TOBACCO CONTROL LAWS

Maryland v. Philip Morris, Inc.

The tobacco companies challenged the calculation of their payments due under the 1998 Master Settlement Agreement (MSA) to the State of Maryland.  The companies sought to decrease their payments based on an adjustment contained in the MSA, while Maryland argued there was an exception to the adjustment which applied to the state, requiring full payment.  In this matter, Maryland sought to enforce the exception through state courts and the companies, relying on the MSA, argued that arbitration was the proper forum for settlement of their calculation dispute.  Agreeing with the trial court, which referred the case to arbitration on pretrial motion, the appellate court found the plain language of the MSA dictated arbitration regardless of a subsequent 2003 agreement modifying the 1998 MSA.

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Maryland v. Philip Morris, Inc., et al., 944 A.2d 1167, Maryland Court of Special Appeals (2008).

  • United States
  • Mar 27, 2008
  • Maryland Court of Special Appeals

Parties

Plaintiff State of Maryland

Defendant

  • Lorillard Tobacco Co.
  • Philip Morris, Inc.
  • R.J. Reynolds Tobacco Co.

Legislation Cited

Master Settlement Agreement

Related Documents

None

Type of Litigation

Challenge to Government Policies Relating to Tobacco Control/Public Health
Tobacco companies or front groups may challenge any legislative or regulatory measure that affects their business interests. Unlike public interest litigation, these cases seek to weaken health measures. These cases frequently involve the industry proceeding against the government. For example, a group of restaurant owners challenging a smoke free law as unconstitutional.
Government Enforcement Action
Government, through its agencies and officials including prosecutors, may seek to enforce its health laws. For example, the government may revoke the license of a retailer that sells tobacco products to minors. These cases may also directly involve the tobacco industry, for example, a government might impound and destroy improperly labeled cigarette packs.
Health Care Cost Recovery
Governments or insurance agencies may seek reimbursement from the tobacco companies for health care costs related to tobacco. The most famous example is the case brought by individual states in the U.S.A. that resulted in the Master Settlement Agreement.

Tobacco Control Topics

Advertising, Promotion and Sponsorship
Measures restricting any form of direct or indirect tobacco advertising, promotion and sponsorship. (See FCTC Art. 13)
Liability
Measures dealing with criminal and civil liability, including compensation. (See FCTC Art. 19)

Substantive Issues

Procedural Defect
The court might consider procedural matters without touching the merits of the case. These might include: improper joinder, when third parties, such as Health NGOs or government officials, seek to become parties to the suit; lack of standing, where a plaintiff fails to meet the minimum requirements to bring suit; lack of personal jurisdiction, where the court does not have jurisdiction to rule over the defendant; or lack of subject matter jurisdiction, where the court does not have jurisdiction over the issue at suit.

Type of Tobacco Product

None

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