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Attorney General's News Release

September 11, 2013

Koster announces Missouri loses tobacco case arbitration --Panel finds six states failed to diligently enforce tobacco laws in 2003; tobacco companies entitled to partial refundó

Jefferson City, Mo.-- Attorney General Chris Koster announced today that a three judge arbitration panel has ruled in favor of more than 30 cigarette manufacturers in their claims against Missouri, Indiana, Kentucky, Maryland, New Mexico, and Pennsylvania.

Tobacco companies alleged that the states failed to diligently enforce state tobacco laws during calendar year 2003, and as a result, the tobacco companies were entitled to a refund under the terms of the 1998 Master Settlement Agreement (MSA). The arbitration panel ruled in favor of the tobacco companies.

Missouri's share of the tobacco companies' 2003 MSA payment was approximately $150 million. Koster said his office was reviewing the order to determine the exact amount of the refund, which will be deducted from the companies' April, 2014 MSA payment to the state of Missouri.

The ruling is the culmination of a national arbitration involving more than 30 tobacco companies and 46 states. Twenty states settled the arbitration with the tobacco companies last December. The tobacco companies' settlement offer required all states to pass legislation called the "Allocable Share Release" (ASR). Forty-five states previously passed ASR. Missouri refused.

Because the General Assembly elected not to pass ASR, Missouri was unable to consider the tobacco companies' settlement offer in this matter and was forced to proceed to verdict.

Koster has asked the Missouri General Assembly to pass ASR each of the last five years, warning that failure to do so would have significant financial consequences for the state.

Koster's 2013 letter to legislative leadership follows:

Read Letter



 
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