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S&M Brands Inc. v. Caldwell, No. 09-30985

By FindLaw Staff on August 11, 2010 11:33 AM

S&M Brands Inc. v. Caldwell, No. 09-30985, involved an action claiming that the Master Settlement Agreement (MSA) reached in the 1990s between the four largest tobacco manufacturers and the several states and the Louisiana Escrow Statute violated the Compact Clause, First Amendment, Federal Cigarette Labeling and Advertising Act (FCLAA), Commerce and Due Process Clauses, and federal antitrust laws.  The court affirmed summary judgment for defendant on the grounds that 1) the MSA may result in an increase in bargaining power of the States vis-a-vis the tobacco manufacturers, but this increase in power does not interfere with federal supremacy; 2) the MSA and Escrow Statute working together did not create an antitrust violation; and 3) while the MSA did restrict the speech activities of participating manufacturers (PMs), the plaintiffs were not PMs and were not coerced to become PMs.

As the court wrote:  "Plaintiffs appeal the district court's grant of summary judgment in favor
of the Attorney General of Louisiana. This case arises out of the Master Settlement Agreement ("MSA") reached in the 1990s between the four largest tobacco manufacturers and the several states. The plaintiffs--who are not signatories to the MSA--sued the Louisiana Attorney General, alleging that the MSA and the Louisiana Escrow Statute, LA. REV. STAT. § 13:5061, et seq., violate the Compact Clause, First Amendment, Federal Cigarette Labeling and Advertising Act ("FCLAA"), Commerce and Due Process Clauses, and federal antitrust laws. For the following reasons, we AFFIRM."

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