Court Snubs Out Foreign Tobacco Cases

Cases seek taxes, cite smuggling, terrorism

Published in CSP Daily News

WASHINGTON -- The Supreme Court refused Monday to consider whether foreign governments can file civil lawsuits in U.S. courts to collect taxes from American companies, said the Associated Press.

Ten members of the European Community and several political subdivisions of Colombia had sought reinstatement of lawsuits they had filed against several cigarette manufacturers, including R.J. Reynolds Tobacco Co., which is part of Reynolds American Inc., and Altria Group Inc.'s Philip Morris Inc.

The foreign governments accused the cigarette [image-nocss] manufacturers of knowingly selling cigarettes to smugglers and alleged the activities were linked to terrorism. The Colombian subdivisionseach similar to a statealleged that the cigarette-smuggling fueled drug trafficking and organized crime.

The 2nd U.S. Circuit Court of Appeals affirmed a trial judge's dismissal of the cases, which was based on a long-standing legal doctrine that encourages American courts to stay out of foreign tax matters.

Lawyers for the cigarette companies had urged the justices to reject the appeal, arguing that such disputes are best left to the president and Congress to resolve. They said foreign states could circumvent treaties with the U.S. government if they were allowed to sue in American courts.

The cases are The European Community v. RJR Nabisco Inc. and Departments of the Republic of Colombia v. Philip Morris Inc., 05-549.