A federal judge in Manhattan has awarded a combined $247 million in penalties and damages in favor of New York City and New York State against the United Parcel Service in a dispute over shipments of untaxed cigarettes into the state.

UPS said it will “vigorously appeal” the decision.

In a decision handed down on May 25, Southern District Judge Katherine Forrest said “significant penalties” are needed for UPS because of the “egregious and prolonged” nature of UPS's conduct and to deter future conduct.