North Dakota Cashes in After Decade-Long Dispute

SHOW ME THE MONEY! $27.5 million has been tied up in a 10-year legal battle over enforcement of a 1998 Tobacco Master Settlement that requires tobacco companies to compensate 46 states, including North Dakota, for public health costs from smoking-related illnesses.

Tobacco Master Settlement Agreement

Nearly twenty years have passed since Philip Morris Inc., R.J. Reynolds, Brown & Williamson (now British American Tobacco), and Lorillard, the four largest U.S. tobacco companies at the time, finally entered into an agreement with the attorney generals of 46 states. The Tobacco Master Settlement Agreement or MSA, as it is otherwise known, was a result of countless individual lawsuits beginning in the 1950s. It was around this time when popular medical journals began publishing articles scientifically linking smoking to lung cancer and heart disease. By the mid-1950s, individual parties began suing tobacco companies, holding them accountable for manufacturing cigarettes. In addition, it is said that over the course of 40 years, over 800 private party claims were brought against tobacco companies.

Finally, in 1998 the states settled their Medicaid lawsuits against the tobacco industry for recovery of their tobacco-related healthcare costs. Not only would the “original participating manufacturers” agree to lessen and/or cease certain dubious marketing practices structured to drive tobacco sales, but pay a minimum of $206 billion over the first 25 years of the agreement.

Monetary Relief for North Dakota

Earlier this week, after nearly a decade of friction, North Dakota and the original participating manufacturers from the 1998 Tobacco Master Settlement Agreement, have reached a point of accord. An immediate payment of more than $34 million will be made payable to the state of North Dakota. The payout will, as a result, eliminate the need for an expensive arbitration process year-after-year.

“If North Dakota had been forced to continue with these annual arbitrations, it risked losing the entire annual payment for any year it was found non-diligent,” said Attorney General Wayne Stenehjem.

According to the Bismarck Tribune:

“… tobacco companies had been withholding part of their combined annual settlement payments, claiming the states, including North Dakota, had not diligently enforced.”

I wonder which state is next in line for a payday.

Especially Relevant: Last Wednesday’s Blog

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Andrew Figgs

Photography Major from Western Washington University . I joined MBV back in December 2014 and am happy to be working in an industry focused on helping others.

  • evan says:

    interesting article

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