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UTAH FILES BRIEF TO PROTECT TOBACCO SETTLEMENT
Attorney General Mark Shurtleff filed a friend of the court brief today to make sure Utah receives the next scheduled payment under the national tobacco settlement. Shurtleff and 37 other attorneys general have asked an Illinois judge to consider the public health consequences when he sets the appeal bond in a local class action case against Philip Morris.
The amicus brief (pdf) was filed today with the Madison County Circuit Court. The brief asks Judge Nicholas Byron to set the bond in an amount that would avoid any adverse effect on payments to the states and require the posting of a bond sufficient to protect the interests of Illinois consumers at the time the appeal is concluded.
"This request is being made to make sure taxpayers are reimbursed for the billions of dollars that have been spent and will be spent on the terrible health care problems caused by tobacco," says Shurtleff.
The National Conference of State Legislatures also joined in the brief. Recently Byron awarded more than $10 billion in a class action by smokers who sued Philip Morris. The appeal bond was set at $12 billion. Philip Morris has warned it may not make payments under its tobacco settlement with the states if the company is forced to post the $12 billion appeal bond.
Under the 1998 Master Settlement Agreement (MSA), tobacco companies agreed to make annual payments to the states in perpetuity. These payments are estimated to total approximately $206 billion through 2025. Utah is supposed to receive $11,525,484 from Philip Morris.
"This isn't an effort to help big tobacco," says Joel Ferre, the assistant attorney general representing Utah on all tobacco litigation. "We are not taking a position on the judgment or other legal issues in this case. We are simply trying to protect Utah citizens from the terrible consequences that would be caused by an immediate funding shortfall."
According to the brief, courts in the past have reduced appeal bonds to accommodate ongoing functions of government. The attorneys general argue that failure of Philip Morris to make a payment will result in a substantial, immediate and unexpected revenue shortfall to the states and imperil vital health and safety interests.
For Fiscal Year 2003, more than 50 percent of the tobacco MSA revenues nationwide were allocated to public health programs. The brief contends that failure of the states to receive such payments promptly would severely threaten public health and safety programs in numerous states and undermine the progress in reducing youth smoking.
Since the settlement, tobacco use in the United States has declined substantially and underage tobacco use has declined by an even greater percentage. The attorneys general argue that a $12 billion bond would be self defeating if it forces Philip Morris to seek bankruptcy protection before it makes its April 15 payment to the States. In that case, state interests would be severely damaged and plaintiffs in the case would lose the security they are seeking from the bond.
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