Okla. Suit Targets Chinese Tobacco Manufacturer

Oklahoma Attorney General Drew Edmondson has filed a lawsuit against a Chinese tobacco manufacturer for reportedly 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.

Hongquiqu Group Anyang Cigarette Factory is accused of failing to properly fund the required escrow account. Anyang manufactures cigarettes under the brand name Homer.

The lawsuit seeks to force the company to comply with Oklahoma law by fully funding the 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.

According to the state Health Department, adult smoking prevalence rates in Oklahoma dropped from 28.7 percent in 2001 to 25.1 percent in 2003.