North Carolina based manufacturer and distributor General Tobacco announced on Tuesday it is suing competitors and 52 U.S. attorneys general over restraint of trade and violation of the U.S. Constitution.

General Tobacco (GT) is suing 52 attorneys general of the United States and its territories and 19 tobacco companies, including Philip Morris and Reynolds American.
GT is asking for treble damages in excess of USD 1 billion (EUR 773.1 million) from competitors, for allegedly conspiring with the states to set up the Master Settlement Agreement (MSA) so that later market entrants, such as GT, have to pay the states substantially more than certain competitors pay. GT believes the effect of the MSA is to drastically limit future competitors from fair market competition.
The complaint, filed in U.S. District Court in Louisville, Kentucky, charges the 52 states and territories' attorneys general with violating the Sherman Anti-Trust Act, its constitutional rights under the Equal Protection and Due Process Clauses of the Fourteenth Amendment, the Compact Clause and the Commerce Clause of the U.S. Constitution as well as violation of the Civil Rights Act, Title 42 USC Section1983.
The complaint asks for treble damages under the Sherman Act as well as for an injunction, attorney fees and other relief. It comes a day after Dustin McDaniel, the attorney general of Arkansas, sent General Tobacco a letter notifying the company that it had failed to make full payment on its settlement agreement obligations.
The MSA was created in 1998 by the 46 states, the District of Columbia and five U.S. island territories, along with the biggest tobacco companies which then controlled more than 97 per cent of the market. The deal was structured so that the companies in the market in 1998 would receive future preferential payment terms.
GT, the sixth largest tobacco company in the US with approximately USD 300 million in annual sales, began operating in 2000. The company said it has contributed USD 36 million to the agreement this year and more than USD 502 million since joining the agreement in 2004. (pi)