Liggett's Settlement Agreement with Various States

In the mid-1990s, Liggett, along with the major tobacco companies (Philip Morris, R.J. Reynolds, Brown & Williamson, Lorillard and American), was named as a defendant in lawsuits brought by certain states' Attorneys General. These lawsuits involved claims seeking reimbursement of costs associated with smoking, as well as claims of targeting and marketing to youth. In late 1995, Liggett began negotiating a series of settlements of those lawsuits. LeBow WD, 1:19-23.
In March 1996, Liggett reached a settlement agreement which resolved the claims of the Attorneys General of five states: Florida, Louisiana, Massachusetts, Mississippi and West Virginia. (no bates) (LGI 11). Among the most significant terms were Liggett's agreement to withdraw its opposition to FDA jurisdiction over cigarettes, and Liggett's agreement to comply with several FDA proposed advertising and marketing restrictions, including termination of billboard advertising in certain areas. Liggett further agreed to pay $140 million to the five states. Id.

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Immediately following execution of these agreements, Liggett was sued by several additional states' Attorneys General. Within a few months of the March 1996 Settlement Agreements, over twelve other states' Attorneys General sued Liggett and the other major tobacco companies. LeBow WD, 4:5-8. In March 1997, Liggett entered into a comprehensive agreement with seventeen additional states' Attorneys General. (no bates) (LGI 338).
As part of the March 1997 settlement, Liggett agreed to make a public statement acknowledging, among other things, that smoking is a cause of lung cancer and other diseases and that both cigarette smoking and nicotine are addictive. Liggett also added a voluntary warning label on the packs of its cigarettes which states, "Warning: Smoking is Addictive." Liggett agreed to significant advertising and marketing restrictions, particularly those affecting youth, and agreed to provide cooperation and assistance to the states' Attorneys General in the prosecution of their ongoing lawsuits against Philip Morris, R.J. Reynolds, Brown & Williamson and Lorillard. Id.; LeBow WD, 4:20-5:4.
There were several ways in which Liggett provided cooperation and assistance to the states' Attorneys General in their continuing lawsuits against the major tobacco companies. Liggett agreed to waive attorney-client privilege and work product protection with respect to internal Liggett-only privileged documents relevant to smoking and health issues and produced such documents to the states. As to joint defense privileged documents in Liggett's possession, Liggett produced many of those documents to courts around the country for in camera reviews and Liggett's outside counsel participated in efforts to have such documents de-privileged. These productions resulted in the first judicial decisions compelling the major tobacco companies to release privileged documents. Liggett also agreed to make its scientists and executives available for informational interviews by the Attorneys General and their outside counsel and conducted informational tours of Liggett's manufacturing facilities for counsel for the states and others in the public health community. Finally, Bennet LeBow and others affiliated with Liggett testified on behalf of the states' Attorneys General in those cases where trials were commenced. Id. at 5:6-19.

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Throughout 1997 and early 1998, Liggett continued to negotiate and enter into settlements with additional states that sued or contemplated suing the tobacco companies. By March 1998, Liggett had entered into Settlement Agreements with forty-one states and a number of United States territories. Id. at 7:17-20.
Liggett's Settlement Agreements facilitated successful negotiation of the 1998 Master Settlement Agreement.
Liggett became a signatory to the Master Settlement Agreement in November 1998, at the same time that the major companies entered into that Agreement. Liggett and the forty-plus states and territories with which it had previously settled agreed to replace the terms of their prior agreements with the terms of the Master Settlement Agreement in order, among other things, to provide uniformity among the companies and the states with respect to advertising, marketing and company conduct restrictions. Id. at 8:1-6.

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