British Columbia v. Imperial Tobacco

See the B.C. government web-site related to this suit

Key documents:

Legislation

Tobacco Damages and Health Care Costs Recovery Act (2000)

Pleadings from the Province of British Columbia

British Columbia's Writ of Summons and Statement of Claim

Summary

Full Version (PDF 127K)

AGBC - reply to Imperial and Imasco Statement of Defence (PDF  11K)

AGBC - reply to RJR Statement of Defence (PDF  11K)

AGBC - reply to Rothmans Statement of Defence (PDF  11K)

AGBC - reply to CTM Statement of Defence (PDF  11K)

Previous Court Decisions

Supreme Court of Canada Decision, September 2005

BC Court of Appeal Decision, May 2004

BC Supreme Court decision, June 2003


 

Time line

September, 1996: 
British Columbia Minister of Health, Joy Macphail, expresses interest in suing tobacco companies to recover health care costs.

June 1997:
British Columbia Premier, Glen Clark, announces intention to sue tobacco companies

July 28, 1997
Tobacco Damages Recovery Act adopted by BC Legislature with all-party support.

January 6, 1998
British Columbia announces legal team to lead lawsuit.

June 11, 1998:
British Columbia legislature revises the Tobacco Damages Recovery Act and renames it the Tobacco Damages and Health Care Costs Recovery Act. (TDHCCRA)

November 12, 1998:
British Columbia files a lawsuit against tobacco companies operating in Canada as well as their foreign owners.

Tobacco companies challenge constitutionality of the TDHCCRA.

February 23, 1999
B.C. government files its Statement of Defence

March, 1999
Parties agree to a schedule for hearing of Constitutional issues

August 13, 1999
British American Tobacco files a request to be considered outside the scope of the lawsuit.

February 21, 2000
Supreme Court of British Columbia rules that the Tobacco Damages and Health Care Costs Recovery Act in British Columbia is unconstitutional based upon the extra-territorial scope of the Act. The BC Government's action is dismissed.

March 21, 2000
B.C. government announces that it will re-file its lawsuit.

May 15, 2000
B.C. introduces new legislation to govern lawsuit against tobacco companies. Bill 15 "no longer contains extraterritorial provisions. The wording of some other provisions has been changed to provide greater clarity."

July 6, 2000
A revised version of the Tobacco Damages and Health Care Costs Recovery Act is passed by the B.C. Legislature.

January 24, 2001
B.C. government re-launches its lawsuit.

Tobacco companies again challenge constitutionality of the revised Act.

April 12, 2001. 

October 11, 2001.  

 

June 5, 2003
B.C. Supreme Court rules that the amended Act is unconstitutional on the grounds of extraterritoriality.

May 20, 2004
B.C. Court of Appeal reverses lower court and unanimously (3:0) rules that the amended Act is fully constitutional.

July 9, 2004
Supreme Court of B.C. turns down tobacco industry request for a variance in scheduling.

December 28, 2004. 

November 22, 2004.  

December 2, 2004
B.C. Court of Appeal grants a stay pending appeal to the Supreme Court.

June 26, 2005
B.C. Supreme Court (Justice Holmes) rules that even though some of the defendents are located outside of Canada, they can be included in the lawsuit.

September 29, 2005
 Supreme Court of Canada upholds the validity of the Tobacco Damages and Health Care Costs Recovery Act.

September 15, 2006
B.C. Court of Appeal upholds Justice Homes ruling that 'ex-juris' defendants should be included in action.

January 12, 2007: 

January 16, 2007. 

January 31, 2007.  

February 27, 2007. HMTQ Reply to Statement of Defence (Rysekkes)

April 5, 2007
Supreme Court of Canada rejects appeal of B.C. Court of Appeal decision.

April 12, 2007.  

June 6, 2007
Imperial Tobacco file Third Party Notices to involve the government of Canada in the lawsuit.

July 2007
JTI-Macdonald, Rothmans, Benson and Hedges and Imperial Tobacco file Third Party Notices to involve the government of Canada in the lawsuit.

November 2007

 

April 10, 2008
 B.C. Supreme Court dismissed third party claim

June 1-8, 2009
B.C. Court of Appeal hears arguments to overturn ruling of dismissal of third party claim

December 12, 2009
B.C. Court of Appeal rules that the third party claim must be amended, but can continue against federal government.

