Victory for Pennsylvania in Tobacco Settlement

April.10.2014

On April 10, 2014, a cross-practice Litigation team achieved a major victory for the Commonwealth of Pennsylvania, convincing the Pennsylvania Court of Common Pleas to modify an arbitration panel’s ruling that had gone in favor of all of the major tobacco companies. The big tobacco companies were trying to claw back money from the funds owed to the Commonwealth of Pennsylvania under the tobacco master settlement agreement.  One of their tactics was to enter into in a side agreement with some states and then seek to transfer part of the settling states’ liability onto the remaining states, including Pennsylvania. After extensive briefing and argument, the Pennsylvania Court of Common Pleas flatly rejected the tobacco companies’ tactic, thus saving Pennsylvania approximately $120M under the master settlement agreement this year and potentially much more in future years.  Much of the money will go to fund hospitals in poor and rural areas as well as cancer research.  The ruling will also help several other states in their cases against the tobacco companies.

The Orrick team was led by Jonathan Guy and Bob Loeb, and included Kathleen Orr, James Burke, Alec Orenstein, Aaron Rubin, and Brooke Daley.