Attorney General Tim Fox Announces Historic Tobacco Settlement

Montana Attorney General Tim Fox held a press conference on Monday at the Mazurek Justice Building in Helena to announce an historic settlement with Big Tobacco for monies withheld over the years as part of a nationwide settlement.

The MSA (Master Settlement Agreement) allowed the tobacco companies to withhold up to 10 percent of the settlement funds, after they sued, stating that Montana was not diligently enforcing state statutes against companies that did not participate in the settlement.

Through extensive individual litigation, Montana was able to win all that money back for the state, said Attorney General Fox.

“Today I'm announcing we have achieved a one of a kind, groundbreaking and historic settlement,” said Fox. “Under this settlement, Montana will receive all of the funds withheld from it to date plus interest, over $49 million, as you can see here with this check for $53.5 million dollars.”

Fox said the funds from the tobacco companies will benefit the health of all Montanans.

“The funds will be returned to vital health care programs like the Children's Health Insurance Program or ‘CHIP’ that suffered during the decade, plus withholding,” he said. "In addition, nearly $10 million will be deposited to the general fund of the state of Montana. And of course we all know that the state needs these funds now more than ever.”

Fox said the settlement states that Big Tobacco can never again withhold any of the funds it owes to Montana.

“The defense also agreed not to withhold any funds from Montana in perpetuity,” he said. “Under the allegations in the lawsuit, currently approximately $4.5 million a year, which is represented by this check on my left, we estimate that in the next 10 years, that's worth approximately $55 million in money that will be paid without dispute to the state of Montana in addition to the other annual payment that the tobacco companies made.”

Fox said Montana stands alone in being able to make this claim on Big Tobacco.

“In addition, the defendants waive their rights to make any similar claim on Montana through the year 2030,” he said. “This permanently protects an additional approximately $55 million over the next 10 years. No other state in the union has received 100% of what was withheld by the defendants under a similar claim.”

Missoula Attorney David Paoli, who earned Fox's praise for his years of litigation on behalf of Montana, explained why the tobacco companies were withholding the payments to the state.

"There are companies out there that did not participate in the original settlement agreement and their tobacco companies were saying that Montana was not diligently enforcing our statutes against those non participating companies," said Paoli. "To be able to do work such as this on behalf of your own state is just an incredible honor and privilege, especially to represent Montana against these tobacco outfits and recover these funds that go to such important programs. We had such an incredible good team of smart, creative and tough attorneys, which was so incredibly essential to beat these tobacco companies and the types of lawyers who represent them."

The case was settled while on appeal to the Montana Supreme Court by the tobacco companies.  The Montana Supreme Court previously ruled that Montana’s enforcement of MSA can be litigated only in Montana court, a ruling — like today’s groundbreaking settlement — no other MSA state has been able to achieve.

Paoli was singled out by Attorney General Fox for his years of legal work in making the settlement a reality.