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Washington, D.C., November 14, 2006—A lawsuit challenging the $240 billion, 46-state tobacco settlement can have its day in court, a federal district judge said in a ruling filed Monday. The lawsuit, brought by the Competitive Enterprise Institute on behalf of five plaintiffs in August 2005, challenges the constitutionality of the settlement.
“The judge’s denial of Louisiana’s motion to dismiss is a welcome ruling,” said Sam Kazman, CEI General Counsel. “Given the number of unsuccessful challenges to the tobacco Master Settlement Agreement across the nation, it might be easy to conclude that the legality of this deal is settled. It isn’t, and we look forward to addressing these issues in court.”
The MSA was unveiled eight years ago, in November 1998, as an agreement between 46 state attorneys general and the four major tobacco companies. It required the companies to pay huge sums to the states (over $200 billion in 25 years) and to abstain from certain advertising and other practices. In return, the states would protect the companies from competition.
“The MSA was an incredibly lucrative backroom deal, paid for by smokers, that has become a blue-print for state attorney general activism” said Kazman. “It should be struck down.”
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