OMAHA, Neb. (KCAU) — A Nebraska federal judge has ruled that the state cannot take tobacco sale revenue from the Winnebago Tribe.

The Tribe said in a release that the judge’s ruling is a victor for tribal sovereignty.

“The state’s regulatory overreach has damaged the ability of the Winnebago Tribe and tribes across Indian Country to provide for themselves,” said Nicole Ducheneaux, an attorney representing the companies. “We are pleased the court will not allow state regulation of the Tribe’s lawful business on its own reservation.”

In January 2018, ATF agents raided the offices of Ho-Chunk Inc. in Winnebago, seizing records involving cigarette and other tobacco sales. At the time, Ho-chunk called it “the latest round in a 20-year state-tribal tobacco dispute.”

Ho-Chunk Inc. and subsidiaries HCI Distribution and Rock River Manufacturing then filed a lawsuit against Nebraska public officials in April 2018., stating the state was trying to impose a settlement that was made with major cigarette companies onto the tribe. The state tried to dismiss the case, arguing that because Ho-Chunk Inc isn’t a tribe and sells tobacco products to people outside of the reservation, they have to follow U.S. Regulations regarding escrow payments. A judge ruled in favor of proceeding with the lawsuit in December 2018.

It was ruled last week that the state cannot collect tobacco sale revenue from sales on the Winnebago Reservation because of the 1998 Tobacco Master Settlement Agreement. The agreement allocated a percent of tobacco sales to state governments in order to offset public health costs that were related to smoking.

“Tribes were never part of the Master Settlement Agreement between states and Big Tobacco,” Ducheneaux said. “This ruling protects the Winnebago Tribe’s economic and public health interests in regulating its own tobacco sales.”

Ho-Chunk, Inc. CEO said that this lawsuit coming to a close is a good step forward for state and tribal relations.

“The Tribe and the state have been making great strides lately in building a relationship,” said Lance Morgan, CEO of Ho-Chunk, Inc. “Ending this controversy is a big step in respecting each other’s sovereignty.”

Ho-Chunk Inc. said that tobacco is a crucial trade to Winnebago and many other tribal economies and the state’s attempts to regulate on-reservation business have caused significant damage to any advancement.