May 20, 2010

Supreme Court of Canada grants leave to appeal to the federal government and tobacco companies with respect to the December 8, 2009 judgement of the B.C. Court of Appeal on the inclusion of the government as a third party in the Knight class action and B.C. damages recover suits.

January 2011
Factums tabled in Supreme Court in two B.C. cases. (These can also be found on the SCC site

July 29, 2011
Supreme Court rules on third party notices, disallowing the industry claim against the federal government. (ruling)

 

 


Selected Media Coverage


 

B.C. to launch lawsuit against tobacco firms
Province wants to be repaid for smoking-related health-care costs:

Reuter-CP. Toronto Star. Toronto, Ont.:Sep 26, 1996. p. A.29

VANCOUVER (Reuter-CP) - British Columbia intends to sue tobacco companies in a bid to recover health-care costs for smoking-related illnesses.

``We will be pursuing all our legal options to the full limit,'' said B.C. Health Minister Joy MacPhail.

Legal experts believe the lawsuit, similar to 16 already launched by American states, would be the first of its kind by a governmental body outside the U.S.

MacPhail, in remarks released by her ministry Tuesday, said the lawsuit was part of an intensified campaign by the province to fight smoking.

``I have asked the lawyers in my ministry . . . to pursue all options around taking the tobacco companies to court for the health- care costs imposed upon our system as a result of tobacco use.''

Fred Bass of the B.C. Doctors Stop Smoking Project said smoking costs the provincial health-care system an estimated $420 million to $560 million a year.

A ministry spokesperson said no date has been set for the lawsuit to be filed. The ministry has also not released the names of the companies to be targeted.

``It's an excellent example of leadership from British Columbia,'' Cynthia Callard, executive-director of Physicians for a Smoke-Free Canada, said in an interview from Ottawa yesterday.

``The kind of political commitment it would put behind the fight on tobacco would be helpful to all citizens in all provinces.''

BC takes on tobacco giants.
The National - CBC Television. Toronto:Jun 16, 1997.
 

PETER MANSBRIDGE: Good evening. British Columbia is taking on the tobacco giants like no other province has done before. BC is demanding that tobacco companies admit their products are addictive and deadly, and that they help cover the cost of caring for sick smokers. If the companies say no, the province is threatening to sue. We begin tonight with the CBCs Terry Milewski.

UNIDENTIFIED: Alex, you're smoking!

TERRY MILEWSKI: British Columbia's like everywhere else: a lot of young people think smoking is cool, something to laugh about.

UNIDENTIFIED STUDENT: We love to smoke! It makes us healthy! Cigarettes are addictive! Ha ha ha!

MILEWSKI: But the BC government says it's no joke that every day 20 British Columbians start smoking, and that half of those will eventually die from it. Now BC is the first Canadian province to say it plans to take the tobacco industry to court.

GLEN CLARK / PREMIER OF BC: To the tobacco industry I am saying very simply, it's time to leave our kids alone and finally begin to take responsibility for the harm your products inflict upon our citizens.

MILEWSKI: Premier Glen Clark says his government will sue the tobacco companies for the cost of treating smoking- related illness -- but not yet. First, he's asking the tobacco companies to do three things: stop marketing to kids, admit the health dangers of tobacco, and volunteer to pay for treating smoking-related diseases. No one expects the industry to do that, so Clark's getting ready for a lawsuit by bringing in new legislation making it easier to sue tobacco companies and starting an anti-smoking PR campaign.

(TV Ad: U.S. Center For Disease Control): You may get cancer, but I doubt you'll get the truth from cigarette companies.

MILEWSKI: With grim TV ads like this, provided free to the BC government by the US Centers For Disease Control, BC hopes to lead a Canadian assault on big tobacco.

ROB CUNNINGHAM / CANADIAN CANCER SOCIETY: I think the impact is that the tobacco companies are going to have to sit up and take notice like they never have before and I think other provinces are going to look much more aggressively at pursuing the same strategy.

MILEWSKI: Rob Cunningham wrote a book about the industry called "Smoke And Mirrors," and he applauds the BC approach. Raymond Greenwood does not. He runs a popular firework show sponsored by a tobacco company.

RAYMOND GREENWOOD / "BENSON & HEDGES" FIREWORK FESTIVAL: And I'd like to ask Premier Clark what he going to do with all the taxes from the tobacco industry? What's he done with those -- what departments has he spent those on?

