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For Immediate Release:  
For Further Information Contact:
April 18, 2006

Office of The Attorney General
- Zulima V. Farber, Attorney General
Division of Law
- Nancy Kaplen, Acting Director

 

Peter Aseltine
609-292-4791

 

Attorney General Farber Files Suit to Ensure Full Payment
from Tobacco Companies

TRENTON – Attorney General Zulima V. Farber filed suit today for the State of New Jersey to ensure full payment by all tobacco companies that are part of the tobacco Master Settlement Agreement.

Tobacco companies made their annual payment to the states on Monday, April 17, as required by the Master Settlement Agreement (MSA) reached in 1998 between the states and tobacco companies, but R.J. Reynolds Tobacco Co., Lorillard Tobacco Co. and several smaller companies paid a portion of their payments into a disputed-payment account. Other companies, including Phillip Morris USA Inc. made full payment, but also assert they are entitled to adjustments to pay less.

Under the MSA, the participating tobacco manufacturers are not entitled to any reduction in their payments unless they can show that the states have failed to enforce state laws that require other cigarette companies that are not part of the MSA to make certain payments into escrow accounts.

“We have filed suit to ensure that we receive full payment under the Master Settlement Agreement,” said Attorney General Zulima V. Farber. “We are seeking a court order affirming the fact that we have diligently enforced our statute requiring escrow payments from tobacco companies that are not parties to the MSA. Based on that enforcement, we are entitled to our full payment.”

New Jersey is entitled to a payment of approximately $242 million this year. New Jersey’s share of the amounts withheld is approximately $30 million.

The states received a total of over $5.7 billion from the companies for the April 17 payment, bringing the total paid under the MSA to over $47 billion since 1998. New Jersey’s payments since 1998 have totaled over $1.8 billion. Reynolds and Lorillard paid about $755 million of their overall payment into disputed-payment accounts.

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