STATES REACH $160 MILLION SETTLEMENT
WITH TOBACCO COMPANIES

Attorney General J. Joseph Curran, Jr., announced today that Maryland will receive more than $1.88 million from tobacco companies in a settlement of pending disputes over payments. The bulk of the money will come from Brown & Williamson, the nation's third largest tobacco manufacturer. The 1998 Master Settlement Agreement required all of the major tobacco companies to pay $206 billion to the states over the first 25 years of the agreement.

The payment to the state comes as part of a new, global settlement reached today for $160 million between the 52 states and jurisdictions and most of the nation's tobacco manufacturers.

"Today's agreement shows that we will not tolerate anything less than full payment from each and every tobacco maker," Attorney General Curran said. "We will not hesitate to take action again if payments are not made in accordance with the terms of the Master Settlement Agreement."

Today’s agreement resolves Brown & Williamson's failure to make payments to the states for the cigarettes it manufactured for Star Tobacco, Inc., a company that refused to join the settlement. On behalf of the other states, the Attorney General of Vermont sued Brown & Williamson over the payments last December.

As part of the settlement, all major tobacco manufacturers agreed they will take responsibility for cigarettes they manufacture for other companies. The settlement also avoids complex disputes over whether the 1998 settlement was a "significant factor" in causing the market share of the companies that signed it to decline during the first four years of the agreement. That issue had threatened to drag on into years of costly litigation, Attorney General Curran said. Instead, the settlement avoids claims from the tobacco companies that might have reached as much as $1 billion.

Vermont Attorney General William H. Sorrell, chair of the Tobacco Committee of the National Association of Attorneys General who headed the team that negotiated the agreement for the states, declared that the agreement was "a major step forward for the states in ensuring that they will continue to receive the full payments promised under the MSA."

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