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September 11, 2013 at 6:29 PM

Washington to get $15M in disputed tobacco-settlement money

OLYMPIA — Washington state will receive nearly $15 million in disputed tobacco-settlement money after an arbitration decision said that tobacco companies were not entitled to pay the state less under a landmark multi-state 1998 settlement agreement, the state Attorney General’s Office announced Wednesday.

Attorney General Bob Ferguson said that the state will receive $14.8 million in disputed tobacco-settlement funds that were withheld from 2003.

In all, 45 tobacco companies were involved in the settlement that former Washington state Gov. Chris Gregoire, who was the state’s attorney general at the time, helped negotiate on behalf of 46 states. Those states settled their suit against the industry for $206 billion, payable over 25 years. Four states settled separately for a total of $40 billion. The states sought to recover costs for treating sick smokers.

The companies, including R.J. Reynolds, Phillip Morris Inc., Lorillard and more than a dozen smaller companies, said Washington state failed to collect escrow payments as required from other manufacturers who didn’t sign the 1998 agreement, specifically those sold on Indian reservations.

Washington was one of nine states that won arbitration against the companies, while six others were found to fail to enforce the agreement in 2003, the state Attorney General’s Office said.

In a written statement, Philip Morris officials said the company expects a credit of $145 million against next year’s payments and will pursue arbitration for 2004. Phone messages left after hours with other companies were not immediately returned.

Washington state has received more than $2 billion in payments since the settlement.

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