Day 83: Federal Government Released

Late in the afternoon of a tedious session at the Montreal trials of the Quebec class action suits, a buzz went through the classroom.  Simultaneously, lawyers from all sides (and also Justice Riordan) were reading their e-mails. The word had come down from the Quebec Court of Appeal - the federal government was being released from this case.

Justice Riordan looked up from his computer and said simply "Congratulations, Mr. Regnier."

"It's been a pleasure, monsieur le juge" replied the federal lawyer, who then closed his computer, picked up his briefcase and left the room with his government colleagues following behind.

For the first time in 6 months of trial, the back bench on the plaintiffs' side was empty. The courtroom, already hollowed out during the document exercise underway, suddenly felt diminished. Including judge, bailiff, stenographer, clerk and bloggers there were only 16 people left in the room.

This decision gives everyone a year or two back of their life, as the trial will now be considerably shorter. But was there any other good news for those left in the courtroom?

The tobacco companies have lost their hoped-for fall guy. The plaintiffs, who once entered into a formal agreement with the federal government, have lost the daily presence of  Maurice Regnier, an ally and a litigator with deep experience in dealing with tobacco companies. Justice Riordan has lost face, to the extent that one of his major decisions has been overturned. I am losing hope that this case might more forcefully prompt the federal government to review the sufficiency of its actions to "protect the health of Canadians."

The 40 page judgement (en francais, naturellement), was written by Justice Gascon on behalf of Jacques Leger and Jacques Fournier. In addition to supporting the federal view, it also awarded costs (although less than they were originally asking). I will leave to others the interpretation of the reasons.

Is this the end of the road for the federal government in this case? The companies aren't shy to knock on the door of higher courts, and there might be a bit of uncertainty until the Supreme Court rejects their leave to appeal. The ruling (para 159) sets the conditions for the companies to keep the federal government in the case during an appeal to the Supreme Court. But the end of the road for the federal government is clearly in sight.

It's hard to visualize the government effectively removed from the case. The tobacco companies will have even greater motive to invoke the federal role and to make claims about the instructions they received from Health Canada and Agriculture Canada officials. They will still be able to say "I was only following orders," but now there will be no one there to say "No you were not - and here is the proof." 

Taxpayers, however, do have reason to cheer. The federal government spent $15 million last year defending itself against third party tobacco suits. I am told they are still not dismissed from the Ontario government damage recovery suit, and are expected to be drawn into the Quebec government case.

Earlier in the day

This was the third day in a row that this trial was focused on procedural and management issues. Without witnesses, there has been no requirement for court robes. While black prevails, some of the lawyers have used the occasion to express their fashion creativity and unveil a wardrobe of astonishing ties. (If the Court of Appeal ruling makes Mr. Regnier think the pink floral concoction he wore today is his 'lucky tie,' then future clients should be warned.)

The lawyers' creativity was not confined to their wardrobes. In this transition phase of the trial, new tools were being worked on to defend against the testimony of the plaintiff's expert witnesses. New arguments. New framing. New objections. It didn't feel like sabre rattling so much as sword sharpening.

It looks like this phase will be a war on footnotes, with the companies individually challenging hundreds of documents used by the experts during the preparation of their reports. How this war will be fought is not yet clear. The prolonged discussion on these issues seemed to substitute for the "motion for directions" that had been filed but was not in the end debated.

The industry sound like they intend a series of skirmishes during the testimony of each witness. Bruce Johnston cautioned that the plaintiffs would consider it an abuse of process if the defendants interrupted the flow of witness testimony with a barrage of objections. Justice Riordan proposed that it was better to hold off disputes over the value of such evidence until much later in the trial.

Justice Riordan: "Wouldn’t it be sensible to wait until the written argument? In that argument plaintiffs will refer to documents and you will have a reasonable period of time to made your arguments."

Deborah Glendinning: "Absolutely not. We need to know what proof we need to make." 

One expert report clearly in the sites of the companies is the first one, that of Robert Proctor, who is scheduled to begin testifying on November 26.

Order some more bookshelves

Yesterday, Mr. Lespérance had referred to the physical challenge of introducing evidence document-by-document through witnesses and pointed to the 30,000 documents that the companies had identified in their "403" notices. Justice Riordan pushed for clarification from the defendants on the number they anticipated they would produce. There was some hesitation before showing their hands, but the lawyers for Imperial Tobacco indicated there would be 15,000 to 19,000 (of which 11,000 were newspaper articles). JTI-Macdonald and RBH volunteered they had about 3,000 additional documents between them.

Not being "overly inclined" to sit in court while thousands of documents were individually entered into evidence, Justice Riordan began proposing alternative methods, one of which was test-run this afternoon. A set of documents that will end up being footnotes to the expert reports of Richard Pollay was discussed, given tentative exhibit numbers and offered up for objections.

