The U.S. Supreme Court turned away an appeal from a California smoker who blamed rising cigarette prices on the $206 billion settlement reached a decade ago between 46 states and the nation’s largest tobacco companies.
The justices, without comment, today refused to revive Steve Sanders’s antitrust lawsuit against California Attorney General Jerry Brown and tobacco companies including Altria Group Inc.’s Philip Morris USA unit and Reynolds American Inc.’s R.J. Reynolds Tobacco unit. A San Francisco-based federal appeals court threw out the lawsuit in September.
Sanders’s lawyers argued unsuccessfully that the 1998 settlement led to lockstep price increases of $12.20 per carton between 1998 and 2002 alone.

The accord “effectively established a horizontal cartel that eliminated all incentive to increase market share or to compete on price,” Sanders argued in his appeal, filed in Washington.
The 1998 settlement resolved state lawsuits that sought to recoup the cost of treating sick smokers. In addition to paying $206 billion over 25 years — plus another $40 billion to four states that settled separately — the industry agreed to scale back marketing and take other steps to reduce youth smoking.
States have sold about $40 billion in bonds backed by their shares of the settlement.
Courts around the country have taken differing approaches to antitrust lawsuits that center on the 1998 settlement. In 2004, a federal appeals court in New York said a similar lawsuit could go forward.
In urging the Supreme Court not to hear the case, the companies said that even the New York case probably will be dismissed in the end. After the appeals court decision, a federal trial judge refused to issue a preliminary injunction blocking the accord.
“Every court that has examined the merits of the claim at issue here has reached the same conclusion: The facts as proved tell a quite different story from the allegations of anticompetitive conduct in the plaintiffs’ complaint,” the companies said.