A Complex Achievement: The Tobacco Master Settlement Agreement

AuthorJoelle M. Lester & Kerry Cork
Chapter 3: A Complex
Achievement: The Tobacco
Master Settlement Agreement
Joelle M. Lester, J.D. and Kerry Cork, J.D., M.A.*
I. Introduction
It is hard to overstate the historic signicance of the 1998 Master Settlement
Agreement (MSA) between the major cigaret te companies and 46 states—
the largest legal settlement ever executed in the United States.1 Following
decades of unsuccessf ul individual lawsuits by injured smokers, the MSA
and the four individual state tobacco se ttlements that preceded it2 showcased
the role of litigation as a formidable tool in public health policy and shifted
the legal focus from the personal responsibility of plaintis, who were often
smokers dying of tobacco-related diseases, to the corporate responsibility of
the tobacco industry.
e initial goal of the tobacco litig ation was to recover monetar y damages
for the states based on the Medicaid health care costs they had incurred in
treating sick and dying ciga rette smokers.3 As part of the MSA, the tobacco
industry agreed to compensate the set tling states in perpetuity, with annual
payments initially expected to tota l $206 billion through 2025.4 e other
1. See Master Settlement Agreement (1998), available at https://www.naag.org/naag/about_naag/naag-
php [hereinafter MSA].
2. See, e.g., Settlement Agreement & Stipulation for Entry of Consent Judgment, State v. Philip Morris,
Inc., No. C1-94-8565 (Minn. Dist. Ct. May 8, 1998) [hereinafter Minnesota Tobacco Settlement
Agreement]; See also Tobacco Control Archives, U.  C. S.F., https://www.library.ucsf.edu/ar-
chives/tobacco/ (last visited May 20, 2020) [hereinafter State Tobacco Settlements] (making available
the texts of the other settlements).
3. See e ABCs of the Tobacco Settlement Agreement, N’ A’  A’ G., https://www.naag.org/
ment.php (last visited May 22, 2020) [hereinafter e ABCs of the Tobacco Settlement Agreement].
4. See MSA, supra note 1; see also U.S. G’ A O., T S: S’ U
 M S A P 2 (2001); NAAG Tobacco Project: 11 Years of MSA
Coordination, N’ A’  A’ G., https://www.naag.org/publications/naagazette/volume-
3-number-4/naag-tobacco-project-11-years-of-msa-coordination.php (last visited May 22, 2020).
* Joelle M. Lester is Director of Commercial Tobacco Control Programs and Kerry Cork is Senior
Sta Attorney at the Public Health Law Center. e authors thank Douglas Blanke, J.D., and Mark
Greenwold, J.D., for their editorial review.
Copyright © 2020 Environmental Law Institute®, Washington, DC.
42 Looking Back to Move Forward: Resolving Health & Environmental Crises
litigation objectives were equally as ambitious: (1) restraining tobacco com-
pany marketing and advertising to prevent appeals to youth; (2) ending the
industry’s false and deceptive denia ls of science; and (3) funding public health
policy eorts to help current smokers quit and prevent underage smoking.5
To this end, the industry agreed to several concessions, including restric-
tions on advertising, sponsorship, lobbying, and litigation activities—par-
ticularly those targeting youth. e restrictions included the creation of a
charitable foundation to reduce teen smoking, the disbanding of three
tobacco industry organi zations, and public access to damaging internal doc-
uments demonstrating the extent to which the industry had misled the pub-
lic about tobacco’s health harms. By many measures, the tobacco sett lement
agreement was a success. Yet some in the public health community continue
to view the MSA’s long-term impact on public health policy and the land-
scape of tobacco control as a disappointment.
