The Tobacco Master Settlement Agreement: Enforcement of Marketing Restrictions

On November 23, 1998, forty-six states and six other U.S. jurisdictions entered into the largest civil litigation settlement in the nation’s history. The tobacco Master Settlement Agreement (MSA) resolved litigation brought by over forty states in the mid-1990s against the major U.S. cigarette manufacturers, including Philip Morris, R.J. Reynolds, Brown & Williamson, and Lorillard, along with the tobacco industry’s trade associations and public relations firms. By signing the MSA, the states gave up their legal claims that the defendants had been violating state antitrust and consumer protection laws for decades. In return, the companies agreed to pay the states billions of dollars in yearly installments and to change the way they advertise and market their products. Since November 1998, about twenty-five other tobacco companies have signed onto the MSA and are also bound by its terms. A separate settlement, called the Smokeless Tobacco MSA (STMSA), resolved the states’ claims against U.S. Smokeless Tobacco Company (USSTC). The marketing and advertising restrictions in the STMSA parallel the MSA, although the agreement does not require USSTC to make settlement payments to the states. This law synopsis summarizes the MSA’s restrictions on tobacco product marketing and advertising, as well as the types of conduct the MSA does not affect. It also provides a step-by-step description of the enforcement process, from informal inquiry to litigation, reviews several enforcement actions that have helped flesh out the meaning of some of the MSA’s marketing and advertising restrictions, and notes other areas of industry conduct that raise current and likely future challenges for MSA enforcement.