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Big Tobacco Suffers Huge Setback in Nigeria: Update on Kano State Government Litigation Against Tobacco Companies

May 9, 2010

Background: On May 25th 2007, the Kano State government instituted an action against British American Tobacco British American Tobacco (Nigeria) Limited, International Tobacco Company Limited, British American Tobacco Plc, British American Tobacco (Investment) Limited and Philip Morris International Inc. to obtain damages and other remedies on account of injuries and death caused by the production and sale of cigarettes by the tobacco companies.

Background: On May 25th 2007, the Kano State government instituted an action against British American Tobacco British American Tobacco (Nigeria) Limited, International Tobacco Company Limited, British American Tobacco Plc, British American Tobacco (Investment) Limited and Philip Morris International Inc. to obtain damages and other remedies on account of injuries and death caused by the production and sale of cigarettes by the tobacco companies.
Since the commencement of the action, tobacco companies have used all tactics to cause procedural delays in the action. These include the filing of various objections challenging the jurisdiction of the Court to hear and determine the suit. Essentially, tobacco companies have not denied any wrongdoing in manufacturing, distribution and marketing of deleterious and addictive tobacco products to underage persons. Their simple objection is about the form of commencement of the action and the exercise of the Court’s discretionary powers under law to order the issuance and service of writs of summons.

In about 3 years while the various preliminary objections were pending before the Court, tobacco companies intensified their manufacturing, distribution and marketing of cigarettes in Kano State. Tobacco companies’ huge profitability comes at a very great cost to Kano State in terms of expenditure on treatment of tobacco related diseases in government hospitals and the depletion of the state’s work force. Tobacco companies’ sales statistics shows that tobacco consumption in Nigeria increased tremendously and income increased by N17,552,200,000 billion from about N92,000,000,000 billion between 2007 and December, 2009. The result of the leap in tobacco companies’ profitability is a corresponding catastrophic increase in the prevalence of tobacco smoking, smoking diseases and mortality.

The Ruling of the Court on Jurisdictional Objections on 16th April, 2010 and Current Procedural Posture

The rulings of Hon. Justice Wada Abubakar Omar of the Kano State High Court on tobacco companies’ jurisdictional objections hatched a new hope for definitive governmental actions to curb tobacco prevalence and mortality in Nigeria. In three separate rulings in respect of preliminary objections filed by the ITC, BAT PLC and BAT Investments Ltd, the learned judge held that it has jurisdiction to hear and determine the suit and the Court dismissed the preliminary objections dated 3rd August, 2007, 19th September, 2007 and 3rd July, 2007 respectively.

Specifically, the Court dismissed ITC’s objection to jurisdiction on the ground that Kano State failed to obtain prior leave of court to issue and serve the writ under Order 5 Rule 14 of the High Court of Kano State (Civil Procedure Rules) 1988 and that the writ was not endorsed for service out of jurisdiction as required by Sections 97 and 99 of the Sheriff and Civil Process Act. The Court upheld the submission of Counsel on behalf of Kano State that Order 5 Rule 14 does not apply to service of Court processes on ITC, a company in Nigeria because the phrase “out of jurisdiction” under the rules refers only to service outside of the Federal Republic of Nigeria. Regarding the alleged non-compliance with the Sheriff and Civil Process Act, the learned judge, relying on relevant decisions of the Supreme Court, held that it is the duty of the Registrar to endorse the writ as appropriate. As a result, the Court concluded that an omission to endorse the writ cannot invalidate the action.

On BAT Plc’s objection that there is no foundation for Kano State’s allegation that it committed a tort in Kano State, the Court held as follows:
“I think what the 3rd Defendant has done seems to be an invitation for the Court to comment on the substantive issue before the Court as rightly observed by the Plaintiff in their written address. It should also be noted that before this Court did grant the ex parte application of the Plaintiff and made the order complained of, the Court had been fully satisfied with the material at its disposal. As the said order is not a nullity ab initio, I cannot appreciate any reason why same should be reversed at this juncture. Issue number 1 formulated by the 3rd Defendant/Applicant should be and is hereby resolved against it.”

