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Is the Tobacco Settlement Constitutional?
Published online by Cambridge University Press: 01 January 2021
Extract
In August 2005, the Competitive Enterprise Institute (CEI), a conservative “think tank” and advocacy organization, filed a lawsuit in the Federal District Court for the Western District of Louisiana against the Louisiana Attorney General challenging the legality of the 1998 Master Settlement Agreement (MSA). If successful, this lawsuit could lead to the unraveling of one of the most significant opportunities to improve public health in United States history.
Under the MSA, forty-six states agreed to end their litigation against the four largest tobacco companies in the United States, who in turn agreed to pay the states an estimated $206 billion. The CEI alleges that the MSA is unconstitutional. Specifically, the suit alleges that the MSA established a cartel under which the states receive monetary payments and the four major tobacco companies are insulated from price competition – and that this arrangement violates the Compact Clause of the U.S. Constitution.
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