NEW YORK - A federal judge says New York City's lawsuit against cigarette stores on a tiny Indian reservation on eastern Long Island can proceed.

New York is suing eight smoke shops on the Poospatuck Indian Reservation, claiming they sell huge quantities of untaxed cigarettes to smugglers.

The city wants $195 million in back taxes.

U.S. District Judge Carol Amon rejected arguments Monday that the smoke shops are sovereign entities exempt from state and city laws.

She also said the reservation does not have federal recognition as Indian land.

Harry Wallace, the owner of a smoke shop and the chief of the Unkechaug Nation, called the judge's decision preliminary. He predicts the businesses will ultimately prevail.

The reservation is about 75 miles east of Manhattan.