Challenge to '98 Tobacco Settlement Loses
WASHINGTON (Reuters) - The U.S. Supreme Court on Monday let stand a ruling that dismissed a constitutional challenge to the $206 billion 1998 tobacco settlement.
Without comment, the high court rejected an appeal by a small tobacco company, Star Scientific Inc. (NasdaqNM:STSI - News), that sought to reinstate the lawsuit the company filed in 2000 over the settlement and a Virginia state law that implemented it.
The 1998 settlement, which resolved suits brought by state attorneys general to recoup money spent on sick smokers, required the major tobacco companies to pay 46 states $206 billion over 25 years.
The Star lawsuit alleged that the settlement was an interstate compact that required the consent of Congress under the Constitution.
It challenged the constitutionality of the Virginia law that requires tobacco companies that did not join the settlement to pay part of their cigarette revenue into an escrow account to cover state claims that could arise against them in the future.
Star, based in Chester, Virginia, argued that it did not engage in the misconduct attributed to the major tobacco companies and was not sued by any of the states involved. It said it would be unfairly burdened by the deal's requirements.
A federal judge in Richmond, Virginia, ruled that Star lacked the legal standing to challenge the constitutionality of the settlement because it was not bound by the provisions. The judge also rejected the company's challenge to the Virginia law.
A U.S. appeals court in January upheld the decision.
Virginia Attorney General Jerry Kilgore urged the Supreme Court to reject Star's appeal, saying the petition was "utterly devoid" of reasons why the justices should hear the case.