Clearly some imaginative thought had been given to finding new objections to knock out these footnotes. "Irrelevant!" said Simon Potter about many types of research documents that have already been put on the trial record (such as exploratory marketing research or focus groups on young persons outside Quebec). Against the Browne and Dunn rule! said Doug Mitchell about documents that could have been linked to witnesses who have come and gone.

As a result, many of the more than 100 documents reviewed were consequently marked with an "R" for reserve when they are produced in the coming days. This has to be balanced against the happy decision to remove the "confidential" status of survey records entered yesterday. When available, these sets of documents will be added to yesterday's blog.

Today began with Mr. Lespérance announcing that the plaintiffs were now planning to introduce documents from Legacy through conventional procedures.

David Schechter testifies posthumously

Justice Riordan will be providing reasons later for his decision, announced today, to permit the evidence of David Schechter before the DOJ case as though presented in this trial.

Tomorrow two witnesses will make their final appearances at this trial -- Ms. Rita Ayoung and Mr. Pierre-Francis Leblond. Next week, Mr. John Barnett, the current CEO of Rothmans, Benson and Hedges, will testify during the first days of the week. 

Please release me, let me go....

The three parties involved in the Quebec class action suits assembled in the Pierre-Basile Mignault room in Montreal's beautiful Court of Appeal on Thursday, August 9 to seek a decision on whether the federal government can be liberated from this trial.

The Court of Appeal was asked to decide whether the February 2012 decisions of Justice Riordan to allow Imperial Tobacco to expand its claim against the federal government, and to reject the government's request for dismissal of all the third party/action in warranty claims made against it by the three tobacco companies.

Getting the Court of Appeal to overturn a lower court decision is a two-step process - the usual first step is to convince one judge of the Appeal Court that an appeal is justified, the second is to convince a bench of three judges that the initial ruling was wrong.  But just over three months ago, Justice Kasirer deferred the decision on the government's request for leave to appeal these decisions, and set an unusual mid-summer hearing for three of his colleagues to consider  all issues together. So it was that the questions were the subject of a one-day hearing before Justices Jacques Léger, Jacques Fournier and Clément Gascon.

Belt and suspenders: two legal principles to support the federal position.

Within my circles, the case for the federal government is considered very strong. The Supreme Court, after all, unanimously determined a year ago that that it was "plain and obvious" that similar claims by the tobacco companies in two B.C. cases had "no reasonable chance of success and should be struck out." Core government policy decisions, the Court confirmed, are shielded from lawsuits. Moreover, it said, the floodgates of such "indeterminate liability" against the government should be kept closed. With the same industry claimants, the same government defendants and the same government-industry interactions involved, the issue has already been decided, the government and its supporters say. It is a chose jugée!

To add to this belt of legal doctrine the suspenders of a second legal principle are attached - the doctrine of precedent. Because the Supreme Court unanimously sided with the government in this chose jugée, and because such decisions are binding on all lower courts, it is thought inevitable that the Quebec Court of Appeal will come to the same conclusion. This is what the New Brunswick Court of Queens Bench decided last February when it struck out similar third party claims by the same companies against the same government over the same issues.

These two issues were the core of the federal government case presented confidently during the morning session by counsels Nathalie Drouin and Maurice Régnier. Their presentations detailed the many ways in which the actions in warranty were identical to the third party claims that had been considered and struck out by the Supreme Court and the many reasons why the Court should make exceptions to the general rule of not allowing appeals of such rulings when a trial is ongoing. The amended claim of Imperial Tobacco was dissected and presented an unacceptable attempt to slide past the Supreme Court decision.

(When available, the written arguments of the federal government and industry will be posted here).

Hoist on its own petard?

Despite the safe money being on the federal side, the tobacco company representatives (Suzanne Coté and Craig Lockwood for Imperial Tobacco, Simon Potter for Rothmans Benson and Hedges and Doug Mitchell for JTI-Macdonald) offered the judges a variety of reasons to refuse to consider the appeal and to uphold Justice Riordan's decision.

During their afternoon's presentations, they took several swings at the strategy of the federal government leading up to the trial, especially its decision of postponing any attempt to get out of the Quebec case until the BC issues were resolved. (A few weeks before the Supreme Court issued its decision, the federal government reached an out of court arrangement with the plaintiffs - it too was rejected by Justice Riordan.)

