WASHINGTON -- The Supreme Court refused to review an antitrust appeal by cigarette wholesalers of the $206 billion settlement between major tobacco makers and 46 states, the District of Columbia and five territories.

The Supreme Court's decision, though, won't end challenges to the 1998 legal settlement. Lawyers representing the wholesalers have gone back to court, filing an antitrust suit against the state of Pennsylvania on behalf of smokers who have had to pay more for cigarettes since the settlement. In trying to win Supreme Court review, the wholesalers had argued the settlement violated federal antitrust laws. They also argued in part that the price increases by major manufacturers to cover the costs of the settlement with the states -- $206 billion over 25 years -- damaged their businesses. And they contended that the case "presents an issue of critical importance to the limits of the encroachment by a group of states upon the powers of the federal government in regulating interstate commerce." But the high court, without comment, declined to hear the matter. The case involved Philip MorrisCos., R.J. Reynolds Tobacco Holdings and Brown & Williamson Tobacco Corp. The appeals court decision was challenged by A.D. Bedell Wholesale Co. and Triangle Candy & Tobacco Co. The wholesalers said the three defendants in the cigarette case, along with a fourth company, controlled 98% of the national cigarette market in 1998. The U.S. Court of Appeals for the Third Circuit in Philadelphia dismissed the lawsuit in June, saying the cigarette makers were immune from antitrust charges. The appeals court, citing a First Amendment doctrine, found that "freedom from the threat of antitrust liability should apply to settlement agreements as it does to other more traditional petitioning activities." (Bedell v. Philip Morris)

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