NYT/Reuters: California Sues Big Tobacco to Pay in Full

[DeepModem Mom]

California Sues Big Tobacco to Pay in Full
By REUTERS
Published: April 18, 2006

NEW YORK (Reuters) - California on Tuesday became one of the first states to sue cigarette-makers to force them to pay their share of the total of $1.2 billion the companies say they do not owe because they lost business to discounters.

In 1998, tobacco companies settled lawsuits brought by states by agreeing to pay $206 billion to provide medical care for ailing smokers. The settlement lets cigarette-makers cut their payments if they lose market share to rivals, often discounters, that did not sign the landmark accord.

Big Tobacco says discounters in 2003 won enough of their business to trigger the reduced payments. But the states say they still are owed the full sums because they met another requirement: they ``diligently'' collected payments from non-signing companies.

California Attorney General Bill Lockyer in a statement said he had filed papers in San Diego County Court to prevent cigarette-makers from "taking back" at least $154 million that they owe the state....

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He added the "Big 3" tobacco companies -- R.J. Reynolds Tobacco Co., Lorillard, and Philip Morris -- and 27 smaller firms are disputing a total of $1.2 billion of payments they owe the 46 states in the settlement....

http://www.nytimes.com/reuters/news/news-economy-states-tobacco.html