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FOR IMMEDIATE RELEASE
August 03, 2001
AG's Office Sues Companies for Failure to Make Tobacco Payments


Olympia – August 3, 2001 - Attorney General Christine Gregoire has sued tobacco companies in Arizona and the Philippines for failing to make state-mandated payments that are set aside to cover possible judgments against them in future state lawsuits.

The lawsuits, filed Friday in Thurston County Superior Court, were brought against Earth Tobacco and Single Stick, Inc.

Earth Tobacco is a company in the Philippines that manufactures a roll-your-own tobacco product called "Sixty 1" and sells them in Washington. Single Stick, Inc. is an Arizona company that manufactures cigarettes called "Single Stick" and sells them in Washington.

A provision of Washington state law requires cigarette manufacturers to either sign the Master Settlement Agreement reached with major tobacco companies in 1998, or pay into an escrow account approximately a penny per cigarette sold within the state. The money remains the property of the company but may be used to pay judgments in the event of lawsuits filed over future violations of state law.

Under the settlement agreement, the companies that signed agreed to significant marketing and advertising restrictions and must make annual payments to the states based partly on the number of cigarettes they sell.

In the first lawsuit filed today, the state claims Earth Tobacco failed to pay approximately $205,000 into the escrow account. The state is asking for civil penalties of up to $616,000, three times the amount improperly withheld from escrow, and state costs and attorneys fees.

In the second suit, the state claims USA Tobacco Distributing failed to pay approximately $35,000 into the escrow account. The state is asking for civil penalties of up to $105,000, three times the amount improperly withheld from escrow, and state costs and attorneys fees.

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