Judge rules Oklahoma tribe has standing to seek recovery of funds

Tulsa, Oklahoma (AP) 9-07

An Oklahoma tribe that sued over issues related to the 1998 tobacco settlement will get its day in court.

U.S. District Judge Gregory Frizzell issued an order on Septmber 6th that said the Seneca-Cayuga Tribe of Oklahoma does have the proper legal standing to seek recovery of funds it has paid into an escrow account.

Plaintiffs’ attorney Daniel Doyle said Friday that although the order isn’t a final decision on the merits of the lawsuit, it means the tribe’s efforts to retrieve more than $4 million in funds will go before another judge.

U.S. Chief District Judge Claire Eagan in November dismissed the 2006 lawsuit on a technical issue. The tribe subsequently filed papers asking the court to set aside or alter the order. The case was re-assigned to Frizzell in February when he became a federal judge.

The tribe alleges the Seneca-Cayuga Tribal Tobacco Corp. had been driven to the verge of going out of business because the corporation did not have access to the money held in an escrow account.

The account was established as a result of the settlement of a lawsuit several states filed against major tobacco manufacturers in the mid-1990s to recover costs incurred while treating smoking-related diseases.

In 1998, 46 states – including Oklahoma – reached a settlement with Phillip Morris USA; Lorillard Tobacco Co.; Brown & Williamson Tobacco Co.; and R.J. Reynolds. Forty more companies later joined in the settlement.

Under the pact, states could require non-participating manufacturers to make annual payments or make deposits into escrow accounts based on cigarettes sold in their states. Payments into the Tobacco Escrow are substantially equivalent to what the non-settling manufacturers would have paid had they settled in 1998, according to the lawsuit.

Frizzell found this week that Eagan’s November order did not address the tribe’s argument that it was entitled to the escrow funds under the theory of sovereign immunity.

The more than $4 million in escrow should be used to fund tribal programs, Doyle said.

The tribe’s Grove plant employs about 70 people and produces more than 13,000 cartons of cigarettes a day.

The Seneca-Cayuga company is the only tribally owned cigarette manufacturer in Oklahoma.

Information from: Tulsa World, http://www.tulsaworld.com