Tobacco companies to appeal $12B Canadian court ruling

Canadian court punishes three tobacco companies with 12 billion dollars, companies to appeal court ruling

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

Three tobacco companies said on Monday they would appeal a Canadian court ruling that awarded more than C$15 billion ($11.98 billion) in damages to Quebec smokers in two related class action cases.

Imperial Tobacco Canada, a subsidiary of British American Tobacco PLC, JTI-Macdonald Corp, part of Japan Tobacco Inc Group and Rothmans, Benson & Hedges Inc - a subsidiary of Philip Morris International - all issued statements saying they disagreed with the ruling by Quebec Superior Court Justice Brian Riordan on Monday.

Launched in 1998, the action was considered to be the largest civil case in Canadian history, marking the first time tobacco companies have gone to trial in a civil suit in the country. The trial began in March 2012, hearing from 76 witnesses and reviewing more than 43,000 documents before wrapping up in December 2014.

The damages would compensate about 100,000 Quebec smokers and ex-smokers who alleged that the companies knew since the 1950s that they were selling a harmful product that was causing cancer and other illnesses, but that the industry allegedly failed to adequately warn consumers.

Regardless of any appeals, the ruling ordered the companies to deposit at least C$1 billion in trust with their attorneys within 60 days.

The ruling also awarded about C$131 million to about 900,000 Quebec residents who alleged that they became addicted to cigarettes.

"It's a great day for victims of tobacco who have been waiting for this moment for 17 years," said Mario Bujold, director of a Quebec anti-smoking lobby group that represents the plaintiffs in the case.

Imperial Tobacco Canada, ordered by the judge to cover 67 percent of the damages, said in a statement that the three firms are the only three legal tobacco manufacturers in Canada, but that they should not be held responsible for decisions made by consumers.

"Today's judgment ignores the reality that both adult consumers and governments have known about the risks associated with smoking for decades, and seeks to relieve adult consumers of any responsibility for their actions," said Tamara Gitto, vice president, law, and general counsel at Imperial Tobacco Canada. "We believe there are strong grounds for appeal and we will continue to defend our rights as a legal company."

The ruling said Rothmans, Benson & Hedges was responsible for covering 20 percent of the damages while JTI-Macdonald Corp was responsible for covering 13 percent.