2001), was an early appellate case testing the legality of the Tobacco Master Settlement Agreement (MSA), in this instance whether it could properly be alleged to violate the Sherman Antitrust Act.

The complaint from A.D. Bedell of Salamanca, New York and other distributors alleged that the multibillion-dollar settlement with the states violated 15 U.S.C.S.

The wholesalers were challenging two sections of the MSA as creating an output cartel that imposes draconian monetary penalties for increasing cigarette production beyond 1998 levels and effectively bars new entry into the cigarette market: Together, the Renegade Clause, the Qualifying Statutes and the Enforcement Fund allegedly created severe obstacles to market entry, or to increasing production and market share.

MSA § IX(d)(2)(E) It was these barriers to entry and increased production that plaintiffs claimed form an output cartel that violates the antitrust laws.

Defendants contended the Multistate Settlement Agreement did not violate the antitrust laws, but even if so, they are immune under both the Noerr-Pennington doctrine, which protects petitioning activity, and the Parker doctrine, which protects sovereign acts of states from antitrust liability.