Attorney General's News Release

Nov. 19, 1998

Nixon announces settlement of tobacco lawsuit

Jefferson City, Mo. — Attorney General Jay Nixon announced today he will accept a proposed settlement of the state's lawsuit against the nation's largest tobacco companies in which the companies agree to pay $6.7 billion to Missouri over a 25-year period and implement the most significant legal reforms in the history of the tobacco industry.

"From a financial standpoint, the settlement is larger than any verdict ever collected in Missouri but equally important are the reform measures which could not have been awarded in court," Nixon said. "A lawsuit provides for a monetary award but does not allow for injunctive relief, such as advertising bans and other significant public health measures. These are concessions that can only be secured through a settlement."

The settlement includes a ban on outdoor advertising and on the use of cartoon characters in tobacco advertising. Nixon's lawsuit claims the use of cartoon characters and other tactics illegally targeted children and contributed to the growing addiction of children to cigarettes.

Nixon said as many as 3,000 children a day start smoking and serve as a replacement market for the 1,000 people who die daily from tobacco related illnesses. The Missouri tobacco case was scheduled to be heard in January 2000.

Springfield attorney Tom Strong, head of Nixon's tobacco litigation team, expressed support for Nixon's decision. "I have been in close consultation with the Attorney General as he has reviewed the proposed settlement. I respect and support his decision as one that is best for the client, the state of Missouri."

The settlement agreement also requires the tobacco companies to pay for the legal fees and expenses of the Missouri tobacco attorneys. "Under this agreement, state taxpayers will pay zero in legal fees," Nixon said.

Nixon also reviewed the settlement proposal with Governor Carnahan, legislative leaders and with leaders in the public health community.

"The meetings were an opportunity to brief those concerned and listen to important input on the need to make a strong commitment to dedicate a significant portion of this money to public health issues," Nixon said.

He said he will work with the public health community to promote these issues with the legislature. The current settlement contains provisions to protect children, including an agreement by the tobacco companies to contribute $1.5 billion to a national anti-smoking campaign and $250 million for a foundation dedicated to reducing teen smoking.

Other provisions would:

• Prohibit the industry from targeting youth in ads and marketing.
• Prohibit all outdoor advertising including billboards and transit advertising.
• Ban payments for placement of tobacco products in movies and television.
• Ban the distribution and sale of merchandise bearing tobacco product logos or brand names.

The first payment to Missouri of $200 million is expected to be made no later than June 30, 2000. Payments may begin earlier if states representing 80 percent of the nation's population reach final settlement prior to June 30, 2000. To ensure the industry lives up to the agreement, the settlement would be enforceable through consent decrees which will be entered in each state court. In addition, the industry will provide $50 million for an enforcement fund which states could use to pursue violations of the settlement.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818