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News Summary

The Ninth U.S. Circuit Court of Appeal has rejected a lawsuit claiming that the 1998 nationwide tobacco settlement between the states and Big Tobacco led to a tobacco “cartel” that drove up cigarette prices, Reuters reported Sept. 26. Smoker Steve Sanders filed the suit against the California Attorney General, saying that the tobacco settlement and ensuing state legislation violated federal antitrust laws. The suit said that the agreement allowed cigarette makers to raise cigarette prices $12.20 per carton so they could cover the costs of the settlement without losing sales or market share. The appeals course ruled that the tobacco settlement did not implicitly or explicitly quash competition in the cigarette market. Current California AG Jerry Brown said the ruling “reaffirms the legal framework of the national tobacco settlement.” Added Philip Morris spokesperson Bill Phelps: “The decision affirms that the [settlement] and the related state statutes do not violate the antitrust laws and are not preempted by the Sherman antitrust statute, and that the state of California, as well as the tobacco manufacturers, are immune from lawsuits under the antitrust laws for entering into the [agreement].” Similar cases have been filed in other courts, and some have allowed the litigation to proceed to the discovery phase.