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Horne Announces Tobacco Enforcement Settlement that Protects Arizona's $100 Million Annual Payments by Tobacco Companies

PHOENIX (Tuesday, December 18, 2012) -- Arizona Attorney General Tom Horne announced today a multi-state settlement with the major cigarette companies resolving a $3 billion payment dispute under the 1998 tobacco Master Settlement Agreement.

“This is a significant result for Arizona as it provides additional monies to the state and eliminates the risk that it could lose its $100 million annual payment from the companies for one or more of the next several years,” Horne said.

The Master Settlement Agreement (MSA) requires the major cigarette companies to pay states more than $200 billion over 25 years to settle lawsuits over the health care costs related to smoking.  Arizona receives approximately $100 million annually under the MSA.  For the past several years, there have been disputes over a portion of those payments.  Had the companies prevailed, Arizona could have lost some or all of its annual payment for ten years.

The settlement announced today, which requires approval by a nationwide arbitration panel, resolves that dispute for Arizona and 18 other States that agreed to it.  It also will result in the release to Arizona of its share of more than $ 4 billion from disputed payments accounts.

“This was a situation that confronted me immediately upon taking office in 2011,” Horne added. “Continuing to arbitrate these disputes could have meant the possible loss of at least a portion of the annual tobacco settlement payments to Arizona.  And each calendar year that is in dispute, starting with 2003, would be arbitrated separately, resulting in years in arbitration at a very high expense to the taxpayers.  The settlement eliminates that expense and makes additional MSA monies available for the state.  This settlement is ultimately a win for Arizonans.”