Ieyoub v. Philip Morris USA

In 1998, the tobacco companies and the state of Louisiana (among other states) entered into the Master Settlement Agreement (MSA) in an action brought by states against the tobacco companies to recover costs for health care services provided to individuals suffering from tobacco-related illnesses.  Under the MSA, the tobacco companies were to make annual payments to the state in exchange for the state waiving future healthcare cost recovery claims. Both sides agreed that the United States Federal Arbitration Act (Arbitration Act) would control should a dispute arise. The tobacco companies filed a motion to compel arbitration after an independent auditor did not apply an adjustment in the calculation of the annual payment to the state. The Court reversed the trial court's dismissal of the motion and compelled arbitration, assigning costs to the state, based on the broad scope of the arbitration provision and application of the Arbitration Act.

Ieyoub v. Philip Morris USA, Inc., 982 So.2d 296, Louisiana Court of Appeals, Third Circuit (2008).

  • United States
  • Apr 30, 2008
  • Louisiana Court of Appeals, Third Circuit
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Parties

Plaintiff Richard Ieyoub

Defendant

  • Commonwealth Brands, Inc.
  • Compania Industrial de TabacosMonte-Paz, S.A.
  • Daughters & Ryan, Inc.
  • Farmers Tobacco Company of Cynthiana, Inc.
  • House of Prince A/S
  • Japan Tobacco International USA, Inc.
  • King Maker Marketing, Inc.
  • Kretek International, Inc.
  • Liberty Brands, LLC
  • Liggett Group, LLC
  • Lorillard Tobacco Co.
  • P.T. Darjum
  • Peter Stokkebye Tobaksfabrik A/S,P.T. Djarum
  • Philip Morris USA, Inc.
  • R.J. Reynolds Tobacco Co.
  • Santa Fe Natural Tobacco Co., Inc.
  • Sherman's 1400 Broadway NYC, Inc.
  • Top Tobacco, LLP
  • Vibo Corp.
  • Virginia Carolina Corp., Inc.
  • Von Eicken Group

Legislation Cited

Related Documents

Type of Litigation

Tobacco Control Topics

Substantive Issues

None

Type of Tobacco Product

None

"As explained by the United States Supreme Court in Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983), Section 2 creates a body of substantive law favoring arbitration and any doubt as to the scope of arbitrable issues must be resolved in favor of arbitration. See also La.R.S. 9:4201; Aguillard v. Auction Management Corp., 04-2804, 04-2857 (La.6/29/05), 908 So.2d 1. Accordingly, we find that the trial court erred in denying the motion to compel arbitration. We grant the motion, ordering that the issues of whether the Independent Auditor properly excluded the Non-Participating Manufacturer Adjustment from its calculation and whether the State diligently enforced its Qualifying Statute proceed to arbitration as anticipated by the Master Settlement Agreement."