Canadian companies to appeal C$15.6 billion ruling
Rothmans, Benson & Hedges (RBH) has said that it will appeal a Canadian trial court decision setting damages in respect of the members of two class actions at C$15.6 billion and allocating C$3.1 billion of that amount to RBH.
The decision, made public in Montréal yesterday, found in favor of the plaintiffs in two class actions – one seeking damages for addiction and one for smoking-related diseases. The cases, based on alleged conduct from decades ago, were filed in 1998 and later consolidated for trial.
The trial court found that the class members’ damages should be about C$15.6 billion, and allocated C$10.5 billion of that amount to Imperial Tobacco Canada, C$3.1 billion to RBH, and C$2 billion to JTI-MacDonald (JTI-MC).
‘The trial court calculated these amounts based on the assumption that all of the individuals estimated to be part of the disease class as defined will ultimately file a valid claim, while recognizing that in most large class actions only a small portion of eligible class members make a claim,’ RBH said in a report of the trial. ‘The ultimate damages disposition will depend on further proceedings at the trial court level and an individual claims process for eligible class members.’
RBH said that its parent company, Philip Morris International, was not a party to these cases and was not liable for any portion of the judgment.
“These cases are far from over,” said RBH spokesperson Anne Edwards. “We will vigorously appeal this lower court’s judgment, and believe that we have very strong legal grounds to overturn the judgment in its entirety.
“Plaintiffs sought money for over a million people but not a single class member, in nearly three years of trial, testified under oath. Not one showed up to say that he or she was unaware of the risks of smoking. We believe that, in light of prevailing law and common sense, the judgment should not stand.
“The evidence at trial, including the government’s own polling and statements, demonstrated that the Canadian public has been aware of the risks of smoking for many decades. The trial court explicitly acknowledged this but nonetheless held RBH liable to those who chose to smoke in light of these well-known risks.
“The Québec Court of Appeal has already ruled – in an earlier appeal in these very cases – that by bringing a class action, plaintiffs must prove not only that defendants engaged in wrongdoing but that this wrongdoing caused injury to every member of the class. The trial court had no evidence to conclude that any class members smoked and were injured due to any alleged wrongdoing by RBH, much less regarding the number of class members on which its judgment is based.”
RBH said the trial court had ordered the defendants to deposit a portion of the damages amounting to about C$1.1 billion into a trust account within 60 days. Imperial’s share of this deposit is C$743 million, RBH’s share is C$246 million and JTI-Macdonald’s share is C$143 million.
The cases are Létourneau v. Imperial Tobacco Canada Limitée, et al. (the addiction class), and Conseil Québécois sur le Tabac et la Santé (CQTS) et Blais v. JTI-Macdonald Corp., et al. (the disease class) before the Superior Court of the District of Montréal, Province of Québec.
In a note posted on its website, Japan Tobacco Inc. said that its subsidiary, JTI-MC, fundamentally disagreed with the court’s conclusions. JTI-MC intended to appeal the decision and to request that the Quebec Court of Appeal suspend the initial payment order, it said.
And in a note included on its website, British American Tobacco said ‘British American Tobacco plc was not a party to the proceeding and is not a party to the judgement, only its Canadian subsidiary, Imperial Tobacco Canada’.
‘On 1st June 2015, the judge publicly issued a ruling in favour of the Plaintiffs awarding a total of CAD$15.6 billion in moral and punitive damages, including interest,’ BAT said in its note. ‘Imperial Tobacco Canada’s share of the total damages would be CAD$10.4 billion.
‘The judgement also stated that if an appeal was to be made, a provisional execution order would require the defendants to pay CAD$1.131 billion between them. Imperial Tobacco Canada’s share of the provisional execution order would be CAD$743 million.
‘There are strong legal grounds with which to challenge both the overall judgement, and to seek a stay of the provisional execution order, which Imperial Tobacco Canada will do within 30 days of the original 27th May ruling.
‘As such, no payments will be made until the request to stay the provisional execution order has been heard and a judgement made.’
