Some thoughts for transparency on the day before the tobacco litigation settlement demands are submitted

The rest of us might have gone fishing, but there was likely little cottage time this July for the many parties caught up in the Canadian tobacco industry insolvency proceedings. The man assigned with the task of mediating a settlement between tobacco companies and those suing them imposed an August 1st deadline for the presentation of each party's "mediation brief". By this time tomorrow, the Hon. Warren Winkler will have each party's position in hand.

So what will the lawyers representing provincial governments and injured smokers include in their demands to settle their long-fought suits? And what will the companies offer to avoid further litigation?

Your guess is as good as mine. Or - if you are a provincial government health worker - it is hopefully better. Perhaps the health ministries have been let in on the discussion.

Over the past 20 years, government lawyers have not canvassed Canadian communities for suggestions on how to resolve these suits in a way which will prevent future disease, and this July they did not break with that tradition. This lack of engagement is a worrying signal that the provinces have not kept the transparent development of health outcomes uppermost in their demand list -- contrary to their international obligations to do so.

International law and Canadian tobacco lawsuits.

It is hard to imagine that a settlement which is purely financial will meet the international obligations of Canadian provinces to deal with tobacco liability in the context of public health. Nor is it obvious how a settlement which includes public health measures which has been secretly negotiated could satisfy expectations under global treaties to conduct negotiations with tobacco companies in a transparent way.

The requirement to direct litigation against tobacco companies towards tobacco control objectives is embedded in the global tobacco treaty to which Canada (and the provincial governments) are bound.

The Framework Convention on Tobacco Control encourages governments to address the liability of the tobacco industry, but requires them to do within the context of public health and tobacco control. The requirements to use litigation "for the purpose of tobacco control" and to make it "part of comprehensive tobacco control" are set out in Articles 4 and 19:

FCTC Article 19.1. For the purpose of tobacco control, the Parties shall consider taking legislative action or promoting their existing laws, where necessary, to deal with criminal and civil liability, including compensation where appropriate.

FCTC Guiding principle Article 4.5. Issues relating to liability, as determined by each Party within its jurisdiction, are an important part of comprehensive tobacco control

The FCTC also instructs governments to protect tobacco policies from interference by tobacco companies. This general obligation of parties is set out in Article 5.3 of the treaty, for which interpretive guidelines have been in place for over a decade. Among these is the guiding principle of transparency.

Principle 2: Parties, when dealing with the tobacco industry or those working to further its interests, should be accountable and transparent.
14. Parties should ensure that any interaction with the tobacco industry on matters related to tobacco control or public health is accountable and transparent.

The government department responsible for coordinating Canada's implementation of the FCTC is Health Canada. Just this week, lawyers for that federal department were added to the service list of the CCAA proceedings. Perhaps they will be brought in to the discussions.

Fingers crossed!

-------------------

"Common Service List" for the CCAA proceedings (July 29, 2019)

