Montana Secures Major Settlement With Big Tobacco on Missed Payments
In 1998, there was a major national settlement involving multiple states, and some major tobacco companies, over the issues of alleged concealment and misrepresentation of information regarding adverse health impacts related to the use of tobacco products.
However, according to Eric Sell from the Montana Attorney General’s Office, around 19 companies began withholding their agreed-to payments in 2004.
"Something interesting happened in the early 2000s," Sell said. "A lot of these tobacco companies banded together and deployed a nationwide strategy to withhold these payments. They claimed that states were failing to enforce the 1998 settlement agreement. That of course is untrue and in Montana's case we have very good documentation to show that we were living up to our end of the deal in that agreement."
Yesterday, Montana was able to secure another settlement with those nineteen companies to collect a small portion of those missed back payments.
"That state of Montana, as a part of this agreement, will be receiving roughly $3.4 million in back payments that these companies owed to the state," Sell said. "That is going to go to the Department of Public Health and Human Services to fund a number of health programs including the Children's Health Insurance Program. There are some more outstanding payments that still needs to be paid over the period of 2006 to 2018."
The three point four million dollars Montana received is just for a single year. Montana is still waiting for back payments on every year from 2006 to 2018.
Sell says the amount owed each year varies from between two million and five million dollars.
Montana is in a unique position to negotiate on this issue as it is the only state in the nation that didn’t settled with the tobacco companies for a lower amount than originally owed and it is also the only state in the country that can litigate this issue in state court rather than going through national arbitration.