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Attorney General Jason R. Ravnsborg

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Attorney General Jackley Reaches Tobacco Settlement Agreement for Education Enhancement

FOR IMMEDIATE RELEASE:  Wednesday, March 14, 2018

CONTACT:  Sara Rabern (605) 773-3215 

PIERRE, S.D. – Attorney General Marty Jackley announced today that he has reached a settlement agreement releasing $27.5 million belonging to South Dakota that has been trapped in an escrow account during a decade-long dispute between the State and the major tobacco companies. The agreement settles a long-running dispute regarding enforcement of the 1998 Tobacco Master Settlement Agreement (MSA), which requires the companies to compensate South Dakota for the public-health costs of smoking-related illnesses. 

“This agreement will provide important funding for children’s education for many years. $27.5 million with future investment opportunities are needed funds for our teachers and their students,” said Jackley. 

Last year, South Dakota prevailed in the arbitration which covered payments for the year 2003.  Prior to this settlement, South Dakota was arbitrating the 2004 MSA payment. By settling payments for the years 2004 to present, the agreement eliminates decades of potential litigation and settles all issues concerning past annual payments under the MSA. This would mean that South Dakota gets a significant chunk of its money upfront, instead of having to wait multiple years.  

The settlement will allow the South Dakota Investment Counsel to begin investing the funds for the State now rather than waiting untold years and enduring the uncertainty and cost of arbitration – a win for South Dakota.  

The Attorney General is committed to ensuring that tobacco companies meet their obligations to South Dakota under the MSA without delay or uncertainty. This agreement ensures prompt and reliable payment of already-promised compensation to South Dakota’s Educational Enhancement Trust Fund.  Every year since 2003, the trust fund has distributed money into the general fund that has been appropriated for education enhancement.   

The agreement was negotiated by the Attorney General’s Tobacco Enforcement Division.