On Friday April 14th, parties to the insolvency protection of Canada's tobacco companies were again virtually convened before Justice Thomas McEwen of the Ontario Superior Court. The sole purpose of this hearing was to allow lawyers from Tyr LLP (lawyers working for the Heart & Stroke Foundation) to say why they should be allowed to ask for a seat at the negotiating table.
More than 6 months have elapsed since this large Canadian health charity first made official its desire to see "future tobacco harm stakeholders" represented in these proceedings by their choice of counsel. Their objective at that table would be to see the establishment of a Fund managed independently of government or the tobacco industry.
It was only in February that they received permission to make their case -- and even then Justice McEwen decided that before the charity could present the substance of its arguments in favour of being included, it would be necessary to show that it had the right to make the argument: "the leave motion should be heard in advance of the motion itself (assuming leave is granted)."
In a sequence of presentations, lawyers Natasha MacParland, Jane Dietrich and Linc Rogers aggressively argued against a decision to allow HSF to put their case formally to the court at a later session. They pointedly stuck to the procedural issues, refusing to stray into the substantive issues raised by Mr. Bunting and also by Justice McEwen (how is this different than other cases?)
The monitors did not agree that there were any unrepresented future claims. They drew the judge's attention to the broad language he agreed to when they recommended that Mr. Wagner become representative for "unascertained and unasserted" claims for "tobacco related wrongs". They saw no conflict or temporal distinction in the potential claims of current and future smokers.
The monitors claimed that because HSF had not made their request earlier in the process it should not be heard now. Doing so would involve adjustments to previous decisions of the court, and would not be fair to those who had been negotiating under those "building blocks".
Moreover, HSF participated by supporting the earlier request of the Canadian Cancer Society (CCS) for a seat at the table. The monitors said the two groups were fundamentally asking for the same thing -- representation and a fund -- and that the rejection of the earlier request by the CCS should have settled this question.
They appealed to Justice McEwen to see that his job was to ensure the court met its core role as gatekeeper and that in the absence of any reasons to restructure the process he should not allow HSF's request for a hearing on the merits of assigning a representative for "future harm" stakeholders.
Only one other party offered an opinion on the issue: the representative of the Quebec government said that it supported the Monitors and recommended that leave be denied.
HSF's proposal draws fire from other quarters, too.
This is not the first request by Heart and Stroke for governments to include health measures in any resolution of their lawsuits against tobacco companies. Together with the Canadian Cancer Society and the Lung Association, they have proposed 10 measures they want to see included -- with increased funding and an independent foundation in charge of 10% of settlement revenues at the top of their list. In its motion to the court, however, HSF has seemingly abandoned all objectives other than the creation of a fund administered outside of government.
The charity may not have succeeded in convincing the court to consider its request for participation, but it did succeed in exposing the growing rift between it and its traditional allies and community partners.
For example, the motion today catalyzed the Campaign for Justice on Tobacco Fraud to urge governments to oppose HSF's participation in negotiations. "To be blunt, in language of the street, the Heart Foundation Motion and affidavit by executive Diego Marchese have all the earmarks of a cash grab." An angry letter was also sent to the Canadian Cancer Society, accusing it of conspiring with Heart & Stroke on the motion to the detriment of the larger health community.
Other tobacco control groups have, like HSF, identified that the burden of a monetary settlement will be borne by future victims - triggering a "a kind of litigation Ponzi scheme, where harm is passed down the chain in order to make good to initial victims."
In order to avoid this, they have called on governments to use these lawsuits instead to wind down the tobacco business. "The principal goal of a litigation outcome should be significant and permanent changes to the foundation of the companies and their business practices. The companies should not come out of this process with the continued capacity to profit from tobacco sales."
In an op-ed published in the Calgary Herald today and related press release, the Quebec Coalition on Tobacco Control cautions that "The worst outcome from a public health perspective is for provinces to force a superficial monetary outcome primarily focused on splitting up the available cash pie and calling dibs on future company profits."
It urged the CCAA participants instead to shift their focus from money towards better controls on the industry. "Rather than squabbling over how to slice the modest money pie or how to tap into revenues from current and future consumers, they should focus on a plan to prevent further damages — not one that benefits from them."
Déja vu all over again
The Canadian government lawsuits against tobacco companies are taking place almost 3 decades after the U.S. lawsuits, and the criticisms levelled today at HSF by its civil society partners may only be familiar to those with long memories.
Ultimately arriving at a "Master Settlement Agreement", parties to the U.S. lawsuit first agreed to a "global settlement" for which there was a seat at the table for one health agencies. The involvement of one health agency in that controversial process - despite the independent fund that was eventually put in place -- did not protect future generations from this harmful industry, but instead did much to worsen relations among partners.
