These “waves” of tobacco litigation seemed to move slowly; however, it was the lawsuits by the individual states that ultimately turned the tables on the industry’s success. In the 1990s, more than 40 states sued the tobacco companies under their own state consumer protection and antitrust laws. The states argued that cigarettes contributed to health problems that triggered significant costs for public health systems in providing healthcare to sick smokers. In these state lawsuits, the tobacco companies could not use the defense that they had perfected and that had proven so successful in lawsuits brought by individuals, that is, that the individual smoker was aware of the risks and decided to smoke anyway. The claims asserted by the states in their litigation based their theory for financial recovery upon the costs involved in treating sick smokers—actual harm to the public fisc—rather than harm to a particular smoker. This was completely new to tobacco litigation, and provided a real challenge to the industry. In the discovery process, the states uncovered evidence that the tobacco companies had known for many years about the damage caused by their products and had fraudulently conspired to suppress the information and mislead the smoker, the general public, and public officials. The tobacco industry realized that the costs of defending lawsuits against states would be prohibitively expensive. After the industry made an effort to work with federal lawmakers, including the U.S. Senate, to obtain immunity from suit, an effort which failed, it became clear that a resolution was necessary. In November 1998, the attorneys general of 46 states and four of the largest tobacco companies doing business in the United States (Philip Morris USA, R.J. Reynolds, Brown & Williamson, and Lorillard) agreed to settle the state suits and the potential suits, without any admission of liability. As stated in the agreement, the parties settled “to avoid further expense, delay, inconvenience, burden and uncertainty of continued litigation (including appeals from any verdicts). The $206 billion settlement, referred to as the Master Settlement Agreement (“MSA”), provided the following terms: 1. Tobacco companies agreed to cease engaging in certain advertising practices targeting youth; 2. Tobacco companies agreed to pay annual sums of money to the states to compensate them for healthcare related costs related to smoking (a minimum of $206 million over the first 25 years); 3. The settlement created and funded a foundation dedicated to reducing youth smoking and preventing diseases associated with smoking. 4. Tobacco companies were required to dissolve the functions of three of the largest tobacco industry organizations. 2 2 These organizations were dismantled as part of the MSA because of their significant role in advancing the tobacco companies’ fraudulent activities: The Center for Indoor Air Research, The Tobacco Institute, and the Council for Tobacco Research. 3