Illinois Receives Over $800 Million From Tobacco Manufacturers – The Southland Journal

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Attorney General Raoul: Illinois receives over $800 million from tobacco manufacturers (Springfield, IL) – Attorney General Kwame Raoul announced today that Illinois has received more than $804 million from tobacco manufacturers under the 1998 Tobacco Master Settlement Agreement (MSA). In addition to its more than $258 million annual MSA payment, Illinois has also received more than $546 million tobacco manufacturer were recently requested for approval. Funding had previously been withheld from annual MSA payments to the state.

“Although Illinois has prevailed in both arbitrations conducted to date, the process has become so cumbersome and lengthy that Illinois has had to wait too long to receive the money owed. Without this agreement, this would be the case for years to come,” added Raoul. “This settlement, now raising hundreds of millions of dollars and settling the dispute for the next six years, is a far better solution for Illinois than waiting decades to collect the money owed.”

Attorney General Raoul’s office recently completed a settlement separate from the MSA that settles claims by tobacco companies that they were entitled to reduce their annual payments to Illinois and other states based on cigarette sales by tobacco companies that don’t participate in the MSA. In 2013 and 2021, two arbitral tribunals composed of former federal judges found that Illinois had not been subject to this payment cut known as the Nonparticipating Manufacturer Adjustment in certain years. The panels found that the state has diligently enforced the provisions of the Tobacco Product Manufacturers’ Escrow Act, which requires tobacco manufacturers, not the state, to shoulder the financial burdens imposed on the state by cigarette smoking. For several years, states, including Illinois, have disputed the payment cut, arguing that its misapplication allowed participating manufacturers to withhold billions of dollars. The settlement settles the dispute for additional years through 2028 and requires tobacco companies participating in the MSA to release approximately $546,313,882 that they withheld from Illinois’ annual payments.

The MSA ruled on lawsuits filed by several states, including Illinois, against tobacco companies in the 1990s. States claimed tobacco companies deliberately marketed cigarettes to children, hiding cigarettes’ addictive properties and adverse health effects. They joined the MSA, which imposed significant restrictions on tobacco companies’ marketing practices and banned advertising aimed at youth.

Reducing underage use of tobacco and nicotine products has long been a priority for the Illinois Attorney’s Office. Although the MSA has banned the advertising of tobacco products in TV shows, films and other video content, Attorney General Raoul has encouraged creative guilds to support efforts to do more to stop tobacco use among youth by showing tobacco images more responsibly. In addition, Attorney General Raoul called on the federal government to require in 2020 that cigarette packages — in addition to textual warnings — contain images depicting the dangers of cigarette use. Attorney General Raoul has also appealed to the Food and Drug Administration (FDA), asking the agency to strengthen guidance on e-cigarettes by prioritizing enforcement actions against manufacturers of flavored e-cigarettes and asking the FDA to ban flavored tobacco products.

For more information and free tobacco cessation resources, visit the Illinois Tobacco Quitline website or call 1-866-QUIT-YES.

This Master Settlement Agreement Dispute Resolution is being handled by Darren Kinkead, Deputy Chief of the Special Litigation Bureau, Katherine Johnson, Chief of the Tobacco Enforcement Bureau, and David Buysse, Deputy Chief of the Public Interest Division.

Attorney General Raoul: Illinois receives over $800 million from tobacco manufacturers

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