Maryland Attorney General Anthony G. Brown announced Monday that a Baltimore City Circuit Court ruling will prevent major tobacco companies from reducing the annual settlement payments they owe Maryland to cover potential damages in a separate lawsuit filed by Baltimore City.
The decision protects millions of dollars Maryland receives each year under the 1998 Master Settlement Agreement, which provides funding for healthcare related to smoking-related illnesses and other public health programs.
The agreement, reached between major tobacco companies and 52 states and territories, resolved claims involving Medicaid costs associated with smoking-related diseases and requires tobacco companies to make annual payments indefinitely.
Baltimore City previously filed a lawsuit against tobacco companies, including Philip Morris USA and R.J. Reynolds Tobacco Company, alleging environmental damage caused by discarded cigarette filters. The companies argued that any damages awarded to the city could be deducted from their settlement payments to Maryland.
The Maryland Attorney General’s Office intervened in the case, and the court ruled that environmental damage claims fall outside the scope of the 1998 agreement. As a result, the companies cannot offset their payments to Maryland to cover potential damages awarded to Baltimore City.
According to the Attorney General’s Office, the ruling is the first in the nation to address whether the settlement agreement covers environmental claims brought by a local government against tobacco companies. Baltimore City’s lawsuit can now proceed.