MILEWSKI: The BC government says it takes in $450-million a year in tobacco taxes, but it says it spends all of that and more -- $500-million a year -- on treating smoking-related diseases. The industry's chief lobbyist says that figure's inflated. He says what's really going on here, is that governments are hooked on tobacco taxes and that BC just wants more.

ROB PARKER / PRES., CANADIAN TOBACCO MANUFACTURERS' COUNCIL: Voters in British Columbia and the public nationally will have to judge whether this is a sincere effort and a real need or, as whether it is as I've described it, a thinly-disguised and politically-motivated tax grab.

MILEWSKI: None of this stops anyone smoking today, and a legal showdown is still a long way off. But the federal government and several other provinces say they share BCs concerns, and they'll meet in September to discuss a national strategy against tobacco. Terry Milewski, CBC News, Vancouver.

Copyright Canadian Broadcasting Corporation. 1997 All Rights Reserved.

Indexing (document details) Classification Codes 9172 Document types: Broadcast transcript Publication title: The National - CBC Television. Toronto: Jun 16, 1997. Source type: Transcript ProQuest document ID: 439597471 Text Word Count 640

 

B.C. fight against tobacco industry could attract allies
CP Wire. Times - Colonist. Victoria, B.C.:Jun 18, 1997. p. 1

The Canadian Press Ian McKain/Times Colonist photo REGINA Ottawa and the provinces should consider pooling resources to take on large and wealthy tobacco companies in court, Saskatchewan Health Minister Eric Cline said Tuesday. He praised the British h Columbia government's announcement Monday that it will bring in legislation allowing class-action lawsuits against the tobacco industry.

Ontario has not ruled out following British Columbia's lead in pursuing tobacco companies to reimburse the costs of smoking- related illnesses.

But Premier Mike Harris says that's not a priority - prevention is.

"If we could prevent, discourage people from smoking, it would be a moot point. I think that's our primary goal," Harris said Tuesday.

B.C. wants to use its legislative muscle to press for direct compensation for taking care of people with smoking-related illnesses.

But it could be more cost-effective if governments work together to take on the industry, Cline said.

"We, being a relatively small province and the tobacco companies having very deep pockets, perhaps we could work with some of the other provinces or the federal government to take action together."

Cline said he hopes the issue will be put "very near the top of the agenda" when health ministers next meet, likely in September.

Federal Health Minister Allan Rock, who has said he's watching B.C.'s plan with interest, also wants to discuss a co-ordinated approach with the provinces.

A non-smokers' rights groups has warned that tobacco industry lawyers will likely put up a tough fight against the B.C. legislation.

Saskatchewan will consider applying for intervener status to support B.C. in such a court battle, Cline said.

"Anything that would do some good plus would keep the cost to a minimum and not duplicate efforts, I think would be a sensible way of going."

The four Atlantic premiers pledged last month to look into suing tobacco manufacturers for health-related costs of smoking.

Individuals in Ontario have taken similar legal action against tobacco companies but Ontario Health Minister Jim Wilson said that province had not made any final decisions.

"Certainly, it's something we'll take a close look at," Wilson said.

"We're not in any way ruling it out. My view would be that we should be taking a national approach.

"We have the toughest tobacco control act in the country, so other provinces have some catching up to do," he said, adding that Ontario has fined more people for selling cigarettes to minors than any other province.

The B.C. legislation would allow class-action lawsuits against the tobacco industry and would make it easier for the province to prove its case in court.

Ontario already has legislation in place permitting class-action lawsuits.

The B.C. government is also planning to implement tough licensing fees for tobacco manufacturers who want to sell cigarettes. The money raised would be used for provincial smoking-prevention programs.

Indexing (document details) People: Cline, Eric Author(s): CP Wire Section: News Publication title: Times - Colonist. Victoria, B.C.: Jun 18, 1997. pg. 1 Source type: Newspaper ProQuest document ID: 256496171 Text Word Count 468

 

B.C. takes on Big Tobacco
Ken MacQueen. Maclean's. Toronto: Oct 16, 2006.

The U.S. got billions, and B.C. wants in. But how will it use the money?

