General Tobacco Sues 52 U.S Attorneys General and 19 Tobacco Companies..

October 30, 2008 - Cigarette manufacturer and distributor General Tobacco (GT) filed a lawsuit in the U.S. District Court in Louisville, Ky., against 52 U.S. attorneys general and 19 tobacco companies—including Philip Morris USA, R.J. Reynolds Tobacco Co., Reynolds American Inc. and Lorillard. GT alleges the defendants conspired to set up the Master Settlement Agreement (MSA), which was created in 1998, so later market entrants including GT, which began operations in 2000, would have to pay "substantially more" than other tobacco companies, in an effort to "drastically limit future competitors from fair market competition," the company stated.

"The structure for the MSA created an impossible business environment for future competitors, especially small players such as GT," J. Ronald Denman, executive vice president of GT, said in a statement. "All we are asking for is a level playing field for everyone."

The action follows an Oct. 27, 2008, notice from 42 attorneys general stating they had ended negotiations to reduce GT’s MSA payment obligations, which included a notice of intent to sue. The suit filed by GT asks for a preliminary injunction preventing the MSA from enforcing penalties on GT including de-listing of or failing to certify its brands, or attempting to take the funds in escrow, the suit states.

Reference: General Tobacco Sues 52 Attorneys General, Convenience Store News, 10/30/2008.

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