TOPEKA - (July 12, 2012) - The State of Kansas will receive more than $1 million from a settlement with a tobacco company, Kansas Attorney General Derek Schmidt announced today.
Grand River Enterprises (GRE), of New York State, agreed to a back payment to Kansas of $672,000 in escrow funds in addition to $336,000 in penalties and reimbursement of the attorney general's office fees and expenses. The money secured in escrow is held by statute for 25 years. This money is intended for any Kansas consumer that makes a health-related claim against a “Nonparticipating Manufacturer” to the tobacco Master Settlement Agreement (MSA), in this case GRE. The $336,000 in penalties goes directly to the State 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 cases. The first was a multistate lawsuit in the Federal District Court in the Southern District of New York. This case was filed by GRE alleging that multiple states that signed the MSA committed constitutional and antitrust violations. In the second case, Kansas sued GRE in 2008 alleging that as a "Non Participating Manufacturer" to the MSA, GRE had not paid escrow payments as required by law.
Assistant Attorney General Patrick Broxterman of Schmidt's office led the efforts to negotiate the settlement. The settlement was recently approved by District Judge Frank Yeoman of the Shawnee County District Court. These cases stem from enforcement of the landmark multi-state tobacco settlement case in 1998.