Attorney General: Connecticut Joins 21 States in Partial Settlement with Tobacco Companies
Attorney General George Jepsen announced that Connecticut has joined 21 other states in a partial settlement with the major tobacco companies of a dispute dating from 2006 regarding payments to the states under the 1998 tobacco Master Settlement Agreement (MSA).
Under the MSA, which resolved numerous lawsuits by states against tobacco manufacturers regarding the harms caused by tobacco, the states receive substantial annual payments from the manufacturers in perpetuity. From 2000 through 2013, Connecticut has received about $1.8 billion.
The settlement, reached Friday, May 24, fully resolves claims for sales years from 2003 through 2014. Highlights of the complex agreement include the following:
• Connecticut will receive a percentage of future disputed payments, which amounts to approximately $63 million by 2014, in addition to its regular annual MSA payments.
• Connecticut extinguished the risk of losing up to $260 million in tobacco payments in future years if it does not prevail in the current and related future litigation involving sales for years 2003 through 2014.
• Connecticut’s expected payments in 2015 and 2016 will be reduced by $1-2 million per year, and payments for years thereafter will be increased by over $8 million annually.
• Connecticut’s potential maximum financial exposure in any possible future disputes concerning sales years after 2014 will be reduced by roughly 30 percent.
• For sales years after 2014, Connecticut accepts somewhat broadened tobacco enforcement responsibilities under the MSA, to include enforcement regarding certain illegal contraband cigarette sales which have been the subject of dispute between the manufacturers and the states.
“After careful consideration, I have determined that this settlement is in the best interests of our state,” Attorney General Jepsen explained. “It provides direct financial benefits, in a much shorter term, than we could have achieved by litigation, even if we were fully successful. It also avoids burdensome future litigation regarding sales years from 2004 through 2012.
“Our long term goal, on which we continue to advance, is to reduce smoking and its terrible costs in lives, health and money to near zero. When we succeed, tobacco payments will also fall to near zero. But until that day, it remains essential that states receive all possible compensation for the past wrongs and present medical costs imposed on all of us by tobacco sales to our citizens.”
Assistant Attorney General Heather Wilson, Finance, and Associate Attorney General Joseph Rubin assisted the Attorney General with this matter.
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Media Contact:
Susan E. Kinsman 860-808-5324 (office) 860-478-9581 (cell) 860-808-5318 Facebook: Attorney General George Jepsen Twitter: @AGJepsenConsumer Inquiries: