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Oil Price Drops, Saudis Import Suit Against Tobacco

One clear sign that Saudi Arabia is concerned by the drop in oil prices is that it has decided to indirectly sue Big Tobacco. AP (via Law.com) reports that the Health Ministry has filed a $34 billion suit against importers of cigarettes from international tobacco companies, including U.S. firms, for costs of medical treatment of smoking-related illnesses. Cigarettes in the kingdom cost $1.50 per pack. The Saudis know the local importers cannot afford to be sued, but the Health Minister expressed confidence that they would be able to "resolve" this issue with Big Tobacco.

The legal basis of the suit is not immediately clear. "We have patients who are sick because of the agents who import cigarettes," the Health Minister said. "We have documented proof that these diseases were caused by smoking, and I am asking for compensation for these patients." There are many acute legal problems inherent in the "theory" that underlies that brief statement (is the government subrogated to individual claims? are the smokers claiming they were defrauded by the tobacco importers? is knowledge of the risks of smoking unknown or hidden in the kingdom? etc.) but of course the Saudis are here emulating American states and its federal government, all of whom have sued Big Tobacco (though the federal suit is still pending).

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Rafael Mangual
Project Manager,
Legal Policy

Katherine Lazarski
Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.