Monday, August 17, 2009

Does the recent Ohio case about tobacco settlement funds apply to Wisconsin?

Many people have asked whether or not the recently decided Ohio case about state tobacco settlement funds could potentially apply to other states, such as Wisconsin.

A little background on the case would be helpful. In 2000, the Ohio state legislature placed their $230 million Big Tobacco settlement into an endowment, specifying that the money could only be used for tobacco prevention and cessation programs. Thus, when the state tried to use the money for a stimulus plan in 2008, the plaintiffs for the case sued. The plaintiffs were receiving benefits from cessation programs and felt the money should go to prevention and control programs, rather than general state funds.

The decision, handed down earlier this week, found that the legislature acted illegally when using the tobacco settlement money to fund other state programs. However the state has appealed, so the battle is far from over.

However, according to the Tobacco Legal Consortium, the Ohio case is unlikely to have legal influence on other states unless the state has a specific endowment like Ohio's already set up.

When the state of Ohio passed the law in 200o creating the "irrovocable trust", the law required that the Department of Health create an endowment specifically for the Tobacco Prevention and Control Program, place the settlement money in the fund, and use the money for only the intended purpose. Because Ohio had the legal protections in place, the plaintiffs had a clearer case --- the state taking the funds was clearly illegal.

Advocates in other states could have a chance at winning a similar suit, but they would have to find a state lawmaking it illegal to use tobacco settlement money for purposes other than prevention and cessation.

We hope this clarifies some questions people had about the master settlement agreement. To read the Campaign for Tobacco free Kids' press release on the Ohio case, click here.

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