New York State Tobacco Litigation: $25 Billion Recovery Against Four Major Manufacturers

For decades, the four largest American tobacco companies sold cigarettes while publicly disputing the science linking smoking to disease. By the mid-1990s, state governments had paid billions through Medicaid and public-health programs to treat lung cancer, emphysema, and cardiovascular disease in smokers. New York State was among the hardest hit.

Sullivan Papain Block McManus Coffinas & Cannavo joined a coalition of attorneys representing New York in litigation against Philip Morris, R.J. Reynolds, Brown & Williamson, and Lorillard. The legal theory was unconventional for the era. Rather than seeking damages on behalf of individual smokers, the team argued that New York taxpayers had been forced to absorb the medical costs generated by the tobacco industry's products. As senior partner Robert Sullivan later described it: 'The genius was that we didn't represent the smokers, we represented the non-smokers.' The question put to the companies was direct: who should pay the Medicaid and Medicare bills for patients dying of smoking-related illness, the public or the manufacturers?

The approach reframed a product-liability dispute as a government-reimbursement claim. New York joined 45 other states, the District of Columbia, and several U.S. territories in the coordinated litigation. The defendants, facing simultaneous pressure across nearly every jurisdiction, agreed to settle.

In November 1998, the Master Settlement Agreement was signed. For New York, the agreement produced a recovery of approximately $25 billion, to be paid out over 25 years. The companies also agreed to end advertising practices that had historically targeted young people, and to fund anti-smoking public-health campaigns. The structural changes accompanied the money: between 1998 and 2019, U.S. cigarette consumption fell by more than 50 percent, and the high school smoking rate dropped from 36.4 percent in 1997 to 6.0 percent in 2019. Nassau County alone received approximately $200 million from the settlement proceeds.