Trials smoke out tobacco industry

By Nancy Zuckerbrod The Associated Press

WASHINGTON – The tobacco industry is facing lawsuits across the country as it tries to hang on to about $1.2 billion that states say the cigarette makers owe them under a landmark 1998 legal settlement.

Attorneys general in California, Massachusetts, New Jersey and Ohio filed lawsuits Tuesday seeking to collect the money from the tobacco companies.

“We will fight to see that full payments are made,” Ohio Attorney General Jim Petro said in a statement. Ohio estimates it is owed about $38 million, Petro’s office said.

Officials in New York and Connecticut said they, and other states, would probably take similar steps. “We’re continuing to review our options, but certainly a lawsuit looks likely this week,” Connecticut Attorney General Richard Blumenthal said in an interview.

Negotiations between the states and tobacco companies over the money recently broke down, leading to the lawsuits.

“We had tried to work hard with the states to resolve this very difficult matter and are disappointed an agreement couldn’t be reached,” said David Howard, a spokesman for No. 2 cigarette maker R.J. Reynolds Tobacco Co.

R.J. Reynolds and No. 3 cigarette maker Lorillard Tobacco Co. 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.