Over the past couple of decades, the courts and Congress have been grappling with tobacco-related issues, among them, the Food and Drug Administration's (FDA's) authority to regulate tobacco under the Federal Food, Drug, and Cosmetic Act (FFDCA); the Master Settlement Agreement (MSA) that resulted from lawsuits by states' attorneys general against tobacco companies; federal, private party, and foreign lawsuits against tobacco companies; limits on tobacco advertising; and restrictions on selling and distributing tobacco to minors. This report concerns all of the above issues except the FDA's authority to regulate tobacco products, which is covered in a separate CRS report. Beginning in 1994, 41 states and Puerto Rico began filing lawsuits against tobacco companies for reimbursement of tobacco-related medical expenses, particularly Medicaid expenditures. In November 1998, attorneys general from 46 states, the District of Columbia, and five U.S. territories signed the Master Settlement Agreement (MSA) with the major tobacco companies. Four states—Mississippi, Florida, Texas, and Minnesota—did not join the MSA, but instead settled individually with the tobacco companies. The MSA did not settle individual, union, private health care, or class action suits. Under the terms of the settlement, states will receive annual payments worth $206 billion over the next 26 years followed by unspecified subsequent payments to continue in perpetuity. Each state needed to and did obtain its trial court's approval to receive the MSA funds. The MSA also prohibited certain advertising, marketing, and promotion of tobacco products (see " Tobacco Advertising: Federal Regulations, MSA Restrictions, and Local Ordinances " below). According to a March 2007 article by the American Bar Association Journal, of the $61 million paid to the states by tobacco companies, states had spent less than 8% on anti-smoking endeavors. Government Accountability Office figures indicate that states have spent even less on tobacco control, which it defines as efforts to include prevention, education, enforcement, and cessation services. States had allocated 30% of their MSA payments to health care, including Medicaid, health insurance, and hospitals; 22.9% towards budget shortfalls; 7.1% to general purposes; 6% towards infrastructure; 5.5% to education; 5.4% to debt service on securitized funds; 3.5% on tobacco control; and 7.8% to other projects. The states had not allocated 11.9% of their MSA payments. As noted, the MSA grew out of lawsuits by the states seeking reimbursement for their medical expenses on behalf of tobacco users. If a third party, such as a tobacco company, causes an illness or injury to someone, and a state provides medical care for that illness or injury, as, for example, out of Medicaid funds, then the state may sue the third party for reimbursement of such funds. Because the federal government pays for at least 50% of each state's Medicaid costs, by law the federal government is entitled to its share of any reimbursements of Medicaid funds that a state receives from a third party that caused an illness or injury on which Medicaid funds were expended. With respect to the MSA, however, Congress enacted P.L. 106-31 (2000), which authorizes the states to keep reimbursements they receive from third parties. The federal lawsuit against major tobacco companies and industry trade groups began under the Clinton Administration in 1999 as a way for the U.S. government to recover tobacco-related medical costs paid by federal health care programs. The Department of Justice (DOJ) was seeking: (1) restitution for money paid by the federal government's health care programs for treatment and care of persons with tobacco-related diseases; (2) a disgorgement of the profits that the tobacco industry allegedly earned by violating the Racketeer Influenced and Corrupt Organizations Act (RICO); and (3) orders preventing fraud and future violations of the law, such as racketeering or making false, deceptive, or misleading statements about cigarettes; as well as orders that the defendants take certain actions, such as issuing corrective statements, disclosing research, and funding smoking cessation programs. Ultimately, the United States could not recover any funds from the defendants. In 2000, the U.S. District Court for the District of Columbia dismissed two claims by the government that would have provided for recovery under the Medical Care Recovery Act as well as under the Medicare Secondary Payer Act provisions of the Social Security Act. The suit then proceeded under two RICO claims, 18 U.S.C. Section 1962(c) and (d). Section 1962(c) criminalizes the association of persons, including corporations, with enterprises that conduct their affairs through "a pattern of racketeering activity," which means that they commit two or more specified crimes within 10 years. Section 1962(d) outlaws conspiracies to violate Section 1962(c) or related provisions regarding racketeering activities. The government alleged that a pattern of racketeering activity existed because the defendants defrauded "individual smokers of their property (i.e., the money they spent on cigarettes)" and sought disgorgement of certain profits. The defendants