In March 1996, Liggett Group broke ranks with the tobacco industry and settled smoking-related lawsuits brought by Attorneys General of Florida, Louisiana, Massachusetts, Mississippi, and West Virginia. Among other things, the settlement provided for certain payments to the states as well as compliance with proposed FDA regulations. It was a historic settlement marking the first time, after many decades of litigation, that a tobacco company ever settled such a lawsuit. Leading government officials and public health authorities across America praised Liggett's settlement, calling it a "historic watershed" in the country's efforts to address smoking and health issues. President Clinton called Liggett's first settlements "a major breakthrough" and acknowledged their significance as "the first crack in the stone wall of denial."
After Liggett Group's 1996 settlement, the number of States filing lawsuits against the tobacco industry increased from 6 to 22. In a May 18, 1997 article in The Washington Post, Attorney General Mike Moore of Mississippi stated, "The Liggett settlement gave us credibility. That helped me get more states. Our travel schedule really picked up."
In March 1997, Liggett Group entered into a comprehensive settlement of tobacco litigation with Attorneys General of 17 additional states and with a nationwide class. Under this settlement, Liggett Group made significant public acknowledgments - that smoking causes disease, that smoking is addictive, and that the tobacco industry marketed to youth. Liggett also waived privileges and released thousands of previously undisclosed internal documents relevant to smoking and health.
Liggett Group has since become the first and only American cigarette manufacturer to add a "SMOKING IS ADDICTIVE" warning on its cigarette packaging and has instructed its marketing and advertising personnel to scrupulously avoid any and all advertising and marketing that could appeal to children or adolescents.
In March 1998, Liggett signed a third settlement agreement with more states, bringing the number of states with which it had settled to approximately 40. By mid-1998, Liggett Group had settled with approximately 40 states. Liggett's earlier settlements became the catalyst for the other major tobacco companies to eventually resolve claims in all 50 states and certain territories as well, ultimately resulting in the tobacco Master Settlement Agreement ("MSA"). In November 1998, Liggett Group joined the MSA. Vector Tobacco joined the MSA in early 1999.