Party	Law firm
Applicant Tobacco Companies
JTI Group
1.      JTI-Macdonald Corp	Thornton Grout Finnigan LLP
2.      The Monitor of JTI-Macdonald Corp	Deloitte Restructuring INC
3.      Deloitte Restructuring INC., in its capacity as Monitor of JTI-Macdonald Corp.	Blake, Cassels & Graydon LLP
4.      Chief Restructuring Officer of JTI-Macdonald Corp.	Bluetree Advisors INC.
5.      JT Canada LLC INC. and PricewaterhouseCoopers INC., in its capacity as receiver of JTI-Macdonald TM Corp.	Torys LLP
6.      Receiver and Manager of JTI-Macdonald TM Corp.	Pricewaterhousecoopers
7.      R.J. Reynolds Tobacco Company and R.J. Reynolds Tobacco International Inc.	Chernos Flaherty Svonkin LLP
BAT Group
8.      British American Tobacco p.l.c., B.A.T. Industries p.l.c. and British American Tobacco (Investments) Limited	Stikeman Elliott LLP
9.      Imperial Tobacco Canada Limited and Imperial Tobacco Company Limited	Osler, Hoskin & Harcourt LLP
10.   FTI Consulting Canada INC., in its capacity as Monitor of Imperial Tobacco Canada Limited and Imperial Tobacco Company Limited	Davies Ward Phillips & Vindeberg LLP
11.   Monitor of Imperial Tobacco Canada Limited and Imperial Tobacco Company Limited	FTI Consulting Ccanada INC.
PMI Group
12.   Rothmans, Benson & Hedges, INC.	Mccarthy Tétrault LLP
13.   Monitor of Rothmans, Benson & Hedges, INC	Ernst & Young INC.
14.   Philip Morris International INC	Gowling WLG (Canada) LLP
15.   Ernst & Young INC, in its capacity as court-appointed monitor of Rothmans, Benson & Hedges, INC.	Cassels Brock & Blackwell LLP
Insurers to the Applicant Tobacco companies
16.   North Atlantic Operating Company, INC.	Miller Thomson LLP
17.   AIG Insurance Canada	Miller Thomson LLP
18.   La Nordique Compagnie D’Assurance du Canada	Blaney McMurtry LLP
Tobacco company suppliers
19.   Westrock Company
20.   The Bank of Nova Scotia	McMillan LLP
21.   Labstat International
22.   Citibank Canada	McMillan LLP
23.   Top Tube Company	BCF LLP
24.   Sobeys Capital incorporated	Stewart Mckelvey
Provincial government claimants
25.   Provinces of British Columbia, Manitoba, New Brunswick, Nova Scotia, Prince Edward Island and Saskatchewan, in their capacities as plaintiffs in the HCCR Legislation claims	Bennett Jones
26.   Financial Advisory for the Provinces of British Columbia, Manitoba, New Brunswick, Nova Scotia, Prince Edward Island and Saskatchewan, in their capacities as plaintiffs in the HCCR Legislation claims	KSV Advisory INC.
27.   Attorney General British Columbia	Ministry of the Attorney General
28.   Her Majesty the Queen in Right of Ontario	Ministry of the Attorney General
29.   Her Majesty the Queen in Right of Alberta	Jensen Shawa Solomon Dugid Hawkes LLP; Paliare Roland Rosenberg Rothstein LLP
30.   Her Majesty the Queen in Right of Newfoundland	Paliare Roland Rosenberg Rothstein LLP; Roebothan McKay Marshall
31.   Province of Quebec	McMillan LLP
Class Actions and individual claims
32.   Conseil québécois sur le tabac et la santé, Jean-Yves Blais and Cécilia Létourneau (Quebec Class Action Plaintiffs)	Fishman Flanz Meland Paquin LLP; Chaitons LLP; Trudel Johnson Lespérance
33.   Lawyers for the representative plaintiff, Kenneth Knight, in the certified British Columbia class action, Knight v. Imperial Tobacco Canada Ltd.	Klein Lawyers
34.   Class Action Plaintiffs (MLG)	Merchant Law Group LLP
35.   The Ontario Flue-Cured Tobacco Growers’ Marketing Board	Strosberg Sasso Sutts LLP
36.   Imperial Tobacco claimant	Lecker & Associates
Other government interests
37.   Superintendent of Financial Services, Ontario	Ministry of the Attorney General
38.   Minister of National Revenue, Canada	Attorney General of Canada
39.   Health Canada (or Public Security?)	Attorney General of Canada
40.   Retraite Québec	Vaillancourt & Clocchiatti
Other
41.   Former Genstar U.S. Retiree Group Committee	Kaplan Law
42.   Grand River Enterprises Six Nations Ltd	Brauti Thorning LLP
43.   Court-Appointed Mediator	Lax O’sullivan Lisus Gottlieb LLP
44.   Canadian Cancer Society	Fogler, Rubinoff LLP

Canada's newest Supreme Court justice highlights the significance of the Blais-Létourneau victory

Late this afternoon, the Prime Minister's Office announced that Nicholas Kasirer was the newest appointment to Canada's 9-bench Supreme Court.

Justice Kasirer has sat on the Quebec Court of Appeal since 2009. On a handful of occasions he was assigned to rule on some of the many interlocutory appeals filed by tobacco companies during the Quebec tobacco class action suits. His most powerful involvement in tobacco litigation, it goes without saying, was his membership on the 5-judge panel that on March 1, this year  unanimously ad almost entirely upheld the 2015 ruling of Justice Riordan.

It turns out that he counts this as one of the most significant cases that came  before him.

As part of his nomination process, Justice Kasirer was asked to "Describe the five (5) most significant cases or matters that you dealt with while in legal practice or as a judge and how you dealt with them." His answer, made public today, was prefaced as follows:

I hasten to say that the most far-reaching case in which I shared in the preparation of unanimous reasons is arguably Imperial Tobacco Canada ltée c. Conseil québécois sur le tabac et la santé, 2019 QCCA 358 (Morissette, Hilton, Bich, Kasirer and Parent, JJ.A.), rendered on March 1, 2019. It is 417 pages in length and numbers 1285 paragraphs. The Court dismissed an appeal against a judgment maintaining two class actions against three tobacco companies brought by smokers who developed lung cancer and smokers who developed an addiction to tobacco. The appeal concerns the liability of manufacturers and the private law duty to inform; fault, causation and the apportionment of liability; wrongful conduct including misrepresentation under the Consumer Protection Act; violation of fundamental rights under the Quebec Charter; prescription; punitive damages; and various other issues including some related to class action procedure and practice.

The reasons for judgment in Imperial Tobacco are signed by the five-member panel and authorship is not otherwise identified...

More high powered help

Earlier this week, Justice McEwen appointed more advisors to the mediation efforts between Canada's tobacco companies and the provinces and injured smokers' who are suing them.

Mr. Winkler can now draw on "financial and strategic advisory services" of Alvarez and Marsal. No fee was identified, but commitments were made that they would bear no responsibility/liability for the results and would be constrained by confidentiality.

They come to the job with some experience in meeting the needs of tobacco companies -- JTI hired the firm to evaluate the causes of illicit tobacco trade and this year the company put out a report denying the role of the tobacco industry in contraband.

 Lo and behold! Alvarez and Marsal's analysis supports the view that it is taxes, not industry tax avoidance, that leads to contraband. An odd appointment, perhaps, given that the last time the provinces and the Canadian tobacco companies were in settlement talks was to address their role in the contraband crisis in the 1990s.