Simon Potter painted a picture of a recalcitrant government, resisting Judge Riordan's appeals to bring forward its motion to be dismissed from the case. He cited Judge Riordan's frustrated comments in his February ruling that although he had "beseeched Canada to present its Motion to Dismiss in time so that these files could follow what appeared to be an inevitable path to the Supreme Court of Canada hand in hand with the BC proceedings. The Court's urgings fell on deaf ears." Potter pointed out that in a ruling as early as 2008, Justice Riordan had pushed the federal government to fish or cut bait. The outcome was a decision of Justice Riordan to postpone a final decision on the federal involvement, a case management decision the Court of Appeal should respect, he concluded.

Craig Lockwood took swipes at other actions of the government, in particular its continued engagement in licensing 'lower tar' varieties of tobacco after evidence of compensation had been shared with them.  The industry should be permitted to show that these actions were wilful and reckless, he said, and therefore the federal government should remain in the case.

The B.C. (and New Brunswick) cases should not be considered precedents, the industry argued, as they were decided on laws quite different than those in Quebec. Because the Supreme Court ruling was on the statutes in those provinces and not on common law or other principles, the ruling did not automatically apply to Quebec's differing laws. In support of this position, they emphasized the logic of Judge Riordan's ruling that  another Supreme Court ruling (on the Canadian Food Inspection Agency) was more relevant as it reflected the constitutionality of different proceedings in different jurisdictions. The distinctiveness of Quebec's legal system was repeatedly emphasized by the industry's representatives.

Judicial solidarity?

To date, the Court of Appeal has turned down almost all of the appeals sent its way in this case, and concerns about allowing any appeals of decisions made while the trial was under way were reflected in some of the comments from the bench. Justice Leger pointed out that Justice Riordan would have taken the Supreme Court decisions into account before making his decisions. Justice Gascon reflected on the slippery slope of allowing appeals of interlocutory judgements.

A BIG decision

In this case, the Court of Appeal will have to decide whether to draw a line between the Quebec class action and the B.C. and New Brunswick case s and, if so, on which side of that line the federal government’s future involvement lies. 

It is not only the federal government and industry that have a lot riding on the outcome of this hearing. If the government is excused from the case, valuable experience and expertise sympathetic to the plaintiffs' side will leave the room. Testimony by the government's expert witnesses, which support the plaintiff's case, will not be available. The imbalance between the resources of four local law firms and those of three of the world's largest multinationals may become more important.

The Canadian public also stands to lose a unique opportunity for a judicial review, however strangely constructed, of the government's handling of a one of Canada's most sustained and deadly epidemics.

Holiday season (for some)

The Blais-Létourneau trial is on recess for another month, but it's a fair guess that the legal teams involved in tobacco litigation in Canada have not been able to fully enjoy this spectacularly warm and sunny July.

Appeal Court hearing on August 9th

In just over two weeks Quebec's Court of Appeal will consider the federal government's request to overturn Justice Riordan's ruling which kept them in this case as well as his decision to allow Imperial Tobacco to amend its claim against them. (On April 20th, Justice Kasirer of the Court of Appeal opted to defer  all decisions on the requests to a three-judge "bench"). 

Decisions from New Brunswick

Lawyers involved in other tobacco cases have also been given summer deadlines. Justice Cyr of New Brunswick's Court of Queen's Bench is responsible for the case management of New Brunswick's claim agains the companies for damages related to health care costs. At the beginning of this month, he expressed frustration with BAT's attempts to delay proceedings and ordered those companies to have their Statement of Defence filed with the court by late August.

Provincial statements of claim

Tobacco industry lawyers will also be working on their defence to the two new provincial claims that were filed on June 8th.  The Quebec government's claim is for $60 billion, and the Alberta government claim for "at least $10 billion" also seeks "an order prohibiting the Defendants from continuing their misrepresentations, deceptive marketing practices and unfair trading practices" and "such further and othe relief the court may deem just." Alberta is the first province to include specific non-monetary remedies in their claim -- they are notably missing from those of the other provinces that have filed suit to date (British Columbia, New Brunswick, Ontario, Newfoundland).

Rooftop
A disappeared brand

Federal Court of Appeal rules on one of the world's most famous trademarks.

It's not only lawyers who have been busy as a result of court decisions. In late June, the Federal Court of Appeal overturned Philip Morris/Rothmans, Benson and Hedges 2010 court victory against Imperial Tobacco's challenge of PM/RBH's Rooftop brand as an infringement of ITL's ownership of the Marlborough trademark in Canada.

My local retailer tells me this ruling caused a bit of a scramble as all the "Rooftop" packages were pulled from shelves and the (very few) customers of the brand were left to quit or switch.  The significance of this decision to public health may be uncertain, but this shows that even if public health law hasn't yet  removed cigarettes from the market, intellectual property law has.

Themed lists of Blais-Létourneau exhibits

The pause in the hearings for the class cations has allowed for a more leisurely reading of the
almost 850 exhibits that were presented during the first four months of the trial. In an attempt to make reading them a little more efficient, we are assembling chronologies of documents related to some key themes in the trial. 

