Tuesday, 4 December 2012

PQ #1: The Court of Appeal looks at the industry's right to know.

This week is a break week during the trial of the Quebec class action suits against the subsidiaries of the three of the world's large tobacco multinationals (the trial resumes on Monday, December 10th).

But that does not mean that there was no court action on tobacco files in Montreal this week. To the contrary!

Into this intermission stepped a case that has been a little hidden from view in recent years -- the challenge by tobacco companies to Quebec's 2009 law which set the rules for the province to file a lawsuit to recover the costs of treating tobacco-caused disease.


The Quebec cost recovery law is much like the law passed by British Columbia in 2000. It establishes a way for the province to quantify the costs paid by the state to treat tobacco-caused disease, to sue the companies to recover those costs and to apportion the responsibility to tobacco companies based on market share. The BC law was upheld by the Supreme Court of Canada in 2005, and judged consistent with Canada's constitution.

Despite this ruling from Canada's highest court, tobacco companies sought to have Quebec's similar law ruled unconstitutional. As crazy as this seems, the Quebec government was unable to persuade Justice Paul Chaput to dismiss the case before it was tried (and was similarly unable to persuade the Appeal Court to reconsider Justice Chaput's ruling). One reason for the seemingly redundant legal case is the fact that Quebec has its own constitution, which differs slightly from the Constitution of Canada.

The companies have exploited these differences in their arguments and are claiming, among other things, that the Quebec law changes the rules of procedure and proof in ways that deprives them of a fair trial and that it is an improper interference by the legislature in the judicial process. Other provinces have been able to benefit from British Columbia's precedent, but Quebec find itself having to re-fight the issue.

The constitutional challenge has been ongoing for more than three years, with few outward signs of resolution or even progress towards trial. (It has not, however, prevented the government from preparing and launching a compelling claim against the companies).  One delay seems to have been the insistence by the industry on receiving a wide scope of documents during the discovery phase of the trial of its constitutional challenge.

It was in February this year that Justice Clément Gascon of Quebec's Superior Court firmly smashed down the request of the industry for such material. He called the industry's request for a wide scope of background material to the development of legislation a fishing expedition ('recherche à l'aveuglette'), and sided firmly with the government in its decision to not provide the industry with the documents in question.

(Justice Gascon was promoted to the Court of Appeal only a few weeks after making the ruling under review this morning and was able to put some of his tobacco experience to good use. He was part of the three-judge panel that last month liberated the federal government from the class action suits).

Today's hearing

Ten months later, the companies and the provincial government found themselves today in the Court of Appeal rehashing the issues that Justice Gascon had tried to settle. Justice Gascon (Appeal Court judge) was not assigned to review the decision of Justice Gascon (Superior Court judge). Instead the issue was presented to three other justices of Quebec's Court of Appeal  -  Justices Yves-Marie Morissette, Nicholas Kasirer and Jacques Dufresne.

These three men know more than a little about tobacco law and tobacco companies. Justice Morissette formerly served as an expert witness for the federal government during its defense of the federal Tobacco Act against a previous constitutional challenge. Jacques Dufresne once headed up the litigation group for the lawfirm that represented Imperial Tobacco. Nicholas Kasirer has participated in a few decisions bounced up from the class action suits, including November's  'big' decision to release the federal government from the class action suits.

The lawyers on the industry side are familiar faces from the class action suits that are normally the subject of this blog. The presence of Eric Préfontaine (for Imperial Tobacco), Francois Grondin (for JTI-Macdonald) and Kristian Brabander (for Rothmans, Benson and Hedges) in the Blais/Letourneau cases is usually overshadowed by the lawyers who lead the defence in these class action trials, but the last two gentlemen are frequently present at the trial.

Imperial Tobacco: The law goes too far. Justice Gascon went too far

I almost felt sorry for Eric Préfontaine as he rose to present his case. (Mr. Préfontaine represents Imperial Tobacco, but was presenting the case on behalf of all three companies). Each side had clearly been given 90 minutes to make its presentation, and had doubtless structured and rehearsed accordingly. Yet the first words out of Justice Morissette's mouth were to the effect that 90 minutes was now considered to be quite excessive. The judge's scowl was enough to contradict his instruction that the lawyer should nonetheless use his time as he saw fit.

One reason Eric Préfontaine may have taken a full hour despite this warning was that he was frequently interrupted by Justices Dufresne and Kasirer. These interruptions were not kindly ones. The judges disagreed with his interpretation of the rulings of previous judges. They pointed to sections in the written arguments that they did not like. They contradicted some of his assertions, and discouraged his insights into the ruling he was seeking to have overturned. Nonethetless, he soldiered on, pointing to the detriment that would be done to his client's case if the evidence they sought were deprived to them

Justice Québec: The Court does not need this material to render a decision

By contrast, when the lawyers for the provincial government presented their views (first Mr. Benoit Belleau, and then Mr. Francis Demers), the judges sat mostly silently. Their few interventions seemed friendly - one was a suggestion that a legal authority was 'not necessary', another was a soft-ball question about the relationship of the information being sought by the industry to the types of material which would be denied under Access to Information rules.

In a soft baritone made almost inaudible by the hard acoustics of the room, Mr. Belleau presented the case that Justice Gascon had supported. (The Court of Appeal is drop-dead gorgeous, but the stone walls and 30 foot ceilings make the high frequencies necessary to speech simply drop dead).  His colleague, Francis Demers, began his short submission by providing a history of the government's participation in the Supreme Court of Canada decision on the constitutional issues in the British Columbia case and ridiculing the idea of requiring governments to divulge pressure from outside organizations.

All over but the judging.

The hearing wrapped up at 12:33 (after a response to the government's submission by Francois Grondin, who represents JTI-Macdonald. The justices left the room and ater a short pause, Justice Morissette returned alone to say that they hoped they would provide their decision at 2:00 p.m. tomorrow (Wednesday).

One reason they may be in a hurry to provide their views is that the next hearing in this case is only 10 days away. On Friday, December 14th, a Superior Court judge will be deciding whether or not the lawsuit filed by the province last June must be suspended until the constitutional challenge is resolved.

The Appeal Court decision on this case will be posted here as soon as it is available.

Post Script:  Although the ruling was not posted on the public web-site of the Court of Appeal until December 12, it turns out that the decision was in fact rendered the following day. The mood of the court against the companies was reflected in the decision -- the appeal was denied.