What Were the Terms of the Master Settlement Agreement (Select All That Apply.)

For OPMs (Original Participating Manufacturers), payments are determined on the basis of their relative market share from 1997 onwards. The amount of payment for a given OPM is also determined by the „volume setting“, which compares the number of cigarettes sold in each payment year with the number of cigarettes sold in 1997. If the number of cigarettes sold by an OPM in a given year is less than the number of cigarettes sold in 1997, the volume adjustment allows the OPM to reduce its payment to the billing States. In other words, a reduction in the number of cigarettes sold by OPMs means that settlement states receive less money. Faced with the prospect of defending several actions nationwide, the majors asked for an appeal to Congress, mainly in the form of a national legislative regulation. [9] In June 1997, the National Association of Attorneys General and the Majors jointly petitioned Congress for a comprehensive resolution. On June 20, 1997, Mississippi Attorney General Michael Moore and a group of other attorneys general announced the details of the settlement. The settlement included a $365.5 billion payment from companies, approval of possible regulation by the Food and Drug Administration in certain circumstances, and stricter warnings and advertising restrictions. In return, businesses would be exempt from class actions and litigation fees would be capped. [10]:422 In the ten years since the agreement, many state and local governments have chosen to sell so-called tobacco bonds. They are a form of securitization. In many cases, bonds allow state and local governments to shift the risk of declining future payments from framework settlement agreements to bondholders. In some cases, however, the bonds are backed by secondary promises of public or local revenues, creating a perverse incentive to support the tobacco industry on which they now depend for future payments against that debt.

[55] The Trust Articles explicitly require the NPM to deposit the following amounts into an eligible trust fund by April 15 of the year following the year in question (since these amounts are adjusted for inflation): For subsequent participating manufacturers, payments are determined based on their relative market share relative to other MBMs. For PMSs that have joined the MSA within 90 days of its implementation, annual payments are determined by the number of cigarettes a PMS sells above the „grandfather“ volume – calculated as the highest market share of the individual PMS in 1998 (the year in which the MSA was exported) or 125% of the PMS market share in 1997. If the sales volume or market share of an SPM falls below the amount of acquired rights, it is not obliged to make payments to the billing States. PMS that have not joined the MSA within 90 days of its execution will not receive an amount of grandfathering. Next year, major cigarette manufacturers reached an agreement with tobacco-producing states to compensate tobacco producers for losses they would incur as a result of rising cigarette prices as a result of earlier regulations. This agreement, dubbed the „Phase II“ program, created the National Tobacco Growers` Settlement Trust Fund. Tobacco producers and quota holders in the 14 states that grow combustion tobacco and burley tobacco to make cigarettes are entitled to trust fund payments. The states are Alabama, Florida, Georgia, Indiana, Kentucky, Maryland, Missouri, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Virginia and West Virginia. During the development of the MSA, OPMs and settlement states considered that many of the smaller tobacco companies would choose not to join the MSA. This lack of accession was a potential problem for both the MPOs and the states of the resolution. THE OPMs were concerned that NPMs, both because they would not be bound by the advertising and other restrictions of the MSA and because they would not be obliged to make payments to billing states, would be able to charge lower prices for their cigarettes, thereby increasing their market share. The argument that the Framework Settlement Agreement created a cartel of major U.S.

cigarette manufacturers that allowed them to charge „supracompetitive“ prices for their product was rejected by the United States. Ninth District Court of Appeals in 2007. [53] The Court of Appeal found that the applicants had not established sufficient facts to prove that the MSA and two related state statutes violated the federal Sherman Act. [54] The Tobacco Settlement Framework Agreement (BFA) was concluded in November 1998 between the four largest tobacco companies in the United States (Philip Morris Inc., R.J. Reynolds, Brown & Williamson and Lorillard – the „Original Participating Producers“). called the „Majors“) and the attorneys general of 46 states. States have settled their Medicaid lawsuits against the tobacco industry to cover their tobacco-related health care costs. [1]:25 In return, the companies agreed to restrict or discontinue certain tobacco marketing practices and to make various annual payments to states on a permanent basis to compensate them for a portion of the medical costs of caring for people with smoking-related illnesses.

The money also funds a new anti-smoking advocacy group called the Truth Initiative, which is responsible for campaigns like Truth and maintains public records of documents that have emerged from the cases. Some tobacco control advocates, such as William Godshall, have criticized the MSA for being too lenient towards the big tobacco companies. In a speech at the National Tobacco Control Conference, Godshall said that „with the unprecedented future legal protection afforded by state GAs in exchange for money, it appears that the tobacco industry has emerged even more powerful from state lawsuits.“ [47] Thus, an NPM is still required to pay annually into a state`s trust fund resulting from multiplying the number of cigarettes that npM sells in that state in that state by the same amount per cigarette for that year as set out in the State Trusts Act. The NPM may receive a refund if these deposited funds are greater than the amount it would have had to pay under the MSA for the same year, based on the same number of cigarettes sold. [42] To fill this gap, the National Association of Attorneys General („NAAG“) introduced the Allocable Share Release Repealer („ASR Repealer“) in late 2002, a model law that eliminated the ASR […].