Master Settlement Agreement

The largest civil litigation settlement in U.S. history changed tobacco control forever. The settlement is also the first chapter in the Truth Initiative origin story. Learn the basics of the Master Settlement Agreement.

The 1998 Master Settlement Agreement between the major tobacco companies, 46 U.S. states, the District of Columbia and five U.S. territories transformed tobacco control.

In the largest civil litigation settlement in U.S. history, the states and territories scored a victory that resulted in the tobacco companies paying the states and territories billions of dollars in yearly installments. The money served as compensation for taxpayer money that had been spent in connection with tobacco-related diseases and the loss to local economies. The agreement also called for the creation of an independent organization devoted to youth tobacco use prevention and included funds to found that organization, now Truth Initiative.

Key parts of the settlement include:

• The MSA resolved litigation brought by 46 states, the District of Columbia and five U.S. territories in the mid-1990s against major U.S. cigarette manufacturers Philip Morris, R.J. Reynolds, Brown & Williamson and Lorillard, plus the tobacco industry's trade associations.
• It settled the state lawsuits that sought billions of dollars in costs associated with treating smoking-related illnesses.
• The Attorneys General of the 46 states, the District of Columbia and five U.S. territories signed the MSA with the four largest U.S. tobacco companies in 1998. (The remaining states had settled separately with the tobacco industry on their own.)
• As outlined in the MSA, each of the signing states and territories gave up any future legal claims they might have based on the companies’ actions at issue in these cases. This did not include individual claims their citizens may have.

The MSA also created new restrictions, including:

• New limits were created for the advertising, marketing and promotion of cigarettes.
• Tobacco advertising that targets people younger than age 18 was prohibited.
• Cartoons in cigarette advertising were eliminated.
• Outdoor, billboard and public transit advertising of cigarettes was eliminated.
• Cigarette brand names could no longer be used on merchandise.
• Many millions of tobacco company internal documents were made available to the public.

Since the MSA was signed in November 1998, about 40 other tobacco companies have signed onto the agreement and are also bound by its terms.