MS Being Short Changed Millions Of Dollars In Tobacco Settlement

The state of Mississippi is being short changed millions of dollars in the 1998 Tobacco Settlement. That's according to a motion heard in Jackson County Chancery Court today.

In arguing for the state Biloxi Attorney Matthew Mestayer said Brown and Williams, one of the four major cigarette companies in the tobacco settlement, excluded 7.8 billion cheap cigarettes made by Brown and Williams for another company.

Mestayer said those cigarettes were not included in Brown and Williams' production numbers to come up with the tobacco settlement.

Mississippi receives 90-100 million each year from the settlement.The motion seeks to add payment for those cigarettes online into the 1998 agreement.

Mestayer said, to date, Brown and Williams has short changed Mississippi $8.1 million.

Tobacco Payment Suit Goes To Trial

A county judge heard Monday a claim by Mississippi Attorney General Jim Hood that the State has received "substantially less" than it should have under a settlement agreement with tobacco company R.J. Reynolds.

According to the Mississippi Press, Jackson County Chancery Judge Jaye Bradley presided over the non-jury trial, which is expected to last two days.

Hood filed the lawsuit in February 2010. He alleges that R.J. Reynolds Tobacco Co. "overstated" its 1997 base-year profit and has failed to report shipments of "free," "continuity," and lost or stolen cigarettes.

The tobacco company was part of a master settlement agreement in 1997 that included 46 states and was led by then-Mississippi Attorney General Mike Moore.

Mississippi, which was represented by now-jailed attorney Richard "Dickie" Scruggs, had a separate agreement from the 46-state settlement.

"When it shipped these cigarettes, R.J. Reynolds necessarily anticipated that they would be consumed by smokers in the United States and all or virtually all of them were in fact consumed in the United States, thus contributing to Medicaid and other costs that the Mississippi Settlement payment amounts were intended to offset," Hood wrote in the lawsuit.

"Under any plausible meaning of the term, these cheap cigarette online were 'shipped for domestic consumption,' and they should have been included in the Actual Volume figures reported by R.J. Reynolds."

The attorney general says R.J. Reynolds should be required to report the actual number of cheap cigarettes it shipped for domestic consumption in each year beginning in 1997 and to include in such figure the promotional, free, "continuity incentive," and lost or stolen discount cigarettes it failed to report.

Then the correct amount the State is entitled to receive under the settlement can be calculated, Hood says.