MISSOURI WINS RETURN OF NEARLY $50M IN TOBACCO CASE

(The following is a reformatted version of a press release
issued by the Office of the Missouri Attorney General Chris
Koster and received via electronic mail. The release was
confirmed by the sender.) 
May 2, 2014 
Attorney General Koster announces Missouri wins return of nearly
$50 million in tobacco settlement case 
Jefferson City, Mo. -  Attorney General Chris Koster announced
today that Judge Jimmie Edwards of the City of St. Louis Circuit
Court has partially vacated a 2013 arbitration panel ruling that
cost Missouri approximately $70 million from its annual tobacco
settlement payment.  Koster sent a copy of the ruling to
PricewaterhouseCoopers, the independent auditor that calculates
the states’ tobacco payments, along with a letter demanding that
Missouri’s payment be revised to comply with the court’s ruling. 
“As a result of today’s decision, Missouri should be paid nearly
$50 million that the tobacco companies sought to withhold from
our State,” Koster said.  “This money will provide needed
support for state priorities like public education. I thank our
dedicated team of attorneys, who have litigated this case for
years to ensure that Missouri receives its fair share of the
settlement money.” 
The current dispute arose when the tobacco companies who
participated in the 1998 Master Settlement Agreement (MSA)
alleged that many states, including Missouri, failed to
diligently enforce state tobacco laws in 2003.  As a result, the
tobacco companies argued, they were entitled to withhold a large
portion of their payment for that year under the terms of the
MSA. 
During the arbitration, 22 states settled their cases.  Last
September, a three judge arbitration panel ruled in favor of the
tobacco companies in their claims against six states that did
not settle:  Missouri, Indiana, Kentucky, Maryland, New Mexico,
and Pennsylvania. 
The arbitration panel ordered that the six losing states were
responsible not only for their own share of the loss, but also
for the shares of the states that had settled their cases. 
Koster’s office filed suit in Missouri court last fall, arguing
that reallocating the liability of the settling states onto the
six losing states violated the terms of the MSA.  Today, Judge
Edwards agreed, finding that the share of the loss that would
otherwise be assigned to the settling states should not be
shifted to Missouri. 
Judge Edwards’ Order and Judgment. 
http://ago.mo.gov/newsreleases/2014/OrderJudgmentCase_2014-05-02.pdf 
Koster’s letter to PricewaterhouseCoopers. 
http://ago.mo.gov/newsreleases/2014/LetterPWC2014.5.2.pdf 
(bjh) NY 
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