The first are: 

• Document destruction at Imperial Tobacco
• The CTMC
• The Smokers' Freedom Society.

Back to the cottage!

The weather in Montreal is predicted to continue warm and mostly sunny - enjoy it those who can!

Day 25: Federal government counters industry claims

For information on accessing documents, see note at the end of this post

As it ends its second month, the trial of the Montreal class actions against tobacco companies is setting a brisker pace. The introduction of documents is faster (last week's ruling continues to be felt in new ways as previously reserved documents are being placed on record). The number of exhibits is climbing towards 500, which means there are more documents and more testimonies to refer back to.

Keeping up is an increasing challenge!

Yesterday, the sun shone on the plaintiffs, who were able to put dramatically disturbing documents on the record. Today was the federal government's turn in the light, as they were able to blunt disturbing testimony against them by two former senior officials at Imperial Tobacco - Jean Louis Mercier and Anthony Kalhok. It was also the last day on which these two men are expected to appear at the trial.

Farewell to Jean Louis Mercier

The testimony of Jean Louis Mercier was challenged in three different ways over the morning.

Firstly, Mr. Trudel (on behalf of the plaintiffs) softened the ground underneath him by producing documents that showed that, despite Mr. Mercier's earlier testimony, additives had been put in Canadian cigarettes (Exhibit 286) and that despite earlier testimony, the company sought to find "ways of telling people in a subtle and acceptable manner that it is 'alright to smoke'" (Exhibit 288). Mr. Trudel's questions about the consumer research project Plus/Minus (Exhibit 284) spurred Mr. Mercier to admit for the first time that their studies into the smoking choices of 'starters' were not only to forecast future demand (a common explanation in previous trials), but were also used to inform advertising campaigns.

The credibility of Mr. Mercier was surprisingly challenged, albeit in a polite way, by Imperial Tobacco lawyer Suzanne Coté. In her cross-examination, she suggested that Mr. Mercier was not qualified to respond to many of the questions put to him, and that Dr. Stewart Massey (a former scientist whose status as witness is not yet clear) might be "in a better position" to talk about about compensation, addiction, ames tests, causality, mouse-skin painting, etc.

But the real diminishment of this witness came when Maurice Regnier, on behalf of the federal government, came out with a one-two punch that knocked down two of Mr. Mercier's claims against Health and Welfare Canada.

(As explained elsewhere the federal government is involved in this case because the companies have filed "actions in warranty" which attempt to deflect to them responsibility for the way cigarettes were sold. In August, the federal government will try to persuade the Quebec Court of Appeal that last year's Supreme Court decision to strike down similar 'third party' motions should apply to this case. Until then, the feds are in this non-love triangle. Today was the first time in this stage of the trial that they have engaged with witnesses.)

After politely introducing himself to the witness, Mr. Regnier set quickly to the work of challenging two key charges against his client: 1) that the government had not sought a reduction in nicotine levels and 2) that there was an agreement between industry and government that the industry not communicate health risks.

Mr. Regnier's first two jabs were with letters written to the CTMC in 1976 and 1978, requesting reductions in maximum tar and nicotine levels and in market average levels (Exhibit 50001 and 50002). The Minister of Health (the Hon. Marc Lalonde) had asked the industry to reduce the maximum level of nicotine in cigarettes, and the assistant deputy minister (Dr. Alex Morrison) had requested a reduction in the market average nicotine levels.

Would you not now admit that the government also asked you to reduce nicotine ?
Yes.  

16 varied warnings appeared
on Swedish cigarette
packages after 1975

Mr. Regnier's second third and fourth jabs were an exchange in 1977 between Dr. Morrison and Mr. Paul Paré (then head of the CTMC and also Mr. Mercier's boss). Health and Welfare Canada was seeking industry agreement to more than a dozen undertakings, included in which was one for the companies to "adopt the use of several different educational messages as is being done in Sweden." (Exhibit 50003)

Do you remember what the companies said in response?
I don’t.

Not surprisingly, Mr. Regnier had the answer on hand. (Exhibit 50004) Five months after receiving Dr. Morrison's request, Mr. Paul Paré, chair of the CTMC and also Mr. Mercier's defacto boss, replied:
We disagree with this type of activity--member companies should continue as communicators of information to smokers about their own brands, but cannot be reasonably expected to advertise or promote the concept that people should not smoke, or that smoking is bad for you.

Did Imperial Tobacco ever change its mind about this policy (of not promoting the concept that smokign is bad for you)? Not really, conceded Mr. Mercier.  

At 12:45, Justice Riordan and Mr. Mercier thanked each other, and the former president left the court.



