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Attorney General Keith Ellison announces $81 million settlement with tobacco companies

Ellison's 2018 lawsuit alleged that R.J. Reynolds Tobacco Company failed to make required payments to the state.

Minnesota Attorney General Keith Ellison announced Wednesday that his office has reached a $81 million settlement with two tobacco companies after they failed to make required payments to the state.

The settlement involves the state’s lawsuit against R.J. Reynolds Tobacco Company and ITG Brands.

The lawsuit alleged that after R.J. Reynolds Tobacco Company transferred four cigarette brands to ITG Brands in 2015, it failed to include revenue from those brands in its payments to the state, as required under a 1998 settlement.

The 1998 settlement requires certain tobacco companies, including R.J. Reynolds, to make annual payments to the state’s general fund based on sales.

The state sued R.J. Reynolds Tobacco Company and ITG Brands in 2018, alleging the companies were liable for payments and that ITG Brands assumed responsibility under the 1998 settlement when it acquired the four brands from R.J. Reynolds.

A Ramsey County District Court determined in 2019 that the companies were liable for payments for the transferred brands.

Under the settlement announced Wednesday, the state will receive a full back payment for obligations that were unpaid from 2015 to 2020. The state also anticipates annual revenue from the continued payments to be at least $10 million. Payments will go to the state’s General Fund.

“Two decades ago, Big Tobacco made a commitment to the people of Minnesota. We fought and won to make sure they keep that commitment,” Ellison said in a statement.

“Defending the settlement and ensuring that the settling tobacco manufacturers cannot avoid accountability by selling off cigarette brands was and will remain a high priority for this Office.” 

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