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Press release from PR Newswire

Brazilian Superior Court of Justice Rejects Indemnification Claim for Consumption of Cigarettes

Wednesday, April 28, 2010

Brazilian Superior Court of Justice Rejects Indemnification Claim for Consumption of Cigarettes12:34 EDT Wednesday, April 28, 2010BRASILIA, Brazil, April 28 /PRNewswire-FirstCall/ -- By unanimous vote (3x0), the 4th Panel of the Superior Justice Court (STJ), the highest Brazilian court for uniformization of precedents on non-constitutional matters, yesterday denied the claim for indemnification for moral damages brought against the cigarette manufacturer Souza Cruz S/A (the Brazilian branch of British American Tobacco Group - BAT, Amex: BTI) (Bovespa: CRUZ3), by family members of ex-smoker Vitorino Mattiazzi, in the estimated amount of R$ 490,000. This was the first time the Brazilian Superior Court of Justice reviewed the merits of a lawsuit for indemnification for damages attributed to the consumption of cigarettes, and their decision confirmed the majority of the rulings adopted by Brazilian courts in first and second instances in decisions already handed down in similar cases. In all 290 lawsuits with final rulings in Brazil, such indemnification claims were denied.The case that was reviewed yesterday by the Superior Court of Justice began in 2005 in the city of Cerro Largo (state of Rio Grande do Sul, 490 km from Porto Alegre), when the widow of Vitorino Mattiazzi filed a lawsuit alleging that her husband was unaware of the risks associated with smoking, had been induced by misleading advertising and had died from respiratory illnesses which the widow attributed, exclusively, to the consumption of cigarettes manufactured by Souza Cruz. As redress, she claimed indemnification for moral damages in an amount greater than 2,000 minimum salaries.At first instance, Judge Guilherme Eugenio Mafassioli Correa did not accept the argument of "lack of awareness" of the risks associated with smoking, pointing out, further, that the sale of cigarettes is legal and that it is not possible to prove that the person exclusively smoked products manufactured by Souza Cruz, since these are not the only cigarettes available on the market. Further, he emphasized that "there is no way to hold third parties liable for a decision that is eminently one's own, individual, as is the case here. Even if it were questions of status when Vitorino began smoking, he could have opted not to smoke. Certainly there are people who did so".The plaintiff appealed to the Court of Appeals of Rio Grande do Sul (TJRS), where the justices shifted the burden of proof during the judgment session and accepted the claim of indemnification, ruling that Souza Cruz should have proven that it did not manufactured the cigarettes smoked by Mr. Mattiazzi. Further, the reporting justice assumed, based on generic data extracted from the Internet, that Mr. Mattiazzi's disease had been caused by smoking cigarettes, although such causation link had not been evidenced in the evidentiary phase. Souza Cruz then filed a special appeal to the Brazilian Superior Court of Justice, which was granted in yesterday's session. The justices of the 4th panel confirmed, by unanimous decision (3x0), the understanding that cigarettes are a product with known inherent risks, the consumption of which is a decision made exclusively by the consumer, and that, in the sphere of civil liability, the causation link should not be established based on presumption, i.e. grounded on statistical data. Moreover, the Reporting Justice mentioned that the cigarette advertising does not interfere in the free will of the consumers, who may choose to smoke or not. These, among other factors, according to the Justices, exclude the manufacturers from liability for alleged damages associated with smoking.This was the first ruling on merits on the matter rendered by the Brazilian Superior Court of Justice which, till now, had only reviewed the issue of the statute of limitations being applicable to claims of this nature, confirming the understanding that the period to be applied is five (5) years, as expressly provided in the Brazilian Consumer Protection Code. SOURCE Souza Cruz S.A.For further information: Cia da Informacao, Rafael Machado, +55-11-3071-3494, Ext. 21, rafael@ciadainformacao.com.br, or Cassia Rodrigues, +55-11-3071-3494, Ext. 30, cassia@ciadainformacao.com.br