Attorney General Cameron Announces Over $300 Million Multistate Settlement with S&M Brands, Equity Shareholders for Cigarette Product Liabilities

                                                                                                   Kentucky Will Receive Over $2.6 Million in Settlement Funding

FRANKFORT, Ky. (January 13, 2021) – Attorney General Daniel Cameron today announced a more than $300 million multistate settlement with non-Tobacco Master Settlement Agreement (MSA) cigarette manufacturer S&M Brands, Inc. (S&M Brands) and equity shareholders to offset the liability associated with cigarette manufacturing, distribution, and sales. 

The settlement reached between S&M Brands and nine attorneys general, along with MSA participating cigarette manufacturers (PM’s), concludes a lawsuit brought by S&M Brands against the state of North Carolina related to the cigarette manufacturer’s desire to reclaim deposits previously made, in accordance with state escrow statutes, for cigarette sales.

Kentucky’s MSA escrow statutes, KRS 131.600 – 131.602, require non-participating manufacturers, like S&M Brands, to place funds in an escrow account each quarter based on the number of cigarettes sold in Kentucky as a safeguard against future liability for cigarette sales.

“This settlement provides $2.6 million to the Commonwealth based upon S&M Brand’s in-state sales,” said Attorney General Cameron. “I am grateful to Assistant Attorney General Michael Plumley for administering matters related to the MSA for our office and to National Association of Attorneys General Counsel Patricia Molteni for her work to assist us in upholding Kentucky’s MSA escrow statutes.”

Under the settlement, S&M Brands agreed to pay 30 percent of escrow principal to the states and 30 percent to MSA PM’s. Collectively, the states will receive $98,982,562.81, and Kentucky will receive $2,613,351.22. 

Attorney General Cameron was joined by attorneys general of Delaware, Georgia, Maryland, North Carolina, South Carolina, Tennessee, Virginia, and West Virginia in the settlement. The multistate coalition was assisted by the National Association of Attorneys General in this case.

To view a copy of the settlement agreement, click here.

To learn more about the Tobacco Master Settlement Agreement, click here.