Appeals Court Upholds Dismissal Of Oregon Union Lawsuit Against the Tobacco Industry

Jul 14, 1999, 01:00 ET from R.J. Reynolds Tobacco Holdings, Inc.

    WINSTON-SALEM, N.C., July 14 /PRNewswire/ -- The U.S. Ninth Circuit Court
 of Appeals today upheld the dismissal of a health-care reimbursement lawsuit
 against the tobacco industry by more than 50 labor unions in Oregon.  This
 decision marks a consistent trend of courts -- including two other federal
 appeals courts -- that are rejecting lawsuits by union funds alleging claims
 against tobacco companies.
     Today's ruling affirmed the decision by a federal court in Portland in
 August 1998 to reject the Oregon labor union lawsuit (Oregon Laborers -
 Employers Health & Welfare Fund, et al.), ruling that there was no legal basis
 for the union funds to sue the tobacco industry because union funds had not
 suffered any direct harm.  The opinion issued today endorsed and reiterated
 the 1998 opinion by the U.S. District Court which said, "To allow plaintiffs
 to maintain actions that are entirely dependent upon the harm suffered by
 others threatens chaos for the judicial system ..."
     "Courts across the nation have been finding that the plaintiffs' basic
 legal theories are without merit, regardless of how their claims are stated,"
 said Charles A. Blixt, executive vice president and general counsel for R.J.
 Reynolds Tobacco Company.  "These rulings show that these lawsuits are a waste
 of judicial time and taxpayer money.  These decisions by federal appellate
 courts demonstrate that courts will not let plaintiffs stretch case law to
 unrecognizable proportions in pursuit of claims that have no basis in law or
 fact.  The opinion supports our belief that third-party cases of this type are
 based on contrived legal theories that don't deserve to be tried in court."
     More than a dozen cases of this type have been dismissed by courts across
 the country, including these recent decisions:
 
     -- On April 9, 1999, the U.S. Second Circuit Court of Appeals ruled that a
        lawsuit filed against the industry by a group of union health and
        welfare funds in New York (Laborers Local 17 Health and Benefit Fund,
        et al.) should not proceed to trial.
 
     -- On March 29, 1999, the U.S. Third Circuit Court of Appeals issued an
        opinion in a similar union trust fund case in Pennsylvania
        (Steamfitters Local Union No. 420 Welfare Fund, et al.), upholding a
        lower court's dismissal of the case based on the fact that third-party
        payers are too remote from any alleged damage to sue for recovery.
 
     -- In March 1999 -- in the only case of this type to go to trial (Iron
        Workers Local Union No. 17 Insurance Fund, et al.) -- a jury in U.S.
        District Court for the Northern District of Ohio unanimously ruled that
        the major U.S. tobacco manufacturers were not responsible for any
        alleged smoking-related medical costs paid by Ohio's labor union
        health-care funds for their workers.
 
     Similar cases have also been dismissed in Florida (Southeast Florida
 Laborers District Health and Welfare Trust Fund, dismissed 4/13/98),
 California (Stationary Engineers Local 39 Health & Welfare Trust et al.,
 dismissed 4/30/98) and Maryland (Seafarers Welfare Plan et al., dismissed
 7/13/98).
     R.J. Reynolds Tobacco Company is a wholly-owned subsidiary of R.J.
 Reynolds Tobacco Holdings, Inc. (NYSE:   RJR).  R.J. Reynolds Tobacco Company is
 the second-largest tobacco company in the United States, manufacturing about
 one of every four cigarettes sold in the United States.  Reynolds Tobacco's
 product line includes four of the nation's ten best-selling cigarette brands:
 Winston, Camel, Salem and Doral.
 
 

SOURCE R.J. Reynolds Tobacco Holdings, Inc.
    WINSTON-SALEM, N.C., July 14 /PRNewswire/ -- The U.S. Ninth Circuit Court
 of Appeals today upheld the dismissal of a health-care reimbursement lawsuit
 against the tobacco industry by more than 50 labor unions in Oregon.  This
 decision marks a consistent trend of courts -- including two other federal
 appeals courts -- that are rejecting lawsuits by union funds alleging claims
 against tobacco companies.
     Today's ruling affirmed the decision by a federal court in Portland in
 August 1998 to reject the Oregon labor union lawsuit (Oregon Laborers -
 Employers Health & Welfare Fund, et al.), ruling that there was no legal basis
 for the union funds to sue the tobacco industry because union funds had not
 suffered any direct harm.  The opinion issued today endorsed and reiterated
 the 1998 opinion by the U.S. District Court which said, "To allow plaintiffs
 to maintain actions that are entirely dependent upon the harm suffered by
 others threatens chaos for the judicial system ..."
     "Courts across the nation have been finding that the plaintiffs' basic
 legal theories are without merit, regardless of how their claims are stated,"
 said Charles A. Blixt, executive vice president and general counsel for R.J.
 Reynolds Tobacco Company.  "These rulings show that these lawsuits are a waste
 of judicial time and taxpayer money.  These decisions by federal appellate
 courts demonstrate that courts will not let plaintiffs stretch case law to
 unrecognizable proportions in pursuit of claims that have no basis in law or
 fact.  The opinion supports our belief that third-party cases of this type are
 based on contrived legal theories that don't deserve to be tried in court."
     More than a dozen cases of this type have been dismissed by courts across
 the country, including these recent decisions:
 
     -- On April 9, 1999, the U.S. Second Circuit Court of Appeals ruled that a
        lawsuit filed against the industry by a group of union health and
        welfare funds in New York (Laborers Local 17 Health and Benefit Fund,
        et al.) should not proceed to trial.
 
     -- On March 29, 1999, the U.S. Third Circuit Court of Appeals issued an
        opinion in a similar union trust fund case in Pennsylvania
        (Steamfitters Local Union No. 420 Welfare Fund, et al.), upholding a
        lower court's dismissal of the case based on the fact that third-party
        payers are too remote from any alleged damage to sue for recovery.
 
     -- In March 1999 -- in the only case of this type to go to trial (Iron
        Workers Local Union No. 17 Insurance Fund, et al.) -- a jury in U.S.
        District Court for the Northern District of Ohio unanimously ruled that
        the major U.S. tobacco manufacturers were not responsible for any
        alleged smoking-related medical costs paid by Ohio's labor union
        health-care funds for their workers.
 
     Similar cases have also been dismissed in Florida (Southeast Florida
 Laborers District Health and Welfare Trust Fund, dismissed 4/13/98),
 California (Stationary Engineers Local 39 Health & Welfare Trust et al.,
 dismissed 4/30/98) and Maryland (Seafarers Welfare Plan et al., dismissed
 7/13/98).
     R.J. Reynolds Tobacco Company is a wholly-owned subsidiary of R.J.
 Reynolds Tobacco Holdings, Inc. (NYSE:   RJR).  R.J. Reynolds Tobacco Company is
 the second-largest tobacco company in the United States, manufacturing about
 one of every four cigarettes sold in the United States.  Reynolds Tobacco's
 product line includes four of the nation's ten best-selling cigarette brands:
 Winston, Camel, Salem and Doral.
 
 SOURCE  R.J. Reynolds Tobacco Holdings, Inc.