Canada lagging on suits against tobacco companies

Other provinces ought to consider establishing funds like the pots of public money set aside in Quebec and Ontario to help fund class-action suits, says Dalhousie University’s top lawyer.

“One of the things we learned from the US tobacco litigation story is just how hard it is when you don’t (have public financial support),” Dean Camille Cameron of the Schulich School of Law told students at a seminar Friday on the history of class-action suits against Big Tobacco.

In Ontario, lawyers who tap into the public pot to advance their cases agree to give a chunk of any winnings back to the fund, Cameron said.

“You can grow the fund that way so it’s not entirely state supported,” she said.

In Australia, third party litigation funding is now coming from companies that do it for profit, Cameron said.

“I don’t like that model as much, although I think it’s better than nothing,” she said.

“It means the difference, sometimes, between the cases being brought and not being brought. And there are some of these private third party funders funding some cases in Canada now. But less so because of the fact that lawyers can charge contingency fees and that we have in Quebec and Ontario the funds.”

Class-actions are much more economically viable than individual cases, she said.

“The damages to be received will indeed be much greater than the cost of litigation. Thus there is an incentive for lawyers to assume the risk,” Cameron said.

“And one of the things that sometimes I think is lost about class-action is very often you hear about the greedy lawyers who are getting a huge amount of money, and sometimes that happens. But if … it weren’t for risk-taking lawyers taking a chance and growing the legislation and growing the regime, it would not be nearly as effective as it is.”

In an interview, Cameron said convincing the province of Nova Scotia to set up a fund to help defray the cost of class-action suits would likely take a long time.

“It’s not out of the realm of possibility, but it certainly hasn’t even been on the agenda in terms of a discussion point,” she said. “Possible, but unlikely. It would really need some champions. And it would need political will and I think, at least in the current situation, it’s just not high enough on the priority list.”

There’s “substantial” class-action litigation going on now in Quebec against Big Tobacco, Cameron told the seminar.

“Substantial because they have pockets that are deeper than deep,” she said.

Three waves of litigation in the US

That litigation is unfolding in a way that has been shaped by three waves of American tobacco litigation, Cameron said.

“Beginning in the 1950s and running until the late 1990s there were three very intense waves of tobacco litigation in the United States,” she said.

Big Tobacco takes a “deep pockets, scorched earth, take-no-prisoners approach to litigation,” Cameron said.

“One view is that they expose the worst of the adversarial system.”

The tobacco industry had “a strictly no settlement policy” in the US, she said.

The first wave of US litigation began as “information was slowly coming to light suggesting that smoking might be dangerous,” Cameron said.

“The tobacco industry put a robust public relations approach in place to counter this potentially damaging information. Individual tort lawsuits began and, generally, these were not successful. And by that I mean plaintiffs lost and the tobacco industry defendants won. In this first wave of tobacco legislation, we had not yet had the advantage of whistle blower revelations, surgeon general reports, and evidence of industry cover-ups. That came later. The industry was able to succeed by arguing primarily there was no scientific proof that smoking caused cancer.”

One approach Big Tobacco took, she said, is summed up in the maxim: “a case is never lost if it is not tried.”

That meant, “basically, drag it out as long as you can, and, by the way, our system and our civil procedure rules make it possible to do just that,” Cameron said.

“If you delay, delay, delay, that means money, money, money, and if you’ve got deep pockets that works for you.”

One tobacco company executive described it this way: “To paraphrase General Patton, the way we won these cases was not by spending all of our money, but by making the other son of a bitch spend all of his.”

The economics stakes were high for Big Tobacco in the 1950s.

“Theirs was reportedly, at that time, a $50 billion per year industry,” Cameron said. “They had seen what happened in the asbestos industry (where) the asbestos companies started settling individual suits and eventually they became bankrupt. And so the tobacco industry was very aware of what had happened and did not want the same thing to happen in tobacco litigation.”

The second wave of class-action suits came in the 1980s.

“A lot had happened between 1960 and 1980 to change the game a little bit,” Cameron said.

“Between the end of the first wave and the beginning of the second wave there had been a great deal of asbestos litigation.”

That gave lawyers expertise in mass injury litigation that they could transfer to the tobacco cases, she said.

“Furthermore, there was also now more evidence, including a surgeon general’s report, of a link between smoking and cancer. But notwithstanding this, the industry still prevailed in the litigation.”

Tobacco companies were able to succeed by prolonging cases procedurally and “on individual causation issues,” she said.

It was still difficult to prove that cigarettes caused an individual’s cancer, Cameron said.

“Their narrative was to blame the victim,” she said of Big Tobacco.

“That’s what they did and it worked. And by the way, juries did, too. Because these trials were jury trials and juries were still not inclined to do anything other than say, ‘If you’re stupid enough to smoke, then you get what you deserve.’”

That ignores the reasoning that most people became addicted to smoking as teenagers, and tried unsuccessfully to quit, she said.

One of the big things advocates and governments try to do is control tobacco advertising directed at young people, Cameron said.

