New Mexico Sues Over Tobacco Settlement

New Mexico is suing over a dozen tobacco companies over payments relating to the 1998 Master Settlement Agreement, alleging conspiracy and breach of contract, reports the Albuquerque Journal, citing Attorney General Hector Balderas.

Balderas claims that the companies have withheld portions of annual payments due under a multistate tobacco settlement. According to the attorney general, New Mexico has lost more than $84 million over the past 14 years.

“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 Balderas.

Companies are obligated to pay annually under the settlement, but each year, the companies file disputes that result in a percentage of the payment being withheld, which triggers an arbitration process that can take years, according to the attorney general’s office.

The amount withheld grows each year, according to officials, and the lawsuit states that the tobacco companies do not disclose how much is withheld or where the withheld funds are held, and withholding practices can change annually.

“This conspiracy is a calculated strategy to permanently and fraudulently decrease defendants’ contractual payments under the (settlement agreement) and to frustrate the purposes of the (settlement agreement),” the suit reads.