Wednesday, 23 November 2016

QCA 3: In search of a technical victory

One thing I have learned during the past years of court-watching - the most interesting parts of the day are often when the judges are speaking.

Let's just say that today - the third day in the Court of Appeal's review of the judgment against Canada's tobacco companies - was very interesting indeed!

The comfortably-filled Louis-H Lafontaine room had barely settled and Mr. Mahmud Jamal had not yet cleared his throat to resume his presentation on behalf of Imperial Tobacco Canada when Justice Yves-Marie Morissette announced on behalf of his four colleagues that "out of their discussions emerged a problem which troubles us" and turned to Justice Kasirer to explain.

The problem, it would seem, related to a key issue in this trial - causation.

The mantra and mini trials

Over the past two days the court has been told that the plaintiffs never proved that the companies' actions caused any individuals "let alone all individuals" to smoke or to become ill. Conduct causation! Medical causation!

The idea that class actions do not alter the burden of individual-level proof has been described variably as "the mantra" (by Justice Morissette) and "the well anchored principle" (by JTI-Macdonald counsel, Guy Pratte).

To hammer this point home, the industry lawyers have repeatedly displayed a few short lines from a decision written by Justice Bich in early 2014. That would be the same Justice Bich who is sitting second from the right on the panel. Again and again, paragraph 41 - rough translation below - was flashed on the screen and read aloud.

Their clear message was that this court had given assurance that the mantra would be upheld in this case.

Justice Marie-France Bich has sat silently during all of this. She did not even smile, as far as I could see, to the mannered praise given by Simon Potter on Monday - "particularly beautifully written". 

She maintained her silence again this morning as Justice Nicholas Kasirer directed Mr. Jamal to a different paragraph from a different ruling by a different court. This one, written by Justice Beverley McLachlin, Chief Justice of the Supreme Court of Canada, suggests that the mantra might not hold for all time.

"What does it look like if causation is inherently indeterminate?"

Justice Kasirer asked Mr. Jamal and his colleagues to reflect whether the Supreme Court was opening the door for cases where it is harder to establish who has been hurt than it is to establish that some people have been hurt. He suggested that "the Mantra cannot be the complete answer."

Mr. Jamal did not immediately deviate from his efforts to keep any such door closed. He instead continued to support the scenario, building over the past two days, that if the Appeal Court upholds the decision against them, it should reduce the number of eligible claims and ensure that the smoking and medical history of every recipient of a damage reward is scrutinized.

"Certain things should be taken off the table."  Mr. Jamal said no one who started smoking after 1976 should be eligible for damages for disease. "These people assumed the risk." 

Put back on the table should be the ability of the industry to challenge every claim and to examine every claimant's circumstances. Collective recovery should be abandoned in favour of individualized claims. Mr. Jamal said the companies should have "the right to defend fully and completely on what remains." He wanted the companies to be able to challenge whether each individual smoked as a result of the companies' actions. "The presumptions would be rebuttable on an individual stage."  

Mr. Jamal said that "small trials" for each claim need not jettison the class action trial entirely. "Was the whole trial of 250 days plus a waste? – No. If you uphold any class questions, it has not been a wasted process."

"Eight hundred thousand mini trials??!!" Justice Kasirer's interjection about the number of potential claimants did more than highlight the administrative challenge. It also hinted that abandoning collective recovery in favour of individual claims could also restore the ability of addicted smokers to seek the compensation that Justice Riordan had denied them when he decided that collective recovery was not workable for the Létourneau class.

Late in the day, in the closing moments of the companies' arguments, Mr. Jamal returned to the issue of indeterminate causation. He cautioned that it would be a "pretty radical thing to change the but-for standard". 

But for the Tobacco-related Damages and Health Care Costs Recovery Act, Justice Kasirer might have agreed with him. His last comment for the day was that this law had changed the 'but for' test of causation by introducing the language "caused or contributed to".  

Unravelling the decision

The excitement of the early morning judicial intervention over, Mr. Jamal returned to his dissection of Justice Riordan's reasoning. To these ears, it seemed he was trying to unravel the fabric of a decision that had interwoven multiple faults against four laws in order to hold each thread up against a technical legal standard it could not meet.
  • He melded all of the faults into "failure to warn" - all the rest, he said, were related to information and all ceased to have meaning after people "knew" the risks. 
  • He drew a line under the date that the judge had set as a "knowledge date" -- when everyone knew or should have known that cigarettes caused disease (January 1, 1980). 
  • He measured each fault against this time. There was no failure to warn after that time, no conspiracy, no misleading advertising, no lulling into complacency. "It's not a fault to fail to warn the warned." 
  • He measured the laws against the Blais knowledge and smoking date - discounting the relevance of the Consumer Protection Act and the Charter, which were enacted around the same time.
Later in the day, he similarly took multiple swipes at the assessment of punitive damages. The penalty levied in the Létourneau case (in the absence of compensation to individuals) was $131 million. Mr. Jamal suggested that the principle of "restraint" would suggest punitive damages in the range of $5,000 to $25,000. 

