Tobacco companies sued for $133 million in missed settlement payments


Philip Morris USA, RJ Reynolds Tobacco Co. and more than a dozen other tobacco companies have been sued by the Iowa Attorney General for allegedly failing to pay the state $133 million owed under a 1998 settlement intended to avoid future health-related lawsuits.

The companies withheld part of their annual payments to Iowa in bad faith and “through a system of misrepresentation and feigned ignorance,” Iowa Attorney General Tom Miller said Thursday. a Democrat, in a statement.

The landmark 1998 agreement called for tobacco companies to pay some $206 billion to states to offset health care and other costs incurred by smoking-related illnesses. Tobacco companies have called on states to resolve any alleged breaches of arbitration every year, but Miller says that process is taking too long. Iowa won the last such dispute in 2021, but the companies “still refused to pay,” he said.

“We have fought and won these legal battles for years, and there is no end in sight to these disputes,” Miller said in the statement. “We must now escalate the case and force the tobacco companies to pay what they owe the State of Iowa.”

Iowa received a total of $1.41 billion in payments under the deal.

The press offices of Altria Group, the parent company of Philip Morris USA, and RJ Reynolds did not immediately respond to messages seeking comment.

Copyright 2022 Bloomberg.

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