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Karl A. Racine
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Tobacco Settlement Brings Additional $11 Million to District

Thursday, March 14, 2013
“This settlement is good for District residents and good for investors in District tobacco bonds,” said Attorney General Nathan.

WASHINGTON, DC – The District of Columbia is due to receive an additional $11 million in settlement funds over the next five years under a new multi-state settlement agreement with major tobacco companies, Attorney General Irvin B. Nathan announced today. The agreement resolves a 10-year dispute regarding payments under the 1998 Master Settlement Agreement (MSA).  

In 1998, the major tobacco companies agreed to make annual payments in perpetuity to states, including the District, to settle lawsuits over the states’ health care costs due to smoking. Since 2003, there has been a dispute between major tobacco companies and the states over those annual payments, including whether the District was entitled to the approximately $355 million in MSA payments it has received since 2003.  

The District’s tobacco settlement money goes first to pay holders of bonds issued when the District’s settlement-payment stream was partially securitized in 2001 and 2006. Residual amounts are retained by the District Government.

“This settlement is good for District residents and good for investors in District tobacco bonds,” said Attorney General Nathan. “And it saves the District the cost and risk of continuing litigation before an arbitration panel.”

Nathan commended the trial team of Assistant Attorneys General Jimmy Rock, Brian Caldwell, and Andrew Costinett, and paralegal specialist Joan Hungerford, as well as the tobacco enforcement work of Bennett Rushkoff, Chief of the Public Advocacy Section.  The team handled a lengthy arbitration against the major tobacco companies, which alleged that the District had failed to comply with its enforcement obligations under the MSA and should have settlement funds withheld.  “The District’s lawyers demonstrated compliance with our obligations, and the settlement followed,” Nathan said.

The settlement was also joined by 18 other states and territories, including Alabama, Arizona, Arkansas, California, Georgia, Kansas, Louisiana, Michigan, Nebraska, Nevada, New Hampshire, New Jersey, North Carolina, Puerto Rico, Tennessee, Virginia, West Virginia and Wyoming.

Media Contacts

  • Ted Gest (202) 727-6283