State Medicaid Reimbursement Lawsuits
In May 1994, each of the 50 states filed suit against the tobacco companies seeking monetary, equitable, and injunctive relief under various consumer protection and antitrust laws. The theory behind these suits was that the tobacco industry’s products (i.e., cigarettes) contributed to health problems among the population, which resulted in significant costs to the states’ public health systems.
As an example, see the Florida Attorney General’s complaint.
The legal campaign was initiated by Michael Moore, the Attorney General of Mississippi, but other states soon followed his lead. Plaintiffs alleged a wide range of deceptive and fraudulent practices over decades of cigarette sales. The lawsuits sought to recover Medicaid and other public health expenses that the states incurred in the treatment of smoking induced illnesses. In this context, the tobacco companies were unable to use the defense of “personal responsibility” which had shielded them in many cases brought by individual smokers.
In 1997-98, Mississippi, Florida, Texas, and Minnesota (the first states to sue) settled with the tobacco industry defendants. Then in 1998, 46 states and the tobacco companies agreed to the Master Settlement Agreement (MSA), which set limitations on the companies, mandated annual payments to the states, and made tobacco industry documents (disclosed during litigation) available to the public.