On July 28, the Iowa attorney general’s office filed suit against Philip Morris, USA, R.J. Reynolds Tobacco Co., and 16 other tobacco companies, accusing them of defrauding Iowa of over $133 million by allegedly engaging in bad faith disputes over amounts due under the Master Settlement Agreement (MSA).

Tobacco company signatories to the MSA, also known as participating manufacturers (PMs), must pay the settling states their portion of $9 billion dollars on an annual basis. These payments are subject to a handful of various upward and downward adjustments, one of which is known as the “Non-Participating Manufacturer Adjustment” or “NPM Adjustment.” The NPM Adjustment may reduce the amount of money a state is due from the PMs in a given year if the state did not enact and “diligently enforce” an “escrow statute,” requiring non-participating manufacturers (NPMs) to place money in proportion to their sales made into that state into an escrow account. Continue Reading Iowa Attorney General Brings Suit Against Participating Manufacturers to the Master Settlement Agreement

An article by the Troutman Sanders Tobacco practice appears in the February issue of Smokeshop Magazine. The article, titled “Pennsylvania’s Legal Battle Over MSA Payments Keeps Twisting” discusses the ongoing battle between Pennsylvania and major tobacco manufacturers regarding disputed 2003 Master Settlement Agreement (“MSA”) escrow payments.

Continue Reading Troutman Sanders Tobacco Practice Publishes Article on Pennsylvania’s Ongoing MSA Payment Battle in Smokeshop Magazine

An article by the Troutman Sanders tobacco practice appears in the December issue of Smokeshop Magazine. The article, titled “Disputed 2003 MSA Payments Resolved,” discusses the recent rulings of the arbitration panel regarding the “diligent enforcement” dispute that erupted between Participating Manufacturers and governments of MSA settling states. The full text of the article can be found here. Continue Reading Troutman Sanders Tobacco Practice Publishes Article in Smokeshop Magazine

As mentioned in a previous blog post, on September 11, 2013, a three-member federal arbitration panel decided the on-going dispute among three participating manufacturers (“PMs”) and 15 states involving the 2003 payment obligations under the Master Settlement Agreement (“MSA”). Continue Reading Arbitration Panel Rules Against State of New Mexico

As mentioned in a previous blog post, on September 11, 2013, a three-member federal arbitration panel settled the on-going dispute among three participating manufacturers (“PMs”) and 15 states involving the 2003 payment obligations under the Master Settlement Agreement (“MSA”).

New York is one of the states that the arbitrators ruled in favor of in denying the PMs a credit under the non-participating manufacturer (“NPM”) Adjustment.  The arbitration panel concluded that “the MSA’s first condition for application of the 2003 NPM Adjustment was satisfied: the PMS had suffered a ‘Market Share Loss’ for 2003.”  In particular, the independent auditor calculated approximately an 8 percent market-share shift from the PMs to the NPMs from 1997-2003.  New York (nor any of the other 14 states) disputed the auditor’s finding that the PMs suffered a market share loss in 2003.  Continue Reading Arbitration Panel Rules in Favor of New York State, Finds No Obligation to Collect Escrow for Tribal Sales