In response to BAT Plc’s request to set aside the order of the Court which authorized the service of Court processes on BAT Plc, the Court held as follows:

In my opinion, to determine whether the Plaintiff has pleaded sufficient facts to establish any conduct by the 3rd Defendant that could constitute a tort or other civil wrong, the statement of claim of the Plaintiff must be examined thereby digressing into the substantive case at this stage of procedural challenge on the jurisdiction of this Court. It will be quite inappropriate to comment on the substantive case now. After all, this Court was fully satisfied with the relevant materials placed before it before it made the order granting leave to serve the writ outside the jurisdiction. I will not delve into the substantive case for the purpose of vacating the said order which is not a nullity by any stretch of imagination.

The ruling of the Court on BAT Plc’s objection is consistent with the guidance laid down by the Supreme Court of Nigeria. In all cases, Courts faced with interlocutory applications have been urged to refrain from prejudging the issues for determination at the substantive trial of the action.

The last thread of objections by BAT Investment Plc are closely related with objections raised by BAT Plc. BAT Investment however further contended that the Court is precluded from asserting jurisdiction on the ground that the  service of processes was defective under the Sheriff and Civil Processes Act. The Court dismissed the contention as follows:

The writ of summons in this case was to be served on the 4th Defendant outside the jurisdiction of this Court, and it was so served. The 4th Defendant was served out of the Federal Republic of Nigeria. The question is, is service on the 4th Defendant governed by the provisions of the Sheriff and Civil Process Act? This question has been effectively answered in the case of NNPC v. Anwuta (2000) 13 NWLR pt. 682 at 376 cited at page 21….The 4th Defendant that is residing out of Nigeria could not rely on non-compliance with Sections 97 and 99 of the Sheriffs and Civil Process Act as a ground to vitiate the service of the writ of summons on it. This is because service on the 4th Defendant as a person resident outside Nigeria is governed by the Kano State High Court (Civil Procedure) Rules 1988, not the Sheriffs and Civil Process Act.

In sum, after hearing the various preliminary challenges filed by the Defendants, the Court firmly established that it has both personal and territorial jurisdiction to hear and determine this suit. The ruling on the Court marked the end of a phase in tobacco companies’ deliberate use of technicalities to defeat substantive justice in the pending action against them for causing injury to public health in Kano State.

The Tobacco Story:


Tobacco use, as you are aware has been implicated as the cause of various ailments and cancers, which have resulted in death of human beings all over the world, especially in developing Countries, like Nigeria. Research has shown that the mortality rate attributable to tobacco smoke far exceeds a combination of deaths from HIV/AIDS, Malaria and Tuberculosis put together. According to research conducted in 12 Government owned health facilities in Lagos State in 2006, 2 persons died daily in the state from a smoking related ailment, the figures have since escalated by 300% in the last 2 years.

Global statistics confirm the tragic trend of the prevalence of tobacco related diseases and mortality in Nigeria. According to World Health Organization’s statistics, 5.4 million people died of tobacco related diseases in 2006, about one death every 6.5 seconds. 8 million persons also died as a result of tobacco use in 2007 and by 2030, one in 6 people globally will die of a tobacco related disease. WHO estimates that 1 billion people would die from tobacco-related diseases this century. Of this number, 175 million people will die from tobacco related diseases before 2030. If unchecked, 80% of these deaths will be in Nigeria and other developing countries. (See: a copy of an extract from the WHO Report sourced from Mathers CD, Loncar D. of global mortality and burden of disease from 2002 to 2030. PLoS Medicine 2006, 3(11):e442.) The reality of these facts is indeed mind boggling to say the least. It is imperative to understand that the risk of a tobacco related ailment is not limited to addicted smokers alone, unsuspecting 3rd party smokers are also at greater risk from the incidence of Environmental Tobacco Smoke (ETS).

The prevalence of tobacco smoking, especially among children and underaged persons, its grave impact on public health, the economy and revenue on account of tobacco related health expenditure have therefore become a growing concern to the Federal government and many states of Nigeria including Kano, Ogun, Oyo, Gombe and Lagos (which pioneered health care cost-recovery action against tobacco companies in Nigeria).

After several decades of tobacco companies’ crass conspiracy to conceal the adverse health effects of consuming the cigarettes produced and distributed by them, they now openly admit that cigarette is the only product, which if consumed as intended by the manufacturer, causes real danger to the consumer and eventual death. In an advertorial titled “There is More to our Business-BAT”, British American Tobacco declared through its own Corporate Communications Manager, Aliyu Ma’aji, -“We have long accepted that smoking is risky. Our view is that along with the pleasures of cigarette smoking come real risks of lung cancer, respiratory disease and heart disease” Thisday of Monday, September 2006, p. 40.

Despite tobacco companies’ full knowledge of the danger of smoking, they consistently design strategies to induce and addict young people into smoking habits. To undermine regulatory restrictions on outdoor advertising, tobacco companies now use branded personal gifts such as, colorful t-shirts, umbrellas, carryon bags and caps. The goal of tobacco companies’ marketing strategy is to present smoking as desirable, socially approved, safe and healthful, and widely practiced behavior among adults, whom children and young people want to emulate. With this more children smokers are recruited on a daily basis into smoking and half of the smokers initiated daily are unable to stop till death as a result of their addiction to nicotine (which is the addictive substance in cigarette). The content of each cigarette consumed by a smoker is specially designed to addict, making the smoker unable to quit the habit. This is achieved through the manipulation of the nicotine content of the cigarette.
The tobacco companies have also exploited the absence of age verification process to make tobacco more accessible to more young persons who take up smoking habits and become addicted.

Tobacco Companies’ Use of Dilatory Tactics to Prevent Eventual Liability in the Pending Lawsuit

Remarkably, tobacco companies’ resort to technical impediments is an industry wide accepted strategy to delay the determination of all actions against the tobacco companies for damages on account of tobacco related injuries. Expectedly so, Phillip Morris International Inc in its 2009 Annual Report to the United States Securities and Exchange Commission expressed fear that its business faces significant governmental action to prevent the public health danger of tobacco products in Nigeria and noted that “litigation related to cigarette smoking and exposure to environmental tobacco smoke (“ETS”) could substantially reduce our profitability and could severely impair our liquidity”. The strategy therefore is to file the “various preliminary motion” to delay litigation outcome. (See: A copy of 5th Defendant’s 2009 Annual Report to the US Securities and Exchange Commission filed on 26th February, 2010 at 8.24a.m ET.)

 R.J. Reynolds' general counsel also admitted in a 1988 internal memo as follows, "[t]he aggressive posture we have taken... continues to make these cases extremely burdensome and expensive....To paraphrase General Patton, the way we won these cases was not by spending all of Reynolds' money, but by making that other son of a bitch spend all his." (See: the 1988 memo of R.J. Reynolds’ General Counsel (retrieved on April 24th, 2009 from www.kazanlaw.com/verdicts/articles/images/exb_d_sob.gif).

The tobacco litigation in Nigeria is ongoing and we shall keep you abreast of its future proceedings.

You may please revert, should you require further information and clarification on the above or on our various campaigns and matters relating to tobacco control.

 

We thank you for the kind courtesies extended to us, while wishing you and your organization the very best in your reporting and future endeavors.
Kind regards,

 

FOR: THE COALITION AGAINST TOBACCO (CAT)
 

ONAOLAPO OLATOYOSI M.

National Coordinator,

COALITION AGAINST TOBACCO

234 - 1- 8023139205, 8052190794, 7268285

E - MAIL: [email protected], [email protected]

Web site: www.coalitionagainsttobaccong.org

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