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ASH
Daily News
 

style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt">Tuesday 7 November 2000

 

style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt">Headlines

style="FONT-SIZE: 12pt; mso-bidi-font-size: 13.5pt">EU sues U.S. tobacco
companies in U.S. court

style="FONT-SIZE: 12pt; mso-bidi-font-size: 13.5pt">Italy backs EU lawsuit
against U.S. tobacco giants

style="FONT-SIZE: 12pt; mso-bidi-font-size: 13.5pt">Florida judge upholds
verdict in Engle case
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Tobacco smuggling explained
 

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style="FONT-SIZE: 12pt; mso-bidi-font-size: 13.5pt">EU sues U.S. tobacco
companies in U.S. court
The
European Union has filed a civil lawsuit in a U.S. court against the tobacco
companies RJ Reynolds and Philip Morris, alleging that the U.S. companies were
involved in smuggling cigarettes into the EU. The EU, which says cigarette
smuggling costs its 15 member nations billions of dollars in lost tax revenues
each year, also asked the court for "injunctive relief to prevent further
smuggling."
EU
Budget Commissioner Michaele Schreyer said the lawsuit, which was expected, is a
"new step in our strategy to fight against fraud and financial irregularities."

But
EU officials declined to provide details on any of the allegations made in their
filings with the U.S. District Court for the Eastern District of New York,
citing legal reasons. They said the filings didn't include any figures for the
damages the EU budget is alleging it suffered from lower collection of
value-added tax and customs duties.

style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt">David Davies, a spokesman
for Philip Morris Europe SA, said the company would vigorously contest the suit,
and called on the EU to pursue talks on a co-operative approach to combating
smuggling. 
The
EU joins Canada, Ecuador and Colombia which have in the past year all filed
cases alleging cigarette smuggling by US tobacco companies.
style="mso-spacerun: yes">  European Commission spokesman Jonathan
Faull said the EU had chosen to lodge its case in the US because the companies
were based there. 


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Wall Street Journal, The Guardian, - November 7, 2000
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Italy backs EU lawsuit against U.S.
tobacco giants
The
Italian government has backed the European Commission decision to file a civil
lawsuit against U.S. tobacco companies Philip Morris and R.J. Reynolds.

The
Finance Ministry said Italy would launch a separate lawsuit against the two
tobacco firms, which the Commission is suing over their alleged involvement in
smuggling cigarettes in the European Union.

style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt">“The Italian government will
intervene to support the lawsuit filed by the European Commission against the
multinationals Philip Morris and RJ Reynolds,” it said.

style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt">Finance Minister Ottaviano
Del Turco was quoted in the statement as urging the other EU countries to follow
Italy's path and launch separate lawsuits.
 

style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt">Links:
style="mso-spacerun: yes"> 
href="http://biz.yahoo.com/rf/001106/l06425303.html">http://biz.yahoo.com/rf/001106/l06425303.htmlSource:
Reuters, 6/11/00

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style="mso-spacerun: yes"> 
Florida judge upholds verdict in
Engle case

style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt"> 
style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt">A Florida judge has upheld a
jury's award of a record $145 billion in punitive damages against leading U.S.
companies in a class action lawsuit brought by sick smokers in Florida, a
plaintiff's attorney said.

style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt"> 
style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt">Attorney Stanley Rosenblatt
said Miami-Dade Circuit Court Judge Robert Kaye rejected the tobacco companies'
post-trial motions, including one for a reduction of the sum of punitive damages
awarded by a six-person jury in July.

style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt"> 
style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt">“His judgment upholds the
jury's verdict ... he didn't change the number or the amount of the verdict,”
Rosenblatt said.  “This is terrific,
and terrific he did it so quickly,” he said, adding that the tobacco companies
would now have to go to an appeals court to pursue the case.


style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt"> 
style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt">Kaye's move came just three
days after a federal judge in Miami ruled that the case belonged in state court,
rejecting a motion by the tobacco companies after the jury returned its verdict
to have the case moved to federal court.

style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt"> 
style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt">In a verdict that dwarfed
previous U.S. punitive damages awards, the jury in the so-called Engle case
awarded $145 billion in punitive damages on July 14 to the state-wide class of
more than half a million sick smokers and relatives of people who died of
smoking-related diseases.

style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt"> 
style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt">One analyst said that Kaye's
upholding of the jury verdict would be certainly contested on the grounds it
went counter to Florida and federal law.

style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt">
style="mso-spacerun: yes"> “If he's upheld the verdict amount again,
it could be just one more thing in a list of many reasons why this case will be
decertified,” said Credit Suisse First Boston tobacco industry analyst Bonnie
Herzog.   “Legally, he should
have reduced this verdict amount, because under Florida and federal law you
cannot bankrupt a defendant.”

style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt">
style="mso-spacerun: yes"> 
style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt">The state court held a
two-year-long trial that resulted in a jury determination that smoking causes a
host of diseases and a $12.7 million compensatory damage judgment for three
plaintiffs harmed by smoking. The case was named after Howard Engle, a Miami
paediatrician with emphysema.

style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt"> 
style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt">Rosenblatt was delighted
with Kaye's upholding of the jury's July verdict. Kaye had not been able to
enter his judgment while a federal judge considered whether or not the case
belonged in a state or federal court, but he came back with his response within
days of being told the case was back in his court.

style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt"> 
style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt">“It's a terrific feeling,”
said Rosenblatt.  “No jury has ever
worked harder, listened to more witnesses. It represents justice that the jury's
verdict is being validated by the trial judge,2 he said.

style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt"> 
style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt">links:
href="http://www.nytimes.com/aponline/national/AP-Florida-Smokers.html">
style="mso-spacerun: yes"> 
href="http://www.nytimes.com/aponline/national/AP-Florida-Smokers.html">http://www.nytimes.com/aponline/national/AP-Florida-Smokers.html
style="mso-spacerun: yes"> 

style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt">
style="mso-spacerun: yes"> 
href="http://biz.yahoo.com/rf/001106/n06644400.html">http://biz.yahoo.com/rf/001106/n06644400.html 


style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt"> 
style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt"> 
Tobacco smuggling explained
The
Guardian’s Education supplement includes an article about tobacco smuggling,
including a helpful map showing the principal smuggling routes around the
world.  The article sets out the
arguments presented by the tobacco companies and health campaigners.
style="mso-spacerun: yes">  It also gives a breakdown of the costs
and share of ill-gotten gains that go to the manufacturers, smuggling gangs and
smokers.

style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt"> 
style="FONT-SIZE: 12pt; mso-bidi-font-size: 10.0pt">Source: The Guardian,
7/11/00

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