GT has paid approximately $470 million to the MSA and [image-nocss] an additional $36 million in escrow, it said.
The complaint, filed in U.S. District Court in Louisville, Ky., charges the 52 attorneys general with violating the Sherman Anti-Trust Act, its constitutional rights under the Equal Protection & Due Process Clauses of the 14th Amendment, the Compact Clause and the Commerce Clause of the U.S. Constitution as well as violation of the Civil Rights Act, Title 42 USC Section1983.
The MSA was created in 1998 by the 46 states, the District of Columbia and five U.S. island territories, along with the large tobacco companies which then controlled more than 97% of the market. The MSA was structured so that certain companies in the market in 1998 would receive future preferential payment terms, while "new members" such as GT would have to pay substantially more than the original preferred members, GT said.
J. Ronald Denman, executive vice president of GT, compared the MSA's unequal treatment to a cartel. "The structure for the MSA created an impossible business environment for future competitors especially small players such as GT. All we are asking for is a level playing field for everyone," he said.
The complaint asks for treble damages under the Sherman Act as well as for an injunction, attorney fees and other relief.
Mayodan, N.C.-based GT, the sixth-largest tobacco company in the nation with approximately $300 million in annual sales, is a full participating member of the MSA. It began its operation in 2000 distributing its own value-priced cigarette brand, GT One. The company now distributes Bronco, Silver, Vaquero Little Cigars and its new premium menthol cigarette, 32 Degrees.
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