alternative, there was an implied undertaking given to the same effect.”
GRE was granted the licence on May 29, 1997.
The suit also claims the federal government failure to control contraband and counterfeit tobacco sales on Six Nations has led to “financial losses and unfair playing field.”

GRE expansion

GRE began complaining to the federal government in February 2003, about the increased availability of contraband on the Reserve.
The suit says while GRE was paying $50 to $60 million a year in taxes and duties, “it could see no effort on the part of any federal agency to combat the illicit trade in contraband products on the Reserve.”
The suit says “GRE has on a frequent and recurring basis brought to the attention of the

Ken Hill
GRE partner

Ministers responsible for implementing and administering the Initiative and their representatives their failure to combat the problem of contraband on the Reserve. Even so, the Ministers have done virtually nothing to address the issue of contraband on the Reserve.”
No trial date has been announced.




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