News Release
05/20/2008
W.A. Drew Edmondson, Attorney General
State Sues Chinese Cigarette Company for Failing to Pay Escrow
The attorney general’s office yesterday filed a lawsuit in Oklahoma County District Court against a Chinese tobacco manufacturer for violating an Oklahoma law stemming from the 1998 tobacco settlement.
Oklahoma enacted a “non-participating manufacturer” law in 1999 requiring tobacco companies who chose not to join the 1998 Master Settlement Agreement (MSA) to pay into an escrow fund. Manufacturers who sell tobacco products in Oklahoma are subject to the statute. The required payment is roughly equal to what a company would have paid had it joined the MSA and is used to fund any future legal claims the state may have against the company.
The state alleges Nanjing Cigarette Factory failed to pay almost $3,100 in required escrow payments for 2007. The lawsuit asks the court to order the company to deposit the escrow funds within 15 days. The state also seeks more than $9,000 in penalties. Nanjing manufactures cigarettes under the brand name Quincy.
The lawsuit seeks to force the company to comply with Oklahoma law by fully funding the required escrow account. Oklahoma law requires non-participating manufacturers to make a yearly payment to the escrow account based on the previous year’s product sales.