Iowa Attorney General Tom Miller is accusing Philip Morris USA, R.J. Reynolds Tobacco Co., and 16 other tobacco companies of defrauding the state of more than $133 million in withheld payments it owes Iowa, according to a lawsuit filed yesterday. The lawsuit stems from the 1998 Master Settlement Agreement, which requires tobacco manufacturers to pay billions annually to participating states in exchange for the states agreeing not to sue for health-related damages to citizens. The motion, filed in Polk County District Court, alleges that the companies have withheld a portion of their annual payments to Iowa in bad faith and “through a scheme of false claims and feigned ignorance.” The continuing dispute is over the Non-Participating Manufacturer Adjustment, which allows tobacco companies participating in the Master Settlement Agreement to reduce their annual payments under certain circumstances. Those circumstances include having experienced a loss of market share to non-participating competitors, and showing that a state failed to “diligently enforce” state laws against tobacco companies that did not sign the MSA. The state of Montana filed a similar lawsuit against the tobacco companies in 2020 and reached a $100 million settlement later that year. The former Montana attorney general, Tim Fox, is assisting with Iowa’s lawsuit. In January, the Executive Council of Iowa approved the hiring of outside law firms to assist in the litigation against the tobacco companies. “Iowa and other states who signed on to the MSA have lived up to their end of the bargain. It’s time tobacco companies do the same,” Miller said. “They should pay us what they owe us.”