Canada appeals U.S. verdict on tobacco smuggling
OTTAWA, July 28 (Reuters) - The Canadian government said on Friday it will appeal a U.S. court decision that quashed its $1 billion lawsuit against RJ Reynolds Tobacco Holdings and affiliates over charges of smuggling tobacco into Canada.
``Canada will not tolerate smuggling schemes that undermine this country's tobacco control policies and programmes,'' the Justice Department said in a statement.
On June 30, the U.S. District Court in northern New York state dismissed Canada's case, relying on an 18th century rule that Ottawa says has been called into question by other U.S. courts and in any case does not apply in this case.
The government alleges that the defendants broke U.S. racketeering law by conspiring to defraud Canada through an international smuggling scheme, thereby undermining anti-smoking policies and adding to health and enforcement costs.
R.J. Reynolds sold its Canadian unit, RJR Macdonald Inc, and other international operations to Japan Tobacco Inc. last year but retained all liabilities that might arise from the smuggling investigation.