Liggett Group Agrees to Another Multi-Million Dollar Settlement

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NEW ORLEANS: The Liggett Group, America's fifth largest cigarette maker, agreed Friday to end lawsuits with five states by paying their Medicaid costs for smoking-related ailments. Liggett consented to pay Mississippi, Massachusetts, Florida, Louisiana and West Virginia ten million dollars and seven and a half percent of its annual profit for the next 25 years. In addition, the states are entitled to divide two and a half percent of Liggett's yearly profits to compensate future Medicaid costs, and annual payments to cover state medical expenses already incurred. Another five percent of the tobacco company's income is to be pooled ready for other states needing Medicaid reimbursement. Maryland is already preparing such a suit. The first check from Liggett is scheduled to arrive this week. TIME's Elaine Shannon says "The state lawsuits are using 'good Samaritan arguments', saying simply that they didn't actually smoke, they simply helped someone who did, so why should they pay for it." Because this is a more compelling argument than a suit from one single smoker, Shannon says, Liggett settled to avoid possible billions in litigation costs.