Florida Judge Directs Dismissal of Ecuador Suit; Ruling Extends Dismissal Streak.

Business Editors; Legal Writers

MIAMI--(BUSINESS WIRE)--April 17, 2001

A Florida state court judge ruled yesterday that he would dismiss a lawsuit brought by the Republic of Ecuador against Philip Morris U.S.A. and other U.S. cigarette manufacturers. The oral ruling follows 10 consecutive federal appellate decisions rejecting similar health care cost recovery cases.

"This decision should be a clear signal to the attorneys pursuing these lawsuits that state courts will be as hostile to these claims as the federal courts," said William S. Ohlemeyer, Philip Morris vice president and associate general counsel. "Federal courts in this country have uniformly rejected such lawsuits. Because similar rules apply regardless of where these cases are filed or who files them, these cases should be dismissed whether they are filed in state or federal court."

The Republic of Ecuador and nine other foreign governments, including several states of Brazil, have filed lawsuits in Miami, seeking reimbursement of health care costs. Seven U.S. federal appellate courts have issued 10 unanimous decisions rejecting cases brought by insurers and other third-party payors of tobacco related medical expenses. These appellate courts, as well as over 30 federal and state trial court judges, have rejected cases filed by a variety of third party payors of health care costs -- including Blue Cross plans, labor union health funds, employers and public hospitals -- by concluding that any such claims for damages can only be brought on behalf of individual smokers. A federal judge in Washington, D.C., recently applied the same legal reasoning to dismiss a series of cases brought by the governments of Guatemala, Nicaragua, Ukraine and Ontario.

"These claims have been rejected decisively and uniformly by every appellate court to consider them. Simply alleging injuries to its citizenry does not entitle a foreign government to target an American industry and try to exploit the U.S. court system," said Ohlemeyer.

"The result in the Ecuador case, together with the decisions in the Guatemala and other cases, should help close the door on tobacco cases filed by foreign governments in the United States," Ohlemeyer added.