Tuesday, 30 September 2014

Day 240: An addictive, useless product that causes death in half its long term users.

There was a lot crammed in to the last day and a half of the plaintiffs' closing arguments in the Quebec class action trials. Yet there was nothing rushed about the way in which they presented their legal theories, their proposals for the amount that should be paid by the companies in damages, and their appeal that damages be imposed on a collective (class-wide) basis (without the burden of assessing individual claims). Oh, and they also gave a second try for "provisional execution" of some portion of any damages.

Something is certainly missing from that list -  but after two very full days, and an ill-advised pause before writing up an account of the day, I feel I am doing well to remember that much!

The legal theory: selling cigarettes is a fault

The plaintiffs say that the Canadian tobacco companies have broken three Quebec laws:
*  The Quebec Civil Code (particularly Article 3, 1457), and its predecessor the Civil Code of Lower Canada (Article 1053),
*  the Quebec Consumer Protection Act, (Articles 215-228) and
*  the Quebec Charter of Human Rights and Freedoms (sections 1, 4, and 49).

Grossly oversimplified, these are the laws that offer Quebecers the right to life, security and dignity, that protect them from unfair commerce, and that say everyone has a responsibility not to hurt other people.

In their written brief, the plaintiffs say that the manufacturing, marketing and promotion of cigarettes does not conform with those laws.

49. The Plaintiffs therefore submit that it is a civil fault to design, sell, and manufacture an addictive, useless product that causes death in half of its long term users. The Defendants’ behaviour throughout the class period violates the norms of conduct incumbent upon a manufacturer and engages their liability to the class members.

50. The Plaintiffs submit that the Defendants’ fault is compounded by their reliance on the materialisation of the gravest of the dangers inherent in the product they sell, namely addiction, in order to create, maintain and grow the market.

In presenting this argument to Justice Riordan this week, Bruce Johnston elaborated on the threads that come together to form this conclusion. As threads are wont to do, they wove together.

An addictive, dangerous product

Mr. Johnston said he was not arguing that cigarettes were a defective product (ones that didn't work as expected), but they should instead be seen as "inherently dangerous products". As such, their sale should only be permitted if the conditions for such products were met. For cigarettes sold in Quebec, he said, this had not been the case, and still was not.

In their brief, they write: "A manufacturer may only sell a non-defective, dangerous product without fault if the usefulness of the product outweighs the risk of harm." Even then, "such products need to carry appropriate warnings." 

Mr. Johnston offered a list of warnings that, used together, might be appropriate. The first one was the blunt message: "Do not use this product."

The addictiveness of nicotine is a key component of this danger, he said. If all teenagers wanted from their cigarettes was to "look cool", then what they had needed was a product that would allow them to do that, but which would not be addictive.

He said it was wrong to compare cigarettes to products with known inherent dangers. "They say it is like a knife - 'don't stab yourself with it' -  but it is more like a pharmaceutical product. If they are selling a drug, should they not be bound by the same rules as a drug company is with respect to information?"

(He later referred to Supreme Court rulings on the obligations of manufacturers with respect to birth control pills and breast implants as examples of the type of warning that was required of manufacturers.).

A fault to sell it, but not a request to ban it

Would a finding of civil fault for the sale of cigarettes be tantamount to a ban? That's how the defendants have characterized it in their written briefs. They say such a finding would trespass on the rights of legislatures to set policy.

To this, Bruce Johnston offered what my political friends would call a 'nuanced' position.

He pointed to several policy reviews which had reflected on why it was unrealistic to ban cigarettes (The Supreme Court, Exhibit 75A, the Isabelle Committee, 1554.4). He cited the World Health Organization saying that such a product would never be allowed for sale if it were introduced to the market today. (Exhibit 1422).

The companies are "trying to impress that what we are looking for is a ban, but that's not what we are doing," said Mr. Johnson. "Coming back to the Broad Street metaphor, we aren't asking you to take the handle off. We are asking you to order them to compensate the people they have harmed."

What would happen to the cigarette market if this happened? Mr. Johnston did not say. He suggested that the judge should not focus on such questions or be swayed by the apocalyptic threats of the companies. Instead he should focus on how the law should be applied.

