The Tobacco MSA with Alabama is the particular version of the Tobacco MSA that was signed by Alabama, was enabled by means of legislation of Alabama, and has been interpreted since then in Alabama courts.
The MSA contained incentives to the Settling States to enact statutes which would require NPMs to place money in escrow each year based on their market shares, such money to be held to settle or pay judgments in possible future lawsuits against them. Arkansas enacted such a law, codified at A.C.A. § 26-57-260 and 261, and referred to as the Escrow Statute. As originally enacted, A.C.A. § 26-57-261 provided, in relevant part, as follows:
Any tobacco product manufacturer selling cigarettes to consumers within the state . . . after the date of enactment of this section, shall do one (1) of the following:
(1) Become a participating manufacturer, as that term is defined in section II(jj) of the Master settlement agreement, and generally perform its financial obligations under the Master settlement agreement; or (2)A.C.A. § 26-57-261(a)(2)(B)(ii) was known as the "Allocable Share Refund" provision. It insured that an NPM would not pay more, under the Escrow Statute, than the amount Arkansas would have received from the manufacturer if it had been a PM.
In February 2005, the Arkansas General Assembly amended the Allocable Share Refund provision by Act 384 of 2005. The amended provision (the "Allocable Share Amendment"), is codified at § 26-57-261(a)(2)(B)(ii), and provides as follows: