The tobacco companies challenged the calculation of their payments due under the 1998 Master Settlement Agreement (MSA) to the State of Connecticut. The companies sought to decrease their payments based on an adjustment contained in the MSA, while Connecticut argued there was an exception to the adjustment which applied to the state, requiring full payment. In this matter, Connecticut 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 granted the pretrial motion to compel arbitration, the appellate court found the plain language of the MSA dictated arbitration of the payment calculation dispute.
State of Connecticut v. Philip Morris, 959 A.2d 997 (Conn. 2008)
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, 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.
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.
A violation of the right to procedural fairness. For example, a party may claim that a government agency did not consult with public or stakeholders when issuing regulations.
Any violation of a law designed to ensure fair trade, competition, or the free flow of truthful information in the marketplace. For example, a government may require businesses to disclose detailed information about products—particularly in areas where safety or public health is an issue.
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
Limitations regarding the use of quotes The quotes provided here reflect statements from a specific decision. Accordingly, the International Legal Consortium (ILC) cannot guarantee that an appellate court has not reversed a lower court decision which may influence the applicability or influence of a given quote. All quotes have been selected based on the subjective evaluations undertaken by the ILC meaning that quotes provided here may not accurately or comprehensively represent a given court’s opinion or conclusion, as such quotes may have originally appeared alongside other negative opinions or accompanying facts. Further, some quotes are derived from unofficial English translations, which may alter their original meaning. We emphasize the need to review the original decision and related decisions before authoritatively relying on quotes. Using quotes provided here should not be construed as legal advice and is not intended to be a substitute for legal counsel on any subject matter in any jurisdiction. Please see the full limitations at https://www.tobaccocontrollaws.org/about.
"As we have explained previously herein, § IX (d)(2)(B) of the agreement provides that a state can avoid the application of the nonparticipating manufacturer adjustment if it has enacted a qualifying statute that is in full force and effect during the calendar year and the state diligently has enforced the statute during the calendar year. Accordingly, the determination of whether a state has diligently enforced its State v. Philip Morris, Inc., 959 A.2d 997, 289 Conn. 633 (Conn., 2008) qualifying statute is central to the independent auditor's determination of whether to apply the nonparticipating manufacturer adjustment because diligent enforcement precludes the application of the adjustment. We conclude, therefore, that the determination of whether a state has diligently enforced its qualifying statute arises out of or relates to the independent auditor's calculations and determinations, including the application of an adjustment, in this case, the nonparticipating manufacturer adjustment. The present dispute between the parties therefore is subject to arbitration under the agreement."
Limitations regarding the use of quotes The quotes provided here reflect statements from a specific decision. Accordingly, the International Legal Consortium (ILC) cannot guarantee that an appellate court has not reversed a lower court decision which may influence the applicability or influence of a given quote. All quotes have been selected based on the subjective evaluations undertaken by the ILC meaning that quotes provided here may not accurately or comprehensively represent a given court’s opinion or conclusion, as such quotes may have originally appeared alongside other negative opinions or accompanying facts. Further, some quotes are derived from unofficial English translations, which may alter their original meaning. We emphasize the need to review the original decision and related decisions before authoritatively relying on quotes. Using quotes provided here should not be construed as legal advice and is not intended to be a substitute for legal counsel on any subject matter in any jurisdiction. Please see the full limitations at https://www.tobaccocontrollaws.org/about.
The tobacco companies challenged the calculation of their payments due under the 1998 Master Settlement Agreement (MSA) to the State of Connecticut. The companies sought to decrease their payments based on an adjustment contained in the MSA, while Connecticut argued there was an exception to the adjustment which applied to the state, requiring full payment. In this matter, Connecticut 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 granted the pretrial motion to compel arbitration, the appellate court found the plain language of the MSA dictated arbitration of the payment calculation dispute.