U.S. cigarette makers pay $750 million to Florida

By Michael Peltier TALLAHASSEE (Reuter) Cigarette makers handed
$750 million to Florida Monday, a down payment on a landmark lawsuit
settlement that will cost the industry $11.3 billion through 2022.
All of the $750 million the biggest payment yet by Big Tobacco to
settle antismoking lawsuits was wired into two escrow accounts by
five companies named in the settlement. Florida on Aug. 25 became the
second state to settle with tobacco companies since a tentative
national agreement was hammered out earlier this summer. Mississippi
settled for $3.4 billion and has already received a $170 million
first payment. Speaking to reporters in Tallahassee, Gov. Lawton
Chiles hailed Florida's settlement as a windfall that will go a long
way toward curbing smoking among teenagers and reimbursing Florida
taxpayers for money spent on treating sick smokers. ``We have won a
settlement of historic proportions. It's time for payback,'' Chiles
said. The state will not be able to immediately spend the money,
which is being held in escrow by a judge in West Palm Beach. Florida
and a group of attorneys were arguing over how much to pay private
lawyers called in to assist the state. Five members of the state's
trial team filed a lien against the $750 million, arguing that the
state owes them S1.25 billion under terms agreed when they took on
the state's case three years ago. But the settlement between Florida
and Big Tobacco called for reimbursing the legal team $12 million for
outofpocket expenses and paying the state $10 million for legal
expenses. The agreement said attorneys fees would be set by an
arbitration panel. Palm Beach County Circuit Judge Harold Cohen last
week ordered the money held in escrow and gave the two sides 30 days
to settle their differences. Under the settlement, Philip Morris paid
$472.8 million into the escrow accounts. R.J. Reynolds Tobacco paid
$86.1 million; Brown & Williamson Tobacco paid $130.9 million;
Lorillard Tobacco paid $57.6 million; and U.S. Tobacco paid $2.7
million. Of the total, $200 million will be used for antismoking
education and $550 million for a general fund, officials said.
Interest on the money will accrue at about $113,541 a day.