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Tobacco Money Spending Up To States

A federal appeals court is reaffirming the right of states to spend tobacco settlement funds at their discretion.

The Ninth U.S. Circuit Court of Appeals today sided with several other federal appeals courts that have addressed the topic.

The San Francisco-based court said federal legislation allows the states to spend the funds any way they want. The money comes from a historic 1998 accord with the tobacco industry.

The court struck down a challenge to how Hawaii is spending the $1.38 billion it is receiving over 25 years.

Hawaiian residents federally insured by the Medicaid health plan sued to get a piece of the pie. Forty-six states, including Hawaii, settled a lawsuit with the tobacco industry, which agreed to pay billions of dollars.