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Minnesota's landmark tobacco settlement is 20 years old

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Minn. AG Hubert Humphrey III, Blue Cross-Blue Shield CEO Andy Czajkowski
Minnesota Attorney General Hubert Humphrey III, center, and Minnesota Blue Cross and Blue Shield CEO Andy Czajkowski, right, were all smiles as they left the Federal Courthouse in St. Paul, May 8, 1998, after the settlement of the state's lawsuit against tobacco companies.
Jim Mone | AP 1998

Twenty years ago Tuesday, Minnesota reached a landmark settlement with tobacco companies.

Minnesota tobacco lawsuit lead attorney Michael Ciresi
Minnesota tobacco lawsuit lead attorney Mike Ciresi, shown in a February 1998 photo, said April 29, 1999, the Minnesota Legislature will waste a "once-in-a-lifetime" opportunity to improve the health of future generations if it gives the tobacco settlement money to taxpayers. The one-year anniversary of the $206-billion settlement is May 8.
Jim Mone | AP 1998

Under the deal, the tobacco industry agreed to pay the state and Blue Cross and Blue Shield of Minnesota more than $6.5 billion, among other provisions. The settlement followed months of trial, in which the plaintiffs argued that tobacco companies had misled Americans about the dangers of their products. 

"Our lawsuit was not about taking cigarettes off the market, because that's within the province of the government. And that's not going to happen," said Mike Ciresi, the state's lead attorney. "If they had a legal product, they had to sell it legally. And our position was that they were selling it illegally and that they were targeting children and they were manipulating the nicotine, which is the addictive part of cigarette smoking. So we grounded our case on that theory, and that's what we stuck to all the way through and it was a long and arduous task."

When the lawsuit was filed in 1994, just one other state, Mississippi, had sued Big Tobacco. But by the time the case went to trial, the tobacco industry was under fire, and around 40 states had filed their own lawsuits. Some had already settled, but none had gone to trial. 

But Minnesota had a mountain of evidence, including more than 30 million pages of tobacco industry documents, which Ciresi credits his co-counsel, Roberta Walburn, for gathering. And midway through the trial, which began in January 1998, the U.S. Supreme Court refused to stop the release of even more papers.

"The ones we used were remarkable. They showed that the industry did know everything we were saying they knew, and they knew it back in the 50s and 60s," said Ciresi. "I think that really turned the tide."

By May 8, 1998, a settlement was reached, just as the jury was set to begin deliberations. The tobacco companies said they'd been unable to get a fair trial.

Minnesota has used the money to fund anti-smoking campaigns.
In the 20 years since the settlement, the state of Minnesota and Blue Cross and Blue Shield have used the money to fund everything from public health programs and anti-smoking campaigns to the bright green Nice Ride Minnesota bikes in the Twin Cities.
Minnesota Historical Society

"And the jury, of course, was very upset, because they wanted to deliberate," said Ciresi. "And that was the hardest thing, I think, was coming in in front of that jury and telling them that the case was resolved. But you know, it was — we got all the relief that we wanted, we got all the documents out."

And Minnesota got more than $6 billion.

"And it can be more than that. It goes on forever, in perpetuity, as long as the industry is selling product," said Ciresi. "The formula is that they would get up to $200 million a year, but it's based on the profitability of the industry and what the volume of sales are. And of course, the volume of sales have been going down because of everything we got out during that case." 

Even though no verdict was reached, the settlement was widely hailed as a win for the state and Blue Cross and Blue Shield, and a loss for the tobacco industry. 

"They have surrendered, and they have surrendered on our terms," said former Minnesota Attorney General Skip Humphrey after the settlement was announced. "These are truly groundbreaking terms that will expose the full truth to the public, recover record amounts for taxpayers, impose tough reforms on the industry, and most important: protect the future generations of our children."   

In the 20 years since, the state and Blue Cross and Blue Shield have used the settlement money to fund everything from public health programs and anti-smoking campaigns to the bright green Nice Ride Minnesota bikes in the Twin Cities. Ciresi points out that politicians have also dipped into the state's pot a few times. 

"Gov. Pawlenty raided it for about a billion dollars when we had the deficit," said Ciresi. "And then Gov. Dayton raided it to float the bonds. So the money has not gone for the purposes for which it was intended, in all respects." 

In the settlement, tobacco companies also agreed to provisions like curbing their advertising in Minnesota and dissolving the industry's Council for Tobacco Research. 

Ciresi said after the case was settled, he and Walburn traveled to Geneva to speak before the World Health Organization.

"And at the end, there was a question and answer period. And the first comment was not a question. It was a comment from a woman from, I forget which nation, it was an African nation. And she said, 'Mr. Ciresi, will you do me a favor,' and I said 'yeah, what's that?' " said Ciresi. "She said, 'will you go back and thank the people of Minnesota for bringing the lawsuit? Because we're using those documents in our own country.' And that was a remarkable statement to us as to the impact that the lawsuit had, and it also led to over 400 peer-reviewed medical articles up to this point in time that have been written. So it had a rather dramatic impact."