New Mexico Sues Tobacco Companies over Breach of Settlement Agreement

Dec.06.2022
New Mexico Sues Tobacco Companies over Breach of Settlement Agreement
New Mexico sues tobacco companies for breach of settlement agreement and conspiracy, alleging over $84 million in losses.

The state of New Mexico is currently suing several tobacco companies, alleging they conspired and breached contracts.


New Mexico Attorney General Hector Balderas announced a legal challenge on Tuesday, alleging that tobacco companies have been withholding annual payments required by a multi-state settlement that resolved dozens of lawsuits seeking reimbursement for healthcare costs related to smoking-related illnesses.


Complaints from New Mexico are focused on a specific provision of a 1998 settlement agreement, alleging that the company's abuse of that provision has resulted in the state losing over $84 million in the past 14 years.


In a statement, Balderrama said, "These baseless tactics of delay have no end, and now is the time to compel tobacco companies to pay the damages owed to New Mexico - providing funding for much-needed health initiatives.


The companies did not immediately respond to requests for comment regarding the lawsuit in the state of New Mexico.


According to a settlement agreement, each company is obligated to make annual payments to the state of New Mexico. However, the Attorney General's office claims that these companies often raise disputes every year, resulting in a certain percentage of payments being withheld and potentially leading to arbitration procedures that could last for years.


For example, the arbitration payment made in 2004 concluded last month, while the arbitration payments made from 2005 to 2007 have only recently begun.


Officials from the state government have stated that the average annual cost paid is between $30-40 million, which only covers less than 5% of New Mexico's healthcare costs directly attributed to smoking. They estimate that healthcare costs related to smoking will exceed $980 million by 2021.


In 2020, Montana launched a similar legal challenge and successfully retrieved over $49 million in payments that tobacco companies had wrongly withheld. The state also reached an agreement with these companies, ensuring they would not contest annual payments to Montana over the next ten years.


Officials in the state of New Mexico have stated that the amount of settlement money being withheld each year is increasing.


According to the lawsuit, defendants - including tobacco giants Philip Morris and RJ Reynolds - did not disclose to the state of New Mexico how much money they withheld or where the funds were held. The practice of withholding taxes may also vary from year to year.


According to state prosecutors, the best estimates suggest that defendants in New Mexico are withholding between $6 million and $9 million annually due to a lack of transparency. "This scheme is a calculated strategy designed to permanently and fraudulently reduce the contractual payments defendants are obligated to pay under settlement agreements, and to undermine the purpose of such agreements," the complaint stated.


The Office of the Attorney General has stated that many states have been renegotiating with tobacco companies for years to avoid continuing arbitration regarding annual payments and to concede more favorable terms to the companies.


Officials in New Mexico state that only eight states are still demanding full payment of the funds they are entitled to under a settlement agreement.


2FIRSTS will continue to report on this topic, with future updates available on the "2FIRSTS APP." Scan the QR code below to download the app.



Disclaimer

This article is provided solely for professional research, industry discussion, and informational purposes. Any references to brands, companies, products, technologies, or policies are made for factual reporting and analytical purposes only, and do not constitute endorsement, recommendation, promotion, or advertising by 2Firsts.

Nicotine-containing products, including but not limited to cigarettes, e-cigarettes, heated tobacco products, and nicotine pouches, carry significant health risks. Readers are responsible for complying with all applicable laws and regulations in their respective jurisdictions, including age restrictions and access limitations.

The information contained in this article should not be regarded as investment, legal, medical, regulatory, or commercial advice. While 2Firsts strives to ensure the accuracy and reliability of its content, it does not assume liability for any direct or indirect loss arising from errors, omissions, inaccuracies, or reliance on the information contained herein.

This article is not intended for individuals below the legal age for accessing tobacco or nicotine-related information in their jurisdiction.

 

Copyright Notice

This article is either original content produced by 2Firsts or content reproduced, translated, summarized, or adapted from third-party sources with attribution where applicable. The intellectual property rights of the original content remain with 2Firsts or the respective original rights holders.

No individual or organization may copy, reproduce, distribute, republish, modify, translate, or otherwise use this content without prior authorization. Any unauthorized use may result in legal action.

For copyright-related inquiries, corrections, or removal requests, please contact: info@2firsts.com.

 

AI-Assisted Translation and Editing Notice

Portions of this article may have been translated, edited, or reviewed with the assistance of artificial intelligence tools to improve efficiency and readability. Due to the limitations of AI-assisted translation and editing, discrepancies, omissions, or inaccuracies may exist when compared with the original source.

Where applicable, readers are advised to refer to the original source for the most complete and accurate information. If you identify any errors or believe that any content infringes upon your rights, please contact us at info@2firsts.com, and we will review and address the matter promptly.

