U.S. News

Altria in rare settlement over chewing tobacco

BOSTON (Reuters) - Altria Group Inc agreed on Tuesday to pay $5 million in a rare settlement over the death of a chewing tobacco customer.

But the deal arose from one-time circumstances and Altria does not plan to settle future claims, a spokesman for the company said.

The case was brought by the family of Bobby Hill of Canton, N.C. He chewed tobacco made by U.S. Smokeless Tobacco Co -- bought by Altria in 2009 -- from the time he was a teenager until his death from tongue cancer at age 42 in 2003, attorneys for his family said.

Altria previously noted in a regulatory filing that U.S. Smokeless Tobacco Co, maker of Skoal and Copenhagen brands of chewing tobacco, had made the $5 million settlement offer.

The company only chose to settle with Hill’s family to honor the deal struck by U.S. Smokeless Tobacco before the acquisition, Altria spokesman Steve Callahan said.

“We have no intention of settling cases such as this in the future,” Callahan added.

News of the agreement prompted speculation Altria might be more willing to strike deals with consumer plaintiffs than in the past. The deal was finalized by the courts last week, said Antonio Ponvert, the Connecticut attorney who represented the Hill family.

Ponvert said Altria also was prodded to settle by documents obtained in the course of the litigation.

He cited memos that describe the company developing plans to market chewing tobacco to users as young as 15 years old, such as minutes from one meeting in 1972. In another memo, a man roughly Hill’s age recalled getting free samples from a car driven through neighborhoods by a Skoal salesman, the same summer Hill starting chewing.

“Basically, it was either Skoal or Copenhagen was pretty much the neighborhood choice,” the other man, Lewis Wayne King, said in a deposition Ponvert cited in a legal memo.

The case was Estate of Bobby Hill vs. U.S. Smokeless Tobacco Co filed in state Superior Court in Stamford, Connecticut. U.S. Smokeless was formerly headquartered in Greenwich, Connecticut.

Reporting by Ross Kerber; editing by Aaron Pressman and Andre Grenon