Star Scientific, the fledgling cigarette maker, says it's a nice guy that just happens to run with a rough crowd. The Chester, Va.-based company says it is developing less harmful cigarettes, and it bitterly resents being made to pay for the sins of its f

Star casts itself as a righteous truth-teller which never claimed cigarettes are safe, but is now doing its utmost to make them so. But the fact is Star sells cigarettes that are every bit as harmful as any other, and it is being made to pay into the settlement fund in proportion to the number of cigarettes it sells. It will also get the money back (albeit not for 25 years) and earns interest on it even today. Star filed suit on Dec. 15 in a Virginia federal court seeking to have the 1998 master settlement agreement between the big tobacco companies and 46 states and related legislation declared unconstitutional on a variety of grounds. The settlement requires Star to pay almost $12 million into escrow. While the payment is under protest and could be returned to the company, Star describes the obligation as ``crushing'' since the amount is greater than its 1999 net income of $11.5 million. The settlement was designed to compensate the states for Medicaid payments related to illnesses caused by smoking. But Star says it never agreed to the settlement and should not be bound by its terms because it is not part of the problem--indeed it is part of the solution. The master settlement creates a $206 billion fund (plus attorneys fees). The huge number was widely reported. Much less ballyhooed was the fact that the settlement was to be paid out over 25 years and would be covered by increases in the price of cigarettes. At the same time, the big tobacco companies like Philip Morris and R.J. Reynolds rid themselves of the uncertainty surrounding 50 separate multibillion-dollar claims. Star, which started selling its own brand of cigarettes in 1994, was forced to participate in the settlement as a ``non-participating manufacturer.'' It claims that it should not have to contribute to the fund because it never advertised deceptively, never claimed that cigarettes were not harmful and was never sued for causing health problems. It says its efforts to develop a less toxic cigarette can only be hindered by the burden the master settlement and the enabling legislation have placed on it. ``Our research and development activities are directly and immediately threatened as a result of the unconstitutional burdens placed on us,'' says Paul Perito, Star's chairman. Perito employs a rhetorical bait and switch. He suggests that Star is doing good by developing a cigarette with lower levels of tobacco specific nitrosamines (TSNAs) and links that to his claim that the settlement and the qualifying statutes are unconstitutional.

<< Prev	CIGoutlet.NET News Home	Next >>