Thursday, 11 June 2015

"Maintained in part"

When the story runs "Judge awards $15 billion", it is easy to think that the plaintiffs in the Quebec Class action won their entire case.

But, as described in an earlier post, the ruling by Justice Riordan refused a mechanism for addicted Quebec smokers to receive any compensation from the companies. Although he said their case was supported by the three-legged stool of civil liability (fault-damages-causality), he then knocked that stool out from under them by denying a method of recovery.

This was not the only area in which Justice Riordan was not convinced by the plaintiffs' arguments. Among his findings are several which will disappoint the public health community, including his decision that the companies had not been proven to have acted improperly when they designed and marketed light cigarettes or by advertising to youth.  A game-changing moment was lost when Justice Riordan soundly rejected the plaintiffs' request for a decision that cigarettes were too harmful and too useless to be on the market.[1]

No fault for light cigarettes or nicotine manipulation

The quantity of nicotine that was provided in tobacco leaves, in cigarettes, and to the lungs of smokers received a lot of air-time during the trial.

The companies were accused of making sure there was enough nicotine in cigarettes to keep smokers addicted, especially in "light" cigarettes which were designed to give low readings of tar and nicotine to smoking machines.

To accomplish this, the companies were said to have encouraged the cultivation of higher-nicotine tobacco blends, to have chosen the leaves that had higher levels of nicotine and to have designed their low-tar/light cigarettes so that it was easy for smokers to pull out as much nicotine as their addiction required. The plaintiffs also argued that the marketing of light cigarettes one way that the companies gave false reassurance to smokers that they could reduce the risks of smoking.

Against these charges, the companies denied that they had done anything other than comply with government policy. They said the development of higher nicotine tobacco was the brain-child of Agriculture Canada and Health Canada. [2] As for the risk that smokers would over-smoke low-tar cigarettes  - this was a concern that they had communicated to government as early as 1971. Although smokers might get more from a low-tar/light cigarette than the packaging label would suggest, they still got less than they would from a regular strength cigarette. [3].

On all of these nested issues, Justice Riordan ended up on the companies' side. He did not even give them a yellow card.

No fault in using higher-nicotine tobacco:"... Accepting that they did choose tobacco with higher levels of nicotine, the Companies were in a very practical way forced to do so by Health Canada. Moreover, in the context of the time, far from being a nefarious gesture, this could actually be seen as a positive one with respect to smokers' health. ...ITL was neither attempting to keep its customers dependent nor committing a fault."

No fault in selling compensatable cigarettes, once they had warned Health Canada
"Once they had warned Health Canada of the situation regarding compensation, it is difficult to fault the Companies for not intervening more aggressively on that subject. To do so would have undermined the government's initiatives and possibly caused confusion in the mind of the consumer. Perhaps more importantly, at the time it was genuinely thought that reduced delivery products were less harmful to smokers, even with compensation...we find no fault on their part for not doing more than they did with respect to warning of the dangers associated with compensation."

Not false reassurance,
just normal business practice
No fault in advertising low tar brands is not a fault, as they were produced under pressure from Health Canada
"We conclude that Health Canada was the main advocate of reduced-delivery products in conjunction with its "if you can't stop smoking, at least switch to a lower tar and nicotine cigarette" campaign. We also note that the Companies were under pressure to cooperate with that by producing low-tar brands. Under such circumstances, it was simply normal business practice to research the market for such brands. If that research showed that some smokers switched as a way of easing their guilt or anxiety about smoking, it would be normal to use that knowledge in developing advertising for them. The Court sees no fault in that."

The use of ‘light’ and ‘mild’ descriptors was not misleading.
"There seems to have been a fair degree of confusion among all concerned as to how to market reduced-delivery products to the consumer. Accepting that, the Court does not see any convincing evidence that the use of the descriptors "light" or "mild", in the context of the times, was any more misleading than any other accurate terms would have been, short of adding a warning containing all the relevant information that the Companies knew about their products. As such, we do not find a fault in the Companies' use of those descriptors." 

No fault for marketing to youth 

Not clear enough that
they were targeting youth?
More than a decade ago, the marketing practices of tobacco companies were thrashed out before the Quebec Superior Court before Justice André Denis. Many of documents used in that trial were also used in this class action. (The legal proceedings started about 18 months apart).

Justice Denis was convinced that tobacco companies targeted youth. In his 2002 decision, he wrote that it was "completely unrealistic to claim that tobacco advertising does not target people under 19 years of age." ...  "Internal marketing documents introduced at trial strongly suggest that tobacco companies see advertising as the cornerstone of their strategy for reassuring current smokers and expanding the market by attracting new smokers, mainly young people."

