Tobacco.org

• Huge Settlement Could Get Smaller ($$) 

On Monday comes a decision that could fray the relationship.

That's when an arbiter is to issue a decision that could allow cigarette companies to reduce a multibillion-dollar payment due this spring by $1.2 billion -- and potentially similar amounts in future years. A decision in favor of the industry would be a significant blow to the states, which have come to rely on the annual payments to prop up their budgets. That the issue is even being discussed highlights a new bravado exhibited by the major cigarette companies after a string of legal victories.

The money in question is part of Big Tobacco's obligation to 46 states under a landmark 1998 legal settlement that ended a raft of state-government lawsuits against the industry. The agreement requires Altria Group Inc.'s Philip Morris USA, maker of Marlboro, and other major cigarette companies such as Reynolds American Inc.'s RJR and Loews Corp.'s Lorillard to reimburse the states for their costs to care for sick smokers, in yearly installments. So far the companies have paid $41.6 billion and about $6.5 billion more is due April 17.

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