State of São Paulo and Republic of Panama v. The American Tobacco Company, et al.
Two foreign governments filed separate actions against several manufacturers and distributors of tobacco products seeking recovery of government medical expenditures incurred when treating their citizens from diseases caused by tobacco use after being misled regarding the health risks of smoking. The Supreme Court of the State of Delaware consolidated the two cases. Upon consideration of defendants' motion to dismiss, the Court held that foreign governments could not legally assert claims on behalf of their citizens, except in situations where the federal executive or federal legislature has granted such ability. Moreover, the Court held that the governments' claim was not cognizable. By alleging only derivative harms caused to the government and failing to allege primary harms caused to specific citizen subrogees, the government-health insurers failed to assert a legal duty owed by the tobacco companies.
State of São Paulo of the Federative Republic of Brazil, et al. v. The American Tobacco Company, et al., 919 A.2d 1116, Supreme Court of the State of Delaware (2007).
Governments or insurance agencies may seek reimbursement from the tobacco companies for health care costs related to tobacco. The most famous example is the case brought by individual states in the U.S.A. that resulted in the Master Settlement Agreement.
The court might consider procedural matters without touching the merits of the case. These might include: improper joinder, when third parties, such as Health NGOs or government officials, seek to become parties to the suit; lack of standing, where a plaintiff fails to meet the minimum requirements to bring suit; lack of personal jurisdiction, where the court does not have jurisdiction to rule over the defendant; or lack of subject matter jurisdiction, where the court does not have jurisdiction over the issue at suit.
Type of Tobacco Product
None
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"Before addressing the legal sufficiency of the Foreign Governments’ claims, it helps to put those claims into perspective. Although the Foreign Governments characterize themselves as “quasi sovereigns,” the specific capacity in which they are suing is functionally indistinguishable from that of an insurer or third party provider of medical care. In that capacity the Foreign Governments could have
chosen to stand in the shoes of their injured citizens and bring these actions to enforce their rights as subrogees. Indeed, in some jurisdictions, the Foreign Governments would have been required to do so."
Limitations regarding the use of quotes The quotes provided here reflect statements from a specific decision. Accordingly, the International Legal Consortium (ILC) cannot guarantee that an appellate court has not reversed a lower court decision which may influence the applicability or influence of a given quote. All quotes have been selected based on the subjective evaluations undertaken by the ILC meaning that quotes provided here may not accurately or comprehensively represent a given court’s opinion or conclusion, as such quotes may have originally appeared alongside other negative opinions or accompanying facts. Further, some quotes are derived from unofficial English translations, which may alter their original meaning. We emphasize the need to review the original decision and related decisions before authoritatively relying on quotes. Using quotes provided here should not be construed as legal advice and is not intended to be a substitute for legal counsel on any subject matter in any jurisdiction. Please see the full limitations at https://www.tobaccocontrollaws.org/about.
Two foreign governments filed separate actions against several manufacturers and distributors of tobacco products seeking recovery of government medical expenditures incurred when treating their citizens from diseases caused by tobacco use after being misled regarding the health risks of smoking. The Supreme Court of the State of Delaware consolidated the two cases. Upon consideration of defendants' motion to dismiss, the Court held that foreign governments could not legally assert claims on behalf of their citizens, except in situations where the federal executive or federal legislature has granted such ability. Moreover, the Court held that the governments' claim was not cognizable. By alleging only derivative harms caused to the government and failing to allege primary harms caused to specific citizen subrogees, the government-health insurers failed to assert a legal duty owed by the tobacco companies.