To cut to the chase - the decision on whether the federal government can appeal two decisions regarding the nature of its involvement in the trial has been postponed to August 9th, when a panel of judges will hear the request for Appeal and possibly the appeal itself.
A limited account of the hearing is at the end of this post. But first a little background on the "Action in Warranty" that has to date trapped the federal government in this litigious ménage a trois.
(If you are have trouble telling the players, we've prepared a scorecard!)
The story so farFirst there was the Knight case
The Blais and Letourneau lawsuits, which were launched in 1998 and have now reached trial stage in Montreal are only one of several litigation efforts that have been launched in Canada since the 'third wave' of tobacco litigation surged in the United States in the mid 1990s.
Another class action suit (and one of only 3 yet to be certified in Canada) was filed in 2003 against Imperial Tobacco in Vancouver by Klein Lyons on behalf of Kenneth Knight. The Knight case concerns the allegedly wrongful marketing of 'light' cigarettes, specifically Imperial Tobacco's best-selling Player's lights.
Imperial Tobacco responded to the Knight suit by filing, in April 2004, a Third Party Notice agains the federal government, claiming that the way in which 'light' cigarettes were designed and sold was directed by the federal government. [They were only following orders?....]
This was the first time, to my knowledge, that the industry had tried to shift responsibility in a tobacco lawsuit to government regulators. If you know of earlier examples, please let me know!
The federal government responded to this novel strategy by siding with the tobacco companies in recommending to the court in October 2004 that the Knight case not be certified.
What made the decision of the federal government to stand with the tobacco companies in a lawsuit so noteworthy is that it was done while Ujjal Dosanjh was federal health minister. Mr. Dosanjh, it will be remembered, had previously served as Attorney General of British Columbia in 1998 when that province became the first Canadian jurisdiction to file a suit against the tobacco companies. Included in that lawsuit was a claim for damages resulting from the deceptive marketing of light cigarettes.
Despite the federal government's efforts to quash the Knight case, it was certified in February 2005 - only days before the Blais and Letourneau cases were certified in Quebec.
Then there was the Sparkes case
In July 2004, a second class action suit regarding light cigarettes was filed. This time it was in Newfoundland, the lawyer involved as Ches Crosbie and the class representative was Victor Todd Sparks.
Imperial Tobacco continued with the same playbook, and so did the government. As it had in the Knight case, the company again filed a Third Party Notice against the federal government in January 2006. As it had in the Knight case, the federal government sided with the industry and asked that the case not be certified. This time, however, the industry and federal government were successful and the certification was denied in December 2008.
Next came the B.C. government claim.
Having twice convinced the federal government to side with them, the tobacco companies again filed third party notices against the federal government in 2007. This time the case was, at a political, legal and strategic level, more complex.
The case involved was the first (and at that time the only) provincial suit to be filed to recover health care costs associated with tobacco use. It had been first filed by British Columbia almost a decade earlier, in November 1998, and had already tumbled through successful industry challenges to the enabling legislation and consequential adjustments to the law and the suit.
Two months after learning, in April 2007, that the Supreme Court would not allow further challenges to the revised legislation, tobacco companies used third party notices to draw the federal government into the case. Between June and November 2007, each of the domestic and international companies that were involved in the suit (Imperial Tobacco, Rothmans Benson and Hedges, JTI-Macdonald, RJ Reynolds, RJ Reynolds International, BAT Industries and Carreras Rothman) filed their own Third Party Notice.
The feds push back - all the way to the Supreme Court.
Having failed to convince the B.C. courts to reject the Knight class action, the federal government turned to the courts to ask it to dismiss the third party claims. The B.C. Supreme Court agreed, and the notice was dismissed in July 2007. (This was one month after Imperial Tobacco filed its Third Party Notice in the B.C. government's damages recovery suit). Nine months later, in April 2008, the same court agreed to dismiss the third party notices that had been filed in the B.C. government claim.
With the same issues, the same courts and the same litigants, the contest with tobacco companies over whether or not there was a federal role in either the Knight case or the B.C. government claim were subsequently heard and decided simultaneously.
