TOPEKA, Kan. - Attorney General Steve Six announced Wednesday that the 10th Circuit Court of Appeals has upheld a state statute requiring tobacco companies to pay money into escrow.
Kansas first adopted its tobacco escrow statutes in 1999 to implement the Master Settlement Agreement with certain tobacco companies. Forty-six other states, and six other territories, have similar statutes.
The statute requires every cigarette manufacturer whose products are sold in the state to place a certain amount of money for cigarette sales in escrow. If not used for legal claims, the money is returned to the company 25 years after it was placed in escrow.
Xcaliber challenged certain sections of the escrow statutes claiming they violated federal anti-trust laws and were unconstitutional. The Court of Appeals rejected the claim and sided with the Attorney General.
“We’re pleased with today’s opinion.” Six said. “Decisions such as these emphasize the importance – and lawfulness – of state unity and cooperation.”
Six has made tobacco enforcement a priority of his administration. Just Tuesday he announced the creation of a new Tobacco Enforcement Unit. The new unit will work to prevent the sale of tobacco to minors, enforce terms of the tobacco Master Settlement Agreement (MSA), and investigate unlawful violations of tobacco related statutes.