Arkansas v. American Tobacco Co.(3rd Party Rec. AR Chancery Ct. 1997 Settled) Citation: 342 Ark. 303 (12 Oct 2000)
This third party health care cost recovery suit was filed by Winston Bryant as the Attorney General for the State of Arkansas against American Tobacco Co., Philip Morris, R.J. Reynolds, Brown & Williamson, British American Tobacco, Lorillard, Liggett, United States Tobacco, Hill & Knowlton, the Council for Tobacco Research and the Tobacco Institute on May 5, 1997.
The plaintiff claimed that the defendants violated the state's Deceptive Trade Practices Act. It also claimed restitution, unjust enrichment, concealment of material facts, nuisance, and breach of special duty. It alleged that the industry conspired to defraud Arkansas citizens and target youth with image-based advertising. The plaintiff sought reimbursement for health care costs related to cigarette smoke and for injuctive relief against youth marketing and requiring the defenants to disclose research on tobacco use, addiction and health.
No answer was ever filed by the defendants.
The case was heard in the Chancery Court of Pulaski County, Arkansas. The case was settled as part of the Master Settlement Agreement, executed November 23, 1998.
Three law firms intervened following the settlement claiming $243 million in attorneys fees and moving to set aside the settlement on December 30, 1998. They alleged that because they were not listed as Outside Counsel in the MSA, the State would be required to pay their attorney fees, not the tobacco company. This was not in the best interest of Arkansas's citizens. The Arkansas Chancery Court for Pultaski County, through the Honorable Mackie M. Pierce, denied both motions and found that the State was entitled to sovereign immunity. The law firms appealed. The Arkansas Supreme Court (342 Ark. 303) affirmed the ruling on October 12, 2000. It held that the motion was untimely, and that the law firms lacked standing to intervene or challenge the decree, neither party to the original suit had the authority to unilaterally modify the consent decree, and the State did not waive its sovereign immunity from attorney-fee claims.