Tennessee AG sues Colombian cigarette company over unpaid fees..

January 7, 2009 - Tennessee Attorney General (AG) Bob Cooper is suing Pronalci, a Colombian cigarette manufacturer over unpaid fees on smokes sold in his state.

Cooper said in a statement that Procesadora Nacional Cigarillera S.A. / Pronalci S.A., or Pronalci, is required by law to make payments into an escrow account for all cigarettes sold in Tennessee.

The Master Settlement Agreement allowed manufacturers who were not parties to the lawsuit to join the master agreement within 90 days, making them exempt from having to make future payments with certain restrictions. Unlike the Participating Manufacturers to the Master Settlement Agreement other cigarette makers have not been released from State claims. But the master agreement allows states - including Tennessee - to enact statutes forcing such non-participating manufacturers to place money into escrow each year to settle future judgments based on the number of cigarettes sold in that state.

It is the Attorney General’s responsibility to enforce the Tobacco Master Settlement Agreement and the subsequent statutes governing tobacco sales. AG Cooper is seeking back payment of $300,000 plus attorney fees and penalties for cigarettes sold in Tennessee last year. The lawsuit was filed in the 20th Judicial District Circuit Court of Davidson County in Nashville.

Money in the tobacco escrow account is to reimburse the state for health care to treat smokers in the Volunteer State.

Bucaramanga, Colombia-based Pronalci is not a member of the multistate Tobacco Master Settlement Agreement and is therefore classified under the Tennessee Tobacco laws as a Non-Participating Manufacturer. As such, the company must pay into the special escrow account.

The settlement agreement was reached originally by the nation's four largest tobacco companies: Philip Morris USA, R. J. Reynolds Tobacco Company, Brown & Williamson Tobacco Corp., and Lorillard Tobacco Company. More than 40 other tobacco companies later joined the agreement.

Reference: Tennessee AG sues Colombian cigarette company over unpaid fees by CHRIS RIZO (chrisrizo@legalnewsline.com), LegalNewsline.com, 1/5/2010; State sues Colombian cigarette maker, The City Paper, 1/5/2010.

Related news brief:
Kansas - cigarette makers fined, failed to pay into escrow accounts..;
Arkansas - escrow accounts Master Settlement Agreement, non-participating manufacturers..