Big Tobacco wins payment dispute (weasels out of fines)

[BR_Parkway]

1 hour, 15 minutes ago

NEW YORK (Reuters) - An arbitrator ruled that cigarette makers lost market share as a result of a settlement reached with U.S. states, boosting the chances they can reduce the $6.5 billion payment they owe next month, according to a copy of the decision obtained by Reuters on Tuesday.

U.S. states who signed the accord have said they would fight in court if they lost. New York state this month has already won one such court battle, according to The Brattle Group, the arbitrator who wrote the decision.

But the states now are trying to negotiate a settlement, according to the National Association of Attorneys General. The states argue they met another requirement under the pact because they collected funds from tobacco companies that did not sign it.

Big Tobacco in 1998 agreed to pay states $206 billion to help pay for the costs of treating ailing smokers. Their next payment is due in mid-April, and several cigarette makers want to withhold about $1.2 billion because sales have dropped, partly because prices rose, discounters rushed in and the number of smokers, on a per capita basis, has fallen to levels last seen in the late 1930s.

http://news.yahoo.com/s/nm/20060328/bs_nm/tobacco_states_dc_6