Debate and Issues Index

draft settlement

Tying The States' Hands


If a state settles its lawsuit against the tobacco companies as part of the proposed multi-state settlement, that state cannot file the same claims against the companies again. The state must release these claims against the tobacco companies and other defendants in order for there to be a settlement.

But the extent of the release of a state's claims -- especially regarding future acts of the tobacco companies and other defendants -- can be narrow or broad. In the proposed multi-state settlement (section nn), the states are asked to release the following claims:

for past conduct, all civil claims (including those seeking damages, civil penalties, or any other relief) that are in any way related to the use, sale, distribution, manufacture, development, marketing or health effects of, exposure to, and research or statements about tobacco products (except for claims for outstanding liability under existing licensing fee laws or existing tax laws)

for future conduct, the proposed settlement releases "only those monetary Claims directly or indirectly based on, arising out of or in any way related to, in whole or in part, the use of or exposure to Tobacco Products . . ." including all future claims for reimbursement of health care costs associated with the use of or exposure to tobacco products.

Questions and Concerns:

Exactly what claims would the state release if it joined the proposed multi-state settlement?

States would be barred from filing new health-related monetary claims, even for health problems for which they are not now being compensated. States would appear to be blocked from filing suits for health-care reimbursement costs relating to disease and death due to second-hand smoke, for example.

How are future acts of the company treated differently than past acts in the release provisions? What is included under the definition of "monetary claims" that the state can pursue in the future?

Would the state be able to assess civil penalties against the tobacco companies if they violated state statutes in ways that are directly or indirectly related to tobacco and health?

How would these provisions affect the ability of states to enforce or bring claims under state antitrust, fraud and other consumer protection statutes?

For more information, contact: Robert Weissman, Essential Action, 202-387-8030.