COMMONWEALTH OF MASSACHUSETTS,
Plaintiff,
v.
PHILIP MORRIS INC., et. al.
The Complaint
Massachusetts' action is brought against six cigarette manufacturers, two trade
associations in the tobacco industry, and two Massachusetts wholesalers of tobacco
products. The complaint alleges that "each year, the Commonwealth must spend
millions of dollars to purchase or provide medical and related services for Massachusetts
citizens suffering from diseases caused by cigarette smoking." The
"smoking-related costs to the Commonwealth" are said to include, but not be
limited to, "medical assistance provided under Massachusetts' Medicaid program"
and "medical assistance provided under the CommonHealth Program." The
complaint seeks "both monetary damages and injunctive relief."
STATE OF NEW YORK, Plaintiffs,
- against -
PHILIP MORRIS INCORPORATED, et. al.
STATEMENT OF FACTS
Historical Context
In 1994, a number of states took the unprecedented step of commencing legal
actions against manufacturers of tobacco products and other related entities seeking,
inter alia, money damages for the substantial public health costs incurred through
Medicaid and other programs associated with the treatment and care of persons suffering
from tobacco-related illnesses such as cancer, emphysema, and heart disease.
By 1997, several additional states, including the State of New York, commenced
separate lawsuits against tobacco manufacturers also seeking to recover public health
costs associated with tobacco-related illness. As more and more states joined in the
effort to recover these enormous costs through litigation, settlement discussions on a
national level between the various states and tobacco manufacturers were pursued.
Excerpts from: Forty-Six States Agree to Accept $206 Billion Tobacco
Settlement
By Milo Geyelin, The Wall Street Journal
November 23, 1998
Forty-six states agreed to accept a $206 billion settlement with the tobacco
industry over public-health costs connected to smoking, setting off a scramble
within the states over how to spend the money.
The deal, which ends lawsuits brought by the states against the industry, is the
largest civil settlement in U.S. history. It is to be signed by state attorneys general
and officials of the nation's five largest tobacco companies today. ...
The 46 states and five U.S. territories that agreed to the settlement will
receive their money over 25 years. The amounts will depend on the numbers of Medicaid
recipients on each state's rolls, the cost of medical services and the amount each state
contributed to Medicaid coverage historically, said Colorado Attorney Gale Norton, one
of eight attorneys general who forged the agreement.
Excerpts from: Commentary; Lining Up for the Tobacco Money
By Katherine Kersten, Minneapolis Star Tribune
December 16, 1998
Minnesota's $6 billion tobacco free-for-all is about to begin. Folks, get ready to
witness the boondoggle of the century.
Forget the fact that the tobacco lawsuit was waged in the name of the
taxpayers, ostensibly to compensate them for the smoking-related costs they have borne.
At this moment, organizations ranging from HMOs to ad agencies to schools are lined up 12
deep to grab a piece of the mind-boggling tobacco windfall for themselves.
Excerpts from: Hospitals Want Tobacco Money
Associated Press
December 17, 1998
Seventy Michigan hospitals will ask an Ingham County judge next week for a share
of the state's $8.2-billion tobacco settlement.
The settlement, announced last month, is intended to compensate states for
Medicaid coverage of smoking-related illnesses. Hospitals say they deserve some of the
money since the amount the state pays for Medicaid patients doesn't cover the patients'
total costs.
Excerpts from: Illinois Hospitals File Seeking Share of Tobacco
Settlement
Bloomberg Press
December 7, 1998
Sixteen Illinois hospitals filed a motion in Cook County Circuit Court in Chicago
last week seeking a share of the state's $9.1 billion settlement with tobacco companies,
according to Crain's Chicago Business. The hospitals requested in the filing the right to
sue the tobacco industry independently if they can't get a piece of the settlement. The
hospitals seek to recover the cost of treating Medicaid patients with illnesses related to
smoking, Crain's said.
Excerpts from: Smokescreen; The Ifs and Buts of the Tobacco Settlement
by Sylvia Nasar, New York Times
November 29, 1998
Last week's $206 billion settlement between the tobacco industry and 46 states is
supposed to put Big Tobacco on the run. The agreement requires cigarette makers to
compensate states for the medical costs of treating smoking-related diseases.
Excerpts from: Lawyer Who Took On Tobacco is a Fighter
by Wendy Koch, USA TODAY
November 24, 1998
Under the deal signed Monday, the nation's four largest tobacco companies will
pay 46 states $206 billion over 25 years for them to drop their lawsuits to recover the
health-care costs of treating smokers.
Excerpt from: A New Tobacco Deal
Editorial, Washington Post
November 17, 1998
A new agreement has been reached between the major tobacco companies and the
states that have sued them to recover past tobacco-related health care costs. The
agreement is more modest than the one that became the basis for the tobacco bill that
failed in the last Congress. It would settle the state lawsuits, mainly for money --
perhaps a fifth of a trillion dollars over the next 25 years.
Excerpts from: Editorial, New York Times
November 17, 1998
The deal negotiated by eight state attorneys general and the tobacco industry
would do far too little to combat teen-age smoking, the primary goal that any legal
settlement should advance. Instead, this proposal is mostly a financial agreement in
which the companies would pay off state lawsuits for Medicaid costs incurred for
smoking-related diseases.
Excerpts from: $206B Tobacco Deal Would Limit Ads, Repay States for
Health Costs
by Harry Berkowitz, Newsday
November 16, 1998
Negotiators yesterday completed a $206-billion deal, including $24 billion to New
York State, for tobacco companies to reimburse states for smoking-related health costs
and to restrict marketing and advertising of cigarettes.
Excerpts from: Feds May "Rip Off" Tobacco Money
by Randy Ludlow, Cincinnati Post
November 18, 1998
Sixty percent of Ohio's $9.9 billion share of a potential settlement with the
tobacco industry could disappear if the federal government seeks to "rip off"
the states by claiming Medicaid reimbursement, warns Ohio Senate President Richard
Finan.
Excerpts from: State's Tobacco Funds in Danger?
by Brian Ford, TulsaWorld
December 17, 1998
The attorney general says the federal agency that oversees Medicaid may get a
substantial portion of the money.
A huge part of Oklahoma's $2 billion tobacco settlement could wind up in the hands
of the federal agency that runs the Medicaid program unless Congress says otherwise, state
Attorney General Drew Edmondson warned Wednesday.
Oklahoma is to receive $2 billion over the next several years as part of a $206
billion settlement between several states and the nation's top six cigarette producers. Oklahoma
had filed suit to recoup money paid for Medicaid for tobacco-related illnesses.
Medicaid receives most of its funding from the federal Health Care Finance Authority. The
state pays for the rest.
Excerpts From: McConnell; Give States Tobacco Money - Bill Would Block
U.S. from Gtting Any of Settlement
by Kirsten Haukebo, The Courier-Journal
December 13, 1998
U.S. Sen. Mitch McConnell said yesterday that he will sponsor legislation to stop
the federal government from claiming any of the $206 billion from the national settlement
between tobacco companies and the states.
As things stand now, the federal government could claim up to 70 percent of
Kentucky's $3.45 billion share of the pact.
That's because the states, in their lawsuits against tobacco companies, are
seeking compensation for money spent under Medicaid to treat smoking-related illness,
and Medicaid is largely a federally funded program. In Kentucky, about 70 percent of the
program's cost is paid by the federal government.