Ramsey County District Court. File No. C1037120.
Considered and decided by Stoneburner , Presiding Judge; Schumacher, Judge; and Forsberg , Judge.*fn1
1. Minn. Stat. 297F.24 (Supp. 2003), does not unconstitutionally abridge the First Amendment rights of tobacco distributors and manufacturers who are not parties to the settlement of the state's tobacco suit, State by Humphrey v. Philip Morris, Inc., No. C1-94-8565 (Minn. Dist. Ct. May 8, 1998).
2. Minn. Stat. 297F.24 does not violate the Equal Protection Clause or the state's uniformity clause by taxing distributors of cigarettes manufactured by non-settling manufacturers.
3. Minn. Stat. 297F.24 is not an unlawful bill of attainder.
4. Minn. Stat. 297F.24 does not violate the state constitution's prohibition against special legislation.
The opinion of the court was delivered by: Robert H. Schumacher, Judge
Appellants Council of Independent Tobacco Manufacturers of America, Carolina Tobacco Company, and Winner Tobacco Wholesale, Inc. brought this action to prohibit enforcement of Minn. Stat. 297F.24 (Supp. 2003), alleging that the statute violates the First Amendment, Equal Protection and state uniformity clauses. Appellants further contend that the statute is a bill of attainder and unconstitutional special legislation.
Minn. Stat. 297F.24 is not a direct attempt to regulate speech but has a legitimate legislative purpose and therefore is not an infringement of appellants' rights to free speech. The statute creates classifications based on genuine and substantial distinctions, does not violate the Equal Protection or state uniformity clauses, and is not special legislation. Finally, because the statute seeks to regulate prospective rather than past conduct, it is not a bill of attainder. We affirm.
Appellants are manufacturers and distributors of cigarettes who were not parties to State by Humphrey v. Philip Morris, Inc., No. C1-94-8565 (Minn. Dist. Ct. May 8, 1998), which ended in settlement in May 1998. In that matter, the state sued Philip Morris, Inc., R.J. Reynolds Tobacco Co., Brown & Williamson Tobacco Corporation, and Lorillard Tobacco Co., the so-called"major manufacturers," as well as Liggett Group, Inc., asserting claims for costs associated with the tobacco companies' conduct in denying the deadly and addictive nature of their products and attempting to conceal this information.
The state settled with Liggett on March 20, 1997. Liggett agreed to make annual payments of $100,000, publicly acknowledge the dangers of nicotine, restrict its advertising, and cooperate with the state in its action against the major manufacturers. After trial, but before a verdict was returned, the state entered into a settlement agreement with the major manufacturers ("Minnesota settlement").
Broadly stated, the major manufacturers agreed to make six one-time payments, as well as annual payments in perpetuity, amounting to approximately $6.1 billion over 25 years. The annual payment amount is based on the national market share of each of the major manufacturers. In addition, the major manufacturers agreed not to oppose legislative proposals designed to reduce tobacco use by children, to challenge certain existing laws or rules governing tobacco, or to support national legislation designed to override the settlement agreement. The major manufacturers further agreed to discontinue advertising on billboards and in transit facilities, refrain from paying for product placement in movies, and cease sales of products bearing logos of their products. In return for these agreements, the state agreed to release the major manufacturers from all past and future tobacco-related claims.
Six months after the Minnesota settlement, 46 states and 6 United States territories settled with the major manufacturers in the"Master Settlement Agreement." Like the Minnesota settlement, the Master Settlement Agreement involved settlement payments, annual payments in perpetuity, and restrictions on lobbying and advertising activities in exchange for releases from claims. The Master Settlement Agreement also permits manufacturers other than the majors to join in the settlement by making annual payments. The Master Settlement Agreement encouraged all ...