Breaking ranks with the tobacco industry, the cigarette maker Liggett Group said Wednesday it has agreed to settle a major class-action lawsuit that claims nicotine levels in cigarettes are manipulated to keep smokers hooked.
The maker of Chesterfield and Eve cigarettes said, without admitting wrongdoing in the case, that it would pay a portion of what it earns over the next 25 years to be used for smoking cessation programs.If the settlement is approved by the federal court in New Orleans, where the case is filed, it would be the first time a tobacco company paid anything to settle a smoking lawsuit.
Liggett is the smallest of the nation's five major tobacco companies, and its agreement is likely to enrage other tobacco makers who were also defendants in the class-action suit.
The company also said it was in settlement talks with the attorneys general of five states who are trying to get the tobacco companies to pay for the states' costs under Medicaid programs of treating smoking-related illnesses.
The states are Florida, Massachusetts, Minnesota, Mississippi and West Virginia.
Liggett said it was close to a settlement with the states under terms similar to those in the class-action suit in Louisiana.
The tobacco company also said it had agreed to come into compliance with proposed federal regulations discouraging sales of cigarettes to children, such as a prohibition on using cartoon characters in ads and limits on distributions of free samples.
Bennett LeBow, chairman and chief executive of Liggett's parent Brooke Group Ltd., said in a statement the agreement means the tobacco maker's assets would "no longer be held hostage by the tobacco litigation."
"The tobacco industry has lived for too long with the possibility of financial catastrophe from product liability suits that could destroy the industry. This settlement is a fresh and prudent approach to this problem and positively addresses concerns about underage smoking," he said.
Under the deal, Liggett would be removed as a defendant in the class-action lawsuit brought by a consortium of law firms that represent millions of smokers and former smokers who say they're addicted.