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Excerpts from: Court Sides with Tobacco on Foreign Suits

Reuters [10/29/01]

WASHINGTON (Reuters) - The U.S. Supreme Court rejected on Monday an appeal by three foreign nations of the dismissal of their lawsuits seeking to recover smoking-related health-care costs from the tobacco industry.

The justices, without any comment or dissent, declined to hear the appeal by Guatemala, Nicaragua and Ukraine after a U.S. appeals court upheld a federal trial judge's dismissal of their claims.

In the appeal, lawyers for the three governments questioned whether sovereign nations should be prevented from proceeding in U.S. courts with claims against the tobacco industry on the grounds the losses they incurred in providing health care to those with tobacco-related illnesses were too ``remote.''

The appeals court ruled the injuries claimed by the foreign governments were ``too remote'' to have been caused by the alleged misconduct of the tobacco companies.

The Guatemalan suit named Philip Morris Cos. Inc. (NYSE:MO - news); a group of companies affiliated with British American Tobacco Plc (BATS.L); two companies affiliated with Vector Group Ltd.'s (NYSE:VGR - news) Liggett Group Inc; and the tobacco industry's public relations and research organizations.

The lawsuit sought unspecified damages under U.S. racketeering laws. Guatemala claimed it incurred unnecessarily high health-care costs between 1973 and 1997 because it was misled by the defendants about the health risks associated with smoking.

Nicaragua and Ukraine brought similar lawsuits under U.S. racketeering and antitrust laws, claiming they should be compensated for their costs for treating sick smokers.

Lawyers for the three nations told the Supreme Court the appeals court was wrong, and they had alleged injuries sufficient to allow the cases to go forward.

``Each nation suffers when public monies are diverted from other social programs to care for the victims of the tobacco industry's ... conduct,'' they said.