AG McDaniel Settles Tobacco Agreement Dispute

Attorney General Dustin McDaniel (D) announced Thursday (March 14) that an arbitration panel has issued a ruling that will allow a settlement to proceed between Arkansas and the tobacco companies that signed the Master Settlement Agreement.

The settlement ends a long-running dispute and restores certainty to the State’s annual payments from the 1998 Master Settlement Agreement.

In the agreement, Arkansas will receive its share of more than half of the money that has been held in escrow for nearly a decade as the dispute was ongoing. It will also include 2013 funding, which will bring the total amount of windfall to $22.7 million.

The tobacco companies argued that Arkansas and certain other states had violated the Master Settlement Agreement by failing to diligently enforce state tobacco laws. The state disagreed with the assertion.

“The tobacco companies’ challenge could have jeopardized the entire annual payments that the state receives, and with them, the important anti-smoking and public health efforts paid for by these funds,” McDaniel said. “This settlement assures that we no longer face that risk. This year, the state’s annual payment will increase to its rightful amount for the first time in nearly a decade. In addition, the state will receive more than half of the disputed funds. This resolution allows us to move forward with certainty in regard to these vital health programs.”

Under terms of the MSA, Arkansas receives approximately $60 million per year.

McDaniel led the effort to reach the settlement, which was joined by 16 other states, including California, as well as the District of Columbia and Puerto Rico.

McDaniel served as co-chairman of the Tobacco Committee of the National Association of Attorneys General from 2010 to 2012, and he said he sees this settlement as “one of the most significant accomplishments of my entire service as Attorney General.”