Star Appeals Settlement

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Star Appeals Settlement

11/06/2001
RICHMOND, Va.

A small Virginia tobacco company says it should not be forced to join a $206 billion multistate settlement with cigarette makers because it produces a safer cigarette.

An attorney for Star Scientific told a federal appeals court that the terms of the 1998 settlement are unconstitutional. "It is not a legitimate state purpose to force us to join a lawsuit in which we have never been sued," Charles Fried, told the Associated Press.

A U.S. District Judge ruled in March that the Virginia company could not challenge the settlement because it chose not to join the pact between the major tobacco manufacturers and 46 states. Under the settlement, nonparticipating tobacco companies are required to place money in escrow for 25 years to cover potential liability in future lawsuits.

"Big tobacco is paying for 50 years of liability," Fried said. "We've only been selling for five years and we deny that we're involved in any misconduct. We have no past sins so there is no equivalent."

Star has patented a tobacco curing process that eliminates a class of chemicals called nitrosamines, considered by some scientists to be the worst cancer-causing compounds in tobacco. Fried argued that the settlement violated both the Constitution's compact and supremacy clauses.

The tobacco company claims the deal to reimburse states for smoking-related health care costs enabled the largest U.S. tobacco companies to "increase their prices and protect their marketing dominance by stubbing out competition from smaller companies," the report said.