Oregon Department of Justice

Attorney General Ellen F. Rosenblum

Oregon Department of Justice - Attorney General Ellen F. Rosenblum
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Oregon To Receive $1,994,780 In New Global Tobacco Settlement

June 18, 2003

Attorney General Hardy Myers today announced that Oregon will receive $1,994,780 from tobacco companies in a settlement of pending disputes under the Master Settlement Agreement. The bulk of the money will come from Brown & Williamson, the nation's third largest tobacco manufacturer. The 1998 Master Settlement Agreement required all of the major tobacco companies to pay $206 billion to the states over the first 25 years of the agreement.

The payment to the state comes as part of a new, global settlement reached today for $160 million between the 52 states and jurisdictions and most of the nation's tobacco manufacturers.

"Today's agreement demonstrates that we will insist on full payment from each and every tobacco maker," Attorney General Myers said. "Additionally, it provides critical revenue at a time that state services to all Oregonians are in jeopardy."

The agreement resolves Brown & Williamson's failure to make payments to the states for the cigarettes it manufactured for Star Tobacco, Inc., a company that refused to join the settlement. On behalf of the other states, the Attorney General of Vermont sued Brown & Williamson over the payments last December.

As part of the settlement, all major tobacco manufacturers agreed they will take responsibility for cigarettes they manufacture for other companies. The settlement also avoids complex disputes over whether the 1998 settlement was a "significant factor" in causing the market share of the companies that signed it to decline during the first four years of the agreement. That issue had threatened to drag on into years of costly litigation, Attorney General Myers said. Instead, the settlement avoids claims from the tobacco companies that might have reached as much as $1 billion.

Vermont Attorney General William H. Sorrell, chair of the Tobacco Committee of the National Association of Attorneys General who headed the team that negotiated the agreement for the states, declared that the agreement was "a major step forward for the states in ensuring that they will continue to receive the full payments promised under the MSA."

Attorney General Sorrell said that the settlement demonstrated that the states would fight to hold the companies to the full amount of their payments and to prevent companies from resorting to indirect means to subvert the intent of the MSA.

"This settlement confirms the principle  that signatories to the MSA are responsible for all the cigarettes they manufacture and that they cannot enter into agreements with companies outside the agreement designed to minimize their obligations under the MSA," Attorney General Sorrell said. "This is a good settlement because it provides not only payment for cigarettes manufactured in the past but also establishes clear ground rules for the future."

Contact:

Kevin Neely, Justice, (503) 378-6002
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