Minnesota Attorney General says big tobacco companies owe the state $58 million after underpaying settlement payments

Minnesota Attorney General Keith Ellison has filed a motion Wednesday to get big tobacco companies to pay up some money he claims they owe the State of Minnesota.

Ellison says tobacco manufacturers have underpaid their annual settlements to the state required under Minnesota's historic tobacco settlement reached in 1998 .

Ellison says that they used tax information from the wrong year, and that they owe the state $58 million.

"The likelihood of them fighting this is 100%," Ellison says. "They're going to fight. I mean, these people love their money. They don't care how much pain their product causes Americans. And so they're going to fight. But the question is not whether they're going to fight, we're going to fight harder for the people of Minnesota."

In 1998, Minnesota reached a $206 billion settlement with the largest tobacco manufacturers that restricted the manufacturers’ marketing of tobacco products and required annual payments to Minnesota.

After a months-long trial in 1998, Minnesota reached a settlement with the largest tobacco manufacturers. The settlement payments to Minnesota are based, in part, on the size of the manufacturers’ after-tax profits in a given year.

The motion Attorney General Ellison filed alleges that after the federal corporate tax rate changed in 2018, Philip Morris misrepresented the content of the Minnesota settlement to the third-party payment administrator, PricewaterhouseCoopers, in a way that incorrectly reduced the manufacturers’ payments to Minnesota by nearly $10 million per year.

“After lying to the American people about the dangers of their products, it is unfortunately not surprising that the largest tobacco manufacturers have also tried to avoid the commitments they made when settling with Minnesota,” said Attorney General Ellison.

Tobacco manufacturers have faced challenges over similar underpayments in Mississippi and Texas , where courts have determined that the underpayments were improper and ordered reimbursement to the states.

The state settlements with the tobacco industry are widely recognized as landmark public health achievements, leading to a dramatic decrease is overall cigarette use since 1998.