Washington will receive about $66 million from Philip Morris through a new tobacco-related settlement

Washington will receive about $66 million from Philip Morris to resolve lingering disputes between the company and the state related to the landmark multibillion-dollar tobacco settlement reached in 1998.

The agreement with Philip Morris follows another one reached in April of this year between the state and other tobacco companies, including R.J. Reynolds Tobacco Company. Under that settlement, the state received over $277 million from R.J. Reynolds and the other manufacturers to resolve similar disputes.

Washington and 45 other states entered into the Master Settlement Agreement (MSA) with major tobacco makers in 1998. The settlement imposed major restrictions on the industry's advertising and marketing, including prohibiting tobacco advertising targeting people younger than 18. As part of the master settlement, participating tobacco manufacturers pay billions each year to states that reached resolutions with them. Former Attorney General Christine Gregoire played a lead role negotiating the settlement, under which Washington has received roughly $3.8 billion over the years. These payments continue as long as people buy tobacco products from those companies. In exchange, the states agree not to pursue additional suits for health-related damages.

"That 1998 agreement with tobacco companies continues to be a shining example of holding companies accountable for putting profits over people's health," Attorney General Nick Brown said. "I'm grateful to our team for negotiating these latest settlements for the benefit of our entire state."

The disputes at issue in the recent settlements with Philip Morris and the other tobacco makers concern one part of the master settlement with regard to enforcing laws against tobacco companies that did not join the MSA. Disputes and arbitrations over this provision have dragged on for years. Some of the money that Philip Morris, R.J. Reynolds, and the other participating tobacco companies owed to the state was held in an account while the disputes continued.

This year, the manufacturers and the state have agreed that it's better to reach a resolution and avoid further expense and uncertainty. The money that was held is being released and divided between the state of Washington and the tobacco makers, including this recent settlement with Philip Morris.

The agreement with Philip Morris resolves disputes through the year 2015. Washington and Philip Morris have agreed to arbitrate disputes related to subsequent years.

Assistant Attorneys General S. Todd Sipe and Eric Mentzer and Paralegals Diane Hoosier and Christine Truong worked on the settlement for Washington state.

A copy of the settlement with Philip Morris is available here.

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