April 11, 2014

Attorney General: PA Wins Back $120 Million From Tobacco Manufacturers

Attorney General Kathleen G. Kane and First Deputy Attorney General Adrian R. King Jr. Thursday announced a collaborative team from the Office of Attorney Office, the Governor's office and House and Senate leadership teams has resulted in a court victory that prevented an excess of $120 million from being reduced from Pennsylvania's annual payments pursuant to the Tobacco Master Settlement Agreement (MSA).
Last fall, the Commonwealth filed a motion in the Philadelphia Court of Common Pleas to overturn an arbitration panel decision, which found that in 2003 Pennsylvania did not "diligently enforce" certain laws requiring the collection of taxes and other payments from certain tobacco companies that did not sign the 1998 MSA.
The panel's decision shifted certain financial obligations of states that entered into a 2013 settlement agreement to Pennsylvania. States that joined the 2013 settlement did so to avoid a possible finding that they failed to diligently enforce their laws regarding non-signatory tobacco companies. In today's ruling, the court found that the arbitration panel ignored the plain language of the 1998 MSA which did not permit such a financial shift.
Because the panel's decision will not stand, Pennsylvania's reduction from an estimated annual payment of $335 million payment will only be approximately $60 million.
"I would like to congratulate First Deputy Adrian King and the entire team involved for their tremendous dedication to fighting the unjust reduction of MSA funding," said Attorney General Kane.
"This bipartisan collaboration shows what can happen when government works together for the people," she said. "While we were not able to win the entire amount, we are excited for this victory and what it means for the future of important smoking cessation, medical research and health programs that depend on this money."