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R.J. Reynolds liable for USD 100 mln in disputed big tobacco settlement

30 Jul 2020. A state appeals court said R.J. Reynolds Tobacco Co. is responsible for paying more than USD 100 million in a dispute rooted in a landmark legal settlement between Florida and cigarette makers more than 20 years ago, Miami Herald reported.

The unanimous decision of a panel of the 4th District Court of Appeal followed R.J. Reynolds' arguments that it should not make payments to the State related to four cigarette brands (Salem, Winston, Kool and Maverick) which it had sold to another company. But the appeals court upheld a decision by a Palm Beach County circuit judge who said R.J. Reynolds “remained on the hook for the payments under a 1997 settlement in which cigarette makers agreed to pay hundreds of millions of dollars a year to the state because of smoking-related health costs and, in exchange, received liability protections.”

“We find, simply put, that a contract is a contract, and that Reynolds continues to be liable under the contract it signed with the state of Florida,” Miami Herald cites the 11-page decision.

In 1995, Florida filed a lawsuit against R.J. Reynolds and four other tobacco companies, pointing to the state’s health-care costs stemming from cigarette smoking. The settlement eventually resulted in the defendants making an initial payment of USD 750 million and agreeing to pay USD 440 million annually, the report said. But R.J. Reynolds' parent company sold the Salem, Winston, Kool and Maverick brands to ITG Brands, LLC in 2015, which was not part of the settlement with Florida. As a result of the sale, R.J. Reynolds has claimed that it is no longer responsible for payments related to the four brands, the report said.