Big Tobacco Scores Twice

A three-judge federal appeals court in Washington, D.C. has handed a major defeat to plaintiffs' attorneys bringing lawsuits against U.S. cigarette manufacturers on behalf of foreign governments and U.S. union labor health funds.

The U.S. District Court of Appeals for the District of Columbia unanimously upheld the dismissal of lawsuits brought by Guatemala, Nicaragua and the Ukraine against U.S. tobacco companies. The court ruling also dealt a major setback to attorneys representing union labor health funds that alleged the companies violated Racketeering Influenced Corrupt Organizations (RICO) statutes.

The Guatemalan suit named Philip Morris Cos. Inc., the maker of category leader Marlboro cigarettes; Brown & Williamson Tobacco Corp., maker of KOOL, Lucky Strike and Pall Mall; two companies affiliated with Vector Group Ltd.'s Liggett Group Inc.; and several of the tobacco industry's public relations and research organizations.

"For all practical purposes, this means that the bevy of high-profile plaintiffs' attorneys can unpack their bags and stop trying to peddle lawsuits to foreign governments," said Mitch Neuhauser, attorney for Brown & Williamson. "This decision also knocks the foundation from lawsuits brought against the tobacco industry by any government institution or other third party."

The union health funds sued major tobacco companies and entities associated with the tobacco industry, alleging a fraudulent scheme to preserve their control of the cigarette market. In its ruling, however, the federal court found that the union health funds' claim was "too remote, contingent, derivative and indirect to survive."
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