In December 2009, the B.C. Court of Appeal (which is a higher level court than the B.C. Supreme Court, despite the common connotations of the term 'supreme court') overturned the core of the previous decisions on the Knight and B.C. government cases. Once again the federal government found itself on the hook, and the issue was bounced upstairs to the highest court in the land.
When the Supreme Court of Canada reviewed the lower rulings in 2011, international and domestic tobacco companies lined up against the federal government and provincial government intervenors, including two other provinces which had filed suits similar to B.C.'s by this time (Ontario and New Brunswick). In late July, the Court unanimously struck out the industry's claims agains the federal government in both cases.
Any hopes the industry might have had that the federal government would be in the cases and would side against the plaintiffs, as they had in earlier stages of the Knight and Sparkes cases, were put to rest.
Meanwhile, a different story unfolds in Quebec
Attempts by the tobacco companies to engage the federal government in litigation followed a somewhat different path in Quebec than in the B.C. cases or in Newfoundland.
The companies did not move forward with Actions in Warranty (similar to Third Party notices) in the Quebec cases until almost 4 years had passed since they first tried the strategy in the Knight case. It was not until leap year's day, February 29, 2008 - ten years after the class actions were first filed - that Imperial Tobacco, Rothmans, Benson and Hedges and JTI-Macdonald filed such claims.
For its part, the federal government also shifted its game. Unlike the Knight and Sparkes class action suits, it did not try to scuttle the Blais and Letourneau cases. Nor did it ask the Quebec courts to remove it from the lawsuits.
Instead, it negotiated a role on the plaintiff's side of the court. On July 4, 2011 (three weeks before the Supreme Court ruling in Knight and the B.C. government claim), newspapers began printing notices that a deal had been struck between the federal government and with the Quebec plaintiffs.
In this proposed settlement, the federal government promised to remain in the trial and to cooperate with and assist the plaintiffs, as well as providing them with up to $1.6 million to defray the costs of expert witnesses. In return, the plaintifs promised to release the government "from any and all manner of claims by the class members."
This settlement could not be put into place without the agreement of the court - but that agreement would not come to pass. On September 21, 2011, Justice Riordan ruled that the settlement was not in the interests of the class members (the smokers and victims of lung disease on whom the class actions were being sought). Given the magnitude of the $27 billion claim, he said, the companies might go bankrupt. In that case, the settlement would prevent the claimants getting money from the (non-bankrupt) government if it was eventually found responsible and was therefore not in the interests of the class members.
The federal government did not appeal this decision. Instead, they turned to the strategy that had worked for them in B.C. -- asking to be dismissed from the cases. Justice Riordan, who had by then overseen trial developments for almost 4 years, heard their motion. Again he rejected the federal government's request for a change in its status in the proceedings.
In his February 2012 ruling, Justice Riordan felt that last year's Supreme Court decision regarding the B.C. suits did not necessarily apply to these Quebec cases, and not only because of the differences between common and civil law.
[T]he SCC Judgment must certainly serve as a beacon but, in light of the differences between the Actions in Warranty and the TPNs, it will not necessarily see us safely into port."
(In a separate ruling, he permitted Imperial Tobacco to expand the grounds of its claim against the government.)
Justice Riordan chastised the federal government for its delay in trying to get out of the Quebec actions:
 There is an additional procedural aspect that the Court cannot ignore when considering Canada's Motion to Dismiss: its timing.
 The Companies served their Actions in Warranty on Canada in February 2008, nearly four years before Canada served the present motion. At that time, the Superior Court of British Columbia had already granted the Motions to Dismiss based on Crown immunity and appeals had been launched. In 2008, Canada did not hide its intention to invoke the immunity provided for in the CLP Act against the Actions in Warranty; the only question was when.
 On numerous occasions, the Court invited, and then beseeched, Canada to present its Motion to Dismiss in time so that these files could follow what appeared to be an inevitable path to the Supreme Court of Canada hand in hand with the BC proceedings. The Court's urgings fell on deaf ears. Canada chose to invoke the point as part of its Defences in Warranty filed in June 2011.
When the federal government appeared before Justice Nicholas Kasirer at 2:00 on the afternoon of April 20th, to seek leave to appeal the two February rulings of Justice Riordan, it was thus at least the sixth time that they tried to extracate themselves from Canadian litigation against tobacco companies (three times in British Columbia, once before the Supreme Court and once previously in Montreal).