That Marlboro Man is one busy cowpoke. From Alaska to Texas, he and other iconic American cigarette brands are helping state governments build bridges, fill potholes and balance budgets. Since 1998, U.S. tobacco manufacturers have showered all 50 states with cash, as part of a series of out-of-court settlements worth about US$250 billion over 25 years. In exchange, the states are barred from suing to recover health care costs. With some ot'that cash earmarked tor measures to keep young people from smoking, the settlements were heralded as a major advance in weaning Americans off tobacco. Yet eight years later, most states are spending their windfall on everything but youth anti-smoking programs. And now the scent of major money-enough to run the Canadian government for more than a year-has British Columbia leading a band of provinces on a similar legal quest to extract billions from Big Tobacco. But to what end?

The U.S. experience offers both a wealth of information and a cautionary tale as B.C. moves closer to hauling cigarette makers into court. In 1994, Minnesota was the first state to use antitrust and consumer fraud laws against Big Tobacco. Its claims were similar to those used by B.C.-that the industry misled the public about the health risks of smoking, that it marketed to children, and that it suppressed damaging medical research. Minnesota, with & slightly larger population than B.C., initially sought US$1.3 billion to recover health costs. Instead, with the case about to reach the jury in 1998, the industry settled for US$6.1 billion. It also agreed to a national ban on tobacco branded merchandise, and on payments for using cigarettes in movies. Three other states won similar settlements. The industry, under siege, signed a Master Settlement Agreement dividing US$205 billion among the remaining 46 states.

The settlement, negotiated by former state attorney general I Iubert "Skip" Humphrey, set aside eight per cent of the money for an endowment to reduce youth smoking. Just three years later, the fund-credited with diverting some 14,000 young people from smoking-was emptied by a new state administration facing a fiscal crisis. Humphrey called the elimination of the endowment a victory for tobacco companies, and a "total mockery" of the purpose of the lawsuit. Jeanne Weigum, president of the Association for Nonsmokers-Minnesota, says there were similar experiences across the land. "In some states they enthusiastically embraced prevention programs, and then they went away," she says. "In others, they never even bothered. They jus! say, 'hey, free money.' "

Perhaps the greatest legaey, Weigum says, is Minnesota's public repository of millions of damning pages of once-seeret tobacco company files. The B.C. government suit, first liled in 1998, draws heavily on those and other industry records. Many are posted on its website of the case (www.healthservices. gov.bc.ca/gtiildford/index.litml). And B.C.'s case got a significant boost last month, when the provincial appeal court ruled it has jurisdiction over foreign tobacco companies, which have a large stake in Canada. "The foreign parent companies have very deep pockets," says Rob Cunningham, an Ottawa-based lawyer and senior policy analyst for the Canadian Cancer Society. "The potential damages that could be recovered by B.C. and other provinces is increased by possibly tens of billions of dollars." Manitoba, New Brunswick, Nova Scotia and Newfoundland and Labrador have passed laws similar to B.C.'s Tobacco Damages and Health Care Costs Recovery Act. Others are expected to follow if B.C. gets to court.

Canadian manufacturers say governments already extract damages through heavy taxes-about $140 billion over the next 25 years by one industry estimate. The U.S. payout was a "business decision" and not an admission of guilt. Robert Bexon, then head of Imperial Tobacco Canada, testified in 2001 before a Newfoundland legislative committee. Don't expect a quick cash settlement in Canada, Bexon said-"It will not happen." He called the U.S. settlements a "shameful" cash grab by lawyers, who pocketed some US$12 billion in fees, and by governments. "The vast majority of funds," he said, "never found themselves anywhere near the issues surrounding tobacco use or health care."

It isn't clear if B.C. is any more likely to spend settlement money on stopping the next generation of smokers. Cunningham of the cancer society says the aims of the lawsuit are provincial compensation for health costs, and to exact a measure of justice and deterrence. As for preventing future problems, he said the society hopes "one outcome would be more resources to prevent kids from starting, and to help smokers quit." But Weigum, speaking from experience, says hope doesn't count for much. Money creates its own set of cravings, and politicians are far from immune. "If it's not written into law," she says, "it ain't happening."

 

Top court rules against tobacco giants; B.C. court action to recover billions in health care costs will go ahead;
[Final Edition] Bruce Constantineau.
The Vancouver Sun. Vancouver, B.C.: Apr 6, 2007

The Supreme Court of Canada has rejected an application by multinational tobacco companies to appeal a B.C. court ruling forcing them to stand trial in B.C. over smoking-related health costs.