“Some of you in the room might be old enough to remember Joe Camel, a cartoon character that was used to advertise cigarettes,” she said.

“Some research was done indicating that a very high percentage of kids actually were quite familiar with the cartoon character which, of course, was the aim. But certainly one of the strategies of the tobacco industry was to advertise to and appeal to young people, and to get them started young.”

As public awareness grew about the addictiveness of tobacco use, the prejudice against smokers eventually faded like a puff of, well, smoke.

A case brought by flight attendants switched the narrative from “’you are hurting yourself and you are responsible for that,’ to, ‘you are hurting me,’” Cameron said.

The third wave of class-action litigation in the US included state claims to recover Medicaid costs “related to state expenses incurred in dealing with the negative health affects of smoking,” Cameron said.

“These state claims were a new component not present in the first two waves,” she said, noting that was likely the turning point in the story.

Information from whistle blowers and intel gleaned from the discovery process in unsuccessful litigation provided more ammunition against Big Tobacco.

“The causation and contributory negligence arguments used by the industry in the earlier waves of cases brought by individuals were irrelevant in cases in which the states were plaintiffs.”

The Medicaid cases were based on epidemiological evidence, not on the conduct of any individual smoker, she said.

“The states were fault-free claimants against which the industry could not employ assumption of risk or contributory negligence defences.”

The master settlement agreement in 1998 eventually lead to all states signing deals with Big Tobacco.

“The industry agreed to pay about $240 billion and to make certain other concessions regarding things like advertising and promotion.”

Rolah McCabe

Constructive legal outcomes also came from cases that were, ultimately, lost.

“One of the biggest positive developments in this morality tale, this tobacco story, is the revealing of information through discovery and through whistle blowers,” Cameron said.

An unsuccessful individual suit against British American Tobacco in Australia was “a gift” to lawyers looking for ammunition to use against tobacco companies, Cameron said.

Rolah McCabe launched her case against the tobacco giant in 2001.

“I say a gift, but of course this was not a happy story; tobacco litigation is never happy story” Cameron said.

McCabe was in her early 50s when she commenced the proceeding.

“She had begun smoking in her early teens — I think she was around 13 or 14 when she started smoking — she was addicted and she was very sick,” Cameron said.

“She died before the case finished, as often happens in these cases. One of the reasons being, of course, the sickness of the person, another being that they take so very, very long to go from beginning to end.”

McCabe won at trial, but her case was overturned on appeal and leave to appeal to Australia’s high court was denied.

“That case did have a significant influence on the national and international discourse about tobacco litigation, tobacco control, and the conduct of tobacco companies,” Cameron said.

Win or lose, such cases make a considerable contribution to the overall control of tobacco, she said.

In the Australian case, the tobacco company had a “document retention policy,” Cameron said. “The purpose of that document retention policy was to have a systematic way of destroying documents. The name, therefore, was quite interesting.”

Industry research documents were funneled through company lawyers to attract solicitor-client privilege, she said.

Back in the US, disclosure of damaging information “that told us about the industry and what it had been up to,” and increasingly adverse media attention served to reframe the narrative “from traditional individualized tort litigation principles of responsibility, assumption of risk (and) contributory negligence to the language of fraud, deceit and addiction,” Cameron said.

Canada lagging

Every province in Canada now has a claim to recover health care costs related to tobacco, she said.

“I’m surprised it’s not getting more attention,” she said.

“It started in BC with the Health Care Cost Recovery Act. The tobacco industry challenged it. It went all the way to the Supreme Court. The Supreme Court upheld it, and then other provinces followed suit. So now we’ve got basically a nation-wide litigation similar to those American Medicaid cases.”

There are also two class-action cases going on in Canada: “One brought by a group of people who actually are suffering from cancer and other smoking-related illnesses, and one brought by people who, although not suffering from illnesses, are addicted,” Cameron said.

“The plaintiffs’ claims state the tobacco manufacturers failed to warn consumers about the dangers of their products to consumers’ health, and that they implemented policies to publicly deny the harmful affects, that they deliberately manipulated their products to maintain addiction, and that they were very much involved in generating scientific controversy and spreading misinformation.”

The Canadian class-actions against Imperial Tobacco Canada, JTI- Macdonald Corp. and Rothman, Benson Hedges Inc. started in 1998 and were certified in 2005.

“So it took seven years just to get to certification, over 16 years of proceedings and 253 days of hearings. Seventy-six witnesses took the stand and over 30,000 documents were tabled as evidence.”

The decision released in May 2015 was in favour of the plaintiffs.

“In a 276-page judgment, Justice Brian Riordan of the Quebec Superior Court found the tobacco companies liable. He made an order for damages in the amount of $15 billion. All three tobacco companies have appealed.”

According to the Montreal Gazette, “Riordan’s decision involved two class-action suits. One involved 100,000 smokers and ex-smokers who had developed lung cancer, throat cancer or emphysema. The other group represented 918,000 addicted smokers, but only those who developed disease will get a financial award.”

The appeal was heard at the end of 2016. “So it will be very interesting to see what happens with that one,” Cameron said.