The return of - and farewell to - Anthony Kalhok. 

Mr. Kalhok had last been seen on April 18, and had returned to allow the federal government to conduct its cross examination. The delay had served to allow time to assemble documents to challenge his assertion that Health Canada, through a personal meeting between Tony Kalhok and with assistant deputy minister Dr. Alex Morrison, had explicitly approved the marketing of Players Lights cigarettes.

Once again, Mr. Regnier came prepared with correspondence between Health Canada and the tobacco companies that directly refuted the evidence of the witnesses. He began by reading Mr. Kalhok's answer to a question put to him by Imperial Tobacco lawyer, Craig Lockwood about the level of cooperation between the government and the company.

A complaint was lodged with Dr. Morrison in terms of that we were using the word "Light" on a product that had T&N delivery that was not in the category of the Matinées and Craven "A"s, and therefore we were perhaps being misleading. And so I invited Dr. Morrison to come down to Montreal, which he did, and explained to him everything that we were doing, the research behind it, and that we were genuinely trying to put a product out there that would allow to switch down the tar and nicotine level.

Anyway, to make a long story short, once he heard all that, he said to us, "Go ahead, I have no problem in you using the word "Light" on Player's Light." (Transcript, April 18).

No documentary evidence of such a meeting has ever been made public, and Mr. Regnier was left with the challenge of proving the non-existence of a private meeting between two men at an unspecified time.

He did so by laying out a series of correspondence between the federal Minister and assistant deputy Minister over the time that Players was launched. Individually, each document refuted the notion that there was comfort, let alone approval, at Health Canada over the use of the name light on brands, like Players Light, which had relatively high tar levels. Collectively, they made any such meeting seem highly improbable.

On multiple occasions between 1977 and 1979, Health and Welfare Canada had repeated a concern for Players Light and for the establishment of meaningful standards for the use of such terms. On multiple times, Imperial Tobacco and Tony Kalhok had resisted these efforts.

--On April 3 1977, Dr. Morrison wrote Mr. Paul Paré (as chair of the CTMC) to express concern about the use of terms like "light" on cigarettes that were very little different from ordinary cigarettes, and singled out Players Light as an issue of concern. (Exhibit 50005)

--On May 3 May 1977, Mr. Ed Ricard (writing on behalf of ITL) responded to the letter, to defend the use of "light" as a relatiev term and to oppose a standard for the use of the term. (Exhibit 50006)

--Around September 6 1977, Dr. Morrison replied to Ed Ricard to repeat a request for "definitions of the terms "mild" and "light" and how they will be used. Again, Players Light is singled out as being problematic, in that its level of tar is almost as high (17 mg) as the highest tar level for any cigarette. (Exhibits 50009 and 50009A).

--On September 19, 1977, Tony Kalhok wrote a memo to Mr. Ricard to discuss Dr. Morrison's letter, and recommended that the company "stick to its guns" and not accept any standard for the use of terms like "light". He was available to provide further ammunition if necessary  (Exhibit 50009B) Stick to your guns. Any more ammunition. Were you at war with Dr. Morrison? Mr. Regnier asked. 

--On December 21, 1977 a meeting was held between members of Health and Welfare Canada to discuss issues. The industry adopted the position of Mr. Kalhok,s memorandum (Exhibit 50009B) - i.e. to "stick to its guns" against standards for "light" cigarettes. (Exhibit 50010)

--On October 31, 1978, another meeting was held between the CTMC and members of Health and Welfare Canada, this time including Dr. Morrison, who reports that at the next meeting he wishes to discuss "an industry standard definition of "light" and "mild". (Exhibit 50011)

Mr. Kalhok suggested that the fact Health Canada had not prevented the use of the terms "light" and "mild" supported his testimony that Dr. Morrison had wanted them to "go ahead" and that he "had no problem" with the label.

Is it your testimony that you had an agreement with Dr. Morrison on Light and Players Light?
After I had the discussion with Dr. Morrison, I do not recall any further communication either through CTMC or through Dr. Morrison that we should not continue.

Is it your testimony that at some point in time - you don't know when -  you don’t know how - he agreed with the term  Players Light?
All I can say with all this time going by that his position was such that we did nto have to change the product spec on Light or stop using the term Players Light.

It is one thing to not take any action, another to say “go ahead, I have no problem with it”
Well, that’s my recollection that once having discussed it with him that satisfied his query.

Having clarified the record that Health Canada on numerous occasions requested that the industry change its labelling of lights, Mr. Regnier finished his questions.

"Last chance" Justice Riordan prompted - looking at the company lawyers.  No one stood to offer any documentation to support Tony Kalhok's story of his meeting with Dr. Morrison.