"They will raise societal issues. 'If we go bankrupt it will be mayhem'", he predicted. "But I think there's a more important question, more relevant to what you have to decide,. If this industry, with this product, can't be held liable, why would any other industry bother to respect the law?"

The judge was only being asked the question "Are they liable in these circumstances, for this period?.... you are not being asked to look at whether you're going to ban smoking."

Ending the special treatment

"How does it work that you acquire a right to spread disease intentionally?" Interspersing Mr. Johnston's presentations this week were reminders of the scope and scale of tobacco industry wrongdoing, and the legal protection that has perversely been provided to them.

"Tobacco built for itself a sort of parallel regime. It's the Twilight Zone of law, where apparently the law doesn't apply to them." ... "The enormity of the proposition that  the worst industry could have the least obligation is quite astounding."

He attributed this to the smoking culture that once existed in Quebec, as elsewhere. Fifty years ago it would have been "virtually impossible" to gain acceptance for the idea that the companies were acting against the law, he said. But things were changing!

The limits of consent, and the progress of civilization

Changing social values make it more "feasible" to apply the law equally to tobacco companies, he said. pointing to a 1991 Supreme Court ruling that altered how consent was viewed in the context of criminal law.

(The case was Jobidon vs. The Queen. A man was killed in a fistfight he had provoked. His opponent was originally found not guilty of manslaughter on the basis that the victim had consented to the fight. The Supreme Court overturned the verdict, citing "policy considerations" in its view that consent to the fight did not exonerate the crime. Fistfights were not a practice that the court wanted to see protected in this way.)

"The process of civilization is decisions like this one. It may have been accepted before, but it was always wrong and we are not going to accept it any more. It never was acceptable, but now we are going to say it." Mr. Johnston characterized changed interpretation of old laws as an element of social progress.

Justice Riordan challenged: "But you are asking me to change the rules of civil liability.... You're saying consent, volenti non fit injuria, and all those kinds of rules that we learned .. don't apply anymore."

Mr. Johnston disagreed. He said the plaintiffs were NOT asking for any change to the rules - "we're just asking you to apply them." The legal principles regarding consent were unchanged, but he said that it is now accepted that there are limits to how consent can be used as a defence. "[Consent] is not valid in this case" He recapitulated his arguments why: "It is not fully informed, it is based on misinformation, it relates to bodily injury, and the product is addictive." The impact of addiction on impairing a smokers' ability to revoke consent to accepting harms of cigarettes was repeated several times this week.

And what about government?

He asked the judge to see past the industry's argument that because governments had not banned cigarettes, then the sale of them was lawful.

With what I took to be understatement, he said that "government didn't always act with the greatest scientific thoroughness" But that "once they realized they needed to do something, they acted to restrain smoking in the ways they chose." Government, too, had been lied to by the industry, he reminded the judge.

Justice Riordan is the only Canadian judge to have refused to excuse the federal government from a third-party/action in warranty claim by the tobacco companies.

Today, he referred to the government's role through an allusion to the Jobidon case. "In this case, not only is the government not prohibiting fighting -- they are charging a fee to get in to watch it!"

Twenty-two months after the federal government was released from this case, there are moments like these when it it's presence is very much felt!

How much exactly?

It was Gordon Kugler who presented the plaintiffs' views on the severity of the punitive damages that should be assessed against the companies. (Mr. Kugler heads up one of the four law firms which are working together on this case, but he is not a regular presence at this trial).

He reminded Justice Riordan of three recent Supreme Court decisions which have clarified the way in which damages can be assessed under the Quebec Consumer Protection Act. (Marcotte vs. the Bank of Montreal, Cinar Corporation v. Robinson and Richard v. Time Inc. (Justice Riordan owned up to having worked on the last case in its early stages before he became a judge.).

Mr. Kugler encouraged Justice Riordan to see that these rulings would allow him to:
* have considerable discretion on the amount he awarded, as long as the award was rationally connected to the harm done, and that he should not fear a higher court overturning his decision.
* award heavy punitive damages for past behaviour, even if he felt that the companies had improved their behaviour in recent years. Such punishment would serve as a deterrent to other businesses.
* award an amount in punitive damages that was sufficiently large to act as a deterrent, even if it was much larger than compensatory damages.

