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Smile, EZ!!!! Delaware Court Nixes Tobacco Suit

Monday February 26, 2:15 pm ET
By Randall Chase, Associated Press Writer

Delaware Court Upholds Dismissal of Foreign Governments' Tobacco Suit

DOVER, Del. (AP) -- The state Supreme Court has upheld the dismissal of a lawsuit filed by two foreign governments against the tobacco industry.
Panama and the Brazilian state of Sao Paulo, seeking to recover expenses for the medical care of sick smokers, appealed last year after a Superior Court judge said they were not seeking damages for personal injuries suffered by smokers and they failed to establish that tobacco products were the proximate cause of their alleged economic injuries.

Superior Court Judge Richard Cooch also rejected an attempt by Panama and Sao Paulo to assert standing based on a doctrine under which a government can bring a lawsuit as the "parent" of a citizen.

In a decision handed down Friday, the Supreme Court agreed that the lawsuit should be dismissed, but not for the reasons cited by Cooch.

While upholding Cooch's determination that foreign governments, except in rare circumstances, lack the "parental" standing accorded to U.S. states, the Supreme Court said the issue was "immaterial" to the appeal.

The real issue, the justices said, is whether the tobacco companies owe a direct duty to insurers or health care providers of smokers, a theory that other courts have rejected.

Employing a proximate cause analysis of the foreign governments' alleged injuries "presupposes" that they were owed a duty by the tobacco companies, Justice Jack Jacobs wrote for a three-judge panel.

"No basis in public policy has been shown for judicially creating such a duty, particularly since the insurers are at all times free to seek judicial relief in American courts the remedy of subrogation," Jacobs wrote.

Instead of subrogation, in which insurers or third-party medical care providers sue on behalf of injured customers in an attempt to recover costs, the governments sued the tobacco companies directly, bypassing the key questions of whether the citizens themselves may have been able to prevail in tort litigation.

"Accordingly, we hold that although the Superior Court reached the correct result, the better rationale is that in selling their products to citizens of the foreign governments who later became injured as users of those products, the tobacco company defendants incurred no legal duty to those foreign governments, separate and apart from any duty owed to their citizens," Jacobs wrote.

Jon Wise, a New Orleans attorney who argued the foreign governments' case before the Supreme Court, said he was disappointed by the ruling.

"This is a blow to foreign tobacco suits, there's no doubt about that, but we'll just have to read it and see if there's any reason to apply for re-argument," he said.

Kenneth Parsigian, a Boston attorney who represented Philip Morris USA and its parent Altria Group Inc., said the Supreme Court's decision is consistent with other appellate court rulings.

"The argument is that the people who buy and use cigarettes are the people who have or don't have a claim against the tobacco companies," he said. "... You can't just step into a situation and provide medical care and say that gives you a claim against somebody who you had no dealings with."