PRESS RELEASE: Idaho Reaches Multi-Million Dollar Settlement with Tobacco Companies

[BOISE] – Attorney General Raúl Labrador announced today a multi-million-dollar settlement with several tobacco companies. The settlement resolves years of litigation among the tobacco companies and Idaho concerning Idaho’s right to funds from the 1998 Tobacco Master Settlement Agreement.

This settlement resolves the claims over disputed funds from the years 2005 to the present, as well future claims to such funds through the year 2031. In 2024, Idaho will receive more than $74 million, which includes not only this year’s annual payment, but also a percentage of the disputed funds for past years.

“By reaching this settlement, Idaho resolves all past disputes and future potential disputes for the next several years,” Attorney General Labrador said. “This settlement avoids decades of expensive litigation and eliminates risk that could threaten millions of dollars of Idaho’s annual MSA payment. I’m committed to ensuring that the tobacco companies meet their obligations to Idaho under the MSA without delay or uncertainty.”

With this settlement, Idaho joins 38 other states and territories that have similarly settled their disputes with the tobacco companies. Idaho’s payments go into Idaho’s Millenium Fund. Since its formation, the Millenium Fund has funded tobacco cessation and youth smoking prevention programs as well as other health-related initiatives. With this settlement payment, Idaho has received more than $661 million in MSA payments.

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Under the 1998 settlement, Idaho receives annual payment that is a fixed percentage of the tobacco companies’ total annual payment to the states. But before Idaho receives this annual payment, the tobacco companies typically dispute approximately $3 to $5 million of that payment and place that amount in a “disputed payment account.” For Idaho to ever receive any portion of these disputed amounts, Idaho is required to prevail in complex and expensive litigation.

While Idaho has prevailed in this litigation in the past, future results are never guaranteed. For example, just recently, in December 2023, the state of Washington lost its arbitration with the tobacco companies. If Idaho were to lose the litigation, it risked losing the disputed amounts and some portion of its annual payment based on a “reallocation” provision in the 1998 agreement. Idaho has now eliminated the risk of losing some portion of its annual payments to “reallocation.”

The agreement gives Idaho the disputed funds now, instead of waiting for many years. The litigation has proven to be so slow that at present, Idaho was preparing for trial on its entitlement to disputed funds from the years 2005-2007. Thus, even if successful, Idaho had faced at least a 19-year delay in receiving the disputed funds. Idaho has now eliminated this delay.

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