Master Settlement Agreement

The Master Settlement Agreement (MSA) is an accord reached in November 1998 between the state Attorneys General of forty-six states, five U.S. territories, the District of Columbia and the five largest tobacco companies in America concerning the advertising, marketing and promotion of tobacco products. In addition to requiring the tobacco industry to pay the settling states approximately $10 billion annually for the indefinite future, the MSA also set standards for, and imposed restrictions on, the sale and marketing of cigarettes by participating cigarette manufacturers.

Among its many provisions, the MSA:

• Forbids participating cigarette manufacturers from directly or indirectly targeting youth;
• Imposes significant prohibitions or restrictions on advertising, marketing and promotional programs or activities; and
• Bans or restricts cartoons, transit advertising, most forms of outdoor advertising, including billboards, product placement in media, branded merchandise, free product samples (except in adult-only facilities), and most sponsorships

Over the years, the states have collected record amounts of tobacco revenue, but are spending less of it on tobacco prevention programs.  According to the Campaign for Tobacco-Free Kids, which tracks state tobacco prevention spending vs. state tobacco revenues, only one state to date – North Dakota—currently funds a tobacco prevention at even half the level recommended by the Centers for Disease Control and Prevention.

Key Resources – MSA Background

• Master Settlement Agreement (1998) PDF, 270 Kb.
• National Association of Attorneys General. The Tobacco Project serves as liaison to the NAAG Tobacco Committee and Settling States for the implementation and enforcement of the Tobacco MSA. The Project assists the States in defending the MSA, in coordinating enforcement strategies, in construing and applying the MSA to specific situations, and in dealing with other tobacco issues.  Legal documents and resources related to the tobacco litigation and MSA are available on this site.
• Tobacco litigation. University of California, San Francisco Digital Library.  This website contains resources pertaining to federal, state and regional litigation actions including key documents from cases brought by the Attorneys General of 44 states.
• Public Health Advocacy Institute, Potential Master Settlement Agreement Violations Evidenced in Judge Kessler’s Findings in USA v. Philip Morris USA, Inc., et al. (2007).
• Robert Wood Johnson Foundation Anthology, The Center for Tobacco-Free Kids and the Tobacco-Settlement Negotiations, Digby Diehl (2003).    

Key Resources – MSA Revenue

• Campaign for Tobacco-Free Kids, A Broken Promise to Our Children:  The 1998 State Tobacco Settlement 11 Years Later (2009).  According to this report,  states in Fiscal Year 2010 will collect $25.1 billion in revenue from the tobacco settlement and tobacco taxes, but are spending just 2.3 percent of it — $567.5 million — on tobacco prevention and cessation programs (the states also receive $62 million in federal grants for tobacco prevention, for total funding of $629.5 million). In the past year, states have cut funding for tobacco prevention by $103.4 million – more than 15 percent.
• Understanding the State Tobacco Settlements, Campaign for Tobacco-free Kids series of fact sheets.
• Tobacco Settlement Payments to the States, Campaign for Tobacco-free Kids series of backgrounder fact sheets.