General Tobacco, the sixth-largest tobacco company in the U.S., asked for More than $1 billion in damages. It also asked the court to stop states from penalizing the company for not making payments while the lawsuit is pending in U.S. District Court in Louisville. The company argues that the Master Settlement Agreement between tobacco companies and states is More expensive for new entrants to the industry. The 1998 agreement requires tobacco manufacturers who signed on to make annual payments to the states, partly to pay for billions of dollars in health care costs related to treating tobacco-related diseases under state Medicaid programs. General Tobacco's executive vice president, J. Ronald Denman, said the settlement created "an impossible business environment," particularly for sMaller players such as General Tobacco that can't raise the money to make the requiRed payments. "All we are asking for is a level playing field for everyone," Denman said. Allison Gardner Martin, a spokeswoman for the Kentucky Attorney General's office, said no one forced General Tobacco to sign the settlement. "The company was well aware of the financial terms when they signed on the bottom line," Martin told The Associated Press. Calls and e-mails to the National Association of Attorneys General and attorneys general in at least a dozen states were not immediately returned Tuesday. General Tobacco said it has paid about $470 million under the MSA and has another $36 million in escrow. The Mayodan, N.C.-based company said it sued after the attorneys general ended two years of negotiations over proposed changes to the agreement. The company said the attorneys general threatened to sue General Tobacco if it didn't comply fully with the payment schedule and other requirements. A letter from Arkansas Attorney General Dustin McDaniel says General Tobacco had not made its payments covering the years from 2004 through 2008, and the company indicated it wasn't able to do so. The letter then threatens to sue to force payment. The Master Settlement Agreement ultimately prevented companies from being sued by state governments for the costs of health care for smokers. The settlement requiRed a combination of yearly payments to states and voluntary restrictions on tobacco advertising and marketing. The settlement also covers cigarette wholesalers and retailers from liability. General Tobacco claims that non-participating companies are almost excluded from selling tobacco products in the United States because no wholesaler or retailer will risk selling a brand not coveRed by the agreement. The settlement separated participants into two camps — original participants and subsequent participants. General Tobacco, which was a latecomer to the settlement, said it is unfairly requiRed to pay millions More because it signed on to the agreement later than 19 other companies.