WEST PALM BEACH – A spokesman for R.J. Reynolds Tobacco Co. remained mum in the face of a recent court setback after a Florida judge ordered the tobacco company to continue paying the state millions of dollars annually to offset medical costs caused by smoking despite R.J. Reynolds' selling off several of its best-known cigarette brands to a British firm.
Whether R.J. Reynolds attorneys will appeal the Dec. 27 decision rendered by 15th Circuit Judge Jeffrey Dana Gillen remains to be seen.
Florida Attorney General Pam Bondi
“The ruling will ensure Florida’s tobacco settlement is honored and the state receives the money it is owed,” Florida Attorney General Pam Bondi told the Florida Record in a statement. “My office is committed to pursuing all appropriate remedies when companies try to evade their monetary obligations to the state of Florida.”
After a two-year court battle, in 1997 a settlement was reached with cigarette producers R.J. Reynolds and Philip Morris obligating them to make annual payments to the state of Florida every Dec. 31 into perpetuity to cover medical costs for public health problems caused by smoking.
The litigation centered around three well-known cigarette brands: Kool, Winston and Salem. The brands were sold by R.J. Reynolds to Imperial Tobacco Group, a British multinational tobacco company headquartered in Bristol, United Kingdom, in June of 2015 for a reported $7 billion.
R.J. Reynolds had made millions in payments to Florida from the time of the original settlement in 1997 but after the 2015 sale to Imperial Group, stopped making payments costing the state an estimated $30 million per year, according to the attorney general’s office.
The refusal to pay led Bondi to file an enforcement motion on Jan. 18, 2017. At a three-day hearing in December, Gillen ruled Reynolds was still obligated to make the yearly payments under the terms of the original agreement. The amount owed the state for past and future payment will be recalculated a communique from Bondi’s office read.
David Howard, communications officer for R.J. Reynolds, declined comment on the case.
“As this is pending litigation, we are not providing comment on the matter at this time,” he told the Florida Record.
Fort Lauderdale attorney Scott Schlesinger has expertise in tobacco litigation and has been involved in the case.
“My firm along, with several others, represented the state (Florida) back in the 1990s,” he told the Florida Record. “We were sort of the tip of the spear on this matter.”
Schlesinger said originally it was hard for individual smokers to win court cases against the tobacco companies because the companies adopted the position the smokers assumed risk when they smoked. Nevertheless, medical care to treat smoking-related illness often had to be paid for by Medi-Cal in California or the federal Medicaid programs that pay medical costs for people with limited income or no insurance.
“The state was paying for the (health) ravages of smoking,” Schlesinger said.
Florida has a population of about 20 million and roughly 20 percent aged 18 and older smoked, according to a 2011 survey by the Centers for Disease Control and Prevention.
“When millions get sick they often rely on state health benefits,” Schlesinger said. “But people didn’t start smoking when they were 24, they got addicted when they were teenagers. You can’t make a good deal with bad people. Tobacco is trying to renege. You can’t shirk your duty to pay.”
Schlesinger said annual payments to the state of Florida could total $350 million per year.