MAYODAN, N.C. – General Tobacco (GT) announced that it has appealed the interpretation of the Master Settlement Agreement (MSA) by the Superior Court of California. The company also answered a claim by Arkansas Attorney General Dustin McDaniel seeking payments from General Tobacco for products it sold before joining the MSA.
The continuing legal issue in both matters involves the fairness of the MSA which dictates that later market entrants, such as GT, have to pay the states substantially more than certain competitors pay.
J. Ronald Denman, GT executive vice president, said none of the largest cigarette companies, which were sued by the states for decades of misleading the public about the harms of tobacco products, paid anything for pre-MSA sales.
“In addition, to induce some of the oldest tobacco companies to join the MSA, the states agreed to yearly sales exemptions giving those companies hundreds of millions of dollars in free sales. GT was offered no such exemption and must pay the MSA for every sale made each year,” he said in a press release.
Arkansas alleges GT must pay a debt for cigarettes sold prior to its entry into the MSA. General Tobacco seeks to defend the Arkansas lawsuit on grounds of violation of its Equal Protection, and a variety of other legal claims.
Denman said the company will continue legal action. “Arkansas’ suit is an attempt to collect on an obligation that it believes is owed by General Tobacco. We intend to show that the U.S. Constitution and trade laws preclude such a lack of fairness against select companies, ” he said.
“General Tobacco remains confident that it will be successful in its appeal of the lower court ruling in California so that it can show Big Tobacco got away with billions before the MSA, and now seeks to squeeze its competitors out of business under the auspices of the MSA so that it can make many more billions.”