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.

Belgium Approves Vape Flavor Ban, Allowing Only Tobacco-Flavored and Unflavored Products From September 2028
Belgium Approves Vape Flavor Ban, Allowing Only Tobacco-Flavored and Unflavored Products From September 2028
Belgium’s federal government on Thursday approved a ban on flavored vapes, allowing only tobacco-flavored and unflavored e-cigarettes on the market from September 2028. Health Minister Frank Vandenbroucke said the measure is aimed at protecting the health of children and young people and preventing a new generation from becoming dependent on tobacco.
May.06 by 2FIRSTS.ai
Spanish parties PP and PSOE reach agreement on sales restrictions for e-cigarettes and nicotine pouches
Spanish parties PP and PSOE reach agreement on sales restrictions for e-cigarettes and nicotine pouches
Spain’s Popular Party and Socialist Party reached an agreement in the Joint Congress-Senate Commission for the Study of Addiction Problems and approved a non-binding motion calling for the sale of e-cigarettes, nicotine pouches and related products to be limited to authorized and controlled channels, such as tobacco shops and specialized stores, while excluding internet sales and general retail outlets.
Apr.27 by 2FIRSTS.ai
Italy Fines PMI €7 Million Over Misleading ‘Smoke-Free Future’ Marketing Claims
Italy Fines PMI €7 Million Over Misleading ‘Smoke-Free Future’ Marketing Claims
Italy’s Competition and Market Authority (AGCM) has fined Philip Morris Italia €7 million, finding that the company’s use of “smoke-free future” and related claims in promoting products such as IQOS, VEEV and ZYN could mislead consumers.
Jun.16
BAT New Zealand Says Illicit Tobacco Trade Drove Nearly 29% Revenue Decline in 2025
BAT New Zealand Says Illicit Tobacco Trade Drove Nearly 29% Revenue Decline in 2025
British American Tobacco New Zealand said the illicit tobacco trade is responsible for its profit halving and revenue falling between the 2024 and 2025 financial years. Financial results filed with the Companies Office show that BAT Holdings (New Zealand) recorded 2025 revenue of NZ$180.7 million, or about US$106.95 million based on the European Central Bank’s April 27, 2026 reference rates, down from NZ$254 million, or about US$150.33 million, in 2024.
Apr.28 by 2FIRSTS.ai
Moscow Police Seize About 65,000 E-Cigarettes Worth More Than RUB 30 Million
Moscow Police Seize About 65,000 E-Cigarettes Worth More Than RUB 30 Million
Russian Interior Ministry spokesperson Irina Volk said on May 6 that police in Moscow seized about 65,000 nicotine-containing products from a man during searches of residential and warehouse premises. The products were valued at about RUB 30 million, or about USD 395,727 based on an exchange rate of USD 1 = RUB 75.81.
May.11 by 2FIRSTS.ai
Altria Reports Q1 2026 Net Revenues of $5.43 Billion and 7.3% Growth in Adjusted Diluted EPS
Altria Reports Q1 2026 Net Revenues of $5.43 Billion and 7.3% Growth in Adjusted Diluted EPS
Altria Group reported its first-quarter 2026 results on April 30. Net revenues were $5.43 billion, up 3.2% year on year, while revenues net of excise taxes were $4.76 billion, up 5.3%. Reported diluted EPS was $1.30, up more than 100%, and adjusted diluted EPS was $1.32, up 7.3%.
May.06 by 2FIRSTS.ai