November 16, 2008

Upon the 10th anniversary of the tobacco master settlement agreement (see below here and here), we find the legal disputes carrying on. Indeed, it appears the settlement did more sparking than settling. Perhaps that's the inevitable result of addressing important policy questions through a joint lawsuit by state attorneys general instead of through a state-by-state basis by legislative bodies, which can better weigh public sentiment and balance political considerations. So, more litigation.

A news release from General Tobacco, October 28.

North Carolina based manufacturer and distributor General Tobacco (GT) announced today it is suing 52 attorneys general of the United States and its territories and 19 tobacco companies. GT is asking for treble damages in excess of $1 billion from competitors for allegedly conspiring with the states to set up the Master Settlement Agreement (MSA) so that later market entrants, such as GT, have to pay the states substantially more than certain competitors pay. GT believes the effect of the MSA is to drastically limit future competitors from fair market competition.

GT has paid approximately $470 million to the MSA and an additional $36 million in escrow.

The complaint, filed in U.S. District Court in Louisville, Kentucky, charges the 52 states and territories' attorneys general with violating the Sherman Anti-Trust Act, its constitutional rights under the Equal Protection and Due Process Clauses of the Fourteenth Amendment, the Compact Clause and the Commerce Clause of the U.S. Constitution as well as violation of the Civil Rights Act, Title 42 USC Section1983.

More from the Chamber-sponsored Legal Newsline , the Louisville Courier-Journal, and Winston-Salem Journal.