The decision means a civil trial can proceed in B.C. as the province seeks to recover billions in health-care costs going back decades.

"Obviously, I'm very pleased with this result," Attorney General Wally Oppal said in an interview Thursday. "All the jurisdictional impediments have been dealt with, and we can now look forward to having this case decided on its merits."

The tobacco companies had questioned the jurisdiction of B.C. courts to hear a case against them because they are multinational corporations headquartered outside the province.

But the B.C. Court of Appeal ruled provincial courts do have jurisdiction, and the Supreme Court of Canada's decision reinforces that ruling.

The B.C. government claims tobacco companies engaged in deceptive marketing, provided inadequate health warnings and targeted children in the 1960s, '70s and '80s.

Tobacco companies fighting the B.C. court action include R.J. Reynolds, Rothmans, British American Tobacco, and Philip Morris.

Vancouver lawyer Kenneth Affleck, representing Rothmans Inc., said the next step will be to choose a trial date, which he expects will be "a few years out" because of the complexities of the case.

Oppal hopes the trial can begin as early as next year, although he acknowledged there are many procedural issues to deal with before that can happen.

"It will take some time, but who knows. Hopefully we might even be able to settle this thing," he said.

B.C. has pursued the case for eight years at an estimated cost of $20 million. A law passed in 2000 allows the B.C. government to collect damages if it can show tobacco companies breached an obligation to the province's citizens by failing to inform them of the risks of smoking.

The U.S. tobacco industry agreed to a massive $206-billion US settlement in the U.S. in 1998, with payments being made over 20 years.

Oppal said lawyers from Atlanta have been to B.C. to talk to him about helping out in the B.C. lawsuit.

"But so far it has been progressing, so I'm not so sure we need anyone else's help," he said.

Rothmans Loses Bid to Sue Canada Over Health Costs (Update1)
By Joe Schneider, April 14, 2008

April 14 (Bloomberg) -- A judge threw out a lawsuit by Rothmans Inc. and other tobacco companies that sought to blame the Canadian government for health-related costs incurred by British Columbia.

The province sued the companies in 2001, seeking to recover billions of dollars spent by its government-funded health-care system to treat people with diseases such as emphysema and lung cancer. The companies sued Canada last year, claiming federal officials were responsible for the costs.

``The allegations cannot succeed because Canada is immune to liability,'' British Columbia Supreme Court Judge Catherine Wedge wrote in an April 11 ruling in Vancouver. Only Parliament can lift the immunity, she said.

Tobacco companies have unsuccessfully fought a British Columbia law that lets the province collect damages if it shows the cigarette makers breached an obligation to customers by failing to inform them of the risks of smoking.

Ontario and other provinces have passed laws to allow similar suits. New Brunswick sued March 13 to recover health- related costs from tobacco companies, including Rothmans.

High Stakes
``The stakes are very high'' for tobacco companies, with potential damages reaching into the tens of billions of dollars, Rob Cunningham, a policy analyst with the Canadian Cancer Society, said in a telephone interview. ``They'll try what they can'' to avoid a trial.

Wedge also denied the companies' request for a finding that they committed no ``tobacco-related wrongs,'' saying that will be determined at trial. The companies can appeal Wedge's ruling to the provincial appeal court and then, if necessary, to the Supreme Court of Canada.

Karen Bodirsky, a spokeswoman for Toronto-based Rothmans, declined to comment, saying lawyers were still reviewing the ruling. Rothmans makes Benson & Hedges cigarettes.

Companies that sued included the Imperial Tobacco unit of British American Tobacco Plc, which makes Canada's top selling du Maurier and Players brands, and JTI-MacDonald, a unit of Japan Tobacco Inc.

Tobacco Claims
The companies claimed that the federal government was responsible for the wrongful conduct alleged by the province because it created programs requiring warnings on packages, disclosures of amounts of tar and nicotine, and the promotion of ``light'' and ``mild'' cigarettes.

The government argued it was acting as the nation's health regulator, trying to find a solution to a public health problem.

The case is Between Her Majesty the Queen in the Right of British Columbia and Imperial Tobacco Canada Ltd. and the Attorney General of Canada, S010421. Supreme Court of British Columbia (Vancouver).

 

 



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