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• MINNESOTA v. Philip Morris, et. al. 

S Y L L A B U S The imposition of the Health Impact Fee under Minn. Stat. § 256.9658 (Supp. 2005) does not violate the 1998 settlement agreement between respondent tobacco companies and the state because the terms of the settlement agreement do not unmistakably relinquish the state legislature’s sovereign authority to impose such an exaction on tobacco products in order to recover health care costs related to the use of tobacco products and to discourage smoking.

Reversed.

Heard, considered, and decided by the court en banc. . . .

PAGE, Justice (concurring specially).

While I concur in the result reached by the court, I write separately to make two points.

First, the state’s 1994 litigation against the major tobacco manufacturers was premised on the notion that the tobacco industry – “not the State of Minnesota, or its citizens” – should pay for the health care costs caused by tobacco use. Despite this premise, nothing in the 1998 settlement agreement between the state and respondents required respondents themselves to bear the cost of the settlement. Indeed, as we observed in Council of Independent Tobacco Manufacturers of America v. State, the manufacturers simply raised their prices to cover the cost of the settlement. ___ N.W.2d ___, 2006 WL 648137 at *2 (Minn. Mar. 16, 2006). As a result, while the state has collected hundreds of millions of dollars in annual payments from tobacco companies thus far under the terms of the 1998 settlement agreement, the lion’s share – perhaps all – of the cost of that settlement has actually been borne by smokers.

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