Mississippi Settles Lawsuit with Cigarette Makers Summary

  • Last updated on November 10, 2022

When Mississippi became the first state to settle a lawsuit with tobacco manufacturers, the settlement provided the state with reimbursement for past health care expenditures on smoking-related illnesses paid for by state-funded medical programs. The lawsuit was the catalyst for a $246 billion settlement between state attorneys general and the tobacco industry.

Summary of Event

Throughout most of the last half of the twentieth century, tobacco companies successfully fought legal battles related to smoking-related illnesses and deaths. Their success was predicated on a three-pronged strategy. They refused to admit any negative health effects from cigarettes, including the addictiveness of nicotine or that smoking causes cancer. They instead focused on smoking as a personal decision by individuals who should be held responsible for their own actions. These arguments, combined with virtually unlimited spending on legal defense, helped tobacco companies to either win jury trials or have negative verdicts overturned on appeal. Tobacco Lawsuits;tobacco industry Cancer;tobacco use Smoking;lawsuits [kw]Mississippi Settles Lawsuit with Cigarette Makers (July 3, 1997) [kw]Lawsuit with Cigarette Makers, Mississippi Settles (July 3, 1997) [kw]Cigarette Makers, Mississippi Settles Lawsuit with (July 3, 1997) Tobacco Lawsuits;tobacco industry Cancer;tobacco use Smoking;lawsuits [g]North America;July 3, 1997: Mississippi Settles Lawsuit with Cigarette Makers[09750] [g]United States;July 3, 1997: Mississippi Settles Lawsuit with Cigarette Makers[09750] [c]Government and politics;July 3, 1997: Mississippi Settles Lawsuit with Cigarette Makers[09750] [c]Health and medicine;July 3, 1997: Mississippi Settles Lawsuit with Cigarette Makers[09750] Fordice, Kirk Moore, Mike Scruggs, Richard F.

Tobacco suits had traditionally been filed by individual smokers or as class-action suits on behalf of smokers suffering from the effects of tobacco. However, on May 23, 1994, the state of Mississippi filed an innovative suit against thirteen tobacco companies in its court system. Mississippi attorney general Mike Moore argued that regardless of individual culpability in smoking cases, the state had been forced to pick up millions of dollars worth of Medicaid and other medical bills on behalf of elderly and poor smokers and public employees covered by the state health plan. The lawsuit alleged that tobacco companies were aware of the health consequences of smoking but continued to claim otherwise. The Mississippi lawsuit was the first time that a government had sued the tobacco companies to recoup tax money spent on treating smoking-related illnesses. Attorney General Moore filed the suit in the state chancery court to ensure that the case would be decided by a judge rather than a jury of citizens, because juries had been unwilling to rule against tobacco companies in past suits.

The lawsuit was opposed by Mississippi’s Republican governor Kirk Fordice, who argued that it was a public relations gimmick by the Democratic attorney general to shake down tobacco companies. Fordice filed suit to dismiss Moore’s case, arguing that the governor, not the attorney general, was responsible for the operation of the state’s Medicaid program. Fordice’s suit was dismissed, but the governor actively opposed Moore’s suit and even filed a friend of the court brief supporting the tobacco companies.

Mississippi attorney general Mike Moore speaks at a news conference in Jackson, Mississippi, on July 3, 1997, after the tobacco industry agreed to pay $3.6 billion to the state over twenty-five years.

(AP/Wide World Photos)

Mississippi’s lawsuit used a unique blend of government and private resources in order to confront the tobacco companies. Personal injury attorney Michael T. Lewis Lewis, Michael T. conceptualized the innovative concept of suing tobacco companies on behalf of state taxpayers in May, 1993. He took the idea to Attorney General Moore, who enlisted the help of a friend from law school, Richard F. Scruggs. Moore did not have the monetary resources to fight a protracted court battle with the well-endowed tobacco companies. Consequently, he signed Scruggs, Lewis, and other private lawyers to contingency contracts with the state. The private lawyers used their own resources during the court case in hopes of reaping a potential windfall of millions of dollars if the case was settled. This contingency model was used by all of the other states that followed Mississippi in suing the tobacco companies. The arrangement was praised by supporters of the lawsuits, who claimed that it gave more resources to the antitobacco effort. However, opponents of the contingency model claimed that politically connected lawyers were often used by attorneys general and that private lawyers were more interested in settling for large sums of money than in preventing smoking deaths.

Moore and Scruggs became the leaders of a national movement among state attorneys general to sue the tobacco companies on behalf of taxpayers. The two men actively lobbied states to join their lawsuits and then served as the primary negotiators between the tobacco companies and the state attorneys general that led to a monetary settlement. The states’ lawsuits, in addition to Scruggs’s tenacity, were effective in getting former tobacco industry employees to testify against the companies and to turn over documents showing the companies’ knowledge of the addictiveness of cigarettes.