All of which brings us to the Quebec Court of Appeal.
|Quebec Court of Appeal, Montreal|
The stone walls, high wood panelling and flamboyant art-deco elements give court an almost cathedral-like quality. With the change in setting came a change in atmosphere - more hushed, more subdued. Some sombreness on the left hand side of the court seemed justified: it didn't start out like a cake walk for the federal side.
From behind the high wooden bench, Justice Kasirer began by telling the court he was struggling with the choices before him -- between the rock of handing the Court an issue it couldn't handle and the hard place of further appeals.
Maurice Regnier, on behalf of the Attorney General, was given a very short time to comment on why an appeal should also be allowed on the ruling in favour of an amendment to Imperial's claim against the government.
Suzanne Coté, representing Imperial Tobacco in this court as she did in the main trial, argued that the Supreme Court decision should not apply in Quebec because of the unique circumstances of Quebec. (After she hastened to assure the judge that she was a federalist, she was reminded by Justice Kasirer that there was one crown that covered both systems.) She claimed that uncertainty over the federal position in the trial affected the companies' right to a fair trial, in that the questions that the federal lawyers were allowed to ask would became part of the evidence before the court even if they were dismissed from the case. "We want them with us the whole time," she said.
The proceedings were predominantly in French until her Toronto-based colleague, Craig Lockwood, took the floor to speak to Imperial's amended motion. Ever more the whipper-snapper, he parried with the judge about the extent to which his client might have been motivated by strategy in amending its claim.
Doug Mitchell spoke on behalf of his client, JTI-Macdonald. He pointed out that neither his client nor Rothmans, Benson and Hedges were changing their claim against the government, and then drew attention to what he characterized as the strategic decision of the government to not push for dismissal while the B.C. issues were before the court.
When Justice Kasirer asked him whether the government did not have the right to do whatever they wanted to, Mr. Mitchell characterized the government's decision as 'wanting the best of both worlds.' To Mr. Kasirer's inquiry whether he was suggesting an abuse of process, he hastened to say he would not go that far.
Two hours after the session had begun (and at least 15 minute after the judge began closing his books, gathering his materials and looking impatient as Nathalie Drouin replied to the industry's comments), the session was suspended.
Justice Kasirer returned at about 4:30 to inform the court that in both cases he was punting the decision to grant leave to appeal on both cases. The reservations he had expressed at the outset of the proceedings were reflected in his judgment:
" Given the gravity of the question, I am of the opinion that a bench of this Court should hear the motion for leave to appeal and, if it sees fit, entertain the appeal on the merits. Rather than grant the motion, risking that the bench find itself without jurisdiction, I propose to defer the motion to the Court."
Discussions then turned to details of the hearing. When? August 9th. How long for each party? Less than they wanted (2 hours for the government, 2 hours for the tobacco companies to share and 10 minutes for the Blais and Letourneau lawyers. Paperwork? A federal paper of no more than 30 pages to be circulated by May 31 2012. (No one in the court room noted that this was World No Tobacco Day). The industry to circulate their response, again no more than 30 pages, by June 14th. Lest anything be left to chance, the size of the paper and font size were also defined.
As for the head-hurting bits? More about that some other time.
So where do things stand?
Until August 9th, at least, the proceedings in the trial will continue, and the federal government will, in effect, also be on trial for the way in which cigarettes were designed and marketed to Quebecers.
One of the fundamental questions in politics and policy, as in law, is "who's side are you on?"
In the class actions in British Columbia and Newfoundland, the federal government sided with the industry. Now, 6 years later, they are aligned with the plaintiffs against the industry.
From a public health perspective, it seems a more natural position for the government to sit in opposition to the manufacturers of one of the world's most deadly inventions. But not everyone sees it that way.
During a discussion on the potential scope of questions by federal lawyers during the trial, Suzanne Cote chastized the decision of the plaintiffs and federal government to collaborate.
"Why would a plaintiff who is suing my client come to the aid of a defendant-in-warranty against me? It is illogical... What interest do they have in the success of the defendant in warranty [the federal government]. None! To the contrary, it is against the interests of their members that the defense in warranty succeeds."
There have been stranger bedfellows.
The main trial resumes on Monday, April 30th.