Tobacco Company Owes ‘Millions’ to State of Minnesota, AG Says

Tobacco Company Owes ‘Millions’ to State of Minnesota, AG Says

The Ramsey County District Court found that R.J. Reynolds Co. failed to comply with financial terms of a 1998 settlement between the state and the tobacco industry for smoke-related health care costs.

The Ramsey County District Court on Tuesday ruled that North Carolina-based R.J. Reynolds Tobacco Co. failed to fulfill the payment terms of a 1998 tobacco settlement with the state of Minnesota.

Minnesota’s lawsuit two decades ago was the first state lawsuit against tobacco companies to go to court, The New York Times reported at the time. The suit called for the tobacco industry to pay the state $6.5 billion in damages from smoke-related health care.

The new case against R.J. Reynolds was brought as an effort to refresh and complete enforcement of the settlement.

“The historic tobacco settlement two decades ago set a high standard for holding corporations accountable for harm they’ve done to Minnesota. I’m proud to be able to enforce it,” said Minnesota’s Attorney General Keith Ellison in a release. “My office will be aggressive in making sure the people of Minnesota get every dollar they’re owed from the tobacco companies.”

The underpayment R.J. Reynolds was found guilty of stems from a merger the company underwent three years ago. Reynolds merged with fellow North Carolina-based tobacco company Lorillard in 2015.

Lorillard was incorporated into the Minnesota settlement, but in the wake of the merger, Reynolds transferred its KOOL, Maverick, Salem, and Winston cigarette brands to the umbrella manufacturer of ITG Brands. ITG Brands was not part of the 1998 settlement, and as such, the attorney general’s office says Reynolds stopped including the sales of the four brands in its settlement payment amount totals.

The state filed the suit against Reynolds in March 2018, seeking to hold both Reynolds and ITG liable for continued payments on the four cigarette brands.

The decision made Tuesday was a summary judgment in favor of the state against Reynolds specifically. The case against ITG Brands is ongoing—with the court having rejected ITG’s claim that it should not be obligated to make the payments.

The amount R.J. Reynolds owes Minnesota has yet to be determined, according to the attorney general’s office. It will be determined within the coming months.