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US Judge Declines To Stop Tobacco Settlement Enforcement Tuesday September 14, 7:09 PM EDT NEW YORK (Dow Jones)--A federal judge on Tuesday declined to temporarily stop New York state officials from enforcing a nationwide settlement with the tobacco industry. Two smaller cigarette importers who aren't part of the settlement but who must now pay a per-pack fee under New York state law as a result of the pact had sought a temporary injunction stopping New York Attorney General Eliot Spitzer and the state's tax commissioner from enforcing it. U.S. District Judge Alvin K. Hellerstein declined to do so, saying that the cigarette importers didn't demonstrate the likelihood they would prevail or that they were suffering irreparable harm as a result of the overall settlement. The judge did say, however, that a recent change in state law that makes it harder for those smaller tobacco companies to recover portions of the per-pack fee they pay into a state escrow account did jeopardize their ability to compete with companies that were part of the settlement. He granted a preliminary injunction on that single point. "Since this issue, and all others, will have to be fully explored at trial, my ruling will have the effect of preserving the competitive status quo until the trial and final judgment," Judge Hellerstein wrote in his ruling. Hellerstein initially rejected the claims of Freedom Holdings Inc. and International Tobacco Partners Ltd. that New York state law enforced an illegal cartel which maximized the profits of the largest tobacco companies - which participated in the settlement - and discouraged the sale of cigarettes by those that weren't part of the settlement. The U.S. Court of Appeals for the Second Circuit recently reversed his ruling and sent the case back to district court. The case is pending. In 1998, 46 states and the District of Columbia reached a settlement of tobacco litigation with the nation's four largest cigarette companies - Philip Morris Inc., R.J. Reynolds Tobacco Holdings Inc., Brown & Williamson Tobacco Co., and Loews Corp.'s (LTR) Lorillard. -By Chad Bray, Dow Jones Newswires

 

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