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Cigarette Makers Win Dismissal of Suit

April 10, 1999|Bloomberg News

Philip Morris Cos., the world's largest tobacco company, and other cigarette makers won dismissal of a lawsuit by labor union health funds seeking to recover costs stemming from members' tobacco-related illnesses. The 2nd U.S. Circuit Court of Appeals in New York ruled that the funds lacked legal standing to assert their racketeering and fraud claims because any financial injuries the funds suffered were too indirect. Still, the panel said the funds may be able to invoke a different legal theory in the future to press their case. The 3-0 decision reversed a lower court order that allowed the suit to proceed. Laborers Local 17 Health and Benefit Fund and other union funds also sued R.J. Reynolds Tobacco Co., Brown & Williamson Tobacco Corp. and other major tobacco makers. The tobacco industry won similar victories in March, when a Philadelphia-based federal appeals court threw out a suit by seven Pennsylvania-based union funds. Also, an Ohio federal jury, in the first of the union health and pension fund suits to go to trial, determined that tobacco companies couldn't be held liable for such damages. The influential 2nd Circuit Court said it would be difficult to assess damages against the cigarette companies in suits in which the plaintiffs are not individual smokers.

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