Mass. AG, major tobacco cos. reach $600M settlement over marketing to children

Tobacco settlement overview: 

• Who: The Massachusetts Attorney General’s Office reached a $600 million settlement with major tobacco manufacturers.
• Why: The tobacco companies agreed to pay the funds to help offset medical expenses caused by smoking. 
• Where: The parties reached the agreement in Massachusetts.

The Massachusetts Attorney General’s Office reached a $600 million settlement with major tobacco manufacturers over marketing cigarettes to teenagers. 

The settlement resolves seven years worth of disputes stemming from payments owed under a 1998 nationwide tobacco settlement, the office says in an Aug. 12 press release. 

The new agreement is the largest resolution in recent history of the attorney general’s office, officials say. 

Per the settlement, $600 million will be paid into the state’s general fund this fiscal year. Moving forward, the tobacco companies will make additional payments totaling tens of millions of dollars each year.

“The country’s major tobacco manufacturers have pushed smoking products to young people for decades – and this settlement is evidence of our ongoing commitment to hold these companies accountable for their actions that caused irreparable harm to public health and safety,” says Massachusetts Attorney General Andrea Joy Campbell. “I am grateful to my team whose dedicated efforts over the course of many years secured these funds.”

Some companies withheld funds, AG says

The deal came out of a 1998 Master Settlement Agreement with major tobacco companies in which they agreed to stop marketing their products to children, cease other harmful marketing practices and pay states billions of dollars each year to offset medical expenses caused by smoking. 

Since then, Massachusetts received hundreds of millions of dollars in annual payments from the major tobacco companies for past and ongoing medical costs related to smoking. 

However, some manufacturers that are parties to the MSA have withheld substantial funds due to a contractual adjustment, the attorney general says. This placed hundreds of millions of dollars in dispute. 

Last week’s settlement resolves seven of these past disputes. Officials say the settlement should also increase the speed at which additional disputes are resolved. 

In addition to the $600 million payment, the agreement also mandates the companies withhold less money in future years based on a contractual adjustment in the MSA.

“While the AGO is at odds with the major tobacco companies on nearly every ground, such resolution is not possible without the cooperation of all parties and counsel,” the press release states.

Meanwhile, in June, a jury in Florida awarded more than $9 million to the family of a man whose death was ruled to have primarily been caused by smoking cigarettes made by RJR Reynolds Tobacco Co. 

What do you think of the settlement in this tobacco case? Let us know in the comments! 

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