At 4:15, Justice Riordan thanked Mr. Kalhok, who left the court - but not before shaking hands with Imperial staff lawyer John Kiser, who had made a rare appearance at the hearing and was sitting in the back row.

To access trial documents linked to this site:

The documents are on the web-site maintained by the Plaintiff's lawyers. To access them, it is necessary to gain entry to the web-site. Fortunately, this is easy to do. 

Step 1: Click on: https://tobacco.asp.visard.ca

Step 2: Click on the blue bar on the splash-page "Acces direct a l'information/direct access to information" You will then be taken to the document data base. 

Step 3: Return to this blog - and click on any links.

Res judicata. Stare decisis. Oy vey!

My head is still hurting a little from attending last Friday's hearing at the Court of Appeal in which the federal government sought -- still unsuccessfully -- to extricate itself from the Montreal class action trial against Canada's 3 large tobacco companies.

To cut to the chase - the decision on whether the federal government can appeal two decisions regarding the nature of its involvement in the trial has been postponed to August 9th, when a panel of judges will hear the request for Appeal and possibly the appeal itself.

A limited account of the hearing is at the end of this post.  But first a little background on the "Action in Warranty" that has to date trapped the federal government in this litigious ménage a trois.  

(If you are have trouble telling the players, we've prepared a scorecard!)

The story so far

First there was the Knight case

The Blais and Letourneau lawsuits, which were launched in 1998 and have now reached trial stage in Montreal are only one of several litigation efforts that have been launched in Canada since the 'third wave' of tobacco litigation surged in the  United States in the mid 1990s. 

Another class action suit (and one of only 3 yet to be certified in Canada) was filed in 2003 against Imperial Tobacco in Vancouver by Klein Lyons on behalf of Kenneth Knight. The Knight case concerns the allegedly wrongful marketing of 'light' cigarettes, specifically Imperial Tobacco's best-selling Player's lights.

Imperial Tobacco responded to the Knight suit by filing, in April 2004, a Third Party Notice agains the federal government, claiming that the way in which 'light' cigarettes were designed and sold was directed by the federal government. [They were only following orders?....]

This was the first time, to my knowledge, that the industry had tried to shift responsibility in a tobacco lawsuit to government regulators. If you know of earlier examples, please let me know!

The federal government responded to this novel strategy by siding with the tobacco companies in recommending to the court in October 2004 that the Knight case not be certified.

What made the decision of the federal government to stand with the tobacco companies in a lawsuit so noteworthy is that it was done while Ujjal Dosanjh was federal health minister.  Mr. Dosanjh, it will be remembered, had previously served as Attorney General of British Columbia in 1998 when that province became the first Canadian jurisdiction to file a suit against  the tobacco companies. Included in that lawsuit was a claim for damages resulting from the deceptive marketing of light cigarettes.

Despite the federal government's efforts to quash the Knight case, it was certified in February 2005 - only days before the Blais and Letourneau cases were certified in Quebec.

Then there was the Sparkes case

In July 2004, a second class action suit regarding light cigarettes was filed.  This time it was in Newfoundland, the lawyer involved as Ches Crosbie and the class representative was Victor Todd Sparks.

Imperial Tobacco continued with the same playbook, and so did the government. As it had in the Knight case, the company again filed a Third Party Notice against the federal government in January 2006. As it had in the Knight case, the federal government sided with the industry and asked that the case not be certified. This time, however, the industry and federal government were successful and the certification was denied in December 2008.

Next came the B.C. government claim.

Having twice convinced the federal government to side with them, the tobacco companies again filed third party notices against the federal government in 2007. This time the case was, at a political, legal and strategic level, more complex.

The case involved was the first (and at that time the only) provincial suit to be filed to recover health care costs associated with tobacco use.  It had been first filed by British Columbia almost a decade earlier, in November 1998, and had already tumbled through successful industry challenges to the enabling legislation and consequential adjustments to the law and the suit.

Two months after learning, in April 2007, that the Supreme Court would not allow further challenges to the revised legislation, tobacco companies used third party notices to draw the federal government into the case. Between June and November 2007, each of the domestic and international companies that were involved in the suit (Imperial Tobacco, Rothmans Benson and Hedges, JTI-Macdonald, RJ Reynolds, RJ Reynolds International, BAT Industries and Carreras Rothman) filed their own Third Party Notice.

The feds push back - all the way to the Supreme Court.

Having failed to convince the B.C. courts to reject the Knight class action, the federal government turned to the courts to ask it to dismiss the third party claims.  The B.C. Supreme Court agreed, and the notice was dismissed in July 2007. (This was one month after Imperial Tobacco filed its Third Party Notice in the B.C. government's damages recovery suit). Nine months later, in April 2008, the same court agreed to dismiss the third party notices that had been filed in the B.C. government claim.

