Competition Watchdog Challenges Tobacco Agreement

Source from:  Tobacco Reporter 11/15/2010

A new challenge to the $200 billion deal between major US tobacco companies and 46 state attorneys general has been filed with the US Supreme Court by the Competitive Enterprise Institute (CEI). The CEI's petition for Supreme Court review, filed on Monday, alleges that the tobacco "Master Settlement Agreement" violates the constitutional provision against multi-state agreements that have not been approved by Congress. "The tobacco settlement was hatched in a smoke-free backroom between tobacco companies and state attorneys general," said Sam Kazman, CEI general counsel, in a note posted on the CEI's website. "The state AGs [attorneys general] imposed a massive national sales tax on cigarettes, without a single elected legislator at any level of government voting for it. This was a major power grab by state AGs at the expense of citizens." "CEI's challenge to the tobacco settlement focuses on the Constitution's Compact Clause (Article I, Section 10): 'No State shall, without the Consent of Congress …enter into any Agreement or Compact with another State, or with a foreign Power …'," the note said. "The Compact Clause was specifically aimed at preventing states from collectively encroaching on federal power or from ganging up on the citizens of other states. The tobacco settlement, a multi-state compact, plainly violates that provision. The settlement set a dangerous precedent in disregarding constitutional protections against government power. The deal also violates federal antitrust laws, setting up a national tobacco cartel that allows Big Tobacco to raise prices while severely restricting its competitors." Enditem