Tobacco Settlement Checks Short
Posted on: Thursday, 20 April 2006, 12:00 CDT
By Jim Stafford, The Daily Oklahoman
Apr. 20--Edmondson views next step for funds Attorney General Drew Edmondson is weighing his legal options after the state received tobacco settlement checks this week that were millions less than projected, a spokesman said.
Charlie Price, a spokesman for the attorney general's office, said the state received a check for $56.3 million Monday and another $3.5 million Wednesday.
That's less than the $65 million the state received in 2005, Price said.
The amount paid to Oklahoma and other states was reduced because cigarette makers R.J. Reynolds and Lorillard Tobacco Co. withheld more than $750 million from annual settlement payments.
At issue is a claim by the nation's largest tobacco companies that they owe less to the 46 states participating in the tobacco settlement fund because their market share has declined. The companies claim the $206 billion nationwide settlement agreement spells out their rights to withhold money if their share of the tobacco market declined.
"We're still trying to determine what our course of action should be," Price said.
Attorneys general from California, New Jersey, and Ohio filled lawsuits against the industry Tuesday seeking to reclaim the withheld settlement funds.
"We were, and remain, entitled to full payment," California Attorney General Bill Lockyer said in a statement.
Officials in New York and Connecticut said they, and other states, probably would take similar steps.
Industry leader Philip Morris USA said earlier this month it had made all of its $3.4 billion payment, but that it believes the sum should be reduced.
Edmondson helped develop the nationwide tobacco settlement in 1998.
The settlement compensates states for funds they spent under Medicaid for treating smoking-related illnesses, Edmondson said.
The 46 participating states and the District of Columbia receive $6.2 billion annually from the 45 companies participating in the settlement. Oklahoma receives between $65 million and $70 million a year.
In a posting on its Web site, R.J. Reynolds claimed it was entitled by the tobacco settlement agreement to withhold a share of the payment because of declining market share.
"We are disappointed that some of the states have decided to seek legal action when it is clearly spelled out in the (Master Settlement Agreement) that disputes over payments should be resolved through binding arbitration," said Charles Blixt, executive vice president and general counsel for R.J. Reynolds Tobacco Co.
Contributing: Associated Press
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Source: The Daily Oklahoman
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