R.J. Reynolds wins summary judgment in settlement agreement enforcement proceeding against State of Mississippi

Client(s) R.J. Reynolds Tobacco Company

Jones Day is defending R.J. Reynolds Tobacco Company in an action brought by the State of Mississippi in the Chancery Court of Jackson County, Mississippi, alleging that RJRT violated its 1997 settlement agreement with the State. The State argued that RJRT had violated its settlement agreement by erroneously excluding an $80 million charge from the amount that serves as a basis for all future calculations of one component of payments under the settlement. In response, Jones Day argued that the agreement contained a fixed number notwithstanding any alleged errors in arriving at that number and also elicited deposition testimony from the State's own witnesses showing that the parties had specifically discussed the challenged amount. After both sides engaged in exhaustive discovery, the parties filed extensive briefing and participated in a lengthy hearing in the Chancery Court.

The Chancery Court issued an Order rejecting the State's claim, holding that the evidence clearly showed that the State was bound by the settlement agreement's clear and unambiguous terms, and that summary judgment for RJRT was therefore appropriate. Accordingly, the Court denied the State's request for $6.7 million in damages, supplemental attorneys' fees, and increases in future payments.

In re Jim Hood, Attorney General, ex rel. State of Mississippi Tobacco Litigation, Cause No. 94-1429 (Chancery Court of Jackson County, Mississippi)