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New Tobacco Settlement May End Municipal Lawsuits in Eight States.

A new tobacco settlement announced last week may pre-empt local government lawsuits in states participating in the agreement.

The $206 billion pact involving eight states and tobacco companies would settle state claims seeking recovery of government health costs for treating sick smokers who are or were, Medicaid beneficiaries or part of the indigent population.

States participating in the settlement agreement include Washington, California, Colorado, North Dakota, North Carolina, Pennsylvania, New York, and Oklahoma.

The agreement is a result of five months of negotiations and is less stringent than both the June 20,1997 settlement and proposed legislation from the 105th Congress.

The agreement is open for consideration of all other states that have sued tobacco companies, except Minnesota, Florida, Texas, and Mississippi who have already settled their lawsuits. States were supposed to decide whether to participate in the settlement by November 13, 1998, but some states have requested additional time to consider the agreement and the deadline was extended to November 23, 1998.

The Master Settlement Agreement includes local governments and hospital districts as a "releasing party" which means that a settling state's participation in the agreement may end any past, present, and future claims against tobacco companies.

A state's participation in this agreement would thereby automatically preempt the ability of local governments to continue any pending lawsuits or file future lawsuits. Additionally, all financial settlement distribution would be managed by the state, and each state would determine how to distribute the funds. Local governments would receive no direct compensation. Class action suits would be allowed by the agreement.

Municipal officials concerned about pending lawsuits or their city's ability to file future lawsuits should contact their state attorney general immediately to express their concerns over this settlement.

Proposed NLC policy that will be considered at the December 2-5, 1998 Congress of Cities supports a tobacco settlement or legislation that would not preempt local authority, including the ability to continue pending lawsuits or file future lawsuits.

California's local governments stand to reap a significant portion of the financial settlement in the state of California if the state chooses to settle. In August, the California State Attorney General's office agreed to a pact with cities and counties that would give local governments haft of any amount that the State of California wins in a lawsuit against the tobacco industry.

Under the California Attorney General's agreement, half of any money recovered would go to the state, 10 percent would be split evenly between San Francisco, Los Angeles, San Diego, and San Jose and the remainder would be distributed to California's 58 counties according to their population.

As this agreement would be implemented, settling states would work through the National Association of Attorneys General to enforce it.

Under the pact, the National Association of Attorneys General would have the responsibility to periodically inform the National League of Cities, as well as the National Governors' Association, the National Conference of State Legislatures, and the National Association of Counties of meetings and conferences of the settling states and participating manufacturers.

All oversight in carrying out the agreement would come from the National Association of Attorneys General. Other features of the settlement would include:

* $1.7 billion for research and programs aimed at discouraging smoking, especially by youth and teens;

* limits on cigarette marketing, including use of cartoon characters, sponsorships of sporting events;

* beginning in the year 2008, tobacco companies would pay more than $9 billion per year to the settling states and $12 billion in "up front" payments over the next five years; and

* a $50 billion enforcement fund for states to pursue of violations of the settlement.
State Allocation Percentages

Following are the settlement percentages of payments
made to states, if all state suing the tobacco companies
participate in the agreement.


Alabama 1.6161308%
Alaska .3414187%
Arizona 1.4738845%
Arkansas 8280661%
California 12.7639554%
Colorado 1.3708614%
Connecticut 1.8565373%
Delaware .3954695%
D.C. .6071183%
Florida already settled
Georgia 2.4544575%
Hawaii .60186650%
Idaho .3632632%
Illinois 4.6542472%
Indiana 2.0398033%
Iowa .8696670%
Kansas .8336712%
Kentucky 1.7611586%
Louisiana 2.2553531%
Maine .7693505%
Maryland 2.2604570%
Massachusetts 4.0389790%
Michigan 4.3519476%
Minnesota already settled
Mississippi already settled
Missouri 2.2746011%
Montana .42475591%
Nebraska .5949833%
Nevada .6099351%
New Hampshire .6659340%
New Jersey 3.8669963%
New Mexico .5963897%
New York 12.7620310%
North Carolina 2.3322850%
North Dakota .3660138%
Ohio 5.0375098%
Oklahoma 1.0361370%
Oregon 1.1476582%
Pennsylvania 5.7468588%
Rhode Island .7189054%
South Carolina 1.1763519%
South Dakota .3489458%
Tennessee 2.4408945%
Texas already settled
Utah .4448869%
Vermont .4111851%
Virginia 2.0447451%
Washington 2.053258%
West Virginia .8864604%
Wisconsin 2.0720390%
Wyoming .2483449%

American Samoa .0152170%
N. Mariana Islands .0084376%
Guam .0219371%
U.S. Virgin Islands .0173593%
Puerto Rico 1.1212774%
COPYRIGHT 1998 National League of Cities
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1998 Gale, Cengage Learning. All rights reserved.

Article Details
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Author:Cormier, Kristin E.
Publication:Nation's Cities Weekly
Geographic Code:1USA
Date:Nov 30, 1998
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