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For Immediate Release
May 12, 2005
Media Contact:
Kevin Enright 410-576-6357


Attorney General J. Joseph Curran, Jr. announced today that the Circuit Court of Baltimore City issued orders in April and May requiring tobacco manufacturers to pay out more than 3 million dollars for failing to comply with Maryland's tobacco law. On May 4, Circuit Court Chief Judge Joseph H.H. Kaplan issued a $2,706,255.62 judgment for the State against GTC Industries, Ltd., an Indian tobacco company, and on April 15, Circuit Court Judge Edward R. K. Hargadon entered a judgment for the State in the amount of $520,657.85 against Virginia-based CigTec Tobacco, LLC.

" These judgments help hold tobacco companies responsible for the health costs caused by the sale of their cigarettes in Maryland," said Attorney General Curran. Of the total judgments, $676,563.90 from the GTC judgment and $52,314.46 from the CigTec judgment must be paid into escrow accounts where the money will be held for 25 years to pay any judgments the State wins against the tobacco companies for the health costs of smoking.

The rest of moneys the judges ordered the tobacco companies to pay -- $2,029,691.71 in the GTC case and $468,343.39 in the CigTec case -- are civil penalties to be paid to the general state treasury.

Attorney General Curran brought lawsuits against the two manufacturers in 2004 for violations of Maryland's Escrow Act. The Escrow Act was enacted by the General Assembly in 1999 in the wake of the State's settlement with the major tobacco companies, known as the Master Settlement Agreement (MSA). The Escrow Act requires tobacco manufacturers that are not participants in the MSA to make payments into special escrow accounts for each cigarette they sell in the state. The statute is intended to level the playing field between participants and nonparticipants in the MSA, and to provide a source of funds to pay for settlements or judgments of tobacco-related health claims brought by the State. GTC and CigTec had failed to make their escrow payments, and Attorney General Curran filed suit to enforce the Escrow Act.




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