Ohio SC will rule on tobacco funds dispute

John O'Brien Mar. 15, 2010, 2:00pm


COLUMBUS, Ohio (Legal Newsline) - The Ohio Supreme Court will decide if the state had the authority to eliminate tobacco cessation and prevention programs that were funded by the 1998 Tobacco Master Settlement Agreement.

Legacy, a national public health foundation created by the MSA, is challenging the decision made by the Ohio Legislature that abolished both the Ohio Tobacco Prevention Foundation and its endowment. A state court of appeals ruled in December for the state, reversing a lower court decision.

"(Thursday's) decision is an extremely important step forward," Cheryl G. Healton, president and CEO of Legacy, said.

Gov. Ted Strickland announced a stimulus package that would be partly funded by diverting the OTPF's endowment in April 2008.

Tobacco companies make annual payments to states under the MSA. The states sought to recover the costs of treating smoking-related illnesses.

Forty-six states and the District of Columbia participated in the MSA, which has an estimated worth of $250 billion over its first 25 years. The other four states have separate agreements with tobacco companies.

OTPF attempted to transfer $190 million to the American Legacy Foundation, but Strickland signed legislation that liquidated the organization's endowment.

A month later, Strickland signed a bill that abolished the OTPF. The state is attempting to seize $258 million.

"States desiring to permanently restrict the use of their tobacco settlement money have done so expressly through constitutional amendments," the appeals court ruled.

"Ohio has never promulgated a constitutional amendment restricting the use of its tobacco settlement funds. Accordingly, the General Assembly retained its power to legislate with regard to those funds."

From Legal Newsline: Reach John O'Brien by e-mail at jobrienwv@gmail.com.

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