Kan. AG settles with tobacco company for $1M

Bryan Cohen Jul. 12, 2012, 4:35pm


TOPEKA, Kan. (Legal Newsline) - Kansas Attorney General Derek Schmidt announced a $1 million settlement on Thursday with a tobacco company, resolving multiple lawsuits.

Under the terms of the agreement, the New York-based Grand River Enterprises agreed to pay Kansas $672,000 in escrow funds as a back payment, $336,000 in penalties, and a reimbursement of attorneys fees and expenses.

The money secured in escrow will be held by statute for 25 years and will be intended for any consumer in Kansas who makes a health-related claim against a non-participating manufacturer, in this case GRE, to the tobacco Master Settlement Agreement. The $336,000 in penalties will go toward the state's General Fund.

"This is a positive outcome in this long-running case," Schmidt said. "Kansas is meeting its obligations to diligently enforce the tobacco Master Settlement Agreement, and I am pleased to return these funds to Kansas taxpayers."

The settlement resolves two related lawsuits. GRE filed a lawsuit in federal court in the Southern District of New York alleging that multiple states signing the MSA committed antitrust and constitutional violations. In the second matter, Kansas sued GRE in 2008 alleging that GRE was required to pay escrow payments as a non-participating manufacturer to the MSA.

The settlement was approved by the Shawnee County District Court. The cases are connected to the enforcement of the 1998 landmark multi-state tobacco settlement case.

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