Vermont to recover millions in tobacco settlement

MONTPELIER — The state will receive $14 million in civil penalties and legal relief from tobacco giant R.J. Reynolds following a 2005 lawsuit, Vermont Attorney General William Sorrell announced Monday.

The state sued the company over unsubstantiated advertising claims about the health consequences of one of its products.

A trial court ruled in 2010 that the company did not conduct sufficient scientific studies to support an advertising claim that a non-traditional cigarette, known as Eclipse, would reduce a smoker’s chance of developing cancer. The court awarded the state $8.3 million in civil penalties for the violations and issued a permanent injunction against Reynolds to prevent similar conduct in the future.

The court was in the process of considering the State’s request for attorneys’ fees and costs incurred in the lawsuit when the parties reached a settlement, according to Sorrell.

Vermont Attorney General William Sorrell

Vermont Attorney General William Sorrell

Under the the terms of the settlement, the company will pay the state $8.3 million in civil penalties. The remaining amount will cover attorneys’ fees and costs and will be divided among the Vermont Attorney General’s Office, other state attorneys general offices and a private attorney that worked on the lawsuit, along with the National Association of Attorneys General Tobacco Enforcement Fund, which advanced funds for the lawsuit.

The permanent injunction against Reynolds will remain in effect.

“This was a long and hard, but successful fight. Reynolds crossed the line and it cost them. At a time when tobacco companies are trying to find ways to hook new smokers, Vermont has sent a message that advertising tobacco products with unsubstantiated health-benefit claims is illegal and will not be tolerated,” said Sorrell said in a statement.

Reynolds made its “less risk” claims in print ads placed in nationwide publications, on a website promoting the product, in direct mail materials sent to Vermont consumers and on cigarette packages of Eclipse sold in Vermont.

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