RJR must pay $100M in Big Tobacco settlement

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A Florida appeals court ruled Wednesday that R.J. Reynolds Tobacco Co. must pay $102 million to settle a lawsuit between the state of Florida and four tobacco companies dating back to 1995.

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RJR argued that it should not be subject to any more payments related to four of its since-sold cigarette brands — Salem, Winston, Kool and Maverick — as part of a 1997 settlement that offered tobacco companies liability protections if they agreed to pay Florida hundreds of millions of dollars annually to cover smoking-related health care costs.

"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," the decision by the Florida District Court of Appeal reads.

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The 1997 ruling determined that RJR, Philip Morris and other tobacco companies had to make immediate payments of $750 million each to Flordia plus an additional $440 million a year.  Wednesday's decision notes that the 1997 agreement was "binding upon all Settling Defendants and their successors and assigns."

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In 2017, a circuit court ruled that RJR had to pay a $102 million settlement after the company sold its four cigarette brands involved in the 1995 suit in 2015. RJR argued in a brief that the settlement was "contrary to the express terms of the [1997 settlement]," according to The Florida News Service.

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The appeals court determined Wednesday that the 1997 agreement requiring RJR to make annual payments to Florida "with no condition of termination, in exchange for the release of liability for past and future medical costs" has not changed.

Cigarette packs are on display for sale in a shop April 1, 2009, in New York City. (Getty Images)

"Significantly, the [agremeent] could be 'amended only by a writing executed by all signatories hereto and any provision hereof may be waived only by an instrument in writing executed by the waiving party.' It is undisputed that there was no written agreement by the signatories to the [agreement] altering or waiving Reynolds’s payment obligations to Florida," the appeals court's decision states.

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RJR, therefore, is still required to pay $102 million under the 2017 judgment.

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