DOJ: News Release

Judge Bars Four Tobacco Manufacturers from Selling Cigarettes in Montana

HELENA – District Court Judge Thomas Honzel on Thursday ordered four foreign tobacco companies to establish and properly fund the escrow accounts required by Montana law, and barred them from selling cigarettes in the state for two years from the time they comply with those requirements.

The decision came as a result of a suit filed in February by Montana Attorney General Mike McGrath, charging that 30 tobacco companies failed to establish or properly fund escrow accounts required by Montana law. The companies named in the suit manufactured cigarettes sold in Montana in 1999 and 2000.

The companies ordered to establish escrow accounts and the amounts owed, including costs and penalties are:

  • Choice Tobacco, Prince Edward Island, Canada — $10,715
  • Mohanlal Horgovenddas, Jabalpur, India — $1379
  • Apara International, Mumbai, India — $1634
  • Sable & Waghire, Pune, India — $1641

The defendants in the suit are so-called “non-participating manufacturers,” companies that refused to participate in 1998′s massive Master Settlement Agreement between major tobacco companies and 46 states.

In 1999 the legislature adopted a statute requiring NPMs to pay into an escrow fund an amount roughly equal to what they would have had to pay to participate in the settlement. The escrow funds would be used to defray any judgments the state might win against NPMs for damages similar to the ones paid by the settling companies.

The law allowed the state to bar sales of cigarettes by non-participating companies that did not comply. The State has lawsuits pending against more than 20 such companies, including the four involved in the actions resolved Thursday.

Share this!

Subscribe to our RSS feed. Tweet this! StumbleUpon Reddit Digg This! Bookmark on Delicious Share on Facebook