Mississippi and four other states received their first victory on March 13, 1995, when cigarette producer Liggett Group Liggett Group settled out of court for $41 million in payments over twenty-five years. This brought the larger tobacco companies to the table, and negotiations on a nationwide settlement to the states’ suits continued over the next year. During this time, more state attorneys general joined Moore in suing the industry. The major tobacco companies were finally convinced to enter into an agreement after twenty-two states reached a new settlement in March, 1997, with Liggett that required the company to declare that smoking causes lung cancer and that the firm marketed to youths. The tobacco industry settled out of court on June 20, 1997, for $368.5 billion in payments to forty states over twenty-five years. They also agreed to numerous provisions designed to reduce youth smoking and to be regulated by the federal Food and Drug Administration. In exchange for the settlement, the tobacco companies would have limited their liability in future suits. These regulatory and liability issues required that the federal government consent to the agreement before it could go into effect.

The provisional nature of the national agreement led Mississippi to settle its lawsuits with cigarette companies on July 3, 1997, just days before the case would have started in court. The state agreed to drop their suit in exchange for $3.6 billion over twenty-five years and $136 million annually in the following years. The agreement was purely monetary; the tobacco companies did not agree to any of the marketing or public health provisions contained in the national settlement. Further, the pact ensured that Mississippi would be entitled to more funds if any other states reached more advantageous terms in settlements with the tobacco companies. The agreement guaranteed that Mississippi would receive restitution even if the national pact was not ratified by Congress.

The June 20, 1997, settlement between the state attorneys general and the tobacco industry required the consent of Congress before it could go into effect. Throughout the fall of 1997 and the spring of 1998, President Bill Clinton Clinton, Bill and Congress debated alternative settlements that would have resulted in harsher penalties for the tobacco companies. Any hope of federal action died in mid-1998 when a bill sponsored by Arizona senator John McCain McCain, John was defeated on the floor of the Senate by tobacco supporters. The states were forced to renegotiate with the tobacco companies. Forty-six states (including Mississippi) reached a final agreement with the tobacco companies on November 23, 1998. The settlement guaranteed $246 billion to the states over a twenty-five-year period. It also contained stringent requirements to limit youth access to tobacco, to cut cigarette advertising, and to fund antismoking initiatives. The absence of federal regulatory and liability provisions in the final agreement resulted in a smaller monetary payout to the states.

Significance

Mississippi’s successful lawsuit against the tobacco companies was the beginning of a landmark triumph for public health advocates against the tobacco industry in the United States. Tobacco companies had been successful at defeating lawsuits in the past. However, Mississippi’s innovative approach of suing on behalf of taxpayers instead of individual smokers finally brought tobacco interests to the negotiating table. Mississippi built a large coalition of states who were collectively able to pressure the tobacco companies into a $246 billion settlement. The tobacco companies ultimately capitulated rather than face numerous protracted court cases against the states with uncertain outcomes.

The multibillion-dollar settlement helped the states recoup past expenditures on smoking-related illnesses and funded antismoking campaigns across the country. However, from the vantage point of public health experts, the most important components of the settlement related to the end of cigarette marketing toward youth. The tobacco companies agreed to stop sponsoring events attended by young people, to do away with popular images such as Joe Camel, and to cease the distribution of merchandise with tobacco logos. This triumph for public health advocates and the states was somewhat offset by the fact that the original June, 1997, settlement giving the U.S. Food and Drug Administration the power to regulate tobacco was never ratified by Congress. Tobacco Lawsuits;tobacco industry Cancer;tobacco use Smoking;lawsuits

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Brandt, Allan M. The Cigarette Century: The Rise, Fall, and Deadly Persistence of the Product That Defined America. New York: Basic Books, 2007. Comprehensive “biography” of the cigarette covers all aspects of the topic of smoking. Sections address the culture, science, politics, law, and globalization of tobacco products.
  • citation-type="booksimple"

    xlink:type="simple">Derthick, Martha. “Federalism and the Politics of Tobacco.” Publius: The Journal of Federalism 31 (Winter, 2001): 47-63. Overview of the factors that brought states together in their tobacco suits. Derthick also discusses the ramifications of the settlement for tobacco politics in the United States.
  • citation-type="booksimple"

    xlink:type="simple">Mollenkamp, Carrick, Adam Levy, Joseph Menn, and Jeffrey Rothfeder. The People vs. Big Tobacco: How the States Took on the Cigarette Giants. Princeton, N.J.: Bloomberg Press, 1998. Journalistic reconstruction of the events that led to the tobacco companies’ huge settlement with the states.
  • citation-type="booksimple"

    xlink:type="simple">Pertschuk, Michael. Smoke in Their Eyes: Lessons in Movement Leadership from the Tobacco Wars. Nashville: Vanderbilt University Press, 2001. Insider’s account of the day-to-day negotiations leading up to the tobacco settlement with the states.
  • citation-type="booksimple"

    xlink:type="simple">Snell, Clete. Peddling Poison: The Tobacco Industry and Kids. Westport, Conn.: Praeger, 2005. Provides a historical overview of tobacco control and a chapter examining the phases of the states’ 1998 settlement with the tobacco companies.

Canada Passes the Tobacco Products Control Act

First Monetary Damages Are Awarded to the Estate of a Cigarette Smoker

U.S. Surgeon General Reports on Tobacco and Health

CDC Publicizes the Dangers of Secondhand Smoke

Categories: History Content