The Master Settlement Agreement ("MSA") is an agreement originally negotiated between the four largest tobacco companies and 46 U.S. States and 6 U.S. Territories reached in 1998. The negotiations addressed the potential liability of the tobacco industry for an alleged cover-up of tobacco-related health problems and ultimately exempted the companies from tort liability from state governments in exchange for a combination of yearly payments to the states and voluntary restrictions on advertising and marketing of tobacco products. The agreement was meant to provide state governments with compensation for smoking related medical costs and to help reduce smoking in the United States.

The MSA was originally signed in November, 1998 by the four largest tobacco companies, Philip Morris USA, R.J. Reynolds Tobacco Company, Brown & Williamson Tobacco Corp., and Lorillard Tobacco Company. The agreement was later joined by over 40 other tobacco companies. Every U.S. State and 6 U.S. Territories signed the agreement. Florida, Minnesota, Texas and Mississippi had already reached individual agreements with the tobacco industry.

Although the MSA has been criticized as being too lenient on the major tobacco companies, cigarette consumption in the United States fell to a 50 year low in 2004. Another criticism is the alleged favoritism shown to the major tobacco companies over smaller independent tobacco growers and sellers. Proponents of this argument claim that certain restrictions on pricing and advertising make it more difficult for small growers to compete with "Big Tobacco". 12 states have successfully fought against this argument in court during the last two years.

External link

• Text of the Master Settlement Agreement

Notes

• Roger Parloff, "Is the $200 Billion Tobacco Deal Going Up in Smoke?'", Fortune Magazine p. 126, (March 7, 2005)

Tobacco control | 1998 in law