TOBACCO SETTLEMENT ENDOWMENT TRUST FUND v. STITT

2026 OK 1
CourtSupreme Court of Oklahoma
DecidedJanuary 13, 2026
Docket123238
StatusPublished

This text of 2026 OK 1 (TOBACCO SETTLEMENT ENDOWMENT TRUST FUND v. STITT) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
TOBACCO SETTLEMENT ENDOWMENT TRUST FUND v. STITT, 2026 OK 1 (Okla. 2026).

Opinion

OSCN Found Document:TOBACCO SETTLEMENT ENDOWMENT TRUST FUND v. STITT, ET AL.

TOBACCO SETTLEMENT ENDOWMENT TRUST FUND v. STITT, ET AL.
2026 OK 1
Case Number: 123238
Decided: 01/13/2026
THE SUPREME COURT OF THE STATE OF OKLAHOMA


Cite as: 2026 OK 1, __ P.3d __

NOTICE: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL.


TOBACCO SETTLEMENT ENDOWMENT TRUST FUND, Petitioner,
v.
KEVIN STITT, Governor of Oklahoma; LONNIE PAXTON, President Pro Tempore of the Oklahoma Senate; KYLE HILBERT, Speaker of the Oklahoma House of Representatives; GENTNER DRUMMOND, Attorney General; TODD RUSS, State Treasurer; CINDY BYRD, State Auditor and Inspector; and State Superintendent of Public Instruction, Respondents.

OPINION

0 Petitioner brought this action seeking declaratory relief. We assume jurisdiction, find that HB 2783 is unconstitutional, and grant declaratory relief.

ORIGINAL JURISDICTION ASSUMED
DECLARATORY RELIEF GRANTED

Bob Burke, Oklahoma City, Oklahoma for Petitioner Tobacco Settlement Endowment Trust Fund.

Benjamin M. Lepak, Remington D. Dean, Audrey A. Weaver, William T. Milam, III, Oklahoma Office of the Governor, Oklahoma City, Oklahoma for Respondent J. Kevin Stitt.

Garry M. Gaskins, II, Solicitor General, Sam Black, Assistant Solicitor General, Zach West, Cullen D. Sweeney, Office of the Attorney General, Oklahoma City, Oklahoma for Respondents Gentner Drummond, Lonnie Paxton, and Kyle Hilbert.

Heidi J. Long, Leonard Long & Cassil, Oklahoma City, Oklahoma for Respondent Cindy Byrd.

Jacquelyne K. Phelps, Oklahoma State Department of Education, Oklahoma City, Oklahoma, for Respondent State Superintendent of Public Instruction.

Wyatt A. McGuire, McGuire Law Firm, Edmond, Oklahoma, for Amicus Curiae Campaign for Tobacco-Free Kids.

KUEHN, V.C.J.:

¶1 Petitioner, the Tobacco Settlement Endowment Trust Fund (TSET), claims that HB 2783 conflicts with the constitutional requirements for appointment of TSET's Board of Directors. This case does not concern the general limits of legislative authority, nor does it speak to whether existing statutory provisions for removal of officers do or do not apply to TSET directors. The only issue before us is the narrow constitutional question: does the amended statute, as written, violate the Oklahoma Constitution? We find that it does and grant declaratory relief.

Background

¶2 Following extensive litigation, in 1998 Oklahoma entered into a Master Settlement Agreement with the tobacco industry. This dispute concerns the Board of Directors of the entity created to oversee allocations of the settlement funds.

¶3 The Agreement provided for an estimated $2.4 billion settlement, with the first installment, in FY2001, expected to be $60.1 million. In anticipation of these payments, in 2000 Oklahoma citizens approved State Question 692, amending the Oklahoma Constitution to create TSET. TSET was designed to hold the earnings from the projected annual payments in trust, to be used for research and treatment to prevent and combat tobacco-related diseases, including cancer, as well as tobacco prevention and cessation programs. TSET also targeted other programs to maintain or improve Oklahomans' health and health care services, emphasizing programs for children; common and higher education programs, including substance abuse prevention and treatment, designed to improve Oklahoma children's health and quality of life; programs to enhance the health and well-being of senior citizens; and authorized administrative expenses. Okla. Const. art. X, § 40(E). In FY2024, the TSET budget allocated $77,745,164 to programs in these categories. As of June 20, 2024, the trust fund balance was valued at $1.858 billion. [TSET FY2024 Annual Report at 4.]

¶4 Originally, when determining how the settlement funds should be used, legislative leaders, Attorney General Edmondson, and Governor Keating agreed that the state would be best served by directing the money specifically toward tobacco-cessation and health programs and by preserving the funds in a separate, protected structure. Their explicit intent was to safeguard the money from legislative diversion. The chosen solution was to create TSET through a constitutional amendment, thereby removing legislative power to allocate or appropriate TSET funds.

¶5 In addition to creating the trust, the TSET founding authorities ensured that the seven-member TSET board of directors (Board) would be geographically diverse and bipartisan. Each member is appointed by a different elected official from either the executive or legislative branch. The directors serve staggered terms. At least one director must be appointed from each congressional district, but there may be no more than two from any single district; no more than four directors may be members of the same political party and each director must have been a member of their party for a year prior to the date of appointment. Okla. Const. art. X, § 40(D). Taken together, these provisions ensure that neither a single executive or legislative leader, nor any single political party, can control the Board membership. This reduces outsiders' ability to put pressure on directors to invest or allocate funds to specific entities, or to allocate money for a purpose other than that specified in the constitutional provisions.

¶6 In the recent 2025 legislative session, the Legislature passed HB 2783, amending the statutory provisions governing the Board appointments and terms. Petitioner claims this amendment is unconstitutional because it removes the Article X Section 40(D) requirement that directors serve staggered fixed seven-year terms. Petitioner is correct.

The Law

¶7 The constitutional provision creating TSET provides:

There is hereby created the Board of Directors of the Tobacco Settlement Endowment Trust Fund. The Board of Directors shall consist of seven (7) members, one appointed by each of the following appointing authorities:
1. The Governor;
2. The President Pro Tempore of the Senate;
3. The Speaker of the House of Representatives;
4. The Attorney General;
5. The State Treasurer;
6. The State Auditor and Inspector; and
7. The State Superintendent of Public Instruction.
The initial appointed members shall serve staggered terms of office as provided for by law. Thereafter, the appointed members of the Board of Directors shall serve seven-year terms of office. At least one appointee shall be appointed from each congressional district, and not more than two appointees shall be appointed from any single congressional district. Not more than four appointees shall be members of the same political party. An appointee shall have been a member of the political party to which the appointee belongs for at least one (1) year prior to the date of appointment. Appointees shall have demonstrated expertise in public or private health care or programs related to or for the benefit of children or senior adults.
The Board of Directors shall meet at least one time each calendar quarter.

Okla. Const. art. X, § 40(D).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
2026 OK 1, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tobacco-settlement-endowment-trust-fund-v-stitt-okla-2026.