challenged the right of the government to seek disgorgement of profits. Although the district court ruled in favor of the United States, in 2004, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) reversed and ruled in favor of the defendants. Thus, the court of appeals allowed only forward-looking injunctive relief. The United States could not recover the $280 billion disgorgement that had been sought for tobacco profits earned since 1971 for marketing to youth. The court of appeals stated that injunctive relief under RICO must focus on preventing future wrongdoing rather than on punishing past conduct. Noting that Congress explicitly crafted a set of remedial measures in the RICO statute and likely did not intend to provide other remedies, the court of appeals was "reluctant" to infer an additional remedy such as disgorgement. In August 2006, after a nine month trial, the U.S. District Court for the District of Columbia ruled that the defendants had violated RICO. The court found that the tobacco companies and trade industry organizations had conspired "to deceive the American public about the health effects of smoking and environmental tobacco smoke, the addictiveness of nicotine, the health benefits from low tar, 'light' cigarettes, and their manipulation of the design and composition of cigarettes in order to sustain nicotine addiction." Although the court of appeals prevented the district court from imposing the remedy of disgorgement, the district court ordered the defendants to pay DOJ's legal costs, which totaled approximately $1.93 million. The district court also enjoined the defendants from using descriptors such as low-tar, light, mild, and natural on their cigarette packaging and advertisements; ordered the defendants to place "onserts" or stickers with corrective statements on their packaging and to issue statements in newspapers and on television and retail displays; and extended the length of time that tobacco companies must make documents produced in litigation available to the public, a requirement that originated in the MSA. In March 2007, the U.S. District Court for the District of Columbia responded to a motion by certain defendants for clarification of the court's August 2006 order restricting the defendants' use of marketing descriptors such as natural and ultra light. Noting that RICO provisions have effect outside the United States if the illegal activity abroad "causes a 'substantial effect' within the United States," the court concluded that the defendants were prohibited from using such marketing descriptors and express or implied health messages internationally as well as in the United States. The district court order did not take effect immediately because of the appellate court's stay and the pending appeal, discussed below. Both the tobacco companies and the DOJ filed notices of appeal with the D.C. Circuit. On May 22, 2009, the court of appeals issued its decision largely upholding the district court's finding of liability against the nine cigarette manufacturers. The appeals court also upheld the district court's remedial order that had imposed the numerous affirmative and negative duties on the defendants while denying the government's proposed remedy of a counter-marketing campaign, smoking cessation program, youth smoking reduction program, and monitoring scheme. Furthermore, the appeals court rejected the government's request to seize billions of dollars in corporate profit from companies that include Altria Group, R.J. Reynolds, and Brown & Williamson. The court of appeals also partly vacated the district court's remedial order and remanded for further proceedings on four discrete issues. These included vacating the remedial order with respect to the prohibition on health messages or descriptors and ordering the district court "to reformulate [its] injunction so as to exempt foreign activities that have no substantial, direct, and foreseeable domestic effects." It remains to be seen how this order will affect the district court's earlier March 2007 decision that the provisions in the remedial order that prohibit defendants from using express or implied health messages apply to the defendants' actions taken outside the United States. Prior to 1992, tobacco lawsuits were typically individual product liability and negligence suits brought by smokers or their relatives seeking damages for smoking-related illnesses. The tobacco industry generally prevailed in these cases by arguing that the Federal Cigarette Labeling and Advertising Act (FCLAA), which requires warning labels, preempted plaintiffs' claims that the tobacco companies had a duty to warn consumers. In some cases, however, tobacco manufacturers prevailed by arguing that smokers assumed the risks of smoking. Then, in 1992, in Cipollone v. Liggett Group, Inc. , the U.S. Supreme Court made it more feasible for smokers to recover. Although the Court held that federal laws requiring warning labels precluded states from imposing additional requirements or prohibitions on cigarette advertising and labeling, and therefore precluded lawsuits alleging that the federally required warning labels were inadequate, the Court stated that federal law did not preclude "state-law damages actions."