Indiana appeals $62.8 million tobacco settlement reduction

The state is appealing an arbitration panel ruling from September that reduced by $62.8 million the amount due from tobacco companies to offset Indiana’s health costs associated with treating sick smokers and tobacco users.

Indiana was to receive $131.2 million next April under terms of the 1998 Master Settlement Agreement between states, the federal government and major tobacco companies, but the arbitration panel reduced Indiana’s anticipated payment to $68.4 million.

Attorney General Greg Zoeller on Wednesday announced the state would appeal the arbitration ruling and seek to vacate or modify the panel’s award.

“Fifteen years after signing the Master Settlement Agreement that was intended to bring some closure to the issue, the big tobacco companies continue to wage a legal battle against Indiana and other states to reduce their settlement payment for the consequences of their product on the costs of health care for our citizens,” Zoeller said in a statement announcing the appeal.  

“Triggered by the tobacco companies themselves, this arbitration process was extremely complex, and the panel’s fundamentally flawed ruling treated Indiana unfairly compared to similar states. Through this legal action we seek ultimately to restore the tobacco payments to Indiana to more equitable levels,” he said.