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    R.J. Reynolds Settles $5 Million Suit

    Company agrees to settle charges that it violated a California law when it distributed 100,000 packs of free cigarettes on public property.

    WINSTON-SALEM, N.C.--R.J. Reynolds Tobacco Co. has agreed to pay $5 million to settle a lawsuit filed by the California attorney-general over the company's distribution of free cigarettes, according to The Business Journal of the Greater Triad Area .

    The California Supreme Court ruled in December that federal laws governing cigarette marketing didn't supersede state laws banning the distribution of free cigarettes on public property, according to a news release from California Attorney General Bill Lockyer.

    The lawsuit filed by Lockyer in 2001 alleges that Reynolds, a subsidiary of Winston-Salem-based Reynolds American Inc., violated state law when the company distributed more than 100,000 packs of free cigarettes at six events held on public property, according to the report.

    A trial court had earlier ruled that Reynolds violated the law and imposed a fine of $14.8 million, but the state supreme court had sent the case back to the trial court to determine whether the fine was too high, reported the newspaper.

    The settlement still has to be approved by a judge.

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