Appeals Court upholds landmark ruling ordering tobacco companies to pay billions

In what is being described as a major defeat for the tobacco industry, the Quebec Court of Appeal on Friday upheld a landmark judgment ordering three companies to pay billions of dollars in damages to Quebec smokers.

Imperial Tobacco, JTI-Macdonald and Rothmans-Benson & Hedges had appealed a ruling that found the companies chose profits over the health of their customers.

In June 2015, Quebec Superior Court Justice Brian Riordan ordered the companies to make payments of more than $15-billion to smokers who either fell ill or were addicted. At the time, the ruling was believed to be the biggest class action award in Canadian history.

Lise Blais, the widow of a man who died from smoking-related illness, said Friday she was sorry her husband couldn't be there to share the moment. Jean-Yves Blais, one of the case's original plaintiffs, died of lung cancer in September 2012 at the age of 68.

"During the trial, the tobacco companies said it was the fault of the smokers, but for me it isn't. They played hide-and-seek with smokers," she said.

She said her husband began smoking in the 1950s, when people weren't aware of the risks, and he was unable to quit despite trying three times. "They're liars," she said of the tobacco companies.

She described Friday's decision as a victory, but noted it is unlikely to be the end of the road for victims, given the likelihood that the matter will end up before the Supreme Court of Canada.

Philippe Trudel, a lawyer for smokers who brought the class action, called Friday's decision a complete victory. Trudel estimated that after the appeal ruling, the total damages owed by the companies would be more than $17-billion.

"It is excellent news for victims who have been waiting for this day for a long time. We're very happy with the result, clearly," he said.

Quebec's highest court, which began hearing the appeal in 2016, struck down almost all of the tobacco companies' grounds for appeal. The five-judge panel confirmed that the companies failed in their duty to inform their customers of the risks of smoking and failed to demonstrate that consumers were aware of the risk.

The judges concluded that the companies understood that their marketing strategies would expose consumers to the risk of addiction or fatal disease. "In so doing, they certainly infringed in an illicit and intentional fashion the rights to life, to personal security and to inviolability" of the plaintiffs, the court ruled.

The 422-page decision concluded that the tobacco companies failed to demonstrate errors of law in the lower court ruling, "except on certain minor points."

Rothmans-Benson & Hedges denounced the judgment and said it would seek leave to appeal to the Supreme Court.

"Today’s decision by the Court of Appeal changes a fundamental principle of class action law and allows class-wide recovery of damages without proof from even a single class member," the firm's managing director, Peter Luongo, said in a statement.

"We believe this unprecedented change in the law warrants review and reversal by the Supreme Court of Canada."

Eric Gagnon, a spokesman for Imperial Tobacco, said the company was disappointed by Friday's decision.

"We've shown that adult consumers have known the risks associated with tobacco for decades," he said. "We also know that it's the federal government that gives us the license to allow us to operate in this market, and we followed the laws and regulations," he told reporters.

JTI-Macdonald Corp. issued a statement saying it "fundamentally disagrees" with the decision. JTI-Macdonald and Imperial indicated they are also considering appealing to the Supreme Court of Canada.

The Court of Appeal did find the judge erred in several minor aspects, including how the interest was calculated. Trudel called the change a "technicality" that would have little effect on the overall damages.

"Out of all the billions, I don't think they'll call it a victory," he said. "But we call it a total victory on all fronts."

Friday's decision is the latest step in a case that has been before the courts for more than 20 years. The companies were targeted in two lawsuits heard at the same time, which were filed in 1998 and only argued in court in 2012. They covered roughly 100,000 smokers who took up the habit between 1950 and 1998.

One lawsuit was started by people who were addicted to cigarettes and couldn't quit, and the second was brought by those who had suffered from cancer or emphysema.

Some 76 witnesses testified at the Superior Court trial and nearly 43,000 documents were entered into evidence, including internal tobacco company documents that showed smokers didn't know or understand the risks associated with cigarettes.