Attorney General Gansler Announces Settlement with
Santa Fe Natural Tobacco
Settlement Ends Illegal Distribution of Natural American Spirits Cigarettes Branded Merchandise

BALTIMORE, MD (January 7, 2009) – Maryland Attorney General Douglas F. Gansler announced today that Maryland, as part of a coalition of 42 states, has entered into a settlement with Santa Fe Natural Tobacco Company after the company violated the tobacco Master Settlement Agreement (MSA) by distributing decorative tin signs to consumers that featured its “Natural American Spirit” cigarettes brand name.

Distribution of merchandise bearing cigarette brand names violates the MSA, the historic 1998 settlement between state Attorneys General and cigarette manufacturers. According to the settlement announced today, Santa Fe Natural Tobacco Company agrees to not distribute the following types of brand name merchandise in the future: decorative tin signs; toys; games; fashion accessories; CDs; DVDs; video games; clothing; athletic equipment; outdoor gear; luggage; stationery items; house wares; and paintings and plaques intended for the home. In addition, Santa Fe agrees to pay a penalty of $250 for every future violation of the agreement.

The MSA required participating tobacco companies to make substantial annual payments in perpetuity to 52 states and territories, and imposed significant marketing and advertising restrictions on the companies. Since the MSA was signed, American consumption of cigarettes has declined by over 100 billion cigarettes, based on data from the American Lung Association. According to the Centers for Disease Control, however, tobacco-related disease continues to be the leading preventable cause of death in the United States and results in more than $190 billion in medical expenses each year.

In addition to Maryland, the states that were a part of the settlement include: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Michigan, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Washington, West Virginia, Wyoming and the District of Columbia.