Smokers Sue to Block Cigarette Price Hikes

Philip Morris Cos., R.J. Reynolds Tobacco Co. and other tobacco companies were sued by smokers accusing the industry of illegally banding together to raise cigarette prices to pay for its $206-billion settlement with 46 states, Bloomberg News said. The suit, filed in U.S. District Court in Tulsa, Okla., on behalf of 40 million Americans who smoke, asks a federal judge to block the price increases and order the companies to return the extra revenue they have already collected. The record-setting settlement will reimburse the states for the costs of treating smoking-related illnesses. Tobacco industry experts downplayed the antitrust claims, saying that similar pricing in competitive industries is common. Meanwhile, a negotiator for the major tobacco companies met behind closed doors in Durham, N.C., with officials from nine tobacco-producing states to begin hashing out a $5.15-billion plan to help farmers facing lower leaf demand following the settlement. In a separate development, Blue Cross & Blue Shield of North Carolina said it wants to join 44 similar U.S. insurance plans in a federal suit against the tobacco industry to recover costs for treatment of tobacco-related illnesses.