They also contended the money the state would collect from tobacco companies far exceeds what the state has paid to cover smoking-related health care costs for all Medicaid recipients.

The 4th District Court of Appeals rejected their arguments, saying the state had no law entitling the Medicaid recipients to the settlement money.

John C. Cabaniss, an attorney representing the three Medicaid recipients, was at a trial Thursday in Virginia and could not be reached by the Associated Press for comment.