On July 28th, Iowa Attorney General Tom Miller filed a lawsuit accusing Philip Morris USA, R.J. Reynolds Tobacco Company, and 16 other tobacco companies of defrauding Iowa out of over $133 million.
The lawsuit filed by Iowa Attorney General Tom Miller stems from the 1998 Master Settlement Agreement, which required tobacco manufacturers to pay billions of dollars annually to participating states in exchange for those states agreeing not to bring lawsuits related to public health damages caused by tobacco products.
Miller submitted the lawsuit to the Polk County Court, which accuses tobacco companies of maliciously withholding part of their annual payments to Iowa. The tobacco companies are demanding that Iowa submit to arbitration to recover the funds that have been withheld each year. Miller explained that litigating each dispute takes several years, resulting in a backlog of withheld funds.
Iowa has consistently come out on top in every dispute, including the most recent one in 2021, but the tobacco companies continue to refuse payment to the state. In a statement, Miller said, "We have been litigating for years and winning, but these disputes seem endless. We must now escalate this matter to compel the tobacco companies to pay what they owe to Iowa.
The lawsuit seeks to recover actual punitive damages, as well as attorney's fees and other costs. Under Iowa's False Claims Act, the state requires compensation in an amount three times that of actual damages.
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