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Company Press Release

Texas Court Throws Out Labor Health Care Fund Case Extending Tobacco Industry's Nationwide String of Victories

NEW YORK--(BUSINESS WIRE)--Sept. 1, 1998--Continuing a strong nationwide trend, a federal judge in Texas dismissed all 17 claims in a union health care fund lawsuit against the tobacco industry. Three Texas funds sought reimbursement for medical costs attributable to the alleged smoking-related illnesses of their members.

``This ruling marks the ninth time since April that courts have summarily dismissed or gutted attempts by labor funds to sue the tobacco industry for the health care costs of their members,'' said Steven B. Rissman, senior counsel for Philip Morris. ``We have said all along that time honored rules of law should not change merely because the defendant is politically unpopular.''

Echoing recent decisions from federal and state courts in Maryland, California, Florida, New Jersey, Pennsylvania and Oregon, U.S. District Court Judge Thad Heartfield rejected the Texas funds' claims as too remote or indirect. ``Sound judicial policy dictates that this action must be dismissed. Standing to bring suit must be limited to those parties directly injured,'' Heartfield said. The judge further held that ``this action is precisely the type of indirect, massive and complex lawsuit the case law advises against.'' The court also refused to permit the funds to amend their complaint, holding that such an effort would be ``futile'' because ``the deficiencies of the complaint could not be cured by amendment.''

     Philip Morris, New York
     Ken Seda, 212/878-2144