| 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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