State to get $3.6 million from new tobacco lawsuit deal
MADISON â€” Wisconsin will get $3.6 million from a new national settlement worth $160 million that resolves disputes the states had with tobacco companies related to their 1998 landmark agreement, Atty. Gen. Peg Lautenschlager said Wednesday.
As part of the settlement, major tobacco manufacturers agreed to take responsibility for cigarettes they manufacture for other companies.
Most of the money will come from Brown & Williamson, which had previously refused to make payments to the states for the cigarettes it manufactured for Star Tobacco Inc., a company that did not join the settlement.
The states argued that practice violated the terms of the master settlement agreement reached in 1998. Vermont filed a lawsuit on behalf of the states against Brown & Williamson seeking payments for the Star cigarettes.
â€œThe settlement is good for Wisconsin because it provides not only payment for cigarettes manufactured in the past, but also establishes clear ground rules for the future,â€ Lautenschlager said.
The settlement also ends complex disputes over whether the 1998 settlement was a â€œsignificant factorâ€ in causing the market share of the tobacco companies to decline since it took effect.
That issue had threatened to drag on into years of costly litigation, Lautenschlager said.
Mark Smith, a spokesman for Brown & Williamson, whose brands include Kool and Lucky Strike, said the settlement lowers the amount of money the company will pay through the 1998 settlement, because it has lost market share.
The net result will be a $33 million increase in the companyâ€™s profits for the second quarter of 2003, Smith said.
Since the 1998 settlement, Brown & Williamsonâ€™s share of the national tobacco market has declined from 14 percent to 10 percent, according to Smith.