April 07, 2006
States Must Arbitrate Tobacco Claims
An arbitration clause is, apparently, an arbitration clause -- even when it's in a settlement agreement between sovereign states and giant industries. So the New York Appellate Division has thrown out a lawsuit by the state of New York arising out of the $206 billion tobacco settlement. An arbitral panel ruled that the states, which together get about $6.2 billion a year from the settlement, may see a $1.1 billion reduction based on an alleged failure to enforce some aspects of the settlement. New York had claimed a right to litigated the issue in court. Whether the payments will be reduced still has not been decided.
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