French Seita partly blamed for smoker death (fwd)

[Robert Weissman <rob@essential.org>]

FOCUS-French Seita partly blamed for smoker death
(Recasts with Seita reaction, background)
by Christian Curtenelle
Source: Reuters, Wednesday, 12/8/99
Wednesday December 8, 1:27 pm Eastern Time

MONTARGIS, France, Dec 8 (Reuters) - A French court ruled on Wednesday
that French cigarette maker Seita was partly to blame for a smoker's
death, opening a new front in the war on tobacco firms just as Seita
prepares to merge with Spain's Tabacalera.

The court said Richard Gourlain, who died of cancer of the lungs and
tongue at 50, was at fault himself for smoking two packs of filterless
Gauloises cigarettes a day for more than 35 years, but that Seita was also
largely responsible.

Seita said it was surprised by the verdict and would appeal, but the
ruling sent its shares into a tailspin on the Paris bourse and raised the
spectre of protracted legal wrangles at a time when Seita is preparing to
fuse with Tabacalera .

Industry analysts said it was hard to assess the impact of the ruling
beyond the immediate hit for tobacco shares in France and further afield.

But they said it was the first time a suit had got so far in Europe, where
efforts to take tobacco firms to task in Britain and on the continent have
been proving tougher for plaintiffs than in the litigation-happy United
States.

``It's unexpected and disappointing. It's the first case that the European
industry has ever lost,'' Michael Smith, a tobacco industry analyst at
Morgan Stanley Dean Witter, said.

Seita's stock shed nearly 10 percent after the ruling before recovering
somewhat, to close down 3.85 percent.

Tabacalera, partner in its plans to create the world's fourth-largest
tobacco group, was spared any knock-on due to a public holiday on the
Madrid stock market.

Smith said he expected Tabacalera shares to suffer when the market
reopened in Madrid, but that the ruling did not look as if it would damage
the merger plan, and that one judge's verdict could well end up being
overturned in the appeal.

``Tabacalera has seen off similar litigation claims in Spain. The legal
systems are very similar. I think this is an example of one particular
judge taking an aberrant view and it will be appealed to a three-judge
panel and I think likely overturned,'' Smith said.

Another question thrown up is the extent to which the French state is
exposed, given that Seita was privatised only in 1995.

The local court south of Paris said in the case taken by his widow that
Gourlain was 40 percent to blame himself from the age of 20 onwards, when
he had already been smoking for six years.

It said Seita was responsible on the grounds it had not fulfilled it
obligations to inform smokers of health risks after 1976, the year France
introduced laws obliging companies to put health warnings on cigarette and
tobacco packets.

Gourlain's widow is seeking close to three million French francs
($469,000) in damages following the death of her husband on January 7 this
year. The court set a three-month deadline for an evaluation of the
damages claim.

Seita's lawyer, Pierre Louis Dauzier, said the appeal would be lodged
before the evaluation of damages was completed and the firm itself
reiterated that it could not be held responsible.

``Seita is surprised by this decision...Seita cannot be held responsible
today for the choice, which is one of individual responsibility,'' it said
in a statement.

It said it welcomed the fact that the court had rejected a parallel
complaint by the health authority in the Loiret region, which wanted
977,396 francs in damages on money spent to care for Gourlain.

($1=.9751 Euro)

($1 equals 6.394 French Franc)