With the same issues, the same courts and the same litigants, the contest with tobacco companies over whether or not there was a federal role in either the Knight case or the B.C. government claim were subsequently heard and decided simultaneously.  

In December 2009, the B.C. Court of Appeal (which is a higher level court than the B.C. Supreme Court, despite the common connotations of the term 'supreme court') overturned the core of the previous decisions on the Knight and B.C. government cases. Once again the federal government found itself on the hook, and the issue was bounced upstairs to the highest court in the land.

When the Supreme Court of Canada reviewed the lower rulings in 2011, international and domestic tobacco companies lined up against the federal government and provincial government intervenors, including two other provinces which had filed suits similar to B.C.'s by this time (Ontario and New Brunswick).  In late July, the Court unanimously struck out the industry's claims agains the federal government in both cases.

Any hopes the industry might have had that the federal government would be in the cases and would side against the plaintiffs, as they had in earlier stages of the Knight and Sparkes cases, were put to rest.

Meanwhile, a different story unfolds in Quebec

Attempts by the tobacco companies to engage the federal government in litigation followed a somewhat different path in Quebec than in the B.C. cases or in Newfoundland.

The companies did not move forward with Actions in Warranty (similar to Third Party notices) in the Quebec cases until almost 4 years had passed since they first tried the strategy in the Knight case. It was not until leap year's day, February 29, 2008 - ten years after the class actions were first filed -  that Imperial Tobacco, Rothmans, Benson and Hedges and JTI-Macdonald filed such claims.

For its part, the federal government also shifted its game.  Unlike the Knight and Sparkes class action suits, it did not try to scuttle the Blais and Letourneau cases.  Nor did it ask the Quebec courts to remove it from the lawsuits.

Instead, it negotiated a role on the plaintiff's side of the court. On July 4, 2011 (three weeks before the Supreme Court ruling in Knight and the B.C. government claim), newspapers began printing notices that a deal had been struck between the federal government and with the Quebec plaintiffs. 

In this proposed settlement, the federal government promised to remain in the trial and to cooperate with and assist the plaintiffs, as well as providing them with up to $1.6 million to defray the costs of expert witnesses.  In return, the plaintifs promised to release the government "from any and all manner of claims by the class members."

This settlement could not be put into place without the agreement of the court - but that agreement would not come to pass. On September 21, 2011, Justice Riordan ruled  that the settlement was not in the interests of the class members (the smokers and victims of lung disease on whom the class actions were being sought).  Given the magnitude of the $27 billion claim, he said, the companies might go bankrupt. In that case, the settlement would prevent the claimants getting money from the (non-bankrupt) government if it was eventually found responsible and was therefore not in the interests of the class members.

The federal government did not appeal this decision.  Instead, they turned to the strategy that had worked for them in B.C. -- asking to be dismissed from the cases. Justice Riordan, who had by then overseen trial developments for almost 4 years, heard their motion. Again he rejected the federal government's request for a change in its status in the proceedings.

In his February 2012 ruling, Justice Riordan felt that last year's Supreme Court decision regarding the B.C. suits did not necessarily apply to these Quebec cases, and not only because of the differences between common and civil law. 

[T]he SCC Judgment must certainly serve as a beacon but, in light of the differences between the Actions in Warranty and the TPNs, it will not necessarily see us safely into port."

(In a separate ruling, he permitted Imperial Tobacco to expand the grounds of its claim against the government.)

Justice Riordan chastised the federal government for its delay in trying to get out of the Quebec actions:

[12] There is an additional procedural aspect that the Court cannot ignore when considering Canada's Motion to Dismiss: its timing.

[13] The Companies served their Actions in Warranty on Canada in February 2008, nearly four years before Canada served the present motion. At that time, the Superior Court of British Columbia had already granted the Motions to Dismiss based on Crown immunity and appeals had been launched. In 2008, Canada did not hide its intention to invoke the immunity provided for in the CLP Act against the Actions in Warranty; the only question was when.

[14] On numerous occasions, the Court invited, and then beseeched, Canada to present its Motion to Dismiss in time so that these files could follow what appeared to be an inevitable path to the Supreme Court of Canada hand in hand with the BC proceedings. The Court's urgings fell on deaf ears. Canada chose to invoke the point as part of its Defences in Warranty filed in June 2011.

All of which brings us to the Quebec Court of Appeal.

When the federal government appeared before Justice Nicholas Kasirer at 2:00 on the afternoon of  April 20th, to seek leave to appeal the two February rulings of Justice Riordan, it was thus at least the sixth time that they tried to extracate themselves from Canadian litigation against tobacco companies (three times in British Columbia, once before the Supreme Court and once previously in Montreal).

