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November 15th, 2012:

Quebec Court of Appeal sides with Feds in tobacco lawsuit

The Canadian Press

Posted: Nov 15, 2012 8:00 PM ET

Last Updated: Nov 15, 2012 8:37 PM ET

The Quebec Court of Appeal says the federal government cannot be sued or held liable for damages in lawsuits involving Big Tobacco. (The Canadian Press/Graham Hughes)

The Quebec Court of Appeal has sided with the federal government in a case pitting smokers against Big Tobacco, saying the government isn’t on the hook in class-action suits.

The decision, dated Wednesday, repeats essentially what the Supreme Court of Canada ruled in July 2011 — that Ottawa cannot be sued or held liable for damages in smoking lawsuits.

Quebec is the battleground for a landmark $27 billion civil trial pitting three major tobacco manufacturers against representatives of 1.8 million Quebecers. The case is described as the biggest class-action lawsuit in Canadian history.

The federal government has been dragged into the case by the tobacco companies. The companies have argued that their cigarette sales simply followed federal guidelines, and said they plan to sue Ottawa to recoup damages if they lose.

With this week’s ruling that tactic seems unlikely, barring a successful appeal. And the Supreme Court of Canada, which would have to hear an appeal, has already made it clear what it thinks.

In July 2011, it ruled unanimously that the federal government can’t be dragged into court cases aimed at getting tobacco companies to foot the bill for smokers who get sick.

The latest Quebec ruling says the Supreme Court case, involving two lawsuits from B.C., is no different from the cases being heard in Quebec.

“The … judgment closed the discussion on the issue of immunity,” says the provincial verdict. “The federal government is right to say that it doesn’t have to make the arguments again before Quebec Superior Court.”

A spokesman for Health Canada said it welcomed the decision from the provincial appeals court.

The massive, two-year Quebec civil trial has often heard from tobacco companies who’ve defended themselves by saying they were simply following federal health authorities’ recommendations.

The defendants — Imperial Tobacco Canada Ltd.; Rothmans, Benson & Hedges; and JTI-Macdonald — have argued that the dangerous health effects of tobacco have been common knowledge for decades and there was no conspiracy to hide it.

Chris Koddermann, director of corporate affairs for Rothmans, Benson & Hedges, says the ruling will not have any impact on its defence.

“One of our principal defences is Rothmans can’t be held liable for conduct that has been, for decades, guided by the directives, policies and wishes of the federal government,” said Koddermann. “That defence remains untouched by the Court of Appeal’s ruling.”

Koddermann said the company still intends to call federal government witnesses to testify in support of their defence.

Eric Gagnon, a spokesman for Imperial Tobacco, expressed disappointment.

“From our perspective, we believe the federal government has been a senior partner of the industry and has been for decades, so it only makes sense for them to stand next to us in these class actions and respond to any allegations,” Gagnon said.

The three tobacco companies now have 30 days to determine whether they will appeal.

One anti-tobacco lobby spokesman says he would be surprised if Canada’s highest court would open the debate again. Mario Bujold said this week’s decision could also have a positive impact on the Quebec trial.

“It’ll reduce the time of the trial … because the Canadian government won’t be involved,” said Bujold, head of the Quebec Council on Tobacco and Health. “That’ll have an impact on the total time of the trial.”

The case is expected to last up to two years.

About 15 witnesses have already appeared before the Quebec Superior Court since the trial began last March including numerous former and current tobacco industry executives.

Health experts are scheduled to be next.

The federal government had tried to have itself recused from the case shortly before it started but the trial judge elected to go forward with the case, hoping to avoid further delays.

The case has taken years to reach the trial phase. It stems from two cases that were filed in 1998, certified and consolidated in 2005 by Quebec Superior Court, and there were motions, delays and appeals before it got under way in 2012.

The plaintiffs argue that the companies are liable because they knew they were putting out a harmful product and hid the health effects from the public.

One suit filed by a Quebec anti-tobacco group on behalf of Jean-Yves Blais seeks $105,000 in compensatory and punitive damages for smokers who suffered from cancer in their lungs, larynx or throat, or emphysema.

The other suit, worth $17 billion, was filed by Cecilia Letourneau on behalf of the province’s roughly 1.8 million smokers who were addicted to nicotine and remained addicted or died without quitting.

Letourneau, according to the claim, started smoking at age 19 in 1964. Despite her repeated attempts to quit, she said she’s unable to do so. That suit seeks $10,000 in compensatory and punitive damages per plaintiff.

Quebec’s is the only case to get underway in Canada.

The British Columbia cases on which the Supreme Court ruling is based have yet to reach trial, and several other provinces are at earlier stages in similar legal fights. Separately, all provinces have announced plans to sue tobacco companies to recoup health-care costs.

The Quebec case took more than 13 years to make it before a judge.