Reynolds Reveals Some Legal Costs

R.J. Reynolds Tobacco Holdings Inc. spent more than a half-billion dollars in tobacco-related lawsuits from 2000 through 2002, according to a financial report.

The parent company of the nation’s second-largest cigarette maker spent $512 million to defend itself in the lawsuits, Reynolds said in a filing with the Securities and Exchange Commission last week.

Philip Morris USA Inc., the No. 1 cigarette maker, disclosed in November that it had spent $1.1 billion on external defense costs during the same period.

The disclosure by Reynolds was response to an SEC request seeking additional information about tobacco-related litigation and other matters, the company said.

Reynolds Holdings said late last year there were more than 4,000 cases pending against it, including about 1,060 individual smoker cases in West Virginia, which have been consolidated. The total figure also includes nearly 2,800 suits by flight attendants over secondhand smoke.

The expense figures aren’t related to payments the company makes as part of its share of the industry’s $200-billion settlement with 46 states in 1998.

The SEC is seeking more details beyond the company’s total litigation expenses, but Reynolds Holdings hasn’t provided a breakdown, citing attorney-client privilege and competitive concerns.

A federal judge held a hearing on the conflict this month, Reynolds spokesman Seth Moskowitz said. No date was set for a ruling on the matter.