New Jersey § 52:4d-1

§ 52:4d-1.

a. Cigarette smoking presents serious public health concerns to the State and to the

citizens of the State. The Surgeon General has determined that smoking causes lung cancer, heart disease

and other serious diseases, and that there are hundreds of thousands of tobacco-related

deaths in the United States each year. These diseases most often do not appear until many years after the person in question

begins smoking. b. Cigarette smoking also presents serious financial concerns for the State. Under certain health care programs, the State may have a legal obligation to provide

medical assistance to eligible persons for health conditions associated with cigarette

smoking, and those persons may have a legal entitlement to receive such medical assistance. c. Under these programs, the State pays millions of dollars each year to provide medical

assistance for these persons for health conditions associated with cigarette smoking. d. It is the policy of the State that financial burdens imposed on the State by cigarette

smoking be borne by tobacco product manufacturers rather than by the State to the

extent that such manufacturers either determine to enter into a settlement with the

State or are found culpable by the courts. e. On November 23, 1998, leading United States tobacco product manufacturers entered

into a settlement agreement, entitled the “Master Settlement Agreement,” with the

State. The Master Settlement Agreement obligates these manufacturers, in return for a release

of past, present and certain future claims against them as described therein, to:

pay substantial sums to the State, tied in part to their volume of sales; fund a

national foundation devoted to the interests of public health; and make substantial

changes in their advertising and marketing practices and corporate culture, with the

intention of reducing underage smoking. f. It would be contrary to the policy of the State if tobacco product manufacturers

who determine not to enter into such a settlement could use a resulting cost advantage

to derive large, short-term profits in the years before liability may arise without

ensuring that the State will have an eventual source of recovery from them if they

are proven to have acted culpably. It is thus in the interest of the State to require that such manufacturers establish

a reserve fund to guarantee a source of compensation and to prevent such manufacturers

from deriving large, short-term profits and then becoming judgment-proof before liability

may arise.