Big Tobacco Can Arbitrate Dispute with New Mexico

ALBUQUERQUE, N.M. (CN) - Tobacco manufacturers are entitled to arbitrate a dispute with the state of New Mexico over a multi-state settlement agreement, the New Mexico Court of Appeals ruled.

New Mexico filed for a declaratory judgment that the American Tobacco Co. and other tobacco companies were not entitled to an offset of the payments they must make to the state as part of a settlement agreement.

The agreement releases the companies from other liabilities to the states through annual payments.

Judge Bustamante agreed with the trial court that the tobacco companies can seek their offset payments at the arbitration table.

"The plain language of the Settlement Agreement requires the parties to arbitrate the state's claim that it should not be subject to an adjustment," Bustamante wrote.

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