WASHINGTON – On Tuesday, the U.S. Supreme Court ruled against the tobacco industry in its challenge of a Minnesota health fee in cigarette sales (Philip Morris USA v. Minnesota), Dow Jones Newswire reports. The tobacco companies claimed that the fee violated the 1998 global tobacco settlement with the states.

Along with other tobacco companies, Philip Morris USA Inc., Reynolds American Inc. and Loews Corp.'s Lorillard Inc. have fought the Minnesota fee since its approval in 2005.

The fee adds 75 cents per pack for all tobacco products sold in the state, with the proceeds funding state health costs connected to tobacco-related illnesses.

After a Minnesota state court ruled that the fee violated the global tobacco settlement, the Minnesota Supreme Court let the fee stand because the state legislature approved it. The tobacco industry appealed to the Supreme Court: "The Minnesota court's decision, if let stand, would allow any state to impair virtually any proprietary contract as long as the state does so by enacting legislation that is not expressly and specifically barred by the contract."