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Bondi Goes To Court For Tobacco Payments

Jan 19, 2017
Originally published on January 18, 2017 11:54 pm

Florida Attorney General Pam Bondi on Wednesday asked a Palm Beach County circuit court to resolve a dispute about whether two tobacco companies have improperly avoided paying tens of millions of dollars to the state under a landmark 1997 settlement with the tobacco industry.

Bondi's office filed a motion to enforce the settlement in a dispute that stems from R.J. Reynolds Tobacco Co. selling the Winston, Kool and Salem cigarette brands to the tobacco company ITG Brands. The dispute also includes Maverick cigarettes, which were transferred to ITG amid a merger between R.J. Reynolds and Lorillard Tobacco Co.

The 1997 settlement required certain major tobacco companies, including R.J. Reynolds, to make annual payments to the state in exchange for legal protections.

In the motion filed Wednesday, Bondi's office contends that payments based on Winston, Salem, Kool and Maverick cigarettes improperly stopped after the brands became part of ITG. The motion said the state is owed more than $45 million.

A spokesman for Reynolds American, the parent company of R.J. Reynolds, said the company will fight the state's claims, but he couldn't comment directly on the active litigation.

A representative for ITG didn't immediately respond to a request for comment.

The settlement resolved Florida's 1995 lawsuit over the unlawful marketing and sales of cigarettes by R.J. Reynolds and other major tobacco companies.

The settlement required the tobacco companies to annually pay several hundred million dollars to Florida — the state received $378 million in 2014 — in exchange for a release from liability for past and future damages tied to the sale and marketing of cigarettes.

After the transfers of the four cigarette brands, Bondi's office contends Reynolds has refused to include money from sales of the four brands in its annual payment to Florida, while ITG has similarly refused despite having agreed to assume obligations regarding the cigarettes.

Without any enforcement of the settlement, the motion argues, the state could be out $30 million a year in future payments. Money from the settlement is supposed to cover health care expenses tied to cigarettes.

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