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October 9, 2015      1:17 PM

Supreme Court picks up small tobacco challenge

It could put tens of millions of dollars in revenue in limbo

The Texas Supreme Court has agreed to take up the so-called “small tobacco” challenge, a decision that could put tens of millions of dollars in revenue into limbo.

The tobacco industry resolved its long-standing legal dispute with 46 states back in 1998. Under the master settlement agreement, the five largest tobacco companies agreed to curtail advertising to youth and paid out $10 billion a year, indefinitely, as an acknowledgment of the healthcare costs around cigarette smoking.

Rep. John Otto’s House Bill 3536 added new tobacco companies to the settlement in 2013 in order “to recover health care costs to the state from non-settling manufacturers.” Small tobacco argued it was never party to the original lawsuit, did not commit the same legal infractions and should not be taxed as such.

Former Supreme Court Justice Craig Enoch, who represents the Texas Small Tobacco Coalition and Global Tobacco, outlined the ills of big tobacco in his brief on merits and called Otto’s bill a violation of equal and uniform taxation.

By Kimberly Reeves