Arizona Turns to a 50% Retail Vape Tax as Tobacco Tax Revenue Falls 47% From 2008
Arizona Turns to a 50% Retail Vape Tax as Tobacco Tax Revenue Falls 47% From 2008
Arizona's First Things First is pushing for an excise tax equal to 50% of the retail price of vaping products, estimating that the measure could generate about $100 million annually. The agency says its tobacco-tax revenue has fallen 47% from 2008 levels. Arizona has attempted to broaden its nicotine tax base in each of the past two years: a 2025 bill proposed a 50% wholesale-price tax, while a 2026 measure shifted to a 50% retail-price tax covering alternative nicotine products and vapor products. Separately, the state enacted HB 4001 this year to establish a new licensing and sales framework for alternative nicotine products.
Sep.21
Altria Showcases Ploom, Marlboro Heated Tobacco Sticks and Non-Nicotine Energy Products at NACS Show 2026
Altria Showcases Ploom, Marlboro Heated Tobacco Sticks and Non-Nicotine Energy Products at NACS Show 2026
At the 2026 NACS Show, Altria displayed Ploom devices alongside imagery of Marlboro-branded heated tobacco sticks, while also featuring RIOT Energy and Proper Wild non-nicotine products. The booth showcased on! PLUS nicotine pouches, including 12 mg variants not listed among FDA-authorized products as of October 9, and NJOY e-cigarettes. Altria also presented convenience-store traffic figures highlighting its retail presence. 2Firsts examines the company's expanded product portfolio, non-nicotine business activities and the regulatory status of products displayed at the show.
EXPO
Oct.10
Product | PMJ Adds Bold Ruby to IQOS ILUMA i Lineup in Japan, Convenience-Store Rollout Starts Sept. 29
Product | PMJ Adds Bold Ruby to IQOS ILUMA i Lineup in Japan, Convenience-Store Rollout Starts Sept. 29
Philip Morris Japan (PMJ) launched Bold Ruby as a new regular color for the IQOS ILUMA i and IQOS ILUMA i ONE in Japan on September 16, 2026, priced at JPY 6,980 and JPY 3,980, respectively. Initial sales began through IQOS online and physical channels, with convenience stores and selected tobacco retailers set to follow from September 29. Bold Ruby is a regular rather than limited-edition colorway and is available for the ILUMA i and ILUMA i ONE, but not the ILUMA i PRIME. The release does not involve changes to the devices' core hardware or functions.
Sep.22
Wall Street Journal: U.S. FDA Plans Faster Vape and Nicotine Pouch Reviews, Revisit of 2021 PMTA Rule
Wall Street Journal: U.S. FDA Plans Faster Vape and Nicotine Pouch Reviews, Revisit of 2021 PMTA Rule
The Trump administration is preparing changes intended to accelerate FDA market authorization reviews for e-cigarettes and nicotine pouches, according to The Wall Street Journal. The FDA is expected to revisit its 2021 PMTA rule and may simplify some scientific study requirements and shorten review times. The agency has not formally announced the changes. Over the past year, the FDA has already accelerated nicotine-pouch reviews, expanded ENDS authorizations and upgraded its CTP Portal NextGen application system. As of August 2026, 43 nicotine pouch products and 48 e-cigarette products had received FDA marketing authorization.
Sep.24
Beyond IQOS ILUMA, PMI Expands Lower-Priced BONDS Heated Tobacco Platform: Seven Markets Added in Q3, With Rollouts in Japan, Europe and North Africa
Beyond IQOS ILUMA, PMI Expands Lower-Priced BONDS Heated Tobacco Platform: Seven Markets Added in Q3, With Rollouts in Japan, Europe and North Africa
Philip Morris International (PMI) is expanding the international footprint of BONDS by IQOS, its lower-priced heated tobacco platform. The company's third-quarter 2026 SEC filing shows that BONDS devices and BLENDS tobacco sticks were available in 15 markets at the end of September, up from eight at the end of June. In November, PMI announced plans to extend sales from three to 17 Japanese prefectures and introduced BONDS in Spain and Morocco. The platform uses ROUNDHEAT external heating technology and proprietary tobacco sticks, separate from the IQOS ILUMA system. In Japan, BONDS retails for ¥2,980, approximately 25% below ILUMA i ONE, while BLENDS costs ¥570 per pack. PMI management says BONDS targets cigarette smokers who have not adopted heated tobacco. Separate sales and revenue figures remain undisclosed.
company
Nov.06
Malaysia's Poisons Board Backs New Vape Nicotine Exemption After Unanimously Opposing 2023 Proposal
Malaysia's Poisons Board Backs New Vape Nicotine Exemption After Unanimously Opposing 2023 Proposal
Malaysia's Poisons Board has endorsed Health Minister Dzulkefly Ahmad's proposal to exempt liquid nicotine used in vaping products from the Poisons List, according to a November 2, 2026, report by CodeBlue. The Board unanimously opposed a similar proposal in 2023, but the government proceeded with the exemption. The Kuala Lumpur High Court invalidated the 2023 decision in May 2026, and the government withdrew its appeal in August. No new ministerial order has been published. The development raises questions about the interaction between Malaysia's two regulatory frameworks and the treatment of RM354.51 million in excise duties collected on e-cigarette and vape products between May 2023 and June 11, 2026.
Regulations
Nov.03