The three-judge panel of the 2nd U.S. Circuit Court of Appeals concluded the law banning the direct shipment of cigarettes to New York consumers and challenged by Brown & Williamson Tobacco did not discriminate against interstate commerce.
"Cigarettes will continue to flow into New York State in the same manner they always have," the court said.
David Remes, a Washington lawyer who argued the case for Brown & Williamson, said the company hadn't decided whether to appeal.
"We believe the district court was right, and the New York State law violates the Constitution," he said. "We also believe that the Second Circuit's decision has troubling implications for online sales of other products, not just tobacco."
Brad Maione, a spokesman for the state attorney general's office, called the ruling a "major victory" in the state's effort to keep children from smoking.
The law banning the sales was passed in 2000, but its enforcement was blocked by the court after the law was supposed to take effect in November of that year.
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