This finding and his conclusions were upheld by the Supreme Court in 2007, which makes it all the more surprising that Justice Riordan did not find that the evidence was strong enough to find fault with the companies for having tried to recruit young teens.

By contrast, Justice Riordan found "The evidence is not convincing in support of the allegation of wilful marketing to Young Teens. There were some questionable instances, such as sponsorships of rock concerts and extreme sports but, in general, the Court is not convinced that the Companies focused their advertising on Young Teens to a degree sufficient to generate civil fault. ...The proof does not support a finding that ITL, or the other Companies, were guilty of such targeting."

He did agree that there was evidence that the marketing hit smokers younger than 18, but here again the companies were shielded by government policy and by the curious views of the judiciary that sponsorship advertising is not cigarette advertising.

"The evidence is strong in showing that, in spite of pious words and industry marketing codes to the contrary, some of the Companies' advertising might have borne a sheen that could appeal to people marginally less than 18 years of age. That, however, cannot be an actionable fault, given that the federal and provincial legislation in force allowed the sale of cigarettes to anyone 16 years of age or older until 1993 and that from 1988 to 1995 the Companies were not advertising at all."

That is not to say that Justice Riordan took the issue lightly. It was the argument that failed to satisfy, not the concern.
"Let us be clear. Were there adequate proof that the Companies did, in fact, target Young Teens with their advertising, the Court would have found that to be a civil fault. If it is illegal to sell them cigarettes, by necessary extension, it must be, if not exactly illegal, then certainly faulty - dare one say immoral - to encourage them to light up." 

No fault for marketing to adult non-smokers

In their arguments and through their expert witness, David Soberman, the tobacco companies denied that their marketing was intended to reach anyone but adult smokers. Justice Riordan did not buy their argument -- but nor did he find any fault with their marketing to adult non-smokers.

Tobacco advertising was aimed at both smokers and non-smokers.
"It is simply too unbelievable to accept that the highly-researched, professionally-produced and singularly-attractive advertising used by JTM under RJRUS, and by the other Companies, neither was intended, even secondarily, to have, nor in fact had, any effect whatsoever on non-smokers' perceptions of the desirability of smoking, of the risks of smoking or of the social acceptability of smoking. The same can be said of the effect on smokers' perceptions, including those related to the idea of quitting smoking. 

The "mature market" argument is bogus
"His [defence marketing expert David Sobertman] testimony boils down to saying that, where a company finds itself in a "mature market", it loses all interest in attracting any new purchaser for its products, including people who did not use any similar product before. This flies so furiously in the face of common sense and normal business practice that, with respect, we must reject it." 

Marketing to non-smokers did not offend the law
"Hence, the Court finds that, perhaps only secondarily, the Companies' targeted adult non-smokers with their advertising. So be it, but where is the fault in that? Not only did the law allow the sale of cigarettes to anyone of a certain age, but also the Companies respected the government-imposed limits on the advertising of those products... we do not see how the advertising of a legal product within the regulatory limits imposed by government constitutes a fault in the circumstances of these cases."

No fault for selling such a dangerous product

Justice Riordan readily accepted that cigarettes were a "dangerous and harmful" product, and that among the dangers they posed was the risk of addiction. It was the companies knowledge of those dangers and its failure to inform consumers about the dangers that resulted in Canada's highest damage award.

But the plaintiffs had asked him to go a step further, and to rule that the risks of using cigarettes were so high and the benefits so low that selling them should be viewed as causing a harm to others in a way not permitted under the Quebec Civil Code.

This far Justice Riordan would not go.
"[T]he Court finds no support in the case law and doctrine for a principle of civil law similar to the one that the Plaintiffs wish to invoke."

To my reading, it was the manner of sale, and not the product, that was the problem for this judge.
"...the Companies manufactured, marketed and sold a product that was dangerous and harmful to the health of the Members. As noted, that is not, in itself, a fault or, by extension, an unlawful interference. That would depend both on the information in the users' possession about the dangers inherent to smoking and on the efforts of the Companies to warn their customers about the risk of the Diseases or of dependence, which would include efforts to "disinform" them."


[1]. This argument was made in the plaintiffs Notes and Authorities on page 8.
[2]. These events were recently described by Neil Collishaw
[2]. See, for example ITL's Notes and Authorities, page 82.