NEW YORK — A federal judge ruled against the United Parcel Service (UPS) last week, saying the delivery firm shipped contraband cigarettes from and between Native American reservations in violation of a 2005 agreement it made with the state.

The state and city of New York had sued for violations of a state and two federal cigarette-trafficking laws, according to court documents.

Judge Katherine Forrest of the U.S. District Court in the Southern District of New York held that Atlanta-based UPS violated an Assurance of Discontinuance agreement it signed with New York saying it would cease transporting untaxed cigarettes. State law prohibits the nontaxed sale of cigarettes from tribal members to nonmembers.

More specifically, the judge found that UPS “knowingly transported cigarettes from and between Indian reservations for all but one of the [six] shippers [in the case].”

Lawyers for UPS argued that it complied with the agreement “without interruption,” followed its own internal policies without breaking the law and did not knowingly deliver cigarettes to individuals and consumers.

UPS lawyers also argued against several of the plaintiff’s declarations regarding the amount and methods of determining damages and penalties. The judge ruled that in violating the agreement, UPS was open to liability but that the state and city of New York did leave themselves open to “severe attack” and “exposure” on the damage and penalty amounts. That said, the judge gave the parties two weeks to provide evidence before she issues a final order on damages and penalties.

In a statement to the New York Law Journal, Eric Schneiderman, attorney general for the state of New York, called the judge’s decision “a win for New York and a win for public health.”

“We are pleased the court has found that UPS knowingly shipped millions of untaxed cigarettes through its facilities each year,” Zachary Carter, corporation counsel for the city of New York, told the publication. “We will work with the attorney general to calculate the precise amount of damages and penalties for which UPS is liable.”

“Three cheers to the state Attorney General [Schneiderman] and the city Corporation Counsel for prosecuting this case, and to Judge Forrest for seeing through UPS’ lame excuses for knowingly facilitating New York’s worst-in-the-nation cigarette tax avoidance epidemic,” said Jim Calvin, president of the New York Association of Convenience Stores, Albany, N.Y., in a statement to CSP Daily News.