The US Supreme Court rejected on Tuesday an appeal by 30 attorneys general arguing for the dismissal of a challenge by three small tobacco companies to state laws adopted as part of a 1998 settlement.
The justices declined to review a ruling by a US appeals court that allowed the lawsuit against the attorneys general to go forward. The appeals court reversed a federal judge's ruling that dismissed the claims for lack of jurisdiction.
The lawsuit stemmed from the $206 billion Master Settlement Agreement in 1998 that resolved the litigation between 46 states and four major tobacco companies over the costs incurred in treating smoking-related illnesses.
The companies that sued are Grand River Enterprises Six Nations Ltd, a Canadian cigarette maker owned by the Iroquois tribes; Nation-wide Tobacco Inc, a Washington state company that distributes cigarettes made in the Philippines; and 3B Holdings Inc, a Washington state manufacturer of loose tobacco.
They challenged state escrow laws that require tobacco companies to join the settlement or to put in escrow funds based on the number of cigarettes they sell within the state.
They also challenged the laws that require companies that did not join the settlement to certify periodically to their compliance with state escrow law. The companies said the states laws violated federal antitrust law and the US Constitution's commerce clause, which protects interstate commerce from interference.