Hegar v. Texas Small Tobacco Coalition

During nationwide tobacco litigation in the 1990s, the State individually settled its lawsuit against several of the largest tobacco companies over smoking-related Medicaid costs. In return for the manufacturers’ commitment to make annual payments of $500 million to the State in perpetuity, the State waived, without limitation, any future reimbursement claims against the settling manufacturers. In 2013, the Legislature passed legislation that sought to recover the State’s health costs costs imposed by non-settling manufacturers’ products through a tax on those manufacturers. Respondents - manufacturers, retailers, and distributors who are subject to this taxation scheme - sued the State alleging that the tax is unconstitutional under the Equal and Uniform Clause of the Texas Constitution and the Equal Protection and Due Process Clauses of the United States Constitution. The trial court declared the tax unconstitutional under both the state and federal Constitutions. The court of appeals affirmed by addressing only the Equal and Uniform Clause claim. The Supreme Court reversed, holding that the taxation scheme does not violate the Equal and Uniform Clause of the Texas Constitution. Remanded. View "Hegar v. Texas Small Tobacco Coalition" on Justia Law