Punitive damages could be warranted if deterrence were needed, he said, but the companies were already completely compliant with government regulations on warnings. This drew another interesting comment from the bench, with Justice Bich drawing his attention to the section of the federal Tobacco Act (s. 16) which ensures that regulated warnings to not pre-empt the manufacturers other duties to warn.

Punitive damages under the Quebec Charter were also inappropriate, as any violations on thatact were technical, and lacked intentionality. (Justice Kasirer wondered whether fuelling a scientific controversy to maintain doubt about the effect of smoking and health was a purely "technical" violation).

The common knowledge of risk

Craig Lockwood, unlike Mr. Jamal, represented Imperial Tobacco during the tiral before Justice Riordan. His role during this Appeal today was to show that Justice Riordan made judicial errors when he rejected their evidence that everybody knew that smoking was hazardous and hard to quit since the 1960s.

Craig Lockwood
The trial judge wrongly imposed the standards of today on the behaviour of previous years, said Mr. Lockwood. "Justice Riordan failed to contextualize the duty to inform and never tried to ground himself in the applicable standards of the time." 

It was the defence experts who had presented the best evidence, and judge should not have ignored it.

Especially egregious was the judge's decision to favour a comment by Robert Proctor over the detailed written reports of the industry's historians and pollsters. Robert Proctor! Who never did any research in Canada! Who acknowledged expressly that he had a bias and was not impartial!

It was their witnesses - Mssrs. Flaherty, Lacoursière, Duch whose evidence should have established that the risks of smoking were common knowledge in the 1950s and 1960s. "The failure on the part of a trial judge to take central evidence into consideration is grounds for an intervention [by the Appeal Court]." 

It was after repeated statements about the harms of smoking being known in the 1960s that Justice Bich reflected about the nature of such knowledge. "You may be told that something is dangerous, but you do not fully appreciate the danger, because you are not educated enough, or the information is contradictory."

She gave examples of the current uncertainties about the harmfulness of sugar and fats, and the challenges people have in processing such information even today. Years ago, it was even harder, she said.  "In the 1950s and 1960s, half the population did not have a secondary degree -  with what you could see in magazines and television, could you really say that people really understood the actual and real dangers of tobacco?"  

During the trial the spectrum of  'awareness', 'knowledge' and 'beliefs' had frequently been alluded to. Justice Bich is the first one I have noted to put her finger on the space ahead of awareness of news reports when she toyed with the term 'internalize' to describe the acceptance of the information.

The role of government has had little air time in this hearing, other than Mr. Lockwood's criticisms today that Justice Riordan had wrongly made inferences from government policy decisions, and had wrongly ignored the testimony of the former public officials who had testified in their defence. "The trial judge doesn’t engage squarely with the issue of  the role of government." 

Sharing the blame

Much of the last two hours of the industry's appeal were focused on the concerns of individual companies -- especially those related to Imperial Tobacco and JTI-Macdonald getting additional penalties resulting from what Justice Riordan saw as their greater contribution to fault.

Very little court time was spent on the document destruction policy of BAT and Imperial Tobacco, or its the engagement of outside counsel to cull records. Mr. Lockwood said this series of events was irrelevant to any Quebec litigation, and that in any event no record had been identified as destroyed which had not been made available in this trial.

François Grondin 
Mr. François Grondin presented his reasons for JTI-Macdonald to be excused from any fine, and certainly any additional fine. As he explains it, RJReynolds acquired Macdonald Tobacco without assuming an obligations prior to 1978. And as for the way the company reorganized its business to avoid having any profits in Canada, the record was clear this was no more than a way to avoid taxes, and not a "cynical, bad-faith effort" to remain judgment-proof, as Justice Riordan interpreted it. (JTI's written argument claims that it now avoids $30 million a year!)

The wrap-up

It fell to Mr. Jamal to sum up the industry's requests to court. He framed their arguments in two themes: the responsibility of the plaintiffs for the errors in the judgment against them, and the injustices to the defendants if the judgment were upheld.

"We are where we are because of strategic choices made by plaintiffs. ... The extraordinary ambition of their case – their candid and daring admission that they were not even going to try to prove conduct causation for any members"

"The judge misdirected himself and set class action law on its head."

"Access to justice does not trump all else ... does not mean access to compensation, does not mean access to injustice for the defendants."

A moral loss. A technical victory.

The presentations over the past three days leave a somewhat different impression than the written briefs (ITCO, RBH, JTIM) submitted last year.

This week it seemed more apparent that the companies' fall-back position to a complete victory is something like the outcome for the Florida Engle class action.

They hardly challenged the aspects of the judgment that found them guilty of severe moral wrongdoing or ruthless disregard for the health of their customers.

Their arguments instead were focused on showing that the law was not written with their kind of wrongdoing in mind, and that it was the responsibility of individuals to manage the risks they assume. (Curiously, in all of the discussion about assumption of risk this week, no one has yet mentioned that most people start smoking at an age when they are not normally considered capable of assuming responsibility or risk).

Tomorrow the plaintiffs will begin their argument in support of Justice Riordan's decision.

This post has been back-dated to provide consistency in indexing.