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EU Files New Tobacco Suit

The European Commission filed a new complaint against New York-based Philip Morris Cos. Inc. and Winston-Salem, N.C.-based R.J. Reynolds Tobacco Holdings Inc. for cigarette smuggling after a U.S. judge dismissed the case last month.

A U.S. District Judge ruled last month that the commission wasn't injured by alleged smuggling of cigarettes into the 15-nation European Union (EU) and didn't allow other EU members to sue. The commission said the case was rejected on "a single technical point of law" and that the court "rejected in substance all other arguments" by the companies, according to Reuters.

The original suit, filed in federal court in Brooklyn, New York last November, was the first time the EU had sued U.S. companies in a U.S. court. It sought unspecified financial damages for violations of federal racketeering laws, alleging the smuggling cheated the EU out of billions in customs duties, fees and taxes, the report said.

The commission, the EU's executive arm, filed the new case in federal court in Brooklyn along with Italy, Germany, France, Spain, Portugal, Greece, Belgium, the Netherlands, Finland and Luxembourg.

R.J. Reynolds said in a statement that it couldn't comment on the specifics of the case because it hasn't seen the suit. "To suggest that R.J. Reynolds Tobacco Co. has been involved in smuggling activity -- in Europe or elsewhere -- is unsupportable and untrue," the company said.

It sells cigarettes only in the U.S. Philip Morris has yet to comment.

The original suit alleged that Philip Morris and R.J. Reynolds and several affiliates conspired with cigarette distributors, shippers, smugglers, drug dealers and currency brokers to illegally bring their cigarettes into European Union countries starting in the late 1970s.

In May, Philip Morris' vice president and associate general counsel William Ohlemeyer said it "didn't do Philip Morris any good to have its cigarettes sold in countries where it shouldn't be sold."
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