The Master Settlement Agreement on Tobacco Litigation and the Compact Clause

by Ed Whelan

On Balkinization, AEI’s Michael Greve has a long and interesting post about a pending petition for certiorari (in S&M Brands v. Caldwell) that raises the important questions (1) whether the 1998 agreement on tobacco litigation between major tobacco companies and state attorneys general (the so-called Master Settlement Agreement) violates the Constitution’s Compact Clause, and (2) whether that agreement is immune from antitrust scrutiny. I won’t try to summarize here Greve’s legal case for Supreme Court review, but this passage from his conclusion concisely explains why he believes that virtually everyone ought to welcome such review:

The MSA created a national de facto tax, in excess of a quarter-trillion dollars, that no legislator, state or federal, ever voted on. And it granted the nastiest industry in America a uniquely favored status—that of a public utility without any supervision of, or constraint on, pricing and profits. Both the Tea Party and the dailykos crowd should recoil at the arrangement, if for somewhat different reasons. Supreme Court review in this case might help both to train their metaphorical guns on a real and readily destructible target.

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