Quebec Court of Appeal, Montreal

The regular proceedings of the class action are held on the 17th floor of a modern court room.  But the Court of Appeal is housed across the street in a former 'Palais de Justice' that was built many decades earlier.  (It was designed by and is now named after the same architect, Ernest Cormier, who designed Canada's Supreme Court.) 

The stone walls, high wood panelling and flamboyant art-deco elements give court an almost cathedral-like quality. With the change in setting came a change in atmosphere - more hushed, more subdued. Some sombreness on the left hand side of the court seemed justified:  it didn't start out like a cake walk for the federal side.

From behind the high wooden bench, Justice Kasirer began by telling the court he was struggling with the choices before him -- between the rock of handing the Court an issue it couldn't handle and the hard place of further appeals.

Justice Kasirer

Nathalie Drouin, senior counsel with Justice Canada, faced some struggles of her own in trying to present her case. She was peppered with questions by the Judge and diverted from her prepared comments on why the appeals should be allowed. Along with questions of law, she observed that the industry was treating the government as a defacto underwriter for their liabilities.

Maurice Regnier, on behalf of the Attorney General, was given a very short time to comment on why an appeal should also be allowed on the ruling in favour of an amendment to Imperial's claim against the government.

Suzanne Coté, representing Imperial Tobacco in this court as she did in the main trial,  argued that the Supreme Court decision should not apply in Quebec because of the unique circumstances of Quebec. (After she hastened to assure the judge that she was a federalist, she was reminded by Justice Kasirer that there was one crown that covered both systems.)  She claimed that uncertainty over the federal position in the trial affected the companies' right to a fair trial, in that the questions that the federal lawyers were allowed to ask would became part of the evidence before the court even if they were dismissed from the case. "We want them with us the whole time," she said.

The proceedings were predominantly in French until her Toronto-based colleague, Craig Lockwood, took the floor to speak to Imperial's amended motion. Ever more the whipper-snapper, he parried with the judge about the extent to which his client might have been motivated by strategy in amending its claim.

Doug Mitchell spoke on behalf of his client, JTI-Macdonald. He pointed out that neither his client nor Rothmans, Benson and Hedges were changing their claim against the government, and then drew attention to what he characterized as the strategic decision of the government to not push for dismissal while the B.C. issues were before the court. 

When Justice Kasirer asked him whether the government did not have the right to do whatever they wanted to, Mr. Mitchell characterized the government's decision as 'wanting the best of both worlds.' To Mr. Kasirer's inquiry whether he was suggesting an abuse of process, he hastened to say he would not go that far.

Two hours after the session had begun (and at least 15 minute after the judge began closing his books, gathering his materials and looking impatient as Nathalie Drouin replied to the industry's comments), the session was suspended. 

Justice Kasirer returned at about 4:30 to inform the court that in both cases he was punting the decision to grant leave to appeal on both cases.  The reservations he had expressed at the outset of the proceedings were reflected in his judgment:

"[5]  Given the gravity of the question, I am of the opinion that a bench of this Court should hear the motion for leave to appeal and, if it sees fit, entertain the appeal on the merits.  Rather than grant the motion, risking that the bench find itself without jurisdiction, I propose to defer the motion to the Court."

Discussions then turned to details of the hearing.  When? August 9th. How long for each party? Less than they wanted (2 hours for the government, 2 hours for the tobacco companies to share and 10 minutes for the Blais and Letourneau lawyers. Paperwork? A federal paper of no more than 30 pages to be circulated by May 31 2012.  (No one in the court room noted that this was World No Tobacco Day). The industry to circulate their response, again no more than 30 pages, by June 14th. Lest anything be left to chance, the size of the paper and font size were also defined.

As for the head-hurting bits? More about that some other time.

So where do things stand?

Until August 9th, at least, the proceedings in the trial will continue, and the federal government will, in effect, also be on trial for the way in which cigarettes were designed and marketed to Quebecers.

Taking sides

One of the fundamental questions in politics and policy, as in law, is "who's side are you on?"

In the class actions in British Columbia and Newfoundland, the federal government sided with the industry. Now, 6 years later, they are aligned with the plaintiffs against the industry. 

From a public health perspective, it seems a more natural position for the government to sit in opposition to the manufacturers of one of the world's most deadly inventions. But not everyone sees it that way.

During a discussion on the potential scope of questions by federal lawyers during the trial, Suzanne Cote chastized the decision of the plaintiffs and federal government to collaborate.

"Why would a plaintiff who is suing my client come to the aid of a defendant-in-warranty against me? It is illogical... What interest do they have in the success of the defendant in warranty [the federal government]. None!  To the contrary, it is against the interests of their members that the defense in warranty succeeds."

There have been stranger bedfellows.

The main trial resumes on Monday, April 30th.