The state of Texas brought action against tobacco companies for breaching their obligations under a settlement agreement. The state argued that one of the tobacco companies had failed to report as their own cigarettes that it manufactured for another company, a figure used to calculate the tobacco company’s annual payments to Texas. As a consequence of the alleged underreporting, Texas claimed that it had been deprived of millions of dollars in settlement payments between the years 1999 and 2002. The Court concluded that the tobacco company did not breach its obligations to the state under the settlement agreement.
Texas v. American Tobacco Co., et al., 463 F.3d 399 (5th Cir. 2006).
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.
The tobacco industry may have perpetrated a fraud upon the public or the courts by presenting false information or deliberately hiding known-facts.
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.
"B&W, on the other hand, argues that the contract-manufactured cigarettes were properly excluded from the annual payment calculations because they were not B&W’s cigarettes and it was not req uired to report those cigarettes to MSA, Inc. It should be noted that as a subsidiary of a British corporation, B&W does not report to the SEC. Therefore, B&W reported as its shipments under the Texas Settlement Agreement the same shipments that it reported to MSA, Inc. Pursuant to the agreement between MSA, Inc. and B&W, B&W was not required to report the Star contract-manufactured
cigarettes as its own. Even though the Texas Settlement Agreement does not specifically refer to MSA, Inc., B&W argues that the plain language of the Texas Settlement Agreement requires the annual payment calculations to be based on the Settling Defendants “audited” shipment reports, which are, in turn, the MSA, Inc. reports. B&W then argues that if there is any doubt about how the annual payments are calculated, such doubt is eliminated by the parties’ course of performance."
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 state of Texas brought action against tobacco companies for breaching their obligations under a settlement agreement. The state argued that one of the tobacco companies had failed to report as their own cigarettes that it manufactured for another company, a figure used to calculate the tobacco company’s annual payments to Texas. As a consequence of the alleged underreporting, Texas claimed that it had been deprived of millions of dollars in settlement payments between the years 1999 and 2002. The Court concluded that the tobacco company did not breach its obligations to the state under the settlement agreement.