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• Latin American Nations Claim Tobacco Cos. Violated RICO 

A centuries-old common-law rule may bar three Latin American nations from suing American tobacco companies under RICO in U.S. courts.

According to Kenneth J. Parsigian, who argued for the tobacco companies Tuesday before a panel of the 11th U.S. Circuit Court of Appeals, the nations of Belize, Ecuador and Honduras don't have the right to sue his clients.

"No court anywhere in history, anywhere in the world, has ever allowed a claim like this to go forward," said Parsigian, of Boston's Goodwin Proctor.

The three countries have accused five tobacco companies, including R.J. Reynolds Tobacco Co., Phillip Morris Cos. Inc. and Brown & Williamson Tobacco Corp., of setting up "elaborate criminal schemes to move their tobacco products into the hands of smokers, well below the radar screen of [the countries'] regulatory infrastructure." According to the plaintiffs, the companies sold tobacco in the Latin American nations tax-free by moving it through shadow companies and smugglers.

They filed a complaint in a Florida state court, alleging money laundering and mail and wire fraud, among other things. . .

Perwin said his clients' right to recourse in the U.S. courts is established under the plain language of RICO.

"[The revenue rule] is obviously superseded by the plain meaning of the federal statute," he said. "The plain meaning of the statute covers our claim. No doubt about it."

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No court anywhere in history, anywhere in the world, has ever allowed a claim like this to go forward.
Kenneth J. Parsigian, who argued for the tobacco companies before a panel of the 11th U.S. Circuit Court of Appeals against the suit by Belize, Ecuador and Honduras.

[The revenue rule] is obviously superseded by the plain meaning of the [RICO] federal statute. . . No doubt about it.
Joel S. Perwin, lawyer for the Latin American nations.