Nebraska sues tobacco company over escrow payments

Lincoln, Nebraska (AP) 2-08

The state of Nebraska has filed a lawsuit against an American Indian tobacco company over escrow payments that the business is required to pay under the 1998 tobacco settlement.

The lawsuit filed early Febuary in Lancaster County District Court said the Seneca-Cayuga Tribe of Oklahoma failed to pay $53,000 into an escrow account in the state’s name. The money due was based on the Seneca-Cayuga Tribal Tobacco Corp.’s 2003 in-state sales, which amounted to an estimated 3.6 million cigarettes mainly through its Skydancer and Silverton brands.

A provision of the 1998 settlement with major tobacco companies calls for smaller companies to fund escrow accounts with money comparable to what the big companies agreed to pay to the states.

Nebraska said in court documents that the tribe was supposed to put $70,580 into the escrow account by April of 2004, but only deposited a portion of that. The state wants the tribe to pay the $53,000 that’s overdue and a $159,000 penalty.

Seneca-Cayuga Chief Paul Spicer declined to comment on the lawsuit.