Washington state will receive approximately $66 million from Philip Morris as part of a newly finalized agreement resolving long-running disputes tied to the historic 1998 tobacco settlement. This latest payment follows a separate settlement reached in April with R.J. Reynolds and other major tobacco companies, which brought more than $277 million to the state.
The 1998 Master Settlement Agreement (MSA), reached between 46 states and the largest tobacco manufacturers, imposed strict limits on tobacco advertising and prohibited marketing to minors. In return, tobacco companies agreed to make ongoing annual payments to the states to compensate for healthcare costs related to smoking. Washington has received about $3.8 billion under the MSA, and those payments continue as long as tobacco products are sold by the participating companies.
Former Washington Attorney General Christine Gregoire played a lead role in negotiating the original deal. In addition to funding public health initiatives, the settlement remains one of the most significant examples of corporate accountability 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,” said Attorney General Nick Brown. “I’m grateful to our team for negotiating these latest settlements for the benefit of our entire state.”
The current dispute involved a complex provision of the MSA related to enforcement against tobacco companies that did not join the agreement. Over the years, disagreements about how this provision should be applied have led to prolonged arbitrations. During that time, millions of dollars owed by Philip Morris, R.J. Reynolds, and other companies were placed in escrow accounts pending resolution.
This year, both the state and the tobacco manufacturers agreed it was time to settle and avoid further legal costs and uncertainty. The funds previously held have now been released and divided between the state and the tobacco companies. The $66 million agreement with Philip Morris resolves claims through 2015. Both parties have agreed to arbitrate disputes related to later years.
