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The tobacco industry scored a legal victory Tuesday when a federal appeals court ruled against foreign governments and administrators of union health care funds seeking to recover costs for treating sick smokers. Lawyers for the U.S. labor funds and the nations of Guatemala, Nicaragua, and Ukraine argued in separate claims that they should be compensated for caring for smokers. They also stated that the U.S. cigarette companies committed conspiracy and fraud, violating antitrust and racketeering laws. The U.S. Court of Appeals for the District of Columbia dismissed the claims in a joint unanimous ruling. The three-judge panel is the eighth federal appeals court to issue such a ruling against union health care plans and the first to address claims of foreign governments. In the court’s written opinion, Judge Judith Rogers said the countries and the benefit funds could not prove they were directly injured by the tobacco companies. Philip Morris Inc. attorney Steven Rissman hailed the decision. “These cases are baseless,” he said. Brown and Williamson attorney Mitch Neuhauser said the ruling “knocks the foundation from lawsuits brought against the tobacco industry by any government institution or third party.” Salomon Smith Barney tobacco analyst Martin Feldman predicted the ruling would make it more difficult for the Justice Department to succeed in a separate lawsuit against the cigarette manufacturers. The Justice Department lawsuit, filed in September 1999, accuses big tobacco companies of putting profits before health by concealing data showing that nicotine is addictive and that smoking causes disease. U.S. District Judge Gladys Kessler ruled last year that the government could pursue racketeering claims in the case. In issuing its decision against the union health plans Tuesday, the appeals court overruled a separate decision by Kessler. Anti-smoking advocates are hopeful Tuesday’s ruling will not affect the federal lawsuit, which seeks to force the industry to hand over profits dating back to the 1950s. “I think the government has a strong case on the merits,” said Matthew Myers, president of the Campaign for Tobacco-Free Kids. “There’s no reason legally for them to drop it.” U.S. Attorney General John Ashcroft opposed the lawsuit when he was a Missouri senator but has not said whether the Justice department would continue pursuing it under his watch. The ruling isn’t expected to impact the companies’ $246 billion settlement with the states, which withstood a Supreme Court challenge last year. In 1998, the tobacco industry ended a slew of health-related lawsuits by agreeing to annual payments to the states over 25 years. The money was to compensate the states for the cost of treating smoking-related illnesses of people on Medicaid. Copyright 2001 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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