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Big Tobacco ordered to pay millions to N.Y.

Rochester Business Journal
September 11, 2013

A ruling by a special three-judge panel will see New York collect more than $92 million from the so-called Big Tobacco companies, state Attorney General Eric Schneiderman said Wednesday. 

The ruling comes in a dispute over payments relating to a 1998 agreement in which a number of tobacco companies agreed to pay New York, other U.S. states and two territories to settle charges that the tobacco companies promoted smoking while willfully ignoring its health risks. Under the master settlement agreement, ongoing payments to the states and territories are tied to sales of tobacco products within their borders.

Costs of treating smoking-related illnesses largely paid for by states through Medicaid and other health and welfare programs.

The tobacco companies claimed New York owed them $800 million for money they had paid on untaxed cigarette sales on Indian reservations. The judicial panel said settlement terms calling for the cigarette manufacturers to pay into an escrow fund for every unit of product sold applies.

“This ruling is a huge victory for all New Yorkers, and I applaud the panel for denying Big Tobacco’s efforts to avoid responsibility for illnesses caused by cigarettes and paid for by taxpayers,” Schneiderman said. “Big Tobacco companies contribute to the deaths of thousands of people every year. Finally, these companies will be required to reimburse the state for money spent treating New Yorkers made ill by their deadly product.”

The ruling applies only to a single year and the tobacco companies are continuing to press similar claims in other years.

“This office will make every effort to force the tobacco companies to give New York the money they are unlawfully withholding from the state, including going to court if necessary,” Schneiderman said.
(c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail


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