Raúl Torrez | Attorney General

AG BALDERAS SUES TOBACCO COMPANIES OVER MILLIONS IN WITHHELD PAYMENTS

For Immediate Release:
November 29, 2022
Contact: Jerri Mares — (505) 321-4372

SANTA FE—Today, New Mexico Attorney General Hector Balderas announced that he is filing a lawsuit against Philip Morris, R.J. Reynolds Tobacco Co., and other tobacco companies for, among other claims, breach of contract, defrauding New Mexico taxpayers, and conspiracy. The complaint, filed in the First Judicial District Court, alleges that the tobacco companies have withheld a portion of their annual payments to New Mexico in bad faith and in breach of the 1998 Master Settlement Agreement (MSA).

“There is no end to these baseless delay tactics, and it is time to force the tobacco companies to pay New Mexico what they owe for damages–funding much-needed health initiatives,” said Attorney General Balderas.

The MSA was a significant public health achievement in which New Mexico, along with other states and jurisdictions, settled claims against big tobacco for distorting the science of nicotine addiction and marketing their products to children in order to addict them as “replacement smokers”.

The MSA obligates each company to make a payment to New Mexico each year. However, the tobacco companies dispute New Mexico’s diligent enforcement of its laws every year, requiring New Mexico to go to arbitration to recover each year’s withheld payment. It has taken years to litigate these disputes–the arbitration over the year of 2004 just concluding in October 2022.

In 2021 alone, New Mexico healthcare costs directly attributable to smoking was more than $980 million. New Mexico’s average annual MSA payment is between $30 and $40 million, only covering a small portion of these costs.

A copy of the filing is attached.

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Raul Torrez

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