Attorney General Fox Holds Tobacco Companies Accountable

HELENA – Concluding a multi-year legal battle between the state of Montana and several major tobacco manufacturers, Attorney General Tim Fox announced a settlement agreement Tuesday that ensures the tobacco companies follow through with past commitments to the state.

Since 2004, nineteen tobacco companies have disputed, withheld or refused to transfer annual payments owed to the state of Montana. The payments owed to the state were agreed to in the 1998 nationwide Master Settlement Agreement resolving multiple state lawsuits over alleged concealment and misrepresentation of information regarding adverse health impact related to use of tobacco products. As outlined in the original 1998 settlement, a portion of the annual payments by the companies to the state are intended to encourage “diligent enforcement” of a stipulated tobacco statute.

Withholding payments to state governments is a tactic collectively deployed by the same tobacco companies across the country. Montana is the only state in the nation that has not settled with the tobacco companies for a lower amount than originally owed. Additionally, Montana is the only state in the country that can litigate this issue in state court. All other MSA states must participate in a nationwide arbitration. This allows a Montana court, rather than an out-of-state arbitration panel, to judge the proceeding. The most recent settlement with the state, signed July 18 of this year, ensures the state of Montana is paid in full all funds withheld for calendar year 2004.

“Any businesses operating in Montana must be held accountable for wrongdoing,” Attorney General Tim Fox said. “This settlement ensures that tobacco companies live up to the deal they agreed to two decades ago and pay in full the funds owed to the state. This is an historic agreement for the state of Montana, and I’m proud of my team for making this happen.”

In total, Montana recovered $3,367,741 in back payments and interest. Importantly, the settlement also protects and confirms Montana’s right to retain its full payment for calendar year 2004 of over $27 million. The remaining disputed portions of the annual payments owed to the State range from $2 million to $5 million a year.

The funding secured by this settlement, like other MSA payments, fund important health programs including the Children’s Health Insurance Program and other programs operated by the Department of Public Health and Human Services. These funds are key to supporting smoking prevention and cessation programs.

The companies involved in the settlement include: RJ Reynolds, Philip Morris, Farmer’s Tobacco Company of Cynthiana, Commonwealth Brands, Compania Industrial de Tabacos Monte Paz, Daughters & Ryan, House of Prince, Japan Tobacco Inertanital U.S.A., King Maker Marketing, Kretek Intertnational, Scandinavian Tobacco Group Lane, Liggett Group, ITG Brands, Peter Stokkebye Tobaksfabrik, P.T. Djarum, Santa Fe Natural, Reemstma Cigarettenfabriken Gmbh, and Wind River LLC.

Click here read the full settlement.

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