BAT prepares evasive action

[Robert Weissman <rob@essential.org>]

November 22 1999
The Times of London

BAT prepares evasive action

BY FRASER NELSON

 BAT is trying to shield itself from the full financial impact
 of the US Justice Department's new lawsuit against
 tobacco companies.

 It is requesting that its Brown & Williamson subsidiary be
 treated as an independent company.

 Demetra Frawley, the lawyer representing BAT in the US,
 said her client is trying to be dismissed from the lawsuit on
 jurisdictional grounds - and offer up Brown & Williamson
 instead. If the move is successful, it will effectively shield
 BAT from liability for any fine that exceeds Brown &
 Williamson's assets. BAT has until Boxing Day to file its
 defence. This will include asking the US Justice
 Department to dismiss the case. It will also file a "personal
 jurisdiction" motion, arguing that it had so little contact
 with Brown & Williamson during the relevant period that it
 should not be held liable.

 The new court action began when Bill Clinton detailed
 surprise plans to sue BAT along with other tobacco
 companies in January this year. Two months ago the US
 Justice Department filed a lawsuit accusing the industry of
 fraud and deceit since the 1950s. It is seeking to recover
 the billions of dollars spent on treating smoking-related
 illnesses.

 Last year several large US cigarette manufacturers -
 including BAT - agreed a $206 billion (£124 billion) civil
 settlement with 46 American states.

 In the new lawsuit, BAT stands accused with Philip
 Morris, RJ Reynolds, Loews Corp and Liggett Group.
 The case is not due to start until January 2003.