The Sixth Circuit heard oral argument yesterday in General Tobacco’s appeal of a 2009 decision dismissing its lawsuit against various tobacco companies and states. General Tobacco’s lawsuit challenged the effects of the Master Settlement Agreement (MSA) entered into by certain tobacco manufacturers and states to resolve claims that the manufacturers targeted children with advertising and understated the harmful effects of cigarettes. As part of the MSA, the states agreed to not only release participating manufacturers, but also retailers, suppliers, and distributors of cigarettes with respect to sales of products made by settling manufacturers. This provision encouraged companies to only do business with settling manufacturers. The MSA also required non-settling manufacturers to put money into an escrow account to ensure that they did not receive a financial advantage from not participating in the settlement. General Tobacco was not an original signatory of the MSA.
General Tobacco filed suit October 28, 2008, claiming that the original settling manufacturers were receiving preferential treatment under the MSA. General Tobacco made various claims, including anti-trust claims and constitutional claims against the states. In a Memorandum Opinion and Order, Judge Coffman of the Western District of Kentucky dismissed General Tobacco’s claims. Plaintiff’s anti-trust claims against the settling manufacturers were dismissed on Noerr-Pennington grounds. The anti-trust claims against the states were dismissed based on state-action immunity. Finally, the court found that plaintiff’s constitutional claims against the states had been waived when it signed on to the settlement.
The appellate panel hearing the case consisted of Circuit Judges Clay, Gibbons, and White.