Background

The Attorney Generals of 46 states entered into an agreement with the four largest tobacco companies resulting in the Tobacco Master Settlement Agreement (MSA). With the establishment of the MSA, the states were able to settle all of the outstanding lawsuits related to healthcare costs associated with illness caused by tobacco, and the companies agreed to curb their marketing practices. The agreement created a fund settlement for states as well as spawned an anti-smoking advocacy group. The settlement required the four original participating manufacturers to pay a minimum of $206 billion over the first twenty-five years of the agreement. Phase II of the settlement included an agreement between the major manufacturers and the states that housed growers that would be impacted by the higher pricing of tobacco products. The resulting settlement was called the National Tobacco Growers’ Settlement Trust Fund and benefited the growers and quota holders in 14 states.

Results

Our team of Class Action experts facilitated the settlement agreement on behalf of four of the states entitled to funds including Indiana, Kentucky, Ohio and Tennessee. Working closely with the United States Department of Agriculture, we facilitated the terms of the settlement over the course of six years. The class of claimants incorporated 60 percent of the nation’s growers and 45 percent of the national tobacco crop.

With a class of more than 403,000 claimants, we worked diligently to identify farm operators, quota holders, growers and tenants. Through the facilitation of multiple noticing periods, the team was able to clearly identify the qualifying claimants and continue ongoing communications over the years. The company established custom processes that ensured the highest level of quality control. Streamlining the management of class members, the noticing program, mailing, claims administration and distribution, we were able to secure a zero error rate. As a result, the percentage of distribution was a notably high 99 percent.

Our team’s success in administering Phase II of the MSA led to our engagement in the Tobacco Loss Assistance Program (TLAP). As a result of the Agriculture Risk Protection Act of 2000, $340 million in direct payments were issued to tobacco quota holders and growers. Additionally, we are engaged in the Kentucky Burley Class Action litigation. The Burley case is ongoing, and KCC continues to utilize the expertise it gained from Phase II of the settlement agreement to identify cost and time efficiencies for current and future case work.

To learn more about how KCC can help ensure your success, email or call us at 866.381.9100.