Tobacco Companies Win Dismissal of Venezuela Lawsuit
11/20/01
Miami, Nov. 20 (Bloomberg) -- Philip Morris Cos., R.J. Reynolds Tobacco Holdings Inc. and other cigarette makers persuaded a Florida judge to throw out a lawsuit brought by Venezuela over health care damages.
A judge in Miami rejected the South American country's bid to recover public health-care costs. Venezuela also sought billions of dollars in damages, claiming tobacco-related deaths and illnesses hurt the nation's economy by depriving it of healthy workers who would have paid more taxes and produced more goods and services.
The court also threw out a claim by the Brazilian state of Espirito.
The decision is the latest loss by foreign governments suing American tobacco companies in U.S. courts. The U.S. Supreme Court last month rejected appeals by Guatemala, Nicaragua and the Ukraine in similar cases, leaving intact rulings that any losses to public treasuries are too tangential to the alleged wrongdoing to be addressed by a court. Several other countries have filed similar suits, including Ecuador and Bolivia.
``A state court won't ignore the overwhelming number of decisions by federal courts rejecting these lawsuits,'' said William Ohlemeyer, Philip Morris's vice president and associate general counsel, of today's decision.
The Venezuela suit was first filed in Miami-Dade Circuit Court, then transferred to federal courts in Miami and then Washington before it was returned to the state court.
Plaintiffs' lawyers had thought the suit would have a better chance of succeeding in the Miami court, which has been unfriendly to the tobacco industry. In July 2000, a Miami-Dade jury told the cigarette makers to pay $145 billion to a class of Florida smokers. That award is being challenged.
Philip Morris shares fell 38 cents to $47.67 in trading today; R.J. Reynolds rose 40 cents to $57.42; Loews Corp. rose 51 cents to $56.51, and British American Tobacco Plc's American depositary receipts rose 36 cents to $15.69.