Mr. Kugler did not mince words. "I submit that Your Lordship has to clearly send the message that in Quebec, such conduct is reprehensible and intolerable, and the award must be sufficient to induce them and others to cease such behaviour towards Quebec residents."

"Their reprehensible conduct has resulted in the deaths of thousands of people. Justice La Forest said that, but to no avail! The defendants were not discouraged from their behaviour : they continued on their merry way."

He listed a number of prominent authorities who had censured the industry's behaviour, without resulting in any significant improvements. These included the U.S. Surgeon General and Justice Gladys Kessler, "None was sufficient to change the reprehensible behaviour of these defendants: they continued to target youth, to destroy research reports, to publicly deny cause and effect relationships."

Justice Riordan asked for Mr. Kugler's views on whether punitive damages should be assessed not on a per-member basis but on a per-defendant basis, and also whether a sum determined should be determined not on a market share basis, but on the basis of the comparative levels of wrongdoing by the defendants.

While generally agreeing, Mr. Kugler asked for the amount to be assessed on an industry-wide basis. "I think you will come to the conclusion that there was a conspiracy of the three defendants - that there was collusion. They never could have done what they did without the full cooperation of all three."

Surprising, to me, was that Mr. Kugler repeatedly gave the example of an award for punitive damages of only $3 billion. This is a little more than half the $5.3 billion that was proposed in the plaintaiffs' written pleadings.

[My records show that the take-home profits (unadjusted for inflation) for the companies in the late 1990s was about $1 billion per year. A $3 billion fine would leave the revenue for 47 of 50 years of the class period untouched.]

Nonetheless, he stressed that in order for punitive damages to have the required effect, Justice Riordan would have to "hit them hard."

"If you don't hit them hard, as they have shown for the past 50 years, they will just ignore the court. They ignore the reports from everywhere else. They ignore the fines. They don't care." 

Mr. Kugler said more -- but much of it was interspersed with his reflections on the situation of JTI-Macdonald which, as before, are not to be shared. Justice Riordan agreed to the proposal for non-disclosure of all references to JTI-M's structure and finances. This time, however, he reminded the lawyers that it was his decision to make, not theirs. His order was a temporary one. Stay tuned!

Collective recovery 

Late in the day, Philippe Trudel provided separate arguments about why the damages that awarded should be done on the basis of "collective recovery" and not "individual recovery". The opposite view is a major theme in the companies arguments, and more will doubtless be said about the distinctions in the coming weeks.

Provisional execution

Earlier this week, Justice Riordan had put on ice the plaintiffs' request that owing to the abuse of court procedures by the defendants, a portion of any award be demanded immediately upon his ruling, and not have to wait the outcome of the appeals to a higher court. (This "provisional execution" of the award would be reimbursable to the defendants if they won on appeal).

Today, as their last submssion, André Lespérance gave other reasons that could be used to justify this approach, and which would not require the judge to engage in a mini-trial on the behaviour of the defence during the trial.

He suggested that the plaintiffs had chosen the wrong horse to ride in this request. "We used a western saddle, when perhaps an English saddle would have been better."

He based his argument today on the long delay that the class members had experienced. "Ninety-five percent of lung cancer victims die within 5 years. It has been 16 years that we have been before the courts.... It injures people to ask them to wait a further 5, 6, or 7 years to receive a part of their claim."

He gave the judge a few legal precedents to hang his hat on, and reminded him that "Justice delayed is justice denied."

And then it was over.

With 15 minutes on the clock, the plaintiff's closing arguments ended when Mr. Lespérance thanked Justice Riordan for his patience.

Their next --- and last -- opportunity to present their thoughts will be during the "réplique" that follows the defence teams' presentations.

On October 8, Rothmans, Benson and Hedges will begin its closing arguments. The other days reserved for their presentation are October 9, 10 and 14th.

This post has been back-dated to allow for continuity in indexing. It was written on October 1, 2014.