II. Background
A constellation of research, advocacy, legislative, and legal events made the
state litigation possible and helped shape the core elements of the ultimate
settlement. In the rst half of the 20th century, nearly half of all adults in
the United States were regula r smokers.6 e rise of the use of the cigarette
during this time was paralleled by an alarming rise in lung cancer in the
United States—a disease virtually unk nown at the turn of the century when
cigarette smoking was neg ligible.7 Start ing in 1950, the rst scientic studies
were published that linked cigarette u se with lung cancer.8
In 1953, the tobacco companies e stablished an initiative named the
Tobacco Industry Research Committee. is orga nization, later renamed
the Council for Tobacco Research, primarily functioned as a public rela-
Despite this estimate, MSA payments have only totaled $138.8 billion as of April 2020. N’ A’ 
A’ G., 2020-04-21 P  S S I T A 21, 2020 (2020),
ception_through_April_21_2020.pdf. e discrepancy between projected and actual payments is
the result of the decline in the consumption of cigarettes and a decrease in market share by the four
largest cigarette manufacturers, discussed in more detail below.
5. See C  T-F K, F S, U T S F 
T P: S Q F H-R S O (1999), https://
6. J G, T  H: T C  D 305 (1993).
7. A B, T C C: T R, F,  D P  
P T D A 2–3 (2006).
8. See, e.g., Ernst L. Wynder & Evarts Graham, Tobacco Smoking as a Possible Etiologic Factor in Bronchio-
genic Carcinoma: A Study of 684 Proved Cases, 143 J. A. M. A’ 334 (1950); see also B,
supra note 7, at 131–57.
Copyright © 2020 Environmental Law Institute®, Washington, DC.
A Complex Achievement: The Tobacco Master Settlement Agreement 43
tions wing of the tobacco industry, casting doubt on accusations linking
cigarettes to ill hea lth and promoting cigarette consumption. e council’s
eorts, along with those of the Center for Indoor Air Research, played a
central role in the fraud and misinformation charges later brought against
tobacco companies.9
Despite the eorts of the tobacco industry, evidence of the health risk s of
cigarette use continued to mount, leading to the rst U.S. Surgeon Genera l’s
report on the health harms of smoking in 1964.10 Just a year after t he report’s
release, Congress passed t he Federal Cigarette Labeling a nd Advertising Act
of 1965, which required the rst wa rning labels on cigarette packa ges—a
candid acknowledgement of tobacco-related health risk s.11
A. Waves of Litigation
As the popular media began to report on the dangers of tobacco use, a pub-
lic health movement grew to reduce the prevalence and social acceptability
of smoking and hold the industry responsible for the harm caused by its
products. e obstacles were great, however. e tobacco industry at the
time was largely unreg ulated, the political power of the tobacco industry
and its lobbyists was unchecked, and the smoking culture was entrenched.
Smoking was endorsed by doctors, athletes, celebrities, politicians, a nd
other popular gures; intrinsically tied to the century’s norms and beliefs;
and an omnipresent prop in the rituals of adolescent identity.12 Moreover,
the tobacco industry had a formidable army of lawyers with a raft of legal
defenses and an unrelenting determination to resist even the most modest
of public health demands.13
Nevertheless, starting in the mid-1950s, individual smokers and their
estates sued the tobacco companies for the il lnesses and death caused by
cigarette use. In the mid-1950s through 1994, individuals brought over 800
claims against cigarette manufacturers for damages related to the eects of
smoking.14 However, the manufacturers, raising defenses such as contribu-
9. See Tobacco Industry Research Committee, SW, http://www.sourcewatch.org/index.php/
Tobacco_Industry_Research_Committee (last updated Dec. 25, 2019).
10. Read the Surgeon General’s 1964 Report on Smoking and Health, P. B S., Jan.
12, 2014, https://www.pbs.org/newshour/health/first-surgeon-general-report-on-smokings-
11. Federal Cigarette Labeling and Advertising Act of 1965, 15 U.S.C. §§1331–40; 21 U.S.C. §387c.
12. B, supra note 7, at 56.
13. M P, S  T E: L  M L F  T
W 3 (2001).
14. Robin Miller, Annotation, Validity, Construction, Application, and Eect of Master Settlement Agreement
(MSA) Between Tobacco Companies and Various States, and State Statutes Implementing Agreement, Use
Copyright © 2020 Environmental Law Institute®, Washington, DC.

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