Washington files tobacco suit
OLYMPIA – Washington state sued more than a dozen tobacco companies Wednesday, joining several other states that are seeking $1.2 billion they say they are owed by cigarette makers under a landmark 1998 legal settlement.
Attorney General Rob McKenna filed suit in King County Superior Court in Seattle, seeking to collect the money from R.J. Reynolds and No. 3 cigarette maker Lorillard Tobacco Co., who both withheld money from the annual payment of tobacco settlement funds that were due to the state on Monday. The suit also names Philip Morris USA and several other companies that are seeking to have the payments reduced.
Attorneys general in California, Massachusetts, New Jersey and Ohio filed lawsuits Tuesday, and Maine and Kentucky filed lawsuits Wednesday. Officials in New York and Connecticut have said they, and other states, would probably take similar steps.
In all, 45 tobacco companies are involved in the settlement that Washington state Gov. Chris Gregoire, then the state’s attorney general, helped negotiate on behalf of 46 states. Those states settled their suit against the industry for $206 billion, payable over 25 years. Four states settled separately for a total of $40 billion. The states recovered costs for treating sick smokers.
By Monday, more than $5.6 billion had been paid to the states. McKenna said his state was expecting $130 million this week, but the payment was $15.5 million short.
R.J. Reynolds and Lorillard Tobacco said Monday they had put more than $750 million aside rather than hand it over to the states. R.J. Reynolds paid the states about $1.4 billion but withheld $647 million, putting it in an escrow account until the dispute is resolved. Lorillard paid the states a little more than $550 million but put another $108 million aside.
Industry leader Philip Morris USA made all of its $3.4 billion payment but is seeking to have that sum reduced.
Other companies also made full payment but claim they are entitled to adjustments to pay less.
The companies are citing a provision in the deal that allows the cigarette makers to pay less if they have lost market share to smaller companies that weren’t part of the settlement. The companies argue that they’ve lost sales to smaller companies as a result of the settlement.