More tobacco money due to Missouri

Missouri is due a larger payment as part of the tobacco master settlement, a St. Louis circuit judge has ruled.

“As a result of today’s decision, Missouri should be paid nearly $50 million that the tobacco companies sought to withhold from our state,” Attorney General Chris Koster said in a statement.

The 1998 Master Settlement Agreement gave states access to payments in perpetuity in exchange for releasing certain tobacco manufacturers from consumer fraud or product liability claims. As part of that agreement, the states had to enforce certain statutes that would prevent tobacco manufacturers that didn’t take part in the master settlement from gaining market share.

If the participating manufacturers lost more than 2 percent of their national market share to non-participating manufacturers, states would have their payments reduced.

Missouri was found not to have diligently enforced its qualifying statues in 2003, so the $130 million payment the state was to receive in April was reduced by a total of $70 million.

Judge Jimmie Edwards ruled Friday that as much as $50 million of that penalty was unfair. Twenty-two states, 20 of which were alleged to have failed in their diligence, had entered into a separate agreement in which the allegedly non-diligent states were treated as diligent for purposes of calculating their penalties. The agreement had the effect of hiking the penalties on non-diligent states that did not enter that agreement, including Missouri.

“Accordingly, this Court will order the Independent Auditor to treat the 20 signatory states whose diligence was contested but not proven as non-diligent when calculating the [non-participating manufacturer] Adjustment applicable to the amount owed to Missouri for 2003,” Edwards wrote in an order.

The final say on how much money Missouri will receive rests with the independent auditor to the Master Settlement Agreement, Ted Martens at PricewaterhouseCoopers in Houston. In a letter to Martens, the Attorney General’s Office wrote that it expected the recalculated payment to be the full $50 million.

The case is State ex rel. Nixon v. The American Tobacco Co. et al., 22972-01465.