Court Seeks U.S. View of Smuggling Case

The Supreme Court asked the U.S. government for its view on a ruling that dismissed Canada’s civil racketeering lawsuit accusing R.J. Reynolds Tobacco Holdings Inc. and its affiliates of smuggling billions of cigarettes to avoid paying taxes.

A U.S. appeals court upheld the dismissal of the lawsuit, which alleged the defendants tried to defraud Canada of tax revenue in the early 1990s with a scheme that shipped Canadian cigarette brands to the United States and then smuggled them back to Canada.

The appellate decision declared that Canada’s case represented an impermissible effort to use U.S. courts to collect foreign taxes.