CURRAN FILES MOTION TO ENFORCE MULTI-MILLION DOLLAR PAYMENT FROM TOBACCO COMPANIES

Maryland Attorney General J. Joseph Curran Jr., announced today that the State of Maryland has filed motions to enforce the Master Settlement Agreement (MSA) against R. J. Reynolds and Lorillard Tobacco Corporation, for failure to pay the full due amount to the State as part of the settlement agreement between the State and tobacco companies. RJR and Lorillard withheld more than $17 million in funds from Maryland, but the total amount of Maryland money in dispute is much higher, ranging from approximately $26 million to $145 million.

The MSA is a court-approved agreement between the major tobacco manufacturers and 46 states to settle claims for the enormous cost to the public of treating smoking-related illnesses. The tobacco companies agreed to stop certain advertising and marketing practices and to make annual payments to the States. The MSA required the companies to make a payment to the States on April 17, 2006, but R.J. Reynolds and Lorillard paid a portion of their payments into a disputed account, making it unavailable to the States. Other tobacco companies, including Philip Morris, also maintain that they are entitled to pay less. The companies claim that in 2003 the States did not diligently enforce state laws requiring companies that did not join the MSA to place similar amounts into escrow accounts.

Curran strongly refuted the tobacco companies claim. “Maryland has diligently upheld its part of the agreement. We will vigorously pursue the tobacco companies for failing to live up to their part of the bargain,” Curran said.

As the Supreme Court of the United States has observed, the MSA is a landmark public health agreement that addresses “one of the most troubling public health problems facing the Nation.” Maryland has used MSA money to fund the Tobacco Use Prevention and Cessation Program, the Cancer Prevention, Education, Screening, and Treatment Program, and other State programs that serve vital public health, education, and tobacco prevention purposes. The money is used, for example, for cancer research at Johns Hopkins Hospital and the University of Maryland Medical Center.