On March 28, 2008 a unanimous Alabama Supreme Court affirmed an order of the Montgomery County circuit court compelling the State of Alabama to arbitrate a dispute over the amount owed to the State by tobacco product manufacturers for 2003.

In 1998, the State of Alabama and 45 other states entered into a Master Settlement Agreement with four major tobacco product manufacturers that was later joined in by several smaller manufacturers. The MSA arose out of lawsuits filed by the states seeking to recover healthcare costs for smoking related illnesses. The MSA requires each manufacturer to make annual payments to the states. A dispute arose over the proper amount payable for 2003 and the manufacturers moved the Montgomery County circuit court to compel the State to arbitrate the dispute. The State opposed the motion arguing that certain issues were not covered under the arbitration clause in the MSA or, alternatively, that those issues should be arbitrated in an Alabama-only proceeding. The circuit court granted the manufacturers’ motion and rejected the State’s request for a local arbitration. The State appealed and the Alabama Supreme Court affirmed the circuit court’s decision regarding the arbitration issues. Lightfoot attorneys Samuel H. Franklin and William H. Brooks represented Lorillard Tobacco Co., Inc. and R.J. Reynolds Tobacco Company in the matter.