Tobacco Deal Ruling Could Boost Other States in Pa.'s Boat
Richmond partner Bryan Haynes was quoted in an April 13 Law360 article about an en banc panel of the Pennsylvania Commonwealth Court handing a win to the state by upholding a lower court’s decision that an arbitration panel was wrong to assess a $125.8 million payment against the state over a dispute that involved select provisions in the 1998 Master Tobacco Settlement.
The master settlement requires tobacco companies involved to make annual payments to states with the option to reduce those payments if they can prove that the states “were not ‘diligent in ensuring that the settlement doesn’t jeopardize the settling companies’ market share - the focus of this dispute,” the article stated. Pennsylvania and five other states have contended that they were stuck bearing an unfair share of lowered annual payments compared with other “nondiligent” states.
“The Pennsylvania court’s decision is not binding, of course, but its reasoning appears to be sound and it makes sense that the full brunt is to be borne by all ‘nondiligent’ states,” said Bryan, who is not involved in this dispute.