Judge Dismisses Suits Over Cigarette Smuggling
NEW YORK (Reuters) - A federal judge has dismissed lawsuits brought by Ecuador, Belize and Honduras seeking to hold U.S. tobacco companies liable for tax revenues allegedly lost as a result of cigarette smuggling, a Philip Morris Cos. executive said on Th
"We are pleased that the court dismissed these lawsuits in accordance with longstanding principles followed in this country and throughout the world," said William Ohlemeyer, Philip Morris vice president and associate general counsel.
U.S. District Judge Federico Moreno in Miami based his ruling on a well-established legal doctrine known as the Revenue Rule.
"Though the complaint is pled under federal and state law causes, the substance of the claim is to enforce Ecuadoran tax laws. This is precisely the type of meddling in foreign affairs the Revenue Rule prohibits," the judge was quoted as saying.
"This age-old common law doctrine provides that courts of one sovereign will not enforce unadjudicated tax claims of other sovereigns. The issue here is whether this rule precludes this court from adjudicating Ecuador's (and the other plaintiffs') civil RICO and common law claims. It does."
The ruling was the third time a U.S. federal district court has rejected lawsuits brought against U.S. tobacco companies by governments who claim to have lost revenues because of illegal cigarette smuggling.
Earlier this month, a Brooklyn federal judge dismissed two suits, one by the European Community and 10 of its member states and the second by 24 Colombian departments and the Capitol District of Bogota.
And last year, the U.S. Court of Appeals for the Second Circuit, which sits in New York, upheld the dismissal of a lawsuit brought by the Attorney General of Canada against R.J. Reynolds and related tobacco companies.