US: Gazette Opinion: Montana Makes Big Tobacco Pay Up

Source from:  Billings Gazette 07/31/2018

Montana and 45 other states settled lawsuits against major tobacco companies in 1998, but the fight to make companies pay as promised continues 20 years later.

Montana won the latest round in an agreement that brought the state over $3 million that tobacco companies had withheld from what they owed our state in 2004. Now the Montana Attorney General’s Office must collect the $2 million to $5 million that the same companies have withheld each year since 2004.

Last week, the state received $3.4 million that will be split between the general fund and special health-related revenue accounts as designated by Montana law. Additionally, about $300,000 received last week will help defray the state’s cost of this complex, long-running litigation.

Nationwide, this tobacco settlement pays billions to states and territories, although the payments have decreased over time. Montana collected about $27 million in 2004 alone, but tobacco companies withheld some money, claiming that the state had failed to diligently collect payments owed by tobacco companies that weren’t part of the master settlement of 1998. The same companies have withheld part of their annual payments to other states by making similar claims.

The headline on an Associated Press story in Wednesday’s Billings Gazette incorrectly implied that $27 million was being paid now. In fact, $27 million was paid in 2004, but an additional amount was withheld. Including accrued interest, that withholding totaled $3.7 million, which the tobacco companies paid last week.

“Any business operating in Montana must be held accountable for wrongdoing,” Attorney General Tim Fox said in a press release. “This settlement ensures that tobacco companies live up to the deal they agreed to two decades ago and pay in full the funds owed to the state. This is an historic agreement and I’m proud of my staff for making this happen.”

After that big deal in 1998, states still had to litigate how the payments would be made and what laws would apply to future litigation. Montana alone won the right to make its case in our state courts; every other state is part of a national agreement.

“We believe we have an excellent record of diligent enforcement and that tobacco companies have wrongfully withheld money over the years,” Anne Yates, assistant attorney general for tobacco litigation, told The Gazette.

The state court venue is “an enormous advantage and part of the reason we got such a good settlement,” Assistant Attorney General Mark Mattioli said Wednesday.

Kudos to Fox and staff for collecting this 2004 debt. Now that the state has settled the first year of the withholding dispute, it should pursue collection of multiple years for the full amount owed.

Montana needs the money. Under state law, 40 percent of tobacco settlement revenue goes into a tobacco trust fund with the interest earned funding health programs, 32 percent is designated for tobacco use prevention, 17 percent for the Children's Health Insurance Program and the rest goes to the state general fund.

Remember: the rationale for the 1998 settlement was to compensate states for some of the enormous costs of tobacco-related disease and disability. Tobacco still takes a terrible toll on Montanans, with smoking causing 1,600 deaths annually, according to the Campaign for Tobacco Free Kids, which estimates that Montana households pay an average of $779 a year in state and federal taxes for government expenditures related to smoking.  Enditem